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OKC school board debates $500 million lease-purchase financing deal in marathon meeting


OKC school board debates $500 million lease-purchase financing deal in marathon meeting

Apr 16, 2024 | 10:06 am ET
By Nuria Martinez-Keel
OKC school board debates $500 million lease-purchase financing deal in marathon meeting
The Oklahoma City Board of Education voted Monday night in favor of a $500 million financing plan to expedite construction projects from its 2022 bond package. (Photo by Nuria Martinez-Keel/Oklahoma Voice)

OKLAHOMA CITY — A lengthy discussion and public comments revealed frustrations within Oklahoma City Public Schools over the planning, rollout and oversight of its $955 million bond issue passed in 2022.

The Oklahoma City Board of Education’s eventful 4 1/2-hour meeting Monday featured a massive financing deal, the fate of two historic properties, a new school board member and another’s resignation.

The board’s eight members unanimously approved a $500 million lease-purchase financing agreement with the Oklahoma Industries Authority that will set in motion multiple bond construction projects. 

However, they gave serious thought to postponing the approval, which could have put at risk the district’s pledge to finish all of its bond projects, including six new school buildings, by August 2026.

Chairperson Paula Lewis said the agreement was not presented to the board with enough time for all members and the public to digest the information.

OKC school board debates $500 million lease-purchase financing deal in marathon meeting
Oklahoma City Board of Education Chairperson Paula Lewis, right, listens to Vice Chairperson Lori Bowman before a meeting Jan. 8 at the Clara Luper Center for Educational Services. (Photo By Nuria Martinez-Keel/Oklahoma Voice)

Lewis apologized for not placing the matter on a meeting agenda sooner, but she said the board received the information from district administrators only recently. She said this has been “a pattern.”

“It’s not because I think the lease-purchase agreements are wrong,” Lewis said during the meeting. “I think they’re 100% legal. What I don’t like is we as a board are asked to vote on things without having time to process it. I take full responsibility.”

Vice Chairperson Lori Bowman said the board’s operations committee first heard of the agreement terms last week.

Ultimately, the board voted anyway Monday night after members had the chance to ask several questions. The meeting was the first for newly seated District 3 representative Jessica Cifuentes. It was the last meeting for board member Adrian Anderson, who resigned because he is moving out of District 5 in OKCPS.

The board agreed to pay back the $500 million at an interest rate of no more than 5.5%. The Oklahoma Industries Authority and the Oklahoma County commissioners also must approve the deal.

The agreement acts like a loan to give the district more funds upfront rather than waiting several years to collect the bond revenue needed to start high-dollar constructions and renovations. 

The 2022 bond will collect revenue until the 2033-34 school year. The district received $233 million of the $955 million total already.

Although other Oklahoma districts have used lease-purchase financing, this method is new for OKCPS. 

With past bond issues, the district waited to start on a project until after it sold enough general obligation bonds to finance the construction. That means some facilities were built several years after voters approved them, said Scott Randall, the district’s chief operations officer.

“It took us 17 years to deliver a gymnasium that we promised in 2007,” Randall said of a recently finished structure at Wilson Elementary. “We need a quick delivery system. We need to get our kids into these transformational facilities.”

Clifford Hudson, the school board’s former chairperson and past Sonic CEO, urged the board to postpone or reject the lease-purchase agreement. While speaking in public comment, he called it “poor public body practice” to approve a $500 million deal in the first open meeting acknowledging the matter and without knowing the full cost of interest.

“There’s no discussion about the millions of dollars of bond proceeds from this ’22 bond deal, millions of dollars that should be going into schools that instead are going to pay interest on lease financing agreements,” Hudson said.

District staff said any added costs could be partially offset when the $500 million earns interest in escrow.

Bond overseer alleges poor public transparency

Meanwhile, a member of the watchdog committee over the bond alleged the school district reduced the committee’s role to “a mere rubber stamp” and failed to be transparent with the public. 

The 16-member Citizen Oversight Committee is meant to review use of bond proceeds, monitor projects’ progress and boost public confidence in the process.

Shawntay Alexander, who represents northeast Oklahoma City and Spencer on the committee, said the district gives the group only “fragmented updates,” and her attempts to learn more information have been met with “inequality, gaslighting, intimidation, lies and policy barriers.”

OKC school board debates $500 million lease-purchase financing deal in marathon meeting
Oklahoma City Public Schools headquarters at the Clara Luper Center for Educational Services in Oklahoma City. (Photo by Nuria Martinez-Keel/Oklahoma Voice)

“These updates would solely pertain to the district’s self-reported timeliness and adherence to the budget for campaign projects, effectively eliminating any meaningful oversight for hundreds of millions of dollars,” she told the school board in public comment.

Alexander encouraged the district to address transparency concerns by allowing the committee to have public, rather than private, meetings.

The school board is the final authority on all district and bond-related spending. Lewis, the board’s chairperson, said OKCPS “can always do better on transparency” but she believes the committee has received necessary information.

“I don’t think anything nefarious has happened,” Lewis said. “I don’t think anybody is intentionally not giving the bond oversight committee what they need. But ultimately, we are the oversight of the bond.

“I hear Shawntay. I hear her loud and clear. I think in Oklahoma City Public Schools we have a lot of history that we have to rewrite and do better, and transparency’s the key to that.”

Capitol Hill High School building to be preserved

Another bond-related vote was cause for “celebration and joy” to alumni of Capitol Hill High School, one meeting attendee said.

Board members approved site plans for a new $116 million Capitol Hill High School building, and they agreed to leave the school’s original building intact. 

The district would erect the new construction on Capitol Hill’s grounds in southwest Oklahoma City without demolishing the current school building, built in 1928. The school’s domed field house won’t be preserved.

Michael Smith, a 1960 graduate of Capitol Hill, said 3,000 people signed a petition advocating to keep the school building standing. Smith has been a leader in the alumni’s fight to save the 96-year-old facility.

“Our desires and wishes apparently have been heard,” Smith said during the meeting. “I couldn’t be happier about that. I’m going to declare victory and move on.”

The board also heard a proposal to preserve another 1920s school building — this one for redevelopment. The long-empty facility at 900 N. Klein Ave. could be converted into apartments with a commercial space on the property. 

The board will vote in a future meeting on the redevelopment plan.