Audit Raises Questions Over DPS Debt Practices As Taxpayers Foot the Bill

By Nico Brambila | The Denver Gazette

Denver Public Schools is operating with a negative net position — owing more in long-term obligations than it holds in assets — a rare and troubling financial posture for a major Colorado school district, according to an audit.

Presented on Thursday, the audit for fiscal year 2024–25, which ended June 30, showed the district is carrying $4.07 billion in long-term liabilities. (For context, the district budget last fiscal year was about $1.5 billion.)

Total assets remained lower, even after the district added nearly $1 billion in unspent 2024 bond proceeds to its books — cash voters approved a year ago that had not yet been put to use.

As those bond dollars are spent, the cash asset will disappear, while the long-term debt remains, deepening the district’s negative net position.

In June, the district issued more than $808 million from the 2024 bond, while still holding roughly $170 million from the 2020 bond. As a result, taxpayers are paying interest on nearly $1 billion in unspent bond cash the district has not yet used.

Public entities, like school districts, typically issue bonds when interest rates are low or are expected to rise soon as a way to lock in cheaper repayment terms. Projects also take time, and having the money upfront helps with planning.

Districts use the unspent money to earn investment income.

But the interest taxpayers earn by doing this is almost always lower than the interest taxpayers must pay on the bonds.

‘TREMENDOUS LIABILITIES’

These borrowing decisions have been made against a backdrop of declining enrollment and a wave of school closures, with more expected to come.

Board President Carrie Olson did not respond to a request for comment.

Director John Youngquist — known for asking tough questions — said he is surprised by the scale of the district’s obligations.

READ THE FULL ARTICLE AT THE DENVER GAZETTE