A different perspective on the current state of Jeffco schools

Month: March 2021

Jeffco Officials Were Deceptive and Not Completely Honest Regarding Jeffco’s Capital Improvement Program

Recently, Colorado Community Media, including Jeffco Transcript and Arvada Free Press printed an article by writer Bob Wooley about Jeffco’s Capital Improvement Program.

For the most part, Wooley did a good job of attempting to explain a financially complex program. However, there were some comments and statements made by Jefferson Public Schools’ officials that were misleading or downright false.

I’ve outlined several of those areas below:

1. The article states:

After the Bond passed, the project’s estimated costs were increased by nearly $32 million for a revised total of just under $737 million for the program.

TRUE – $32M in hidden costs were added to the program

After the bond passed, $32M in costs were added to the flipbook for the same list of projects. The use of $32M in contingency to cover these costs was essentially hidden.

2. The article states:

District officials say the increase was a result of changes in scope, market conditions, incorrect estimates or various other factors like asbestos removal, which were determined once the District was able to perform more in-depth evaluations of each individual project.

PARTIALLY TRUE – 81 schools’ cost estimates increased by EXACTLY 5%

While I agree that factors such as scope changes, market conditions and incorrect estimates can result in changed estimates, that doesn’t fully explain the extent of the cost estimate changes between the first and second flipbooks. The project costs for 81 schools, or nearly 60% of the total, increased by EXACTLY 5%. This is not indicative of changes in scope or incorrect estimates. That’s indicative of using Excel to pad costs.

3. The article states:

We told voters we would accumulate six years of approximately $20 million at the back-end to fill up the program,” Reed says.

FALSE – Voters were told $23M

Voters were told that exactly $23M annually in Capital Transfer would be accumulated. In reality only $20.9M annually is currently being transferred. That means there is a $12.6M shortfall in stated revenue, again made up with Contingency.

4. The article states:

and over $3.5 million was spent on hazmat expenses (which technically, do not count as overages).

FALSE – Hazmat costs ARE overages

  1. Why aren’t $3.5M in hazmat expenses considered overages? Any decent construction project manager with 50 year old buildings knows there is asbestos in those buildings that will have to be mitigated. Mitigation costs should have been factored into the original estimates.
  2. Where is the money coming from to pay for the hazmat expenses? It’s coming from the District’s program contingency. Therefore, technically, and for all intents and purposes, hazmat expenses are program costs that reduce available contingency This is merely an attempt by Reed to put lipstick on a pig to make $3.5M in overages not seem like the $3.5M in overages hazmat costs really are.

5. The article states:

In a document Reed says is now posted to the Capital Asset Advisory Committee (CAAC) website, all budget variances are listed with specific overage amounts and the reason for the cost variance.

FALSE – This document lists variances against revised cost estimates, not original estimates

This document hides $32M in cost increases. That’s deception.

6. The article states:

Therefore, the precise amount of contingency that’s been spent on actual projects thus far is $65,815,424.

FALSE – The amount of contingency allocated is currently over $110M

$65M from what Reed wants people to believe is the contingency spent, plus $3.5M in hazmat, plus $32M in increased estimates plus $9M from recent fields project = $110M in contingency allocated.

7. The article states:

I’m not a construction guy,” Bell said. “But we have a construction guy and I was speaking to him this morning and he said “you know, a year ago the cost of steel was $53 a ton — today it’s $79.” A year ago did anybody know it was going to go from $53 to $79? No.”

MISLEADING – Cost of steel is only one small component of cost increases

Both Tim and Steve have told the Board on several occasions that they have been getting good pricing due to the pandemic. And, this report shows that non-residential construction costs have been relatively flat in Denver for the last 2 years, increasing by only 2.1% total over that time. In addition, there are numerous projects that had no steel involved that are significantly over budget. This is a misleading and deceptive statement.

8. The article states:

According to Tim Reed, Jeffco’s Executive Director Facilities & Construction, the amount of contingency that had been spent as of Feb. 22, was just over $81 million, of which nearly $12 million went to charter schools…”

MISLEADING to FALSE – $12M to Charters came from Bond Premium

The agreement with District Charters was that Jeffco would share approximately 10% of all bond proceeds with Charter schools. The $12M Tim Reed is referring to is based on Charters’ share of accrued interest and bond premium. This has nothing to do with District contingency.

The bottom line is that the Capital Improvement Program has already spent or allocated $24M over its original $86M contingency budget ($110M total) only 2.5 years into the program. In addition, Jeffco has hidden a $12M revenue shortfall from Capital Transfer. The amount of deception and lack of accountability for large cost increases is truly unbelievable.

Jeffco’s Capital Improvement Program is Over Budget

Below are the observations I made to the Capital Asset Advisory Committee on November 4, 2020, Tim Reed’s Response, my rejoinder and a current update..

Letter to CAAC – 24 November 2020

$57M over budget. On its own, a program that is $57M over budget less than 2 years into a 6 year plan should automatically trigger a Performance Audit. Just to recap, voters were told the Capital Improvement Program would cost $705M. At the CAAC’s last meeting in November, it had a $762,179,035 price tag.

Tim Reed’s Response – 10 December 2020

Response: The $705M that is cited does not take into consideration premium or accrued interest that in accordance with the bond language and IRS Arbitrage regulations are to be applied to capital projects. At the time of publication the district had no knowledge of what premium or interest earnings there would be. When the amount of those funds were identified the project costs were increased to compensate for future inflation. The budget has been adjusted to reflect the revenue ($762,179,035) available as of October 31, 2020. The remaining bonds are about to be issued and could have a premium associated with them as well as interest on those bond proceeds that will accrue over the next three years resulting in an increase in Program revenue.

Rejoinder to Reed – 4 January 2021

The Capital Improvement Program is $57M over budget, no matter how Tim tries to spin it. Taxpayers gave Jeffco $649M to complete $563M worth of projects. That was the approved budget. Neither taxpayers, nor the Board, gave Tim Reed anything additional to complete the $563M worth of projects. Yes, the Bond market gave Jeffco schools an additional $50M, but there was NEVER any implicit or explicit approval, anywhere, to use that additional money on the same projects that taxpayers already approved a budget for. Let me be blunt. I’m angry that when $86M in contingency was already allocated to a program and with District stated maintenance needs of $1.3B, that $50M in “bonus” money gets shadily added to contingency and essentially squandered when it could have been been used for other needs. Let me ask you as CAAC members a question. Did you or the Board explicitly approve the use of Bond premium for added contingency to the Capital Improvement Program or did Tim Reed merely add it to the “pot”? Was there a discussion on what else could be prioritized and done with that money? Do you not understand the implications of Tim’s actions when it comes time to ask taxpayers for another Bond? Tim can’t tell me in the answer to my Question 9 that Jeffco couldn’t use the $50M in Bond Premium for 2 replacement schools because taxpayers didn’t approve it and then turn around and tell me here that taxpayers approved $50M in added contingency for the CIP. That logic doesn’t hold. The program is $57M over budget, plain and simple and Tim Reed squandered the $50M bond premium.

Current Status – 6 March 2021

Anyway you look at it Jeffco’s Capital Improvement Program is over budget. Taxpayers were told that District projects (excluding Charters) were going to cost $563M with an additional $86M in program contingency. That’s a total of $649M. As of the February 21 CAAC meeting, the total estimated cost of all District projects is $662M (Total less Contingency and $65M for Charters). That’s $13M over the total original budget. Add in the additional $8M+ in contingency the Board just approved for fields and the total budget is now $21M over assuming ZERO remaining contingency. That overage is only going to get worse.

This is not what taxpayers were promised. Taxpayers were promised an on-budget program. $86M in contingency usage to date plus an additional $21M is way over reasonable expectations and over budget in anyone’s definition of over budget.

Where are the Annual Independent Audits of the 5B Bond Program Jeffco Taxpayers Were Promised?

To assure voters that the $705M 2018 bond program would be well managed, Jeffco wrote into the ballot language that the program would be subject to an “annual independent audit”. The implication being that the program would be scrutinized on a yearly basis by a firm without financial ties to the District. Yet, two and a half years into what is now an $832M program only a very basic financial audit has been conducted, by the same firm that has deep and long standing ties to the District.

The ballot language implied that voters would get more than that. Now, with multiple questionable practices and current cost estimates $110M over what were presented to voters, Jeffco’s staff, Board and CAAC have all balked at providing the transparency and accountability that we all thought we would get when we entrusted Jeffco with our money. It is just incomprehensible to me that there is so much resistance to providing the transparency that was promised. It seems that if there was nothing to hide a Performance Audit would give the program a clean bill of health and end, once and for all, all questions. By continuing to refuse to conduct a Performance Audit it only perpetuates the assumption that there really is something to hide. That is not a good look!

In addition, the highly touted Citizens’ Capital Asset Advisory Committee is not doing its job either. CAAC meeting notes reveal that only until recently they have remained silent and allowed the program to go tens of millions of dollars over budget without asking any questions whatsoever. They have provided poor oversight of our money.

After initially observing a high usage rate of program contingency funds and subsequently numerous other instances of extremely questionable observations regarding the transparency, management and fiscal practices of the program I sent an email


to members of the CAAC on November 24, 2020 highlighting 10 very specific instances which raised questions with the management and transparency of the program and urging them to call for a Performance Audit conducted by a truly independent firm. Tim Reed replied on December 10, 2020 and I sent a rebuttal to Tim’s response to members of the CAAC on January 4, 2021.


On each of my letters I clearly include an offer to discuss my concerns and my telephone number. The fact that no one has taken me up on my offer speaks loudly in and of itself.

Finally, on January 4, 2021 I sent a copy of my original letter to the CAAC, Tim Reed’s response and my rebuttal to the Board of Education


The Board of Ed Secretary’s reply was far from confidence building:

Dear Mr. Greenawalt,

Members of the Board of Education received your January 4, 2021 email correspondence regarding our Capital Improvement Program. Thank you for bringing your concerns forward. You are correct that the Board of Education will be receiving feedback from the Capital Asset Advisory Committee and your concerns are noted.


Stephanie Schooley

Secretary, Jeffco Public Schools

with no further communication from the Board.

Over a series of posts I will outline some of the issues I have seen with regard to the transparency and fiscal management of the 5B bond program and take a look at some of the unbelievable and incredulous responses Tim Reed provided in a weak attempt to address my concerns. Here are some of the topics that I will cover:

  • Over budget ($57M as of November 2020)
  • Projected $32M Contingency Shortfall
  • Deceptively adding $31M to Flipbook costs
  • Failure to Share Bond Premium with Charter Schools
  • Out of Scope Projects
  • Deceptively Hiding the True Cost of Alameda HS Cost Overruns
  • Recent Large Underspend on FF&E Projects
  • Unexplained Recent Increase to Capital Transfer Revenue
  • Questionable Use of $50M in Bond Premium Contingency
  • Failure of CAAC Members to Maintain Independence
  • Failure of Jeffco to Provide $23M in Capital Transfer as Promised to Taxpayers

Jeffco needs to put these concerns and questions to rest.

Jeffco needs to conduct the independent Performance Audit that voters thought they were going to get.