Almost $2 million has poured into campaigns working to pass Colorado’s 10 largest school bond requests from a range of interests that could benefit, a Chalkbeat review has found.
The donations are mostly from unions, education reform groups, construction companies and companies that sell the bonds.
While contributors say the money is needed to get the message out about school district needs, potential ethical and legal landmines exist if donors are hired to see bond projects through.
More than 60 school bond and tax measures are on Colorado ballots this year seeking more than $4.2 billion in funding — a record number of measures, and a record dollar amount.
School districts in Colorado spend money on some messaging to inform voters about the capital projects they say their districts need, but cannot fund the campaigns working to pass the measures. Others step in to pay for consultants, signs, polling, phone banks, mailers, door-knocking and more.
“When a transportation issue comes up, voters are keenly aware of the traffic jam they’re stuck in or the potholes they drive over every day. Those are easy to see,” said Kerrie Dallman, president of the Colorado Educators Association, the state’s largest teachers union.
“Most voters, especially if they don’t have kids in class, they don’t see what our public school districts are dealing with on a daily basis,” she said. “They don’t see what teachers are dealing with on a daily basis. They don’t see the lack of resources, but yet it’s very real.”
The CEA and its local associations have given roughly $92,000 to the state’s 10 largest bond campaigns, records show.
Concerns around bond company contributions stem in part from the role of district tax dollars. In Colorado, government bodies such as school districts are not allowed to use public money to influence campaigns and must provide information for and against bond campaigns.
If school districts end up paying bond underwriters extra in higher fees after they contribute or otherwise help lead bond campaign committees, it could be a way for districts to indirectly spend tax dollars on the bond campaign.
A quasi-governmental group, the Municipal Securities Regulations Board, sets rules for how and when bond companies and financial advisers can contribute to campaigns.
While the rules prohibit most contributions to individual candidates — for example, officials who can select bond underwriters — there is no prohibition on contributions to bond campaigns. The board does require companies to report those contributions quarterly.
No other bond company in Colorado has given more to school bond campaigns this year than RBC Capital Markets. The company has given about $50,000, including $15,000 to the $300 million bond campaign for Aurora Public Schools, records show.
Officials from bond companies that have made several large contributions to Colorado bond campaigns did not return requests for comment about their contributions.
Some states such as California have created their own regulations around contributions that bond companies can make to pass bonds. The idea is to stop so-called “pay-to-play” deals in which big donors win a contract, instead of a company that may get the district a better deal.
In Colorado, some school districts select bond companies before the election. Some request bids or proposals to select the company, and others don’t.
The Brighton 27J district has in the past contracted with two companies to sell bonds to create competition and better deals on the interest the district will have to pay, officials there said.
Districts have to avoid similar issues with donors like architects, contractors and other vendors to make sure they aren’t only doing business with those who contributed instead of finding the most qualified businesses.
Contributions are recorded online so people can track to see if contracts only go to those companies.
Many districts have their own processes to separate themselves from bond campaigns and from the selection of vendors once a bond is approved.
“We don’t do any of the fundraising, so that’s one way that we are completely separate from the campaign,” said Charlotte Ciancio, superintendent of Mapleton School District, which is requesting a $150 million bond. She is also removed from selecting bond companies or project vendors, she said.
To select vendors for work on the buildings, Mapleton hires a company that will put out the request for qualifications and review the proposals before making recommendations to the district. Selection committees with people representing the district, the businesses and community also help review proposals or make recommendations.
Past bond company contributions to Mapleton bond campaigns have been criticized. One bond underwriter, George K. Baum & Co., contributed more than $30,000 to bond campaigns from 2007 to 2010, then was paid seven times the market rate to sell the bonds, The Denver Post reported. The district attributed the payment to the extra work Baum did before the bond passed, including community surveys, consulting and financial advice.
In Brighton, the 27J school district has been working on projects from a bond that passed last year. Records show that the big contracts for work performed so far have gone to both companies that contributed to their campaign and others that didn’t.
Construction company officials say they don’t donate to get contracts, though they recognize that there will be more work when bonds are approved.
“We aren’t a contractor that goes state to state. We’re a Colorado contractor. That’s the only place we work,” said Brad Schmahl, vice president of JHL Constructors, which has contributed to several school bond campaigns this year. “We’re passionate about improving our little place in the world. And we know how difficult it can be to get a bond initiative passed.”
Opposition to some of the tax measures on this year’s ballot has formed in some communities, with a fraction of the financial backing. The money raised to spread those concerns totaled less than $500 in the most recent campaign finance reports, filed two weeks ago.
One man leading an opposition to the Poudre School District’s bond — primarily based on what he sees as inequitable funding to charter schools and a high cost for buildings — said it’s nearly impossible to compete with pro-bond campaigns.
“They’ve done three mailers to every voter in the district, communicating their message of why it’s needed or fair,” said Bill Werst, president of Citizens for Sustainable School Funding. “We have to compete against that.”
But Werst doesn’t support restrictions on who contributes or how much. He said voters just need to remain vigilant.
“I’m a big believer in free speech,” Werst said. “If companies believe in something, they ought to have a chance to donate to that. But I think it’s something that should definitely be looked into.”
Chalkbeat is a nonprofit news site covering educational change in public schools.
