As I’ve mentioned before, Dallas ISD is embarking on a major comprehensive plan (called, conveniently enough, the “Comprehensive Plan”) aimed at radically expanding early childhood services, creating more options for parents via schools of choice, expanding specialized career options, and upgrading some dilapidated facilities. This week, the board briefing agenda includes a major first step on that path. The school board trustees are being asked to approve the “interim bridge plan,” which includes a small amount of all the items above.
The bridge plan is, IMHO, fantastic. It’s based on years of conversations at the board table with the administration about major facilities needs and strategic initiatives. It is so chockablock with changes (28 DISD schools are affected) that listing all its details would make this post more absurdly long than they usually are. So let’s touch on a few components of the specific benefits to students, then the costs, and finally end with the major issues at play.
Of the 28 schools affected, a few high points:
Several closed schools are re-opened, but in a truly innovative way to improve student outcomes
- Hulcy Middle School is being re-opened as a school of choice. Hulcy is located just south of I-20 and just west of I-35, almost in Desoto. For context: One of the district’s first schools of choice is A. Maceo Smith New Tech High School, located about a 15-minute drive from Hulcy. As a school of choice, anybody can go to Smith (i.e., it’s not a magnet; all you have to do is want to go there). After Smith’s transition to a school of choice, college readiness at the campus (as measured by TAKS/STAAR, which is just an okay measure, but still) has jumped from 6 percent to 53 percent, even while the poverty rate of its student body has slightly increased. This is a very good model for Hulcy to follow, and this will mean great things for kids in far southern Dallas.
- Harllee Elementary is being re-opened as an early childhood center. Harllee is just across the street from Townview, in the Trinity Bottoms neighborhood. This would become the first specialized early childhood center in DISD, and would include 3-year-olds and 4-year-olds as well as kindergarteners (and perhaps older kids). Crucially, it would also serve as a great training laboratory for pre-K staff in DISD as the district implements the most aggressive early childhood plan in the nation.
- Ditto for Arlington Park Elementary. It’s located in the Medical District, and it will be a specialized early childhood center. For you DISD history buffs, the neighborhood it sits in is where Sam Tasby lives — as in Tasby v DISD, the case that caused the district to finally desegregate. What a great turn of history that the district will be investing in perhaps the greatest tool available to eliminate the racial achievement gap in his backyard.
- Frazier Elementary is going to be opened as one-stop-shop adult services center in partnership with a broad based community-led nonprofit in an effort to execute a true two-generation strategy to really attack poverty. This is about as creative as it gets and should have happened a long time ago. I’m excited to see that the board is finally getting a chance to move forward on this.
A few new “schools” are being created
I put “schools” in quotes because the bridge plan calls for the creation of two specialized early childhood centers. One is located in Far North Dallas — wud up, middle class! — intended to address critical pre-K needs related to Bush, Junkins, and Frank elementaries. The other is located in Wilmer, where there isn’t currently a DISD school at all (there are schools in Hutchins, north of Wilmer), but there has been a lot of growth from new industrial jobs in the area.
Targeted pre-K expansions, addressing overcrowding, and renovations
So far, all these projects but one are south of I-30, where (by my calculations) 97,000 of DISD’s 160Kish students reside. But there are several components of the plan that will be of interest to folks up north (and still a few more for the southern sectors). Most of these involve facility expansions (either targeted at pre-K or just in general), critical fixes for broken and very old building components (like leaky roofs and plumbing), and retrofitting for specialized academic programs (like personalized learning transformations). A few key expansions and renovations are planned northward at W.T. White, Lakewood, Stonewall, Nathan Adams, Smith Elementary, Marsh, Tom Field Elementary, Cabell Elementary, Sanger, Burnet Elementary, and Rogers Elementary. Southward, additional renovation and expansion projects are planned at Holland at Lisbon, Guzick, Seagoville High School, Macon Elementary, and Titche Elementary. In addition, there is a bunch of money set aside for more choice projects, including one (possibly) in downtown.
Even though it’s clear from reading the plan that the love has been spread to most of the trustees’ single-member districts, the methodology used by the administration appears to differ from methodologies of the past. Early childhood expansions are targeted based on specific student population analysis. Renovations are based on the most-broken buildings, per the recently completed facility condition assessment. Expansions are based upon the most overcrowded buildings. And the choice initiatives appear to be targeted to the locations where students are the furthest behind. Meaning: This might be the first real facilities investment in the district focused on need, rather than just “whatevah seems popular or will get me some more votes.” At the last board briefing, some trustees argued that the methodology isn’t perfect. I suspect that’s true. But to the extent those arguments are made just to change the projects included in the list .. well, then that’s not really about the methodology, is it my friends?
The takeaway? This is important. Crazy important. This really is a bellwether moment for the board. If they don’t approve this plan as is, it’s a strong sign that the trustees aren’t capable of focusing on needs for the district as a whole. That they can’t see the big picture. That they can’t, in a word, lead. Instead, major changes to the plan will be akin to our single-member trustees acting solely in their self-interests. Not too different than many politiicans, true. But these politicians make all-too-often hollow claims that their intentions are to help the district’s overwhelmingly poor student population. Big difference to me.
Let’s talk about the money
Nothing in life is free. This plan will cost $148M. But the financing approach is interesting.
The DMN did three marginally informative stories and blog posts on the financing strategy on this plan a few weeks ago. I say marginally informative because the DISD news team, yet again, leaves out critical context. They say DISD has high levels of debt, which is true in absolute terms but dead wrong when considering the number of students or the property tax base (either a much more appropriate way to look at debt). They talk about the district’s tax rate but fail to mention that DISD has the lowest tax rate in North Texas besides Highland Park, as I have noted previously. They talk about interim debt being possible without voter approval without noting that this means that voters pay less in taxes than they would otherwise, and likewise without noting that DISD’s board unanimously approved interim debt in the amount of $143M two years ago without a peep (from the DMN or anyone else). And they talk about one particularly innovative debt method without noting that Houston ISD has used that same method (in larger dollar amounts) than DISD initially proposed. (No, this is not a surprise, but it continues to frustrate me.)
Worth noting: The interim bridge plan is different today than it was when presented last month. That appears to be an administrative response to requests made by trustee Eric Cowan during the last board briefing to explore ways to reduce debt using cash. From my reading of it, this plan is actually better, so kudos to Cowan for pushing them to do so.
Specifically, the $148M breaks down like this:
- $30M is going to come from leftover funds in the 2008 bond program (cash on hand).
- $43M is going to come from general funds (cash on hand).
- $75M is going to come from maintenance notes, paid out of the general operating budget.
Now, school finance is a bit complex, in the same way the Nazis’ Enigma code was a bit troublesome to break. It makes my head spin. So let me break this down in the simplest way I can, for my sake and for yours.
The money coming from the 2008 bond program (first bullet point above) is money already authorized to be spent on construction projects by the voters. It is money that can only be spent on construction projects. It is currently completely unallocated to any specific project. Using that money for the construction portion of the bridge plan is a total no-brainer.
The money coming from general funds (second bullet point) is coming from the district’s fund balance, aka, its savings account. The fund balance is currently about $343M. There’s no magic number for how much this should be, but experts agree that two to three months’ worth of cash flow is a good amount. (Think of it like your checking account relative to your monthly salary.) The district spends about $100M monthly out of its general fund, which would mean $200M to $300M is what should be in that fund balance. This is a clear indication that $43M is an okay number to come out of the fund balance. It is, perhaps, precisely the right number to come out of fund balance, leaving the district with about $300M in said balance, the high end of what DISD should have.
The past few meetings, however, I’ve heard a few status quo trustees question (read: attack) the fund balance numbers. This requires a bit of backstory. A few years ago, the trustees approved interim debt in the amount of $143M for several renovation projects (largely HVAC and middle school science labs). In that case, it was cool that the district was using a special federal grant program so interest would be subsidized. When the board unanimously approved this, the administration communicated the plan about this debt: The district would be setting aside something in the neighborhood of $7M to $8M per year for the next 20 years to pay this off. One year has passed, and so the district has done this one time. But because of accounting rules related to the federal grant, the district had to immediately create a category of fund balance money large enough to account for the entire debt premium. (Stay with me.) This is the “assigned fund balance.” If you subtract that assigned fund balance from the total fund balance, you get an “unassigned fund balance” amount of $159M. The trustees bringing this up appear to be saying to the administration: “You’re misleading us on the amount of funds we really have in our savings account, and as a result, we don’t want to support your proposals to use any of that money for these projects or any other.”
This is important: That logic makes sense if you don’t understand accounting. It makes no sense, however, if you a) understand accounting or b) realize that the administration is doing precisely what it said it would do: setting aside $7M to $8M per year for 20 years.
The basic issue here is this: The district really does have money in its fund balance to partially support these projects. Using that money is maybe not a no-brainer, but it is a way-homer – it’s a no-brainer if you understand the accounting at play, but it takes some time to understand the accounting.
That brings us to interim debt (the third bullet point above). The administration initially proposed two simultaneous debt options, one traditional and one fairly innovative (which, of course, drew the ire of DMN reporters). Given board feedback, the administration dropped the innovative approach completely and shrank the total debt amount dramatically. What is left is $75M in bonds paid for by the general operating budget (one of four budgeting categories, as I’ve noted).
The district currently has $143M in similar bonds. They set aside about $7M to $8M per year to pay for that debt out of their $1.3B annual general operating budget. Assuming I understood staff’s presentations (no guarantee on that, btw), this new debt has been structured so that it will cost about $3M for the first five years and then about $7M each year thereafter for 20 years. (CFO Jim Terry and his staff deserve kudos for figuring out how to do this. They will receive such praise when it thundersleets in hell.)
Now the question the board has to ask is whether it wants to allocate up to $7M per year for 20 years to get these projects going. The last time they were asked this question, they unanimously voted yes. Do trustees do so again?
If so, this will bring total debt service to about $14M per year out of a budget that is currently $1.3B annually, or close to 1 percent. This seems VERY appropriate to me, given the benefits to a big chunk of DISD students from these investments.
But let me drop one more bit of knowledge to convince you. The general operating budget this year has revenue of $1.3B. But last year’s budget had revenue of $1.202B. The year before that, revenue was $1.175B. While enrollment over those same periods increased, the bulk of these funds were new money coming from state increases in public education spending. In an environment where the state has increased DISD’s budget by an average of $63M annually, debt costs of $7M won’t even be noticed. There will be more money to go around for teachers, books, buses, electricity, you name it — even when this debt is being paid off.
All this while tax rates remain static. No new taxes, but new instructional opportunities for kids, many safer buildings, and no crowding out of other expenditures. That’s really the bottom line here.
The real story
I alluded above to the real story behind this. Because if you look at the numbers, there should be no controversy. This is a must-approve by the board.
However … [BIG SIGH]
Trustees will fight over the projected list because they are generally more focused on their territory than on district needs overall. If the list changes, we know that that’s because a majority of trustees couldn’t put the district’s needs as a whole over the needs of the few. If the interim bridge doesn’t pass at all — well, first, that would be a tragedy for kids who have to wait on projects they obviously need.
Some trustees will throw out this specious argument: “This should really be decided by the voters.” That is an appealing argument on its surface, but it doesn’t stand up to any real scrutiny. People elect representatives to make Big Decisions for them, and then we evaluate those decision on the whole when the next vote comes around. We expect them to be better-versed in these issues than we are. In other words, when the time comes, we expect them to lead.
What that argument REALLY means is that you shouldn’t expect trustees to do the right things for kids. It’s only up to the voters to do the right things, and then only if at the same time they want to pay higher tax rates. And for those of you new to politics: “more study” = “we’re trying to kill this.”
The real real story
Even THAT is not the real story in its entirety. Because this is all a backdrop over a board bitterly divided on the superintendent.
Consider: At last week’s board meeting, trustee Joyce Foreman, who has been opposed to Miles almost since his arrival, voted against just about everything on the agenda, including the consent agenda items.
She voted against approving monthly financial statements.
She voted against approving construction projects at Storey Middle School, Walker Middle School, Spence Middle School, and Dealey Middle School, even though the financing and project scope had already been approved for those projects.
She voted against accepting grant funds.
She voted against an early childhood home visitation program done with United Way.
Let me rephrase that last one: She FREAKING voted against an early childhood home visitation program done with United Way.
She voted against replacement lawnmower blades.
As I’ve detailed previously, since Foreman came onto the board, she has pulled just about every item she can pull from the consent agenda to discuss them in open session just to make meetings longer.
Why does she do this? Because she wants to cause as much pain as possible for all the other trustees, until she gets her way. So until further notice, she’s against everything. She will remain so until the superintendent is fired, no matter how much the things she’s voting against will help the children of DISD.
That is the real backdrop of this vote. Of course, if the superintendent is gone, so is his cabinet, so is the interim plan, and early childhood development, and schools of choice, and so much more. But that doesn’t matter to a few trustees, who are perfectly willing to use the kids in this town as pawns in their power struggle with adults. I’m hopeful that the majority of the board won’t let that happen. I’m hopeful they will lead.
