McLeod v. Vista Unified School Dist.

Decision Date14 January 2008
Docket NumberNo. D050449.,D050449.
Citation71 Cal.Rptr.3d 109,158 Cal.App.4th 1156
CourtCalifornia Court of Appeals Court of Appeals
PartiesJerry McLEOD et al., Plaintiffs and Appellants, v. VISTA UNIFIED SCHOOL DISTRICT, Defendant and Respondent.

Law Offices of Everett L. DeLano III, Everett L. DeLano III, and M. Dare De-Lano for Plaintiffs and Appellants.

Foley & Lardner, Kenneth S. Klein; Procopio, Cory, Hargreaves & Savitch, John C. Lemmo and A. Aiko Osugi, San Diego, for Respondent and Defendant.


In November 2000 California voters approved Proposition 39, which is also referred to as the "Smaller Classes, Safer Schools, and Financial Accountability Act." (Prop. 39, as approved by voters, Gen. Elec. (Nov. 7, 2000).) "First, and most important, [Proposition 39] amended the state Constitution to create an exception to the 1 percent limit on ad valorem taxes on real property, and to reduce from two-thirds to 55 percent the number of voters required to approve any bonded indebtedness proposed to be incurred by a school district for the `construction, reconstruction, rehabilitation, or replacement of school facilities.'" (Ridgecrest Charter School v. Sierra Sands Unified School Dist. (2005) 130 Cal.App.4th 986, 993, 30 Cal.Rptr.3d 648; Cal. Const., art. XIII A, § 1, subd.(b)(3).) A local measure submitted to voters under Proposition 39 must set forth certain "accountability requirements," including a list of the specific schools facilities projects to be funded, and a statement that the bond funds may be used only for those projects. (Cal. Const., art. XIII A, § 1, subd. (b)(3)(A) & (B).)

The issue in this case is the applicable statute of limitations for a taxpayer waste action (Ed.Code, § 15284; Code Civ. Proc.,1 § 526a) that challenges various aspects of a school district's successful local measure under which it is authorized to issue bonds for school construction. Under the circumstances here, we conclude the 60-day limitations period of the validation statutes applies (§§ 860, 863). Accordingly, we affirm a judgment of dismissal for the school district on the ground of untimeliness.


It is undisputed that the Vista Unified School District's [District] schools and students have suffered from severe overcrowding. In March 2002, by a vote of approximately 67 percent, the District's voters approved a measure, Proposition O, which authorized it to issue and sell $140 million in general obligation bonds to fund the construction of new schools and to repair and renovate aging schools. The District intended to issue bonds four times over a several-year period.

The voter materials listed numerous projects, which as relevant here included two new magnet high schools located on a single site with shared ancillary and sports facilities, two new K-8 schools and two new temporary schools.3 Proposition 0 did not set forth a particular budget for any of the listed facilities.

As required by statute, Proposition 0 cautioned voters that "[a]pproval of this proposition does not guarantee that the proposed projects in the Vista Unified School District that are the subject of bonds under this proposition will be funded beyond the local revenues generated by this proposition. The school district's proposal for the projects may assume the receipt of matching state funds, which could be subject to appropriation by the Legislature or approval of a statewide bond measure." (Ed.Code, § 15122.5.)

The District formed an independent Citizens Bond Oversight Committee (Oversight Committee), as required by statute, to oversee the expenditure of Proposition O bond funds and provide reports to the public on the District's compliance with the measure and Proposition 39. (Ed.Code, §§ 15278, 15280, 15282.)

In April 2002 the District approved the use of Proposition O funds for the purchase of 12 relocatable classrooms so a program called the Vista Focus Academy could be temporarily moved from an overcrowded school to a site the District already owned, pending the construction of new permanent schools. This work was completed and accepted in early 2003.

Ultimately, the District received approximately $111 million in matching funds from the state, which was $14 million less than anticipated. Further, after voters approved Proposition O the costs of land and construction increased more than the District reasonably could have anticipated. For instance, the cost of the new dual magnet high school site increased dramatically, the price of concrete doubled and the price of steel rose 30 percent. Additionally, the District incurred unanticipated costs to defend itself in lawsuits related to bond-funded projects.4

Because of budgetary concerns, the District hired an experienced and respected national project management firm that specializes in the construction of school facilities. By February 2004 the consultant prepared a "Revised Bond Implementation Plan," which addressed required changes in the District's original plan. The District approved the revised plan, which scaled back the size of some projects, including the dual magnet high schools. Further, changing demographics since the passage of Proposition 0 and the construction of new elementary schools eliminated the need for the K-8 schools listed in Proposition 0, and thus the District deleted them from its original plan.

Minutes from the Oversight Committee's February 17, 2004 meeting show that during a discussion on Proposition O funds, the District advised "that the schools that will not be built are the two K-8 schools and a portable school." The District's legal counsel advised the Oversight Committee that the list of projects in Proposition O "was not a guarantee that all schools on the list would be built."

At the February 26, 2004 meeting of the District's Board of Trustees (Board), the District discussed its revised plan and explained it was necessitated primarily by increased costs of the dual magnet high schools. The District explained the "magnet high school project is expected to exceed the original estimate by $25 million. In order to still fund this project, two K-8 schools and [a] temporary school will be eliminated from the [original] plan." The minutes from the meeting state it was the Oversight Committee's consensus that the District was "doing a good job" and was "extremely responsive" to the group.

At the Board's April 22, 2004 meeting, the District adopted a resolution of necessity for the acquisition of a site in the City of Oceanside near Highway 76 and North Melrose Drive for the dual magnet high schools. The Oversight Committee urged the Board to adopt the resolution. Jerry McLeod attended the meeting and opposed the resolution.

The Oversight Committee's May 2004 annual report stated: "During the past 12 months, the District has witnessed certain conditions which have caused the original facilities plan to seriously exceed its budget," and under the District's revised plan it would save "the costs previously anticipated to build two new K-8 schools." The report explained the "new plan assumes that the future [District] student population will decrease somewhat. A third party consultant ... indicates that the student population should decrease by approximately 1,300 students by 2008. Consequently, the District projects that fewer schools will be required than originally anticipated." The Committee did not criticize the District's decision and found its use of bond funds complied with Proposition O and Proposition 39.

At an April 14, 2005 meeting, the Board voted against a proposal to return to taxpayers $24,278,118, the amount budgeted for the two new K-8 schools and one of the temporary schools identified in Proposition O, facilities the District eliminated from its plan. Jerry McLeod attended the meeting and expressed his view that Proposition O funds were "to be used for a list of specific projects voted on."

The Oversight Committee's May 2005 annual report stated the District "projects to see further, but less significant savings than originally projected in February 2004 related to not building two new K-8 schools as originally planned." The report also noted the Vista Focus Academy was one of several projects completed. The report concluded that during the previous year the District had "continued to successfully fulfill its promise to the community to construct new school facilities and to improve existing school facilities as identified in Proposition O. Although certain minor concerns, which are expressed in this report, do exist, after 3 years in progress the District's facilities construction program continues to move in a positive direction." The report did not complain about the Vista Focus Academy, the Board's action at the April 14, 2005 meeting, or the District's deletion of the K-8 schools and a temporary school from its original plan.

By the time the Oversight Committee issued its May 2005 annual report, McLeod was a member of the committee. He conceded he did not vote against any of the language in the report. The Oversight Committee's May 2006 report again complimented the District on "steady progress in terms of timing, and good management in terms of cost control efforts."

On May 16, 2006, more than 13 months after the Board voted against returning any Proposition O funds to the voters, Jerry McLeod sued the District for declaratory and injunctive relief.5 The first amended complaint added Ann McLeod as a plaintiff. As authority for the action, the pleading cited Code of Civil Procedure section 526a, which generally authorizes a taxpayer waste action, and Education Code section 15284, which specifically authorizes a taxpayer "School Bond Waste Prevention Action." (Ed.Code, § 15284, subd. (e).) The pleading alleged that in February 2004 the District improperly revised its original plan by deleting the two new K-8 schools and two new temporary schools listed in Proposition O, and it improperly...

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