Dude, Where’s My Senate Candidate?
I just became aware of a juicy story written by Gretchen Morgenson and published by the New York Times regarding some, uh, messy information regarding Senator Michael Bennet and his handling of the Denver Public Schools pension monies. Bennet is currently hoping to defend his candidacy and defeat fellow Democrat challenger Andrew Romanoff (more on my thoughts about him below.) People from Colorado, who are witnessing a tight battle between the candidates, should remember Bennet as the former superintendent of Denver Public Schools. DPS employees recall Bennet as a leader who spent his first few months visiting schools with former Chief Academic Officer Jaime Aquino at his side. Together, the gents painted a rosy picture of a future in which teachers and their professionalism would be valued, and insisted that the new Denver Plan they had in the works was there to stay. “We are committed to turning this district around!” Ah, such good times, but… Oopsy, daisy,and, ¡Ay caramba! It turns out the brash, young Mike was openly hostile to collaborating with the local union, eventually going so far as to remove the Denver Classroom Teachers Association link from the DPS homepage. Then, Jaime abruptly returned to the greener pastures of New York City. Next, Senator Ken Salazar got appointed to the Obama Cabinet. Mr. Bennet was gone like a cartoon puff-of-smoke when it was suggested he fill Ken’s shoes for the duration. (Interestingly, he has not minded taking the credit nor any related praise for Denver’s much-discussed ProComp pay system, despite the fact that it was negotiated collaboratively with the previous leadership and…the DCTA.) My sources say the jury is out on the fate of the Denver Plan. Let’s take a look at some of what Morgenson’s piece from the Times has to say:
In the spring of 2008, the Denver public school system needed to plug a $400 million hole in its pension fund. Bankers at JPMorgan Chase offered what seemed to be a perfect solution.
The bankers said that the school system could raise $750 million in an exotic transaction that would eliminate the pension gap and save tens of millions of dollars annually in debt costs — money that could be plowed back into Denver’s classrooms, starved in recent years for funds.
So, the Board of Education thought that sounded jim dandy, and bien chévere, if a bit complex. Mike and his buddy Tom, the chief operating officer helped convince them. Who’s Tom, you might ask? Why, he’s Mr. Boasberg, the current DPS superintendent. There’s more:
Since it struck the deal, the school system has paid $115 million in interest and other fees, at least $25 million more than it originally anticipated.
To avoid mounting expenses, the Denver schools are looking to renegotiate the deal. But to unwind it all, the schools would have to pay the banks $81 million in termination fees, or about 19 percent of its $420 million payroll.
As Denver weighs its refinancing problems, it faces another conundrum: the money the city raised to shore up its pension fund has turned out to be inadequate because of the stock market’s plunge.
The fund turned in a dismal performance in the credit crisis — as was the case with most such funds — losing almost twice the $400 million borrowed by the school district to plug the pension gap. As a result, the school system’s pension shortfall recently stood at around $386 million, only slightly lower than it was two years ago, and even though $400 million had been funneled into it in 2008.
While the pension’s merger with the state system allows Denver’s school system to avoid paying interest on shortfalls, that benefit is temporary. If a shortfall still exists in 2015, the merger requires that it be closed.
Mr. Boasberg maintains that the deal has allowed Denver to hire teachers while other school districts are cutting back. But Henry Roman, president of the Denver Classroom Teachers Association, said that fewer teachers had been hired this year than in previous years.
Some board of education members fear that the human costs of Denver’s exotic refinancing deal are yet to be fully realized — and when they are, it will be in classrooms.
¡Ay de mí! Wasn’t that what they were trying to avoid? (Hey, is there any chance Bennet or Boasberg will pick up the tab if folks want to retire and there’s no money for the pension plans they’ve paid into?)
So we’ve got Mr. Wealthy, Devil-May-Care-About-What-Happens-With-Denver-Schools-After-All and Candidate Romanoff, who, in his role as State House Speaker, helped pass some of Colorado’s current harsh legislation affecting the indocumentados in our midst. (I don’t think you want me to get on that soapbox now, but suffice it to say he’s not my favorite either.)
Ugh! What’s a pro-teacher, Latina, registered Democrat to do now? Ballots are due by the 10th.