Thanks for all the feedback everyone! I also had a feeling I should start on an OG program for reading, but with her teacher being so confident that she was doing fine, I just wasn't sure if I was going overboard.

We started Barton tutoring twice a week for now in the summer- she completed Level 1 and almost through Level 2. I really see a difference in her confidence level and in the way she approaches reading, just from this beginning so we will definitely continue. She can read most CVC words now- single syllable.
We do live in the US (northern California), but the public school near us which is ranked fairly high, is known to be very hard on kids with learning disabilities- I had posted in a parents forum to get some feedback and many people said they had to pull their kids out and homeschool because of how bad it got. They recommended a local Dyslexia Remediation school or a Charter School. I checked out the Dyslexia school but it seems like she would be bored out of her mind there- they don't seem to cater to any type of gifted education, or even project based learning, but mainly drill drill drill the remediation for Reading, Writing and Math. Kids don't seem to go on to "regular" schools out of this program.

For now, I guess I am keeping her in the private gifted home-school while adding the tutoring. I'll try ordering this toe-to-toe book as well and maybe I can work with her at home, but the truth is that I get home after picking up both kids from work around 6:30pm, then its dinner bath and bed. I sometimes don't even get the time to read a bedtime story. Maybe I can squeeze in something in the morning before leaving for school and work.

Thanks for the advice!