DPS pension: Another former board member weighs in
Last week, the New York Times published a poorly researched and highly inaccurate article regarding the refinancing of the Denver Public Schools pension fund and former Superintendent (and current Colorado U.S. Senator) Michael Bennet.
As a former vice president of the Denver Public Schools Board of Education, I voted to approve the refinancing of the pension fund. From my first day on the Board of Education, the pension of DPS employees and a potential merger with PERA was a top priority. I am writing this today to set the record straight regarding these transactions.
Let’s start with some simple facts about what this transaction did, and did not do.
All told, this transaction has SAVED DPS millions of dollars that they’ve been able to invest directly into the classroom. In fact, the district is estimated to save $20 million this year alone.
The transaction significantly STRENGTHENED the teacher pension program, and enabled a merger with the state pension system, so that teachers could move between districts without losing their pensions.
A report from independent auditors Cavenaugh and Macdonald last week showed that DPS’s pension is significantly better funded than any other school district in the state, and will be fully funded years before the statewide school pension division is because of the transaction Michael led.
The actuarial evaluation of the DPS division of the Public Employees Retirement Association shows that DPS’s section is expected to be fully-funded in 2031, while the rest of the school division won’t be fully funded until after 2040. In other words, in large part because of this transaction, DPS is now more than a decade ahead of the rest of the state. As a result, DPS will see a reduction in contributions to PERA when the true-up scheduled by the merger legislation happens in 2015.
The specifics of the transaction were complicated. Banking on this complex subject matter, sadly, allies of Andrew Romanoff have been trying for months to lure reporters into writing slanted, biased accounts of the transactions, in a thinly-veiled effort to unfairly impugn Michael Bennet’s judgment. Board member Andrea Merida, who failed to disclose that she has been a paid consultant on the Romanoff campaign, has been leading the efforts to discredit Bennet, along with Jeannie Kaplan, who has been with the Romanoff campaign since his announcement.
The New York Times took the word of a few DPS board members with a political ax to grind over the facts that have been reviewed extensively by local press in Colorado over the past few years. But the bottom line is that from the headline to the last line, the New York Times got it wrong.
In an editorial back in 2007, at the time this proposal was being considered, the Denver Post endorsed the transaction as the best option available to DPS. Circumstances have more than proven the decision to be correct. While other districts are being forced to lay-off teachers, close schools, and cut school days, DPS isn’t thanks to Michael Bennet and his team.
I am also, to be candid, shocked by the biased perspective of the journalist who wrote this story. As board members of Denver Public Schools, we fully understood this transaction, and invited the New York Times reporter to Denver to sit down and review the facts with us. Instead, she disregarded all the local reporting that’s been done on this story, she failed to accurately express the views of the members of the board that she did speak to who are not Romanoff supporters, and she outright refused to meet with the rest of us.
The article is riddled with factual errors. To note just a few:
- The article claims that DPS underwent $25 million in losses, when in fact the district has realized $20 million in savings as a result of this transaction.
- The article describes the financing as a new form of transaction for DPS. Basic research would have revealed to the author that DPS had done the exact same transaction – variable rate pension certificates with an interest rate hedge or “swap” to protect DPS against changes in interest rates – in 2005. At that time, Jerry Wartgow was superintendent and neither Michael Bennet or Tom Boasberg had yet joined DPS. The Board fully vetted the 2005 transaction and it benefitted DPS. There was no new “little spice” in the 2008 transaction, as Ms. Morgenson alleges. Rather, the 2008 PCOPS simply copied the 2005 PCOPS.
- Perhaps most surprisingly, the article quotes school board member Jeannie Kaplan, as one of the key sources, but it does not think it relevant to mention that she is in fact a leading fundraiser for Andrew Romanoff, and falsely claims that she raised questions about the pension in advance of the primary race. Kaplan voted with the rest of us to approve this transaction. She did so after extensive conversations about the risks and benefits of the transactions. Kaplan then had two years to question the transaction and failed to do so. It was only once the primary was in full swing that she suddenly began to question what she had voted for. It is hard to understand why she is working so hard to launch these attacks on the school district she is supposed to be serving and attempting to cause as much personal damage as she can to both Michael and Tom Boasberg. She says she just wants to have conversations about this issue, but if that is all she wanted, she would have waited until the August Board meeting where it is on the agenda instead of shopping the story to the New York Times.
As a long-time reader of the New York Times, I am disappointed and angered by this article. It is not fair to the hard work Michael Bennet has done on behalf of this district. It is not fair to the parents, teachers and students of Denver Public Schools, who deserve more than to be treated as political pawns. And it is not fair to the Times long-standing readers, who rely on the Times to provide thorough, unbiased, accurate reporting.
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