News

School board, Stanford close in on deal for university's expansion

Board of Education will consider funding agreement at meeting this Tuesday

After months of contentious negotiations, Stanford University and the Palo Alto Unified School District are on the verge of approving an agreement that requires the university to contribute more than $120 million in funding for new district students as part of its ambitious expansion plan.

The agreement, which the school district announced on Monday and which the Board of Education is scheduled to discuss at a special meeting on Tuesday night and approve on April 23, represents a significant concession from Stanford to the school district, which has been lobbying for months for the university to contribute funding and potentially a school site as part of its plan to add 2.275 million square feet of academic space, 3,150 housing units, 40,000 square feet of child care facilities and other support space by 2035. It also effectively removes what has been one of the biggest barriers to the Stanford application.

Under the agreement, Stanford would pay the school district $5,800 for each new student enrolled in the district who lives in tax-exempt housing on the Stanford campus or elsewhere if the housing satisfies the conditions of the general use permit. The number of students will be counted based on the baseline of students who are enrolled in district schools and who live in tax-exempt housing on the Stanford campus as of the 2019-2020 school year, according to a report from district Superintendent Don Austin.

The 40-year funding agreement also includes a 2% annual increase in the per-pupil rate to account for inflation during the first 20 years, followed by a 2% decline from years 21 to 40, up to a minimum of $5,800.

Austin estimated that the agreement will provide $121.9 million in operational support for the district over the length of the agreement, which assumes a growth of 275 students in the fourth year and a total of 500 after 10 years and beyond, according to Austin's report. He noted that the exact number of students is impossible to determine because Santa Clara County staff is still considering the appropriate number of housing units that should be included in the general use permit.

According to the university, the payment will satisfy the county requirement that Stanford pay school-impact fees as part of its expansion application.

While the tentative agreement does not require Stanford to construct a new school, as the school board has initially requested, it does call for the university to provide $15 million for construction of an "innovative space" that will be shared by the university and the district. The new building will be on a school district site, according to Stanford, and will be used "for a variety of purposes designed to add value for PAUSD students."

Stanford also agreed to contribute $500,000 to the city's Safe Routes to School Program, which focuses on transportation improvements such as bike lanes and pedestrian paths at school-commute routes.

If approved, the agreement marks a dramatic turnaround in a process that has long been mired by disagreements over Stanford's obligations to the school district. Members of the school board and parent volunteers have consistently called for the university to "fully mitigate" the impacts of its expansion – requests that dominated recent public hearings on the university's expansion.

The negotiations gained some momentum last month, with both sides recommitting to an amicable agreement. At a March 15 rally in front of City Hall, Austin called the university "a partner to the school district" and a "valued resource." He expressed optimism about the school district's renewed negotiations with Stanford and noted that he wants to serve as many of Stanford's families as it can.

"We just want to make sure that when there's an impact, that they do their part to mitigate it. That's all we're asking for," Austin said.

According to Stanford, the new agreement was reached over a two-day period of "positive and collaborative discussion." A facilitator helped both parties "identify their priorities and focus on the many shared interests of the school district and university," Stanford stated in a news release.

In a Monday statement announcing the agreement, Austin thanked Stanford University President Marc Tessier-Lavigne and the university's team for "their desire to preserve our excellent public-school system in Palo Alto."

"The conditional agreement should serve as a model of what is possible when groups take the time to understand each other and commit to finding mutually-agreeable resolutions," Austin said in the statement. "Beyond the finances of the proposed agreement, PAUSD is excited about the possibility of partnering with Stanford in ways that will benefit all students."

The tentative agreement stops short of what the board sought in its November 2018 resolution, which in addition to annual per-pupil payments and construction contributions, called for Stanford to set aside a parcel of 4 acres or greater on its own property near Sand Hill and Quarry roads. The parcel would be used to build a neighborhood elementary school primarily to serve the families of Stanford affiliates who live in university housing.

Tessier-Levigne thanked Austin and board staff for their role in the negotiations and cited Stanford and the school district's "deep history of partnership in pursuit of providing an excellent education for our students."

"Many of our prior interactions have occurred in an organic fashion," Tessier-Levigne said in the statement. "This agreement makes our engagement more systematic and organized, helping increase its impact for the benefit of students."

Under the agreement, the school district will not oppose Stanford's expansion plan and will not pursue any lawsuits related to the GUP application and associated county approvals, which could include a first-of-its-kind development agreement between the county and Stanford. The university and the county are now negotiating the development agreement, with Supervisors Joe Simitian and Cindy Chavez leading the talks from the county side.

School mitigations were expected to be a major component of the development agreement. The deal between Stanford and the district effectively takes the issue off the table.

According to a school district report, the district must also under the deal "make every effort to accommodate students living in housing generated by the GUP at Nixon and Escondido Elementary School." Stanford will contribute up to $1 million toward facility expansion or materials expenses generated by this accommodation.

Stanford and the school district will also hold discussions three years before the GUP expires to explore the possibility of a new school along Sand Hill Road. These discussions, according to the school district, may involve an exchange of land, location, timing and other factors. Representatives from the two sides will also meet annually to discuss the agreement's implementation and other collaboration opportunities.

The Palo Alto school board will hold a special meeting on the tentative agreement on Tuesday from 6-8 p.m. at the district office, 25 Churchill Ave. View the full agenda here.

Related content:

County abruptly halts development-agreement talks for Stanford's expansion

Over Simitian objections, school board voices support for Stanford agreement

---

Follow the Palo Alto Weekly/Palo Alto Online on Twitter @PaloAltoWeekly and Facebook for breaking news, local events, photos, videos and more.

What is democracy worth to you?
Support local journalism.

Comments

16 people like this
Posted by Crescent Park Res
a resident of Crescent Park
on Apr 15, 2019 at 10:22 pm

Crescent Park Res is a registered user.

This is really very good news. I hope that this deal is approved unanimously tomorrow.


16 people like this
Posted by Wow
a resident of Fairmeadow
on Apr 16, 2019 at 8:49 am

Wow, this is kind of a surprise - it really good for the schools. Kudos to the PTA and community people who turned Stanford around. This is kind of an IQ test for the school board people - how could they possibly not take this?


13 people like this
Posted by Jim H
a resident of Duveneck/St. Francis
on Apr 16, 2019 at 9:51 am

Jim H is a registered user.

I'm surprised this is being hailed as a victory for PAUSD. Looking at the latest budget, PAUSD spends approximately $12,000/year to educate one student. Stanford is giving $5,800, or slightly less than half.

The other items mentioned are vague. A $15M "innovative space"? If anyone can spend $15M on space, it's PAUSD. $500K for Safe Routes to School?

In addition, it's a 40-year commitment but the students will be attending PAUSD schools long after those 40 years are up.


11 people like this
Posted by Jim H
a resident of Duveneck/St. Francis
on Apr 16, 2019 at 10:17 am

Jim H is a registered user.

My mistake. PAUSD spends approximately $20K/student for its 12K students. Mixed up the numbers.

The incremental costs are less, definitely.

So, for full transparency and honesty, maybe PAUSD and PIE can give accurate numbers when they claim their per student spending figures.


12 people like this
Posted by Barron Park dad
a resident of Barron Park
on Apr 16, 2019 at 10:37 am

Hey everyone, why is $5800 per Stanford student considered to be good if we spend far more than that for the other Palo Alto students?


5 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 16, 2019 at 10:41 am

I'm even more confused now. If the average cost per pupil is in the $10K-$20K/year/pupil range depending on how you calculate it, how is $5800/year a good deal? There really is no explanation for the difference given in the article. And yes, I understand the difference between marginal cost and average cost. But, how could the marginal cost be $5800? Someone who understands the budget and the proposal please explain.


22 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 16, 2019 at 11:03 am

Mary O is a registered user.

Todd Collins made up the flyer that came up with the $19,200 number. To do that, he took the total budget and divided it by the number of students. This methodology ignores fixed costs, marginal costs, etc. Even if PAUSD had zero students attending, they would still have a relatively high budget because of their fixed costs and other financial obligations. This is why annual fluctuations in student enrollment (+ or - 200-300 children) don't really impact the budget. This is probbaby why the County commissioned EIR said the new students would have NOT have an impact on the schools.

Another way to examine this number is to consider how this number compares to the average annual single family household contribution to PAUSD. Steve Levy, an economist, wrote a good blog piece that looked at that. You can ffind it here. Web Link

But the average single family home contribution to PAUSD is around $4-$4,500K. That's PER HOME, not per child and for apartments, it's even less. So, $5,800 per student is considerably more that what the average student's home's property taxes contribute to PAUSD.

The model PAUSD used was, in my mind, grossly incorrect. We do not charge "per student" for public education. We all contribute as a community. Stanford homes pay into PAUSD same as here in Palo Alto - regardless if you have children or not. I pay into PAUSD and I do not have children. I own a home and live in Palo Alto and therefore pay taxes to support PAUSD.

Would the School District like for each child to come with a guaranty of a certain amount of money? If so, then I want my taxes dollars to PAUSD to go to one of the children who reside in one the affordable housing units - which pay no taxes into PAUSD.

I think it's a generous offer.

Regarding accurate information from PAUSD. Good luck.



8 people like this
Posted by Jim H
a resident of Duveneck/St. Francis
on Apr 16, 2019 at 11:24 am

Jim H is a registered user.

I wonder if Todd Collins will now go after the approximately 560 VTP students who, I believe, also do not pay property taxes to PAUSD to mitigate their impact on PAUSD.

Or does PAUSD only go after the deep pockets because it's easy and also socially acceptable?


6 people like this
Posted by Paly Grad
a resident of Leland Manor/Garland Drive
on Apr 16, 2019 at 11:26 am

This part of the agreement needs more explanation:

"The 40-year funding agreement also includes a 2% annual increase in the per-pupil rate to account for inflation during the first 20 years, followed by a 2% decline from years 21 to 40, up to a minimum of $5,800."


18 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 16, 2019 at 11:38 am

Mary O is a registered user.

@ Jim H. I believe there's some financial arrangement re: VTP students. They do come with funding. But, as someone else pointed out, the 200+ students that are children of teachers who attend PAUSD do not come with funding. Of course, BOTH programs are excellent and greatly enrich PAUSD's environment. But, how incredibly awful is that we are talking about individual student contributions to attend PUBLIC school? PAUSD is not a PRIVATE school. Yuck. See what happens when you start with a poor analysis? You spread fear and create divides in our community. I went to a public meeting where a mother indicated that she didn't want her child to play with students who weren't paying taxes. What happened to our community values?

If you want to know who much you contribute to PAUSD, look at how much you pay annually in property taxes and then multiply that number by .45. That's your household's approximate contribution to PAUSD.

To get to a contribution of $19,200, you'd have to pay almost $45,000/year in property taxes.


12 people like this
Posted by stephen levy
a resident of University South
on Apr 16, 2019 at 12:10 pm

stephen levy is a registered user.

It looks to me like Stanford calculated what the housing properties would pay if they were taxed and then added a bit.

Residents and businesses pay to the schools based on 45% of their property tax bill.

So Stanford is treating itself as if it were just like other Palo Alto property owners and adding a bit more.

This seems like a good deal to me.

As Mary said none of us pay the full cost of students in our home. On average residents pay less than the $5,800 Stanford is offering. And most of the Stanford housing is rental units not single family homes.


7 people like this
Posted by Major Clarification
a resident of Palo Alto High School
on Apr 16, 2019 at 12:26 pm

I think many commenters are obfuscating who is being charged the $5,800. Stanford is offering to pay that amount per enrolled student, not per housing unit. That is a huge difference that I think writers need to make sure they don't mix up.


3 people like this
Posted by Wayne Martin
a resident of Professorville
on Apr 16, 2019 at 12:42 pm

> Todd Collins made up the flyer that came up with the $19,200 number.

This approach of only reporting costs-per-student based on operation budgets is, unfortunately, too often the practice of schools (and other government agencies). Also needed in such calculations are all of the capital costs associated with new building construction and maintenance. The PAUSD has decided to use bond money for maintenance—so that cost of this maintenance is roughly twice what the sticker price shows, as is the case for the capital construction.

I did some calculations several years ago, and came up with an additional $3-$4K/student. Other spending, such as PIE generally doesn’t amount to much given the budget is now over $200M. It should be added in, however. Then there are gifts, such as the Olympic-size pool at Paly. It’s not exactly clear to me what the 2020 less-than-transparent costs are, but I believe they are in the $5K/student range.

What’s missing from Mr. Collins approach is that the per-student costs have been growing at what seems like an accelerating rate. Almost everyone (in government) uses a 3% geometric multiplier for computing future revenues and costs. The PAUSD’s budget has been growing at something closer to 7% annually, over time. So, it’s spending will most likely exceed any growth in the CPI.

So, just using a 3% multiplier, the cost-per-student will grow from $20,000 today to about $30,000 in 14 years and then up to about $56,000 in thirty years.

So—even though getting Stanford to put some money on the table is a good thing—this is really not a “good deal” in any sense of the word.


1 person likes this
Posted by Wayne Martn
a resident of Professorville
on Apr 16, 2019 at 12:49 pm

> schools receive .45% of property tax collections

This is not strictly true. In addition, there are at least two parcel tax addons, and (if memory serves) two addons for the Bonds issued to pay for the massive construction projects underway.

It couldn't hurt for taxpayers to look closely at their tax bills and figure out exactly how much you are transferring to the PAUSD on a yearly basis. As the median prices of homes moves about $3M, this amount will become sizable--particularly if you end up living in PA for decades.


11 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 16, 2019 at 1:01 pm

Mary O is a registered user.

@ Major Clarification. Yes, an excellent point that I hope I did highlight. It's $5800 PER STUDENT, not per household which is the number that one can ascertain from looking at property taxes. But, that is how we contribute to schools - through our property taxes so that is the number I thought was relevant.

@ Wayne Martin. I noted that multiplying by .45 would give one an "approximate" amount of one's contribution to PAUSD. And, it's close enough for the type of analysis we're doing here.

@ Wayne Martin. Having an entity pay more than what everyone else is paying for the schools is a very good deal I think. If PAUSD's costs are skyrocking, why in the world would it fall to Stanford to bail them out? Seriously. If PAUSD wants to go after $19,200/per student, then if I worked at Stanford (clearly, I don't) and had children (I don't), I'd prefer that they gave me that money and let me put towards a school of my choice.


3 people like this
Posted by Wayne Martn
a resident of Professorville
on Apr 16, 2019 at 1:06 pm

I just did a little calculation, based on the current median price of PA homes, and the aforementioned .46 multiplier for the PAUSD.

Assuming a sale price of $3M, and home occupancy of 40 years--the base transfer of funds to the PAUSD is about $745672. This is before the addon parcel taxes and bond retirement addons. It's hard not to believe that the addons won't come to somewhere in the $200-$250K .. making the cost of the PAUSD to such a home owner to be around $1M over 40 years.

Keep in mind that if the price of housing continues to increase in our town, then the median housing price will increase, and the cost of the PAUSD will similarly increase--so that future homeowners and businesses will see even larger costs of education.


6 people like this
Posted by Wayne Martn
a resident of Professorville
on Apr 16, 2019 at 1:31 pm

> If PAUSD's costs are skyrocking, why in the world would it
> fall to Stanford to bail them out? Seriously.

Don't think anyone is suggesting that Stanford "bail out" the PAUSD. What has been rationally argued here is that Stanford is creating real costs for the PAUSD and that since it is tax exempt, it contribute its "fair share" to pay for the education of the students who originate in tax exempt housing.

Since it should not be a religious argument about how to come up with a reasonable cost/student number--then why would anyone promote the idea that Stanford should be able to introduce as many students as it wants and those costs fall on the PAUSD taxpayers and businesses?

All we are sayng here is: "Stanford--pay your fair share!"


8 people like this
Posted by stephen levy
a resident of University South
on Apr 16, 2019 at 2:22 pm

stephen levy is a registered user.

Stanford is paying its fair share as if it was not tax exempt.

And these are mostly rental units for staff, not $3 million homes.

And now Stanford is being asked to contribute for BMR units, which it is willing to do but these homes will be tax exempt as are, for example, the Buena Vista homes now that it is owned by the County Housing Authority.

In both cases it is equal treatment for equal situations and that is the definition of fair.


6 people like this
Posted by Anon
a resident of Another Palo Alto neighborhood
on Apr 16, 2019 at 2:25 pm

Posted by stephen levy, a resident of University South

>> So Stanford is treating itself as if it were just like other Palo Alto property owners and adding a bit more.

>> This seems like a good deal to me.

>> As Mary said none of us pay the full cost of students in our home. On average residents pay less than the $5,800 Stanford is offering. And most of the Stanford housing is rental units not single family homes.

I'm sorry-- I still don't understand the argument. Sure, only a few recent wealthy homebuyers are paying, per year, the full cost of their student-children. But, how much has the average homeowner contributed over the period of their homeownership? Very complicated to figure, what with Prop 13 on the one hand, and, the present value of their long history of taxes on the other hand. What fraction of the school budget is PAUSD residential property taxes?

Regardless, Stanford is offering to pay a certain amount, approx. $5800, per year/per student. Seems to me that number -should- equal the marginal cost per student per year. I don't understand the arguments against that. It isn't like PAUSD is allowed to collect taxes on Stanford's academic and research buildings and real estate, as it does against downtown real estate. If the true cost to PAUSD of adding a student is, say, $12,000 (perhaps the rest of the PAUSD income comes from the federal gov, state, or donations, or, whatever), then, I see no argument for why Stanford shouldn't pay the $12,000 marginal cost to the district. That is money out of the district's pocketbook that pays teacher salaries, health benefits, and pensions.


Like this comment
Posted by PAUSDwatcher
a resident of Adobe-Meadow
on Apr 17, 2019 at 10:32 pm

Web Link

11. Negotiation of the Development Agreement will take place only between the County Negotiating Committee and Negotiating Team and Stanford Negotiating Committee and Negotiating Team as identified by these Ground Rules. During the Negotiation Period, no official, employee, representative, or agent of Stanford will contact any County elected or appointed official, employee, representative, or agent who is not a member of the County Negotiating Committee or Negotiating Team for the purpose of negotiating the Development Agreement, unless agreed to by the County Point-of-Contact. Similarly, during the Negotiation Period, no elected or appointed official, employee, representative, or agent of the County will contact any Stanford official, employee, student, representative, or agent who is not a member of the Stanford Negotiating Committee or Negotiating Team for the purpose of negotiating the Development Agreement, unless agreed to by the Stanford Point-of-Contact. Notwithstanding the foregoing, during the Negotiation Period both parties may communicate within their own organization on the negotiations as long as such communications remain within each organization. This provision does not preclude the parties from contacting or being contacted by interested parties, including, but not limited to, public agencies and local governments in Santa Clara and San Mateo counties, non-profit organizations, community members, and Stanford students, employees, and residents, to discuss potential Development Agreement terms, as long as the parties do not disclose to such interested parties the positions taken during the negotiations by the opposite party to the negotiations or engage in discussions resulting in a deal between the party and interested party that would be presented as a proposal during the Negotiations Period.

Reading that last sentence above, it seems like Stanford violated their own ground rules, right?


Like this comment
Posted by member1
a resident of another community
on Apr 18, 2019 at 8:17 am

member1 is a registered user.

Why do Stanford area kids want to go to Palo Alto schools? Why not post a charter school that would let them work at their levels and have special ed programs etc.


2 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 18, 2019 at 10:03 am

Mary O is a registered user.

@member1. Stanford kids don't "want" to go to school at PAUSD; Stanford residences - like Los Altos Hills residences - are assigned to PAUSD. That's why Stanford homes and Los Altos homes property taxes go to PAUSD - same as here in Palo Alto. The first PAUSD school was actually somewhere on campus. Stanford was integral in helping to found and get PAUSD up and running. The university was founded before PAUSD. From PAUSD's website. Web Link

"Two major events have materially formed the city—the founding of Stanford University in 1891 and the founding of Hewlett Packard in 1939. With the first event, the intellectual and cultural seeds of the city were sown; with the latter event came the development of the town as a leader in technology and business. The school District was founded on March 20, 1893"


4 people like this
Posted by The Actual First School
a resident of Mayfield
on Apr 18, 2019 at 2:07 pm

Historical correction: The first school (that we know of) in what is now PAUSD was built in Mayfield (Cal Ave area) in 1855. Known as the "Herring Box School," there's an historic marker to it near Cal Ave (Web Link). This pre-dates the founding of PAUSD by about 50 years - Palo Alto at the time did not even exist. But when you get annexed, as Mayfield did, your history tends to be forgotten.

So while Stanford was the impetus for Palo Alto (Mayfield turning down the University since Mrs. Stanford insisted it would have become dry), our local schools pre-dated Stanford and Palo Alto and existed independently for many years before.


2 people like this
Posted by Mary O
a resident of Crescent Park
on Apr 18, 2019 at 3:46 pm

Mary O is a registered user.

@The Actual First School. My understanding is that since the community of Mayfield did not want to become dry, Leland Stanford and friends created a separate town originally called University Park (or something like that) which grew to be as large as Mayfield and known Palo Alto. Mayfield was not annexed into Palo Alto until the 1920's? 1930's? So two separate towns. At the time that PAUSD was founded, the Mayfield community was not part of Palo Alto. Is that right? Two schools for two different towns? Mayfield's in Mayfield which was annexed into PAUSD in 70? 80? years after the first school in Mayfield and 30 or 40 years after the first school in PAUSD? Or did residents of Mayfield start sending children to PAUSD after it was founded in 1893? It's an interesting historical point. Thanks for posting.


Like this comment
Posted by The Actual First School
a resident of Mayfield
on Apr 18, 2019 at 4:59 pm

According to the story, Palo Alto students originally went to Mayfield schools, until 1893 when the townspeople got permission to create their own school (before the town incorporated in fact). This is from the history of Anna Zschokke, who helped create the first school in Palo Alto proper (as opposed to Mayfield), which you can read here: Web Link. I'm not sure when and how Mayfield's schools combined with Palo Alto's. California school district now of course are unrelated to town boundaries (little Menlo Park has 3 elementary districts plus a high school district!), though I don't know if that was different 100+ years ago.


Like this comment
Posted by Mary O
a resident of Crescent Park
on Apr 18, 2019 at 6:00 pm

Mary O is a registered user.

@Actual First School. that's a great article. thanks for sharing!


Don't miss out on the discussion!
Sign up to be notified of new comments on this topic.

Email:


Post a comment

Posting an item on Town Square is simple and requires no registration. Just complete this form and hit "submit" and your topic will appear online. Please be respectful and truthful in your postings so Town Square will continue to be a thoughtful gathering place for sharing community information and opinion. All postings are subject to our TERMS OF USE, and may be deleted if deemed inappropriate by our staff.

We prefer that you use your real name, but you may use any "member" name you wish.

Name: *

Select your neighborhood or school community: * Not sure?

Comment: *

Verification code: *
Enter the verification code exactly as shown, using capital and lowercase letters, in the multi-colored box.

*Required Fields


Be the first to know

Get the latest headlines sent straight to your inbox every day.

What Would it Take to Get Tech Companies to Move Jobs Out of the Region and Is This a Good Idea?
By Steve Levy | 18 comments | 1,339 views

A Power Play
By Sherry Listgarten | 9 comments | 1,194 views

College Match
By John Raftrey and Lori McCormick | 0 comments | 921 views

Palo Alto's Taverna to expand next door
By Elena Kadvany | 0 comments | 861 views

Piles of artwork
By Cheryl Bac | 0 comments | 469 views

 

Vote now!

It's time once again to cast your vote for the best places to eat, drink, shop and spend time in Palo Alto. Voting is open now through May 27. Watch for the results of our 2019 Best Of contest on Friday, July 19.

Vote