Dallas City Hall Wants to Create Nonprofit to Help Uplift Education Sell Bonds for Expansion

upliftedlogo.jpg
Speaking of Uplift Education and its planned expansion into Deep Ellum ...

There's an intriguing item that just appeared on the Dallas City Council's consent addendum for next week's meeting, posted here. According to the doc, the city wants to create a nonprofit called the City of Dallas Education Finance Corporation "for the purpose of financing or refinancing of educational facilities and/or housing facilities incidental to education facilities."

But not just any ol' educational facilities. This is being done at the request of Uplift Education, which, according to those familiar with the proposal, wants the city's help issuing bonds to help with expanding not just in Dallas, but also in Fort Worth, where Uplift expects to open two new campuses in the coming school year. The Educational Finance Corporation, which would have its own board approved by City Manager Mary Suhm and city council, would issue the bonds on Uplift's behalf. Sources say the board's already in place.

Update at 6 p.m.: A lengthy explanation from Uplift CEO Bill Mays follows, in addition to your regularly scheduled jump. Here too is the council briefing for Monday that explains what the city's attempting to do and why.

This is significant for many reasons, chief among them: The state doesn't issue facilities funding to charter schools, but Chapter 53.351 of the Texas Education Code does allow for open-enrollment charter schools to "issue revenue bonds on behalf of authorized open-enrollment charter schools for the acquisition, construction, repair, or renovation of educational facilities of those schools." This is how Harmony funded its recent expansion.

According to Uplift board members with whom I've spoken, all of whom defer to the unavailable-for-now CFO Bill Mays, Uplift is hoping to issue around $85 million in bonds. And they say the reason Uplift wants the city's help is because bonds issued by the Education Finance Corporation would be exempt from federal taxes. Sources say the city would not be on the hook for the bonds that are issued. Calls have been left for other Uplift officials as well.

Of course, we'll know more about this come evening, when the city posts the full addendum and a briefing on the subject that Karl Zavitkovsky, head of the Office of Economic Development, will give to the council's Economic Development Committee Monday. I've left messages for Zavitkovsky as well. Now, then: How did this get on the consent agenda?

This is how it reads, in full:
Authorize (1) establishment of a non-profit corporation, the City of Dallas Education Finance Corporation for the purpose of financing or refinancing of educational facilities and/or housing facilities incidental to education facilities; (2) approval of the Corporation's certificate of formation and bylaws; (3) appointment of the Corporation's initial Board of Directors; (4) the Mayor to execute and deliver a certificate approving the bonds to be issued for the benefit of Uplift Education, a Texas non-profit corporation, and the facilities to be financed with the proceeds of the bonds for the purpose of satisfying the requirements of Section 147(f) of the Internal Revenue Code of 1986, as amended; and (5) the City Manager to file the Corporation's certificate of formation with the Secretary of State - Financing: No cost consideration to the City
Update: Deborah Bigham, Uplift's Chief Development Officer, dispatches this explanation from its chief financial officer, Bill Mays:
Uplift Education has requested that the City of Dallas set up an Education Finance Corporation so that Uplift, as well as other public school operators, can issue certain bonds reflecting a more favorable cost of financing through the EFC. It's important to note that the city does not incur a cost to facilitate the issuance of these bonds, nor does it incur any liability, direct or indirect, for the repayment of these bonds. Full recourse on these revenue bonds remains with the issuer (in this case Uplift Education). Board members of the Education Finance Corporation do not receive a salary and are citizens who are agreeing to serve so that public schools in the community can access Qualified School Construction Bonds (QSCB's) made possible through the federal government. Attached is a link describing this program.

http://www2.ed.gov/policy/gen/guid/secletter/090529.html

To date neither Uplift nor any other local public school has attempted to access this particular type of financing, hence the need now to ask the City of Dallas to form this EFC. By accessing this lower rate financing, Uplift and other public school issuers who choose to access QSCB's are able to direct less taxpayer dollars toward interest costs and more dollars toward teaching resources and the classroom. This is an important source of favorable financing for all public school districts, whether traditional or charter, and it is especially important to charter school operators since they do not have access to facilities financing from the state and thus must operate on fewer dollars per student. Uplift Education is a high-performing, college preparatory, open enrollment, public charter school network with 100% of its graduates accepted to college to date (with over 90%+ accepted to four year colleges). Uplift currently operates 20 public charter schools in Dallas, Arlington and Irving serving nearly 6,000 students and with nearly that many students on their wait list. By 2015, Uplift plans to double the number of students it serves, with its contemplated 2012 bond financing facilitating a portion of this growth.
My Voice Nation Help
49 comments
Sort: Newest | Oldest
Jlewis7997
Jlewis7997

I wouldn't touch that with a 10-foot pole until you get an FOIA request on how they spend taxpayer money. 

Guest
Guest

Uplift has done an amazing job educating low-income kids in Dallas.  we need to support and encourage what they are doing.  thank you Mayor Rawlings for supporting great education for kids in Dallas.

Naaa
Naaa

So we pay astronomical property tax to fund DISD's billion dollar criminal day care centers. Now we need to pay for this too?

 

Mister_Mean
Mister_Mean

There are two basic fallacies regarding the budget and city funding:1)      that the city will grow enough to off set any budget spending.2)      That hotel taxes etc. will pay for our spending (let those out of towners pay for our spending. Until you come to the realization that the population will not grow enough to cover existing debt nor enough for future debts incurred or that everyone will flock to Dallas from out of town to pay for the city council and staffs squandering then you will have budget problems.   That and not spending your moneys wisely wasting it on consultants, ineptly implemented projects and squandering it on such things as suspension bridges and toll roads in potential flood plains as opposed to fixing streets and funding libraries..

Having said that do you trust the city to spend any money wisely?   Not me.   No new bonds no new taxes (as that will allways accompany the bonds).

Guest
Guest

and it seems no one has mentioned these are the same folks that are at this very moment trying to hijack Deep Ellum. WFT gives w/ these ass clowns?

Rangers100
Rangers100

Oh, the horror.

They want to put a school near a bar and ALSO want to use a legal method that adds no expense to DISD to reduce the expense of their financing. They should all be shot.

Anon
Anon

it's cost free to Dallas unless they default. in which case Dallas pays higher interest costs

Dallas Dad
Dallas Dad

Look at the salaries made by the Uplift administrators. Don't believe their bullsh*t lines about being a non-profit that only cares about helping children. A lot of rich people stand to get a lot richer if the city does this.

The Charters pick motivated students with involved parents. If the students don't perform or the parents don't stay involved, they kick them out and they return to DISD. The charters then tout their "success" with slick marketing and statistics while condemning the "failed" public schools.

Wake up people! This is a money and power grab designed to destroy public education and replace it with corporate schools with no community accountability.

Hometown Boy
Hometown Boy

So who is getting a salary, and how much are they?  If you're going to make a wild claim like that, back it up.   Else you're just blowing hot air.

biscuit98
biscuit98

With a total lack of transparency as to where the $$$ goes, it's kind of hard to follow the public dollars, but if they are doing with the money what they do in terms of lying about their results........these schools throw out the problems and teach only to the state tests. Their Dallas schools are mediocre at best. How much public tax money is spent marketing the lousy SAT scores at their Dallas schools? Excuse, how much public tax money is spent covering up the lack of real college readiness of their Dallas graduates? Is El Centro really the school of choice, or the only place they could stash all those 750 scores on the SAT?

biscuit98
biscuit98

No, we are always two in, and out. While they market us as the elite, no one is interested in sticking around. None of us would allow our future kids anywhere near these schools. That says it all.

Frank Poston
Frank Poston

Biscuit98, it's pretty clear you were asked to leave...no way they'd keep you around with that attitude. It has to be pretty frustrating when your only recourse is to make misleading and anonymous posts using a code name similar to a breakfast item in the Observer.

biscuit98
biscuit98

Yeah, shill. Quit misleading the public. No, not every student, and don't confuse the public by adding critical reading, math, and writing, which is not the way TEA or anyone else reads these scores. Since we saw them in-house, we know how bad they are--stick with 850 for an average, not 1100 for North Hills only. The AU school was worse with no passes on AP, and we had plenty of 750 and below scores. Finding a college somewhere to accept these students doesn't equate to anything. They all went to El Centro for a reason. These reports don't line up with the Dallas high schools.

Hometown Boy
Hometown Boy

Yep, pretty hard to go to their website and look up their annual reports...requires you to type.  I'll save you the energy.

http://www.uplifteducation.org...

Page 32 is their income statement.  Took me 30 seconds to find it.

Average SAT for Texas is 1467; not every student takes it.  Average SAT for Uplift is 1532; EVERY student takes it.  That's on page 11.  Took me another 15 seconds to find that data.

Sample list of colleges is on page 15.  100% acceptance rate, 90%+ at four year colleges per their letter above.

Pretty transparent to me.

Anything else I can do for you biscuit98?

Joyce Foreman
Joyce Foreman

My hometown Dallas is so messed up with corruption.....  DISD,Cityhall,Dallas County,Parkland and DART.  Hopefully someday we can elect people who do not get in office and immediately drink the water.

There are Charter Schools that build their own campuses without asking the taxpayers for more money.  Nova Charter and  AW Brown are two of them. Silly me, these charter schools are not ran by the rich trying to get richer. Go figure.

Hometown Boy
Hometown Boy

Joyce, please read the article and the link.  Taxpayers aren't being asked for any additional money here.  Dallas is simply sponsoring the creation of a non-profit to facilitate accessing cheaper federal financing for the construction and renovation of schools.  Any public school district can access this financing....DISD, Uplift, etc.  The charters you mention are funded the same way as Uplift and they could access this financing as well.  Seems like a no-brainer....less taxpayer dollars going toward bondholders in the form of interest expense and more toward classrooms.  Perhaps DISD should look at this as well.

Joyce Foreman
Joyce Foreman

Yeah, just like Dallas is in the hotel business.

Anon
Anon

maybe you need to read the article as well. these charters are paying back the bonds. where do charters get their funding? tax money (yes, they do get private grants but those alone won't keep the lights on). 

Hometown Boy
Hometown Boy

Then your issue isn't this financing. Your issue is you don't want taxpayers and their kids to have choice in public schools. You're entitled to that view. I'm just glad it's in the clear minority

bink
bink

I hate this hick town!

Diane Birdwell
Diane Birdwell

Want to bet that if they get this money, oh---maybe a couple of the recently closed schools---Bohnam comes to mind, will be "leased" to them by DISD in an effort to "maximize" assets in a budget conscous time.....

Wanna bet?

Its So Sad
Its So Sad

My God. We really are screwed!Not only are we making people rich by teaching a few select children, now they want us to finance their business so that THEY don't have to come up with the money themselves!

It's such a good deal, maybe I'll start my own charter school!

Guest
Guest

a few select children...these kids are low-income kids from the neighborhood...

Mister_Mean
Mister_Mean

Wellfair for the rich.  See examples of it all the time in the Dallas News.  Private profits and public risks

Downtown Resident
Downtown Resident

Ranger100 will be chairing the bond committee and ready to issue as soon as the city gives the ok.

DISD Teacher
DISD Teacher

Because only "real cities" have charter schools next to topless bars.

Charter schools will gladly empty his unsuspecting wallet asap.

Rangers100
Rangers100

Yuk, yuk.

As if the opposition to a school in Deep Ellum was because it was a charter school.

You're confusing two arguments here, fwiw.

Hometown Boy
Hometown Boy

DISD Teacher, I'd stick to education.

Who the hell thinks its a good idea to drive away all businesses thru your "conspiracy theory" and then own an empty building in a ghost town?  What a crock.  I hope you don't teach our kids economics.

DISD Teacher
DISD Teacher

Deep Ellum doesn't care that a school is going in there; they object to what will happen because it is a school.

It's a school because that's the best vehicle to use to ruin property values and make the area easy pickins for real estate developers.

Once the land is sold to them, the charter school will go away, its mission accomplished.

fwiw.

RTGolden
RTGolden

What exactly is "housing incidental to education"?  Is this a bond issue to provide no-cost housing for teachers?  Also, with a school district in dire need of funding (to the tune of $260 mil) why is the city even considering such an exclusive bond package?

How have these "the city is not on the hook for financing" things worked out in the past?

Anon
Anon

If the city decides to allow the default, its borrowing cost goes up. Legally, they are not responsible for the cash but I can guarantee you the investors in these deals build in safety nets for themselves.

Texasdave60
Texasdave60

Methinks this is where the money will come from to buy existing real estate in Deep Ellum and turn it into condos.  That is, once Uplift gets the SUPS denied.

DISD Teacher
DISD Teacher

Charter schools are going to cost DISD taxpayers a fortune.

CHARTER SCHOOLS GET TAX DOLLARS.They are sold as the alternative to horrible public schools.Instead of giving them money we don't have, why don't we just copy what they do IF they are so effective?Or, why don't we just give kids vouchers to go to existing private schools instead of Uplift?  Most private schools have pretty good results.  WHY UPLIFT?  WHY DOES UPLIFT GET THE MONEY?It's called Edu-Business and they are after the trough of cash collected from taxpayers.Also, Todd Williams is an Uplift poo-bah.  Someone with the last name of Williams recently donated a chunk of money to Edwin Flores' reelection campaign.  

THAT'S what headed to Dallas if voters don't stop it.

Guest
Guest

because Uplift gets great results..

jfpo
jfpo

I've about had it with the charter school racket.

Guest
Guest

what's the racket...

DISD Teacher
DISD Teacher

I think Seattle parents have mounted a campaign against them.

They are Public Schools with Problems 2.0

Guest
Guest

This doesn't sound at all like a situation that could result in a significant amount of corruption.

Titus Groan
Titus Groan

"The state doesn't issue public funds to charter schools"

Actually, yes they do.  Charters wouldn't exist otherwise.

Robert Wilonsky
Robert Wilonsky

Should have said, as it does not, the state does not issue facilities funds to charter schools.

Anon
Anon

So in order for charter schools to succeed they need to be free from public school rules, public accountability, the requirement of educating every child regardless of how little they want to be there, AND they need access to publicly subsidized debt financing?

Also, there is a difference between legally being on the hook for the debt, and being in a position where you are forced to make good on it. See Fannie Mae and Freddie Mac if you are confused about what I mean. Make no mistake. If the market thinks you are on the hook for the debt, you are.

Titus Groan
Titus Groan

It's called privatize success/assets/profits, socialize failure/debt/losses.  The best students go to the best schools which make money to get even better.  As for the rest...

Guest
Guest

these schools are in low-income neighborhoods serving, greatly serving, low-income kids..

Douglas Martin
Douglas Martin

Why didn't they do this to save the 11 schools they voted to close?

Guest
Guest

they weren't in areas that had enough kids to make keeping often the facility feasible...

LaceyB
LaceyB

Why not do an LLP with some Subchapter 'S's? You can still not have liability and the rich owners can completely defer taxes, but there would still be some write offs for many?

Now Trending

Dallas Concert Tickets

From the Vault

 

General

Loading...