What's the Hurry? Why Does Council Have to Vote on Helping Uplift Sell Bonds This Week?

MapofUpliftSchools.jpg
The map of Uplift schools, present and future, as presented in this morning's briefing to the council's Economic Development Committee
You know the cell phones must have been burning all weekend when the first city council committee briefing of the week at City Hall on Monday morning starts off with a rebuttal. Wait, rebuttal already? While those of us out here in the peanut gallery are still wiping the weekend from our eyes, could you give us a hint what you're rebutting about?

Actually, I knew. I got some of those cell calls over the weekend.

Last week a few alert council members (cough, cough) noticed (ahem) somebody had slipped something into their "consent agenda" about authorizing the city to create something called an "Education Finance Corporation."

Wow. The city has never been in the education business before. The school district has always been in charge of the education business.

This is big.

But somebody stuck this big ditty into the consent agenda, which is a long laundry list of hum-drum housekeeping items not worth the council's full attention. Normally the council says OK to the whole consent agenda at once and about three dozen little things on the list get voted into law in one fell stroke.

But the council members have to watch out. Sometimes those slick tricky city manager people try to slip items in there. In this case, somebody wanted the council to vote for an item without really paying any attention to it that would involve the city in borrowing money for the biggest charter school operation in Dallas, an organization called Uplift Charter Schools.

Tennell Atkins, a southern Dallas council member who is chairman of the council's Economic Development Committee, is pushing the Uplift deal. He opened the committee's briefing session this morning with an attempt to shoot down the worry-warts before everybody even knew what they were worried about.

Atkins called on Joe Eckert, a bond lawyer with McCall Parkhurst & Horton, who was representing Uplift in the deal, and asked him if the city could ever incur any liability whatsoever for money borrowed by Uplift. Eckert said no. He said the entity the council was being asked to create would serve merely as a "conduit" or "shell" for money borrowed by Uplift.

The education finance corporation created by the city would merely "sponsor" the bond sales by Uplift in a way that would enable Uplift to qualify for lower interest rates. Eckert told the committee that the city's sponsorship of borrowings by Uplift would never mean that taxpayers would be on the hook for a default.

But he also said it has to be done right now, chop chop, no time to waste, in order to meet Uplift's construction schedule. Can't even talk about it for an extra week.

This is in part for a school Uplift wants to build in the middle the bar district in Deep Ellum, to the dismay of some business and property owners. They're worried that the zoning attached to a school will push them off the block because of distance requirements.

And it seems odd, doesn't it? This is for a charter high school. Will it be called Night Life High? Will it have a curriculum devoted to proper pub crawling?

Out in the hallway today after the meeting, Rena Honea, president of the Alliance-AFT teachers association, suggested to reporters that Uplift's plans for a bar district high school could be little more than a land play:

"Is it really for the good of the students or is it a land thing, where they're trying to get hold of a good piece of property at a low interest rate, so if the school does not produce what it's expected to produce, they're just going to have a nice piece of property that they can make a huge profit from."

Southern Dallas Council member Carolyn Davis said later she didn't get the rush-rush part of the deal. She said she assumed if Uplift is a well-run organization that it should have been aware of all the borrowing requirements for this project months ago.

Even if the city won't incur a financial risk by helping Uplift borrow money, it will be a signal, she said, that the city is endorsing charter schools.

Davis said she doesn't automatically agree or disagree with such a move. She just thinks the council should think about it for more than two minutes.

"I think we have to slow down and say wait a minute," Davis said. "Are we supporting public schools? Are we shifting to private and charter schools? What are we doing?"

The committee voted unanimously this morning to recommend that the full council vote on the proposal Wednesday.

Two days for the city council to decide if it favors charter schools over open enrollment public schools? Well, that's better than two minutes.

I wanted to ask Eckert and Bill Mays, Uplift's CFO, why this thing wound up being such a rush situation, but they said they were in a rush to get out of City Hall after the meeting. Man. The need for Night Life High must be pretty urgent. I guess the city council really just needs to get the hell out of the way.
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42 comments
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Holman
Holman

In the case of Deep Ellum, it is an effective way to further control the use of property beyond the limitations set by its PD 269 zoning ordinance.  There are a few large non-profits who want change in Deep Ellum that have been frustrated by the current residents and property owners.  Plopping a 900-student school at ground zero - however incongruous a land use - will afford the kind of change they are looking for.

Wylie H.
Wylie H.

I don't have a clue as to the merits of this proposal. However, if I were a member of Council, I'd be extremely pissed to discover something of this magnitude being placed on the consent agenda.

Brenda Marks
Brenda Marks

If the counsel decides this proposal is merited, I suggest the following conditions be applied to approval:  (1) Formal bond opinion from McCall Parkhurst & Horton saying that the city has no liability, present or future; (2) indemnification from Uplift AND the law firm; and (3) fee for underwriting services, just as any bond underwriter charges in an issuance.  Otherwise, there is not reason for the city to approve this.

Oak Cliff Townie
Oak Cliff Townie

 Which brings us to the What do they know and how long have they known it ?

Diane Birdwell
Diane Birdwell

Tennell, if I may call you that---

Please break with the tradition of part of Dallas carrying the water for North Dallas? Please put a break on pushing for something so fast. If it is a good deal now, it will be a good deal in 5 weeks.

I am sick of my city spending a dime or more in helping businesses which do not need it, while my neighborhood, Buckner terrace, gets ignored, or worse, lumped in with the Grove.... sorry, Grove Rats, but you understand. Caraway will probably vote for it. he does exactly what the Citizens Council wants. I know, put the school by Todd Williams' house. Leave Deep Ellum alone. For years now, people, I have been warning of all this. Again, next up, they will want to rent Bonham or something else.

CrackerDaddy
CrackerDaddy

But if Tennel doesn't carry the water, DCC may take away all that walking-around money for the ministers and their friends.  LOL

Oak Cliff Townie
Oak Cliff Townie

How many real business people are going to be rushed into a Major decision  with such  a  limited time frame .I doubt any smart ones would

The sycophants who question the need for some time to reason this out must not be very good business folks their selves.This has all the signs that something isn't right ....Maybe not in their would but for the rest of us who have been blindsided before STOP comes to mind Lets see ?The 11 hour nature of all this .And the quite legal but underhanded way the issue was almost passed under our noses is a warning in it self .

Sorry but I am fresh out of trusting folks on anything without the details  just  because this really has to happen now .And we don't need to get bogged down in them so lets go lets go lets go.No lets wait !Lets take this out and look at in the light of Day.

If its a good deal so be it ..

Peter
Peter

Move into the old Science Museum (state fair)...the state already pays for the building...it is ready to go..

Hometown Boy
Hometown Boy

Not a single comment in the article regarding whether or not Uplift school expansion is a good thing for Dallas or not (I happen to think it is)...we wring our hands about the state of our current school system, and yet conspiracies are more fun/important to talk about vs. whether or not the city can help a NON-PROFIT organization with almost 6,000 parents on its wait list and a 100% college acceptance rate grow at no cost/liability to the city?  Have anyone from the Observer visited an Uplift school?  Talked to a few parents or teachers?  And by the way, charter schools are PUBLIC schools....and they are OPEN ENROLLMENT.  God forbid we let the perfect be the enemy of the good without getting all of the facts first.

Edward
Edward

People need to understand the difference between charter schools, public schools, and private schools. Maybe then they will understand some of the difficulties that public schools have.

Charter schools and private schools can pick and choose who they have as students. So they get motivated students and/or motivated parents. Someone acts up? Out they go. Someone struggles (and drags down the school averages)? Out they go. Someone smarts off to a teacher? Out they go. Someone is a good athlete? In they come.

Public schools don't have this option. They take everyone, whether or not the students (or their parents) want to be there. So charter schools can come in, cherry pick the students they want (the good, motivated ones) and leave the rest.

Many charter schools aren't here because they want to educate children, but as profit-generating real estate deals or ways to pay huge salaries to the administrators (and usually their relatives).

Hometown Boy
Hometown Boy

If traditional public schools served their students and parents well, public charter schools would not exist.

Their facilities are often inadequate, many don't have UIL athletic facilities or a full complement of UIL programs.  The large majority can't afford to provide transportation.  Yet despite all of these obstacles, charters are thriving and growing.

There are many that are not serving their students well from an academic standpoint, and like all underperforming public schools, traditional or charter, they should be closed down.  But there are many across the state that are doing well academically, and if we are primarily focused on serving kids (and not the interests of adults) that option should continue.Public charter schools exist because families are NOT satisfied; they are voting with their feet.  Why should a parent who feels their child is in a school that does not meet their needs be constrained if another school does meet their needs?  What are other examples of monopolies that serve their constituents universally well?  Why should affluent parents have choice and non-affluent parents not?

biscuit98
biscuit98

There are a number of failing middle and high schools in Dallas. Upchuck won't take their charmed ones and approach these schools because actual open enrollment isn't their game. They have no magic bullet, just a method of picking off students whose parents guarantee the student will sit and do worksheets for eternity. As far as 100% college acceptance--every student in Dallas County with a GED also has 100% college acceptance at DCCCD.Ask Upchuck to take over a failing middle or high school and watch the look of pure horror. Upchuck can't exist without DISD as a host.

Anon
Anon

a 100% acceptance rate says nothing about whether those students are prepared for college. also, Dallas Community College accepts every college graduate and what % are applying there? I think DCCC is a great option for students to spend less money and prove themselves in a college setting before shelling out on some crappy SMU-type education but if that's where a lot of graduates are applying, a 100% acceptance rate isn't something to crow about. it's better than having an 80% acceptance rate but it's not a good thing in and of itself because it doesn't mean anything. a 100% graduation rate also looks great until you figure out how low standards were set to get there. you also contradict yourself when you say that the charters are open enrollment after talking about 6,000 parents on the wait list. there is no wait list for DISD. that alone makes the two school models different. I agree that this has few costs to the city in terms of financial outlay. I think the bigger cost is to society, and I don't personally think the city council should be complicit in that. I think that the charters themselves are of dubious value, and I think that the interest from these bonds should be taxed. they are costing the federal government money.

Guest
Guest

 It may be a perfectly great thing for the city.

And if it is great, the free market will support it. This is not an area that government needs to be involved.

Guest
Guest

Maybe they need to rethink their business model if they can't make a go of it without getting a big city cosigner for their debt.

Also, my own private local business could probably find a use for some money generated with low-interest bonds. How do I get the City Manager to slip a big fat bond package for me onto the consent agenda?

Anon
Anon

Ask the consultants. I'm sure they know the price tag. I don't think it's too much more complicated than that and I'm being completely serious. These deals are used to finance all sorts of private enterprise. Conduit financing has been set up to finance things like hotels, and I'm not trying to make some clever convention center hotel reference. They have financed true, private market properties because they were "strategic" in some way or another. At least the convention center hotel is owned by the city.This is the reason that I don't think municipal interest should be tax free.

Bruce in Dallas
Bruce in Dallas

When smell fish at the market you're supposed to walk away. This one reeks. Thanks, Jim.

jfpo
jfpo

Going strictly by the quotes in the article, Carolyn Davis becomes the unlikely voice of reason. Good God.

Rangers100
Rangers100

Why all the scare quotes, Jim? Do you have specific reason to believe the arrangement isn't what Atkins described?

Anon
Anon

no one on city council supports anything unless there's something in it for them. that's just how it works. this may or may not be a legitimate project, but you don't get an item like this on the consent agenda unless you've done your homework and spread around the wealth.

whatyoutalkin'boutwillis!
whatyoutalkin'boutwillis!

Night Life High. Their school mascot could be a raging alcoholic transvestite..."The Ragin' Trannies!"....SWEET

Paul
Paul

Oh no we only "sponsor" the bonds ... yeah right ... sounds like someone got really creative in figuring out how to shake down a city for money.

If the bond says "City of Dallas" on the front of it, then the City of Dallas is responsible for paying off the bond.

As it was said in the movie: "Ignore the man behind the curtain."

RTGolden
RTGolden

Didn't Rawlings, back in the campaign trail days, mention something about getting the city involved in schools?  Is this what he meant?

I think using the terms "conduit" and "shell" when you're talking about the transfer of money automatically raise red flags.  These are terms used to describe money laundering and tax dodge schemes.

If they're going to approve this (this is Dallas, they probably will), why not get something written in to the charter of the 'shell' corporation that any real estate value acquired by the bonds raised belongs to the City until there is a clear and definitive written item stating the city, the taxpayers, and DISD have no liability for any outstanding debt.  I'm not a financier, so I'm not sure how that would be worked out, but just going on the word of some lawyer doesn't seem like a good plan of action here.

Rangers100
Rangers100

Oh jeez. Settle down, Beavis.

Companies have shell companies for legal and valid reasons all the time. For temporary restructurings, for acquisition vehicles, for holding virtual duopolies in broadcasting, etc.

RTGolden
RTGolden

The fact that there are legitimate situations for a shell corporation doesn't negate the fact that there are less honorable purposes for them.  Butthead.

Anon
Anon

I'm not entirely sure how the City of Dallas is the official issuer of these bonds while incurring zero liability to pay them off, but it has held up in previous deals. Of course, conduit bonds default at a significantly higher rate than other municipal debt, so I'm not sure why the city wants to be a part of that in the first place (unless there are ulterior motives, hence this article).

Darrd2010
Darrd2010

By the way, you do know that the mayor and the city manager are the ONLY ones to set a city council agenda. Soooooo, if it got on 'consent agenda' it was on purpose and with either or both of their fingerprints all over it. Much like the gas drilling transaction that got slipped in the consent agenda back in February 2008 and was voted through with only Hunt and Rasansky voting no because they thought it needed more discussion.

And yes, Chris Danger you are most likely correct.

Chris Danger
Chris Danger

Im thinking someone is getting paid huge in expectation of DISD going teets up in one way or another...

Titus Groan
Titus Groan

Nah, to borrow from JC: the DISD you will always have with you.

And that's the way they want it.  They can't finance these charter experiments without the boogeyman of DISD.  They can't offload the students they don't want to deal with without the safety net of DISD.  Without DISD, Uplift has to make a case on its own merits, and nobody wants that.

Dallas Diner
Dallas Diner

If ever there was a "follow the money" scenario, this is it.  This stinks to high heaven.  

biscuit98
biscuit98

Here's the clue. Todd Williams and his Goldman Sachs cash seem to find their way to the right members, whether they be council members or Edwin Flores or Bernadette. Add the fact that the Bridge to West Dallas land developers are in bed with uplift which is loaded with real estate developers, all hoping to make big multiples on their investments in swamp land. And yep, DE is a land deal to be financed with govt bond money. Ding ding ding.In Dallas, it's either real estate or oil. This is nothing but real estate masquerading as charter schools.

Rangers100
Rangers100

So your "following the money" hasn't really turned up anything worth noting.

Geekyd
Geekyd

From what I understand the DISD has it's own CAFR but am not finding it online. IT will show you many proofs to what is occurring. There is plenty of money in the CAFR for the schools, they just show you a second budget.

Geekyd
Geekyd

Last week a few alert council members (cough, cough) noticed (ahem) somebody had slipped something into their "consent agenda" about authorizing the city to create something called an "Education Finance Corporation."

Robert, I wish you would look into this, sounds like another slot on the Dallas CAFR report...and smells a LOT like it is coming under the UN Agenda 21 "sustainability" office meme...

Here is a link to that office....http://www.dallascityhall.com/develop....

ICLEI is being implemented nationwide under the UN and calls for EXACTLY what is happening in Deep Ellum...here is the ICLEI website showing Dallas membership....http://www.iclei.org/index.php?id=138...®ion=NA.

ICLEI is global in nature and administered through the UN. What is happening in Deep Ellum IS WHAT A UN LAND GRAB LOOKS LIKE. Under ICLEI, private property rights are meaningless and taxpayer money is used to create their 'sustainable' communities..http://www.iclei.org/.

uptowner
uptowner

It does not make sense to me that the City of Dallas would lift a finger to support charter schools, when DISD is having to close schools.  I think people need to make some noise...

rc
rc

so let's see who shows up on Wednesday and/or burns up the email in box of Mayor Mike.

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