After $5 Million Deal, Critics Ask if Portland Schools Misled Voters

Monday, September 08, 2014

Cornelius Swart and Shelby Sebens, GoLocalPDX

Franklin High

Franklin High School will be remodeled using money from a 2012 voter-approved bond. Credit: PPS

Questions are being raised about whether or not the Portland Schools District misled the public after the district agreed to transfer $5 million in public bond money to the city of Portland for transportation projects.

Some critics are crying foul, stating the projects were not part of the bond that voters approved.

In June, the Portland School District and the City of Portland entered into an intergovernmental agreement to transfer $5.2 million out of a $482 million bond approved by voters, so that the city could “to identify, prioritize, and fund mutually-agreed upon transportation safety improvements,” according to city documents.

The money comes from a schools construction bond that was approved by voters in November 2012. The bond language that went before voters said the money would be used to renovate Franklin, Grant and Roosevelt high schools and Faubion PreK-8 school, as well as other school building improvement projects such as fixing roofs, converting boilers and upgrading science classrooms.

There is no mention, however, of transportation projects.

The spending of bond money can be a slippery slope, according to experts. In the past, PPS has even had to refund money from a bond after the district failed to adequately outline to the public how the money would be spent.

Bonding of public projects

Economist Eric Fruits has been a critic of past PPS bond measures. In 2011 he was involved in a grass-roots campaign against an earlier construction bond the district floated.

Fruits doesn’t mind the district and city working together on projects that keep kids safe, but claimed the district has gone outside the bounds of what it contracted with the public to do.

“When you earmark construction bond money, the money should be used on school property,” said Fruits. “If you use the money outside of PPS property, that's a problem.”

Earlier such missteps led to financial problems.

In 1998 the district got into a financial bind when an internal audit concluded that PPS had not dealt clearly with the voters when it spent $8 million from a $196.7 million from a 1995 construction bond to build Forest Park Elementary School and renovations at PPS headquarters on North Dixon Street.

In that case, construction of the new school in Northwest Portland and the renovations were included in the language put before voters, but they were absent from the district’s legal documents, used to guide spending, according to media reports at the time.

In that case, district Superintendent Ben Canada ordered a halt to the renovations at the district’s Dixon Street headquarters mid-project. The district committed to repaying the $8 million back through its general operating funds, much to the chagrin of teachers negotiating for pay rises at the time.

Oregon State Rep. Lew Frederick was PPS spokesman in 1998 when news of the district’s mismanagement went public.

He said he was surprised by PPS’s latest spending moves.

“That’s a lot of money,” Frederick said. “I would have expected some mention of [transportation projects] somewhere. I would think they would be clear about that.

"You don’t want to say to the public, ‘Please give us money. We’ll figure out later where to spend it.’”

Good deal for the taxpayer, officials say

safe_routes

PPS agreed in June to hand over $5 million to the city's Safe Routes to Schools program. Credit: City of Portland

Both the city and the district said they’ve been working for years on the agreement and that the public will benefit from the deal.

The money will go into the city’s Safe Routes to Schools program. The program prioritizes pedestrian and bicycle improvements on city surface roads and sidewalks.

The city said the agreement is similar to deals it’s made with other school districts in Portland.

“There are transportation safety needs at many schools across the city, in PPS and in east Portland,” said Dylan Rivera, Portland Bureau of Transportation spokesman. “The city is partnering with all school districts to improve transportation near schools, especially for biking and walking access for families.”

The $5 million can only be spent in areas around the 63 of PPS’s 85 schools targeted by the bond. Much of the money will be spent on major construction projects around the high schools slated for renovations.

PPS and the city said the agreement will make it easier and cheaper to renovate schools.

The city of Portland often requires that large construction projects include upgrades to the surrounding transportation infrastructure, such as roads, sidewalks and traffic signals.

The city agreed to eliminate a number of permitting hoops for the district and streamlined the development process for construction as part of the deal, Rivera said.

Considering the scale of the bond construction happening across the city, the deal actually lowers the cost to the district, PPS spokesman John Isaacs said.

“It might normally have cost us $10 to $20 million more,” Issacs said. “It’s a good deal for the community.

"It saves the taxpayer money and the city gets flexibility in the use of the funds.”

A matter of public trust

It’s the flexibility part that municipal attorney Edward McGlone cautions against.

McGlone advises cities throughout Clackamas and Marion counties on municipal issues including levies and bonds.

ballot_tax

Public bond dollars are often legally flexible. Credit: Eyeliam {cropped}, cc

In his view there is plenty of legal grey area within which the district can operate. But that isn't necessarily a good thing, he added.

“There are legitimate interests in getting students to and from school safely,” McClone said.

The district can use bond money to pay for costs that are a normal part of their construction projects, he said.

“But if I was the property owner (paying for the bond) I would be concerned," McClone added. "I’d say, ‘Wait, this isn’t what you promised to do."

McGlone was senior assistant counsel for Clackamas County for a decade. In his experience, public entities get in hot water less for crossing legal lines than when there’s a public perception that a line has been crossed.

“More often than not, it’s about whether or not (public entities) are keeping the trust with the public,” McGlone said. “I think the bulk of it comes down to that.”

Related Slideshow: Slideshow: Top Portland Metro High Schools

GoLocalPDX has ranked the top high schools in the metro area using a method developed in Babson College, Mass. High schools were ranked based on complete data available.

After $5 Million Deal, Critics Ask if Portland Schools Misled Voters

Bonding of public projects

Good deal for the taxpayer, officials say

A matter of public trust

Related Slideshow: Slideshow: Top Portland Metro High Schools

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