BOND PROPOSAL Thank you for your support of our resolution to initiate a bond proposalelection in May, 2004. Much work must be done prior to this time. Theapproval of the resolution. The next step is the appointment of a commimake a recommendation to the board. For those of you who were unablthis week, board members informally decided to submit the names of thOctober 24, 2003. Your nominees can be submitted by phone or by e-msubmit the same name or names of nominees and since some nominees mon the committee, it will be necessary for us to meet in a workshop settithe committee and to determine the best way to include representation frand other key players. Cheryl and I have a meeting scheduled with our week in order to discuss financing and the implications on our tax rate. workshops and/or seminars related specifically to bond elections. I wanabout this topic as we move forward with our proposal. REMINDER:PHONE OR E-MAIL THE NAMES OF THREE INDIVIDUALS WTO SEE INCLUDED ON A BOND EXPLORATION COMMITTEOCTOBER 24, 2003!

CALLED BOARD MEETING A special called board meeting has been set for 12:00 p.m. on Monday, office. The purpose of the meeting is to approve the amendment to the Hcan collect our money from Sabina Petrochemical. We will provide lun(ATTACHED: Copy of agenda and amended contract)

PATRON PRESENTATIONS As you will recall, there were two patron presentations at the board meeattached copies of a follow-up letter that I sent to each presenter. A copJehlen is attached as well as a copy of a letter to Mr. John Wilson. A coforwarded to Coach Jay Stone, Athletic Coordinator Matt Burnett and AMartin. A copy of the letter addressed to Mr. Wilson was forwarded to Burnett and Barbara Comeaux, Coach Pachuca, Roy Esquivel, and Fran

October 17, 2003

I don't know what your destin will be, but one thing I dones among you who will be really happy are those whofound how to serve. ~ Albert Schweitzer

y o know: the only have sought and

~

with a target date for the bond first step was taken with your ttee to study our needs and to e to attend the board meeting ree nominees to my office by ail. Since some of you may ay choose not to participate

ng to finalize membership on om our employees, parents, bond investment banker next Also, I am searching for t to learn as much as I can PLEASE SUBMIT VIA HOM YOU WOULD LIKE

E NO LATER THAN

October 20, 2003, in my B 1200 agreement so that we

ch for all participants.

ting this week. Please find y of a letter to Mr. Charles py of Mr. Jehlen’s letter was ssistant Superintendent Jay Athletic Coordinators Matt k Wilson. It is interesting to

note that the coaches have never requested improvements such as those requested by Mr. Wilson and he, apparently, has not discussed this issue with the coaches. One would hope that a parent who wishes to see improvements made to a specific facility would at least speak with the individuals who use that facility on a daily basis before taking up the effort to make significant changes in the facility. If the facility needs an upgrade, this is another possible consideration for the bond committee. I have also attached for your review a copy of a memo that I used to cover the copy of the follow-up letter that was copied to Matt Burnett, Barbara Comeaux, and George Pachuca. (ATTACHED: Copy of follow-up letters to John Wilson and Charles Jehlen and copy of cover memo sent to coaches and copy of agreement that has been drafted for PONY League use of high school baseball field.)

DESIGNATED FUND BALANCE—HEALTH INSURANCE Your decision two years ago to place unused employee health insurance premiums in a designated fund balance continues to pay dividends—in more ways than one. Our auditors have identified $866,490.27 in this account as of August 31, 2003. Certainly, we expect to owe SETGEP a settlement to cover our cost overruns on the county health insurance plan. However, the fact that we have this money in a designated account will make it possible to pay off the county and still have some money in the account to help buy down future increases in health insurance premiums. I commend this board for making this prudent investment decision on behalf of our employees. I have enclosed for your review a copy of the auditor statement regarding this account. Please feel free to contact Cheryl Hernandez if you have any questions about the account or the balances shown. (ATTACHED: Copy of Auditor Report on Designated Fund Balance)

COASTAL FLOOR SETTLEMENT Please find attached a copy of the documents relating to the Coastal Floor Settlement and a copy of the $47,859.76 check that we received from Roger McCabe this week. This concludes all settlements in the case and leaves pending only the lawsuit filed by Pyramid against us. That lawsuit is scheduled for trial on January 5, 2004. (ATTACHED: Copy of check and supporting documents related to Coastal Floor Settlement)

PARENT COMPLAINT REGARDING SCOLIOSIS SCREENING Since we have just a few parents who may be inclined to call a board member without ever talking to a principal or to a school administrator about their concerns, I want to make you aware of a parent that has complained about the fact that her daughter has been diagnosed with scoliosis and that the school district did not screen for this disease appropriately. Our investigation revealed that our nurses have followed state guidelines in screening for scoliosis and that the student has suffered previous orthopedic problems that should have triggered a full evaluation by medical personnel. In case you get to be the lucky board member that is contacted by this parent, please be aware of the information included on the attached memo and information packet. (ATTACHED: Copy of memo from Jay Martin and copy of documents related to scoliosis screening)

PNG HIGH SCHOOL ACADEMIC CHALLENGE CHAMPION Another accomplishment for PNG High School students! The PNG High School Academic Challenge team defeated Orangefield 235-265 and Hardin Jefferson 220-135 to become the Channel 6 Challenge Champions! Broadcasts of these matches will occur on the following dates and times: Quarterfinals against Bridge City—November 15 at 11:30 a.m., Semi-finals against Orangefield on December 6 at 11:30 a.m., and Finals against Hardin Jefferson on December 13 at 11:30 a.m. I sent notes of congratulations to each team member and to team sponsor Ron Hanks. Team members are Allison Baskin, Chris Myers, Jordan Wappler, and Blake Windhorst.

LAMAR EDUCATORS HALL OF FAME Two of our outstanding teachers have been honored by selection to the Lamar University Educators Hall of Fame. Congratulations to Mrs. Sharon LaRue at Ridgewood Elementary and Mrs. Lea Ann Parks at Port Neches Middle School. An informal recognition ceremony was conducted in each teacher’s class Friday morning. I personally spoke with both teachers later in the day on Friday and expressed our congratulations on this outstanding achievement.

HAPPY BOSSES DAY! Thank you for being great bosses! I appreciate your support for this school district and this superintendent! As I mentioned last week, I have purchased a casserole for each of you. I purchased the casserole to show my appreciation to you as my boss, but also to give you an opportunity to sample the outstanding casseroles provided by our food service department and made available to our employees. The casseroles are stored in the freezer in the administration break room. If you get a chance to come by the administration building, Bonnie will get your casserole for you. I hope you and your family enjoy this meal.

NUCLEAR STRESS TEST I am scheduled to undergo a nuclear stress test on Friday…if I don’t chicken out by then. Anyway, I am hopeful that everything will go well and I will be back in town in time to attend the ball game Friday night.

BREAKFAST OF THE STARS—6:30 A.M. ON FRIDAY, OCTOBER 17, 2003 HAVE A GREAT WEEKEND!

Port Neches-Groves Independent School District Called Meeting of Board of Trustees October 20, 2003 12:00 p.m. Administration Building

1. Call to Order and Establishment of Quorum

2. Consider Approval of Amendment to the Agreement for Limitation of Appraised Value with Sabina Petrochemicals

3. Adjournment If, during the course of the meeting, discussion of any item on the agenda should be held in closed meeting, the Board will conduct a closed meeting in accordance with the Texas Open Meetings Act, Texas Government Code, Chapter 551. Before any closed meeting is convened, the presiding officer will publicly identify the section or sections of the Act authorizing the closed meeting. All final votes, actions, or decisions will be taken in open meeting.

FIRST AMENDMENT

to

TEXAS ECONOMIC DEVELOPMENT ACT PARTICIPATION AGREEMENT

________________________________________________

By and Among

PORT NECHES-GROVES INDEPENDENT SCHOOL DISTRICT,

and

Sabina Petrochemicals LLC,

ATOFINA Petrochemicals, Inc., and

BASF Corporation

____________________________________________

Dated as of

October ___, 2003

FIRST AMENDMENT

TO AGREEMENT FOR LIMITATION ON APPRAISED VALUE OF PROPERTY FOR

SCHOOL DISTRICT MAINTENANCE AND OPERATIONS TAXES

STATE OF TEXAS § COUNTY OF JEFFERSON §

THIS FIRST AMENDMENT TO AGREEMENT FOR LIMITATION ON APPRAISED VALUE OF PROPERTY FOR SCHOOL DISTRICT MAINTENANCE AND OPERATIONS TAXES (hereinafter referred to as this "First Amendment") is executed and delivered by and among Port Neches-Groves Independent School District, a lawfully created independent school district of the State of Texas operating under and subject to the Texas Education Code, Sabina Petrochemicals LLC, a Delaware limited liability company, ATOFINA Petrochemicals, Inc., a Delaware corporation, and BASF Corporation, a Delaware corporation. Capitalized terms used in this First Amendment and not otherwise defined in this First Amendment shall have the meanings ascribed to them in the Original Agreement (as hereinafter defined).

RECITALS

WHEREAS, on or before September 3, 2002, the Superintendent of Schools of the Port

Neches-Groves Independent School District acting as agent of the Board of Trustees received an application from Sabina Petrochemicals LLC, on its own behalf and as agent for ATOFINA Petrochemicals, Inc., and BASF Corporation for an Appraised Value Limitation on Qualified Property, pursuant to Chapter 313 of the Texas Tax Code; and,

WHEREAS, pursuant to Texas Tax Code § 313.027 and local District policy, the Parties entered into that certain Agreement for Limitation on Appraised Value for School District Maintenance and Operations Taxes dated as of December 10, 2002 (the “Original Agreement”); and,

WHEREAS, under Section 4.4 of the Original Agreement, the Applicants undertook to guarantee a minimum amount of revenues to the District by guaranteeing that the appraised value of Applicants’ Qualified Investment would equal or exceed a specified minimum for each of the first two years of the Original Agreement; and,

WHEREAS, the total taxable value of Applicants’ Qualified Investment for the tax year 2003 is agreed by the Parties to be $118,588,560.00, and the Parties have agreed that the minimum value guarantee provided for in Section 4.4 of the Original Agreement has been triggered; and,

-1-

WHEREAS, for the tax year 2003, the Applicants have agreed to pay to the District, on or before the date specified for such tax year in Section 3.6 of the Original Agreement, the amount of $349,648.82 as a payment in lieu of taxation under Section 4.4 of the Original Agreement; and

WHEREAS, it was the original intent of the Parties that the District’s guaranteed taxable value amount for the tax year 2004 be an incremental amount of taxable value that is $100,000,000.00 above the taxable value of Applicants’ Qualified Investment for the tax year 2003; and

WHEREAS, the occurrence of the taxable value shortfall in the first year of the Original Agreement will have the effect of increasing the potential liability of the Applicants beyond the amount contemplated by the Parties and providing a potential double recovery to the District; and

WHEREAS, the Parties have met on the foregoing matters and have agreed to modify the Original Agreement to reflect the original intent of the Parties in light of the actual taxable value of Applicants’ Qualified Investment for the tax year 2003; and

WHEREAS, on October ____, 2003, the Board of Trustees approved this First Amendment;

NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements herein contained, the Parties agree as follows:

1. Section 4.4 of the Original Agreement is hereby amended to read in its entirety as follows:

“Section 4.4. MATTERS RELATING TO GUARANTEE OF VALUES FOR INITIAL TWO YEARS

(a) With respect to the tax year 2003, on or before the date specified in Section 3.6 for such tax year, the District shall be entitled to receive, and the Applicants shall, jointly and severally, be obligated to pay, as a payment in lieu of taxation, the amount of Three Hundred Forty-Nine Thousand Six Hundred Forty-Eight and 82/100 Dollars ($349,648.82).

(b) According to the information supplied by the Applicants, the taxable value of the Applicants’ Qualified Investment will be at least $218,588,560.00 for the tax year 2004. If for the tax year 2004 the taxable value of the Applicants’ Qualified Investment fails to equal or exceed the taxable value specified for the tax year 2004 in the immediately preceding sentence, then the Applicants will be obligated to pay the District an additional payment in lieu of taxation. In order to compute the amount owed, if any, for the tax year 2004 under this Section 4.4(b), the actual taxable value of the Applicants’ Qualified Investment for the tax year 2004 will be subtracted from the taxable value specified for the tax year 2004 in the first sentence of this Section 4.4(b). The difference will then be multiplied by the District’s total (Maintenance and Operations plus Interest and Sinking Fund) tax rate for the tax year 2004. For the avoidance of any doubt, the Parties expressly acknowledge and agree that in applying the provisions of this Section 4.4(b) and determining the taxable value of Applicants’ Qualified Investment, Applicants’ Qualified Investment shall include all property that is (i) used wholly or partially for the control of pollution, and (ii) included in, or built or installed in connection with the building

-2-

-3-

or installation of, the Qualified Investment and/or the Qualified Property described in Exhibit 2 which is incorporated herein by reference for all purposes, if, and to the extent that, such pollution control property described in clauses (i) and (ii) of this sentence has been determined by the Jefferson County Appraisal District to be taxable property. Notwithstanding the foregoing provisions of this Section 4.4(b), to the extent the failure of the taxable value of the Applicants’ Qualified Investment for the tax year 2004 to equal or exceed $218,588,560.00 is caused by Force Majeure, the Applicants shall not be obligated to make any such payment or portion thereof to the District under this Section 4.4(b) to the extent such payment or portion thereof relates to such failure caused by Force Majeure, provided that the Applicants made commercially reasonable efforts to remedy the cause of such Force Majeure.”

2. All references to “this Agreement” contained in the Original Agreement shall be deemed to be references to the Original Agreement, as amended by this First Amendment.

3. This First Amendment and the transactions contemplated hereby shall be governed by and interpreted in accordance with the laws of the State of Texas without giving effect to principles thereof relating to conflicts of law rules that would direct the application of the laws of another jurisdiction.

4. This First Amendment may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Parties.

IN WITNESS WHEREOF, this First Amendment has been executed by the District and the Applicants in duplicate originals as of October _____, 2003, but shall be effective as of January 1, 2003. Sabina Petrochemicals LLC PORT NECHES-GROVES

INDEPENDENT SCHOOL DISTRICT By: ______________________________ By: ______________________________ Name: ____________________________ President, Board of Trustees Title: _____________________________ ATTEST: ATOFINA Petrochemicals, Inc. By: ______________________________ _________________________________ Name: ____________________________ Secretary, Board of Trustees Title: _____________________________ BASF Corporation By: ______________________________ Name: ____________________________ Title: _____________________________

PORT NECHES-GROVESINDEPENDENT SCHOOL DISTRICT

620 A venue CPort Neches, Texas 77651

(409) 722-424~ Ext.22 FAX (409) 724-7864-e-mail jcrcel(~csc5.net

Office of SuperintendentDr. Jimmy Creel

October 15,2003

FROM:

Last night, at the regular meeting of the Port Neches-Groves ISD Board of Trustees, aparent by the name of John Wilson made a presentation during the open forum of themeeting. Mr. Wilson questioned the condition of our shot and discus rings and provideddrawings of proposed improvements to the rings. I have enclosed for your review a copyof the documents provided to the board by Mr. Wilson as well as a copy of my follow-upletter.

Would you please discuss this concern among yourselves and attempt to evaluate thecondition of these facilities in comparison to those used at other schools? Pleasedetermine whether or not you agree with the need to make changes in this area andwhether or not you would view such changes as a top priority in view of shrinkingresources. If you determine that improvements do need to be made and that suchimprovements are a top priority for the athletic department, please work with FrankWilson to design improvements and determine costs of such improvements.

Please make me aware of your analysis and your determination regarding theprioritization of identified needs. If you conclude that the improvements suggested byMr. Wilson are legitimate and if the costs to complete such improvements are significant,I will ask the bond committee to consider this item as they evaluate and prioritize itemsfor a potential bond proposal. If you conclude that the current facility is sufficient for ourneeds, we will not plan additional expenditures in this area. However, if you concludethat improvements are needed and the cost of such improvements is nominal, we willseek to add this item in next year's budget. Thank you for your assistance in addressingthis issue.

Cc: Board of Trustees Update, October 17, 2003Mr. Roy Esquivel, Principal, PNG High School

PORT NECHES-GROVESIND EPEND ENT SCHOOL D ISTRI CT

620 Avenue CPort Neches, Texas 77651

(409) 722-..244 Ext.22 FAX (409) 724-7864e-mail jcrcelrijjesc5. nel

Office of SuperintendentDr. JiJ!1mv Creel

uctooer 15, 2003

Mr. John Wilson7150 Willow OakGroves, Texas 77619

Dear Mr. Wilson.

Thank you for your presentation during the open forum of the Port Neches-Groves ISD Board Meeting lastnight. I appreciate your support for your daughter and your interest in improving the shot and discus arenas atPNG High School.

To the best of my knowledge, our coaches have not requested such improvements previously. Therefore, I amforwarding a copy of this letter as well as a copy of the drawings you shared with the board to AthleticCoordinators Matt Burnett and Barbara Comeaux for their evaluation and consideration. The fact that suchimprovements have not been previously requested does not indicate that the coaches did not see a need for suchimprovements. More likely, it suggests that such improvements were not viewed as top priorities by thecoaching staff. As you are aware, limited resources have forced us to prioritize each and every need withfunding provided in recent years only for those items deemed by the coaches and staff to be top priority items.

I will also include this item in the list of concerns to be considered by the bond committee. The committee willbe charged with the responsibility of evaluating the needs of Port Neches-Groves ISD facilities and prioritizingthose needs as they develop a bond proposal for the community. While it is likely that any future bond proposalwill include parameters that make it difficult if not impossible to meet all facility needs, the committee will havean opportunity to evaluate this need in comparison with other needs in the district and to determine whether ornot they feel that it should be included in a future bond proposal.

In the meantime, I will ask Coaches Burnett and Comeaux to work with Coach Pachuca in evaluating the currentfacility in an effort to make temporary or limited improvements to address this issue during the coming season.Thank you again for your interest and support for our students and our programs.

fJi

l!nmy

u: a'oard of Trustees Update, October 17,2003Coach Matt Burnett, Boys' Athletic CoordinatorCoach Barbara Comeaux:, Girls' Athletic CoordinatorCoach George Pachuca, Weight Coach for girls and boysRoy Esquivel, High School PrincipalFrank Wilson, Director of Maintenance

~162/3=54 ft3

~30

3028.5

28.5

~162

54/27 ft3/yd=2 yards concrete

PORT NECHES-GROVESINDEPENDENT SCHOOL DISTRICT

620 Avenue CPort Neches, Texas 77651

(409) 7224244 Ext.22 FAX (409) 724-7864-e-mail jcrcelrqJesc5.net

Office of SuperintendentDr. Jimmv Creel

October 15,2003

Mr. Charles Jehlen240 1 Friar Tuck LaneGroves, Texas 77619

Dear Mr. Jehlen,

Thank you for your presentation to the Board of Trustees during the open forum of the regular meeting lastnight. I appreciate your interest in young people and I am pleased that we have been able to reach an agreementregarding the use of the Port Neches-Groves ISD baseball field. Mr. Martin has informed me that you havebeen given all forms and paperworlc that will be required to document this agreement and verify the district'sapproval of use of this facility by the Port Neches PONY League.

Our predominant interest in making this agreement is to ensure the protection of all Port Neches-Groves ISDproperty and equipment and to protect the district from any and all liability claims that may arise from such use.I trust that you will complete the appropriate forms and return those forms to Mr. Martin in a timely manner sothat final approval for use of the field can be granted.

It will be important that dte league takes steps to meet dte expectations of Head Baseball Coach Jay Stone andBoys' Athletic Coordinator Matt Burnett and that dte district does not incur any additional costs as the result ofthis agreement. If dtese criteria are met, I am confident that this anangement can be beneficial for the youngpeople whom you serve.

Thank you again for taking the time to introduce yourself to the Board of Trustees. I hope you enjoy a verysuccessful season in the coming year!

Update, October 17, 2003Boys' Athletic Coordinator Matt BurnettHead Baseball Coach Jay StoneAssistant Superintendent Jay Martin

AGREEMENTfor

Using the Baseball Field at Port Neches-Groves High Schoolby

The Port Neches Pony League

During the Period From Through

The baseball field will be maintained as follows:(1) Port Neches-Groves ISD will:

. issue all key(s) to the stadium, press box, concession and equipment storage areas

. be responsible for all fertilizing of grass

. supply necessary equipment for watering the field

(2) Port Neches Pony League will:. complete PN-G facilities rental fonns. provide a schedule for games and practice times. cut and water field as per specifications of Head Baseball Coach. pick up all trash on field and within fence compound. rake infield. mark necessary lines. take down nets for storage at end of season. open and secure stadium for each practice and game. be responsible for cleaning restrooms and keeping them in a sanitary condition. assume responsibility for damages other than nonnal usage

Under no circumstances will any modifications be made to the baseball field without the approval of theBoys Athletic Coordinator, Head Baseball Coach, and/or the Director of Maintenance. No equipment willbe allowed on the baseball field or the auxiliary practice fields without prior approval of the Boys AthleticCoordinator, Head Baseball Coach, and the Director of Maintenance. The field will be used only by thePort Neches Pony League for practice and games. In order to protect both parties, a visual inspection ofthe baseball complex will be made by a representative of Boys Athletic Coordinator, Head BaseballCoach, and the Director of Maintenance, and a representative from the Port Neches Pony League prior tooccupancy by the Port Neches Pony League.

Under this agreement, the Port Neches Pony League will be responsible for payment of utilities for theperiod specified above. Billing will be determined by the number of days electricity is used by the PortNeches Pony League.

This agreement must be renewed annually.

PN-G Boys Athletic Coordinator Date Signed

PN-G Head Baseball Coach Date Signed

Port Neches Pony League Representative Date Signed

Facility Use and RentaV Port Necbes Pony League

Port Neches-Groves Independent School District

Desigated Fund Balance - Health Insurance

(55,251.00)

Deduct:Amount used for 2002-2003 budget - health insurance

362,464.60Balance remaining for interest allocation

533.89

548.69

471.78

536.99

406.73

349.17

370.97

351.35

365.23

344.59

310.97

311.60

499,123.71

Add:

Interest Allocation - September 2002

Interest Allocation - October 2002

Interest Allocation - November 2002

Interest Allocation - December 2002

Interest Allocation - January 2003

Interest Allocation - February 2003

Interest Allocation - March 2003

Interest Allocation - April 2003

Interest Allocation - May 2003

Interest Allocation - June 2003

Interest Allocation - July 2003

Interest Allocation - August 2003

Amount unexpended at 8/31/03

GF-2

IIlbl.S8111 I: ~ ~ ~qO ~O ~"I: 30 ~ 00 ..O..q 0..

ROGER S. McCABESHARFJlOlDER

BoARD CERTIFIEDPERsONAL INJURy TRIAL LAw,

TExAS BoARD OF LEGAL SPEClAUZAnoNRogerMcCabe@mehafJ'ywcber.com

ONE AUBf CENTER.SOODALLAS, SUrrE IlOOHOUSTON, TEXAS 71002

TELEPHONE (713) 655-llOOPAX (713) 6S5-0222

2615 CAWERAVENUEPOST OFFICE BOX 16

BEAUMONT, TEXAS 77704TELEPHONE (409) 835.5011

FAX (409) 835-5177(409) 835-5729

October 13,2003

Re: Cause No. B-163,853; Pyramid Constructors, Inc. vs. Port Neches-Groves I.S.D.; Inthe 60th District Court of Jefferson County, Texas (M&W File No. 7232-1)

Dr. Jimmy CreelSuperintendent of Port Neches-Groves I.S.D.620 Avenue CPort Neches, Texas 77651

Dear Dr. Creel

Several weeks ago, we appeared before the Board and received authority to settle theabove-referenced claim against Coastal Flooring, Inc. for $75,000. The check was promptlyissued by the insurer for Coastal Flooring and was endorsed by you and the Release properlyexecuted.

Pursuant to the instructions of the attorney for Coastal Flooring, we deposited that checkin our trust account at that time not to be disbursed until such time as the Order of Dismissal hadbeen entered by the Court.

The Order was returned to attorney McRory in order to get the signature of attorney DaleTingleaf agreeing ~o it. Apparently, he was never able to get the cooperation of SteveFriedman's attorney to do anything jn this ca..~, which is not surprising. McRory sent it to theCourt without Tingleat's signature and the Court h~ now duly entered it authorizing us todisburse funds to Port Neches-Groves Independent School District. However, we lost anothertwo weeks before the Court sent the signed order to us Friday, October 10,2003.

Enclosed herein, please find a settlement statement setting out the recovery, deductionsfor attorney's fees, and deductions for expenses. Also enclosed herein is the Motion forDismissal and the Order granting same properly executed by the Court.

Finally, enclosed herein please find our trust account check in the amount of $47,859.76forwarding to Port Neches-Groves Independent School District their portion of the $75,000settlement with Coastal Flooring.

0t7 , ~BEAULrrIGAnON:594393.\

A PROFESSIONAL CORPORAllONAlTORNEYS AT LAW

MEHAFFY WEBERDr. Jimmy CreelOctober 13, 2003 Page 2

The only portion of this case remaining is Pyramid Constructors cause of action againstPort Neches-Groves Independent School District for approximately $200,000 retainage. As youknow, that case is specially set for Monday, January 5, 2004, and we will be in contact with youprior to that time in order to prepare for trial.

As always, it has been a joy working with you and the Board concerning this matter and,should you have any questions, please do not hesitate to contact me.

Sincerely,

RS M/ glmEnclosure(s)

cc:Richard A. PeeblesLaw Offices of Richard A. Peebles4001 Garth Road - Suite 107Baytown, Texas 77521

BEAULITIGA nON:S94393.

S. McCabeFor the Firm

Cause No. B-163.853

PYRAMill CONSTRUCTORS, INC. §§§§§

IN THE DISTRICT COURT

vs. JEFFERSON COUNTY, TEXAS

60m JUDICIAL DISTRICTPORT NECHES-GROVES I.S.D.

SETTLEMENT STATEMENT

SE1TLEMENT FUNDS RECEIVED FROMCOASTAL FLOORING, INC.: $75,000.00

Less: 35% Contingency Fee Attorney's FeesTo MehaiTy & Weber and the Law OfficesOf Richard A. Peebles: ' ($26.250.00)

NET RECOVERY AFTER ATTORNEY'S FEES: $48,750.00

Less: Expenses incurred by Mehaffy & WeberFile No. 7232-0001 ($890.24)

NET RECOVERY TO PORT NECHES-GROVES I.S.D. $47,859.76

ACKNOWLEDGMENT

I hereby acknowledge receipt of a copy of this Settlement and acknowledgereceipt of a Mehaffy & Weber Trust Account check in the amount of $47,859.76, madepayable to Port Neches-Groves Independent School District as settlement of the above-referenced cause of action as calculated above with Coastal Flooring, Inc.

BEAULmGAnON:S94391.1

Cause No. B-163.853

PYRAMill CONSTRUCTORS, INC. §§§§§

IN THE DISTRICT COURT

vs. JEFFERSON COUNTY, TEXAS

60TH JUDICIAL DISTRICTPORT NECHES-GROVES I.S.D.

SETTLEMENT STATEMENT

SETTLEMENT FUNDS RECEIVED FROMCOASTAL FLOORING, INC.: $75,000.00

Less: 35% Contingency Fee Attomey~s FeesTo Mehaffy & Weber and the Law OfficesOf Richard A. Peebles: ($26.250.00}

NET RECOVERY AFTER ATTORNEY'S FEES: $48,750.00

Less: Expenses incurred by Mehaffy & WeberFile No. 7232-0001 ($890.24)

NET RECOVERY TO PORT NECHES-GROVES I.S.D. $47,859.76

ACKNOWLEDGMENT

BEAUUTIOAnON:S94391.1

MON 1~::9 PAI 1~O983a3790 ~HAFPY " WEBER09..2%..03

NO. 8-163,853

IN THE DISTRICT COURT OF§§i§§§§

PYRAMm CONSTRUC"tORS. IN.'.

JEFFERSON COUNTY, TEXASvs.

PORT NECHES-GROVES, I.S.D., ItB~:ARCHITEcr5, INC. COASTAL",OORING. [~C. aDd LASCO, INI;. 6O'JW JUDICIAL DISTRICT

ORDER OF D;DllSSAL AS TO CERTAIN CLAIMS

The Court, having received tbe "Agreed Motion to Dismiss Port Necbes-Oroves I.SD 's

claims for damaae5 against Coastal ,qO!)ring. Inc." h~eby finds u follows:

It is Ordered, Adjudged and ~ that all claims for damages by the Defendant/Counter-

Claimant, Port Nechea-Oroves I.~:.DJ are di~ued, with pr~judJce, u to Defendant, Coastal

Flooring. Inc. It is further,

Ordered, Adjudged and Do: ~i that aD daims for COntribUtiOIl and indemDity tiled by aIId

betw~n Plaintiff. Pyramid ConIuuc: ton;, lDC., and Defendant, Coastal Floo! ing, Inc, based upon the

damages claims of Port Necbes-GIOVtIS I.SD. are now moot and Ire dismissed wtth prejlldlce.

Pwnuff, Pyramid ConstruCtors, lac's crilinaJ c.}ain) for retainage under the conaruc:tioo contract at

issue is preaerved u baween Plaioiift'. Pyraujd Constructors,~. and Port Neches-Groves I.S.D.

This cJaim has not yet been re501~I:d imd is still active, as is CouW's claim against Pyramid for

retainage ftmds owed Coaatal. CollStal Flooring. Inc. ;1 & "settling defendant" 15 to the damages

claims of Port Neches-Grovel I.Sl.. aD.d Coutal is now dismissed as a defendant PIny to this case.

It is so Ordered. A 12

Signed this g day of -.

1IF_ILEQat:t~~ - o' cI DC k__-t ..L. M~ J ~w.4~,If'."-'

6~ .

ludge Gary SandersonOCT - 3 2003

To: Dr. J~~~I, Superintendent

J. Maniristant Superintendent

October 14,2003

Re: Parent Complaint (Scoliosis Screening)

I reviewed the district's nurses manual on Scoliosis Screening. We follow the state guidelineon screening which is in the 611 and 911 grades. I also reviewed our board policy manual andfound the same guideline as in the nurses' manual.

I spoke with Nurse Talbert at GMS and she verified that our practice is to conduct the visionand hearing screenings as well as making sure all required immunizations are up to date inthe fall of each year. The scoliosis screening is conducted in January of each school year asstated in the nurse manual.

Nurse Talbert related that she talked with this parent earlier in the year because she hadseveral teachers inquire about the student and if something was wrong with her(orthopedically). The mother related to Nurse Talbert that the girl has had surgery in the paston her hip and she had another doctor appointment in late September or early October for thegirl relating to her pelvic. Judy thinks there is a congenital problem of the pelvic and this iscausing the scoliosis. Apparently the student has had a lifelong history of orthopedic problemsand has been under doctors' care. I also talked with Nurse Miller at GE about this student.She stated the girl walked with a limp and had been in her office frequently over the past twoyears. She said the mother told her the girl had surgery on her hip prior to GE and she knewthe mother took the girl at least once a year for a checkup in Houston or Galveston. She alsostated that this was always a dMlCult situation in dealing with the parent and student becauseof their attitudes.

In summary, I cannot find that either campus has mistreated or not infonned the parent whenthere was a need. The parent seemed to be knowledgeable of the child's situation asevidenced by prior surgeries and doctor visits. Both nurses go beyond what is required indealing with students and parents but must also follow the guidelines and policies of thedistrict, which they both have done.

Attachments:

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3. G:~CHOOL~pinal\Manual\2003RevAbstract: 23 APPENDIX A Forms for School Spinal Screening. SAMPLE PRESSRELEASE A STATEWIDE SCREENING PROGRAM IS BEING OFFERED -

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Port Neches-Groves ISD123908

HEAL TH REQUIREMENTS AND S ER VICES :PHYSICAL EXAMINATIONS

--~,(LEGAL)

VISION ANDHEARINGSCREENING ATENROLLMENT

When a student's initial enrollment in the District is also the student's initialenrollment in any Texas school, the student shall be screened for possible visionand hearing problems. This screening shall occur prior to completion of the flfStsemester of enrollment or within 120 calendar days of enrollment, whichever islonger. Students may meet this requirement by providing evidence of screeningconducted one year prior to enrollment. 25 TAC 37.23( a)

ROUTINESCREENING

ACANTHOSISNIGRICANSSCREENING

The student or minor student's parent. managing conservator, or guardian, mayelect to substitute one or more professional examinations for the requiredscreening tests. Health and Safety Code 36.005( a)

Students in kindergarten and grades 1,3,5,7, and 9 shall be screened for visionand hearing problems annually at any time during the reporting year prior to May31.25 TAC 37. 23(c), (d)" Acanthosis nigricans" means a light brown or black velvety, rough, or thickened

area on the surface of the skin that may signal high insulin levels indicative ofinsulin resistance. Health and Safety Code 95.001(1)

The Texas-Mexico Border Health Coordination Office of the University ofTexas-Pan American shall administer an acanthosis nigricans screening program.The Office shall require that acanthosis nigricans screening be performed at thesame time hearing and vision screening or spinal screening is performed.

The executive council advising the Texas-Mexico Border Health CoordinationOffice by rule shall coordinate screening of individuals who attend publicschools located in TEA Regional Education Service Centers 1,2,3, 13, 15, 18,19, and 20.

Health and Safety Code 95.002

As soon as possible after admission to a school and as required by rule, eachstudent required by rule to be screened shall undergo approved screening foracanthosis nigricans.

The student or minor student's parent, managing conservator, or guardian mayelect to substitute a professional examination for the screening.

Health and Safety Code 95.003

The person performing the screening shall send a report indicating that anindividual may have acanthosis nigricans to the student or minor student's parent,managing conservator, or guardian. The report must include:

1. An explanation of acanthosis nigricans and related conditions;2. A statement concerning an individual's or family's need for further

evaluation of conditions related to acanthosis nigricans; and

3. Instructions to help the individual or family receive evaluation andintervention by the District.

Health and Safety Code 95.D04( d)

,This requirement may be met by a professionalexamination performed by a state-licensed practitioner with expertise indiagnosing spin!l deformities I"":" "'~

A parent, managing conservator, or guardian who declines spinal screening mustsubmit to the school's chief administrator documentation of a professionalexamination which includes the results of a forward-bend test. Thisdocumentation must be submitted to the school during the school year the studentis scheduled for screening, or, if the professional exam is obtained during thefollowing summer, at the beginning of the following school year. 25 TAC 37.148(e)

EXEMPT! 0 N

ANNUALREPORT

If the screening indicates the student may have an abnonnal spinal curvature, theprincipal shall send the original of the screening report to the student's parent,managing conservator, or guardian along with a letter advising of the parent'sresponsibility to select an appropriate health practitioner for an examination. 25TAC 37. 148(f)

A student is exempt from the screening requirements if the tests conflict with thetenets and practices of a recognized church or religious denomination of whichthe student is an adherent or a member. The student or minor student's parent,managing conservator, or guardian shall submit to the principal an affidavitstating the objections to screening. The affidavit must be submitted on or beforethe day of admission for vision and hearing screening and on or before the day ofthe screening procedure for spinal and acanthosis nigricans screening. Health andSafety Code 36.005(b), 37.002(b), 95.003(b)

For vision and hearing screening and spinal screening, each school shall submitto the Texas Department of Health by June 30 of each year an annual report onthe screening status of the individuals in attendance during the reporting year andshall include in the report any other infonnation required by the Board of Health.The report shall be on a fonD prescribed by the health department and submittedaccording to Board of Health rules. Health and Safety Code 36.006; 25 TAC37. 26(c)(3); 25 TAC37.148(m)

For acanthosis nigricans screening, each school shall submit to the Texas-MexicoBorder Health Coordination Office an annual report on the screening status of theindividuals in attendance during the reporting year and shall include in the reportany other infonnation required by the Office. The report shall be on a fonDprescribed by the executive council advising the Office and submitted accordingto the executive council's rules. Health and Safety Code 95.004(e)

DATE ISSUED: 12/02/2002UPDATE 69

SCREENING FOR PHYSICAL DEFECTS

Organization of the Screening Program

Health screening is conducted annually in each school. The nurse's office and the physicaleducation department are the sites in which these activities are held.

Each year students are screened for height, weight, and general health conditions.Screening for visual and hearing defects and scoliosis is accomplished at specified gradelevels indicated on the Health Screening Schedule. From these screening activities,recommendations are made to parents about general health practices and about referralsneeded to counselors, dentists, physicians, and other health care providers.

Parents are notified of screening services at the beginning of each year.

The results of health screening are recorded on the student's pennanent health records.These records are initiated for students entering pre-kindergarten, kindergarten, or earlychildhood, and they follow students throughout their school years in the district. Healthrecords are kept in the permanent folder and/or in the nurse's office and are available toteachers at all times. In fact, teachers should be encouraged to refer to them whenever astudent is not progressing as anticipated, since health is a major factor in a student's schoolprogress.

Follow-up Work on Health Screening

Referral fonns listing specific apparent problems are sent home with the student. A call toparents before the referral fonn is sent home is encouraged. Parents should be contactedwithin a reasonable length of time to determine the results of referrals.

Any report from a physician recorded on the student's permanent health record.

Teachers are infonned of students' problems and the care that should be taken in theclassroom regarding the special needs of students. For example, special seating would beappropriate for a hearing-impaired student. A list of students with health problems areshared with all faculty members who are in contact with the child with a health problem.This infonnation is listed CONFillENnAL!

Specific Screening of students for reportable diseases, skin conditions, etc. may be necessaryduring the school year. This is done at the discretion of the principal or nurse, or at the request of aphysician of public health department personnel.

School nurses in accordance with Texas Department of Health requirements conduct the followinghealth screening activities annually. Parents or guardians are notified of screening referrals.

Screening Activities Scheduled Time

Height, weight PPCD, Early ChildhoodPre-kindergarten,Grade 5: Bi-annuallyGrade 6-12: Annually

Vision Elementary: PPCD, EarlyChildhood, Pre-Kindergarten,KindergartenGrades 1,2, 3, and 5

Secondary: Grades 7, 9 andFirst Time to District andReferred Students: All grades

Hearing Elementary: PPCD, EarlyChildhood, Pre-Kindergarten,KindergartenGrades 1,2,3, and 5

Secondary: Grades 7, 9 andFirst Time Entrants toDistrict and ReferredStudents: All grades

VISION SCREENING

The Special Senses and Communication Disorders Act, requires that children entering school for thefirst time in Texas, be screened for possible vision problems within 120 days from the entry date, orpresent evidence of a vision screening conducted within one year prior to enrollment.

VISION SCREENING WITH THE SNELLEN EYE CHART AND/ORBINOCULAR SCREENING

~IIHQ - The screener must be certified by the Texas Department of Health

The certified screener must follow guidelines, goals and objectives for vision screening inaccordance with Texas Department of Health Guidelines.

REFER TO: VISION SCREENING MANUAL - TEXAS DEPARTMENT OF HEALni

RECORD IN GRESULTS

The following information should be recorded on the student's permanent health record.

Date of visual screening and results

Copy of Referral

Correction prescribed and other finds reported by the physician or optometrist

The Vision Screening and/or Eye Examination form is to be completed on all student's who fail thescreening. See Form #32

If follow-up efforts with parents of students who fail the vision screening are notproductive, the nurse should document efforts to obtain follow-up.

Annual Vision Screening ReQQrt

Tabulations to be kept for the Annual Vision Screening Report for the Texas Department ofHealth.

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Number of students screened in each gradeNumber of students who failed the screenNumber of students referred for medical consultationNumber of students examined by a vision specialistNumber of students who had no problem when examined by a vision specialistNumber of students who received treatmentNumber of students referred who did not seek medical consultation and informationunknown

The Annual Vision Screen Report should be completed by the school nurse, andsubmitted to the administration upon request.

A copy of the current form of the Annual Vision Screening Report is included inthis manual. See Form #33.

A compilation of all tabulations from the schools in the District is made byadministration and submitted to the Texas Department of Health.

HEARING SCREENING

The Special Senses and Communication Disorders Act, Texas Health and Safety Code requiresthat children entering school for the first time in Texas be screened for possible hearing problemswithin 120 days from the entry date, or present evidence of a hearing screening conducted withinone year prior to enrollment.

Hearing screening with audiometer registered with Texas Department of Health

All audiometers must have an annual calibration. Screener audiometer monthly biologicalcalibration check sheet and certificate of calibration are to be stored with audiometer. See Form#34

The screener must be certified by the Texas Department of Health.

The certified screener must follow the guidelines, goals and objectives for hearing screening inaccordance with the Texas Department of Health Guidelines.

Refer To: Audiometer Screening TechniquesTexas Department of HealthBureau of Maternal and Child Health

RECORDING RESULTS

The following infonnation should be recorded on the student's pennanent health record by thenurse.

. Date of audio test and results

. Referral, if made

. Medical findings reported

Individual screening results should be med in the student's pennanent health folder.

Annual Hearine Screening Re~rt

Tabulations to be kept for the Annual Hearing Screen Report for the Texas Department ofHealth

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Number of students in each gradeNumber of students who failed the screenNumber of students referred for medical consultationNumber of students examined by a medical specialistNumber of students who had no problem when examined by a medical specialist

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.Number of students who received treatmentNumber of students referred who did not seek medical consultation and informationunknown

The Annual Hearing Screen Report should be completed by the school nurse, andsubmitted to administration upon request.

A copy of the current form of the Annual Hearing Screen Report is included in this manual.See Form #37

A compilation of all tabulations from the schools in the District is made by theadministration and submitted to the Texas Department of Health

The Hearing Referral fonD is to be completed on all students who fail the screening. SeeFonn #35 and #36.

If follow-up efforts with parents of students who fail the hearing screening are notproductive, the nurse should document efforts to obtain follow-up.

Scoliosis is a lateral or sideward curvature of the spine.

PreQaration

Notify appropriate school personnel of the screening schedule.

Confirm the date, time, and place with the nurse assigned to help with the screening.

Procedures

Parent permission is not needed for scoliosis screening, but parent will be notified prior toscreening.

Screening is done in privacy.

The examiner must be able to view the entire body from the front, side and the back. Havethe student to do the following:

Stand facing the examiner (seated) with feet even, but slightly apart, bring handstogether and flexing forward.

Stand with back to the examiner, flexing forward.

Stand straight and relaxed for the examiner to check hip level and posture.

Stand with side to the examiner, flexing forward, bending at approximately a 60°angle to enable the examiner to look tangentially across the upper back in asequential manner.

Important things to look for in scoliosis in screening:

Scapula asymmetry

Waist asymmetry or fullness

Shoulder height and prominence of the ribs

Asymmetry in distance between anns and torso

Students who are suspect should be referred for medical consultation by contacting theparents or guardians.

SEE FORMS: (1) Prescreening Letter - Form #38

(2) Spinal Screening Worksheet - Forms #39 or #40

(3) Port Neches-Groves ISD Spinal Screening ProgramParent Notification and Referral- Form #41

(4) Informational Fact Sheet - Watch Out for ScoliosisFonn #42

(5) Informational Diagrams for Screener - Forms #43 and #44

RECORDING RESULTS

The following infonnation should be recorded on the student's permanent healthrecord:

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Date of screening and resultsReferral, if madeMedical findings reported

Annual Scoliosis Screening Report

Tabulations to be kept for the Annual Scoliosis Screen Report for the Texas Departmentof Health:

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Separate accounts of males and females screened in each gradeNumber of students under prior treatmentNumber of students re-screenedNumber of students referred who were diagnosed in one of four categories; scoliosis,kyphosis, other, normalNumber of students diagnosed who received one of four treatments: observation,bracing, surgery, otherNumber of students referred but for whom no follow-up reports were received.

The Annual Scoliosis Screen Report should be completed by the school nurse, and submitted toAdministration upon request

A copy of the current annual report fonn is included in this manual See Fonn #45

A compilation of all tabulations from the schools in the District is made by administration and issubmitted to the Texas Department of Health

Coming Events

Called Board Meeting ...............................................................................................October 20, noon Sandwiches will be provided Deadline to submit nominations for the bond exploration committee................................October 24 Please include address and/or telephone number. Red Ribbon Parade ............................................................................................. October 29 @ 9 a.m. Begin lining up @ 8:15 a.m. at the Closed Wal-Mart in Groves.