A different perspective on the current state of Jeffco schools

Category: Financial (Page 1 of 4)

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.

What to do with Jeffco’s $50M 5B Bond Windfall?

When Jeffco went to the financial market to sell bonds for its Capital Improvement Program, interest rates were low. Due to the way the bond was structured, this allowed Jeffco to obtain $50M in unexpected funding, or bond premium, for essentially the same costs.

But what to do with that extra $50M?

  1. In its 5B bond campaign Jeffco leadership stated (falsely) that the District had $1.3 billion in deferred maintenance needs. So why not use that $50M to address some of those needs that the $546M of 5B money couldn’t?
  2. Replace several of the schools that were slated for replacement in the 2016 failed Bond proposal such as Kyffin, Green Gables, Fletcher Miller or Parr.
  3. Ensure there is equity. Once 5B projects are completed there will still be several schools that have obvious FCI values much higher than other schools. For example, Vivian will have a FCI of over 44% while Stober, Colorow, Muhlholm and Lumberg will all have FCIs above 22%, well above the average FCI for District schools. Why not use some of the bond premium to actually provide the equity that Jeffco is always so quick to talk about?
  4. Reduce the amount of Capital Transfer from the General Fund that will be needed each year. The Capital Improvement Program is predicated on receiving $23M per year from the General Fund. It looks like there is already a shortfall this year of $2.1M. So, as a minimum, use the $50M bond premium to reduce the pressure on the General Fund. Spread out over the remaining 5 years of the Capital Improvement Project that would mean a reduction of $10M from the General Fund each year.

This $50M is an OPPORTUNITY to use taxpayers’ money to over deliver and make some additional enhancements to Jeffco.

To do anything less will be fiscal mismanagement, demonstrating that Jeffco is not capable of adequately managing the money taxpayers trusted it with. It will also make it more difficult to get Bonds passed in the future.

Do not use this $50M as added contingency for a program that already has $86M or 15% contingency built into it!

Board Governance, Fiduciary Responsibility, Transparency and 5B Accountability

At the end of January, Tim Reed gave a rosy assessment during his Capital Improvement Program overview.

Unfortunately, things may not be as rosy as he wants everyone to believe.

Tim Reed did not tell the Board of Education, that based on the District’s project estimates presented to voters in 2018 that there are currently at least 5 schools over budget. And, this is just using costs from Board approved contracts.

These overages will be much higher when prorating District wide contracts for IT and Security, allocating Track upgrade costs and any contracts under $500,000 that are not readily publicly available. In addition, it is highly unlikely that these will be the last costs at these schools.

A mere sixteen months after 5B approval, this is not a good track record.

These 5 schools include:

  1. Three Creeks
    • Flipbook Estimate – $4,697,000
    • Contracts Awarded – $5,044,317 + Track(from $19.5M contract), IT and Security Upgrades
  2. Wilmott
    • Flipbook Estimate – $3,894,141
    • Contracts Awarded – $6,694,585 + IT and Security Upgrades
  3. Columbine HS
    • Flipbook Estimate – $14,129,966
    • Contracts Awarded – $15,548,043 + Track(from $18M contract), IT and Security Upgrades
  4. Arvada HS
    • Flipbook Estimate – $14,765,828
    • Contracts Awarded – $15,548,043 + Track(from $19.5M contract), IT and Security Upgrades
  5. Conifer HS
    • Flipbook Estimate – $9,820,651
    • Contracts Awarded – $9,782,705 + Track(from $19.5M contract), IT and Security Upgrades

With $86M in Contingency, $50M in Bond Premium and a few $M saved from cheating Charter schools from their fair share, some overage MAY be alright. But, does the Board KNOW that it is alright? Will there be enough money left to deliver on the promises to the schools which will not be getting work done until the end based on this current rate of overages and use of contingency funds?

And what about the now known extras that were not identified in the Flipbook? Extras such as $7M for the North Transportation Hub, or $4.225M for Trailblazer Stadium or even $750,000 for Project Management (that’s over $11M so far). What else is out there? That eats into the Contingency and Premium pretty quickly.

Doesn’t the Board have a Governance and Fiduciary Responsibility to ensure that everything that was promised to taxpayers is delivered?

I would think that the Board can’t deliver on that promise unless it begins looking at contracts as part of the big picture, starting at how they fit within the Flipbook budget of each school. Then the Board needs to understand how each school fits within the Bond’s total budget. Continuing to approve contracts piecemeal, one at a time, does not give anyone an idea of how spending fits within the overall Bond budget. This is how surprises happen and money runs out.

All decent Project Managers track projects’ budgets. In this case, it could be as simple as tracking the following and have staff report on this to the Board with every contract approval request:

  1. Original Flipbook Estimate
  2. Contracts Awarded to Date
  3. Estimate of Remaining Work
  4. Total Variance from Original Estimate

It would seem that some of the Board’s primary functions are Governance and Fiduciary Responsibility. Without looking at each contract as part of the overall budget, the Board is failing, especially since so many school projects are already over budget.

In addition, the Board has repeatedly stated their goal of public transparency. By allowing staff to continue to merely give rosy 5B assessments without including project budget tracking numbers will mean that the Board is failing in that aspect too,

It’s time for the Board to exercise their Governance and Fiduciary Responsibilities and require District staff to fully disclose budget numbers in a manner that provides accountability to the very specific and detailed public promises made in the District’s 5B Flipbook.

Students, not funding, should be the priority in Jeffco. Vote Susan Miller!

Recently Chalkbeat published the answers to nine questions they asked Jeffco Board candidates Susan Miller and Joan Chavez-Lee.

The bottom line is that Chavez-Lee is focused on state funding, while Miller is focused on students.

Chavez-Lee says that the biggest issue facing Jeffco schools is the ‘amount of money it receives from the state of Colorado’. Miller, on the other hand, says that Jeffco ‘needs to do a better job of preparing our children for the challenges they will face after graduation’ and highlights the large numbers of students who are not meeting state literacy, math and science standards.

The fact that 54% of Jeffco 3rd graders do not meet state literacy standards and are doomed to higher probabilities of not graduating from high school, being incarcerated and lower earnings is the biggest issue facing Jeffco’s students and Jeffco. Coupled with declining overall achievement and growth scores, we need to acknowledge that Jeffco has significant issues.

It’s imperative that we have someone like Susan Miller on the Board. While we can acknowledge that more funding would be better, we need someone who more importantly recognizes the magnitude and severity of the education problem we have. We need someone like Susan Miller who will put students, not state funding, first.

Jeffco Continues to Attempt to Hide Full-Time Enrollment Numbers for 5B Charter Allocation

Enough is Enough, Jeffco!

In response to a CORA request asking for FTE numbers, by school, for every school in the District, Jeffco responded by writing:

At this time, our Subject Matter Experts only have the unofficial student count by school for the Charter Schools and can provide that to you at no cost. If you would like the FTE data for every school in the District they estimate the time necessary to research and retrieve that information to be 3 hours.

This is just a BLATANT attempt to make it difficult for me to get the numbers!

And, it’s outright FALSE!

Let’s look at this from another perspective. If Jeffco truly doesn’t have these numbers:

  1. How could they calculate the Charters’ share of 5B funding?
  2. How does CDE have the detailed, by school numbers?

The answer to the first question is easy – Jeffco couldn’t make the calculation! This makes Jeffco’s response to my CORA request extremely difficult to believe.

For the second question, I know that CDE has the same detailed numbers because I sent a CORA request to CDE with the identical question. And, guess what? CDE responded. CDE gave me, without a fee, the breakout of FTE numbers by school in Jeffco. Yet, for some strange reason, Jeffco doesn’t have those numbers readily. How does CDE have the FTE numbers, readily available, and not Jeffco?

The answers to both of these questions make it impossible to believe Jeffco’s response to my CORA request.

That leaves the question of WHY Jeffco would respond in the manner they did.

Everyone can have their own opinion on the reasons, but I’m going to believe that Jeffco is trying hard to hide something (and I know what it is, thanks to CDE, but more on that later) and their response was outright deception and obstruction of attempts to determine the truth.

The Arrogance of Jason Glass and Ron Mitchell & the Squashing of Questions in Jeffco

Preceding the March Jeffco Board of Eduction meeting, there were questions in the Jeffco Generations Facebook group and in letters to the Board of Education regarding exactly how the District’s Charter Schools’ share of 5B funds was calculated.

Those questions seemed legitimate, since the CDE numbers appear to give Charters a 10.7% share of students – 9,052 Charter school students out of a total of 84,631 students in the District (w/o GVCA). Because of this, people wanted to see, in the interest of transparency, how exactly the prorated share was calculated and the source of the numbers. You would think that it would have been fairly simple.

Because of what I consider to be this justified confusion, I would have thought I would have seen a somewhat different tone in the Facebook responses surrounding this topic. I would have expected to have seen some potentially empathetic or conciliatory responses such as: “Now that you bring this up, we see how there might have been some confusion.” or “Maybe we should have included something to clarify this in our literature.” or “We’re sorry we created this confusion, we’ll learn from this and strive to do better the next time.” or even “At the (add a date here) meeting of the Charter school consortium, we very clearly discussed that Charters would be receiving a prorated share of the Bond proceeds.” Unfortunately, I didn’t see those responses in the Facebook discussion on this topic. At https://www.facebook.com/groups/1236337263132884/permalink/1758767880889817/ you can go back and see if you agree or disagree with my opinion on this.

Yet at the Board meeting, when the District had an opportunity to put these questions to rest, they didn’t. Worse, Jason Glass and Ron Mitchell essentially shamed people for even asking the questions to begin with.

Jason Glass, at 5:25, stated that he thought the District had gone above and beyond being proportionate, fair and direct with regard to Charters, and stated that he found that the “allegation that we have done anything else is offensive.”

Ron Mitchell then agreed with Glass and stated that it is simply not true when people “accuse us of being unfair.”

Glass and the District staff had the opportunity to answer what were simple questions. They didn’t, and instead stated how they were offended by people asking them. Not only was their arrogance on full display, but all of this was a blow to transparency with regard to 5B funds and Charters. Using words such as “offensive,” “allegation” and “accuse” against people who were just seeking understanding certainly sent an extremely strong message to everyone in the community who might have questions in the future – “How dare you question us? Don’t ask questions!”

Glass came to this District stating that he would listen to everyone and try to bring sides together. His responses to the questions on 5B Charter funding, which should be simple to answer, have been anything but that.

Glass’s and Mitchell’s words at the Board meeting showed who they truly are – arrogant and dictatorial!

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