The Washoe County School District (WCSD) has been asked by various community members to respond to ongoing accusations and claims that have been circulated throughout the community. WCSD is therefore providing the following response – WCSD’s responses are in blue, otherwise, nothing has been changed from the original document. WC1 PROMISES MADE, PROMISES BROKEN I TOLD YOU SO $3 million for WCSD salaries! WCSD is precisely implementing the program presented to the residents of Washoe County, and WCSD has kept its promises associated with WC-1 initiative. “… supplantation is not possible.” Pete Etchart, WCSD To all those groups and political officials that supported WC1, the Sales Tax increase for Washoe Schools: I urge you to pay attention now and take action. Supporting the intent of WC1 is one thing but having done so, turning a blind eye to run-away and inappropriate spending is another! Consider too the potential wrath of the voters! Sadly, as an advocate for the opposition, I take no pleasure in saying “I told you so.” As detailed below three main issues addressed at the recent Oversight Committee meeting and the final meeting of the outgoing Board of Trustees are: *After front page news, the board reluctantly had to remove the hefty pay bonus for the super. That attempt shows the dysfunction and disregard for the taxpayer. The superintendent’s bonus is irrelevant to the WC-1 initiative, WCSD’s Capital Improvement Plan, the Oversight Panel for School Facilities, or the Capital Funding Protection Committee. Superintendent Davis willingly (not reluctantly) asked that the Board of Trustees not consider her bonus, and there was no other reason for its removal. 1. WCSD sat on approved repair funding in spite of leaking roofs- apparently for political purposes. Remember that big rain storm just before the election and news coverage of those leaky roofs? This statement is a misguided accusation based on misrepresentations. In 2016, WCSD was authorized to sell additional property tax rollover bonds. In asking for this authority at multiple public meetings, WCSD clearly stated that it was prudent to wait on implementing a portion of this funding pending the outcome of the election because the election would dramatically affect the use of this funding. Furthermore, this funding was authorized in the spring before the election and therefore could not have been expended before the election. Big repair projects can only be undertaken over the summer while school is not in session, and require planning and permitting time, as well as bidding and prep time. The soonest that

this money could have been used was after the election regardless of the election’s outcome. 2. In spite of promises made and predictions by the opposition, WCSD salaries are in fact being included and supplanted in the WC1 funding money. Salaries, maybe to the tune of almost $3 million dollars! * see below for various quotes and promises. This is again a baseless accusation. This assertion is that WCSD is diverting capital expenditures from the general fund to the new sales tax funding provided by the passage of WC-1 and using the general fund savings for other non-capital uses. This is absolutely not occurring because WCSD does not utilize general fund revenues for capital projects. For many, many years, all capital projects have utilized only capital fund revenues. Nevada Revised Statute (NRS) 387.335 specifies that capital fund revenues can only be utilized for capital projects. With the voters’ commitment to schools through passage of WC-1, the District’s budget for construction and repairs is increasing from $10 million - $20 million per year over the past many years to $70 - $120 million per year. As publicly stated, WCSD will hire more project managers, engineers, planners, and other essential personnel in order to plan, design, and oversee these critical projects and ensure the community receives what it paid for. WCSD was up front about this from the beginning. If WC-1 passed and WCSD’s capital projects budget increased, WCSD would need to hire people to oversee that funding, but would not, and legally cannot, use this funding for school administration, teachers, bus drivers, etc. 3. The district continues to grossly inflate and misinform the committee on the cost of building a school. If true, estimates of in spending proposals are sky high. Another baseless statement grounded in misrepresentations. Nothing has changed since WCSD presented the community with cost estimates to build schools during the election. The ballot question passed approximately two months ago; the first new schools are still in the planning process, therefore exact final costs are still to be determined. Since the time these latest cost estimates were developed, no information so far has given WCSD cause to change those estimates. For the record: As provided to the Public Schools Overcrowding and Repair Needs Committee and later to the Capital Funding Protection Committee, WCSD had two independent consultants analyze the cost of building schools. The District also analyzed the cost of schools currently being planned as part of the Clark County School District’s $4.1 billion capital improvement program. WCSD’s projected construction cost is less than all three comparisons. It should be noted that the cost of schools varies greatly depending on what is included in the cost estimate. The estimated cost that WCSD utilizes is an all-inclusive cost including land, water rights, permitting, athletic fields, the building itself, furnishings, and the internal WCSD staff that work on/oversee the project. It is the total cost from concept to students sitting in seats on the first day of class. Less expensive schools can be found in lower cost-of-living states. Likewise, schools in other states can have much higher construction costs. A currently proposed high school in Dublin, Calif.

is estimated to cost over two and a half times the cost of WCSD’s proposed high schools, for example. At the WCSD Oversight meeting, if I read the proposal correctly; the committee was besieged with about $95 million! About 35 different proposals, all for the committee and taxpayer to digest in a few hours! The project funding recommendations were publicly available for days before the meeting of the Capital Funding Protection Committee. After this committee approved them, they were available for another five days before the Board of Trustees met to approve them. All of the proposed and approved projects were directly related to the projects recommended for funding by the legislativelycreated Public Schools Overcrowding and Repair Needs Committee and included on the WC-1 ballot measure approved by the voters. The amount of spending proposed and approved at these meetings is also incorrect -- $76 million, not $95 million. On December 15th the WCSD Oversight and Protection Committee(s) met (they are one and the same). First: COO Etchart admitted repeatedly that WCSD sat on approved repair money as rainstorms hit and roofs leaked. In other words they intentionally allowed damage to expand at schools as they sat on the appropriated money- possibly for political purposes for the passage of WC1. No. See above. This is an absolutely unsubstantiated and untrue statement and Mr. Etchart and the District are placing Mr. Church on notice that if he continues to perpetuate this misrepresentation, he will be acting intentionally and in disregard to the truth, and thus he will be committing defamation, which may be pursued. Repeatedly Mr. Etchart acknowledged that the oversight committee in 2015 approved $35 million in bonds for repairs and they instead “put the money in the bank pending the outcome of the election.” Again, this was explained in detail at public meetings and presentations over the last 6-8 months and the reasoning was well vetted as reasonable steps to take in the planning process. During this time schools sat in disrepair and roofs leaked causing additional damage that could have been avoided. Again, absolutely untrue and answered above. The minutes of the 2015 Oversight meeting reflect the board being told: "$35 million being approved today will to be used for facilities improvement this school year... … Washoe County School District is proposing to issue a bond not to exceed $35 million. This is tentatively scheduled for initially $20 million and then $15 million later in the year.” WCSD proposed $20 million in repairs, and authorization to sell another $15 million in bonds at a later date once the District knew the most prudent course of action to take with the funds. That is responsible planning.

If true this is a serious allegation and if true heads should roll. Could it be criminal in nature? Mr. Church has continually made baseless and slanderous/libelous allegations against Mr. Etchart and WCSD. Again, Mr. Church is being placed on notice that if he continues to perpetuate this misrepresentation, he will be doing so with intentional disregard for the truth giving rise to a defamation cause of action. Issue #2: The voters were repeatedly led to believe by WCSD and WC1 advocates and in the ballot measure itself that: “The money from this tax increase could only be used to repair schools and build new ones; it could not go to salaries, legal fees, or anything else." (Pete Etchart) This is again missing the context of the discussion: it cannot legally go to school administration salaries as per Nevada State Law. Per above, Capital Funds absolutely can and should go to professional planning, engineering, and project management associated with building and repairing schools. As per the attached, the voters were clearly led to believe that salaries were not to be included. We, of course, predicted they would be. WCSD was very transparent that salaries associated with the Capital Program would be funded with capital bond funds. For decades, WCSD has done this. It is the most transparent and accountable way to fund Capital Project’s salaries as it provides the public with the true cost of construction since it includes all costs including the necessary staff salaries. At the Oversight meeting, to the apparent surprise of some members, staff admitted some WCSD salaries are included. Before the ink is try on WC1 and the first penny is spent on changing a light bulb, WC1 taxpayer money will go for salaries and apparently supplanting existing salaries. Exactly as we predicted and they denied. Once again, this is a baseless accusation. There is absolutely no evidence to back up this accusation because it is not occurring. We encourage the public to read the minutes or listen to the audio of the meeting. Capital Funding Protection Committee members were very understanding and supportive of the need for staff to oversee projects. The unanswered question is how many million dollars of salaries over the next 10 years and those hefty pay raises they’ll get citing the huge pot of WC1 money. This is again another baseless accusation. As previously explained, this “what if” scenario would be a violation of law and also has no basis in the District’s previous use of capital funds. All school district salaries, contractor expenditures, and more are easily available and searchable on the Data Gallery. Hidden in the WCSD proposal we find the following: Construction Management Support, $300,000 and Program Administration, $2,500.000!!!! Salaries right? Does that include pay and benefits or just salaries? All from WC1 funds? Almost 3% of the proposal for salaries.

Approximately 3% spent on planning and construction management is on the low end of industry standards. It was absolutely not hidden – it was in the main proposal, same font, same formatting, as all other projects. Staff at both public meetings specifically pointed committee members to this allocation as a discussion point. Program Administration has historically been included in the WCSD Capital Improvement Program. Can anyone look into this? Is this legal? Yes, it is indeed legal. It is the most accountable and transparent method of accounting for Capital Program related salaries. While small, $50,000 for cars. Cars would and have normally been a part of the General Fund (GF) and as salaries currently in the General Fund, as predicted, they are being moved to the WC1 fund, freeing up GF money for pay raises. This is not an accurate statement. Vehicles utilized by capital project staff have historically been paid for with by capital funds. Again, this is the most accountable and transparent method of accounting for capital related expenditures. The third issue of many that could be addressed is committee member Dahir delved into the cost of a K-12 school. Staff indicated inaccurately that the $110-135 million proposed high school (as an example) was consistent with area research and studies. I beg strongly to differ, See attached. Answered above. The annual school study, the “bible” of construction costs along with respected Nevada Guinn and Sage reports, other research, and Mr. Etchart’s own admissions point to a high school around $70 to 85 million. Mr. Etchart provided a presentation to the SAGE Commission on February 11, 2016 and included a detailed report on the repair and overcrowding situation being experienced by the WCSD. As part of this presentation, Mr. Etchart provided the latest new school estimated cost estimates of $23 million for an elementary school, $55 million for a middle school, and $110 million for a high school. As stated previously, these current estimates were developed with the assistance of two independent consultants and also analyzing the cost of schools currently being planned as part of the Clark County School District’s $4.1 billion capital improvement program. These cost projections were also provided to the Public Schools Overcrowding and Repair Needs Committee, the Capital Funding Protection Committee, the Board of Trustees, and to the public during numerous community presentations. The WCSD $110 to 135 million, an extra $40- 65 million each, points to areas of extreme concern. Especially true as the record reflects staff’s own presentation showed many proposed schools sites being free or reduced land costs. WCSD always diligently works with developers on land acquisition and hopes for donated land, but that is not something that it would be prudent to budget for.

In looking at the proposed expenditures, the reader may be surprised to learn that not only salaries are thrown into the WC1 pool but also other areas not commonly associated with capital projects: Cars for staff members, only $50,000. Already Covered – see above Construction Management Support, $300,000. Already Covered – see above Program Administration, $2,500.000!!!! Already Covered – see above Safety and Security, $1,000,000! : What is that? As discussed at the public meetings (and available to view online after the meeting, as well as in audio and written minutes), school safety and security projects are important areas that need addressing in WCSD schools. School repairs and renovations include updating schools to the latest in safety and security improvements for the benefit of students and staff. By law, the details of these safety and security improvements are confidential as to avoid providing those who may intend to do a school harm the ability to understand the safety and security provisions at that school. Educational Opportunities: $250,000. This is a common funding category that the District has had in capital projects budgeting going back several years. It means that architects and engineers do not always know about new educational programs or other projects at a school that fall outside a “repairs” category but are important to an educators’ ability to teach. So there is this category of funding for educators to request projects that are less about keeping a school operational and more about enhancing WCSD’s core mission: college and career-ready graduates. Program Contingency: $650,000 A contingency budget for construction and repairs work is a must-have and typical for the industry. Each area needs to be addressed in detail. This is not “chump change”. Is this legal under capital projects and is it what the voters were promised? Why did WCSD sit on approved repair money? $250 million ++ for salaries? Again, WCSD thoroughly provided answers to these questions at numerous public meetings. Every recommended project has been addressed in detail. In addition, WCSD has an annual evaluation report that details the approved budget and actual expenditure for every past project down to the penny. This report must be approved by the Capital Funding Protection Committee and the Board of Trustees. The WCSD Data Gallery also provides the public with the bid results for every project. WCSD is clearly providing the public with the highest level of public transparency and accountability. Jeff Church RenoPublicSafety.org NevadaCop@earthlink,net

*Note & Disclaimer: I am not an accountant or fiscal expert. This information is from info I think I heard at the dual Washoe County School District (WCSD) Oversight and Protection Committee meetings (December 15, 2016) as well as other sources and the hand out, “WCSD Capital Improvement Program” (12-8-16) Agenda Item 2.05. Please review the meeting minutes, other sources and the proposal to determine the specific facts. Anyone may feel free to contact me for information. I do have viable options and solutions. I can’t fight this alone. These issues warrant an outside audit and research as well as legal review by the Washoe County District Attorney, Nevada Attorney General, Department of Taxation and other officials. There are two issues; Is it legal and secondly is it ethical and reasonable. The WCSD is audited yearly – including the capital program – and for 25 straight years has received “clean” (unmodified or unqualified) Independent Financial Audit Reports. For 23 straight years, the District has been awarded the Certificate of Excellence in Financial Reporting, and for 19 straight years has been awarded the Achievement of Excellence in Procurement Award. Even if legal, the contract with the voters was broken and costs and expenditures are sky high. The voters, WC1 supporters, elected officials, media (our 4th branch of government), taxpayer organizations, and others all have a stake in the legal and effective administration of this taxpayer money. WCSD has begun the precise implementation of the program presented to the residents of Washoe County. The cost estimates presented and approved by the Public Schools Overcrowding and Repair Needs Committee have not changed. Media: In addition to any tapes, minutes etc.; there were various elected officials on the committee you may wish to speak to. Absent was BCC Commissioner Lucey. Those Present included Council members Bybee and Dahir of City of Sparks, BCC Commissioner Herman, and Reno Council members McKenzie and Bobzien. After hours of detailed examination of the recommended projects, the independent representatives from Reno, Sparks, and Washoe County along with the citizen members voted unanimously to approve the projects. I urge you too to contact UNR and ask for some research, perhaps starting with the cost to build a school. Jeff Church THE WC1 NO SALARIES BROKEN PROMISE (UNDERLINE ADDED) I have to admit I was wrong, in pre-election interviews I warned that in fact the WC1 money would be used and supplanted for salaries but I thought they would wait a year or so. I was wrong. The money has been supplanted for upwards of $3

million in salaries & benefits before the ink is dry. Then they threw in cars for the employees. This was covered above. No capital funds are being “supplanted.” Even the actual ballot measure stated: “… to fund only capital projects of Washoe County School District for the acquisition, construction, repair and renovation of school facilities?” At various hearings, debates and in the media the public was either clearly told no salaries or it was implied. WCSD has always been clear that school administration would not be funded (and legally cannot be funded) with capital funds, but that engineers, planners, and project managers associated with the Capital Improvement Program would continue to be paid with capital funds (as WCSD has historically done). To the average citizen, only for construction would seem to mean that, not the salary of a school employee administrator overseeing it, not for cars, not for management. I take no pleasure in saying, “I told you so.” I do offer viable solutions if you ask me. I ask the media to ask these hard questions. Here it is, various sources are cited. I could find plenty more if it served any purpose. Remember those two televised debates. For the reader: Pete Etchart is the COO of the Washoe County School District (WCSD) Mike Kazmierski is the COO of EDAWN which receives government funding yet actively advocated for WC1. Jeffrey Church is a private citizen on the opposition to WC1 and runs www.RenoPublicSafety.org http://www.kolotv.com/content/news/Overcrowding-forces-big-changes-inWashoe-County-Schools-391703251.html "To be honest with you now,…" Washoe County School District COO Pete Etchart said. … The money from this tax increase could only be used to repair schools and build new ones, it could not go to salaries, legal fees, or anything else." Please visit the link and you will see that these are not accurate quotes being attributing to Mr. Etchart, it is copy written by the KOLO staff that is not a quote. The District has no control over whether an independent news outlet adds “school administrator” before salaries or not. The complete quote from Mr. Etchart in that piece was: "’To be honest with you now, we can no longer be proactive, we are in reaction mode,’ Washoe County School District COO Pete Etchart said.” “… supplantation is not possible.” Pete Etchart Directly from the official Washoe County Voter Guide: we predicted the money would be used to “…offset, augment or supplant unrelated salaries…”

They said: “All funding generated by WC1 is legally required to address only school construction and repairs.” And “…only on construction and repairs and not on administrator salaries…” WCSD has not offset, augmented, or supplanted unrelated salaries. This has been thoroughly answered above. mynews4.com/news/local/school-funding-washoe-county-question-1 School funding: Washoe County Question 1. ... WC-1 will raise about $780 million over the next nine years... no salaries, operating costs or ... Check the link: this again is copy written by the news station, and WCSD cannot control whether they add the “school administrator” before salaries. “By state law, the district’s capital funds can only be used to build, repair and renovate schools.” Pete Etchart, WCSD. This statement is true. Planning, design, and construction administration is an integral part of the construction process. FROM WCSD Powerpoint: General Fund: (Operating) • Used for the general operating expenses such as salaries and benefits, utilities, classroom supplies, simple maintenance and equipment. True. Capital Funding: • Used for the major construction of new schools and repairs of existing schools and buildings. Per NRS 387.328, these funds cannot be used for operating expenses. True. *So they said operating expenses (salaries) cannot be used for Capital Funding but it is and the cars to take them there! It is well-established in state law and in WCSD communications that staff whose job is to plan and oversee capital projects are paid for through capital funds. These are not operating expenses for schools, period. http://thisisreno.com/2016/10/critical-mass-why-a-stadium-could-never-build-aschool/ WC1 will establish a law creating a permanent and legal funding source for ONLY Washoe to build and repair schools. Other laws govern other funds like those used to pay teacher and administrator salaries. Indeed. http://mynews4.com/news/local/school-funding-washoe-county-question-1 "People are worried about accountability. What is the school board going to do with the money? We specifically set up a citizen’s oversight committee to ensure that every penny in this tax increase will go to maintenance, repair and building of new schools," said Kazmierski. The sales tax will not be applied to groceries or medicine, and legally can only be used for capital needs of the district, no salaries, operating costs or programs.”

“By law, the additional sales tax dollars generated by WC-1 can only be used for school district capital projects. They can’t be used to fund teacher salaries or other general fund expenses.” OUR PREDICTION: “That’s not quite true. Salaries to plan, design, and build [unneeded] schools can all be funded as part of school capital projects. If the Superintendent allocates 20% of her job to capital projects, then 20% of her salary comes out of capital projects. There is ample precedent for government programs that “borrow” from other supposedly protected programs, like Social Security... Does anyone still believe this?” There is absolutely no precedent at WCSD of this occurring. Again, it is wellestablished in state law and in WCSD communications to the public that staff whose job is to plan and oversee capital projects can be paid for through capital funds, and no one else. Guinn Report #5): If the measure passes, what can these revenues be used for? If a majority of voters approve Washoe County Question 1, Washoe County School District can raise capital funds which, by law, can be used only for construction, repair, and revitalization of schools and support facilities in Washoe County School District." True From the WCSD taxpayer paid for brochure “Community Building Plan’ 5-18-16 “All current and future capital funding by law can only be used to build or repair schools.” And “The money cannot be used for … school administrators…” Are not project managers school employees and administrators? No, “school administrators” are principals, area superintendents, curriculum and instruction staff, etc. An engineer designing a new school or a construction inspector overseeing a private contractor does not fall into this category. "The language of the ballot measure is clear, it can only go to the construction and repair of Washoe County schools," Bybee said, meaning it cannot go toward salaries or other administrative costs. It must be noted that Mr. Bybee was and is not school district staff. However, the context of all salary discussions was that capital funds legally cannot be used for Administrative and non-capital related salaries such as superintendents, principals, teachers, bus drivers, etc. WCSD has historically always used capital funds to pay for capital related salaries associated with the repair and construction of schools as per NRS 387. KOLO COMMENT PAGE: “What you will notice though is that the schools will not improve any at all. But I bet the WCSD execs get a nice pay raise...” This is an online comment and baseless conspiracy theorizing by an unnamed, individual citizen. Editorial in the Sierra Sun Mr. Jim Clark’s recent opinion articles do not provide factual information on this issue. …By State law, the District’s capital funds can only be used to build schools and to repair and renovate existing schools. WCSD has no ability to supplant funds and divert current or future capital funding to non-capital needs. Since no general

fund revenues are used in the capital funding program, supplantation is not possible.” Pete Etchart is Chief Operating Officer for the Washoe County School District. Email him at [email protected]. This statement is indeed factual. All school repair and construction projects have been funded by capital funds and not with general funds. *Complied by Jeff Church, [email protected]