June 2024 – Improve Jeffco Schools

Jeffco’s Capital Improvement Program is running $165M over original cost estimates. In 2018, Jeffco told voters that their Capital Improvement Program would provide $563M in upgrades to district facilities and provide an additional $56M to Charters to upgrade their facilities. Jeffco also received additional revenue of $118M in bond premium and over $16M in earned interest giving the program a current total of $836M to work. Over the course of the program the Board approved $56.5M in new projects and $12M of original projects were dropped leaving $44.5M in net new projects. All of this means that Jeffco burnt through their $86M in program contingency and the district’s $122M share of premium and interest with only $44.5M in new projects to show for it.

What happened to that $165M? Certainly some of it was caused by inflation, but the fact of the matter is that Jeffco apparently didn’t plan for ANY inflation. That is malpractice. However, even projects at the beginning ran over budget, so inflation isn’t anywhere near the real reason for the overages. Certainly, there was added scope, but since the Board didn’t approve that added scope who did, and what was the process for those additions? Unfortunately, no one knows. That is not a good thing. Shouldn’t there have been a Board and community discussion on how to prioritize the use of the bond premium and interest instead of it just disappearing in some black hole? Best practice says that should have happened, but in Jeffco the money just disappeared and no one can explain where it went on who approved it. All of that is shady and plain wrong in my book. Unfortunately, neither the CAAC nor the Board seem to care. That means that neither of those two groups should be trusted when they want to make promises when asking for the next bond.

Here is my calculation in obtaining the $165M in overages number. $165M is just ridiculous, not just in the shear number, but also in the percentage of the entire program.

In order to calculate district overages associated with the CIP, I started with the program’s current revenue and removed costs associated with Charters. I then took the program’s initial estimated cost which was $563M and adjusted it by adding Board approved additions to the program and removing projects that were canceled. For projects that were canceled, I adjusted the amount by the 5% that was added to all project costs at the beginning of the program. For ROTS I, I used the Net addition amount of $12M that was initially told to the Board during the approval process. Detail is listed below.

Here are the steps:

1. Start with the current projected program revenue, $836M.

2. Remove the amount allocated to Charters, $64M.

3. This will leave the funds available for district projects, $772M.

4. Determine the program’s current adjusted budget

a. Reduce the original $563M program budget by projects that were canceled (not including closed schools that were part of ROTS I and II). Adjust for 5% cost increases that were added after the program was started.

b. Add back in the original estimates for projects that the Board approved. For ROTS, this is the net increase for the affected schools. For example, that would be $12M for ROTS I.

5. Subtract adjusted program budget from district funds available to get an Overage amount, $165M, since there are no funds remaining.

6. Adjust Overage amount by Unallocated remaining. Since there is currently a deficit in Unallocated remaining, that increases the Overage. This total is $165.5M.

7. Divide Overage by Adjusted Budget to get Overage percentage, or 27.2%.

Note: Non-Board approved additions totaling $23,048,093 are categorized as Overages.

Last night, the Jeffco Schools Board approved the JCEA contract prior to hearing its full financial consequences and without giving a large component of its constituents, parents and taxpayers, a chance to publicly comment on how bad that contract is.

That was flat-out wrong! Was that intentional? Was the Board afraid of what it might hear?

Let’s take a look at some of the things that should have been heard:

First, the size of the increase, 5% COLA, 2% one-time (bonus) along with Steps and Lanes, seems massive in comparison to inflation and private sector increases. This is on top of recent large JCEA increases as shown in ths image from Board Docs.

In total, JCEA has seen around 40% in increases over the past 5 years. That’s a pretty big number in anyone’s book.

However, what is more concerning is the lack of value that kids and taxpayers are getting from these large increases. Let’s take a look at the recent Spring ELA MAP results in comparison to last year’s. Keep in mind that one of the Superintendent’s evaluation goals was

The percentage of students who meet/exceed literacy standards and show evidence of being on or above grade level will increase at least 2-5% during the 23-24 school year

MAP Reading	Spring 2022-23	Spring 2023-24
Grade	Met or Exceeded 2022-2023	Met or Exceeded 2023-2024	Difference between 2023 – 2024
2	49.2	47.1	-2.1
3	51.2	50	-1.2
4	54.7	53.3	-1.4
5	54.5	53.3	-1.2
6	49.1	45.9	-3.2
7	49.7	51	1.3
8	49.6	47.7	-1.9

These are not the promised 2% – 5% increases, these are decreases! How does that even happen when Jeffco had $61M in ESSER III funding to address academic issues? Did the Board just reward teachers for these horrendous results? Why should teachers even care what happens in the classroom if they are going to be rewarded no matter how bad the results are? Did the Board even consider the message it just sent to the teachers and community?

In case you’re wondering, while Math scores were a bit better than Reading, they too didn’t get close to the goals the Board set for Dorland.

MAP Math	Spring 2022-23	Spring 2023-24
Grade	Met or Exceeded 2022-23	Met or Exceeded 2023-24	Difference between 2023 – 2024
2	40.9	39.8	-1.1
3	41.4	42.1	0.7
4	32.3	33.4	1.1
5	32.8	33.7	0.9
6	29.1	29	-0.1
7	28.4	30.5	2.1
8	31.8	36	4.2

What’s even worse, if that is even possible, is that the Board approved the contract prior to a complete discussion on its financial implications. Was it paying attention when CFO Copland told it what the contract does to the budget? There’s a $33M budget deficit this year and a $40M deficit in FY 27, which is bad enough. But, to keep the deficit at only $40M in FY 27 Copland already had to cut expenses and limited COLA increases to just .5% in FY26 and .9% in FY 27. Think about that in the context of the 5% COLA this year. There is no way the COLA increases will be that limited. The deficits she showed the Board are not going to be even close to reality. They are going to be much, much worse. In essence, the district is headed toward a financial disaster and this contract is a large contributor to that. But, but, but… Jeffco is going to go out for a Mill. The Board might want to think long and hard about exactly how much it can get from a Mill and whether it will be successful. It is going to be a very hard sell given the tax environment and the current public perception of Jeffco schools.

Unfortunately, the Board didn’t hear any of this before it approved the contract last night. There is something very, very wrong with that.

Month: June 2024

Jeffco’s Capital Improvement Program is $165M Over Original Cost Estimates

Approving the JCEA contract at the Study Session was wrong!

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