A different perspective on the current state of Jeffco schools

Category: Financial (Page 1 of 4)

10 Reasons Jeffco Schools Capital Improvement Program Needs a Performance Audit

1. $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.

2. Projected $32M Contingency Shortfall. At the October 7th Board Study Session, Tim Reed told the Board that $68M in contingency had been used to date.

At the CAAC’s November meeting Tim presented the following numbers for funds Expended and Encumbered, totaling $341M.

Subtracting the $68M of contingency from this value means that $273M of the $595M in total program costs are currently Expended or Encumbered, leaving $322M in remaining projects. If that same rate of contingency usage continues, that would require remaining contingency of over $79M. Yet, there is only $47M in contingency remaining, a $32M shortfall.

Expended as of Oct 31, 2020 $224,271,805
Encumbered as of Oct 31, 2020 +$117,596,928
Total Expended & Encumbered =$341,868,733


Less Contingency Used to date -$ 68,000,000
Project Work Encumbered or Expended =$273,868,733


Contingency usage rate ($68M/$273M) 24.83%


Remaining Project Work ($595M – $273M) $321,113,267
Projected Contingency Required ($321,113,267 * .2483) $ 79,736,893
Less Contingency Remaining as of Oct 31, 2020 -$ 46,892,780
Projected Contingency Shortfall $ 32,844,113


Total Projected Contingency Usage ($68M + $80M) $147,736,893

Do the math. The numbers don’t lie. This is not a healthy Program.

3. Deceptively adding $31M to Flipbook costs. District project costs were presented to voters as $563M. You can arrive at that number by subtracting the Charters $56M and the Contingency $86M from the Flipbook presentation.

This can be verified by adding the costs of individual projects in the original Flipbook (Plus approx. $17M in costs for Trailblazer, North Transportation Hub, OELS and Preschools projects which were withheld from voters).

However, sometime after the Bond passed, the District changed the Flipbook. The cost of nearly every project increased. Here are some examples:

Alameda HS – an increase of $1,430,902 to $19,434,000

Green Mountain HS – an increase of $754,078 to $14,361,000

Jefferson Jr/Sr HS – an increase of $672,810 to $14,129,000

This had the net effect of raising BASE costs by a total of $31,967,419. Essentially hiding $31M of cost increases.

For example, when the construction budget for Alameda was presented to the Board, contingency usage of $10,047,814 was based on the updated Base cost of $19,433,745, instead of the original cost estimate of $18,033,098. This usage of the revised cost estimate deceptively hid the totality of the increase, and the additional use of Contingency, of $1,430,902.

Therefore, cost estimates for all projects have now increased by $100M; the $68M in Contingency that Tim Reed freely told the Board PLUS the $31M in hidden cost estimate increases.

4. Failure to Share Bond Premium with Charter Schools. As recently as of the end of October, the District still had not shared Bond Premium with Charter schools, in violation of the Board’s October 2018 Sharing Resolution. The District spreadsheet widely circulated to Charter Schools show that the District only calculated sharing revenue based on the Bond par of $567M.

Yet, at the November 11th Board Study Session, Steve Bell told the Board that Bond Premium is shared with Charters.

Therefore, at this point, Charters are owed approximately $4.6M, PLUS interest – which will subsequently reduce the Contingency available for District projects by a corresponding amount.

Brian Ballard, Chair of the District’s Financial Oversight Committee, has said that it is the CAAC that has responsibility for overseeing 5B Bond funds. If that is the case, why hasn’t the CAAC ensured that District Charters have been given their complete share of the funds?

5. Out of Scope Projects. There are multiple projects that can be identified that were not in the scope presented to voters. Several easily identifiable, high-cost projects include: Ralston Valley HS Roof, Lakewood HS Track, West Jefferson MS Track, etc. The following images were taken from the Original Flipbook presented to voters and clearly do not show these projects.

Was there any discussion relating to the addition of scope and reduction of contingency for these and other added scope projects? What was involved with this process? Were these prioritized over replacement schools? Was there a vote?

6. Deceptively Hiding the True Cost of Alameda HS Cost Overruns. Similar to Jefferson Jr/Sr HS, Alameda HS is slated for Track and Field Upgrades. When the Jefferson project was submitted to the Board for approval, the Track and Field upgrades were included in the project costs and subtracted from the remaining budget.

This was not the case when Alameda was presented to the Board. The cost for the Track and Field upgrades were left off of the presented costs, effectively deceiving the Board that total overages are at least $1.5M over what was shown. Was that intentional deception, or merely incompetence?

7. Recent Large Underspend on FF&E Projects. We all like to get good deals. However, the cost savings on several recent FF&E projects go beyond the definition of good deals, suspiciously into the realm of scope reductions. Look at some of the “savings” generated from some of these FF&E projects that were recently presented to the Board, $150k, $300k, $315k and $310k.

These “savings” are 47%, 22%, 60% and 66% less than the original cost estimates. That’s far more than a reasonable person would expect from a “good” deal. What happened here? Was scope cut at these schools?

8. Unexplained Recent Increase to Capital Transfer Revenue. At the October CAAC meeting, members were shown Capital Transfers into the Capital Improvement Program of $41.8M. Yet, in November, they were shown $51.3M. Where did that additional $9.5M come from?

(On a side note, how does Interest Revenue DECREASE by $110,000 from August to September? Can you trust any numbers that are presented?)

Approximately $3M appears to come from the movement of the contingency in prior capital improvement programs such as 18M and 19M. This contingency decrease can be seen in documents presented to the CAAC.

But, the source of the remaining $6.5M is unexplained as the value of the 18M, 19M, 20M programs remain the same. And this happened mere days after Steve Bell told the Board that the capital transfers would be $20M/year over 6 years for a $120M total.

9. Questionable Use of $50M in Bond Premium for Contingency. Recently, Tim Reed and Steve Bell told the Board that during initial 5B discussions the bond ask amount was decreased and 2 replacement schools were removed from the list of projects.

If this was the case, why then, when the District received $50M in bond premium, weren’t replacement schools immediately added to the list of projects? Instead, it appears that the $50M in bond premium has merely been added to the $86M already allocated to program contingency. What was the process in determining that the additional $50M in contingency should be used for contingency instead of being used for replacement schools, particularly when taxpayers voters were told that Jeffco had $1.3B in deferred maintenance needs?

10. Failure of CAAC Members to Maintain Independence. Tim Reed recently sent members of the CAAC a document relating to the Purpose and Membership of the committee. This document clearly states that members must be:

Independent and free from any relationship that would interfere with independent judgment

Gordon Callahan, a CAAC member, has a relationship with the District. His firm has been the recipient of nearly $1M in contracts over the past year and a half.

This is not the appearance of independent judgment.

For taxpayers to fully trust the Capital Asset Advisory Committee ALL members of the committee must be completely independent and free of District relationships. Unfortunately, that is not currently the case. His continued membership on the committee is ethically questionable and erodes taxpayer trust.

Jeffco Schools’ Great 5B Bond Deception – Part III

Allocation of Bond Premium to Charters

As we saw in Part II, Jeffco’s Board of Education unanimously adopted a Bond Proceed Sharing Resolution that clearly states “the Board of Education will allocate a percentage of the bond proceeds equal to the percentage of full-time district students enrolled in district-authorized charter schools”.

Yet, Jeffco did NOT allocate ANY of the bond premium to District Charters. That was a loss of at least 9.29% of the Bond Premium of $50M or $4,660,360. If the share percentage was calculated correctly with 2019 student count numbers as explained in Part II, that revenue share loss is $4,745,642.

Why didn’t Jeffco schools share the Bond Premium? We weren’t part of the conversations and no discussion took place at the Board table, but we can only surmise that Jeffco is attempting to make a distinction between Bond “proceeds” and Bond “premium”, essentially saying that the bond premium is not part of the bond proceeds in order to keep the $4.7M for District projects.

That is just plain wrong!

While this attempted distinction has worked to silence the meek District Charter schools who are afraid of losing their Charter authorizations, the District knows that the IRS does not make that same distinction.

26 U.S. Code § 148.Arbitrage

Defines Proceeds as:

Proceeds means any sale proceedsinvestment proceeds, and transferred proceeds of an issue.

And sale proceeds as:

Sale proceeds

Sale proceeds means any amounts actually or constructively received from the sale of the issue, including amounts used to pay underwriters’ discount or compensation and accrued interest other than pre-issuance accrued interest. Sale proceeds also include, but are not limited to, amounts derived from the sale of a right that is associated with a bond, and that is described in 1.148-4(4). See also 1.148-4(h)(5) treating amounts received upon the termination of certain hedges as sale proceeds.

Jeffco agrees with this definition as in a May Alameda presentation to the BoE, Tim Reed included the Bond Premium in his calculation used to determine arbitrage requirements.

IRS Target Spend by 12/2021= 85% of Bond Proceeds & Premium $329,610,938

It is obvious that Jeffco knows that the IRS considers Bond Premium to be part of Bond proceeds.

Therefore, Jeffco has violated its own Sharing Resolution and defrauded the District Charters of over $4.6M by not sharing all of the Bond Proceeds, in this case the Bond Premium, with them.

In essence, Jeffco got the Charters to support, and campaign for, 5B, but in the end isn’t holding up its end of the bargain.

Shame on Jeffco schools!

10 Things we learned from Wednesday’s BoE Study Session – None of them good

Here are the 10 things we learned from the October 7, 2020 Jeffco Board Study Session on the District’s Capital Improvement Program.

None of these things is good!

1. HS Parity – We were told during the Wednesday meeting that one of the goals of the bond program was to achieve High School building parity. Someone might want to tell the staff, parents and students at Pomona, Wheat Ridge, Arvada and Green Mountain that. Even after the program finishes, these schools will still have Facility Condition Indexes above 15% while schools such as Bear Creek, Golden, Arvada West and Lakewood will have FCIs below 4%. That’s not parity/equity in my mind. Once again, Jeffco talks equity, but never, ever delivers.

2. Capital Transfer – We learned that in 2 years Jeffco has transferred $41.8M from general funds to the Capital Program and that over the next 3 years another $83.6M will be transferred for a total of $125.4M.

But, Steve Bell made that sound worse by stating that only $120M in total would be transferred over 6 years.

Jeffco voters were promised $23M/year would be transferred for a total 6 year transfer of $138M.

This is now an expected shortfall of $12.6M. This shortfall will need to be made up by either allocating contingency or reducing project scope. I don’t even think that the Board is aware of this shortfall at this point. Bell and Reed will use Wednesday’s presentation to say that they informed the Board, but this is a pretty weak argument. In reality, it was the CFO’s job to ensure that 2019-20 and 2020-21 budgets presented to the Board of Education included transfers of this promised money, OR, to inform the Board of Education of this shortfall. The former CFO Kathleen Askelson failed to do either. She failed in her fiduciary responsibilities to both taxpayers and the Board. It’s no wonder she suddenly decided to leave Jeffco. Once this came to light she should have been fired.

3. 19M Projects – During the meeting Reed casually mentioned that $9.5M worth of projects were transferred from the District’s 19M facilities maintenance program to the Bond program because they were ready to go and it would assist in meeting the arbitrage requirements of the bond.

What he failed to say was that these projects were funded straight from the contingency of the Capital Improvement Program and that this was in reality an increase of scope. Complete and utter deception on the part of Reed and Bell.

4. Missing $41M – $41M is missing from Bell and Reed’s presentation. Where is that money? Jeffco voters were told that the program came with $86M in contingency built into it (see image above). $50M was added through bond premium and another $12M added through interest.

That’s a total of $148M above and beyond the $563M in project cost estimates presented to voters. Reed and Bell told the Board that they are carrying $107M in program contingency.

In that case, where did $41M go?

$ 86M in contingency presented in original Flipbook

+$ 50M in bond premium

+$ 12M in interest

=$148M total available above cost estimates

– $107M in stated contingency

=$ 41M missing

5. % of contingency usage – Bell told the Board that $68M in contingency has been spent (video above). That contingency was spent during the completion of $264M ($332 expended and encumbered from Board docs – $68M in contingency used) in project work. Since there is (now) $594M in total work that needs to be completed for the program that means 44% of the total program work has been done against 64% of the total contingency ($68M of $107M in total contingency). At the current rate, available contingency will be used before all projects are completed and scope will have to be reduced. Calculated a different way, continuing to use contingency at the current rate would mean that Jeffco needs $153M in total contingency, $46M more than what is currently allocated. This is not a good position to be in.

6. Construction increases – We learned that there are several Board member apologists who want to blame inflation and the length of the program (6 years) for cost overruns. I don’t agree with that. A timeline for project work was clearly laid out in the Flipbook. District staff knew when projects would be worked on and SHOULD have incorporated inflation based increases into their cost estimates. If they didn’t do that, then they are incompetent and should be fired, not given a free pass as Rupert and Mitchell want to do. Besides, Jeffco is only 2 years into the program. Inflation based cost increases shouldn’t be responsible for over $68M in cost increases at this point.

7. Contingency use between May and September – In May Reed told the Board that there was $57M in remaining contingency.

May Contingency

Since that time the Board has approved approx. $11M in contingency usage, mostly at Alameda. Now, Reed is now telling the Board that there is only $37M in contingency remaining. What did that additional $9M in contingency get used for in such a short period of time? Where did it go in only a few short months without Board knowledge?

8. Questions about use of $50M bond premium – The bond premium was a bonus. In my mind, it should be used to provide real value to the taxpayers. During the meeting Reed told the Board that to get the total bond package down to something reasonable for taxpayers for the 2018 vote they had to remove two replacement schools.

Now, when Jeffco received bond premium, why did $50M just get consumed to pay for added contingency? Why weren’t 2 replacement schools added into the program? This is pure mismanagement and an atrocious use of taxpayer money. People should be fired for using $50M this way!

9. Where was the Citizens Capital Asset Advisory Committee? Members of the CAAC were supposed to be at the meeting to answer questions regarding their oversight and monitoring of the program. They are definitely aware (here and here) of the depth and degree of the $100M in cost overruns to date. It is suspicious that at the last moment they decided not to show up.

10. Board President Harmon and Directors Rupert and Mitchell will go to great lengths to cover-up waste and mismanagement and protect the District from criticism or scrutiny. When Director Miller brought up questionable practices regarding the use of the $50M bond premium, instead of addressing that issue first, Harmon attacked Director Miller and then Rupert and Mitchell went into a full on defense of the District. It’s not their money, so why should they care?

This Wednesday’s study session was enlightening, to say the least. It raised, and never answered, numerous questions regarding the management of a $3/4 Billion Capital Improvement Program. The degree of deception on the parts of Reed and Bell is just unbelievable.

The Program is a disaster – way over budget and heading further in that direction. That is not how you get taxpayers to approve your next bond request.

It is clearly evident that, as promised to taxpayers, a full and complete performance audit on the program must be conducted immediately!

Jeffco Schools’ Great 5B Bond Deception – Part II

Computation of Charter Share

The Board of Education’s Bond Revenue Sharing Resolution clearly states that “the Board of Education will allocate a percentage of the bond proceeds equal to the percentage of full-time district students enrolled in district-authorized charter schools”.

A reasonable person would have read this resolution at face value and come to the conclusion that the percentage would have been calculated based on the count of full-time enrolled Charter students divided by the count of total full-time enrolled District students. In fact, a spreadsheet presented to Charter schools (attached) to show how the distributions were calculated clearly displayed the following text referring to FTE (Full time Equivalent) in 2 locations:

1. Official Oct 1 2018 FTE

2. Note: October 1, 2018 Official FTE count (audited)

Yet, the District did not use FTE numbers. In its calculations, the District actually used the state calculated Funded Student Count numbers for total District student count number, which is higher. This effectively increases the denominator for the percentage calculation and reduces the Charters’ shares. State Funded student count numbers are higher because, in an environment of decreasing student enrollment, the state reduces impact of revenue decreases by computing a 5 year average of student enrollment. For the school year 2018-2019 this increased the total District funded student count number by 1,397 and resulted in a loss of nearly $1M to Charter schools.

Not only did the District perpetrate this loss of agreed upon revenue to District Charters, but they

  1. Ignored letters to the Board addressing this
    1. Letter to the Board – http://improvejeffcoschools.org/wp-content/uploads/2020/10/Gmail-RE_-Jeffco-Short-changed-5B-Charter-Share-by-Using-5-year-Enrollment-Average-in-Calculation.pdf
    2. Letter to the Board – http://improvejeffcoschools.org/wp-content/uploads/2020/10/Gmail-RE_-Jeffco-Short-changed-5B-Charter-Share-by-Using-5-year-Enrollment-Average-in-Calculation.pdf
    3. Response to Board Letter – http://improvejeffcoschools.org/wp-content/uploads/2020/10/Gmail-5B-Charter-Allocation.pdf
  2. Told the press that this was acceptable – https://arvadapress.com/stories/citizens-district-dispute-amount-5b-bond-money-charters-receive,282993
  3. Convinced the Chair of the District’s Financial Oversight Committee, Brian Ballard, to not investigate and that this was a non-issue.
    1. Letter to FOC Chair – http://improvejeffcoschools.org/wp-content/uploads/2020/10/Gmail-RE_-EXTERNAL-Jeffcos-Distribution-of-2018-Bond-funds-to-District-Charter-Schools.pdf

Charter parents campaigned very hard for a Bond that barely passed. How short-sighted is it of Jeffco to not see this? I doubt Charter parents will be as willing to expend as much effort and energy the next time Jeffco wants to pass a bond when Charters will know that Jeffco will be out to take advantage of them.

Jeffco Schools’ Great 5B Bond Deception – Part I

Jason Glass and Jeffco Schools promised transparency when they put a $567M Bond to the vote of taxpayers in 2018.

To great fanfare, Glass rolled out what was called a Flipbook that explained sources of revenue for the District’s 6 year Capital Improvement Program and exactly how much would be spent at each school.

There was one big problem though. The Flipbook did NOT show where nearly $17M in bond proceeds would be used. I even wrote about it in October 2018 – http://improvejeffcoschools.org/index.php/2018/10/ A year and a half later, through CORA requests, I’ve been able to piece together the uses of that $17M, now blossomed to over $19M, in spending:

ProjectEst. Cost
North Transportation-Joyce Renovation$349,400
Trailblazer Stadium$4,415,250.00
581 Conference Place Reopen$518,877.00
Mount Evans OELS Efficiency$3,210,190
Windy Peaks OELS Efficiency$3,340,982
Anderson Preschool Efficiency$117,794
Irwin Preschool Efficiency$48,935
Free Horizon Montessori$174,682
Litz Preschool Efficiency$77,479
North Transportation-Site Acquisition$7,000,600
Total $19,254,189

In looking at this list, one can only guess at why these projects were not shown to taxpayers – most are not directly related to schools. Trailblazer stadium, North Transportation Site, 581 Conference Place – these are not projects that would have encouraged me to vote Yes on the Bond.

Even when asked a question on his much touted Jeffco Generations Facebook page, Glass failed to answer a question regarding the missing projects.

https://www.facebook.com/groups/1236337263132884/permalink/1614849428614997

And, the most egregious thing was that shortly after the Bond was approved by taxpayers the Flipbook was quietly updated. Cost estimates increased from $563M to $594M, an increase of $31M in cost estimates.

Here are several examples of how project costs changed (you can see the complete list here):

SchoolOriginal FlipbookRevised FlipbookDifference
Alameda HS$18,003,098$19,434,000$1,430,902
Patterson International ES$463,102$2,232,000$1,768,898
West Jefferson Middle School$2,323,535$3,700,000$1,376,465
Powderhorn Elementary$5,756,358$6,100,000$343,642

Not only is there not a corresponding increase in revenue to fund these increases, but the impact of the changes turns out to be extremely important in the on-going deception of hiding the degree of cost overruns, which I will discuss in a future post.

The deception to taxpayers regarding 5B funding and projects started early and appears to be well thought out – not something that should be done if Jeffco wants to get another Bond approved in the future.

Jeffco’s Capital Asset Advisory Committee is Failing Jeffco Taxpayers

In 2018, Jeffco’s 5B Bond request for $567M ballot language included ‘spending of the proceeds of such debt to be monitored by the citizen’s Capital Asset Advisory Committee’.

Eighteen months later, with $70M in contingency already spent and initial cost estimates increased by an additional $30M, the Capital Asset Advisory Committee is failing in its task of monitoring of the bond proceeds.

Our fellow taxpayers,:

George Callahan

Kathy Hodgson

Tom Murray

M.L. Richardson

Jeff Wilhite

Megan Castle

George Latuda

Bret Poole

Brittany Warga

as a whole, have failed to be good stewards of our tax money. They have unquestioningly and nonchalantly allowed Jeffco Schools to add $50M of bond premium into a contingency slush fund, meaning that program contingency increased from an already robust $86M to an exorbitant $136M. And, they have seen an additional $11M in interest added to that same contingency for an obscene total of $146M.

As a voter I heard Jeffco Schools routinely tell taxpayers that the District had $1.3B in facilities needs. The Bond was going to be used to address only $563M of those total needs. Yet, when the District had a windfall of $50M, instead of using that to address additional needs or even replace several additional aging elementary schools, the CAAC blindly went along with the District’s overspending and allowed this money to be put into the massive contingency slush fund.

Instead of using this money wisely, it seems like the District and CAAC are going to rely on taxpayers to pass a new bond in a few years to address facilities needs that are only going to get worse.

This is just atrocious monitoring on the part of the CAAC. Jeffco taxpayers were misled by the District’s ballot language and the reasonable expectation that our fellow taxpayers would monitor the bond money like it was their own. It is painfully obvious now, that once on the committee our fellow taxpayers view taxpayer money as funny money. Shame on them.

The CAAC can’t even be certain that at the current rate of spending there will be enough money complete all projects promised to taxpayers back in 2018, as they have repeatedly failed to ask important questions regarding the overspending.

School Districts routinely complain about lack of funding. Yet, why should taxpayers increase that funding when Districts, and particularly Jeffco, are such poor stewards of that money?

At this rate, and with this level of District program management incompetence, it may be a long time before another Bond issue is approved in Jeffco and members of the CAAC will share in some of that blame.

Jeffco’s Budget Reduction Proposals Don’t Make Sense

The Jeffco Board will be presented with additional information related to next year’s budget today at a Board meeting, here and here.

Much of what is included in the two documents makes it look like Jason Glass and the District staff really haven’t thought through what is going to happen to the District financially or how to make the necessary budget reductions.

To start, Federal money, both direct from Washington and allocated by Gov. Polis, appear to being used as compensation for a large budget shortfall in state funding. However, it is my understanding that the Federal money comes with some strings attached – primarily that it be used for explicit COVID-19 related expenditures, not merely as a backfill for items already budgeted or budget shortfalls. No where in the District staff discussion does it talk about these restrictions or how they will affect the use of the money. It merely appears that Jeffco is using the money as backfill. In addition, there is no discussion of ANY additional costs related to COVID, which the Federal money could be used for. Isn’t the District going to have fairly substantial COVID related costs? Why aren’t they reflected in the budget as increased expenditures?

The second major issue I have with the District’s budget discussion is that it is centered on next year. The state budget shortfall will last at least through the following year, probably longer, and the local property tax shortfall will begin next year as well. In this respect, CFO Askelson fails miserably in her job to present the Board with a complete financial picture. How can the Board decide how much to take from reserves this year if they have ZERO information on how bad the budgetary picture could look in the next few years? They can’t! In my mind, that is a demonstration of the total incompetence on the part of Glass and the CFO to not present that information.

Next, I find some of the District recommended cuts to be extremely questionable.

  1. There are only 2 proposed cuts listed as ‘Damaging’. One of those is the District’s paid lobbyist. Damaging? To whom? I have a hard time even remotely thinking of that cut as Damaging. Listing it this way clearly explains everything that is wrong with Jason Glass and Jeffco schools. Glass likes to say: “keep the main thing the main thing’. I hardly think a paid lobbyist is the main thing.
  2. The listing of the ‘Damaging’ lobbyist cut goes hand-in-hand with the ‘Recommended’ cut of 2 Literacy Interventionists. That’s doesn’t seem to be a great idea in a District where over 50% of kids don’t meet state reading expectations. Why not reduce the number of Community Superintendents by 2 for a $326k+ savings instead and even hire an additional Literacy Interventionist?
  3. And, what about a cut of $2.2M in School Improvement Funds, money that principally goes to Title I schools? In the interest of equity, couldn’t Glass find something else to cut – like $4.2M in 1:1 device purchases that have not been proven to improve academic growth or achievement?

Where would I cut? You can see that in a letter I wrote to the Board here, but below are some suggestions of where the District can and should look to make cuts.

I don’t envy the Board in having to make the cuts. I particularly don’t envy the Board because Glass and District staff have done such a horrendous job in deriving a list of potential cuts. However, there seems to be a tremendous amount of bloat in Jeffco’s $1.2B budget that is not focused on improving education that can easily be cut without affecting education or kids.

Why Doesn’t Jason Glass’ Jeffco Restart Plan Talk About Internet Access?

The Jeffco Restart Plan is all about Hybrid – when and how students can go to physical classrooms. But in all of the scenarios students will still be doing Remote Learning 80% of the time.

That makes internet access extremely important. Yet, the Plan didn’t even mention this.

  • The Plan didn’t mention how the District would identify students needing Internet access prior to August
  • The Plan didn’t mention how the District would ensure ALL students would get Internet access at their place of residence
  • The Plan didn’t discuss the cost of providing Internet access

In essence, the Plan didn’t even touch on a key component of EQUITY in the Restart Plan – ensuring Internet access for everyone.

That is just so disappointing. Equity? Jeffco likes to talk about it, but when it comes to making sure it happens, it’s all about ensuring the activist soccer moms are happy.

Glass and Jeffco Board are Failing in their Fiduciary Responsibilities to Taxpayers

5B Bond projects to date are grossly over budget.

This past Thursday, May 7, 2020, Tim Reed, Executive Director Facilities and Construction at Jeffco Schools, told the Board of Education that as of April 30, 2020 $57M in contingency remained for the District’s 6-year Capital Improvement Program (CIP).

Given that the Contingency presented to taxpayers prior to the 2018 5B vote was $86M, $57M sounds like a reasonable amount to be remaining.

However, it was only after Director Susan Miller asked a question did Tim tell the Board that the $57M included additional Construction Contingency of $11.5M that the Board would later vote on that evening for overages in the Alameda project. This would effectively reduce the amount of remaining contingency to $46M. In addition, it seems that the additional Construction also comes with even more Soft Costs (thanks to another question by Director Miller), usually in the range of 20%. This would necessitate the use of ANOTHER $2.25M in Contingency, further reducing the available amount to under $44M.

While this is troubling, a mere 18 months into a 6 year program, there was even more troubling news in Tim’s slide. That news was that Tim and Jeffco have added the $50M in bond premium and $11M in bond interest to the Program’s Contingency, raising total Program Contingency to a whopping $147M.

It is shocking to me that Jeffco has seemingly burnt through over $100M in Contingency in only 18 months, when the total Program Contingency was presented to taxpayers as $86M.

And only Susan Miller is concerned and asks questions about this.

Brad Rupert asked Tim Reed if he agreed with the statement that it appeared that over half of the Contingency remained and Tim agreed. That statement is ONLY true if you base it on the original $86M.

Ron Mitchell flat out stated that he trusts Tim Reed, obviously too old and tired to, or maybe incapable of, performing the math to show that $100M in Contingency has already been spent.

And through all of this Jason Glass just sat silently. His non-existent leadership on full display.

Who is going to provide oversight to this spending and overages? A contingency budget is money set aside to cover unexpected costs during the construction process. Who is going to ask why nearly every project has unexpected costs and why those unexpected costs are so high? Who is going to ask why there should be an expectation that this trend will change with future projects? Who is going to ask why there should be an expectation that there will be enough money to deliver on ALL of the promises made to individual schools and taxpayers?

Who is going to take their fiduciary responsibility seriously? Glass? Don’t count on it. The Board of Education? Susan Miller is asking the right questions. Brad Rupert is asking questions, but they leave too much wiggle room for Tim Reed. Susan Harmon and Brad Rupert are just District fan boys who never question anything the District does or says, so don’t count on them.

The District and taxpayers have already suffered from this fiscal mismanagement (What to do with $50M in bond premium). It’s time to put an end to the reckless and harmful spending propagated by Glass and Reed to ensure that ALL projects can be completed on time with the initially planned scope and the money taxpayers provided.

The Jeffco Schools CFO is either Incompetent or Trying to Hide Something

It is simply not true when the Jeffco CFO tells the Board that an anticipated loss of 350 students will result in a loss of $3M in revenue or $8,571 per student.

This statement is predicated on 2 assumptions:

1. That all revenue the District receives is based on student count

2. That a loss of students results in an immediate loss of revenue

Neither of those two assumptions is true.

1. Only state revenue to the District is based on student count. Local property tax and ownership tax receipts to the District are NOT based on student count. The District will get the same amount of revenue no matter the student count from local property taxes and ownership taxes. Only approximately $380M of funding comes from the state which means the state funds only $4,700 per student. Therefore, the only revenue loss would be a maximum of $1.7M, NOT $3M.

2. However, Colorado mitigates the loss of revenue due to loss of students by basing District funding on the 5 year average of student count if student count declines. Therefore, when a District loses students, the real first year loss of state funding is only 1/5 of the actual student loss count. In this case 70 students or approximately $350,000, in the first year – 2020-2021. That’s a far cry from $3M that Askelson is telling the Board.

Finally, Askelson’s gloom and doom presentation also only shows one side of the Accounting ledger. Her presentation is based on the assumption that a loss of revenue results in absolutely ZERO reduction in costs. Again, this is a false assumption. Individual schools are ‘paid’ by the District on a per student basis via SBB funding. At approximately $5,500 per student for SBB (page 24 of Budget) and a loss of 350 students, the District’s expenses are reduced by approximately $1.9M.

In conclusion, instead of a $3M loss of revenue, Jeffco, in Year 1, only loses approx. $350,000 in state revenue but also has a corresponding cost reduction of $1.9M, for a net positive impact of $1.5M. Taking into account that Askelson told the Board they would be losing $3M the difference is $4.5M, or more than enough to prevent a furlough day, or prevent the closing of schools.

« Older posts