Tax Rate Hikes and Future Facilities: Cart Before the Horse

cart-before-horseThis blog first brought up the issue of funding Dallas ISD facility needs with a Public Facility Corporation which would issue bonds repaid by general operating funds of the district as part of a lease purchase agreement. These bonds would neither be guaranteed by the state nor voter approved. The bylaws of this Corporation are shot with loopholes and the Articles of Incorporation do not mention some of the more troubling aspects of this scheme found in the law that authorizes those entities.

Talk about upsetting the apple cart!

The Dallas Morning News, Jim Schutze, Todd Williams, and probably even the paid shill over at D magazine have come to the rescue of DISD with editorials and emails denouncing those who dare to question this Corporation setup as evil doers poisoning the waters of public opinion, protecting bad teachers, and in general haters of children, particularly poor kids.

Apparently transparency and honest discussion are trumped by little children. Especially little poor children.

We are asked to support every initiative the district proposes without question because, of course, lack of student success can be overcome with the right program, the right school, the right teacher. Never mind that the Broad Foundation discontinued its annual contest for the best urban school district because, frankly, there just aren’t any, not even after years of Broad driven reform ideas. The Gates Foundation has funded a never ending stream of reforms, from Small Learning Communities to the current Personalized Learning. How many of these initiatives have lasted more than 3-4 years?

Gosh, even the Dallas Morning News, in an apparent lapse of editorial judgment, said “Dallas and other major districts have failed to distinguish themselves for reasons that go beyond effective teaching in the classroom. Poverty is a consistent culprit here, which is why schools in Dallas’ poorest neighborhoods, including those south of Interstate 30 and the Trinity River, post disappointing performance results.”

Really? I could have sworn that the DMN, Todd!, Mayor Rawlings, Ken Barth, et al, have been telling us that BAD TEACHERS are the reason our kids are not succeeding. That a child’s ZIP code should not determine their destiny. That all children can learn, regardless of their SES background. It’s the teachers’ fault if the kid does not achieve!

Which brings us to what to do about those poor kids and their educational opportunities.

The district is asking the Board of Trustees to approve $172 million in debt, $107 million of that funded by the Public Facility Corporation. The next step, apparently, is to ask voters to approve a permanent tax rate hike, to the allowable $1.17 per $100.

This is to fund the “recommendations” of the Future Facilities Task Force. The Task Force has been meeting since October, yet from a review of their agendas it looks like they have mostly been listening, not discussing. There is mention in recent news releases from the district of “community input” but that has yet to happen. In fact, the final report has not even been drafted, and the Task Force has not finished its job. I’m not sure Task Force members even saw the draft report before it was released this week.

The Parson’s Facility Report, released in 2013, is the basis for much of the facility renovation recommendations. Houston ISD also contracted with Parson’s for their facility report, and many were shocked when it was revealed that the figures were not based totally on site visits but also used computer modeling.

Was this how Dallas ISD’s $2.6 billion in needs was calculated?

So trustees are being asked now to approve funding for a major overhaul of district facilities before a final report has even been made. The district has proposed creating a Public Facility Corporation, which will issue debt repaid from General Operating Funds. Payments on the proposed $105.7 million initial debt will be $2.7 million a year for 5 years, with payments increasing afterwards and due in 25 years for a total of $267 million. This will fund a portion of the facilities plan before the district presents a comprehensive plan for the whole $1.5 billion proposal.

While explaining the necessity of this scheme to the board,we were warned we must buy now, as the price will go up! This scare tactic falls short on facts; there is little chance the higher interest rate a PFC would have to pay would be matched by rising rates on General Obligation Bonds issued after next November, especially considering the PFC must wait 60 days for public comment before issuing debt. And of course we are warned construction costs will go up.

As Trustee Foreman said, “We will always have needs.” What’s the rush?

In all of this talk about the future, trustees have not been asked to consider, or even allowed to have a discussion on, the ramifications of a Tax Ratification Election.

The Citizen Budget Review Commission discussed tax hikes during a budget discussion in October 2012. Chief Financial Officer Jim Terry led the discussion and Chief of Staff Alan King participated.

Terry explained the complexities of school finance in a presentation using “buckets” and “pennies”. Long story short, Dallas is a property wealthy district, and, until current law changes, is subject to “recapture” on tax rates above $1.06 per $100.

Terry explained, and these are 2012 numbers so this may have changed, that for every penny above our current rate of $1.04, the district would raise $11.9 million for pennies $1.05 and $1.06; but for pennies $1.07 through $1.17, we would only keep $6.3 million per penny, and would have to send the rest back to the state.

For example, of the extra $130 per $100,000 in taxes you might pay on your home after the proposed TRE, almost $52 will go to other districts.

So say the value of your North Dallas home is $400,000. You will pay an extra $520 per year in taxes, but our children keep $312 and $208 goes to the state. Appraisals are higher now than in 2012 so this number may not be the same today, but you get the idea.

Has this part of a tax hike been made public and discussed? Is this a reasonable, efficient way to fund facilities? It has already been outed that Corporation bonds carry higher interest rates than General Obligation Bonds. Now we want to possibly fund future facilities with tax dollars that we only get to keep a portion of?

Is this the best way? Have we had the discussion?

This is not about upsetting the apple cart, this is about putting the cart before the horse!

Trustees, and taxpayers, should demand full disclosure on the future plans and funding before being asked to approve any part of it. Transparency and common sense demand that we have all the facts before we commit funds to this plan, funds that belong to the children.

Let’s start discussion of our future plans with an honest, detailed analysis of the data, at a child level. Pie charts showing the achievement gap and graphs of income levels don’t tell us what to do in a classroom of 3rd graders. We have the knowledge and the resources to do it the right way; let’s give our children support based on their individual needs and the needs of their community. If the need for a new school or a new classroom becomes apparent after that discussion then let’s find the best way to build it.

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Posted in Baloney Meter

Dallas ISD Public Facility Corporation: Fox in the Henhouse?

fox-in-disd-henhouse-bondsIf there’s one thing chickens hate worse than a snake, it would be a fox in the henhouse.

Guess what, folks, we seem to have both.

Just when we thought we had taken a shovel to the Home Rule snake, it seems to be rearing its ugly head again in the Texas legislature.

But while the snake is slowly encircling its prey, a sneaky fox is eyeing a fat hen or two.

On the Dallas ISD Board agenda for February is a resolution to create a Public Facility Corporation (PFC) for the district. This is an entity authorized by Texas law which, in simple chicken language, totes the note for buildings the school district wants, then leases them back to the district.

The corporation is responsible for the debt and the district pays the lease fees from regular operating funds generated by local taxes or available state or federal funds.

There are several reasons for districts to use PFC’s to fund facilities and many have. But why is Dallas doing this? Why not the usual bond election?

Superintendent Miles has been making the rounds at Town Halls, with wunderkinds Alan Cohen and Mike Kaprowski, selling the idea of choice schools (Kaprowski) and Early Childhood Education (Cohen.)

These are, of course, expensive projects

Miles has been dancing around the prospect of a Tax Ratification Election (TRE) instead of a bond election in these Town Halls. The draft Destination 2020 Plan documents support this prospect, saying a TRE (that’s a tax hike) could fund both facilities and “programming.” So, no “bond election”, just a tax rate hike. It is explained in the 2020 Plan that having both a bond election for facilities and a Tax Ratification Election for programming would be “confusing” to voters. It is much simpler just to ask for the money and decide later how to spend it.

Tax dollars raised by a TRE are Maintenance and Operation monies and would fund the lease payments to the Public Facility Corporation, for facilities financed by bonds issued by the PFC.

The PFC can issue these bonds without voter approval. That is the #1 reason for financing facilities through a PFC instead of the usual bond election.

That way voters don’t see this gigantical humongous number – $1,500,000,000.

The tax rate hike voters will be asked to approve is assumed to be the limit allowed by law, which is 14 cents per $100 valuation. That should bring in around $100 million at current values, enough, I’m guessing, to “lease” the $1.37 billion needed for the new choice schools, pre-K centers and school renovations, plus a little extra for “programmatic needs.” Details will be worked out later, I’m sure; I’m just throwing numbers around.

Even without a tax hike, the Public Facility Corporation can issue debt for district facilities. There doesn’t seem to be any limits imposed on the PFC and the voter never approves the “debt.” Because it isn’t really a “debt.” Rent is an “operating expense.” Are you confused? I hope not!

I know next to nothing about school finance but there seems to be some risk here. Tax collections go up and down. If the budget gets squeezed, who will get paid first, teachers or the Corporation landlord?

The Texas districts that have used PFC’s for new facilities have generally not funded large amounts of debt, one study figured 86.5% of the districts funded projects under $10 million. If Dallas ISD does indeed use this method for $1.37 billion that will be a first, I’m pretty sure.

There are also questions about the rate the Corporation will pay on bonds vs what rate a school district would receive. Trustees need to ask for examples from other districts, examples in the range of debt we are talking about. A $50 million deal carries a lot less risk than one for over a billion.

This brings up the issue of guarantees for the bonds. As another local blogger is wont to say, this kind of stuff makes my head hurt, but the way I read the law on bonds and the Permanent School Fund (PSF), neither the bonds issued by the Corporation nor any subsequent refunding bonds issued by the District are eligible for PSF guarantees. Holy Mackerel! Why would we want to do that?

Do I see a legislative issue on the horizon? Do Dallas taxpayers want to bet on that?

Public Facility Corporations assume the bond rating of their sponsor, which in this case is Dallas ISD. I wonder if the District will have their rating adjusted when lenders realize any debt shifted from the PFC to the District is not guaranteed.

Post update: A commenter has pointed out that the Directors may appoint a for-profit agent to run the Corporation. Perhaps we are closer to putting a name on that fox?

The bylaws of the proposed Corporation read a lot like the ill-fated SOPS charter presented to the Home Rule Commission. There are provisions for directors being removed by the “District” without cause, special meetings held with two hour notice (by “telegraph”, no less, never mind that Western Union sent their last telegram in 2006), and rules for committees which appear to permit Corporation business to be conducted by as few as two directors. Add to that the ability of the “District” to “change the structure, organization or activities of the Corporation” at any time, at its sole discretion, and I’m getting worried.

If Dallas ISD trustees could always remain the Directors of the Corporation, it could be argued our elected officials are still making the decisions, but these bylaws, and the state law prohibiting directors from serving more than six years, pretty much guarantee the Corporation board will not mirror the DISD Board of Trustees for very long. The original resolution authorizing the Corporation appears to give the PFC all the powers the law grants, regardless of the future makeup of the Corporation Board.

Other worrisome “details” include the use of the word “may” when referring to the District’s ownership of the property after the debt is paid, as in the District “may accept title.” Hopefully this means DISD has first dibs on the property and can accept or decline possession, not that the district may not even get the opportunity.

It also seems possible that a property financed by the PFC could not only be leased to someone besides the District, it could be given outright as long as they are in the education business and the district approves. Grand Prairie ISD recently announced a partnership with Uplift Education in which the district and the charter school share a campus.

Could DISD build Uplift a whole new school using the PFC? The law says the Corporation owns the property and can “lease, convey, or dispose of the public facility “to “another entity” if the District says that’s OK.

Would it surprise anyone if Dallas ISD built an Early Childhood Center and gave it to a “non-profit” that agreed to run it?

In the end, this is all about public money that ends up in private pockets.

That’s a given, and it happens all the time; that’s why we have bond elections every few years. But at least bond elections allow the voters to look at the plans, see the numbers, and decide. And, we know how many years we’ll be in debt.

Once Dallas ISD establishes a Public Facility Corporation, taxpayers lose the right to decide what’s done with their money. “In perpetuity”, the Articles of Incorporation states.

That’s a long time, folks!

The trustees should have lots of questions about this agenda item. Let’s hope they sharpen their pencils and have those questions ready! As usual, financial items are last, at the end of a long list of presentations, policy changes, and even a closed session on the HR scandal, so it will be a very long day for the trustees.

Foxes like to wait for the chickens to doze off before they pounce. Just sayin’…

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Posted in Rotten in Denmark

Dallas ISD HCM LYNC Messages

Dallas_ISD_HR_ScandalDallas Friends of Public Education has just posted 113 pages of the internal communications within the Human Capital Management Department that resulted in the resignations of HCM Chief Carmen Darville and Executive Director Jose “Tony” Munoz. .

They are posted here on the Dallas Friends of Public Education website.

According to a Dallas Morning News article on February 3, 2015: “The instant messages were among evidence collected by former DISD investigator Vickie Blair and outlined in a Dec. 18 letter that alleged possible improper recruiting practices, falsified records, retaliatory terminations, nepotism and harassment in the human resources department.”

So, get your program handy, or a DISD org chart, and have at it.

Just unbelievable.

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Posted in Giving Grades, Rotten in Denmark

Dallas ISD School Board – Off to the Races!

princess-Wendy-James-and-frog-edwin-floresThree school board positions are up for grabs this May:

District 1, which includes Northwest Dallas and parts of Addison, Farmers Branch and Carrolton and is currently occupied by Elizabeth Jones.

District 3 covers Northeast Dallas and is represented by Dan Micciche.

District 9 covers South Dallas, parts of downtown, Pleasant Grove, Deep Ellum, Uptown, and East Dallas. Bernadette Nutall is the current representative.

Filing opened last week and so far all three seats have seen action.

District 9: Bernadette Nutall appears to have good community support. She has joined with trustee Joyce Foreman in questioning many of the administration’s decisions and proposals, most recently the boondoggle plan to purchase a multimillion dollar building for the administration. I can’t argue with that. In light of the current HR scandal, who would want to see Human Cattle Management ensconced in digs fancier than the revamped Safeway they currently occupy?

Nutall has drawn a challenger, Demarcus Offord, 23 years old and a DISD graduate, who lost to Nutall in the last election. Offord seems sincere, but is unclear what he brings to the table besides youthful enthusiasm.

District 3: Dan Micciche has picked up a candidate packet and is presumed to be running again. Dan is probably best known for his support of Breakfast in the Classroom, an initiative that is hard to campaign against, even though the implementation has had plenty of criticism, ranging from wasted food to roaches to encouraging obesity. But all in all, Dan seems like a nice guy.

Rumor: Former trustee Bruce Parrott, who lost to Micciche last time around, may throw his hat in the ring again. Parrott, who was on the Board when Mike Miles was hired, redeemed himself when he later admitted the Board had, indeed, purchased a “pig in a poke.” Maybe he feels guilty and wants a chance to rectify his wrong.

District 1 promises some interesting fireworks. While current trustee Elizabeth Jones has not officially announced she will not be a candidate, most folks think she will not run again. Jones revealed last year that she is fighting breast cancer and no one would fault her for concentrating on her health in the coming year.

Edwin Flores was first out of the D1 gate, he of the “we’re going to pay for 8 hours we’re going to get 8 hours” fame, referring to the board vote adding 45 minutes to the teacher workday without an increase in pay. Flores, appointed to the Home Rule Charter commission by trustee Mike Morath, was one of the 5 votes in favor of writing a charter to convert DISD into a charter school district. I don’t need to tell you anymore, he is not a friend to teachers. Or students, for that matter, IMO.

Dr. Kyle Renard filed last week also. Renard, a pediatrician, ran against Flores in 2009, and, in spite of a campaign sharing the ballot with 3 opponents and challenging an incumbent, garnered 40% of the vote. Impressive. Since 2009, Renard has been elected to the Dallas County School Board and has continued her involvement with DISD. She is a regular at DISD Board meetings and was a vocal and active opponent to Home Rule. What’s not to like?

Rumor has it that D1 will draw another candidate, psychologist Wendy James. This is where it gets bizarre. James, who holds two doctorate degrees in Psychology, has no apparent record of ever having been involved in DISD or any political office. She doesn’t appear to have any children in the district or any ties to it, which makes one question her sudden interest in DISD.

She does, however, look an awful lot like Dr. Renard. Long blonde hair, “Dr.” in front of the name…makes you wonder if this is the opposition’s attempt to muddy the waters.

James has plenty of internet coverage and has been on over 240 radio shows as a psychologist giving advice on life issues ranging from love to empowerment. She has some books out, one based on the notion that “men are frogs, and women are princesses. “ Not sure what teachers are. Newts, maybe?

I ran a few of her YouTubes, trying to get a feel for where she stood on education. I asked my rooster what he thought, his comment was “I don’t know what she’s saying, but it looks good.” My feathers got a little ruffled with her suggestion that I put on “a little sexy dress” when I go home to the coop, but Rhode Island Reds don’t like to be told what to do, period.

So, the general feeling is James is more a booby trap than a candidate, a glossy “Dr.” recruited to confuse voters. Maybe she’s the real thing, maybe not. In any event, the odds are stacked against her, though she may have more support than is immediately obvious. We’ll just have to wait and see.

Filing ends February 27th. Stay tuned for more excitement. But do keep informed. Now more than ever, school board representatives are key to the direction DISD will take in the next few years. It is critical we have representatives who are truly for the kids.

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Posted in Trustee Elections

Dallas ISD and the HR Train Wreck: Time to Put the Brakes On

train-wreck-Dallas_ISD“The events surrounding the resignation of two high-ranking district administrators are not reflective of who we are as a school district, or who you are as a staff of our organization,” said Superintendent Mike Miles, in a quote from an article yesterday in the Dallas Morning News.

The “events” are, however, reflective of the leadership which brought the two administrators to DISD, a leadership which has imposed its own patronage system on a district accused in the past of cronyism, nepotism, and race-based hiring.

Professionalism and experience in education and administration no longer seem to be the qualifications for a position in DISD. Instead, youth and a background that excludes child centered study seems to be the norm for new hires. Instead of an early childhood director that has studied early childhood, we have an executive who wrote business plans for BBQ joints.

This same director was placed in DISD after being recruited by Ken Barth, education PAC Kids First founder and owner of a business which has employed not only several DISD administrators but current Board president Miguel Solis. Instead of a Transformation Chief with a background in how children learn best we have one who knows the intricacies of military intelligence and received his education administration training from the Broad Institute, known primarily for its reliance on disruptive change, not child development research.

Teach for America’s founder, Wendy Kopp, has said of TFA “We’re a leadership development organization, not a teaching organization, “and nowhere is that more evident than in DISD. Disgraced HR Chief Carmen Darville is a TFA alum. Current DISD administration includes many TFA alums, from the deputy Chief of Staff to the Special Events Director in charge of the personalized learning initiative.

Many TFA alums are placed in leadership roles through Teaching Trust, the SMU affiliated program that awards a master’s degree in Educational Leadership to those completing the program. TFA alums can apply their AmeriCorps grants to the cost of the program.

Departmental reorganizations, seemingly constant fixtures in DISD, have led to the removal or reassignment of just about every administrator with institutional knowledge of the district. Certainly there were changes needed, but the changes seem to have been made without regard to past successes or experience.

So now we are faced with a scandal that promises to bring not only bad press but costly litigation.

Superintendent Miles is busy assuring us that this is an isolated incident and O gosh, he’s even updating the district’s professional standards training. It seems ridiculous that a professional earning more than $190,000 must be told not to bully and disparage fellow workers and trade racist and sexist jokes with other administrators, but maybe that’s not covered in the five week Teach for America training program.

In addition to a call for more training, we were treated last night to a taste of how Miles and Ken Barth’s protégé, Board President Solis, plan to handle this mess at the Board level. More denial and more backroom deals. Sweep it in under the rug, throw ‘em under the bus, stand by your man.

The Board meeting, called to discuss the HR scandal and the related involvement and knowledge of district officials, quickly dissolved into a match of wills between Trustees Elizabeth Jones, Joyce Foreman, and Bernadette Nutall and Board President Solis and his supporter Nancy Bingham. Jones, Nutall, and Foreman objected in the public portion of the Called Board meeting to both the agenda language and the fact that discussion would be in closed session.
Ultimately, after retiring to closed session, district attorneys agreed the meeting was not properly posted, and the Board adjourned.

Let’s hope the public keeps up the pressure on trustees to do the right thing. Right now, DISD can only be described as train wreck in progress. Let’s stop it now and salvage what we can, before there’s nothing left to save.

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Posted in Giving Grades
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Foundation for Empowerment (FCE) released 3 papers:

1. Disruptive Change: Mike Miles and the Crisis In Dallas ISD, which has been prepared with consultation by education academics, extensive research, review of data and education literature, and meetings and interviews with people of Dallas holding varying and sometimes conflicting points of view;

2. Digging Into Data and Evidence: Mike Miles, Dallas ISD, and Trickle-Down Education Report, by Dr. Julian Vasquez Helig, Lindsay Redd, M.A. and Dr. Ruth Vail; and

3. The Challenge of Disruptive Leadership in Dallas ISD, by Decoteau J. Irby, Ph.D. and Matthew Birkhold, M.A.

"You will see from these papers that, after much research and discussion, we believe the current Superintendent lacks the pedagogical, leadership and integrity qualities necessary to lead Dallas ISD and recommend the Board terminate his contract."

Citizens wanting to speak at regular board meetings and briefings must sign up by calling Board Services at (972) 925-3720 no later than 5 p.m. on the day before the meeting.

Contact the Superintendent and Trustees:
3700 Ross Avenue, Box 1
Dallas, TX 75204

Superintendent Mike Miles

Lew Blackburn, 1st Vice President
District 5
Term Expires 2016
(972) 925-3718
Oak Lawn, West Dallas, Wilmer, Hutchins and portions of East Oak Cliff

Miguel Solis, Board President
District 8
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(972) 925-3721
Love Field, Northwest Dallas, and Central Dallas

Eric Cowan
District 7
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North Central Oak Cliff and parts of West Dallas

Nancy Bingham
District 4
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(972) 925-3722
Southeast Dallas, Seagoville, Balch Springs

Elizabeth Jones, 2nd Vice President
District 1
Term Expires May 2015
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Northwest Dallas, including North Dallas, Addison, parts of Carrollton and Farmers Branch

Mike Morath
District 2
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(972) 925-3721
North and Near East Dallas

Dan Micciche, Board Secretary
District 3
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(972) 925-3722
Northeast Dallas

Joyce Foreman
District 6
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Southwest Dallas

Bernadette Nutall
District 9
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South Dallas and parts of Downtown Dallas, Pleasant Grove, Deep Ellum, Uptown, and East Dallas

"Republics are created by the virtue, public spirit and intelligence of the citizens. They fall when the wise are banished from the public councils because they dare to be honest and the profligate are rewarded because they flatter the people in order to betray them." --Joseph Story, Commentaries on the Constitution, 1833