Wall Street Drops School Board Credit Outlook To “Negative”

2 Jun

It’s always interesting to see Wall Street’s take on one of its best customers — the Broward County School Board.

The school board racked up roughly $2 billion in debt during its recent lobbyist-fueled building boom. As quick as the board could borrow the money, it was shoveled out the door to favored contractors. After its spree the board has another problem — tens of thousands of empty seats.

Fitch Ratings has  dropped the board’s credit rating outlook from stable to negative, citing “concerns about the district’s ability to accommodate substantial budgetary shortfalls with ongoing expenditure solutions while maintaining at least the current modest level of financial flexibility.”

That’s another way of saying the board looks like its in some deep shite, financially speaking.

The Fitch report, which maintains an “A+” rating on the existing board debt, lists the usual reasons for the board’s current financial problems: reduced state funding, less tax revenue due to the real estate downturn, the lack of federal stimulus money, etc.

“Officials plan to close a $141 million funding gap, equal to nearly 8% of spending, with a variety of recurring and one-time measures including meaningful reductions in teaching and administrative staff ,” Fitch tells us.

I guess they are “meaningful,” especially when you talk to one of the 1,400 teachers whose positions are being eliminated and the children who counted on them. The report goes on to talk about reduced district contributions to the Florida Retirement System, which is expected to save as much as $85 million a year.

Fitch also notes that the five-year capital improvement plan has a “sizeable” $1.3 budget. Then it notes perhaps the most dire news of all: Of that $1.3 billion, a whopping billion dollars of it will go to pay off the debt.

The report even addresses the scathing grand jury report that found the school board had wasted hundreds of millions of those dollars it now owes back.

Fitch reviewed the findings and district response to the Statewide Grand Jury report that was released in February 2011 which investigated the functioning of the school board and district staff. The Grand Jury and Florida Department of Law Enforcement found no specific violations of any criminal law and returned no indictments. Although the district has established an ethics committee that addresses many of the issues identified by the report, Fitch remains concerned about the findings’ indications of management and governance weakness.

As do we. Read the report here.

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22 Responses to “Wall Street Drops School Board Credit Outlook To “Negative””

  1. Goldilocks June 2, 2011 at 2:56 pm #

    First. Couldn’t resist.

    • Anon June 2, 2011 at 7:05 pm #

      Try harder next time. The “first” nonsense is almost as idiotic as the morons parroting Parkland Man’s incorrect spelling of Boo Ya.

  2. Patti Lynn June 2, 2011 at 2:57 pm #

    Well, let’s see if the newly elected board members will make a difference. I am not pleased with the 1400 teachers being laid off…while the Crystal Palace offices remain full to overflowing.

    • Rev. Cuntini June 2, 2011 at 3:28 pm #

      yes that is a pitty patty.

  3. First for the First Time! June 2, 2011 at 2:57 pm #

    is this ever going to end? outrageous fiscal irresponsibility at the school board, at the county (mostly as it relates to the aviation department) — note their bond rating was reduced lately as well… Bob, how do we hold ’em all accountable and give broward back to the people?

  4. Score Keeper June 2, 2011 at 3:08 pm #

    I could have told you this was coming. Hey wait a minute, I did tell you this was coming. Maybe the school board doesn’t read the blogs. LOL, everyone knows they do. They just didn’t listen because their under-bosses were having no part of slowing down the spending. Well, I wonder if Fitch talked to any of the under-bosses while preparing their analysis.

  5. Christy June 2, 2011 at 3:13 pm #

    All Pages of the Grand Jury report are true. Each and every one of them.

    “Abolish The school Board”

    2011

  6. Independent Man June 2, 2011 at 3:20 pm #

    There is no need to abolish the school board. The problem lies in the press, namely the Sun Sentinal and Herald. These newspapers are supposed to be the watch dogs of the community instead they are innocuous sellers of advertising space. The voters are to blame as well for not being informed. This is how morons like Jen Jen get reelected year after year. Why because we vote democratic and jewish. Enough of the party and ethnic politics.

  7. Tea Party June 2, 2011 at 3:27 pm #

    Why do you keep hopping on the 1400 layoffs. The job were funded from a one time grant of stimulous money. Even if it happens so what. Lots of businesses laid people off. Are government employees sacrocint that they are immune from layoffs, cutbacks, pension and benefit reductions. Share the pain or have massive tax increases that kill off the rest of the economy.

  8. GFL June 2, 2011 at 4:21 pm #

    Fitch Ratings??!?!?! They were one of the agencies rubberstamping derivatives which led to the financial meltdown.

    But agreed Broward has major problems with long term debt.

  9. Michael E. Levinson June 2, 2011 at 5:02 pm #

    To the extent that Broward County Schools has financial issues that are so severe that its credit rating is now downgraded, it is entirely related to all of the fraud, waste and corruption in the school board. The recent Grand Jury report came as no surprise to many folks because ‘public service’ gave way to ‘self service’ by those who were previously elected by Broward’s voters. The only way to truly bring change to Broward County Public Schools is to vote the incumbent board members out and elect people who genuinely care about children and will protect the interests of the taxpayer–not exploit them! August 2012 can’t come soon enough!

  10. anonymous June 2, 2011 at 6:30 pm #

    We need a grand jury investigation to find out why the last grand jury investigation didn’t result in prison time for some of our school board members and lobbyists, and contractors. No violations! Is that crazy, or what? Half the names associated with the above group need to be doing hard time in the gray bar. Or just strip them of their money. If you offered this gang the Jack Benny one-liner, “your money or your life”, they would have to think about it. Greedy assholes. Where is there any disconnect in the idea that we need taxpayer money to educate our children, not to land in the pockets of the filty school board & associated crooks. Why are we allowing these people to even show their face in decent society.

    • anonymous June 2, 2011 at 7:03 pm #

      Note: There is no decent society in Broward County. So they can just keep showing their faces to each other trying to figure out who is dirtier, greedier, more despicable. Judges committing heinous crimes, commissioners pocketing kick-backs from every which way they can, LE taking Ponzi cash from the biggest corrupt law firm in town, corrupt lawyers grabbing people’s wallets, Chief Judges making money of using the court system to take our fighting heroes houses out from under them while they’re in Afghanistan, probate judges stealing dead peoples estates, adulterous Police Chief whose own wife chased him down the street firing bullets at his ass, rabbis refusing to return stolen money, rabbi wanna-bes like Szfranksi just thieving, stealing money in the name of “whomever”, school board members taking bribes, cutting deals to line their pockets and cheat our children out of educations, Ken Keechl, Joel Steinger under house arrest in $7mm mansion, his lawyer caught with $2MM drug cartel money still not disbarred or jailed, Rosenfeldt and Adler still practicing “ahem, LAW”, County Commissioner Stacy Ritter who’s so despicable even her dad pulled a weapon on her (Stacy, Dad’s Day is just around the corner, you better give daddy a restraining order this year, yikes. Let’s see. Decent society: would that be Jen-Jen, Bon-Bon, Cheat-Cheat Gottlieb? How about Ilene Liberman and her gang, any one in that group who’s likely to represent decent society? How about Mitch Caesar and HIS bunch! Lamberti protects his corrupt friends by asseting that their criminal investigations are “still open” which means full pay, no work, don’t worry. Would decent society be the Police Woman of Broward County and their first rate TV show, surely up for an Emmy next season? It makes Jersey Shore look like Masterpiece Theatre. Who have I missed? The major whose firm just stole a Wellington man’s estate in probate court? No accountability, Broward County! So corrupt people have to fly airplanes over the courthouse to point it out. Next will be airplanes of NBHD. Big disgusting news about the corrupt hospital board and those illustrious doctors who are under investigation for kick-back fraud (big names, too, so “your heart is NOT in the right place). I’ll bet the docs don’t lose their licenses to practice either, just like the Florida Bar. Well, after all, doctors are just “lawyers with knives”.

      I could go on, but why bother. There is no decent society. Even Gayla left town for Israel, living George to knaw at the Feds, now that he’s moved everything of value to Gayla’s new home out of the country. I know people say it’s corrupt everywhere, but it isn’t as corrupt as it is here, no way, couldn’t be. The corruption is too big to clean up. It’s going to have to be leveled with a complete startover. Taxpayers need to do that by taking a first step somehow. People, let’s get to work.

      • deathfrog3. June 2, 2011 at 7:26 pm #

        Great comment

      • augusta June 2, 2011 at 7:52 pm #

        Allof what you said is true. But what about the tirless work of Bob Norman who works to expose the corruption? The living angels who daily provide food and life’s necessities at Our Father’s House Soup Kitchen, the home “parents” who live and love the children at Kids in Distress, the advocates at Women in Distress, the big picture folks at Food for the Poor, the work of the Dearfield Beach dude who tries to clean up corruption in his city, the folks who work at the AIDS Project Florida minstering with indivuals who have been so oftenthe lepers of our society….the list goes on and on…..
        There is indeed a “decent society” in Broward County-it’s just hard to find sometimes underneath all the grit and grime and crime.

      • All That Glitters..... June 2, 2011 at 8:13 pm #

        Very well said!

      • Condo Cowboy June 2, 2011 at 9:13 pm #

        Amen!

  11. augusta June 2, 2011 at 7:54 pm #

    One of these days, I will take my time and actually type slower than I think…Perhaps then I won’t have so many typos….my bad…

    • anonymous June 2, 2011 at 9:09 pm #

      Augusta, you’re absolutely right. There are truly good people in our community and you mentioned many of them. What we have to do is get them into positions of power because right now there are too many bad guys ruling this town with the self-centered greedy ways. And thanks to Bob Norman’s work, supported by the bloggers, good things are happening. I just wish more people would become active. In the meantime, we need to continue to call out every one of the SOBs who are stealing our money and diminishing our community.

      • All That Glitters..... June 2, 2011 at 9:15 pm #

        Absolutely Correct! We are very fortunate to have Bob Norman here to “Expose The Bastards”

  12. Charlene Rebecca Blackwood June 2, 2011 at 9:19 pm #

    First, the School Board has failed in hiring additional auditors to review the construction projects upon completion. In the auditor’s reviewing of the few projects in which the Change Order Category “Other” was created by then Deputy Superintendent Mike Garretson and Building Official Lee Martin, $4-$5 Million Dollars in change orders were granted to contractors for the costs of correcting building code cited violations. “Other” was not an industry standard category for Change Orders. Those standard categories are Professional Errors/Omissions, Unforeseen or Owner Requests. The “Other” category was established to protect the Architect or Engineer of Record or the Contractor. The Architect or Engineer for preparing construction drawings that were not code compliant. The Contractor for constructing the scope of work that did not comply with the code compliant construction drawings and paying them to remove and reinstall the correct construction.
    The School Board pays for Professional Liability Insurance for each Project’s Architect and Engineers, which allows the School Board to file claims for all errors and omissions attributed to the Professionals of Record. No contractor should have received a change order for correcting their own work that did not comply with the code compliant construction documents of the project. Yet, the Facilities and Construction Management Senior Supervisor of Project Management approved these change orders. Lawsuits were filed against the contractors and architects and engineers for those projects with “other” change orders and settlements have been paid to the School Board for those errors. Whether the Facilities and Construction Management personnel elected to file claims on the Professional Liability Policies is a big mystery. Remember the $4-$5 million dollars of “other” change orders were only on the few projects identified by the Chief Auditor’s staff. With only 2 auditors assigned to construction projects, there is no way all of the many construction projects could be audited.

    Efforts have been made to reduce the quality of the inspectors in the Building Department by allowing the bumping of state certified (passed a state exam)inspectors and replacing them with project managers from Facilities and Construction Management and District Maintenance personnel who were given 3 to 5 years to pass the state exam the removed inspectors had passed several years ago. These individuals were allowed to inspect projects without a licensed inspector with them.

    There was a planned intention to reduce the quality of inspections to satisfy the complaining contractors who were contributing to the campaign funds of the Board. Building Official Lee Martin (the one indicted by the Grand Jury in Miami Dade County but charges were later dropped because no one was injured or killed)was responsible for revising the job description for an inspector from a certified (taking exam and passing) to a provisional inspector – 3 to 5 years to take an exam.

    No one has asked the question if there is only $300 million in construction scheduled, why is it necessary to have 19 project managers earning approximately $80,000 – $90,000 annually. Also, why are there project managers in Design and in Contracts in the organization chart?

    Why hasn’t Deputy Superintendent Lindner allowed inspections for District Maintenance projects which consists of fire alarms, fire sprinklers, electrical and plumbing upgrades. Is anyone scheduling biological testing of new water piping in schools, as required by the Department of Health?

    Revised evaluations were sent to the Department of Education in their response regarding the Grand Jury Report, yet the same evaluation forms created for teachers is still being used by professional employees. The Building Department and the Facilities and Construction Management Departments are still allowing their personnel to write their own evaluations and then signing off on them. That to me is not an evaluation.

    I agree with the writer who states just because an individual is hired by the School District should not guarantee them life time employment. There is no incentive to do a good job if just showing up is enough.

    Miami Dade kept their teachers and laid off their other employees. Palm Beach is hiring more. The latest rumor is 400 more teachers are scheduled to go. Yet, there are personnel in Facilities and the Building Department who should retire or be laid off. The Department started in 1997 with 13 inspectors and 354 inspections a month. Now they are averaging less than 20 inspections a day, approximately 400 inspections a month, but there are 25 inspectors, an Assistant Building Official and a Building Official and 5 secretaries and 1 file clerk. Five of those inspectors have provisional licenses and were bumped from Facilities. If they were so knowledgeable in construction, they should have had 90 days to take the state exam and pass it.

    There needs to be some outside review of the support professional staff to lay off administrators, supervisors and other staff that are not needed with the reduction of teachers.

    Miami Dade County’s Teacher’s Union is working with the Superintendent to establish evaluation standards for teachers to increase the quality of the teaching staff. Why isn’t Broward Teacher’s Union also working toward that goal? The days of it doesn’t matter what the quality of your job is, just show up is over and should have been a long time ago.

    Recently, at a democratic meeting I attended Board Member Dinnen stated the Grand Jury report was just a distraction. That statement shows the disconnect with the School Board and what was really going on in the construction department where billions of dollars were being approved by individuals who either did not have experience in construction or were giving favors to their political contributors.

  13. anonymous June 2, 2011 at 10:24 pm #

    Like a bunch of saps we just take their corruption. Now are we going to let them ruin our kids chance for a decent education? Why aren’t people taking to the streets over this school board and dismantling them, immediately? I don’t get it

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