Hermosa Beach voters Nov. 5 will decide the fate of Measure “J,” a $13.6 million school bond aimed at upgrading school facilities along with building new classrooms and a gym.

Opponents of the measure contend district officials overlooked alternative funding sources and feel the bond will gouge taxpayers while backers of the initiative claim the bond will fund sorely needed upgrades, comprising 85 percent of all projects on 50-year-old buildings.

If passed, the district will allocate $1.6 million from the bond and could receive $1.7 million from the California government from a $13.5 billion statewide bond, which would give it more than $3 million to possibly buy the 24,000-square-foot Adelphia site. In the absence of state funds, the district would then only have an estimated $1.6 million for its negotiations.

A $13.6 million bond will require taxpayers to pay an annual rate of $21 per $100,000 of assessed valuation. Recent bonds passed in Manhattan Beach, El Segundo and Redondo Beach are charging residents approximately $45 (two bonds passed in 1995 and 2000), $58 (two bonds passed in 1997 and 2001) and $13, respectively, per $100,000 of assessed valuation.

A new school gym would be the highest priced individual project, costing the district about $2.2 million, while new classrooms would come in at second with an estimated $1.9 million and the cost to modernize older classrooms would follow at slightly more than $1 million.

About $3.5 million will pay for numerous improvements to Valley’s electrical, plumbing, air conditioning and heating systems, restrooms and other student facilities, including technology labs.

Approximately $3.4 million would go to Hermosa View School for various modernization projects including restrooms, food service areas, older classrooms, and the upgrading and replacement of plumbing and electrical systems.

If the bond passes, the district will receive $9.6 million up front and is scheduled to receive $1.9 million in 2008 and $2.1 million in 2013.

A 55-percent vote is needed for the passage of Measure “J.”

North School site

Some opponents believe the School District should sell the North School site located along Valley Drive adjacent to Hermosa Valley School. Hermosa Beach resident and political consultant Fred Huebscher argues the School District could receive upward of $10 million to $20 million for the 6.2-acre property if it’s sold after rezoning the land. The site is now leased out to a day-care center and an adult school for about $175,000 each year.

“Selling or leasing this surplus land could more than pay for the district’s proposed improvements without raising taxes and would generate tens of thousands of dollars in property tax revenues for the city,” explained Huebscher. “The North School buildings are seismically unsafe and selling them would eliminate the potential hazard to the day-care children and adult students currently using that site. The district could float a 99-year condominium lease agreement that would bring in a lot of money; much more than the money it gets from its leases with the day-care center and the adult school.”

According to School Board member Greg Breen, the School District owns 22 lots in the corner of town between Myrtle Avenue and Morningside Drive from 25th to 26th streets. Several lots are privately owned and developed, approximately 12 lots are zoned as residential while nine are zoned as open space.

With this current zoning, the School District anticipated receiving between $5 million and $7 million in the sale.

In order to rezone the land as all residential, which would increase the value of it, the city would have to put the matter to the voters by way of an initiative.

“I don’t see any support for an initiative to rezone it to increase density because the voters have consistently voted against density,” said Breen. “Hermosa is the 11th densest city in the state and I just don’t see people voting to give up park land to increase density.”

The School District would have to put it to the voters because of a initiative passed by the people in the late 1980s that officially zoned all open space areas in town which could not be rezoned to anything else unless passed by a new initiative.

If voters passed such an initiative, it would transform the land into developable lots, the right to purchase the property would go to the city then to the county and then to several other public agencies before a private entity could have a chance at buying it.

School Board member Lance Widman, who sat on the City Council during that time, said the initiative was aimed at preserving open spaces for future years.

“The voters basically allowed the city to take every piece of open space and to make sure it would stay that way,” said Widman. “It extended along the railroad right of way, the beach, Clark Field, everything in the public domain. Some of these lots at North School, you can’t even get to and there are no sewer or electrical systems. If any council allowed an ‘X’ number of condos to go up in this area I hope it would be prepared to withstand the uproar of people living in the neighborhood.”

Community Center

Opponents also claim the School District failed to further examine the idea of transforming the Hermosa Beach Community Center back into an operating campus which already includes a gym for Valley middle school students. According to former Mayor Robert Benz, the School District could look into refurbishing the center to meet current state standards for schools through grants aimed at funding the renovation of older schools.

According to the 1978 purchase agreement between the city and the district, a provision in the contract allows the School District to rent out the center once used as the Pier Avenue School. The lease would be free of charge from the city because the district sold the property to the city for less than fair market value. The total area consists of 4.7 acres or an estimated 204,000 square feet.

“The consideration for the City’s permitting the District to use the premises rent free is that the District is selling the premises to the City for less than fair market value,” states the provision. “The District as set forth in paragraph 2.01 of this agreement is entitled to lease the premises for fifty years (beginning in 1978) in three-year increments.”

“I’m not convinced we need a new gym,” said Huebscher. “The district can still use a gym based on this agreement provision and I think the School Board has misled the community on the options available. I am not opposed to upgrades of schools and classrooms, but I think there are improvement and repair solutions that don’t mean more taxes.”

Supporters feel the money to upgrade and retrofit the Community Center would far exceed the amount of funds requested through the bond. Built in the 1930s, the building would have to meet school codes and standards set by the state.

“Any rehabilitation of buildings for school use is under the control of the Division of the State Architect, which evaluates the suitability of existing buildings using current standards,” explained Breen. “This means we’d be faced with fairly extensive rehabilitation of that school. Even if the city gave us back the facility — and I suspect they’d sell it to us, not give it — we’d be faced with construction costs that are substantial.”

According to Superintendent Duffy Clark, the School Facilities Advisory Committee — comprising parents, teachers, city officials and residents — explored this provision and discovered it could not use the center while the city leased it out to community groups.

“Steve Burrell (city manager) was on the committee and with his help the committee dismissed this option because, under the terms of the agreement, as long as the city is using the facility according to the agreement, the School District does not have a right to the facility,” said Clark. “These facilities are being used extensively by community groups. Since that agreement was entered into by the city and the district, substantial changes have occurred to the California building codes and the additional requirements of the Department of State Architect relating to schools. It would cost a considerable amount of money to bring those buildings up to the new codes even if they were not being used so extensively by other community groups, not to mention the cost of operating three schools in our district when our enrollment does not require three sites.”

Bond costs

Huebscher claims the costs and interest rates associated with the bond will exceed $24 million. With a $13.6 million bond at a 5-percent interest rate, the cost will reach close to this multimillion-dollar amount. He is also wary of the money the School District will spend on services related to the bond once it’s passed.

“The district has already spent thousands of tax dollars on political consultants; and will spend thousands more on bond brokers, consultants and attorneys,” said Huebscher.

Breen contends the district has never concealed these figures from the public and with any kind of bond, interest rates and consultant fees come with the territory.

“It is a part of the function of borrowing money similar to a home mortgage,” he said. “Including interest, it will reach $24 million or so. The principal amount, what we are trying to raise to build school facilities, is the $13.6 million. The remainder is the financing cost. We’re not hiding anything.”

Accounting of bond funds

According to measure opponent Shawn Moonan, the School District gives no guarantee it will not spend the bond money on administrator perks and benefits, and said the School District should cut some of its overhead costs before asking taxpayers to pay more money.

“The state currently spends more than $7,000 per pupil or $196,000 for the average Hermosa class,” he said. “Teachers’ salaries average $59,000, so where does the rest of the $137,000 go? The district claims no money will be spent on administrator salaries but gives no guarantee that bond money will not be spent on administrator perks and benefits. Hermosa can’t afford that sort of accounting.”

The bond is part of a Proposition 39 election which requires School Districts to spend the money solely on school facilities. It prohibits districts from spending the money on what the legislation defines as, “teacher and administrator salaries, and other school operating expenses.”

“Under state law, no bond money can go to salary, perks or benefits,” said Clark. “In addition, there are taxpayer safeguards in place under Prop. 39 that include an independent citizens oversight committee to ensure bond monies are spent as committed to the voters.”

Proposition 39 also requires annual performance and financial audits conducted in conjunction with an oversight committee comprising seven members who represent the business community, senior citizens, taxpayers, parent-teacher organizations and parents.

Campaign contributions

The committee in favor of the bond, led by Jennifer Rosenfeld and Stephen Cannella, raised $27,500 in election contributions since January.

According to its financial reports, $25,000 came from the coffers of financial advising giant USB Paine Webber and the architecture firm Dougherty & Dougherty.

Opponents expressed their distaste on the committee’s acceptance of the contributions from two companies that stand to profit from the bond if it passes.

“I can’t remember a time when the two biggest sources of campaign contributions came from companies that have a lot to gain if this bond is passed,” said Huebscher. “If there is such broad support for this bond, then why did the School District spend thousands of dollars to conduct a poll to see if residents would approve this? If there is such broad support, why hasn’t the committee for the bond received contributions from the community?”

The district hired Dougherty & Dougherty to aid it in generating a list of needed facilities that the bond would pay for over the next 10 years. The district could hire Paine Webber to assist it if the bond is passed.

An additional $1,000 came from Atkinson, Andelson, Loya, Ruud & Romo, a legal firm the district hired for all of its legal services.

The outside general counsel firm Stradling Yocca Carlson Rauth contributed $1,000 and construction company Vanir Construction donated $500.

“I personally am not that concerned about this,” added Breen. “The fees for both the architect and the bond underwriter are fixed, and their contributions don’t affect the fees they’ll collect. I view it more as their endorsement of the school district. They’re putting their money on the Angels instead of on the Brewers.”