District officials in San Francisco have decided to reject a federal eRate grant that would have brought $50 million in telecommunications discounts, internet access, and wiring to the cash-strapped district. The decision raises questions about the benefits and restrictions associated with accepting eRate discounts.

According to officials from San Francisco Unified School District (SFUSD), the decision came when officials could not come up with the approximately $10 million in required matching funds and discovered that the terms of the program did not fit into the district’s technology plans.

SFUSD applied for the eRate funding last year, before current Superintendent Arlene Ackerman took office.

According to Eloise Brooks, Ackerman’s chief of staff, the grant did not look like such a great deal to the new administration.

“Basically, someone outside of the district has decided—in isolation of the school district—that we need something that we do not need,” Brooks said. “We have other needs that we have to address, and we are getting criticized for this. I do not think it’s fair.”

The funding allotted to SFUSD in Year Three of the eRate program would have amounted to about $49,150,000 for internal connections (wiring and routing), $42,380 for internet access (paid to an internet service provider), and $1, 072,000 for telecommunications services (paid to the telephone company), according to a report from the Schools and Libraries Division (SLD) of the Universal Services Administrative Company (USAC), the administrator of the eRate.

But in exchange for those services and discounts, the 60,000-student district would have to front some of its own cash, too.

Differing opinions

According to Mel Blackwell, a spokesman for the SLD, the district would have to pay whatever the eRate did not cover, up to 100 percent of the project’s cost.

Since the level of need in the district (determined by the number of children receiving free and reduced-price lunches) dictated that the eRate should fund 83 percent of the project’s cost, the district would have to fund an additional 17 percent itself, Blackwell explained. That means SFUSD would have to put up about $10 million of its own money.

In a letter to the editors of the San Francisco Chronicle, which has been reporting on the district’s financial woes, district officials wrote that “after analysis, it was determined that the $50 million eRate grant would cost the district $18 million.”

Brooks said the discrepancy reflected the additional expenses the district would incur to rewire some schools.

“If we were doing this on our own, we’d put [Category-5] wiring in our elementary schools, not fiber,” she said. “Fiber is very expensive and, frankly, it may not be necessary in our elementary schools. That’s the reason this is a $50 million grant.”

Brooks said that installing fiber-optic cabling would require SFUSD to pull the wiring out of at least 12 schools that already have Cat-5 wiring.

But according to the former district employee who prepared the eRate application, an electrical assessment by the district and by an independent electrical company was conducted before the eRate money was requested.

“That [electrical survey] said all 46 schools in the eRate application met the requirements for basic hookups,” said Tim Tronson, former district consultant for facilities planning.

Tronson left the district after Superintendent Ackerman took office and let his contract lapse.

“I think it is noteworthy that Mr. Tronson was let go due to bad management processes,” said Brooks, who would not specify exactly what those practices were. Instead, she referred to an article in the Chronicle in which district officials indicated Tronson’s department was bloated and financially irresponsible.

That’s just sour grapes, Tronson maintains.

“At this point, I really don’t care if they take the money or not. But what I do care about is that the district is honest about why they are not taking the grant,” he said.

“Basically, one of three things is going on,” he said. “One, either they never looked at the eRate issue until this point; two, they looked at it but did not understand it; or three, they never intended to go through with this.” Tronson believes the third option is closest to the truth.

District officials admit that coming up with the matching money is a major concern for SFUSD.

“This is about fiscal responsibility,” said Brooks, who added there are other pending items that Ackerman feels take precedence over technology and wiring improvements.

But Tronson does not believe SFUSD can’t come up with the money, explaining that when Ackerman took over from interim Superintendent Linda Davis, the new school chief gave all teachers a 14 percent pay raise, an expense of about $30 million.

“Both vendors—NEC and Inter-Tel—have said they would finance this [project] for seven years,” he added. “There are a number of revenue sources they could use to pay for this without taking on debt.”

Not ‘part of the plan’

But the money is not the only problem, district officials explain.

In the letter to the Chronicle, Jackie Wright, the district’s director of public information, wrote that “the grant was not part of the district’s education plan” and stated: “The type of unilateral decision that prompted the grant is indicative of past practices that led to the district’s current financial problems.”

The district maintains that the information technology and instruction departments were left out of the eRate application process, an allegation Tronson hotly contests.

“There were several meetings with the IT department. All the data on the application came from those meetings,” he said. “The IT participation is documented. To say they don’t want to take the grant because it was not filed properly is bull.”

Tronson and SFUSD officials also differ on whether computers—which are not eligible for funding unless they are servers—would be a part of the eRate project.

In her letter to the Chronicle, Wright stated that the project “would not put computers in the classroom, as [the Chronicle had] erroneously indicated.”

But according to Tronson, before NEC’s bid for the grant was approved, the company had offered to throw in 100 computers to each of the 46 schools sites, including two years of maintenance and training for teachers.

“I’ve not seen that in writing,” said Brooks. “There is no legal document that would let us hold them to this, and that means … we’d have to [supply the hardware] ourselves.”

NEC declined to comment about its relationship with SFUSD.

“This is a case of the tail wagging the dog,” Brooks said. “Why should we be forced into doing something that is not in the plan?”

District officials have not yet discussed the possibility of passing a bond issue that would help SFUSD fund its portion of the $50 million, said Brooks.

SFUSD officials hope to resolve the issue in a way that allows them to make use of at least part of the funding. According to Brooks, the district is checking with the SLD to see how the proposal could be amended to meet their needs.

“We have people in Washington working on that right now,” said Brooks.

In fact, according to the administrators of the eRate, it is not unusual for a district to accept only a portion of the funds it is eligible for.

“There is a very good chance we can change the terms around to better meet the needs of SFUSD,” said the SLD’s Blackwell. “We really want to them to come out of this with what they want.”


San Francisco Unified School District

Schools and Libraries Division of USAC

NEC Global