Month: February 2022

In October 2019 Jeffco’s BoE approved a $36M contract, on the consent agenda without discussion, for the construction of a Jeffco Fiber Network. $21.6M of the funding for this would come from Jeffco’s Capital Reserve Fund with the remaining $14.4M from the IT dept’s budget and grants.

Board Docs very specifically stated that $21.6M would come from the Capital Reserve Fund, not the Capital Improvement Program. The bond had been approved by voters nearly a year before and numerous bond related projects up until that time flatly stated that their funding would come from the bond program. This item was different in that it stated funding was coming from Capital Reserve.

Yet, the ‘H DW Network Upgrades’ project subsequently appeared on the monthly bond program CAAC report in December 2019. When project costs first started to appear on the CAAC report in January 2021, this project came with a $7M price tag.

The project next magically appeared in a Reed presentation to the Board as a “possible” use of $14.6M unallocated contingency in October 2021.

But, it didn’t stay there long. By the December 2021 meeting that $14.6M suddenly showed up on the monthly CAAC report with a $0 original budget. That means it wasn’t planned to be in the scope of the Capital Improvement Program, but yet, there it is. Who approved that and why did they approve it?

And, as is usual in Jeffco schools, it only gets worse. In a presentation posted days before a Feb 2022 Board Meeting, the Fiber project was no longer on the list of potential projects for the CIP’s unallocated contingency.

But, it magically reappeared several days later during the actual presentation (revision 1), but with a price tag of $5.4M, while still appearing on the CAAC report for $14.6M. The only reasonable conclusion for this is that the project is either running significantly over budget, or the IT dept can’t totally fund its $14.4M portion of the project.

Something very strange is happening with the Fiber project. The 10+ schools, including Vivian, Mulholm and Lumberg, who will end the program with FCIs over 20% will continue to suffer in facilities with significant needs because the bond program is spending money on projects that were hidden from voters and not going directly into fixing classrooms.

In February 2020 @JeffcoSchoolsCo BoE was presented with a Food and Nutrition Services Master Plan.

This plan included a recommendation that Jeffco construct a Central Production Kitchen at Quail Street, w/advantages such as providing fresh consistent food quality and alignment with the previous recommendations of the FNS Task Force.

The cost to implement the Central Production Kitchen was $29.4M, including soft costs.

So what did @JeffcoSchoolsCo do?

Absolutely nothing!

Financial genius Brad Rupert noted that Jeffco didn’t have $30M lying around.

Entrepreneurial wizard Jason Glass noted that Jeffco could use the bottomless pit of Capital Reserve funds or ask voters to approve another bond for the funding.

And District COO Steve Bell, who oversees FNS, just sat there like a lump on a log.

The truth of the matter is that Jeffco DID have money for the project and for some reason either incomprehensibly didn’t realize it, or didn’t want to use it.

In December 2018, Jeffco received $50M in premium from the bond’s first issuance, with another $30M expected from the 2nd issuance. If Jeffco set aside $25M of that for a Fletcher Miller replacement school, which was removed from the bond program, that would leave $25M, almost the $29.4M needed.

Yet, the bond program included kitchen renovations for 41 schools and the construction of 5 new schools. It is not hard to imagine $4.4M in cost savings if a Central Production Facility was created, reducing planned construction and renovation costs.

But the Board didn’t take action and leadership, including Glass, Schuh, Dorland and Bell, did nothing to advance the project while estimated costs have now climbed $10.6M to $40M.

How does that even happen over the course of under 2 years? That’s an increase of 37%.

Let’s be perfectly clear. This is now a $15M mistake. Money that could have been used in classrooms.

$25M in overages were spent on fields while a plan for a central kitchen which would supply fresh food to kids was just forgotten and now, based on current program overages, it is doubtful Jeffco will have the money to complete.

More than 3 years after Jeffco received the first $50M in what eventually became $118M in bond premium there has never been a discussion on how to prioritize or utilize that money, and now it is nearly gone, for unexplainable reasons. That is shameful and fiscal malfeasance by everyone involved.

This is just one of the numerous examples of mismanagement and incompetence related to Jeffco’s bond program. Jeffco should never be trusted to be good stewards of bond money ever again.

On November 10, 2020 the consulting firm of Moss Adams presented their findings from a mid-program assessment of Jeffco’s Capital Improvement Program. The report was not good.

Included in the report were areas that should raise serious concerns among the Superintendent, Board Members, District Staff and Jeffco taxpayers.

One of the areas that Moss Adams looked at was Contractor Procurement, essentially how contractors were chosen.

Moss Adams wrote:

… however, bid tabulations or evaluations for the selection and award of the projects were not available. Additionally, documentation was not available to demonstrate the selection process and awarding of professional services from the prequalified list of consultants. We were unable to determine whether or how the selection and award process for District projects included the factors outlined in the District’s policies and procedures.

Essentially, Moss Adams is saying that there is no record of how winning bidders were chosen. Think about that for a minute. Of the 6 projects Moss Adams looked at from a Contractor Procurement perspective (Appendix H), only one was awarded to the low bidder and that there is zero documentation on why low bidders for the other 5 projects weren’t chosen. In addition, 5 of the bidders who were selected were subsequently issued change orders, the minimum value of which was over $6.5M.

This is just beyond belief. It is certainly not hard to imagine scenarios where a procedureless system like this can, and maybe has been abused.

Something similar happened with regards to Architect Procurement.

Moss Adams looked at 8 projects with respect to Architect Procurement (Appendix I). None of the 8 provided a proposal, with Moss Adams stating that these contracts appeared to be “sole source procurement”. How can anyone think that there is not the opportunity for fraud, favoritism or over pricing with so many sole source contracts? And, not to be outdone by the Contractor Procurement, all of these architecture firms were issued substantial change orders too.

This is not the way to run a capital program. The optics are that there is way too much opportunity for fraud and corruption.

These examples are only the tip of the iceberg if you take the time to critically read the full Moss Adams report, not just the cherry picked and sanitized sound bites District staff presented to the Board.

The program is out of control, not just from a cost perspective, but also from management and fraud mitigating perspectives.

Jeffco taxpayers and voters deserve nothing less than full Financial and Performance audits. Taxpayers were promised that Jeffco would be good stewards of their money. That isn’t happening.