On March 29, two weeks before the Palo Alto school district and Stanford University would announce they had agreed on a "conditional" funding deal for new district students as part of the university's expansion plan, Superintendent Don Austin emailed the Board of Education to tell members that a two-day negotiating session with Stanford had been "very productive" and "put us back on track as partners."
Those included that the district and Stanford were not allowed, under rules to which Santa Clara County and Stanford had agreed, to reach such an agreement until April 15, a date set in January on the assumption that the county and Stanford would have completed negotiations on a development agreement that would regulate Stanford for the next 25 years. (Those negotiations hadn't even started due to other delays and have now been indefinitely suspended by the county due to Stanford's and the school district's actions.)
The same ground rules caused Austin to advise the board members not to discuss the agreement with anyone, including public officials.
"We DO NOT have any agreements at this point. They aren't even allowed," Austin wrote to the board in March.
Austin's and others' emails, plus interviews with elected officials and the school district's attorney, show that Stanford and the school district worked together to circumvent county ground rules in crafting a mitigation agreement. In addition, the events leading up to the April 15 announcement of the deal raise questions about the two institutions' discussions and the transparency of meetings held to hammer out the agreement's details.
Austin ended the March 29 email with a suggestion: that they "advertis(e)" the April 16 special meeting "widely, but not posting until close to the 24-hour notice for reasons I will explain later."
(The board is required to post public agendas for special meetings at least 24 hours in advance.)
In an interview, Austin said he suggested delaying public noticing of the meeting because the district was "still working through issues with Stanford."
"There was still a chance that meeting wasn't going to occur," he said. "I thought we were making good progress, but it was not to a place where we had total confidence at that point."
Board President Jennifer DiBrienza told the Weekly that Austin wanted to publicize the meeting "widely because he wanted the community to be part of the conversation, to know where we were, to celebrate the progress that we'd made."
She said that Austin suggested delaying posting of the meeting because there could be no finalized agreement until April 15 and because the district's negotiating team — made up of Austin, Deputy Superintendent Karen Hendricks, Chief Business Official Jim Novak and an attorney — "was informed that Stanford had a set of ground rules and we were trying to be respectful of that."
In his March 29 email, Austin also referenced the district's and Stanford's attorneys conversation about an upcoming April 10 closed-session school board meeting. This meeting, along with five prior closed-session discussions held since January, was billed as "anticipated litigation regarding Stanford University General Use Permit Environmental Impact Report," even though some related to the district's negotiations with Stanford, according to the Weekly's sources. There was never any anticipated litigation against Stanford, nor any grounds for suing Stanford -- the potential legal action would have been against the county for its environmental impact report. Trustees have said Stanford was considered a "party of interest" to that potential litigation.
Austin, however, told the board that the district's attorney, John Dietrich of Atkinson, Andelson, Loya, Ruud and Romo, and Stanford's lawyer were "in complete agreement about the posting language" for an April 10 closed-session meeting, suggesting that Stanford's legal counsel had been consulted on how to provide notice to the public of the meeting.
Austin this week declined to state whether Stanford's lawyer rendered advice on how the April 10 closed-session meeting should be noticed. Jean McCown, Stanford's associate vice president for government and community relations, told the Weekly that the university's attorney denied providing any legal advice to Dietrich regarding agenda posting.
Dietrich said he "would not characterize my interaction with Stanford's counsel as seeking advise or consultation. I informed Stanford's counsel how we intended to agendize the meeting and there was no disagreement expressed."
In Austin's email, he told the board members that he would call them soon, suggesting that he'd talk with them individually to discuss the status of negotiations with Stanford.
Vice President Todd Collins and Trustee Ken Dauber, whose spouses both work at Stanford, had not recused themselves from prior discussions on the general use permit, despite concerns voiced by Stanford staff and at least one of their colleagues, Melissa Baten Caswell. (Baten Caswell voted against appointing Dauber last August to an ad hoc committee to advise the superintendent on issues related to Stanford's proposed expansion, citing "the appearance" of a conflict of interest.)
Dauber initially recused himself from previous GUP discussions until last summer, when Collins sought advice from the California Fair Political Practices Commission (FPPC), which said it was appropriate for them to participate.
Both said that they recused themselves more recently because discussions shifted into direct negotiations with Stanford rather than the county over its environmental impact report on the general use permit.
Dauber said Thursday that he did not attend the closed session meeting on April 10 nor the special meeting on April 16. Collins said he attended the April 10 closed session and then recused himself from the April 16 meeting for the same reasons.
An announcement, and backlash
On April 15, the district and Stanford announced the conditional agreement after months of increasingly strong public and private lobbying by school officials, board trustees, parents and community members calling on the university to "do its fair share" in mitigating the impact of new district students its expansion would generate. Stanford proposes 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.
The proposed agreement, on which the board has not yet taken any formal action, is conditioned on the eventual approval of a development agreement between Stanford and the county, a requirement that Santa Clara County Supervisor Joe Simitian says violates the rules to which Stanford agreed.
Under the agreement, the university 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 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, down to a minimum of $5,800.
While the tentative agreement does not require Stanford to construct a new school, which the school board initially asked for, 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.
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 along school-commute routes.
Leaders from both the district and university praised the agreement, with Austin calling it a "model of what is possible" and Stanford President Marc Tessier-Lavigne saying it makes Stanford's engagement in the Palo Alto school system "more systematic and organized."
But the announcement triggered a fallout: The next day, the county abruptly suspended its development agreement negotiations with Stanford. Supervisor Joe Simitian called the district and university's deal "regrettable," not only because it depends on the county's approval of the development agreement but also because it violates the ground rules that the county and Stanford had established for their development agreement negotiations. The rules specify that negotiations pertaining to the development agreement would only take place between the county's negotiating committee (which includes Simitian and Supervisor Cindy Chavez) and negotiating team and Stanford's negotiating committee and negotiating team.
By Stanford and the district inking a deal that would be required to be included in the development agreement, the county negotiators were excluded from a process that according to the ground rules was to involve them.
The future of the tentative agreement between the school district and Stanford remains unclear. With only three eligible voting board members, all three must vote to approve it or it will not pass. One option, suggested by trustee Shounak Dharap, was to take no action on the agreement and just wait until the county's process proceeds.
Late Friday afternoon, the district released as part of the board's Tuesday regular meeting agenda a May 10 letter from Stanford Vice President Bob Reidy asking the district to pause discussions on the proposed agreement "to be consistent," he wrote, with a request the university made Thursday that the county planning commission delay upcoming hearings on the general use permit. Staff are recommending the board approve Stanford's request.
Editor's note: This story has been edited to clarify that some, but not all, of the referenced closed session meetings were on the subject of the Stanford negotiations, not on anticipated litigation against the county as noticed on the agenda.