DPS and the credit crises

Posted on September 29, 2008 by axooms

This little news nugget caught my attention over the weekend:

Denver Public Schools’ pension plan was pulled into the financial crisis on Wall Street this week when a dearth of buyers at a bond sale cost the fund “hundreds of thousands” of dollars in increased interest payments.

The full article is worth reading in some detail. Particularly the following:

The money paid off the district’s $400 million pension shortfall and helped refinance $300 million in debt at lower interest rates. Rates on those bonds, however, are variable, meaning they change weekly depending on market conditions*.

This week, because of the unstable economic conditions and buyers’ reluctance to enter the market, the rate for DPS’s bonds jumped and forced the district to pay “several hundreds of thousands of dollars more,” said Tom Boasberg, the district’s chief operations officer. “We think this is a very short-term phenomenon,” Boasberg said

I do not know the details of the DPS bond issue, so my opinion on the details is not overly nuanced. But one does not need much nuance to raise an eyebrow or two when, in the course of a few days DPS now has “several hundreds of thousands of dollars” less than it had a week ago. I also have great respect for Tom Boasberg’s business acumen. But I know enough to know that no one in DPS is able to predict the future of the credit markets. Paulson, Bernanke, and several Nobel winners have been spectacularly wrong, and I don’t think DPS has some crystal ball into the future of interest rates; moreover DPS is running a school system — I don’t particularly want them to spend their time trying to anticipate the movement of the prime* interest rates.

I would have thought that the DPS bond issuance was fixed; if not, my hope is that DPS negotiated some limited range within which their debt will float, and they have some protection from a widely fluctuating credit market. But I will be dead honest: I don’t believe for one second that DPS playing the credit markets with floating interest rates* is in my best interest either as a taxpayer or as a parent.

With only a few weeks until DPS asks taxpayers to support the largest school bond in DPS history, it is worth asking for both more transparency on the existing debt and the anticipated debt. And wondering exactly how comfortable we are with DPS making these sorts of decisions.

Postscript (Mon afternoon): Having just watched the $700B bailout fail to pass Congress, while I had been under the assumption that the DPS bond — even despite a very tepid response from the education community and a lot of real problems — would probably pass. I now think it is in some jeopardy. Colorado politicians voting against it included Mark Udall and John Salazar – as well as Musgrave and Lamborn – and their opinions were not shy.

*Posterscript (Mon evening): The initial reporting was incorrect, as I’ve been told that this debt does not float with prime or any index, and that it would take extraordinary circumstances for these shortfalls to wipe out the projected savings overall. However this debt does require a willing market of buyers, which vanished last week. Further explanation and calculation of the potential DPS exposure – exceptional or not – which would insert additional facts into this subjective discussion, and would be most welcome.

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Beware the “for the kids” canard

Posted on September 21, 2008 by axooms

One of my seminal moments in education reform was a Denver BOE meeting many years ago. There was a resolution before the board, and a BOE member spoke passionately and articulately in its favor, ending their statement by saying “we have to do this for our kids“.

Another board member spoke with equal passion and grace in opposing the measure, also concluding their remarks by saying that “we have to think about what is best for our kids.” Needless to say, under this dialogue, the kids always win. Except they also always lose.

This came to my mind Friday when I witnessed someone who is passionate about education complain that his opponents unjustly painted him as being “against kids.” This is clearly unfair, and no one should need the substance of the argument to disagree with that accusation. However, in concluding remarks just moments later, the same person maintained with no hint of irony that his opponents were uniformly “against teachers.”

Hopefully the dialogue here and elsewhere is about different reform strategies and philosophies. No one gets exclusive rights to kids or teachers, any more than they can claim the individual favor of Your Personal Deity. Much of this discussion will focus on kids, who unfortunately don’t participate; lots more will focus on teachers – and individual current, former, or aspiring teachers will certainly have opinions, and generally ones that are highly (and often uniquely) informed.

And hopefully many of them will participate, and unsurprisingly at times they will disagree. No one in this or any other policy debate speaks for an entire class, race, profession, age group, political party, or any other category.

So beware the arguments that end with an admission to do something “for the kids.” But equally beware arguments (and speakers) who purport to be “for the teachers.” It should be a discussion – and yes a debate – about ideas.

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A charter school analogy

Posted on September 17, 2008 by axooms

In an environment where both Presidential candidates have called for an expansion of the roles of Charter schools, and highly-visible and encouragingly successful school districts such as New York, New Orleans and Chicago have embraced Charters as part of their overall strategy, Denver remains resolute in its silence on how Charters should contribute to broader school reform.

What makes this even more timely and relevant are the 2008 SPF results. Charter schools are disproportionately represented among the cities best schools. DSST is in a class by itself for high school, and among middle schools, KIPP, West Denver Prep, and Odyssey all show growth numbers well above Denver’s mean, with Omar Blair pretty close behind. If you eliminate the schools with competitive admissions policies (DSA, Hamilton) and free and reduced lunch numbers far below the city average (Slavens, Dora Moore), the results are even more stark.

The sheer indifference to Charters does not show up only at the high end of the charts, and the SPF shows quite clearly that the worst high school in the city is the recently reauthorized CCI, and two more of the worst four high schools are Charters. Apart from CCI, the results for Charters are better in middle school, but any serious Charter strategy would and should include a strong discussion over closing those schools that consistently fail to perform.

Despite both the cream and part of the manure of the crop, there is no articulated strategy or policy by Denver’s school board for Charter schools – not on the forthcoming bond, on facilities, on ProComp or on any of numerous other areas. The closest I have heard to a policy statement has been a repeated thought from various BOE members along the lines of

“Charters are useful as “Research and Development” efforts where the District can watch and perhaps try some new ideas.“

Aside from this being foolish in practice (one cannot take a piece of what makes a Charter successful and place it in the corpus of a District school and expect similar results), it also made me think of cars.

In 1986 Toyota produced it’s first car on US soil, in a joint-venture with General Motors. Over subsequent years, Toyota featured innovative methods and a focus on continuous quality improvement. GM suffered through a bloated cost structure, crippling pension debt, and labor struggles with an aging, unionized workforce all while continually failing to produce products consumers actually wanted. Sound familiar?

In 2008, just over 30 years from their first US production, Toyota is likely to capture the lead in US market share. Meanwhile, GM lost over $15 billion in the second quarter alone, and the viability of the Big Three is in doubt.

I think somewhere back in 1986, a GM executive told of group of his peers that having Toyota produce cars in the US will be a useful R&D exercise for GM to watch and perhaps try some new ideas.

If urban districts do not move to bring Charters into their educational reform strategies, significantly and rapidly, the timeline may vary, but I don’t ultimately see a different fate.

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Don’t underestimate market impact

Posted on September 11, 2008 by axooms

One of my general beliefs is that markets – for good or for evil, and there is plenty of both – are enormously powerful and should never be underestimated. Trying to act against an established and growing market is akin to trying to put a genie back in a bottle. Witness this remarkably insightful quote from Washington DC Union President George Parker in the NCTQ News Bulletin:

The union has now had to take on a dual role. Previously our main concern was bread and butter issues–to make sure teachers have good benefits and working conditions. We didn’t have to be that concerned about keeping children in [D.C. schools]. But now around 21,000 of our students are in charters and around 45,000 in public schools. We lost 6,000 students last year. The charter schools have created a competition where the very survival of the union and the job security of our teachers is not dependent on the language in our contract. It is dependent on our ability to recruit and maintain students because we are funded pretty much by the number of students we have enrolled in the public system.

The job security of teachers depends less on the bargaining agreement and more on if kids and their families want to attend the schools in which they teach. And note that it is not that DC has fewer teachers (quite possibly more as most charters have lower student/teacher ratios) just fewer union teachers.

Debate good, bad, or indifferent, but that is a pretty fundamental change.

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How much experience is enough?

Posted on September 9, 2008 by axooms

One of the accepted truisms of teaching is that you have to do it for a while before you are any good. The accepted amount of time varies: many people think teachers are only seasoned after 3 years, while I have heard a multitude of opinions that it takes 5 years or more before a teacher hits their prime.

The biggest disturbance to this viewpoint in recent years is Teach For America (TFA), which places top college graduates directly in the nation’s most difficult schools. This is anathema to many traditional educators, who argue both that such inexperienced teachers are unlikely to be effective, and that additional credentials (education degrees, professional certification, etc) are vitally important.

This argument is moving from the purely theoretical to more data-driven, as The Urban Institute released a study which found that TFA teachers are highly effective – more so than many teachers from traditional backgrounds and with more experience. From the summary:

The findings show that TFA teachers are more effective, as measured by student exam performance, than traditional teachers. Moreover, they suggest that the TFA effect, at least in the grades and subjects investigated, exceeds the impact of additional years of experience, implying that TFA teachers are more effective than experienced secondary school teachers. The positive TFA results are robust across subject areas, but are particularly strong for math and science classes.

I confess to being personally unsurprised at the results. I generally work with smaller technology companies, and the number of these that have been created and are sustained by people in their early-twenties is remarkable; and precisely because in the hyper-competitive software and internet industries, nobody expects you to wait 3-5 years before you can be any good.

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Education Songs

Posted on September 4, 2008 by axooms

I was surprised yesterday to see my iPod’s random shuffle cough up a song titled “Education” by modest mouse. Unfortunately (perhaps predictably?) it sucked. And the lyrics were pretty bad as well, even for high-school poets.

A few minutes on Google and the alternatives look like Pearl Jam (song, lyrics), and The Kinks, (lyrics) which seems to set the low point.

Without wanting to run through all the multiple versions of Van Halen’s Hot For Teacher (although I think the big band version by the appropriately named Richard Cheese has some promise), there has got to be something better.

Suggestions?

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Character Study at 5280

Posted on September 3, 2008 by axooms

5280 Magazine, perhaps better known for recent cover stories including “Summer Fun Guide” and “The Definitive Denver Pet Guide,” has evidently found the new critical category list. Yes, September marks 5280′s entrance into Education, with a report on “Denver’s Top Schools“.

Have no fear, educators, 5280 is far too much of a zeitgiest to use any objective method for evaluation, instead “5280 goes beyond the numbers to reveal a smarter education report card.“. Indeed, 5280 manages to tell us that it is “smarter” twice in the first six sentences, and continues:

This past May, 5280 assembled a panel of experts to discuss the state of local education and discover smarter methods for evaluating schools. The word the panelists kept returning to was “character,” the elusive, varied, often unquantifiable quality that arises frequently in the top schools…

The great thing about character, of course, is that everybody has their favorite. So what does this character study give us? To start, a pretty geographically expansive definition of “Denver,” including schools in Boulder, Littleton, Greenwood Village, Aurora, Golden, Lakewood, Lafayette, Louisville, Englewood, and Thorton.

If we keep it to Denver proper, 5280 includes 22 schools. Of these, just 8 are open enrollment (neither private nor a public magnet school). Of the eight, three are charter schools (DSST, PS1, and Wyatt-Edison). One is the highly unique (and not Denver-centric) Rocky Mountain School of Expeditionary Learning. Three more are elementary schools (Beach Court, Montclair, and Steck). Which leaves one.

Who, you might ask, who is the single, open-enrollment District Middle or High school to make 5280′s list of Denver’s Top Schools? Why, goodness me, it’s Bruce Randolph.

Now there are lots of good things to say about Bruce Randolph: they have an engaging leader and deeply committed staff, they have seen some recent progress, and they have intelligently pushed (somewhat) for innovation from both union and District restrictions. They are clearly moving in the right direction. But they are also in the first few yards of a marathon, with 2008 CSAP proficiency ratings in 10th grade of 9% (Writing), 3% (Science), 23% (Reading) and 4% (Math). Character they have, but I will go out on a limb and bet that there is not a single parent who has the option of 5280′s other choices for high school – schools such as DSST (charter), Denver School of the Arts (magnet) and Colorado Academy (private) — who selected Bruce Randolph by preference.

Of course, the oddities of ranking by character is not limited to District schools: hence the inclusion of PS1, a charter school currently on the second year of a two-year probation from the Denver Board of Education for poor academic performance. Odd character indeed, until one notices that a Founder of PS1 is among the seven expert panelists. PS1′s 2008 CSAPs for 10th grade math? Five Percent.

What is most remarkable about the 5280 article is not the oddity of the selections, it is what it ignores under the possessive heading of “Denver’s”: there is no mention of an achievement gap, differences in test scores by income, free and reduced lunch children, or anything else close to what is generally considered the most pressing problem in our schools: the lack of educational opportunities for poor kids. This is not a realistic list of Denver Top Schools to help parents, this is a list of Denver’s Top Schools If Everything Were Free And Nearby.

Oh, 5280 does include “diversity” among it’s unquantified iconographic criteria. There is even a diversity icon, which is defined, in its entirety, as “Diversity of student body and/or community, with programs that reflect that.” No, I am not making this up. While “programs that reflect that” might pass for diverse speech, it takes an remarkably tolerant view of both normalcy and grammar to list both Denver School of the Arts and Graland as diverse, while fellow Top School Bruce Randolph – with roughly 85% Latino students, and 10% African-American – is not. DSA is over two-thirds white (in a public system that is less than 25% white) and 12% free and reduced lunch (in a public system that is two-thirds FRL) – yet it gets the Diversity icon. As does Graland, with tuition of about $17k a year, and 85% of families receiving no financial aid. Diversity, in this light, is achieved by turning the city’s demographic pyramid upside down.

One of the problems here is that every school meeting this definition of “diverse” necessitates schools which are far more homogenous. To be 40% white or 40% FRL in a student population that is roughly 25% white and 66% FRL is, in some ways, mere passing the buck. If the district average is 66% RFL and one school serves 33%, a school of equal size must be almost entirely FRL, or several schools will need to be 75% or more. This pattern — true in public districts across the country — contributes greatly to a system of educational inequality. To praise schools which in no way reflect the overall student population as the correct models of diversity — thus further segregating other schools in the system — is a particularly perverse definition.

Of course “public” education is not really the focus for 5280, any more than the four annual cover stories touting places to eat and drink focus on “public” restaurants. The entire gist of 5280′s list-generation journalism is to suck-up to discretionary incomes. But 5280 has — purely by omission — revealed something many people in Denver know far too well: there are virtually no good public middle and high schools for the roughly two-thirds of Denver’s children who were born poor.

My two sentence summary on education in Denver for people with no knowledge of it is usually this: 1) public education in Denver is far worse than most people who live here think; and 2) However, it is not quite bad enough, for the people who make most decisions have resources and money enough to find alternatives in private schools, magnet programs, and affluent neighborhoods.

5280 has done an excellent job here of perpetuating the latter while ignoring the former. Makes me miss the Summer Pet Fun Guides.

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