Students and staff in the Milton School District will receive new Apple devices two years into the district’s four-year contract with the company.
The Milton School Board voted 4-3 on Monday to allow the district to sell its current fleet of Apple products and enter a new four-year lease-to-own agreement with Apple.
Board members Mike Hoffman, Brian Kvapil and Rick Mullen opposed the sale. This will be the third time since 2016 that the district is reselling its devices before the end of a contract.
The district will replace 24 iMac computers in the high school’s digital media classroom, 2,700 iPads for 4K through middle school students and staff, as well as 1,847 MacBooks for high school students and staff.
Superintendent Rich Dahman called the opportunity a “win-win” and said the district doesn’t intend to replace devices every two years.
“There’s educational advantages for us to move forward, there are financial advantages for us to move forward in having brand-new devices for all of our students and staff, 130 additional devices and being able to lower our annual lease cost,” Dahman said.
Some educational reasons for the switch include the ability to add more capable devices before the lease ends, Apple’s new M1 chip and larger screen size for the iPads, better battery life and graphics in MacBooks, and increased processing power in the iMacs.
Monday’s decision also adds 100 iPads and 30 MacBooks to the district’s collection, “needed to support virtual learners, provide for replacements, and growth in needs,” according to board documents.
Current devices will be sold to Diamond Assets, a company co-owned by former board member Diamond McKenna, who resigned in August.
The company will store the devices before implementation and set them up for district use to ensure they are ready when the transition takes place. Diamond Assets also will help with early training and troubleshooting.
A final price has not been decided for the sale, but Diamond Assets’ minimum guaranteed value for the district devices was about $1.22 million, said Ryan Curless, district director of technology and innovation. The maximum value is about $1.5 million if every device is in “A” condition.
That number is close to what the district currently owes Apple. Proceeds from the sale will be used to pay off the district’s current lease with Apple, which will cost about $1.22 million, as well as to buy new cases and peripheral equipment.
The 2018 lease calls for an annual payment of $612,294.63, including interest, and would have cost the district $2.45 million over the life of the contract. As a condition of the buyout, the district will not have to pay the $30,358.31 owed in interest for the final two years.
The new lease with Apple will cost the district $590,511.50 each year for four years, a total of $2.36 million. The lease comes with 0% interest, which was a big reason the district decided to explore the device swap, Dahman said.
Former board member Bob Cullen and two other residents wrote to the board in support of the product swap. They said the move can save the district money and will help keep Milton students competitive in the education and job markets.
Board members’ opinions differed on the topic. Most focused on whether the move was a necessity and how much the devices’ value would depreciate if the board didn’t accept the current offer.
Mullen said he didn’t support the motion because he thinks the current devices are fine and the district can still sell them after the contract ends.
Kvapil agreed. He said exploring the idea when COVID-19 is causing such a financial strain would make the district “bad stewards” for the community.
“This is probably the most fiscally irresponsible thing I’ve seen if we move forward,” Kvapil said, adding that he wished the district had taken a higher bid.
Kvapil spoke at length before board President Joe Martin stopped him and told Kvapil his turn to speak was over because he was off topic. Martin later apologized for his sharp tone, saying he wants to ensure conversations remain respectful and relevant.
The two had a heated exchange before Business Director Carey Bradley said the district is making the decision based on the information it has right now.
Board member Dave Holterman supported the new devices, saying it makes sense to begin a new contract that saves the district money each year over the current contract. Board member Jennifer Johns agreed.
Hoffman said staff and students have endured a “tremendous” amount of stress this year, and he did not think it was the right time for new devices.
Martin voted in favor of the new devices.
"To me, it’s about lowering our cost, increasing the value to our students and staff and not do it at their expense,” Martin said.
The district chose to sell the devices to Diamond Assets after considering bids from five companies.
The bids ranged from $993,994 to $1.51 million. Diamond Assets’ was the second-lowest offer at $1.22 million.
Curless said while Diamond Assets’ dollar amount was lower than others, the company provided the best overall bid.
In a device buyback, companies often grade devices using a letter system. The process gets complicated, Curless said, because what one company considers to be an “A” device might be a “C” device to another.
The percentage of value that is docked by each lower letter grade also varies among companies, which is often why offers can be so different from company to company, Curless said.
”There’s a very wide variance in that grading piece that ultimately affects the payout,” he said.
Bids were weighted on six criteria on a scale of 1-10, 10 being a perfect score. Scores were decided after deliberation among district officials.
- Price and payment: 30%.
- Prior experience: 20%.
- Management capability: 20%.
- Proximity: 15%.
- Data sanitation: 10%.
- Environmental objectives: 5%.
Diamond Assets scored a perfect 10 on four of the six criteria—prior experience, management capability, proximity and environmental objectives.
“From my point of view, Diamond Assets had a very strong proposal, both in the way they chose to represent themselves in the proposal and also in their response to all of the RFP criteria,” Curless said.
“They responded to every facet of the RFP and went above and beyond to provide additional information or resources that were not requested.”
Diamond Assets was the only company to get a top score in multiple categories and had the highest overall score with a 9. The next-highest company with an overall score of 8.4—Second Life Mac of Skokie, Illinois—scored one 10 in the weighted categories.
Timeline for sale
Logistics will be worked out in coming weeks, Curless said.
A tentative timeline for the district to trade current devices for the new counterparts is late January, but that could change based on shipping of the new devices.
“There are a lot of pieces that need to be worked out yet,” Curless said. “There’s more to do to make sure it’s done well, done right and done in a manner befitting to the staff, the students and the community.”