Category: Financial (Page 4 of 6)

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!

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.

The District has very carefully shown that $705M will be funded for capital improvements, and in very broad categories, shown that $705M will be expended on page 2 of the Flip Book.

The District has also very carefully shown the costs of the new and replacement buildings and the improvements at each school.

However, when looking at the details, $15M in expenditures is missing.

Approximately $415M in detailed school projects (as outlined in the Flip Book), $66M in new construction, $64.5 in replacement schools, $56M to Charters and $86M in Contingency gives a total of approximately $690M.

Where’s the other $15M?? That’s over 2% of the total program and it is not a rounding error.

One could say that it was an innocent mistake. Or, one could also say that $15M in expenditures and projects was purposely left out of the Flip Book to prevent questions being raised about those projects.

In 2016, numerous questions were raised regarding the use of funding for renovating stadiums and transportation centers as significant funding was allocated to projects in these facilities. Obviously, those needs still exist, but they don’t appear in any discussions or literature put out by the District or Glass this year.

Does the District have plans to use the “missing” $15M for projects at other locations and subsequently conveniently “forgotten” to mention those projects or put them in the Flip Book to avoid having to answer questions about them?

Is that being honest with the taxpayers? Is that being transparent?

If this is indeed true, it is certainly not being transparent.

I would even go as far as classifying it as intentional deception on the part of Glass and the District and I don’t think deception should be rewarded.