STEM School, district reach five-year agreement, with conditions

The Douglas County School Board voted Saturday to grant STEM School Highlands Ranch the five-year charter it had sought, but with a review after two years and the option to cut it off early.

STEM’S board unanimously approved the contract a few hours before the district board met Saturday afternoon, said Kristin Edgar, a lawyer who assisted in the negotiations.

The school’s current contract ends Monday. This year the district had offered a three-year contract, but STEM asked the state Board of Education to order the district to take another look, with the hope of getting a five-year contract. The school eventually dropped the appeal and was in talks with the district before the May 7 shooting.

The district will review the new contract in 2021. If the board finds STEM hasn’t complied with the contract, it could vote to cut two years off, ending the contract in 2022. Conditions include setting up a parent complaint policy and keeping the district informed of complaint investigations, requiring staff members to complete training on threat assessments, and hiring enough special education and mental health professionals to meet the district’s minimum ratio.

Krista Holtzmann, the board secretary, had expressed concern about approving a long contract at a meeting this month, but said she thought the new contract will push the school to take care of the “whole child,” not just academic development.

“I’m glad we’ve been able to reach this agreement and move forward,” she said.

Nikki Baird, who has two children in high school at STEM, said she’s pleased the school got a five-year contract, but she said she thinks the annual reviews put an “undue burden” on STEM that other Douglas County schools don’t share.

“There’s been a lot of talk about the shooting, but a lot of this, they were talking about putting on the school before it happened. So I don’t think it can be put on that one incident,” she said.

STEM School had reported a shorter contract would cost it about $4.9 million because of higher interest rates on $15 million of bonds to buy the elementary school building it currently leases, to make improvements to facilities and to refinance some existing debt.

Some board members were reluctant to give a five-year contract, however, because of concerns about safety after the shooting and about whether the school adequately addressed complaints about its special education services. STEM’S previous contract, in 2014, was for three years, although the board extended it to 2019.

In a Jan. 21 email, STEM board member Roy Martinez told Douglas County board members that a three-year contract is a “red flag” to bond rating agencies, which try to assess how likely a school, business or other organization is to repay its debts.

Standard & Poor’s gave the school a BB+ rating after the district gave it a three-year contract in 2014, putting it at the better end of speculative bonds, better known as junk bonds. When a borrower has a junk rating, investors demand higher interest rates to compensate them for taking on a riskier borrower.

An investment banker the school consulted came up with the $4.9 million estimate based on the assumption the school

would receive a similar rating if it sought bonds again. It isn’t clear how rating agencies would view the contract approved Saturday.

On June 18, the board considered a oneyear extension of the current contract to allow time to reach an agreement. Dozens of parents and other people connected with the school told the board to approve a fiveyear contract, saying they needed to support students in the aftermath of the shooting, in a public comment session that lasted nearly until midnight. The board decided to table the one-year extension and to instruct the district’s attorneys to try to reach an agreement with the school before June 30.

The previous meeting filled the board room entirely, and students carrying signs could be heard applauding speakers in another room where they were watching live video of the meeting. About 30 people, many wearing white STEM T-shirts, attended Saturday.

Leticia Vickland, who has twins who will be seniors at STEM, said she’s optimistic that parents will be heard going forward. She said that although her children will graduate in the spring, she wants the school to be an option for younger kids.

“Our school is worth fighting for,” she said.

Board member Kevin Leung thanked the negotiators and said the new contract addresses safety concerns.

“Safety is very, very important, much more important than how much money they can save,” he said.

When STEM appealed to the state, it raised two issues in addition to the shorter contract: a requirement that STEM use the same open enrollment system other Douglas County schools use, and a prohibition on using per-pupil dollars to finance the creation of new schools in different districts.

The district appears largely to have prevailed on both points in the new contract. STEM will have to give priority to students who live in Douglas County, rather than siblings of students who may have gotten into the school through choice from another county. The school also will have to follow district policies if it wants to open another branch.

A man who identified himself as the father of three STEM students said his primary feeling about the contract was relief after Saturday’s meeting.

“I’m just happy that it’s passed and we can get back to the normal business of school, and to grieving our losses,” he said.