Rep. Fillmore’s bill to ease procurement rules on school districts might not actually do that

The sponsor of a bill aimed at loosening the procurement laws that school districts must follow said he’s trying to give districts the same advantages enjoyed by charter schools, but it is unclear exactly what his proposal would do, and even he struggled to explain what changes it would make.

Rep.-elect John Fillmore, R-Apache Junction, has introduced House Bill 2035, which would subject school districts to the same procurement laws and rules that apply to charter schools.

Charter schools are already subject to the same procurement laws as districts, which must seek competitive bids for services and are prohibited from contracting with district employees, relatives or any other entity with a conflict of interest. However, charters can get exemptions from those laws from the State Board of Charter Schools, and most do.

Fillmore, who served a lone term in the Arizona House of Representatives in 2011-12, said he decided to sponsor the bill after speaking with legislators, school superintendents and others who are concerned that charters have an advantage over districts when it comes to procurement. Some of those people argued that charters should have to use the same procurement rules as school districts, but Fillmore approached the issue from a different angle.

“I thought, rather than hog-tie them, why don’t we liberate the public schools and see if they couldn’t save some money and use it to their advantage?” Fillmore told the Arizona Mirror.

But Fillmore was unclear about what changes the bill could bring for school districts, and seemed unsure about exactly what the legislation would do.

He said his intention is to still require school districts to purchase services through a competitive bidding process, but couldn’t say for sure whether they would still have to do so. He also contradicted that assertion, saying he wants to give districts the ability to make purchases outside the procurement system overseen by the Arizona Department of Administration.

Fillmore suggested that it’s sometimes a problem that districts must purchase goods and services from entities that had been awarded a bid, but said his bill won’t allow them to disregard bid winners. And he said the proposal will give school districts more choices in who they can purchase goods and services from, but couldn’t say what new companies or entities they would be able to contract with.

Fillmore said he was unfamiliar with the exemption process for charter schools.

Fillmore said he take steps to ensure that his bill doesn’t pass if there are unanswered questions or “if it’s a bad bill.”

David Wells, research director at the Grand Canyon Institute, which has been critical of charter schools, said he’s not exactly sure what, if anything, Fillmore’s legislation would do.

“It’s kind of vague and not really clear,” he said.

If the bill provides school districts with the procurement exemptions that are available to charters, Wells said it would be a bad move. The exemptions that most charter schools have allow them to contract with the vendor of their choice at the cost of their choice, without regard to whether they’re paying fair market value, Wells said. He said vendors are often related parties who are connected to the charter school in some way.

Chris Kotterman, a lobbyist for the Arizona School Boards Association, also said Fillmore’s bill is confusing, and questioned what it would do, given that the default procurement rules for charter schools are the same ones that are in place for school districts. He also noted that rules for exempt charters are set by the State Board for Charter Schools and are not in state law.

But if Fillmore wants to streamline procurement practices to lift burdens from school districts, Kotterman said the districts would welcome such a move. Procurement takes time and energy, even when using the qualified select bidder list that’s intended to hasten the process. If school districts have preferred vendors for common services and there are no conflicts of interest, they should be able to use those vendors, Kotterman said. In such scenarios, Kotterman said school districts should have the same kind of flexibility available to charter schools.

“His bill I don’t think achieves what his stated objective is,” Kotterman said of Fillmore’s legislation. “But if there are members (of the Legislature) who want to make it easier for school districts to operate more efficiently – if I might borrow a phrase from Gov. Ducey, at the speed of business – then that’s something we’re absolutely willing to talk about because there are things that we can, I think, do to help that along.”

The charter school procurement system has come under tremendous scrutiny lately, largely as a result of reporting by the Arizona Republic about questionable purchasing agreements and other financial arrangements, including some involving state Rep. Eddie Farnsworth, R-Gilbert. Farnsworth, who was elected to the state Senate in November, sold the Benjamin Franklin Charter School he founded for $13.9 million. The Republic also reported recently that charter school founder Glenn Way earned about $37 million from his American Leadership Academy schools.

As a result, state Sen. Kate Brophy McGee has proposed reforms that would tighten procurement and conflict-of-interest laws for charter schools. Gov. Doug Ducey, Attorney General Mark Brnovich and other charter school advocates have voiced their support for reforms.