Public school financial advisory officer pushing brother’s marketing services

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public school marketing

A chief officer of a top financial advisory firm to public school districts is using his platform to sell a security of a different stripe: the services of a marketing firm owned by his brother.

The first customer of the plan offered by Bill Gumbert, director of public finance in Texas for BOK Financial Services, is the Eagle Mountain-Saginaw ISD, which in September paid $100,000 in a no-bid contract with BOK for a plan run by Fort Worth-based Audience Research and Development, or AR&D.  

The CEO of AR&D is Bill’s brother, Jerry Gumbert.

The agreement with BOK Financial, one of the largest bond underwriters of public entities in the state, also includes $30,000 for a “strategic brand research study” to be conducted by the marketing firm and provided to the district.

Language in the contract points out that the marketing deal is unrelated to the financial services agreement BOK Financial has with the district.

Eagle Mountain marketing director Megan Overman declined to comment. Overman was one of the point people in communications with AR&D, emails obtained by The Texas Monitor show.

She coordinated with Jerry Gumbert and Superintendent Jim Chadwell on several meetings, held during school hours, which were called “research study reviews.”

Birdville ISD also signed onto a similar, no-bid deal, executing a $125,000 contract that was approved at a November board meeting. The $31,250 payment for February in the publicly posted check register went to BOSC, a subsidiary of BOK Financial.

District spokesman Mark Thomas declined an interview request.

Emails pitching the plan were sent to several other school districts by Bill Gumbert. The materials make no mention of the sibling relationship between the principals.

“As you know, the actions of the legislature has made public education a consumer driven market and the resulting competition has added new demands for school districts to differentiate their educational experience to stakeholders,” Gumbert wrote in a June 2017 email to Ken Addix, chief financial officer at the Pflugerville ISD. “As exclusive partners to Texas school districts, we have evolved our scope of services to include strategic marketing, branding and student retention/recruitment services…”

Pflugerville Superintendent Doug Killian said in an email that the district considered BOK Financial’s idea, but the district is going to do things in-house.

“We are looking to do more PR and Marketing of the district,” Killian wrote. “It’s the new reality of schools in this competitive environment.”

BOK in a statement said that the marketing partnership is a limited arrangement with two districts, and the family connection “was fully disclosed to both school districts prior to our agreement to provide the aforementioned services.”

“In our role as a financial advisor, we help school districts structure and manage municipal bond issuances to fund school improvements that have been approved by voters,” BOK Financial spokesman Joseph Crivelli wrote. “Given the relationship between municipal revenue and the school districts’ bond ratings…student retention has become an increasingly important priority for certain school districts” (see full statement here).

Crivelli added that Gumbert has announced he is leaving the company voluntarily, although Gumbert said in a brief interview that his departure is not his idea, but “it’s personal, not a public issue.”

BOK Financial is one of the largest municipal bond underwriters in the U.S. and in Texas, it handles bond issuances for dozens of school districts.

As the institution trustees look to them for financial guidance, BOK Financial has the ears of district leaders. A 29-page, full-color deck provided to the districts breaks down the impact of charter schools on public education and notes that charters drain state funding for public schools, claiming that “charter schools increase the cost of public education in Texas by over $600 million per year.”

The deck wraps with an ad from AR&D, using the logos of clients that include The Weather Channel, local ABC affiliate WFAA and ESPN.

Cross selling initiatives would probably not run afoul of the law, said Jay Aiyer, a politics and policy professor at Texas Southern University. The no-bid element, though, is troubling.

“This happens every day in the private sector,” Aiyer said. “But if this is public and if it’s a professional service, they should be putting out a [request for proposal]. The district should also be able to choose vendors and, ostensibly, another vendor should have no ability to persuade you.”

Aiyer asked: “If he is a bond underwriter, what is he doing marketing for a school district anyway? That seems odd on its face.”

Public school districts have funded marketing campaigns as charter schools and homeschooling have taken students and their coveted per-pupil state allotment.

In Pennsylvania, where tuition reimbursements are taking over five percent of school budgets, districts have launched dance programs and all-day kindergarten as a way to lure parents from charters.

“Marketing can work and it’s needed,” said Troy Reynolds, founder of Texans for Public Education. “For too long educators have allowed other groups with an agenda to dictate the dialogue on schools and haven’t tooted their own horn. Parents need to know there are good stories in public education.”

The promotion of the marketing plan by Gumbert at BOK Financial coincides with emails between school districts seeking to exclude bond underwriters and financial professionals who did business with charter schools.

In late January, Hilltop Securities CEO Hill Feinberg announced in a letter that Hilltop would no longer work with charters.

A similar policy is in effect with BOK Financial’s Texas school district finance team, according to Crivelli, the BOK Financial spokesman.

School districts cannot exclude financial service firms that do business with charters, according to a memo sent to a number of public district financial officers by Sarah Orman, an attorney with the Texas Council for School. To do so is a violation of state law.

Whether districts are following her suggestion is hard to determine.

“I’m not sure what has happened after that was sent out,” Orman said in an interview in March.

This year, one school district, Lovejoy ISD, has secured BOK Financial as an underwriter, according to a review of state filings. Several others, including Fort Bend ISD and Conroe ISD, have hired Hilltop for financial services this year.

Steve Miller can be reached at [email protected].

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