Editor’s note: This story has been updated twice to reflect corrected data released by the district and to include new comments on reimbursement by board member Andrea Merida.
An Education News Colorado analysis of spending by Denver school board members shows that two of the seven blew their annual $5,000 budgets for the fiscal year ending June 30, including one member who spent well over twice the amount each is allocated.
Board member Andrea Merida spent more than $12,000, an overspending of $7,000 in a single year, or 153 percent of her annual permitted limit. Thousands of dollars were charged to the district in restaurants and coffee shops, with her credit card statements noting their purpose as “constituent meetings.”
“This is the cost of community engagement,” said Merida, who is a free-lance Web designer. “A lot of the folks in my district, I have to meet them at dinner time. That’s when they’re available.
“I’m a different kind of board member,” she added. “I’m much more active in my community, much more constituent-focused, than anyone I know of. So yeah, there it is.”
Neither of the two who overspent say they received any notice that they exceeded their spending cap – until the year was over. That includes board vice president Arturo Jimenez, who exceeded the $5,000 limit by $1,153.29
Board President Nate Easley and board treasurer Mary Seawell vowed to instill policy changes that will prevent a repeat of the overspending. Jimenez called the overspending numbers a “total surprise.”
“I was told officially by the district that I was less than $100 over on my account,” he said. “That was the official word so this is a total surprise to me.”
Jimenez also said he asked that a district-issued smartphone be turned off this past spring and he expected that would have brought down his expenses “considerably,” putting him in compliance with the spending limit.
But cell phone costs do not count against the cap. The fact that Jimenez, who has served four years on the board, did not know that is one illustration of the confusion surrounding board spending.
“Regardless of what the circumstances are, it’s important that I take responsibility for that,” Easley said of his own overspending, though district figures later showed he was under the limit. “And in the future, it’s important to make sure it doesn’t happen again.”
Overspending comes to light through public confession
The excessive spending came to light publicly when Easley shared a confession near the conclusion of the board’s Aug. 18 meeting. He said he’d exceeded the $5,000 allocated to each board member by $843, and that he had written a check to repay the district. Revised calculations by the district put his overage at $462.84
However, newer information released by the district shows that Easley spent $4,797.83, or $202.17 less than his $5,000 allotment.
“I just feel like as a new, relatively new board member, we need some guidance. And I want the board to work on this, because it’s too important,” Easley said that night. “And, to be honest, I had no idea that I was that much over, believe me.”
Easley was aware, when he spoke at the Aug. 18 meeting, that he was not alone. He knew other board members had exceeded the limit, but not to what extent.
A district response to an open-records request by EdNews after the Aug. 18 meeting shows Easley’s expenditures were far out-stripped by those of Merida, with whom Easley has often clashed, and lesser so by those of Jimenez, who is questioning the accuracy of some of the charges. In addition, the district initially listed Seawell as being over her limit by $452.56.
“As treasurer, my mistake is especially unacceptable and I will pay back DPS,” Seawell said at the time. She then took a closer look at her records and contacted the district, which later – two days after the original EdNews story was published – agreed Seawell came in $85.45 under the cap.
The other three board members finishing under the limit were Bruce Hoyt, who spent $777; Jeannie Kaplan, who spent $1,863.12; and Theresa Peña, who spent $3,879.66.
Collectively, for the fiscal year concluding June 30, the board was about $470 under its $35,000 limit.
Easley, as board president, was required to sign off on each of his colleagues’ monthly statements, while Jimenez, as board vice president, approved Easley’s.
But there are limits to the blame that Easley will either hand out, or accept.
“I’m not going to assign this blame to any one person,” he said. “This is a board issue. This is not a board president issue. But as board president, I’m going to take very aggressive steps to make sure it doesn’t happen again.”
Seawell called the overspending “a collective failure.”
“I think all of us, as individual board members, have a responsibility … There was not one failure, there were multiple failures,” she said. “and that’s what we’ll be addressing in a policy and protocol for board members.
“As board members, we are responsible for tracking and knowing where we are financially, and we need better systems in place to help board members to do that.”
Merida: “My intent was always to be very transparent”
Merida also went over the $5,000 cap – by just $35 – in the previous fiscal year, despite only having been sworn in Nov. 30, 2009, when that fiscal year was already five months old.
In the fiscal year concluding June 30, at least $4,000 of Merida’s total, or close to a third, was spent on credit-card charges at fast food establishments, restaurants and coffee shops.
On credit-card statements obtained by EdNews, Merida’s statements from July through November 2010 carry line-by-line handwritten notations explaining the expenditures.
For example, in July 2010, charges on consecutive days for July 15-19 were recorded at Looking Good Restaurant ($25.10), Carino’s Italian Grill in Lakewood ($39.25), Imperial Dragon ($44.22), Pasquini’s Pizzeria ($44.87) and McDonald’s ($5.61). Each expenditure is noted as being for a “constituent meeting.”
But a similar seven-day streak starting Jan. 22 of this year – Gypsy House Café, Pho Duy Restaurant, Smiling Moose Deli, Jack ‘n Grill, Chick-fil-A, Starbucks, J.S. Noodles and New Thai, and Granny Scott’s Pie Shop in Lakewood – carries no clarifying notations.
None of Merida’s colleagues’ credit card statements featured any notations about individual expenditures.
Asked why she stopped writing down the purpose of her expenditures, Merida said, “I think I just didn’t have time. There were a couple board meetings where maybe I wasn’t there, so I didn’t see it. My intent was always to be very transparent about that, even though people weren’t asking me for it.”
Merida added, “We weren’t given any kind of guidance on this.”
No specific policy on how board members can spend their $5,000 limit
EdNews also obtained records for board members’ spending that was not put on their board Visa Classic cards, but were submitted independently for reimbursement. For Merida, that included a $1,042, four-night stay last December at the plush Broadmoor hotel in Colorado Springs, the site of the Colorado Association of School Boards annual meeting.
That sum included about $215 in room service and restaurant charges. She doesn’t consider that excessive.
“I’m the Denver delegate to CASB,” she said. “That’s what they charge. You’re bound to be there. You have to spend your money there.”
- Policy on school board member conduct on gifts, payments and reimbursements
- DPS propriety of expenses policy
- DPS test of propriety guideline
See proposed new policy
District spokesman Mike Vaughn said it is not spelled out anywhere in board policy specifically what is permissible for board members to spend their $5,000 allotment on, and what is not.
“Unfortunately, there is no written policy or specific listing for the board to refer to as to what is or is not an appropriate expenditure of public funds,” he said, “and therefore each board member, and the board as a whole, is entrusted by the public to conduct themselves ethically and reasonably.”
However, the DPS Test of Propriety Guidelines for the use of district funds poses several questions designed to test whether any expenditure is proper. The first three questions are. “Is this transaction: For official district business? In the best interests of the district? The most effective way to accomplish official district business?”
Merida, who said she had no idea she was over her limit until shortly before the Aug. 18 meeting, called for a complete overhaul of the budgeting system for board members’ expenses.
“We need to allocate money, and we need line items, for professional development and community engagement,” she said. “The new people who are going to come on to the board (after November’s election) are going to have the same problem. They’re going to have to come up to speed, going to conferences, learning about education policy, getting books to read. These are not things the board previously has made the space for. We also have got things we need to talk about with regard to personnel that support us.”
Former board member says she explained policy to Merida – twice
Reactions to the spending revelations were varied, but few were stronger than that of Peña, the at-large school board member who last week was named executive director of the Denver Education Compact, effective Dec. 1 when her second and final term is over. Peña’s spending for the year came in about $846 under the permitted cap.
“For a person who argues for transparency, and for a person who has had this alleged dogged oversight for the (DPS) pension refinance, I think it’s rather ironic that she is so far over on her $5,000 limit,” Peña said of Merida. “It’s an abuse of her authority to be over on her account by that much.”
Not everyone accepts Merida’s claim that she was ignorant of the policy limiting board members’ expenses to $5,000. One of the skeptics is the woman who preceded Merida as the board’s southwest Denver representative, Michelle Moss.
That’s because Moss said she recalls clearly explaining the spending policy to Merida – twice.
“I recall that on at least two different occasions, talking to her about the $5,000,” said Moss. “One was the first time I met her, and that was at my house, in July or August (2009) before she was elected. I told her at that point about the money. I told her it can be expensive, all the mileage, all the places you have to be going, if you have to go to lunch with someone or if you want to go to a conference.”
- “I recall that on at least two different occasions, talking to her about the $5,000.”
– Michelle Moss, former DPS board member
♦ ♦ ♦
- “She may have. I don’t recall any of that.”
– Andrea Merida, DPS board member
The second time she briefed Merida, Moss said, was closer to the November 2009 election, when the two had dinner; Moss believes it was after one of Merida’s debates.
“We talked about the CASB conference in Colorado Springs, that would happen just a week after they were sworn in,” said Moss. “She said, ‘I can’t afford the Broadmoor.’ I said, ‘You could, it’s perfectly acceptable to spend for board and meals when you’re traveling, to attend the conference.’ ”
Merida said she doesn’t remember Moss outlining the policy for her.
“A lot of things were happening,” said Merida, adding, “She may have. I don’t recall any of that.”
There is a third occasion on which Moss was prepared to tell Merida about the policy. That was Nov. 30, 2009, the day Merida, Easley and Seawell were to be sworn in as new board members.
“I actually had a sit-down meeting, where I went over the 3-inch (DPS) binder with the incoming board members at Tony’s Market,” Moss said. “Mary showed up, and Nate showed up. Andrea was a no-show. She didn’t call to tell me why she wasn’t there. We later found out the reason she wasn’t there was because she was at a judge, being sworn in.”
Moss is now able to laugh – a little – about that day, when Merida went directly to Denver District Judge Larry Naves to be sworn in as a member of the board, rather than waiting for the scheduled swearing-in later that evening at the end of the board’s meeting.
Merida’s decision to do so deprived Moss of a chance to cast a vote on a controversial reform measure which Moss supported and Merida did not. Moss, who was in tears that night, said they have been estranged ever since.
There is no question in Moss’s mind that Merida understood the spending cap.
“It makes me angry, because I know that while $7,500 doesn’t seem like a lot in the DPS budget, I know that in any individual school this district, $7,500 makes a huge difference in the lives of our kids and we expect our leaders to play by the rules,” Moss said.
“And Andrea is the first to scream when people don’t. And yet she does this. I can’t figure out why you would put yourself in this position, especially given the state of the economy and the state of school funding right now.”
Board secretary position to be upgraded, with more monitoring oversight
After Aug. 18, Easley initiated action to upgrade the position of board secretary to that of executive assistant. Details of that personnel move are now on the agenda for a Sept. 12 closed-door board meeting.
Easley denied that upgrading the position was a direct response to discovery of the overspending and said the secretary, Jacquie Lucero, is free to apply for the position.
However, he added, “I think, and my colleagues agree, that we need a higher-level position supporting the board. And part of what this higher-level position would do would be tracking” board member expenses.
Easley does not directly blame Lucero for the spending issues but said, “My understanding was that that person was tracking it. I’ve asked her in the past to give me reports on how people were doing. Based on information from my board secretary, we were okay … The only time I knew there was an issue was at the end of the year, when she gave me the final report.”
That came in an e-mail from Lucero dated July 28, responding to a request from Easley, which showed a cumulative tally for individual board members’ spending for fiscal year 2010-11.
- “Remind me, what happens when people go over the allotted amount?”
– DPS board president Nate Easley to board secretary Jacquie Lucero, June 16, 2010
♦ ♦ ♦
- “Nothing really happens, they just move money from the overall board budget to cover it.”
– Lucero’s response, same date
That triggered an Aug. 2 e-mail from Easley to DPS chief operating officer David Suppes, chief financial officer David Hart and DPS legal counsel John Kechriotis, that began, “We need your help!”
It expresses confusion on an array of basic issues, including, “I need your help tracking expenditures. Jacquie does not know if the 5k is (sic) includes phone, Internet, etc. and I really need to know what folks have spent before I sign off.”
Internet expenses are assessed against the $5,000 total, while telephone costs are not.
According to district spokesman Vaughn, board policy, written before there were cell phones, states that the district will pay for a “phone line” for each board member. Now, with many people relying instead on cell phones for business, the district decided paying for board members’ cell phones is the practical equivalent.
Easley sent an e-mail to board members Aug. 19, the day after disclosing his own overspending, pointing out that he was not alone and writing, “In these difficult fiscal times, it is NOT reasonable to ask the district to absorb our over expenditures … ”
Kaplan responded to Easley the same day, copying all other board members and top district administrators, writing, “Nate – I find this communication to be highly offensive and demonstrative of your lack of leadership.”
In an interview Tuesday, Kaplan said, “If this is anybody’s fault, it’s our leadership because we have not been given any professional development. And I’m not sure new board members knew the maximum. We’ve never had any indication.”
Easley also points to a June 16, 2010 e-mail sent to him by Lucero, in response to his question as to what happens when board members exceed their limit: “Nothing really happens,” she wrote. “They just move money from the overall board budget to cover it.”
Jimenez, who is running for re-election, largely blames Easley for a lack of oversight as the cause of any overspending problems. He thinks board members should have debit cards with set limits that cannot be exceeded, rather than charge cards.
“I really do believe this is an oversight by the board president, why this all occurred,” Jimenez said. “(Former board president) Theresa Peña absolutely made it clear to me that this was her area of authority when she was president and, therefore, it should be the current president’s area of oversight and authority.”
Merida did not tie her overspending to Lucero’s job performance, and pointed instead to the DPS administration.
“I think that as far as our employees go, from superintendent on down, it’s incumbent upon the board to put down clear expectations and guidelines, and if there are systems that need to be created to satisfy those requirements, we have to not be passive about what we expect from the district,” she said.
In an email, Lucero stated, “I am not able to nor would I be inclined to comment on your story.”
Board members initially divided over reimbursing the district
Board members initially differed on whether those who overspent should reimburse the district, as Easley did when he believed he was over the limit.
Jimenez, upon studying his statements, said he has found a number of what he believes to be errors on expenses being assessed against his $5,000 limit. However, he added, “If there are overages, I’m happy to pay those back.”
Merida initially insisted that she would not reimburse the district for any overspending.
“No, I don’t intend to pay anything back because these are all legitimate community engagement kinds of things, and there is a lot of professional development lumped into that,” she said.
That prompted concern from other board members, including Hoyt, who called for a “board-level discussion” about reimbursement, and Peña.
“It’s taxpayer money,” Peña said, adding of Merida: “I don’t know where else she thinks it’s coming from. For somebody who has made such a big fuss about protecting taxpayer money, I would think she, of all people, would feel obligated to do that.”
She added, “I think any board member who overspends their taxpayer-funded account should feel obligated to pay it back. Nate did.”
Two days after saying she did not plan to reimburse the district, when the story about board overspending spread to other media outlets, Merida softened her stance. On her personal blog, she wrote:
“Just a quick note to tell you that I’ve decided to pay back what I overspent from our board allotment. I want to be very clear, however, that I did not personally benefit from any of the expenses. There is no personal enrichment here, only spending to outreach to you and to become a better board member.”
She told EdNews that she “didn’t really change my mind.”
“I think the distinction being made is that being thrown a dollar amount without having any justification, or having the opportunity to go through, and see what it’s all about, didn’t seem appropriate to me,” she said.
Easley said, “For me, at this point, it’s between her (Merida) and her constituents, and I think that’s true for all of us. At the end of the day, we answer to our constituents. This is all going to be public, and if my constituents have an issue with it, they’ll take it up with me. And my constituents aren’t very shy.”
Difference of opinion
- “I think any board member who overspends their taxpayer-funded account should feel obligated to pay it back.”
– Theresa Peña, DPS board member
♦ ♦ ♦
- “I don’t intend to pay anything back because these are all legitimate community engagement kinds of things, and there is a lot of professional development lumped into that.”
– Andrea Merida, DPS board member
♦ ♦ ♦
- “Just a quick note to tell you that I’ve decided to pay back what I overspent from our board allotment.”
– Merida, two days later, on her blog
Merida also pointed out that board members come from diverse backgrounds. While she is self-employed as a Web designer, Hoyt is managing director of the St. Charles Capital investment bank.
“I live in the same economic existence as my constituents, and you see somebody like Bruce, who obviously has a lot more resources,” she said. “It’s easier for him to make that decision” to spend little of the district’s money.
“To a point, she’s right,” said Hoyt. “I certainly have the means and make contributions, financial contributions to DPS, as well as time contributions, and I am happy to do so. And I certainly recognize others don’t quite have the same ability.”
Van Schoales, executive director of A+ Denver, a non-profit, non-partisan group of civic leaders advocating for improved Denver schools, called the spending reports “surprising” and “amazing.”
“Regardless of the specifics, spending more than double the amount that you’ve been told you can spend seems totally irresponsible,” said Schoales.
“The more I think about it, the more surprising it is to me. Given the state of the economy, the state of school districts and the discussions that have taken place at the board level about spending in the district, it seems bizarre.”
Even before the board members’ records surfaced, Schoales believed the fact board members receive no salary needed to change.
“The amount of time these people put into these things, they should be able to take people out to lunch and attend conferences,” he said.
“I wouldn’t want to misconstrue my comments as suggesting that these people shouldn’t have any money. I’m just saying they should act responsibly. Also, I think they should be paid. They should get a salary as city council folks do. They’re in control of a billion-dollar budget.”
Kaplan, who labels Easley’s raising of the issue at the Aug. 18 meeting “political,” said, “I don’t think this was misspent money. I think each of us used it in a different way. I would believe all of it was community-driven kinds of things.”
And, Kaplan said, “I’m actually one of those who feels board members should be paid. I wouldn’t do it, until I leave, because it’s not about me. But I think it’s a very small amount of money we’re given.”
Denver school board members receive credit cards and an annual spending limit of $5,000 for items related to their board service. Three of the seven board members exceeded that limit in the past fiscal year, from July 1, 2010 to June 30, 2011. They’re listed here in order of expenditure amounts:
Andrea Merida, southwest Denver – over $5,000 limit by $7,427.87
From credit-card statements:
- Restaurants, coffee shops: At least $4,0222. Used her card at restaurants and coffee shops at least 129 times during the 12-month period. For the first five months of the year, she noted a vast majority of these as “community meetings;” Halfway through the year, she ceased making any notations on her statements.
- Books, other materials: Made 29 charges to Barnes & Noble totaling $454.32, plus charged at least $370 in fax and other expenses described as research.
- Trips: Incurred at least $2,400 in credit card expenses in traveling to Loveland, Washington. D.C., New York, Austin, Texas, and San Francisco, Ca. Purposes included what she described as a “parent engagement” conference in New York, and the National Association of School Boards in San Francisco.
- Other: Spent $40 at Family Dollar for Halloween supplies, $61.54 at King Soopers for “flowers for Kaplan baby,” spent $6.39 with CampaignMonitor.com, which advertises “e-mail marketing software for designers and their clients” and registered two separate $10.76 charges with Netflix. Merida said she used Netflix to rent “Waiting for Superman” and a documentary about Brown versus the Board of Education. She could not recall the “Kaplan baby” to whom she sent flowers.
- Link to Merida’s credit-card statements (pdf)
Arturo Jimenez, northwest Denver – over $5,000 limit by $1,153.29
From credit-card statements:
- Restaurants, coffee shops: At least $1,636. Used his credit card at restaurants and coffee shops at least 67 times. His statements do not include notations for the purpose of the expenditures.
- Trips: Charged more than $1,110 on his credit card for trips to Washington, D.C., and San Antonio, Texas.
- Link to Jimenez’s credit-card statements (pdf)
Nate Easley, northeast Denver – did not exceed $5,000 limit – spent $4,797.83
From credit-card statements:
- Restaurants, coffee shops: At least $803. Used his credit card for these expenditures 21 times during the 12-month period. His statements do not include notations, but in an interview described many of these expenditures as providing “incentive” for constituent meetings.
- Trips: Spent at least $1,409.29 on trips, to destinations including Boston, Chicago, San Diego, Tampa and Washington, D.C. Trips included participation in the Public Education Leadership Project at Harvard, and a meeting of the Council of the Great City Schools, in Tampa.
- Books, other materials: Charged $27.56 to OfficeMax and $12.95 to Smart City for Internet service.
- Other: His restaurant totals include a $225.19 charge on his card in August 2010 at The Kitchen, an upscale eatery off the Pearl Street Mall in Boulder. Easley said it was for dinner with Superintendent Tom Boasberg and two conference facilitators for a board retreat at the Balarat Outdoor Education Center in nearby northwest Boulder County. He also spent $17.22 at the City Park Golf Course, in April.
- Link to Easley’s credit-card statements (pdf)
Mary Seawell, at-large – did not exceed $5,000 limit – spent $4,630.65
From credit-card statements:
- Restaurants, coffee shops: At least $490. Used her card at restaurants and coffee shops 24 times in a 12-month period. Her statements do not contain notations on the purpose of the expenses, but she said in an interview that she only uses her card for such purposes when meeting with a principal or a teacher.
- Books, other materials: Spent $390.98 at Office Depot in November and another $85.57 at Office Depot in April.
- Trips: Made trips to Tampa, New York, Cincinnati and Boston, costing close to $1,600. However, the Donnell-Kay Foundation reimbursed $495.40 of the New York trip to the district on Seawell’s behalf. Also, although the Cincinnati—Boston trip ticket was purchased in June of the past fiscal year, the actual trip did not take place until July, which is in the new fiscal year. Seawell’s trips included a visit to Generation Schools in New York, and her participation in the Public Education Leadership Project at Harvard.
- Link to Seawell’s credit-card statements (pdf)
Theresa Peña, at-large – did not exceed $5,000 limit – spent $3,879.66
From credit-card statements:
- Restaurants and coffee shops: Totaled $754 in 20 transactions at restaurants and coffee shops.
- Trips: Put $613 in charges on her credit card, for a trip to San Francisco for a Council of Great City Schools executive committee meeting.
- Other: Virtually all of Peña’s credit chard charges not spent on restaurants, coffee shops or district travel went to parking, in the amount of $249.11 An exception is one $26.93 charge at King Soopers, the purpose of which she can’t recall.
- Link to Peña’s credit-card statements (pdf)
Jeannie Kaplan, central Denver – did not exceed $5,000 limit – spent $1,863.12
From credit-card statements:
- Restaurants and coffee shops: Charged $699 in 13 visits to restaurants or coffee shops, averaging barely more than one such charge per month.
- Other: One charge to Federal Express for $131.94.
- Link to Kaplan’s credit-card statements (pdf)
Bruce Hoyt, southeast Denver – did not exceed $5,000 limit – spent $777.88
From credit-card statements:
- No credit card: Hoyt is the only board member who declined a district credit card.
- Other: He was reimbursed for $512.87 in Comcast high-speed Internet costs, plus $265.01 in other petty cash expenses, for a total district reimbursement of $777.88.
*Totals do not include cell phone expenses or credit-card late fees. All board members but Hoyt, who declined a district credit card, accumulated one or two $15 late fees.