A different perspective on the current state of Jeffco schools

Category: Financial (Page 1 of 4)

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!

Why won’t Jason Glass show 5B Charter calculations?

As the discussion surrounding the allocation of 5B monies to Charters has continued over the past few weeks, it has been easy to see why there has been confusion. First, EVERY piece of literature put out by the District stated that Charters would receive 10%, or $56M from the bond proceeds. Not one piece that I saw contained an asterik clarifying that the share was dependent upon Full Time Enrollment (FTE) such as “* FTE dependent”. Personally, it makes sense to proportionally distribute the funding based on FTE, but it certainly appears that there are people who strongly believe that they were told that Charters would get a flat 10%, and I can see their point. I wasn’t in those meetings, but the anecdotal evidence is that there was certainly a high degree of confusion in this regards, and not just from EVERY piece of written literature and media.

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.

By the time the Board meeting was held this past Thursday questions regarding Bond proceed allocation appeared to shift to understanding how the FTE numbers were arrived at and the calculation of the prorated share. Those questions seem legitimate to me since using CDE numbers at https://www.cde.state.co.us/cdereval/pupilcurrent it appears that Charter students make up 10.7% of the District’s student counts. These numbers appear to match up with the student count numbers contained on page 20 of the District’s Office Statement to Bond investors that can be seen in this letter to the Board https://www.boarddocs.com/co/jeffco/Board.nsf/files/B9T4N972FC2D/$file/c19119O.pdf, which I would think would be the official, audited numbers. Those numbers show 9,052 Charter school students out of a total of 84,631 total students in the District, or 10.7% by my calculations. I will state that the District may do some additional calculations on these numbers to convert to FTE since some students only attend ½ time, but I think that is what, in the interest of full transparency, people want to see – how exactly the Charter proration was calculated. And, I think it should be simple enough to provide this detail.

Yet, at Thursday’s Board meeting, when the District had an opportunity to put all of these questions to rest, they didn’t.

At the 5:17 point of the Board meeting Livestream Kathleen went into a discussion of the history of past Bond proceed sharing with Charters and then went on to discuss that there are a variety of ways to count students, that the audited student numbers are what the District uses and that Golden View’s numbers are subtracted. Yet, she failed in the most important part of any explanation – showing the actual numbers and formula that the District uses and the source of those numbers. That means that questions remain.

We can only wonder why there is such an unwillingness to show the numbers and calculations.

Is Jason Glass and the District trying to hide something? It seems that it would just be so simple to show the numbers, explain them and let everyone go away satisfied. Unfortunately, that hasn’t happened and the questions remain and people are left to wonder why.

To me, it seems that this entire issue has been extremely poorly handled by Glass and the District staff.

Therefore, in the interest of full transparency, let’s see the full accounting of the formula for and source of the student count numbers used to calculate the Charters’ share of Bond proceeds!

Board’s continued 5B Deferred Maintenance Deception

I’ve previously written about Jason Glass’s & Ali Lasell’s public deception regarding their claims of the District’s $1.3B in “Deferred Maintenance” and sent a letter to the Board regarding the same.

Not only do the District’s numbers not add up, but the use of the very specific term “Deferred Maintenance” is just wrong and inaccurate. “Deferred Maintenance” has a very specific meaning in the financial, accounting and business world. The Federal Accounting Standards Advisory Board defines “Deferred Maintenance” as maintenance and repairs that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period.

What Jason Glass and Ali talk about when they talk about “Deferred Maintenance” is not “Deferred Maintenance” at all!

First, Jason Glass, as the CEO of a $1B organization should know better and SHOULD know what that term means. Second, the use of the key word “Deferred” means maintenance that was scheduled previously, but has not yet been performed, as in delayed. We’re talking about the past tense of a word here for the people in the school District who may not have been paying attention when they went to grade school. In this case, the District attempts to claim that $371M in projected maintenance, over the next 6 years, is currently “Deferred”.

The District’s response to my original letter on this topic was comical, to say the least.

The District continues to claim there was $1.3B in “Deferred Maintenance”, but even their numbers just don’t add up.

Here’s an extract from their response:

The $1.3 billion was arrived at in the following manner.  The capital program is planned over two phases of five to six years per phase.  As of February 2018, the value of deficiencies as defined in the annual Summary of Findings is $588 million.  The proposed 2018 bond, valued at $567 million, will address about $250 million in deferred maintenance priorities 1-3; an additional $125 million towards educational adequacy, the balance in replacement facilities, growth accommodation through additions and new buildings, safety and security, and technology.

The investment in current deficiencies will be $375 million or 64% of the need.  Life cycle renewal is valued at $371.3 million in non-inflation adjusted dollars.  This amount continues to grow each year as systems and components reach the end of their life cycle requiring major investment or replacement.  In 2023, when the 2018 bond should be near completion, these items will have moved into the deferred maintenance categories.  The balance of deferred maintenance items not addressed by the proposed 2018 bond, in non-inflation adjusted dollars, will be $213 million in addition to the $371.3 million of life cycle work that have become deferred maintenance leaving $584.3 million in unaddressed deferred maintenance.

Summarizing, the 2018 proposal is valued at $567 million, a 2024 bond proposal valued in 2018 dollars would be $584 million or nearly $1.2 billion in 2018 dollars.  Applying even a modest inflation of 3% over six years, the cost exceeds the $1.3 billion value.

Here are the summarized key points in that response:

  • As of February 2018, the value of facilities deficiencies is $588M (certainly not $1.3B).
  • The Bond will address about $375M, or 64%, of that need.
  • The balance of deferred maintenance items, not addressed by the Bond, will be $213M ($588M – $375M).
  • The balance of the bond ($567M – $375M or $192M) will go toward “replacement facilities, growth accommodation through additions and new buildings, safety and security, and technology” and Charters.
  • Projected Life Cycle renewal is valued at $371.3M, which in 2023 will have moved into deferred maintenance categories

For the time being, let’s ignore the FACT that you can’t call maintenance “Deferred” now, if you’re talking about something that won’t even be needed for 4, 5 or even 6 years in the future. Therefore, let’s just add up the numbers they gave me:

$375M in bond funds used for maintenance and educational adequacy needs

$213M in current maintenance needs not addressed by the bond

$371M in upcoming life cycle needs over the next 6 years

It’s time to bring out the calculator, because the total from those three numbers is $959M, NOT $1.3B.

The District’s “Subject Matter Expert” attempted to say that a liberal use of inflation COULD bring that total up to $1.3B in 6 years, but the facts are the following:

  1. You can’t compound that total cost figure over the course of 6 years because even the District isn’t claiming that the total amount is currently deferred.
  2. The “Subject Matter Expert” also incorrectly, and deceptively, claimed that in order to get to $1.3B, the entire $567M bond was deferred maintenance, which we know isn’t true: “Summarizing, the 2018 proposal is valued at $567 million, a 2024 bond proposal valued in 2018 dollars would be $584 million or nearly $1.2 billion in 2018 dollars.  Applying even a modest inflation of 3% over six years, the cost exceeds the $1.3 billion value.”
  3. Even still, if you are going to claim that Deferred Maintenance is going to accrue over the next 6 years, shouldn’t you also reduce that by the amount the District plans in Capital Transfers during that period? To present a balanced picture, you should! Hasn’t the District been spending approximately $17M per year in facilities maintenance? And what about claims in the Bond package that amount would actually increase to $138M over the course of the next 6 years — wouldn’t that reduce the $959M by $138M to $821M? It certainly would, and the fact that this offset was left out of the District’s analysis only serves to further highlight either the incompetence or degree to which you, and the District staff, will go in order to misrepresent finances and mislead taxpayers.

To state it plainly, the District does NOT have $1.3B in “Deferred Maintenance” needs, since $371M in the costs portrayed are merely currently PROJECTED needs and haven’t been deferred. And, $192M of the claimed “Deferred Maintenance” is not “Maintenance” at all, including $56M that is designated for Charter Schools.

Therefore, Jason Glass’s, Ali’s, and other District employees’ use of the term “Deferred Maintenance”, in an attempt to portray a greater need than there may actually be within the District is inaccurate, misleading and just plain wrong and highlights the depths they will go in order to intentionally deceive taxpayers.

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