The Adams 14 school district and its management company Friday could not agree on a report showing they had resumed working together, bringing into question whether the state will strip the district of its accreditation.
The state asked for written proof in the form of a joint report that Adams 14 and MGT, its private managers, would resume cooperation after the new superintendent blocked MGT from district schools earlier this year. Officials from Adams 14 and MGT worked late Friday, but ultimately district officials submitted a statement without MGT’s signature.
In it, they asked the State Board of Education to find the district was still in compliance and said MGT insisted on conditions that were not acceptable, including that the district agree not to sue the company.
Colorado education officials have often threatened school districts that failing to meet certain achievement standards over a long period of time could result in losing accreditation. But the state has never acted on those threats, and officials Friday afternoon were unclear about what wielding it against Adams 14 could mean.
The State Board of Education has scheduled an emergency meeting for Monday afternoon.
The district is entering the third year under contract with the external company, MGT. The State Board’s orders required the district to contract with an external manager for a period of four years. The local school board hired its own superintendent this summer for the first time since being managed by the company.
After that, the relationship between the district and MGT quickly broke down. Emails obtained by Chalkbeat show that Superintendent Karla Loria began to assert her authority — raising questions about the cost of MGT’s contract and taking part in hiring decisions that had been MGT’s responsibility — even before she officially started her job on July 1.
In August, Adams 14’s attorney issued a stop-work order, banning MGT staff from schools. In response, State Board members called that a violation of their orders and issued two demands: allow company officials back into the district, and submit a joint report “confirming that the contract partnership has been restored” by Oct. 1.
The district did meet the first requirement by allowing MGT officials back into schools, but the order states, “If the board does not receive a joint written statement confirming that the contractual partnership has been restored by Oct. 1, 2021, the stay of the removal of the district’s accreditation shall lift, and the district’s accreditation will be removed, effective immediately.”
In 2018, Colorado’s State Board of Education moved to strip the district of its accreditation, but delayed implementing its consequences on the condition that the district comply with various state-set conditions, including hiring an external manager and turning over some authority.
Adams 14’s report asks for state officials to find the district in compliance despite not submitting a joint report.
District officials took issue with demands from MGT to agree to waive any possible lawsuits, and with renegotiating how the company could get $500,000 in bonus pay without state tests to show progress.
There were also disagreements about pay. When Adams 14 had stopped MGT from working in the schools, they had also stopped payments. District officials said they made back payments Friday afternoon in an attempt to resolve the disagreement, but MGT officials late Friday said some previous invoices were still outstanding.
“They haven’t made any compromise. They were insisting on the same stuff,” Jonathan Fero, the district’s attorney, said of MGT. “We hope this will meet the state board’s expectations. We feel we’ve done everything we possibly can.”
MGT officials said they had ongoing concerns about whether the district was in compliance and listed examples of how they lack management authority, such as MGT officials not receiving invitations to leadership meetings in the district.
“Not signing this statement was neither our Plan A nor our Plan B — we made proposals all the way through tonight, but ultimately we couldn’t in good conscience affirm that the district was in compliance with the State Board’s order,” Eric Parish, executive vice president of MGT Consulting, said in an emailed statement. “We couldn’t sign something that wasn’t true. Our decisions as lead partner have been ignored. The district delayed payment on long-overdue invoices until today, and still has not paid some.”
Adams 14, with about 6,000 students, mostly from Hispanic and low-income families, is the first district in the state to hand over control of most day-to-day operations to a private company.
In the last month, each side has made attempts to publicly show efforts to reconcile.
Loria has invited Parish, who lives in the metro area, to attend school board meetings and has made a point of asking him in front of the board, and the public, to approve each of her recommendations to the board.
MGT changed staff, replacing Harry Bull, the former Cherry Creek superintendent serving as executive director for MGT in Colorado to oversee the work in Adams 14, with Andre Wright, the chief academic officer of Aurora Public Schools, and a recent finalist for the superintendent job in Denver. Wright will be senior vice president on its Education Solutions team.
But internally, some district employees say there’s been chaos and division between those who support the return of MGT staff and those who don’t.
Loria said recent changes haven’t completely addressed her concerns about MGT, but that work was ongoing.
“We’re working hard to resolve things,” Loria said.
Loria told State Board members last month that one reason she sought an independent evaluation of MGT’s work, the one that she used as basis for attempting to remove the company from schools, was that MGT began pressuring her to increase the amount of the company’s contract “from Day 1.”
State Board member Steve Durham interrupted Loria in that meeting to say the state has ordered outside management, but is not requiring the district to extend the current contract or pay MGT additional money.
Emails obtained by Chalkbeat through a public records request show that in June, just before the deadline for approving a new budget, Adams 14 finance staff realized that a change in Colorado’s school finance formula gave the district a surplus of money with no plan for how to spend it. Already, the district was putting COVID relief money into reserves, emails show, and the district’s finance leader was asking for guidance.
MGT had just submitted a draft proposal for its work in Year 3, and it asked for more money than its 2019 contract specified.
Loria asked Bull, MGT’s leader, why the company needed more money, and what services it would cut if the extra money wasn’t approved.
Bull explained that federal COVID relief funds could cover the additional money MGT was requesting. He also said the contract needed to be renegotiated anyway because it lacked measures to determine if MGT would receive a $500,000 bonus. The original criteria of improving student achievement could not be used because the state had suspended its annual tests during the pandemic.
He said the board appeared to view the $500,000 bonus “as optional, and MGT views [it] as available.”
Loria said she also realized that the district was paying MGT subcontractors directly with its own money, even though the district had also paid MGT to do some of the same work.
The district is awaiting a fiscal audit. It hired Eide Bailly, a North Dakota based firm of accountants and business advisers, to examine all the contracts and money paid to MGT and its subcontractors, and to provide “litigation support if needed.”
As part of having an Adams 14 superintendent for the first time working alongside MGT, the two sides had to figure out how to share responsibilities, including decisions on hiring and firing.
Loria had helped to hire people into key positions before officially starting her job. Under the external management agreement, recommendations for hiring and firing staff has been MGT’s responsibility, while the local school board retained final authority.
Emails obtained by Chalkbeat show one of Loria’s first requests was to review job postings for open leadership positions. She held interviews, and alongside MGT, hired several new administrators, including Chief Business Affairs Officer Mario Marquez. Marquez worked for four years in the Houston school district, much of it during the same time Loria worked there, but previously worked in the oil and gas industry.
As the relationship with MGT frayed and the district forced MGT out of its offices, Loria continued to hire more administrators, including Robert Lundin, the district’s new director of communications and special projects.
Lundin came to Adams 14 immediately after having worked with Stuart Berger, the consultant who performed the independent evaluation that was Loria’s basis for expelling MGT from schools. Before that, Lundin also worked with Loria in Houston years earlier. He has no communications experience and said last week that the special projects part of his work haven’t been defined.
State officials have been in negotiations with Adams 14 and MGT over the past week, and a special meeting is scheduled for Monday. That meeting will include a closed session to consult with an attorney. The executive session may be followed by a public discussion, according to a meeting notice posted Sunday. It’s not clear whether the State Board will take action.