Wife of Houston ISD trustees president Paula Harris’ campaign manager does $75K in no-bid consulting for HISD
Tuesday, Jun 28, 2011, 08:55AM CST
By Lynn Walsh and Jennifer Peebles

The Houston school system has paid the wife of the school board president’s campaign treasurer $75,000 in no-bid work over the last two years as a consultant, arranging classes and after-school programs on subjects including CPR, English as a second language, jazz dance and parenting.

Demetra C. Jones, the wife of prominent Houston lawyer Franklin D.R. “Frank” Jones Jr., and her businesses have been paid $78,110 by the Houston Independent School District since 2009, records released by the school system show.

Frank Jones is the campaign treasurer for Paula Harris, who was elected to the HISD trustees in 2007 and who became the trustees’ president in January. Frank Jones has also done legal work for the Houston schools, including serving as lead negotiator for the school district when it hired current Superintendent Terry Grier away from the San Diego, Calif., schools two years ago.

Demetra Jones is the former longtime head of human resources and risk management for Harris County Precinct One, working under County Commissioner El Franco Lee for two decades. She previously served as office manager in City Hall for state Sen. Rodney Ellis when he was a Houston city councilman some 20 years ago, and was public affairs manager for Ellis’ Houston investment bank, Apex Securities, according to two resumes available online.

She has a master’s degree in education from the University of Houston, and she has taught in the past at both U of H and Lone Star College, her resumes said.

None of the work done by Demetra Jones and her firms was subjected to competitive bidding, and none of it was ever subjected to a vote by the HISD trustees. Individual school principals and HISD department heads made the decision to hire Jones’ firms, a district spokesman said.

Trustees’ votes aren’t required for individual consultant agreements worth less than $25,000 each or less than $100,000 in the aggregate, HISD spokesman Jason Spencer said in an e-mail. A formal “request-for-proposal” process is not required for hiring educational consultants.

Records show the work done by Jones’ companies was billed in dozens of separate expenses of usually several hundred dollars or a couple thousand dollars at a time. “The services were requested in accordance with current procedures,” Spencer said.

The school district put the amount paid to the Jones’ businesses at $74,700.

Demetra Jones did not return phone messages left for her by Texas Watchdog. Frank Jones did not return phone messages or an e-mail for comment.

“HISD needs to have an arm’s-length policy between their board and their contractors or vendors,” said Andy Wilson with Public Citizen of Texas. “It may be that (Jones) was the most qualified person to run these programs — but when she’s awarded a no-bid contract and has financial and political ties to the chair, the public is going to catch a whiff of that and be outraged.

“This could be innocent, but there’s no way to be certain.

“Between this and other recent issues, HISD needs to take a good, hard look at rewriting their ethics rules. Especially in our schools, and especially in this budget crisis where dollars are so precious, we need to insure our school money is going to the most qualified, lowest cost people, not the politically or financially connected ones.”

The revelation of Jones’ work for HISD makes her the second close friend of Harris found to have been paid thousands of dollars by the school system for no-bid work. Texas Watchdog has previously reported that HISD paid companies connected to Pearland businesswoman Nicole C. West for services including private investigations work to find truant teens, dry cleaning drapes and tutoring elementary school students. Harris also voted four times to approve a total of $28 million in HISD contracts that included work for one of West’s firms.

Meanwhile, both Texas Watchdog and the Houston Chronicle have recently reported that HISD trustee Larry Marshall traveled to Costa Rica last year on an all-expenses-paid trip funded by the Costa Rican government and arranged by state Rep. Borris Miles, an insurance agent who also services some of HISD’s flood insurance.

Harris declined to comment to a reporter who approached her after last Thursday’s school board meeting. She also did not return phone messages for comment or respond to a list of e-mailed questions from Texas Watchdog. But in public comments she made during the Thursday meeting — a couple of hours after Texas Watchdog supplied HISD with an extensive list of questions for this story — Harris defended what she said were her many friendships with HISD vendors and others working in and for HISD.

“That presentation we saw (during the meeting) is dedicated to the 12,000 teachers, all of the principals, all of our partners, all of our vendors, all of the folks that provide a great service and provide great added value to the Houston Independent School District. And I’m not ashamed ever to say that I’m friends with some of ‘em. … Sometimes it’s hard to be my friend. They’re gonna do a story every week about my friends, I’ve got so many friends in this district, so many places I sit on (in) this district. But that’s fine. Just know,” she said, echoing something Jesus told his disciples in the book of Matthew, “if you don’t deny me, I won’t deny you.”

ABOUT THE CLASSES

The class offerings Demetra Jones has arranged for HISD are varied.

Among the classes she and her company Training & Leadership Consulting, also sometimes called Training Leadership & Consulting or TL Consulting, arranged for HISD, records show:

$2,100 to put on CPR and rescue breathing classes this fall for second- and third-graders in the health science magnet program at Whidby Elementary;
A total of $10,000 to lead GED and English-as-a-second-language classes for parents at Ortiz Middle. Records are unclear as to whether the payment was for 200 total hours or instruction or for 220 hours of each subject.
$2,250 to put on jazz dance classes at Scarborough High this past spring;
and $2,600 for 13 Saturday ESL classes for parents at Lewis Elementary.
TL Consulting is “… deeply involved in learning about the educational state-of-the-art, investigating research and designing instructional materials,” reads a testimonial attributed to Ortiz Middle on the company’s website, along with this one from Lewis Elementary: “Training Leadership & Consulting have exceptional certified instructors … making a difference in our schools.”

Meanwhile, records show another of Jones’ firms, the FDR Group, was paid $5,040 for preparing Sterling High students for the Texas Assessment of Knowledge and Skills tests last October, and another $3,900 to put on parenting classes last September. HISD’s online check register shows checks for those amounts — but written on different dates — made out directly to Demetra C. Jones last fall, with Jones having the same HISD vendor number as the FDR Group.

The school district can’t just make teachers work in after-school programs without paying them more for it, Spencer said: “In many instances, vendors who provide after-school programs do so at a lower cost rate than teachers.”

TL Consulting application for all-girls academy after-school programs
TL Consulting application for all-girls academy after-school programs

The school district said it has no consulting agreements for the new all-girls’ academy that is slated to launch this fall. But TL Consulting has had on its website recently a downloadable PDF application for after-school programs at the all-girls’ school, with offerings as varied as robotics, lacrosse and “Wacky Writing.”

“Young Women’s College Preparatory Academy After School Program provided by Training and Leadership Consulting Inc.,” the application reads. “For questions regarding all offerings, please contract Demetra Jones, TLC Inc.,” it says, and lists TL Consulting’s phone number and e-mail address.

The PDF was available on TL Consulting’s website as recently as early yesterday afternoon — but it appeared to have been removed from the website later in the day.

KEEPING UP WITH THE JONESES

Frank Jones has been Harris’ campaign treasurer since at least 2008, online campaign finance records show. Harris also confirmed Frank Jones was her campaign treasurer in a recent interview with Texas Watchdog for a previous story.

Demetra Jones was also the contact person for a $250-a-head campaign fundraiser for Harris that was held one evening last week at the posh Tony’s restaurant on Richmond Avenue. Invitations for the event, one of which was obtained by the West University Examiner, asked people to mail checks to Demetra Jones at the same 315 W. Alabama St. address as the office building where Paula Harris and her husband, Dwayne, base multiple businesses they run. The Harrises own the building, according to property records.

When it first sought certification as a minority business from the Houston city government in 2009, TL Consulting reported that one of its largest previous jobs was $300 in training it put on for DPM Investments, Paula and Dwayne Harris’ investment firm, though the company submitted $600 worth of invoices from DPM to back up its application.

“Demetra’s experience includes planning, developing and implementing human resource strategies; preparing new hire recruitment policies; structuring development training programs; and developing educational, health and safety seminars,” Demetra Jones’ online bio says. “Mrs. Jones’ services have been acquired by local governmental offices, school districts and private business entities.”

TL Consulting’s address is listed in much of the HISD paperwork as a residence on MacGregor Way, south of the Texas Southern University campus — the same address where both Frank and Demetra Jones are registered to vote. However, one document Jones filed this month with HISD lists the company’s address as 315 W. Alabama St., the Harrises’ office building.

Harris County records show Training and Leadership Consulting is a registered assumed name, commonly known as “doing business as,” with Demetra Jones as the owner. (Though the firm calls itself “Training and Leadership Consulting Inc.” on its Web site, and uses the “Inc.” on HISD paperwork, the Texas Secretary of State’s office had no record last week of a corporation by that name, or a TL Consulting, tied to a Demetra Jones. Demetra Jones also signed off on HISD paperwork as recently as this year indicating the firm is a sole proprietorship or individual, not a partnership or corporation, and city of Houston records show the company is a sole proprietorship.)

Frank Jones is listed as the registered agent of the FDR Group, a limited liability company, in business records from the Texas Secretary of State’s office.

A current co-chairman of the Houston Library Board, Frank Jones is a prominent attorney specializing in public finance and government issues. His official biography from his law firm, Greenberg Traurig, lists among his major accomplishments as playing a major role in the creation of the Reliant Park complex, Minute Maid Park and the Toyota Center.

Frank Jones is also HISD’s appointee to the authority in charge of redeveloping Houston’s Old Spanish Trail/Alameda Road neighborhood. He was appointed by the Harris County Commissioners Court to the board of the Gulf Coast Waste Disposal Authority.

APPROVING THE WORK

In three cases, records indicate the classes put on by Jones and her firms began even though there wasn’t enough money in the proper budget fund to pay for them — but school principals moved money around and made it happen.

TL Consulting was to put on GED and ESL training at Ortiz Middle School between Sept. 27, 2010, and May 21 this year. But budget officers wrote as late as Nov. 19 that there were “not enough funds” to pay for it, records show. Two weeks later, the funds had been made available.
FDR Group was hired to put on TAKS preparation classes Oct. 4-18 for the juniors and seniors at Sterling High School. But as late as Nov. 10 — which would have been after the classes had ended — HISD’s legal office complained to the high school that there weren’t enough funds in the budget, records show. That day, money was moved around to pay for it.
TL Consulting was hired to put on $20,000 worth of after-school enrichment programs at Alcott Elementary between Sept. 7, 2010, and July 8, 2011. But as late as Sept. 13, HISD’s legal office said there were “no funds in (the) budget” for it, records show.
At the same time, five sets of classes appear to have begun before two of HISD’s top administrators, the district controller and general counsel, signed off on the contracts for them. In two cases, records show the two administrators signed off on the contracts after the classes were already supposed to be over:

The TAKS prep classes at Sterling High were slated to end Oct. 18. But HISD General Counsel Elneita Hutchins-Taylor didn’t sign the contract for the classes with FDR Group until Nov. 11, and HISD Controller Kenneth Huewitt didn’t sign until six days after that, records show.
For a second set of GED and ESL classes at Ortiz Middle, slated to run Sept. 27-Dec. 17, HISD’s top lawyer didn’t approve the contract until Jan. 3, and the controller approved it four days after that.
In most of the cases, Jones and her firms were hired not at the request of HISD’s central office but at the request of individual school principals and the manager of HISD’s after-school programs, records show.

Sterling High Principal Leviticus Williams wanted Jones’ companies hired to prepare juniors and seniors for the TAKS test last fall, and wanted Jones’ firms hired to put on parent enrichment classes at the school this spring, records show. Williams did not return an e-mail message or multiple phone messages left at his school office.

Also not returning an e-mail or phone message was Jonnelle Hollins, the after-school chief. Her name appears on documents as requesting to hire Jones and her firms for eight after-school and GED/ESL programs, including those at Oates, Alcott and Blackshear elementaries and Worthing and Scarborough high schools.

“Evaluating the qualifications of (an educational) consultant is the responsibility of the school/department” hiring them, Spencer said. To hire an educational consultant, the school is required to submit to HISD’s Finance Department the consulting contract and a W-9 tax form, he said.

HISD, which has nearly 300 schools, has long had a culture of empowered principals. HISD principals, for instance, largely set their own schools’ budgets, based on the funds they’re allocated by the central office.

FRANK JONES’ LEGAL WORK FOR HISD

While the school system was hiring his wife to arrange after-school programs, HISD also hired Frank Jones to take the lead on cutting the deal to bring Grier to Houston from California two years ago.

F. JONES
The firm was to be paid a flat $20,000 for its services in negotiating with Grier, along with any travel or out-of-pocket expenses incurred, according to HISD’s agreement with the firm.

HISD relied on Frank Jones even though his firm, Greenberg Traurig, does not appear on the list of law firms that the district trustees approved for legal services in June 2009 for school year 2009-10. But the vote on that annual list also allows the school system to hire additional lawyers on an as-needed basis without additional approval from the trustees, Spencer said.

Greenberg Traurig was picked for the job by the school board’s Superintendent Search Committee, Spencer said. HISD signed a contract with Jones and Greenberg Traurig in August 2009, and the district inked its contract with Grier the following month.

However, Greenberg Traurig’s name does appear on the list of law firms for school year 2011-12 that district trustees voted to approve last Thursday night. Harris abstained from the vote but did not offer an explanation of why she abstained.

Greenberg Traurig is one of five law firms that had to recently pay back money to Harris County for “unsubstantiated travel and entertainment expenses incurred during trips to sell county bonds,” the Houston Chronicle reported. An internal audit showed outgoing county Financial Services Director Edwin Harrison went on out-of-town trips, including travel to Costa Rica, with attorneys doing bond work for the county. The firm paid back about $128,000, and could lose another $175,000 in billing the county is challenging.

“Our hope is that we’ve repaid the money back and we’re done with it,” Frank Jones told the Chron. “Certainly, we felt we had a legitimate issue, but if the county decides that it doesn’t warrant payment, we’re done. They’ve been a great client to the firm, and we just want to put it behind us.”

***
Texas Watchdog Editor Trent Seibert contributed to this story. Contact Lynn Walsh at lynn@texaswatchdog.org or 713-228-2850. Contact Jennifer Peebles at jennifer@texaswatchdog.org or 281-656-1681.

Houston ISD trustees president Paula Harris voted on millions of dollars in contracts involving close friend’s firms
Thursday, Jun 09, 2011, 06:07AM CST
By Lynn Walsh

When the Houston Independent School District has a problem, it increasingly looks to Nicole West to solve it.

Need schools painted or fences installed? HISD hired Nicole West’s firm Westco. Need security cameras and burglar alarms installed at schools? It hired Westco. Need drapes dry cleaned for a school auditorium? It paid Westco to do it.

Need elementary school students tutored in reading? HISD paid Nicole West to tutor them. Need a high school decorated for a rededication ceremony? It paid Nicole West. Need an ambulance on standby for a high school football game? It hired another of West’s firms, a small, private ambulance service.

And when the nation’s seventh-largest school district wanted to hire a private investigations firm to track down truant high-schoolers, it didn’t pick any of the big PI firms in Houston, some of whom have dozens of investigators and have been in business for decades. It instead hired a small firm, only a few years old, owned and run by Nicole West. With two licensed investigators today, the firm’s current legal address with the state is West’s residence in Pearland.

Those business contacts would suggest that West is a person of many interests and talents. Perhaps fittingly, a 2008 profile of West in a local magazine said she “ascribes her success to her ability to multi-task (and to) generate multiple streams of income.”

But she’s also one of the closest friends of the president of HISD’s board of trustees, Paula Harris. Harris is the godmother of West’s children.

Harris has voted four times to approve millions of dollars in school district contracts involving Westco, a Texas Watchdog investigation has found.

Aside from those contracts, West, Westco and three other West-owned firms have done thousands of dollars in business with the Houston schools — business that was not required to be put up for school board approval — since Harris was elected to the school board in 2007, records show.

In a phone interview with Texas Watchdog, Harris said her votes on contracts involving Westco were ethical and were not conflicts of interest. She said she never used her influence to help West or her firms gain business from HISD, but said a vote would be a conflict of interest only if the person involved were a relative.

“I can say that I don’t get involved or go over to (HISD’s) Procurement (department) or over to the business side,” Harris said. “The public can think what they want. She’s my friend … I’m very, very proud of her. And I think everybody should have smart friends.”

Harris voted last month, in April, last August and in 2009 to approve the Houston Independent School District hiring Westco Ventures to share in contracts to paint, put up fences and install security systems at Houston schools, records show. The total value of the contracts is $28 million, though Westco would be in line to receive only a fraction of that work; the school district’s online check register showed payments of $1.67 million to Westco as of last month.

Harris’ votes on the contracts involving Westco are entirely legal under state and local laws and ordinances and are allowed under HISD policies governing trustees’ ethical conduct.

But the allegations of a potential conflict for Harris, a first-term trustee who is up for re-election this year, come after a series of other ethical problems have rocked HISD and its leadership. School board member Diana Davila resigned last year soon after she had tried to get her husband appointed to an HISD oversight board, and the federal government recently unfroze millions of dollars in HISD technology funding it blocked after it was revealed that HISD tech officers accepted big-ticket personal loans and other gifts and freebies from tech vendors.

As head of the trustees for the nation’s seventh-largest school system, Harris is a prominent young Houston political figure. She has been nominated for induction this year to the Greater Houston Women’s Chamber of Commerce Hall of Fame. A petroleum engineer by training, she is head of community affairs for oldfield services giant Schlumberger.

In an e-mailed statement in response to Texas Watchdog’s questions, the school district stressed it works hard to be ethical, but reiterated that votes such as Harris’ break no laws or ethics rules.

HISD “has one of the strongest ethics and conflict of interest policies of any school district in Texas,” read the statement released by district spokesman Jason Spencer. (Read the complete statement, and Texas Watchdog’s questions posed to the district, here.) “The district’s conflicts of interest policies are significantly tighter than any restrictions in state law. To our knowledge, HISD was the first school district in Texas to adopt a local policy prohibiting businesses in which trustees, or trustees’ relatives, have a financial interest from contracting with the district.”

Aside from the contracts Harris voted to approve, records show that West, Westco and three other West-owned firms have done roughly $125,000 in business with the Houston schools since Harris was elected to the school board in 2007 that did not require the school trustees’ approval, records show, because of the relatively small amount of money involved in the individual projects.

Those payments include $19,200 to West’s private investigations firm to track down truants, $2,300 for Westco to restore and clean drapes for an elementary school auditorium, and $5,400 for another West firm to tutor elementary school students in reading.

The total amount paid to Nicole West’s firms by HISD is unclear. The district’s check register noted payments of almost $1.7 million to Westco, but the school district also turned over to Texas Watchdog a number of invoices — which appear to have been paid — from West and her companies that do not exactly line up with payments in the check register, for reasons that are not clear. The school district did not answer a recent question from Texas Watchdog addressing the discrepancy.

“Nicole has been sub(contracting) for the city, the county, the district and the state well before I got on the board,” Harris said. “So, if I needed to break off my friends because they’re smart and they have good companies, then I would be in big trouble, because most of my friends are smart and make lots of money, and, so, I can’t say that I would discontinue our friendship.”

WESTCO’S WORK FOR HISD

Harris was among the HISD trustees who voted unanimously in 2009 to approve a $10 million contract with nine firms — Westco and seven others — to install indoor and outdoor security cameras, fire alarms and intercoms at school buildings, meeting minutes show. The money was paid from bonds issued with voters’ approval two years earlier, HISD said.

Harris was also among the trustees who voted last August to renew that $10 million contract with Westco and seven other firms, minutes show.

In April, Harris and HISD trustees also unanimously approved Westco as one of four companies to share in a $5 million contract for painting at schools. A month later, in May, Harris and the trustees approved Westco to share with three other firms in a $3 million contract to put up fences at HISD schools.

The school district sought competitive bids on each of the four contracts, and the groups of companies chosen for each contract were voted on by the trustees only after HISD administrators reviewed the bids and made recommendations about which firms could do the best job for the lowest cost. The trustees did not vote up or down on each firm — they merely voted to approve the en masse recommendations from the HISD central office, the district said.

In the case of the $5 million painting contract, Westco had the lowest cost percentage for the job, records show, and had the lowest pricing in most categories of the services and materials involved. (Specifics regarding the bids on the two security camera contracts had not yet been released by HISD following Texas Watchdog’s public records request for them, filed last September. A follow-up request for those bid specifics, as well as a request for the specs on the fencing contracts approved in May, was sent to HISD earlier this month.)

View HISD payments to Nicole West and companies in a larger map

Registered with the state seven years ago as a limited liability company, Nicole West was listed as Westco’s president on the paperwork the company submitted to HISD as a potential vendor. Her husband, Anthony West, was listed as vice president, and another woman with the last name of West was listed as the corporate secretary. Records with the Texas Secretary of State’s office show Anthony West as the firm’s current “registered agent.”

Westco reported to HISD that it has 10 employees and offices on South Wayside Drive, just inside the Interstate 610 loop in the Gulfgate/Pine Valley neighborhood. A list of previous clients supplied by Westco to HISD said the firm had previously worked for the Plano, Richardson and Magnolia school districts as well as Paul Quinn University in Dallas.

Efforts to reach West by phone and e-mail were unsuccessful. Messages left in person last week at the locked doors of the South Wayside offices for Westco and another West-owned firm, First Alert EMS ambulance service, went unreturned.

“Our ethics statement talks about family…I really couldn’t vote on anything if it was people I know,” Harris said. “As long as I am not telling people to give her work, it is ethical,” Harris said.

HISD Superintendent Terry Grier has previously spoken critically of HISD’s contracting processes, saying without elaboration that there’s “no rhyme or reason except, quite frankly, influence where influence has no business coming from.” The school district’s two-paragraph statement, issued Monday in response to written questions from Texas Watchdog, did not include a direct response to questions regarding Grier’s opinion of Harris’ close friendship with an HISD vendor.

“There is no requirement in law for a school district trustee or, to our knowledge, any other elected official in Texas, to abstain from voting on a contract that has been recommended by staff, simply because the trustee or elected official might have a personal friendship with someone who works for or owns a business,” the district’s statement said.

However, there are recent instances in which at least one HISD trustee, Larry Marshall, a retired HISD school principal, abstained from voting on issues because of close personal relationships or legal battles with vendors or individuals.

TIES BETWEEN 2 OLD FRIENDS

Giving remarks in January as she was installed as the new president of HISD’s trustees, Harris recognized Nicole and Anthony West and identified herself as a godparent of the Wests’ children. She also said she and Nicole West were members of “a group of friends” who annually give toys to needy families, with Nicole West as the organizer of the effort.

Harris added that both she and Nicole West are godmothers to the children of state Rep. Borris Miles, D-Houston, whom Harris likened to a brother, and that Miles is also godfather to Harris’ children. Aside from his service in the legislature, Miles is also an insurance agent who has provided insurance coverage to HISD. He did not return calls to his insurance office in Houston or his legislative office in Austin for comment for this story.

Three years ago, Harris nominated West for inclusion in a “Moms Who Mean Business” feature for the Houston style publication DBA Magazine. West was featured in a 2008 edition of the magazine, which said:.

Many ask how she does it and without a doubt West is a multi-tasker that gets things done. If you ask West to describe the force behind her drive, she’s quick to provide this reply, “success”. West believes in accomplishing all her set goals to include family, marriage, and business. West ascribes her success to her ability to multi-task, generate multiple streams of income, and the support and leadership of a great husband with parents and in-laws playing an important supportive role.
Harris told Texas Watchdog that she and West have been “friends for close to 20 years,” and if West were a sister or a family member, it would be a conflict of interest. But because West is merely “an acquaintance or a friend or someone who I think does great business,” it is not, Harris said.

With Westco, Harris said she did not consider abstaining from voting and does not think she should have abstained.

Nicole West also donated $1,500 in February 2010 year to Harris’ re-election campaign, financial disclosures show. The two women also previously served together on the board of directors of Houston’s Ensemble Theatre group.

No one in HISD has raised an objection to Harris about her relationship with West, the HISD school board president said. “They probably would,” Harris said, “if I went to them and said, you know, ‘This is a company, this is a good company.’ But, since I don’t do that with anyone … They have no reason to raise a concern, because I’m not on the business side of this.” Besides the top administrators who oversee HISD contracts and the procurement department, she said she doesn’t know HISD’s procurement officers, she said.

Harris went on to say that she believes a “disgruntled contractor” who has lost HISD contracts to Westco has been complaining publicly about Harris’ friendship with West.

“He has been going around telling people, including the media, ‘I’m gonna take Paula Harris down because that’s how Westco has the contract,’” Harris said. She would not identify the individual or the company, saying it “is all hearsay, and that’s one thing” she doesn’t “report on.”

DROP-OUT INVESTIGATIONS

Another West firm that has done work for the school district is NCA Investigations, a private investigations firm that HISD hired to search for truant high schoolers, invoices and other documents show.

Because of the small amount of money involved — slightly more than $19,000 — HISD was not required to seek competitive bids for the work, and the school district trustees were not required to vote to hire the firm.

Site-specific work done

by Nicole West’s firms

View HISD payments to Nicole West and

companies in a larger map

NCA was started by Nicole West in 2001, according to state documents, with West as the president and Anthony West as treasurer. The company’s offices are listed on state records as the same Pearland address where Nicole and Anthony West live; Nicole West is licensed by the state as a private investigator, and state records available online this week showed at least one other licensed PI currently working for the firm.

When HISD hired NCA in fall 2008, the firm was to “commit up to 10 private investigators” to locate missing students’ addresses and conduct on-site interviews to determine why the students were not showing up for classes, according to its contract with HISD.

Tracking down high schoolers who have gone AWOL and getting them back to school — and getting them diploma-worthy — is a key goal for Houston’s urban school system where, a couple of years ago, the dropout rate was about 16 percent. And attendance figures are a crucial part of state and federal funding formulas that largely determine cash-strapped school districts’ budgets.

But how successful West’s firm was in its search for HISD’s truants is unclear today. Invoices the firm submitted to the school district list only the schools involved and do not describe the results or identify or quantify the students being tracked down. Nor do the invoices offer the kind of point-by-point accounting of investigators’ time that is a standard in many private investigators’ billing practices.

NCA’s contract with HISD said the company would provide a “thorough report” to the school district on its work. But the school system doesn’t have that report, HISD’s public information coordinator told Texas Watchdog last fall.

Despite that, HISD paid NCA a total of $19,200 in late 2008, according to invoices marked as approved by HISD staff and internal HISD payment records.

“To the best of our knowledge, these have been the only two times we have” hired private investigators to find truants, Spencer said in an e-mail response to a question from Texas Watchdog, though he added that it would be difficult for the school district to easily find among its files records for companies hired for that specific type of service.

The company was chosen by staffers at two of HISD’s regional offices at the time, and neither of those regional superintendents still work for the Houston school system, Spencer said — their jobs were done away with entirely in a recent reorganization. “They would have had to answer this question,” Spencer said in an e-mail in response to a question about how NCA was chosen.

However, the contracts with NCA were approved and signed by two top HISD officials at the central office who are still on the job — the district’s top lawyer, Elneita Hutchins-Taylor, and the current controller, Kenneth Huewitt.

The “Moms Who Mean Business” profile of West said NCA “has contracts with ATT, HISD, City of Houston, City of San Antonio and several insurance companies.”

HISD did not answer follow-up questions about NCA’s work, including a request to identify the regional superintendents who approved the hiring or whether the school system approached NCA or the other way around.

OTHER WORK FOR HISD

West’s business entities have also performed extensive work for HISD on other matters in which the costs of the individual projects didn’t meet the threshold requiring the district trustees’ approval, records show.

Westco was paid $76,000 for emergency repairs to ceilings and floors of schools damaged by Hurricane Ike in 2008, invoices and payment records show.

The firm’s first job for HISD was in December 2007, records show, when the company did $1,185 in cleaning school air ducts. Harris was elected to the HISD school board the previous month.

Westco also did dry cleaning and restoration on auditorium drapes at McDade Elementary School in Kashmere Gardens in late 2008, costing $2,300, district records show.

Another of West’s firms, First Alert EMS, was paid $600 to post an ambulance on standby for four hours at the football game between Milby and Reagan high schools at HISD’s Barnett Stadium on Aug. 29, 2009, records show. Nicole West is president of First Alert, a firm that was set up in 2006, state records show. West’s “Moms Who Mean Business” profile said the firm had a fleet of 18 ambulances; its offices are next door to Westco’s.

And the district paid West herself $5,400 by check in early 2008 for tutoring third, fourth and fifth graders at Hohl Elementary in the Independence Heights neighborhood in reading, HISD invoice and payment records show. The goal of the 24 hours of tutoring to the 40 students was to “increase knowledge to ensure success on state exams.”

Though the check was written personally to West, the district’s contract was with another West firm, Onsite Technology, records show.

The “Moms Who Mean Business” profile identified West as president and CEO of Onsite, which it said “provides support to schools with her team of tutors and professional trainers.” However, a search of business records with the Texas Secretary of State’s office this week turned up no records connecting a firm called Onsite with a Nicole West.

HISD did not respond to any of Texas Watchdog’s questions about how or why West, or Onsite, was hired to tutor students.

Previous to Harris’ 2007 election to the school board, the school system had paid or directly contracted West and her firms just once, records indicate — she was paid $1,200 for decorating Wheatley High School in the Fifth Ward when it was rededicated in fall 2006, records show.

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Contact Lynn Walsh at 713-228-2850 or lynn@texaswatchdog or on Twitter at @lwalsh.

Texas school systems hang on to big-bucks reserve funds while laying off teachers
Tuesday, May 10, 2011, 08:06AM CST
By Lynn Walsh and Steve Miller

Texas’ largest school systems are laying off teachers by the hundreds and thousands while hanging on to the tens of millions of dollars in their “rainy day” and reserve funds — and some in those communities, including some teachers, say that’s a bad idea.

The Houston public schools, the state’s largest school system, has laid off more than 700 teachers to solve its budget crunch while having $279 million in reserves. The Dallas schools are considering laying off more than 1,110 employees and expect to have $85 million to $95 million in reserves at the end of the fiscal year. And the San Antonio public schools have more than $63 million in reserves, though they have found other jobs for teachers who faced threats of layoffs.

None of the three systems currently plans to dip into those bank accounts to save teachers’ jobs, though their budget proposals for the next fiscal year are in varying states of flux.

“I think they should be using the rainy day fund,” said teacher Susan Wingfield, who will be laid off at the end of this school year after 11 years in the Houston schools, the last seven teaching art at Lamar High. “We need to educate these students … We need to spend money on teachers’ salaries to do that instead of laying them off.”

The Austin and Amarillo public school systems both plan to use some of their reserves to plug their budget holes and prevent or reduce layoffs, spokesmen for those districts said. The Austin schools have $165 million in reserve and plan to use $43 million of it, while the Amarillo schools don’t yet know how much of their $55 million in reserves they will spend.

But school officials in some districts say they need to keep their rainy day funds for an even rainier day than today. And some say the state should spend its rainy day money first, before school districts dip into their own reserves.

A reserve fund “is not money that just sits there,” said Amy Beneski, director of governmental affairs for the Texas Association of School Administrators.

The state of Texas does not require a public school district to keep money in a savings or reserve account, nor does it specify how much money a school district should keep in reserve, according to both Allen Spelce, a spokesman for the state comptroller, and DeEtta Culbertson, a spokeswoman for the Texas Education Agency.

However, the amount of a school district’s reserves factor into its bond ratings, a sort of credit rating for public entities. The worse the bond rating, the more it costs to borrow money.

“The rule of thumb is about two (to) three months of operating capital,” Culbertson said.

That’s a problem for some school districts already. Dallas would need about $150 million to run its schools for two months, but has less than $100 million in the kitty. Two months of running the San Antonio schools would cost $67 million, spokesman Leslie Price said, but the school system is short a few million dollars toward that goal.

“For us, the challenge is that we have to make ends meet for a year or two, but can’t go too deep into the fund,” Dallas ISD spokesman Jon Dahlander said. “It’s just not there. With that $85 million or $95 million, with the current projected cuts in the legislature — the House wants $126 million – we’d bottom out completely.”

The amount of reserves also figures into the state’s rating system for school districts’ financial integrity, called FIRST. It requires school systems to “maintain approximately 60 days of operating expenses in their general fund account,” Culbertson said.

The school systems have a right to worry about drawing down their reserves and hurting their ratings, said Lonnie Hollingsworth of theTexas Classroom Teachers Association. “I’m sure that’s justified. But some districts have more than the suggested two months in reserve. And in a regular year, I’d say they need to be spending that on teacher salaries, but this time around, it’s going to save teacher jobs.”

The Austin schools will still have three months of expenses on hand after drawing down $43 million from its reserves this year, AISD spokesman Andy Welch said. The system has cut more than 1,100 jobs through attrition and layoffs, including 500 teachers laid off, he said.

The Houston schools have reserve funds in two accounts — the rainy day fund, holding about $80 million, and the “undesignated fund balance,” which holds about $199 million, the district’s financial head, Melinda Garrett, recently told trustees.

Houston has “never tapped into the rainy day fund,” HISD spokesman Jason Spencer said in an e-mail. With about $130 million a month in operating expenses, the $279 million on hand would likely keep the 200,000-student system running for about two months.

Six of Houston’s nine school trustees told Texas Watchdog in recent interviews that they did not oppose using some of the district’s rainy day fund to ease the school systems’ budget crunch, though all six also said the state legislature should first dip into the state’s rainy day fund to help school districts across Texas.

“I am not opposed,” trustee Manuel Rodriguez said. “There might be a possibility of taking $10 million out of one of the funds to help plug the hole or reduce the gap, but, you know, once that money goes away, it doesn’t come back very easily.”

Also supporting the use of some reserve money were HISD trustees Harvin Moore, Mike Lunceford, Carol Galloway, Anna Eastman and Juliet Stipeche. Unable to be reached for comment were Larry Marshall, Greg Meyers and trustees president Paula Harris.

“I am not saying we won’t use it,” Moore said. “But the state needs to do all they can from their rainy day fund before school districts use their reserve funds.”

The state’s rainy day fund receives money from oil and gas production taxes, said R.J. DeSilva, a spokesman for the state comptroller. Currently there is $8.2 billion in the fund, though $3 billion of that is likely to be tapped to fill the state’s budget shortfall for the current fiscal year.

“The state can afford to let some of that money go,” Galloway said. “They should release some of that money for education, because if we don’t educate our young people, I can just imagine what situation we will be in ten years from now.”

But local school districts’ rainy day or reserve funds generally must come from property taxes, and they can be slow to build up.

“No one is expecting the budget to get any better in 2013, so they are holding on to it,” Beneski said.

And there’s always the chance of some major unforeseen catastrophe on the horizon. Rodriguez recalled how, when Hurricane Ike hit the Gulf Coast in 2008, the Houston schools had to shut down for several days — but still had bills to pay during that time. (Hurricane expenses were actually paid by the school system’s insurance carriers and not out of the rainy day fund, Spencer said.)

“Something has to be able to sustain unforeseen emergencies and needs,” Rodriguez said.

He compared the reserve funds to an individual retirement account.

“You have your IRA and you lose your job. You don’t run to liquidate your IRA right away…You look for other jobs, you find ways to survive without having to go and dismantle your retirement plan. So, that’s where we are. I am willing to dip into it, but not in large quantities to where we destabilize the district’s financial stability.”

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Contact Lynn Walsh at lynn@texaswatchdog.org or 713-228-2850 or on Twitter at @lwalsh. Contact Steve Miller at 832-303-9420 or stevemiller@texaswatchdog.org

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Houston ISD leaders won’t criticize trustees president Paula Harris for voting on contracts that included work for close friend’s firm
Thursday, Jun 16, 2011, 09:30AM CST
By Lynn Walsh

The leadership of the Houston Independent School District hasn’t said in so many words that it’s entirely appropriate for HISD trustees president Paula Harris to vote on contracts that included work for a company owned and run by one of Harris’ closest friends.

But they certainly aren’t condemning her for it.

(See the orignal Texas Watchdog story by clicking here.)

Trustee Carol Mims Galloway said she didn’t know whether the votes presented a conflict of interest. Trustee Manuel Rodriguez said it was a personal decision, Greg Meyers said it was “up to the individual board member,” and Harvin Moore said it was a “judgment call.” HISD Superintendent Terry Grier said through a spokesman that he would not voice an opinion on the matter. And the school system’s spokesman criticized Texas Watchdog for characterizing Harris’ votes as a potential conflict of interest.

When asked whether Harris should have abstained from voting on $28 million in contracts that included work for her friend’s company, Galloway said she wasn’t sure.

“Well, I do not know … but if it’s a very closely related friend, I would think so, but, I do not know to what extent, because I don’t know people in her circle because she’s so much younger than me,” said Galloway, a former Houston city councilwoman.

Galloway said she was not aware of Harris’ relationship with Nicole West, who is an owner or principal in a handful of firms that have done business with HISD. She said the friendship between Harris and West never came up as a topic of discussion while trustees prepared to vote on the various contracts. Galloway said she knows West but doesn’t “know her that well or who she’s associated with.”

In remarks she made as she was being installed as president of the HISD trustees earlier this year, Harris said she was the godmother of West’s children, and added that both she and West were godparents to the children of state Rep. Borris Miles, D-Houston, whose insurance firm has provided flood insurance to HISD, records show. At the same meeting, Miles called Galloway his “my dear mother and friend” and said she “almost was my mother-in-law.”

Rodriguez also said he was not aware of the relationship between Harris and West, and said the decision to abstain from voting is a personal one for each trustee. “That’s normally left to our ethics,” he said. “If there is some sort of association, relation, we recuse ourselves from voting and abstain if that’s something that you feel might come into play in any way.”

Said trustee Mike Lunceford: “If you look at the rules, (West is) not a family member.” Harris “has said she has no conflict, so, at this point, I have nothing to go by to say that there would be.”

Meyers echoed Lunceford’s comments.

“I know there are no policies or laws that have been violated. I think, from my standpoint, it is up to the individual board member if they think there is any need to abstain,” Meyers said. “… One of the things I would like to point out was, last year when I was board president, even though we had (or) have one of the strongest ethics policies, I think, of any school district that I could think of, last year we embarked on adding to it and put in that ‘black out’ period and I think that’s something that has really strengthened what we do further. And it shows that the bidding process, the (request for proposals) process, the whole process of dealing with a vendor, is very important to the board because it passed unanimously. So, (it was) another attempt to make what we do and how things are governed, as far as process-wise, even stronger.”

Among the amendments made to the conflict-of-interest policies last year was the addition of a “code of silence” period — generally covering the entire bidding-and-contracting process — during which trustees and many HISD administrators are forbidden from communicating with potential vendors.

“I have never been approached by another trustee about a contract vote,” trustee Anna Eastman said in a written statement. “I have had people who are not on the board contact me regarding upcoming votes on contracts.

“I need to know that our procurement process is free from influence to remain focused on my ultimate goal, which is graduating young adults from every corner of this city equipped to realize fully their goals and dreams.”

While the leadership may not object, some in the HISD community are critical. A group calling itself “Educators for a Better District IV” — the HISD district Harris represents — have circulated an e-mail in recent days criticizing Harris’ connection to West. “We find it strange that while our schools are suffering and in need of education dollars, those dollars have gone into her best friend’s pocket,” the email reads. No current HISD employees identified themselves publicly in the missive.

Harris’ votes broke no laws, ordinances or HISD rules. The district’s conflict-of-interest policy for trustees forbids HISD from contracting with business entities “in which a Trustee or anyone related to the Trustee in the first degree of consanguinity (blood) or affinity (marriage) … has any pecuniary interest.” It makes no mention of friends or acquaintances.

In an interview with Texas Watchdog last week, Harris said her votes were ethical because West is not a relative. She said she has never used her influence to help West gain business with the school district.

“It doesn’t look good, in the sense that someone is getting all these contracts in all these different fields,” said Robert Wechsler, research director for City Ethics, a national nonprofit that works to improve local government ethics programs. “It definitely sounds fishy, but it’s hard to say that there was a violation,” he said, given that the Houston school district’s ethics policies don’t mention anyone but relatives.

“One of the problems is that this is one of these areas that ethics codes don’t deal with that well,” Wechsler said. “It is hard to define a ‘friend.’ It’s hard to define a ‘girlfriend’ or ‘boyfriend.’ So, usually, they’re not included. It’s only family members and business associates — you can say you are partners, or you own a business together — those kinds of things are factual. (But) nobody wants to go to the next step of defining what a friend is or what a lover is, so they’re usually left out, and they usually cause a lot of problems.

“It’s really important to point out with ethics laws that they’re minimum requirements,” he said. “It doesn’t mean that because it doesn’t say you can’t do it, like with friends, that means it’s OK to (approve) lots of contracts to your friends. It’s one of those areas (where) you really have to look at the spirit of the law.”

Harris and the other trustees merely voted up or down on slates of vendors to be approved for each contract. The makeup of each slate for each contract was determined by HISD’s administrative staff based largely on the estimated cost, and the trustees had no input into which companies were included in each slate, HISD has said. The votes on all four contracts were unanimous.

“If just knowing someone means that you can’t vote, or that you have to disclose it, then, that’s problematic,” Moore said. “The question is, how well do you have to know someone before you need for everybody to realize that you know someone? And then, what sort of relationships count? … I don’t know how you define that, for a friendship. It’s easy to define for (a) relationship, because that’s in the law and it’s pretty consistent. And you are either related to someone or you’re not. You just can’t do any business. But knowing someone — that’s where it probably becomes more of a judgment call.”

Some government agencies’ ethics policies do consider the involvement of people other than family members as conflicts of interest. Just this week, the U.S. Supreme Court upheld the constitutionality of the Nevada state ethics law, which had been challenged by a city councilman who had been censured by the state ethics commission over a conflict of interest. The councilman had voted to approve a land-use change for a proposed hotel-casino that employed the councilman’s campaign manager, an old friend, as a consultant.

Trustee Juliet Stipeche returned a phone call for comment but could not be reached by press time.

Trustee Larry Marshall, a retired longtime HISD administrator, also didn’t return calls but lavished praise on Harris at last week’s school board meeting, the evening after Texas Watchdog’s story was published regarding West and Harris’ connections. Marshall — who has previously recused himself from votes on the grounds of having a potential conflict of interest — said the district was lucky to have Harris as president, calling her “sweeter than a politician’s promise and colder than a mother-in-law.”

Grier, who was hired by the trustees, has previously questioned HISD’s contracting processes, saying he discerned “no rhyme or reason except, quite frankly, influence where influence has no business coming from.” However, a spokesman last week said Grier did not want to give his personal opinion of Harris’ relationship with an HISD vendor.

“Dr. Grier is not in the business of passing moral or ethical judgments on the decisions made by his bosses on the Board of Education,” HISD spokesman Jason Spencer said in an e-mailed statement. “However, his administration has made it clear to you that there are no policies or laws prohibiting members of the HISD Board, or any governmental entity in Texas, from voting on contracts with companies that happen to be headed by people with whom they are friends.”

Spencer challenged Texas Watchdog’s statement in last week’s story that Harris’ votes presented a “potential conflict of interest”: “The fact that it appears you were unable to find anyone willing to go on the record making an allegation is very telling,” Spencer wrote. “It is also very telling that, to my knowledge, no one has filed a complaint against Ms. Harris in this matter.”

***
Jennifer Peebles contributed to this report.
Contact Lynn Walsh at 713-228-2850 or lynn@texaswatchdog or on Twitter at @lwalsh. Contact Jennifer Peebles at 281-656-1681 or jennifer@texaswatchdog.org.

Texas Watchdog probes Houston ISD’s business ties to friend of trustees’ president
Friday, Jun 10, 2011, 10:25AM CST
By Jennifer Peebles

As part of its ongoing look at potential conflicts of interest for people in government, you may have seen that yesterday Texas Watchdog took a closer look the Houston school system’s business relationship with a close friend of the president of the school district’s trustees.

See the full story by clicking here.

Some key points from the story by Texas Watchdog reporter Lynn Walsh:
*Houston Independent School District trustees president Paula Harris has voted four times to approve contracts that included work for a firm called Westco Ventures, which is owned and run by a close friend of hers, Pearland businesswoman Nicole West, records show. Harris is the godmother of West’s children.

*The total value of the contracts is $28 million, though Westco is receiving only part of the work; total payments by the district to Westco so far total more than $1.5 million, records show.

*The school district has also done $125,000 in business with Westco and other West-owned ventures that did not require approval by the school board, including HISD’s payment of more than $19,000 to West’s private investigations firm, who were hired to track down truant high school students, records show.

*Harris says she has never used her influence to help West gain business from the school district. Harris’s votes were legal under state law and were allowed under Houston ISD ethics rules.

In addition to the full text of the story — which includes an embedded spreadsheet of payments in West’s firms and an interactive map of site-specific work West’s firm has done for HISD — you can also read all of our questions to Houston ISD leading up to our report and the school district’s complete statement in response to them. There’s a first batch of questions, with the answers included in it, and a second batch with a separate statement from HISD.

And if you know of anyone else in local government who faces a potential conflict of interest, please let us know. We’re news@texaswatchdog.org.

Neighbors fear ‘eyesores’ if HISD closes four schools; old Bastian Elementary to be bulldozed
Thursday, May 12, 2011, 11:30AM CST
By Lynn Walsh

The proposed closures of four Houston elementary schools could leave those neighborhoods with more eyesores and create safe havens for illegal activity, some neighbors have said — but school district administrators said they’re taking steps to prevent that from happening.

As Houston Independent School District trustees consider closing four elementary schools, community members are reminding them of the forlorn condition of another campus, the old Bastian Elementary building on Calhoun Road.

“The fact that an unoccupied, unused, raggedy, unmonitored, closed school … sits within 1.3 miles of Grimes Elementary School and only 3 miles away from Rhoads Elementary School is very unsettling,” Tristan Washington told HISD Superintendent Terry Grier and trustees in an e-mail. “We don’t need another school closure which results in another ‘old Bastian Elementary’ situation.”

Washington is a deacon at the Berean Missionary Baptist Church, about a mile down the road from Rhoads, which faces possible closure along with Grimes, Stevenson and McDade elementaries.

HISD’s chief operating officer, Leo Bobadilla, said he has “heard those concerns, too.”

“The last thing we want is an eyesore in the neighborhood,” he said. “We want to be a good neighbor in the community.”

Bastian sites, four schools
Red balloons: Four schools HISD trustees may vote to close.
Blue balloon: Current Bastian Elementary School site.
Blue pin: Old Bastian Elementary site.

View HISD elementary schools in a larger map

The old Bastian building was left vacant in 2007 when HISD built the new Bastian Elementary on Bellfort Avenue in Sunnyside. The new school was financed by bonds approved by voters in 2002, according to HISD’s website, and it combined students from the old Bastian building and Thornton Fairchild Elementary.

HISD still owns the building and the land that the old elementary school occupies, said Issa Dadoush, the district’s general manager of construction and facilities. It was put up for sale a couple of years ago, but the district did not receive any offers on it, Dadoush said. (View video of the old Bastian site in a YouTube clip Sunnyside community members created recently.)

The land and buildings are appraised at $2.2 million for tax purposes, according to the Harris County Appraisal District’s Web site this week — $1.3 million for the buildings and $900,000 for the land. At one point, the property was listed for sale for $825,000, according to an online multiple listings service search, or slightly more than a third of the county’s appraised value for it. (“6-acre tract of land located in Southeast Houston,” the listing said. “Ideally located for redevelopment as a part of the Southeast/Hwy 610 South Corridor.”)

To make it more attractive to possible buyers, HISD plans to bulldoze the 55,000-plus-square-foot building, something Dadoush said should be complete by the second week of July.

Washington calls the Bastian demolition plans a “small victory,” but says there is still more to do.

“The bigger task at hand is upcoming,” Washington said in an e-mail. The possible school closures “must be thought out carefully.”

HISD has only hinted at what the future of the Grimes, Rhoads, Stevenson and McDade campuses may look like if trustees close those schools.

At a recent school board meeting, trustees discussed turning Rhoads’ building into a school that would help “over-age” middle-schoolers move on to high school.

Meanwhile, HISD has had real estate appraisals done for at least two of the other three schools, Grimes and McDade.

HISD has not said it plans on selling either school site, but Bobadilla says that “going forward,” the district wants to make sure its police department is aware of all vacant properties so they can be added to officers’ regular patrol routes for monitoring.

The district also wants to make sure the vacant buildings receive a “certain level of maintenance,” Bobadilla said, so there are not any “rodents, broken windows or fences that need (to be) replaced.”

The 44,000-plus-square-foot building at Grimes, plus the 16 acres of land that surrounds it at Grimes Park, is worth more than $3.7 million, Integra Realty Resources, a real estate appraisal firm in Houston, said in a report completed in late March. The building was built in 1959 and renovated in 2004.

The firm does not recommend razing the property, saying that its value “is significantly greater” with the building in place than it would be as a vacant lot.

McDade Elementary School is worth less than Grimes, according to an appraisal completed by T.N. Edmonds and Associates in Houston. The real estate appraisal company estimates the school building and the more than eight acres of land it occupies is worth a little more than $3.1 million. McDade was built in 1962, and an addition was built three years later.

Old Bastian Elementary: Video
The old school appears in this video made by Sunnyside residents to appeal to HISD to keep Grimes and Rhoads open.

In the report, the company estimates the land is worth a little more than $1 million. It also recommends that the property be used for “public educational facilities…private charter schools/academies, institutional, religious or community centers.” (View the documents here. View Grimes’ documents here.)

HISD also had an appraisal done for Love Elementary School in the Houston Heights, which was at one point being considered for closure along with Grimes, McDade and Rhoads. You can view more details about the Love appraisal here. Texas Watchdog did not include Stevenson Elementary in its public information request because Stevenson was not being considered for closure then.

In response to a Texas Public Information Act request, HISD said that no similar appraisal documents existed for Rhoads Elementary.

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Contact Lynn Walsh at lynn@texaswatchdog.org or 713-228-2850 or on Twitter at @lwalsh.

City of Pearland, education nonprofit settle dispute for $2,500; conflict of interest questions raised
Wednesday, Apr 27, 2011, 02:44PM CST
By Lynn Walsh

When a marriage ends in divorce, often times, neither side walks away happy.

And so it is in the Houston suburb of Pearland, where an unusual marriage between a handful of local government agencies — including the City of Pearland and the Pearland Independent School District — has ended in a messy divorce. And no one seems to be walking away happy.

At issue is a nonprofit called the Northern Brazoria County Education Alliance, which, among other things, aims to improve local workers’ skillsets and help with local job placement.

The nonprofit brought about an unusual intermarriage of the city and the school system that some in Pearland defend and some have criticized. Long story short: Its work was largely funded by city tax dollars, but its employees were technically on the school system’s payroll.

“I’ve been contending all along the school district was innocent,” said Bonny Cain, the former school superintendent in Pearland and currently the head of the Waco schools. “There was nothing illegal on the part of the school district. And I will tell you, (the education alliance) was an excellent, excellent support for the kids in Pearland ISD. Everyone benefitted greatly. It was a win-win for the community, a win-win for the businesses, and it was a win-win for the students. I was really shocked whenever it went down (that) this was something wrong.”

The education alliance received almost $600,000 over the past three years from the Pearland Economic Development Corp., a nonprofit that is largely an arm of the Pearland city government. PEDC gets money from a portion of the city’s 1.5-cent sales tax; it expects to get more than $6.5 million in city sales taxes this fiscal year alone.

The education alliance’s executive director, Terrie Morgan, is on the Pearland ISD payroll, school district documents show, but at one time, three education alliance employees were on the school system’s rosters through an agreement approved by the school district’s trustees, said Renea Ivy-Sims, a spokeswoman for the Pearland schools.

“It was the ability for the employees to be able to get benefits” through the school system, said Mike O’Day, a board member of both the education alliance and the Pearland Economic Development Corp. and a former Republican state House member. (Asked why he left the legislature in 2009, O’Day said he “didn’t want to be in politics [because] you have to deal with reporters.” But then he laughed.)

A 2009 post on the Houston Chronicle’s Pearland blog listed O’Day as one of the 10 most influential people in the city, and called him “the strongest force in setting up” the education alliance. A February 2010 edition of the education alliance’s newsletter says O’Day had served a two-year term as the alliance board’s chairman.

The contract between the alliance and the school system called for the alliance to reimburse the schools for the employees’ salaries and benefits, both Sims and O’Day said.

The alliance has paid the school system more than $300,000 in salary reimbursement, Morgan wrote in an e-mail. School district records show the alliance was current on what it owed as of last week, Sims said.

Morgan’s most recent contract with the Pearland schools began March 1 and includes an annual salary of $38,000. Last year, in the same position, Morgan earned $58,000. She is also eligible for the schools’ health and retirement benefits.

Two other education alliance employees, James Sudela and Sheila Reed, had employment contracts with Pearland ISD as of February 2010. Sudela served as the operations director, earning $50,000, and Reed served as the marketing director, earning $40,000, documents show. Both were also eligible to receive health and retirement benefits from the district. Both are still listed on the education alliance’s website as employees, but neither currently has a contract with the school district.

The education alliance also has its offices at the Pearland ISD headquarters on North Main Street, and has paid more than $18,000 in rent since moving there in mid-2009, Morgan wrote.

But at some point last year, the marriage started to fracture.

At least three board members of the economic development corporation have, at some point, simultaneously served as board members for the education alliance — which posed a potential conflict of interest to some, including Pearland Mayor Tom Reid.

“Conflicts like that are not good for cities, not good for organizations, and we don’t want to be exposed to that,” Reid said.

In a phone interview with Texas Watchdog, O’Day said he did not attend board meetings or vote on funding matters — but it was not clear from the interview whether he meant the PEDC board or the education alliance board.

As of press time, O’Day, who is president of a Pearland water well-drilling firm, had not responded to an e-mail asking for clarification.

Minutes from the June 24, 2010, PEDC board meeting say that O’Day was present at that meeting and that he voted to approve the 2010-11 PEDC budget, which included $210,000 for the education alliance.

Reid said it was O’Day’s position and ability to vote on both boards that led Pearland City Council members to work with the PEDC to “strengthen their by-laws regarding the ethics issues, since that was not really covered in their by-laws before.”

Reid himself previously was an ex-officio board member for the education alliance and is currently an ex-officio board member for PEDC. (“When you are mayor, you are the ex-officio member of everything,” he said.) Cain, too, is still listed on the education alliance’s website as an ex-officio board member, even though she’s now in Waco, but said she attended only one board meeting, and that her role was more that of “figurehead” than anything else.

Another Pearland resident who once served on both boards was City Councilman Ed Thompson, who said the duplicate service was intentional — and meant for a good cause. He said the PEDC board wanted him to serve on the education alliance’s board so it could have another “pair of eyes” taking stock of what was going on there.

The education alliance’s bylaws also specified that it had to have representation from the PEDC, the City Council and other local groups, he said.

But it was too late to save this marriage.

In October, the Chronicle reported that the education alliance would not get additional money from the PEDC because lawyers for the Houston suburb felt the “contract with the alliance was not a good contract.”

“It was not like somebody was trying to cook the books,” Cain told Texas Watchdog. “When (the education alliance) presented it to the school district, their PEDC had already looked into it. If the PEDC had already looked into and they said, ‘This is good’ … then it’s not the school district’s job to look into what a municipality’s rule is.”

Nevertheless, the school system had its attorneys go over the contract one more time, and they found nothing wrong, Cain said.

Late last year, PEDC asked the nonprofit group to pay back $120,000 the PEDC had given it earlier in the year, Pearland City Attorney Darrin Coker said.

“You need to be whistle-clean … and that will be corrected in the future when appointments come up and term limits are up,” the mayor said. The PEDC board members serve two-year terms.

Earlier this month, the two sides reached a settlement: The education alliance agreed to pay PEDC back $2,500 to settle all claims, and the paperwork shows that neither party admits to any wrongdoing.

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Contact Lynn Walsh, lynn@texaswatchdog.org, 713-228-2850 or on Twitter, @lwalsh.

Nonprofit to hire teacher recruiter for Houston ISD while school system lays off nearly 1,000 teachers
Monday, Apr 25, 2011, 01:40PM CST
By Lynn Walsh

Help wanted: Director of teacher recruitment for a school system that just laid off nearly 1,000 teachers.

A nonprofit that is trying to help improve Houston’s public schools is hiring six full-time employees — including a person in charge of recruiting teachers.

This is the same Houston Independent School District that has notified 950 teachers that their positions are being eliminated next school year, with roughly 75% of them losing their jobs due to massive state budget cuts. (The rest are being laid off for performance issues, the school district says.)

Taxpayers aren’t picking up the tab for the six new hires. They’ll be on the payroll of The New Teacher Project, a New York-based nonprofit that has been working with HISD for more than a year to help fine-tune its hiring practices, which HISD hopes will lead to better teachers.

But the timing — and the irony — weren’t lost on the head of HISD’s teachers’ union.

“I just find it a little distressing,” said Gayle Fallon, president of the Houston Federation of Teachers. The school system is “bringing someone in for recruitment when we have over 700 teachers that will not have jobs next year.”

Salaries for the open positions range from $70,000-95,000 a year, according to the postings on the nonprofit’s website. All of the positions are full-time, and include a benefits package and the possibility for bonuses based on performance. The recruiting director would be paid $73,000 a year or a salary commensurate with experience, the nonprofit’s online listing says.

The open TNTP positions include a communications director, business analyst, recruitment and staffing director, a director for implementing teacher evaluation systems, a senior director of teacher compensation strategy and a senior director of teacher evaluation system design.

“All of the positions are being funded by private grants,” Andy Jacob, spokesman for The New Teacher Project, said in an e-mail. “None (of the positions) are being paid for with taxpayer money.”

HISD has received more than $7 million in grants to help fund its effective teacher initiative — $6 million in September from the Houston-based Laura and John Arnold Foundation and $1.5 million in November from the Bill and Melinda Gates Foundation.

In February of last year, HISD estimated that the project would not cost more than $8.4 million.

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Contact Lynn Walsh at 713-228-2850 or lynn@texaswatchdog.org or on Twitter at @lwalsh.

HISD considers cutting 276 central office jobs to prepare for state budget cuts
Wednesday, Apr 06, 2011, 06:13PM CST
By Lynn Walsh

The Houston school system is poised to cut 277 positions — nearly all of them central office jobs — as it braces itself for massive budget cuts from the state.

Houston Independent School District trustees are slated to vote tomorrow on the cuts, which would save the district more than $17 million next year. But the district is facing up to $348 million in cuts from the state.

“Any more cuts would change the level of service provided to students and schools,” the district’s chief financial officer, Melinda Garrett, told trustees recently. “We can make more cuts, but it would mean eliminating entire departments, which we can do if (the trustees) want.”

The reduction in staff will also result in a central office re-organization, which will lead to the consolidation of some departments.

Only one of the positions that could be cut tomorrow is a teaching position — a literacy coach’s job that is current vacant. Seven of the positions being proposed for elimination are currently funded with stimulus dollars, money that is set to expire by the end of this year.

Also Thursday, HISD trustees are expected to continue the “right-sizing” discussion that could ultimately lead to possible school closures and consolidations. Trustees have been provided with a list of more than 60 “small schools” the district considers under-enrolled; the list was narrowed down to 37 last month.

HISD has provided the trustees with data for the under-enrolled schools that includes each campus’ state academic rating, building capacity and enrollment projections over the next 10 years. (You can view all of the data here.)

Four elementary schools, Love, McDade, Grimes and Rhoads, are already being considered for closure by HISD. The district is holding community meetings about the possible closures this week and next week. HISD trustees are expected vote on whether or not to close the schools April 14.

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Are you concerned about the budget cuts at HISD schools? Are you a parent of a student at one of the schools on HISD’s “small schools” list? Texas Watchdog wants to hear from you. Contact Lynn Walsh at 713-228-2850 or lynn@texaswatchdog.org or on Twitter at @lwalsh.

City can’t pay Houston ISD more for crossing guards, mayor says
Thursday, Mar 31, 2011, 02:57PM CST
By Lynn Walsh

The city of Houston can’t pay the Houston school system any additional money for crossing guards, Houston’s mayor said.

Meanwhile, the school system says it doesn’t plan to get rid of crossing guards, despite the superintendent’s recent statement at a school board meeting that the school system is “going out of the crossing guard business.”

The city is already giving the Houston Independent School District all the money it can, Mayor Annise Parker said at a Wednesday press briefing.

“We spend the money that goes into that fund, and we spend all of the money that goes into that fund, and if we don’t generate enough money in that fund, then that’s all they get,” Parker said, as reported by KHOU-Channel 11 and MyFoxHouston.

HISD says the city still owes more than $400,000 from its most recent invoice it sent for reimbursement for the districts crossing guard program. The unpaid bills come at a time when the school system faces possible budget cuts of hundreds of millions of dollars,along with employee layoffs, due to the state’s budget problems.

“We don’t take money from other (school districts) to give it to HISD. It is distributed to all of the (districts) that meet certain criteria as laid out by ordinance,” Parker said.

Texas Watchdog asked HISD about Grier’s response to the mayor’s statement. “We have no further comments on the matter,” HISD spokesman Jason Spencer said in an e-mail Thursday.

HISD also released a statement from HISD Chief Financial Officer Melinda Garrett said that safety is a “top priority” for the district:

“At HISD, school safety is a top priority. There is currently no proposal to end HISD’s crossing guard program. We are hopeful that the district and the City of Houston can come to an agreement regarding the reimbursement of funds. In these tough budget times, any additional monies we receive will go toward ensuring we provide Houston’s children the best education possible.”

At a February meeting with HISD trustees, Grier said trustees should write a “nice letter” to the city saying “we as a district are going out of the crossing guard business and we (HISD) would like you (the City) to assume the responsibility that your charter mandates.”

The city’s contract with the schools says the money it reimburses HISD and other school systems for crossing guards can be drawn only from one particular pot of money, funded by a fee on parking tickets and a surcharge on vehicle registrations. That pot of money doesn’t cover the complete costs of crossing guards at HISD and some other districts.

Parker says there is not much else the city can do.

“It’s not that we have diverted money or moved money. We peel off a certain amount of the money, and it flows into the fund, and it is what it is,” Parker said.