A different perspective on the current state of Jeffco schools

Category: Jeffco Capital Improvement Program

You Can’t Trust Jeffco Schools Capital Asset Advisory Committee (CAAC)

Jeffco Schools Capital Asset Advisory Cmte can’t be trusted to make good financial decisions and gets played as fools by Tim Reed and Steve Bell. They are utter failures at being good stewards of Jeffco’s taxpayers’ money.

They are responsible for overseeing now $110M in cost estimate overages of the Capital Improvement Program and recently agreed to spend an additional $17M for a new gold-plated swimming pool for the community of Arvada.

The $17M and decision process for a new Arvada community pool is egregious. Here’s why:

1. Jeffco swim teams will use the pool approximately 10% of the time, Arvada residents the rest. Yet Jeffco will pay for 50% of the $33M-$35M construction costs. That doesn’t seem equitable. Not one CAAC member questioned that arrangement or suggested that Jeffco’s share be reduced to something reasonable like $7M.

2. Reed told the CAAC that construction costs for a Jeffco owned 50 meter pool would be $15M-$20M. Not one CAAC member asked if Arvada was taking advantage of Jeffco by building a gold plated facility that would cost $15M more than Reed’s estimate.

3. No one asked what was even included in that additional $15M.

4. Other area rec center pools in Wheat Ridge and Evergreen are 25yd pools. No one asked why the Arvada facility had to be a 50 meter pool. No one asked what a 25 yard facility would cost.

5. No one asked what the cost would be to add 25 yard pools at High Schools. Smaller pools, locker rooms already in place and possibly shared walls would result in lower costs.

6. Not one CAAC member asked what the implications and precedent would be set for the other 4 Rec Districts in Jeffco when their pools “age out”. Would Jeffco help those Rec Districts fund their new pools in the future? Or, would Arvada residents be “winners”? In 2018 Evergreen voters rejected a bond package that included pool upgrades to their 50 year old failing facility.

7. No one asked about the equity. No one asked why Reed and Bell thought it was fair for Lakewood or Evergreen residents to pay for an Arvada community pool.

7. Not one CAAC member asked what Jeffco schools facility needs would not get accomplished because $17M went into Arvada’s new pool. Taxpayers were told that Jeffco had $1.3B in facilities needs when they were asked to approve the $567M bond. Are those not real needs now? Shouldn’t there be a prioritized list of projects awaiting funding that this project is compared against? Replacement schools for example? Isn’t prioritization a key function of the CAAC? Yet, trade-offs weren’t even discussed.

8. Not one CAAC member asked about the certainty of Arvada voters passing a bond to fund the facility. A recent bond to fund upgrades in Evergreen Rec district, including pool upgrades failed.

9. Not one CAAC member questioned Reed when he said that the pool would be funded from Capital Transfer, like Cap Xfer is some unlimited source of funds. Jeffco Schools promised voters that Capital Xfer would be committed to the CIP for 6 years. There is no additonal money. In fact, Jeffco is already shortchanging the CIP by $12M

10. Not one CAAC member asked how funding Arvada’s pool would affect voter sentiment District wide when Jeffco needs another capital bond passed in a few years. The current bond was carefully crafted so that everyone got something and still just barely passed. If Jeffco schools pays for Arvada’s gold plated facility, you can be guaranteed it will not sit well with Lakewood, Wheat Ridge and Evergreen voters in the future.

In a 6-0 (one absent) vote, the CAAC recommended to endorse the project.

The committee’s failure to ask reasonable questions relating to spending $17M on a pool facility for a specific community is indicative of the overall lax oversight and general negligence in the CAAC’s role as stewards of Jeffco taxpayers’ money.

Jeffco’s CAAC can’t be trusted to make good financial decisions.

Jeffco taxpayers deserve better!

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

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

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

I’ve outlined several of those areas below:

1. The article states:

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

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

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

2. The article states:

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

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

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

3. The article states:

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

FALSE – Voters were told $23M

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

4. The article states:

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

FALSE – Hazmat costs ARE overages

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

5. The article states:

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

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

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

6. The article states:

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

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

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

7. The article states:

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

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

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

8. The article states:

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

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

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

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