Decatur Schools Referendum - Accountablility

I don't know how I will vote on the May 6 Referendum that would increase property taxes for the benefit of the Decatur School District (MSD Decatur Township). 

I do, however, know that I resent having to make this decision.

How did we get to this point? 

Why, of course, through unrestrained, extravagant, spending by former Superintendent Don Stinson, his #1 guy, Jeff Baer, and the Decatur School Board - primarily former member Don Huffman and current members Larry Taylor, Judy Collins, Cathy Wiseman, and Dale Henson.

Most folks are aware of are all the new school facilities.  What most do not realize is that in 2002 a respected accounting firm, Umbaugh and Associates, analyzed the ability of the community to handle various debt loads.  That year the total debt stood at $25.5 Million.  They concluded that by 2010, Decatur Schools could grow the debt to $80.9 Million and the community would be in a good position to afford the taxes.  Instead, our 'trusted' leaders sank us in $266.7 Million in debt by 2009.  This is a crushing debt load - one we continue to pay dearly for to this day.  It is also the primary cause of any need for passage of the upcoming Referendum.

To pay for all the School Building projects, we were told our property taxes would rise the equivalent of a weekly meal at McDonalds.  Instead, our taxes more than doubled.  Thank goodness for the property tax caps that protected us from the full brunt of our wayward School Board.

Not content with all that rubber stamped, irresponsible spending, the School Board also went on a property buying spree. They bought the old Concentra Building (Southwest Pavilion) across Kentucky Avenue from the High School and hundreds of acres of land for which there was no immediate need.  In most instances, they did not get the two appraisals required by State Law in order to protect the taxpayers from malfeasance.  In one case they got a single appraisal and then paid 40% more for the property - another clear violation of State Law.

But, they didn't care.  Somehow the taxpayers were just the chumps at the other end of the debt.

The District took out a short term loan, usually paid back once tax money is distributed by the State.  But, they didn't pay the loan back when they got the tax proceeds.  Instead, they spent the tax money and only paid interest on the loan.  That was until the stuff hit the fan and they could no longer stay on that course.  So, they floated new debt to pay off the short term loans.

Still not content, they raised Administrator salaries with abandon.  Most Administrators saw their salaries double, the Superintendent saw his more than triple.  This caused the escalation of Administrator salaries in Marion County and Central Indiana - as the Superintendents manipulated their Boards and the situation to grow their salaries over that puny District in Decatur Township.  Every grossly exaggerated salary at the administrator level directly impacts how many teachers can be hired and thereby class size.

By 2009, Central Office expenses had ballooned to over 10% of all General Fund expenses - far outstripping other Marion County Districts.

Hyperinflated salaries weren't enough, either. 

Golden parachutes, above and beyond the tidy nest eggs the District already paid for, were devised for 5 'retiring' Administrators.  The total added up to nearly a Million Dollars.  Even today, they also either receive free health insurance or its cash equivalent until they and their spouses reach the age of 65 and qualify for Medicare.  The cash equivalent this year is over $19,000 per family.  Money that could be used better, for sure.

In the case of the loans and golden parachutes, Superintendent Stinson acted unilaterally - meaning without the approval of the Board.  Both times, when the actions were aired in public, the Board retroactively approved his actions.

I could add to this the hiring of relatives, catered meals before each Board meeting, and other small extravagances engaged in by the Board.  I could go on about the redistricting, causing the need to transport children to the opposite ends of the Township instead of to their closest elementary school, driven by the fact that poor school performance threatened the receipt of federal funds linked to 'No Child Left Behind'.

Since its peak, debt has been going down and, of all the excess property, at least the Concentra Building (Southwest Pavilion) has been sold.  Current debt load is just shy of $140 Million.  Still, this leaves our community with the highest tax rate for School debt of any District in Marion County, and much larger than our nearest neighbors in Hendricks and Morgan Counties.

Looking at abutting School Districts, the school debt tax rate for 2014 is  (dollars per $100 assessed value):

Decatur           1.4766     (1.7752 if referendum to increase by 0.2986 had been approved for this year)
Wayne            1.3787
Perry               0.5048     (0.6287 if you include tax approved by referendum)
Mooresville     0.3411
Plainfield         0.6862

Other tax rates for school debt in Marion County for 2014 are:

Franklin           1.1289
Lawrence         0.3040
Pike                  0.2700    (0.2893 if you include tax approved by referendum)
Warren             0.8858
Washington      0.1725
Beech Grove    1.4243     (1.7743 if you include tax approved by referendum)
IPS                    0.4297     (0.5087 if you include tax approved by referendum)
Speedway         0.0856

That's how we got to this point, where now the community must weigh the pros and cons of approving an additional property tax through a referendum.  Is it throwing good money after bad, or will it mend what the School Board broke?

A friend recently asked me how much the School Board members make.  I don't know the current amounts, but they generally get about $2000 per year plus a some amount for each meeting they attend - perhaps amounting to $5000 per year each.  My friend suggested that the least the Board could do is forsake any compensation for as long as they remain Board Members.  That makes a lot of sense to me.

I'd also like to see each of the four active Board members who are responsible for our financial mess, Taylor, Collins, Wiseman, and Henson, stand up in a public meeting and apologize for putting us in these straits.  How else can we be sure they will not just spend the new money with the same lack of fiscal responsibility they spent all the other money we taxpayers have sent their way.

The least they can do is have the common decency to not run for election again.

Lawsuits Pile Up Against Decatur Schools

"Reporter of the Year" award recipient, Kara Kenney, reports on two recent lawsuits brought against the MSD Decatur Township.  These are in addition to the racial harassment lawsuit filed last August by a 16 year old student (see "Decatur School District - Discrimination Lawsuits and (Could It Be?) Stinson Retiring").

Kenney reports:

Bus driver Teresa Surber, 56, alleges she went on medical leave for a hysterectomy in the spring of 2011 and when she returned, MSD of Decatur Township did not renew her contract.

Surber had worked with MSD of Decatur Township for 25 years, RTV6's Kara Kenney reported. 

In the lawsuit filed May 11, Surber alleged the district kept younger, less qualified bus drivers.

The next filing mentioned by Kenney is the 2nd one filed by former School District Security Officer, Keith Jones.

Jones filed an age discrimination complaint with the Equal Employment Opportunity Commission after he was terminated in 2010. 

Jones’ [2nd] lawsuit states the school’s former Chief Financial Officer, Jeff Baer, retaliated against him by coming out of retirement to write a letter in Jones’ file calling him a “bad employee.” 

“That was wrong,” said Ken Roberts, Jones’ attorney. “It’s important because Jones was an elderly employee and elderly employees should have the same rights as everyone else. You should not discriminate on the basis of age. And once someone makes a charge of discrimination you can’t come back and retaliate against the person.” 

Roberts said Jones had no previous write ups, and an otherwise clean employee record.

In addition to suing the District, Jones' lawsuit over retaliation also names individuals Don Stinson, Jeff Baer, Susan Adams as well as the District's attorney, Jon Bailey, and his law firm, Bose, McKinney & Evans.  Bailey was also the attorney for Wayne Township's School District when former Superintendent Thompon's infamous contract was signed and which is now a matter of litigation (see Kenney's earlier report on WRTV "Atty. Central to Superintendent's $1 Million Retirement Fired").

Jones filed an age discrimination complaint with the US Equal Employment Opportunity Commission on January 4, 2011.  On January 19, 2011, after the District was notified of the complaint by the EEOC, Jeff Baer came back to the District headquarters and penned a negative letter against Jones and put it in Jones' file.  Baer had been retired from the District for six months when he penned the letter.  Retaliation against an employee for filing a complaint is strictly against the law.

Curiously, the Distict's attorney handling Jones' age discrimination lawsuit, Karen Sharp, tells Kenney the following:

On behalf of the school district, attorney Karen Sharp told RTV6 there is no evidence Jones’ firing and failure to rehire him was because of his age. 

“Mr. Jones, the Plaintiff in this lawsuit, previously filed two charges of discrimination with the Equal Employment Opportunity Commission against MSD of Decatur Township, both of which have been dismissed as lacking evidence of any violation of the civil rights laws. The school agrees with the assessment of the EEOC that the Plaintiffs claims are meritless and will defend the lawsuit on that basis,” Sharp said in a statement.

It is curious that a lawyer would characterize the EEOC's action of 'dismissing' the complaint as meaning it lacked evidence of a violation.  In two minutes I was able to get the following from the EEOC's website:

If you plan to file a lawsuit alleging discrimination on the basis of race, color, religion, sex (including pregnancy), national origin, age (40 or older), disability, genetic information, or retaliation, you first have to file a charge with one of our field offices (unless you plan to bring your lawsuit under the Equal Pay Act, which allows you to go directly to court without filing a charge). We will give you what is called a “Notice-of-Right-to- Sue” at the time we dismiss your charge, usually, after completion of an investigation. However, we may dismiss for other reasons, including failure to cooperate in an investigation. This notice gives you permission to file a lawsuit in a court of law.

So, when the EEOC 'dismisses' a charge, it simultaneously issues a "notice-of-right-to-sue".  One cannot file a lawsuit until the EEOC reviews your charges and finds, in fact, that there just may be substance to your claims - not that no such substance exists.  Why a lawyer (also with Bose, McKinney & Evans) would make such statement to the press is perplexing, as it surely misrepresents what the EEOC process actual is.

Jones lawsuit over retaliation claims that Susan Adams, Don Stinson, and Jeff Baer conspired to have Baer to come to the District offices specifically to write the negative letter for the file. It further asserts that the letter contained false information and that Bailey repeated that false information in his response to the EEOC regarding Jones' age discrimination complaint.

At this point, the School District is fighting 4 lawsuits - one for racial discrimination and harrassment, two for age discrimination and one for retaliation.

MSD Decatur Still Doesn't Care About The Laws

The MSD Decatur had some significant issues brought to light in the latest audit by the Indiana State Board of Accounts.

Kara Kenney, ace reporter for WRTV, is reporting on the audit today (see "Audit Questions School's Pricey Tips, Late Fees").  The audit covers the two year period from July 1, 2009 through June 30, 2011.

The SBOA finds that the Decatur School District yet again spent more money than the School Board appropriated and more than the State Department of Local Government Finance approved.  The School Board, true to their rubber stamp ways, amended the appropriations after the fact, but the DLGF would not.  The SBOA audit shows that in 2010, under the so called leadership of Don Stinson and Jeff Baer, the district overspent three funds to the tune of $2.4 million (see p 44 of the pdf).  It is against the law for a governmental unit to spend more than is appropriated at a public hearing that follows specific notification rules.  Of course, the only news publication that the district publishes in is the low circulation Mooresville-Decatur Times, keeping prying public eyes from even the slightest information.

The audit also uncovered what has to be the most lame brained goof up in recent memory.  After purchasing property, the district did not alert the Auditor's Office of that ownership, AND PAID PROPERTY TAXES for 3 1/2 years !  It gets worse in that they paid late penalties for two of the payments.  All for a grand total of $338,935.41 in taxes and penalties THAT THEY DID NOT HAVE TO PAY ! (see p 42 of the pdf) They are now trying to find a way to get the money back.

The property in question was purchased in November, 2006.  This very well might be the infamous former Concentra building property (now the Southwest Pavilion) across Kentucky Avenue from the High School.  This property appears on the Marion County Assessor's website under the old owners' names and with a total Assessed Value of nearly $3.4 million.  You will remember that they bought this property without a single appraisal - another violation of State law (see "Decatur School Board Broke State Law in Purchase of Property")

Speaking of late penalties, the audit also reveals that the district paid penalties and interest totaling $13,771.48 to the State because of a late payment of withholding taxes.

The audit found the district did not reconcile bank statement with their records, an old complaint found in earlier audits - insufficient documentation of travel expenses, another repeated complaint - insufficient documentation of Average Daily Membership (ADM - the number upon which the State determines the amount of money a district will receive for the year) - overdrawn negative balances in two funds - and a $232,820 public works project that was not properly put out for bid.

If anyone in Decatur Township still thinks that the Don Stinson or the rubberstamping School Board care how our tax money is spent, then they will never accept reality.

Decatur Administrator Severance Packages In Contradiction of School Board Policy

A document entitled "Metropolitan School District of Decatur Township Administrators' Employee and Retirement Benefits (July 1, 2004)", is a very interesting read - in light of the sweet retirement packages being collected by 5 Administrators which I posted earlier today, and especially in light of a WTHR report by Rich Van Wyk on July 6.

The WTHR report says in part:

The administrators' severance policy, in place for more than a decade, includes free health insurance and roughly a year's pay in addition to their pensions.

For many administrators it wasn't a tough choice. Retire now with full benefits or retire later and receive less generous benefits similar to what teachers receive now.

Stinson expects board members to discontinue the special retirement benefits and he intends to replace only two of the retiring administrators, saving roughly $750,000 a year, about equal to their one-time retirement costs.

The 'Stinson' referenced is, of course, Don Stinson, Superintendent of MSD Decatur Township.

But, surprise, surprise - the retirement benefits policy signed by then School Board President, Larry Taylor, and Secretary, Judy Collins, on May 11, 2004, emphatically contradicts Don Stinson, and clearly eliminated nearly ALL of the items in the retirement packages Stinson supplied to Jeff Baer, Gary Pellico, Dave Rather, Pat Jones, and Janet Larch.

Totaling well over $800,000 for the first year, and including paid health insurance for an unnamed number of years going forward (which can easily total $100,000 per year), these retirement packages are just one more extravagance Stinson is bestowing upon Administrators. This level of expense could have covered all other RIFs forced upon other employees in the District. RIFs continue, as well, in case you hadn't heard. For perspective, $800,000 could fully fund 15 young teachers for a year.

A little background - back in the early 2000's, the State Legislature finally acted to get ahead of the unfunded retirement benefits looming to become budget busters in Indiana schools. These unfunded mandates were obligations set up by employment contracts for certain items to be included in retirement packages, but for which no money was being set aside by the Districts. The State enacted a window of time during which school districts could float bonds to pay for unfunded pension obligations from the past. MSD Decatur School Board approved this type of bond issue in the amount of $8 million at its September and October, 2003 Board meetings. The September, 2003, minutes state:

Dr. Baer, Assistant Superintendent of Business, explained that the purpose of requesting the additional appropriation was to purchase bonds to cover the School Corporation’s unfunded retirement or severance liability.

All School Board members voted in favor: Larry Taylor, Don Huffman, Judy Collins, Cathy Wiseman, and Herb Bazemore. Huffman, Collins, and Wiseman continue on the Board to this day and should certainly remember the changes in retirement benefits.

The retirement benefits policy, ""Metropolitan School District of Decatur Township Administrators' Employee and Retirement Benefits (July 1, 2004)", sets in motion the change from unfunded retirement benefits for Administrators to fully funded benefits. The fiscal impact would be to put money away each year, according to the commitments in the Teachers Contract and the Administrator's addendum to that contract, instead of trying to come up with money from operating funds in future years after these administrators retired. To achieve the change, the previously contractual obligations had to be appraised for their monetary value, that money invested in appropriate retirement accounts set up for each individual administrator, and future contracts written in keeping with these changes. The 2003 bond was to be used to pay for these buyouts.

The administrator addenda for the 2009-2010 school year for Jeff Baer, Gary Pellico, Dave Rather, Pat Jones, and Candace Milhon-Baer, are all consistent with the new retirement benefits laid out in this 2004 Board policy. I do not have a copy of Janet Larch's latest contract. Don Stinson's contract, however, has several additional retirement benefits, including:

10. A retiring Superintendent shall have the option of remaining in his/her selected corporation health insurance program until qualifying for Medicare, if the minimum requirements of the insurance plan are met. The Corporation shall pay an annual amount equal to the full employee/spouse premium.

11. There will be no limit on the number of accumulated personal illness leave day. [sic]

and a rather long item 18 that invests part of Stinson's 2004-2005 benefits buyout into a series of $15,500 annuities in each of 5 years. The total value of this item is $77,464 - part of the value of Stinson's retirement benefits buyout that resulted from this 2004 Board policy. Other Administrators may very well have recieved as large a buyout as Stinson.

According to the July 1, 2004 Board policy on Administrator retirement benefits, a company named Educational Services Company, was to determine the value of each Administrator's unfunded retirement benefits, and how much money should be deposited into each of the new retirement accounts set up for each individual Administrator. You can read all of these details at your leisure and according to your interest in such things.

The policy states (page 1; emphasis is mine):

Any rights to retirement and severance pay, including, but not limited to, amounts payable following termination of employment for years of service, accumulated sick leave or health insurance from any policy, contract, or addendum to a regular teacher's contract... currently held by an Administrator are terminated and shall not apply to any Administrator retiring or severing employment with the School Corporation on or after the Effective Date. In replacement, the Retirement Benefits of the Administrators employed by the School Corporation as of June 30, 2004 shall be bought out and contributed to the 401(a) Plan and VEBA, as described below.

The policy describes the annual contributions that the District will make to a 401(a), 403(b) and a VEBA retirement accounts (begins page 6). The last is an account designed to purchase health insurance and pay for health related costs after retirement.

The policy requires Administrators to pay for their own health insurance after retiring (page7):

Following retirement, an eligible Administrator and spouse shall be allowed to remain on the group health, dental and vision plans then maintained by the School Corporation, if any, at their own expense until the first day of the month following their eligibility for Medicare.

An Administrator may carry forward a maximum of 30 vacation days each year (page 7) and any in excess of 30 are turned into personal illness days. They may carry forward no more than 5 personal business days each year (page 8) and can cash in the extra for $100 a day, or they will turn into medical illness days.

The policy states (page 8):

Upon retirement, an Administrator's unused and accumulated person illness (sick leave) and personal business leave days shall be forfeited and not otherwise purchased by the School Corporation.

According to this policy and the lack of anything to the contrary in the contracts for Baer, Pellico, Rather, or Jones, they are not entitled to severance payments for service years, leave days, 30% of base salary, compensation for any more than perhaps 30 days of vacation accumulated, and no buyouts for additional years toward the Indiana State Teacher Retirement Fund. Most of the $800,000 in these severance packages are not in accord with Board policy nor are they contractual obligations. Any future payment by the School District for health insurance through the District's health plan, are also strictly forbidden by this policy and is not in their contracts.

Let me go back to Rich Van Wyk's report:

The administrators' severance policy, in place for more than a decade, includes free health insurance and roughly a year's pay in addition to their pensions.

For many administrators it wasn't a tough choice. Retire now with full benefits or retire later and receive less generous benefits similar to what teachers receive now.

Stinson expects board members to discontinue the special retirement benefits and he intends to replace only two of the retiring administrators, saving roughly $750,000 a year, about equal to their one-time retirement costs.

The Board policy does not include free health insurance nor roughly a year's pay upon retirement. The Board already discontinued the old, unfunded, retirement benefits 6 years ago. When you figure in the buyout of their retirement benefits in 2004-2005, some of whom could easily have seen as much as the $77,000 + obtained by Stinson, AND the fact that taxpayers have been contributing to several retirement plans for these Administrators since 2004, it becomes double or triple dipping. This is entirely a give away, far better than a gold watch, using taxpayer money that could have been used to save jobs in the District instead of further feathering nests that did not need to be further feathered.

Decatur School Board Meets Tonight - Much On Plate

The Decatur Township School Board meets tonight, first in executive session and followed by the regular monthly meeting. No word on whether the executive session will be a catered affair, as per usual, despite the economic hard times.

The agenda is posted here, but contains little information for the public to know what actually will be discussed and voted upon.

Central Office retirements will be buried in item 5.0 "Staff Report". Gary Pellico, Candace Milhon-Baer, Pat Jones, Dave Rather, as well as West Newton Principal, Janet Larch, are all taking their leave of the district. Jeff Baer's retirement was previously announced. Will the retirement incentive packages for these Administrators be discussed in public? Not likely.

Also buried in that staff report will be the layoff of a security officer, as Susan Adams firmly believes that blurry camera footage may not avert crime, but it is cheap and like outgoing Jeff Baer maintains, that's why you have insurance anyway. The Board will not likely discuss how effective cameras are at decreasing tempers at after school functions, giving guidance to youths who could follow many paths to adulthood, and providing immediate response to threatening situations. The latter is one of the many duties that Susan Adams thinks is the responsibility of the custodians, after all. When it comes to security, this Administration has let Adams run amok and to the detriment of all of the students, staff, and anyone of the public who attends events in our schools.

Hopefully buried in the staff report is the resignation of Don Stinson. This one item will get aired with all the usual self congratulatory, fact twisting, ego trip that normally accompanies all Board activities.

Somewhat buried is a fiscal matter for which I have been unable to get all of my questions answered. If and when I do get further information I will post it here. But, this is what I have at this point.

Agenda items 6.02 (Impact of 2010 Circuit Breaker on Marion County Schools), 6.03 (Resolution Approving Transfer to Rainy Day Fund), and 6.04 (Additional Appropriation Resolution), involve moving money from the debt service fund into the rainy day fund followed by the appropriation of money from the rainy day fund for ongoing operations. As you will recall, the Board has not always insisted on approving, in a public meeting and as required by law, all new appropriation of expenses that arise during the year that were not so appropriated during the annual budget hearings. So, this is a move in the right (as in legal) direction.

For the fiscal issues, let me backtrack for a minute into the outlines of what we are taxed on and how schools are now funded in Indiana. Changed from the old ways, schools are now fully funded by the State for operating expenses. This would include salaries, catered school board meals, electricity, and the like. Property taxes are now only levied to cover the amount of principle and interest owed on debt that year (debt service fund), the amount of principle and interest owned on debt encumbered to make pension fund contributions (school pension debt fund), money needed to cover routine building repairs (capital projects fund), and money to replace aging buses (bus replacement fund). For 2010, the Indiana Department of Local Government Finance, certified a property tax amount of roughly $12.9 million for debt service, $0.7 million for school pension debt, $3.7 million for capital projects, and $2.1 million for bus replacement, for MSD Decatur Township school district.

Item 6.02 (Impact of 2010 Circuit Breaker on Marion County Schools), will be where Dr. Baer talks about how the tax caps are cutting into how much of that certified levy will NOT be poured into MSD Decatur coffers and must be obtained by transferring money from operating expenses (general fund) to the debt service fund; for by State law, debt must be paid first and then you can spend any other money you have left on ongoing operations. The enormous debt of this school district for the size of the tax base is the cause of much of the budget cuts recently made in the district.

As far as logic goes, this is where things begin to break down.

Item 6.03 (Resolution Approving Transfer to Rainy Day Fund), will ask the Board to approve the transfer of $6.2 million FROM debt service TO the rainy day fund. The rainy day fund is a fund set up to receive excess, unspent money from the other funds, and from which those excess monies may be transferred to a fund with a shortfall. The act of transferring money from debt service to the rainy day fund suggests that this money is excess, which is absurd at this point. I have asked if this is to forgo getting another tax anticipation loan (AKA 'temporary loan'), and Gary Pellico answered that was how he understood it - not a definitive answer to my question. If this proves to be true, it could save the taxpayers interest payments on that loan, but it still does not fully explain why so much money is sitting in the debt service fund when the district has been saying it had to come up with budget cuts which included, among other things, $3 million to pay the interest on the 2009 tax anticipation loan.

Item 6.04 (Additional Appropriation Resolution), will combine the $6.2 million just transferred from the debt service fund with $1.7 million currently sitting in the rainy day fund, and appropriate it for paying ongoing operating expenses - salaries and the like.

Now this last item is a public hearing and the public has the legal right to be heard in the matter. The legally required public notice, published on May 26, says the following:

Notice is hereby given the taxpayers of MSD Decatur Township, Marion County, Indiana, that the School Board will consider the following additional appropriation in excess of the budget for the current year at their regular meeting place at 5275 Kentucky Ave., Indianapolis, IN 46221, at 7:00 pm., on the 8th day of June, 2010, per IC 6-1.1-18-5.
Rainy Day Fund $7,900,000
Taxpayers appearing at the meeting shall have a right to be heard. The additional appropriations as finally made will be referred to the Department of Local Government Finance (DLGF). The DLGF will make a written determinations to the sufficiency of funds to support the appropriations made within fifteen (15) days of receipt of a certified copy of the action taken.
Dated: May 26, 2010
Bob Harris
Chief Financial Officer
10-6048--5:24 (3)

Now if these funds are eventually repaid to the debt service fund when future operating funds are received from the State , then this transfer is temporary and makes sense. If not, then it could be digging the Decatur taxpayer into a bigger hole, even as the district has already laid off a score of teachers and accepted about 30 early retirements. We shall have to await more answers before we can be sure which is the situation.

Crushing Debt at MSD Decatur Township

In 2002, the Decatur School District owed $25.5 million. With the payment schedule in place at the time, that debt would be paid down to $12.0 million by the end of 2009. (Data from the 2002 "Financial Feasibility Report" by H.J. Umbaugh & Associates)

By the end of last year, our debt (principle only) stood at a crushing $266.7 million - not counting the debt from temporary loans. (Finance data from the Indiana Department of Education website)

That means that $254.7 million of new debt was loaded onto the taxpayer's backs in 7 short years. The first round of building projects accounted for $50 million, less what would have been paid back in the intervening 7 years. The High School project accounts for another $85 million. That still leaves over $119.7 million of unexplained debt that Superintendent Don Stinson, Assistant Superintendent for Business Jeff Baer, and the rubber stamping School Board got us into. Judy Collins was on the Board for all of those years - Dale Henson for the last 4 years.

So what? What do those numbers mean?

Back in 2002, the "Financial Feasibility Report" cited above, was commissioned to analyse the amount of debt that the District tax base could handle, without the District dropping below an AA- bond rating. Bond ratings dictate the interest rate and saleability of a governmental unit's bonds. The Report predicted a steady 3.5% growth in the net Assessed Value (AV) of our Township outside of the TIF area - so essentially the tax base from which the School District can draw property taxes. The net AV predicted for 2010 by the report was $1.000 billion. Our actual net AV for 2010 is $1.091 billion - so Umbaugh & Associates did a stellar job with that prediction.

As the net AV grows, the amount of debt that can be carried without losing the top tier of bond ratings grows with it. This is simply because the ability to repay the debt increases as the tax base increases; just like a household qualifies for larger loans as their salary increases.

The "Financial Feasibility Report" used the predicted net AV to calculate the amount of debt the School District could reasonably get into without losing the best bond ratings. The figures ended up that by 2010, we could reasonably handle a total debt of $80.9 million, or 8.3% of our net AV. Instead we have $266.7 million which is a crushing 24.5% of our net AV.

So how do we compare with the other School Districts in Marion County? In 2002, using outstanding debt as a % of net AV to normalize the comparison, MSD Decatur Township was in the middle of the pack. From lowest to highest were: Speedway (with no debt at all), Washington Township, Pike Township, Wayne Township, Lawrence Township, Decatur Township, Perry Township, Warren Township, Beech Grove, and Franklin Township.

How do we compare today? We have, by far, the greatest debt as a % of net AV of any of the other School Districts. Here are the debt loads of all 11 Districts:

Decatur Township = 24.5%
Franklin Township = 15.8%
Wayne Township = 11.1%
Beech Grove = 8.8%
IPS = 8.0%
Warren Township = 5.1%
Lawrence Township = 5.0%
Perry Township = 3.9%
Pike Township = 1.4%
Washington Township = 1.1%
Speedway = 0%

These numbers were calculated from data on outstanding debt provided on the DOE website and the net AV data provided by the Department of Local Government Finance.

This staggering debt may explain the claim that the District owes $3 million interest on a temporary loan of $23 million - an equally staggering 13% interest rate when other taxing units are qualifying for low single digit interest rates.

But for sure, this debt is the source of most of the financial mess we are currently in. The $1.5 million budget cut for Decatur Schools ordered by Governor Mitch Daniels is chump change in the $9.8 million hole. But, all you hear from Stinson, Baer, and the School Board is bad economy and bad Mitch Daniels.

Umbaugh and Associates presented the findings of their "Financial Feasibility Study" to a packed house in the High School Auditorium. Present was Superintendent Don Stinson. Current School Board member Don Huffman was also present. I cannot imagine that Judy Collins, Dale Henson, and Cathy Wiseman missed that meeting, either.

Let me recap - the "Financial Feasibility Study" accurately predicted our net AV and calculated that by 2010 the tax base of Decatur Schools could handle a total debt of $80.9 million. Instead, we are buried in $266.7 million total debt (excluding temporary loans). Less than $147 million can be explained by debt from building projects. Instead of having a prudent debt load of 8.3% of our net AV or tax base, we have by far the highest debt load of any School District in Marion County at 24.5%.

This is EXACTLY why we are in the financial mess we are in. And this is EXACTLY why you should vote for Coffey and Hire on Tuesday.

MSD Decatur's New CFO - Salary on the Rise

Bob Harris was hired to overlap with the departing Jeff Baer as Assistant Superintendent of Business for the Decatur Township School District. At the time, Don Stinson, Superintendent of the District, told the Mooresville-Decatur Times that Harris would be paid $15,000 less than Baer; yet another cost cutting measure implemented by the phenomenal Don Stinson.

As I reported in an earlier blog entry ("Most Administrators Saw Increase in Salary and/or Benefits"), the actual difference in salaries, according to documents the District submitted to the State Board of Accounts, was $11,500.

Well, the gap is closing. The limited contract information received by a private citizen who requested the records (see "Jeff Baer Without a Contract Since 2006 - Really?"), and which they provided to me, shows that in February Bob Harris managed to get a raise.

The public document provided for the Harris contract was a 'Contract Worksheet' covering pay periods 2/12 through 6/30 2010. The annualized salary is now $130,533. What the SBOA document showed was an annualized salary of $128,927. So, congratulations go out to Bob Harris, who now makes only $9,936 less than Baer. Can't wait to see what his next contract looks like !

Jeff Baer Without a Contract Since 2006 - Really?

A concerned citizen contacted me regarding trouble they were having getting contract information from the MSD Decatur Township. They had asked for a number of administrator contracts, only to receive incomplete information and what was supplied had areas whited out. These same areas of the contract were not whited out when the district supplied Superintendent Stinson's contract to the Star. I guess I'd have to ask, why were these whited out areas of the contract deemed public record when the Star asked for the information and denied as public record when a mere citizen made the request?

This person sent me the information they did get and has requested that the State Public Access Counselor rule on the remaining information.

In this entry I'd like to focus on the aspect that surprised me the most about the information the District did give this citizen. The request had been for the current contract for various individuals, including Assistant Superintendent Jeff Baer. All documents turned over, except for Baer's, were indeed current and for the 2009-2010 school year.

The document supplied for Jeffrey S. Baer was a two year contract from July 1, 2004 through June 30, 2006. Really? That's the most recent contract? Really?

Are we to believe that Assistant Superintendent Jeff Baer has been working without a contract for nearly 4 years now? How then, do you explain that the limited information provided by the district even with the old contract showing a base salary of $122,269.09. Documents submitted by the District to the State Board of Accounts provide data for Baer's 2008-2009 salary to be $136,027 (see "Top Decatur School District Salaries for 2008-2009 School Year") followed by a raise to $140,469 this school year (see "Most Administrators Saw Increase in Salary and/or Benefits")? How do you get a raise without a contract?

The document supplied by the District is the "Regular Teacher's Contract" page, but no addendum that adds benefits available to only Administrators. (see the Star copy of Superintendent Don Stinson's contract to see what I mean). Those benefits would include pension payment details, health insurance details, any annuities that are over and above the base salary, and the like. Even with this old contract, the public has the right to know the employment package deal that they are paying for with each and every Administrator, including Jeff Baer.

But, like other pieces of important information about how the MSD Decatur Township operates, it is hard to decide quite what to believe. Is Jeff Baer really receiving pay raises even though he has had no contract with the District for almost 4 years? Or, is the District trying to keep the real contract under wraps? And, why don't they disclose the entire contract - old or not?

MSD Decatur Township Administration Play Blame Game in Audit Response

The most recent audit of the MSD Decatur Township books (spanning July, 2007, through June, 2009) by the Indiana State Board of Accounts reveals one of the hallmarks of the school district's Administration - blaming somebody else for their failures.

All findings of the SBOA audit team are presented to representatives of the governmental unit prior to publication of the audit. Any response to the findings by those representatives is included in the final document in the form of a letter attached at the end. This letter and its contents are not reviewed by the SBOA for the sense or nonsense of its contents; it is simply attached at the end.

I have previously noted how the audit found sloppy bookkeeping and the Administration response to that. Here I would like to focus on the audit findings that the district spent more money than the School Board appropriated and that the district overdrew several fund balances.

Here's what the audit says about spending more than was appropriated:

The records presented for audit indicated the following expenditures in excess of budgeted appropriations:

Fund	Year Expended	Excess Amount
Debt Service	2008	$ 1,282,858
Transportation	2008	938,408

A similar comment appeared in prior Report B32087.

IC 6-1.1-18-4 states in part: ". . . the proper officers of a political subdivision shall appropriate funds in such a manner that the expenditures for a year do not exceed its budget for that year as finally determined under this article."

As noted above, the district spent more than the School Board appropriated in earlier years, as well. In fact, for the 4 years preceding the two years covered in this audit - I noted this in my blog entry "Decatur School Administration Broke State Law by Spending More From Funds Than Had Been Appropriated by Board" - they also over spent. The process of budget review and appropriation of money for specific purposes is a state mandated process intended to keep the review and expenditure of taxpayer money in the public eye. If, during the year, more money becomes somehow available, the district needs to go through the process for those added monies in order to spend it legally. Yes, it is a violation of state law to spend more than the School Board appropriates - but, unfortunately for the Decatur public, this is not unusual in our School District.

The SBOA had this to say about overdrawing funds:

The following funds were overdrawn at June 30, 2008: Debt Service, Retirement/Severance Bond, Local Rainy Day, Construction, Vehicle Repairs/Misc., Textbook Rental, Challenge Learning Center, DTEF Small Grants, GQE Remediation, Early Childhood Center Preschool, Star Grant/DCHS, DWD Biomedical Science Grant; Title II Part A, and Reading First 2008-2009.

The following funds were overdrawn at June 30, 2009: General, Debt Service, Retirement/Severance Bond, Special Education Preschool, Construction, Vehicle Repairs/Misc, Textbook Rental, IMI 2007-2008, Challenge Learning Center, DTEF Small Grants, Early Childhood Center Preschool, School of Ideas, Title I School Improvement, Title III English Lang. Acquisition, Title II, Part B Math and Science.

A similar comment appeared in prior Report B32087.

The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be an indicator of serious financial problems which should be investigated by the governmental unit. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

Now, I didn't go into it before, but this criticism was also leveled at the Decatur School District in the audit that spanned July, 2005, through June, 2007. At the end of the fiscal year (June 30) 2006, there were 7 funds overdrawn leaving a negative balance. At the end of fiscal year 2007 12 funds were overdrawn. And this audit reveals that at the end of fiscal year 2008 14 funds were overdrawn and at the end of fiscal year 2009 15 funds were overdrawn.

The response letter to this audit's findings was signed by Superintendent Don Stinson and the Chief Financial Officer signature is hard to read, but might be Robert Harris, Jeff Baer's replacement. The parts related to appropriations and overdrawn fund balances reads:

Appropriations;

The records presented indicated expenditures in excess of appropriations. As a result of the mandated reassessment in 2007, Marion county has been woefully behind in property tax collections and distributions to the units of government. Therefore, the budgets for this audit period were approved by the State of Indiana over one year late. This means that the budgets for M.S.D. Decatur were approved after the year ended. Obviously, there will be overspending in some funds when the budget is approved "after the fact". Hopefully, going forward, Marion County property tax collections and distributions will be timely thus ending this issue.

Overdrawn Cash Balances;

There were overdrawn funds during this audit period. Once again, because of the 2007 mandated reassessment, Marion County was delinquent in their property tax distributions to the units of government. Even after excessive borrowing, there will be funds that are overdrawn because of late distributions from the county. As was stated above, the funds were received as much as one year late. Timely property tax collections and distributions from the county will remedy this situation.

It cannot be ignored that these two problems are chronic problems in the MSD Decatur Township and did not begin with the state mandated property reassessment ordered in 2007. More importantly, they attempt to lay the blame for these two problems on somebody else. So, lets look at their logic more closely.

The School District drafted a budget for the two fiscal years 2008 and 2009. They would have received guidance from the State Department of Local Government Finance for how much revenue to expect from property taxes - even though the property taxes would be collected late and sent to the district late. Using this guidance, the district not only knows how much to budget, it knows how much to borrow in a 'temporary loan' or 'tax anticipation warrant'. With all of that information in hand, the School Board appropriates the money that may be spent in each fund.

But, the district spent MORE money than the budget called for. That has nothing whatsoever to do with late property tax collections. They spent MORE money than the budget called for. The funds balances were allowed to go negative. They spent MORE money than the budget called for. It doesn't matter when the DLGF certified the budget - the budget was approved and the money appropriated by the Decatur School Board before they spent MORE money than approved and appropriated.

Stinson just wants to blame anybody else that he can. This excuse doesn't hold water.

Its just like when I asked about the temporary loan included in the retirement pension fund (see "And They Wonder Why...") and they said it was a coding error by the Department of Education, and after being called out on that statement by the DOE they blamed it on some person who no longer works for the District.

Its just like the former Concentra building. First the public was told that they weren't buying the building, just leasing some space. When pressed further, they said they were leasing to own, but it would be relatively inexpensive to turn it into an elementary school; that was the reason to buy it. Now we are being told that they can't think of selling the building even as they lay people off, because the economy is sour. When the solid truth all along has been that Stinson and his cronies don't want to be in their tiny offices in their tiny Central Office; they want to move into the fancy building across the street and impress people.

It is just one thing after another with this Administration. And they always have a poor excuse or have somebody else they would rather the public blame. Well, I don' think the public is buying their excuses and finger pointing any more. The SBOA audits have provided us with enough concrete information to know that it is time for a change in the way this School Board and the Administration do things.

Decatur Schools Audit Shows Sloppy Bookkeeping

The State Board of Accounts audit of MSD Decatur Township's books, covering the two year period from July 1, 2007, through June 30, 2009, has now been completed and published on the SBOA website.

Thankfully for all Decatur taxpayers, the District did not buy any more property during this audit period, dramatically reducing the length of the audit findings.

The audit finds that the bookkeeping was sloppy enough that at no time during that two year period did the District's books match the bank statements. The audit mentions this in two places and they are quoted here:

The following deficiencies relating to the recordkeeping were noted. A similar comment appeared in prior Report B32087.

Bank Reconcilements were attempted monthly, but the bank balance did not equal the record balance for any month during the audit period. Differences varied from $27,208.35 long to $33,699.74 short (cash necessary to balance).

Numerous corrections and adjustments were made in the records by use of negative entries.

and

The monthly depository reconciliations of the fund balances to the bank account balances were incorrect during most of the audit period. The monthly reconcilements are showing significant cash necessary to balance from September 2008 until the present. Each month's reconcilement is off by a different amount.

Controls over the reconcilement were insufficient. The reconcilements are performed by the deputy treasurer and are not regularly reviewed in detail by management. The deputy treasurer makes most of the posting entries so there is also a lack of segregation of duties.

The School Corporation should devote more resources to resolving the short and performing the monthly bank reconcilements. We recommended that another employer or member of management aside from the deputy treasurer be involved with the reconcilements on a monthly basis. The monthly bank reconcilements should be reviewed by management.

Governmental units should have internal controls in effect which provide reasonable assurance regarding the reliability of financial information and records, effectiveness and efficiency of operations, proper execution of management's objectives, and compliance with laws and regulations. Among other things, segregation of duties, safeguarding controls over cash and all other assets and all forms of information processing are necessary for proper internal control.

Controls over the receipting, disbursing, recording, and accounting for the financial activities are necessary to avoid substantial risk of invalid transactions, inaccurate records and financial statements and incorrect decision making. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

IC 5-13-6-1(e) states: "All local investment officers shall reconcile at least monthly the balance of public funds, as disclosed by the records of the local officers, with the balance statements provided by the respective depositories."

The schools response, which is always included in these audits but never reviewed by anyone for sense or nonsense, states the following:

Since the monthly depository reconciliations of the fund balances to the bank account balances were incorrect during most of the audit period, we are going to implement the following controls;

1. We will research all records to bring account balances up to date and reconciled.

2. We will devote more resources to resolving the shortage and performing the monthly bank reconcilements. We will have another employee or member of management, aside from the deputy treasurer, be involved with the monthly reconcilements. Each month, the Chief Financial Officer will approve the reconciliation.

We feel that these improvements will help control the accuracy of receipting, disbursing, recording, and accounting procedures.

No name is shown as signing this response.

Two questions arise - how good a job could Jeff Baer have been doing that the books never matched the bank statements during the two year audit period - and they 'fixed' it by just changing the books to match without finding the source of the errors ("Numerous corrections and adjustments were made in the records by use of negative entries")? And, why did it take the SBOA audit to get such a basic flaw recognized and a plan created to actually fix it?

Unbelievable !

MSD Decatur Township Administration Reaction to Fiscal Mess - Part 1

Its going to take a couple of blog entries to lay out the response of MSD Decatur Township Superintendent Don Stinson to the looming fiscal crisis over the past few years. The bottom line will be that Stinson saw the crisis approaching, but spent money irresponsibly anyway.

The following was posted as a comment to my blog entry "Let's Back Up and Move in a Different Direction" by anon 8:01 on March 10. Anon 8:01 posted a letter to the public from Don Stinson, followed by their own comment. I'd like to start this series with that March 10 comment.

April 8, 2008
Dear Parents, Guardians and Community Members,

I want to make you aware of a serious situation facing our school district. The Indiana Legislature has put a cap, or circuit breaker, on the Transportation, Capital Projects, and Debt Service Funds of school districts. This measure could mean a loss of more than $2,000,000 in the school years of 2008-09 and 2009-10 to the MSD of Decatur Township.

In addition, the tax reassessment in Marion County this past year has resulted in delayed payments to the schools from the state. This delay in payment made it necessary for public schools to borrow money to pay regular expenses. The interest alone on these short term loans for Decatur schools amounts to $900,000 for 2007 and $1,500,000 for 2008.

We need to reduce more than $2,000,000 out of the 2008-2009 budget now. In order to meet this goal we have to reduce expenditures in all areas of the school district’s budget.

Unfortunately, this necessary restructuring will include cutting both staff and programs. It will mean eliminating some things that will upset people and change some services that we have come to expect. I have been taking suggestions and listening to different groups to get ideas and suggestions on how to reduce our expenses. In our ongoing effort to decrease expenses and save classroom positions, we have reduced administrative positions from 38 in 2001 to 33 this past year.

I want you to be aware that these are not easy days or easy decisions. We recognize that we are a publicly funded institution and must operate within the parameters that we are given. We want to reassure you that none of these changes will have a negative impact on the education that your child receives from the MSD of Decatur Township. This is a challenge but we refuse to give up the Journey Toward Excellence for our young people.

Please feel free to call me at 856-5265 or email me at stinson@msddecatur.k12.in.us. You can also reach me through the district website: www.msddecatur.k12.in.us.

Sincerely,
Donald H. Stinson
Superintendent
Metropolitan School District of Decatur Township
5275 Kentucky Avenue Phone: (317) 856-5265
Indianapolis, Indiana 46221 Fax: (317) 856-2156

This letter was sent in April 2008 just two months before he and other administrators were given a 4.5% raise in salaries. This letter verifies that there were financial problems long before the economy went downhill. The fact that he and the board raised salaries knowing full well that they didn't have the $$$ is unreal. He and others continued to travel around the country and eat high on the hog.

Anon 8:01 is absolutely correct. On 6-10-08, the Decatur School Board approved an across the board 4.5% raise for all Administrators (click here to read the minutes for yourself). Here is the section related to the raises:

Mr. Stinson reviewed the fiscal restructuring efforts that have taken place which includes a reduction in force of six positions for teachers. Due to attrition it is not necessary to eliminate any support staff positions. He recommended to the Board a fiscal restructuring proposal for nonpersonnel items totaling $2,143,716. The proposal includes 4½ % increase for administrators and support staff equal to the 4½ % approved in the Master Contract with the Decatur Education Association.

So, after they RIF'd 6 teachers, allowed support staff numbers to drop through attrition, they had the unmitigated greed and financial irresponsiblity to gave the Administrators and remaining support staff a 4.5 % raise. The proposed 5% cut in Administrator salaries contained in Stinson's Fiscal Restructuring Plan, presented in January of this year, was estimated to save $191,215. Using the numbers presented in that Plan, I conservatively calculate the 4.5% raise has cost a minimum of $344,000 over the past two years.

Although they had RIF'd 6 teachers, somewhere around March or April of 2009, they hired School Board member, Don Huffman's, grandson Jason Dixson to become head football coach, which required also hiring him in as a teacher. Dixson's salary is $49,343, as disclosed in the 2010 form 100R filed by the District with the State Board of Accounts. The former coach, Tim Able lost $12,000 in salary. This would result in a net increase of $37,343.

Since this letter went out, they also hired Bob Harris to not just replace Jeff Baer as Assistant Superintendent for Business, but to overlap with Baer for 6 months at an annual salary of $128,927 plus whatever benefits. It is not usual to pay for an overlap in an Administrative position and it cost the District over $64,000 to do so.

Since this letter went out, they also created two 'Building Director' positions that are somewhere between teacher and administrator positions. This caused an increase in salary between the two of roughly $24,700. (from form 100R)

Since this letter went out, and after the 4.5% raise in 2008, they gave Debbie Sullivan a raise of $14,498, Jeff Baer a raise of $4442, Nan Wiseman a raise of $3390, and Robert Kehrein a raise of $2559, plus an overall raise in cash and/or benefits of $1450 per Administrator (see "Most Administrators Saw Increase In Salary and/or Benefits"). This information, too comes from the forms 100R submitted by the District to the SBOA. Just the 4 raises noted first, total $24,889.

This is just what I have been able to find by reading the minutes and obtaining public records from the SBOA. It totals over $150,000 in increased expenditures, NOT including the 4.5% raise Administrators got two years ago, NOR the overall increase in cash and/or benefits they received last year.

Bottom line : Stinson saw the fiscal storm coming and continued to pad Administrator positions and their salaries.

The Decatur School District Culture of Fear

Fear rules the MSD Decatur Township school district. Fear that if you step out of line, you will be gone. Fear that if you speak up, you will be gone. There is no recourse - the School Board just rubber stamps everything.

Superintendent Don Stinson doesn't handle the tools of fear mongering himself. He has Assistant Superintendent Jeff Baer and soon to be Assistant Superintendent Susan Adams for that nasty business. Baer is leaving at the end of the school year. But, according to what Susan Adams is saying around the District, she will be getting a promotion to take over the non-business activities that Baer currently handles, but his successor wants no part of. Adams will relinquish her head custodian job, and become the overlord of Transportation and Safety.

Now, I have heard Adams referred to as 'the dragon lady' a couple of times. And by criteria of how she has treated the custodians, she deserves that moniker. She has trimmed their ranks substantially. She cuts the heat off in the winter and the AC off in the summer - even while the custodians lug around vacuum cleaners on their backs and even while they clean carpets. The freezing cold and the sweltering heat and humidity she subjects the custodians to is immoral in my book. I think they should be complaining to the EEOC about their work conditions, quite frankly. But, they are afraid of doing so lest they be released from their employment as revenge. Don Stinson lets the dragon lady mete out this injustice and is ultimately responsible. Well, let me amend that - the School Board is ultimately responsible. If we had a School Board who actually cared to listen to the employees in the district, they might have a very different work environment - one that respected the dignity of all workers.

I will be referring to this again in the section on Security below - the custodians have been told by the dragon lady, that, should there ever be a bomb threat in a school that causes evacuation of the building, they are to remain behind and search for the bomb. Let me repeat that - should there ever be a bomb threat in a school that causes evacuation of the building, the custodians are required to remain behind and search for the bomb.

Now, should you not be that alarmed about the treatment of decent, hard working people in Decatur Township Schools, maybe you would be interested in another aspect of the no heat, no AC for custodians rule. It turns out that what mold needs to flourish is hot, humid conditions. Say, like the conditions one would find in the summer with the AC turned off and right after carpets are steam cleaned. Thanks to the no AC for custodians rule, the district now has a mold problem in the Early Childhood Center and the Decatur Intermediate Learning Center. The problem in the ECC is being 'solved' by moving the school to the Lynwood campus. There appears to be no resolution on the table for the DILC mold problem. Eventually the taxpayers will be on the hook to reclaim these spaces.

Even before assuming her new duties, the dragon lady and Jeff Baer have been 'working' on the bus drivers. The community needs to become more aware of what is going on in the Transportation Department. That budget is being slashed by Don Stinson - seemingly without any Board action or public disclosures. It would seem that the push is to 1) get senior drivers to quit and 2) cut benefits.

The first steps are in the works as we speak. The drivers' hours are being cut from 6 or 7 per day, down to 4 hours per day. Meanwhile more drivers are being hired so that the bus schedule can continue unabated. Dropping the driver's time immediately cuts their take home pay and puts their ability to get benefits in jeopardy. This again is immoral in my book. The bus drivers have families to support. With only 4 hours per day - two in the morning and two in the afternoon - the drivers are also precluded from taking second jobs. Clearly this is a move to get them to quit their jobs. Yet again I emphasize that I consider this immoral.

But it doesn't end there. Senior drivers are being targeted with 'non-compliance write-ups'. These write-ups claim that the drivers were tail gating or speeding. This will provide a paper trail should Baer, Adams, and Stinson want to remove more drivers than those who voluntarily leave their District jobs.

As mentioned in a comment to a previous blog entry, the drivers have now received letters claiming that the cost of repairing any damage to their bus will come out of their pay. One needs to ask what insurance is for?

That leads me to the Security Department. When the midnight shift in that Department was eliminated, Baer said 'that's what insurance is for'. Susan Adams claims that we can do away with the entire department because 'we have cameras on all the buildings'. As I spoke about in some detail in "Security is First Casualty of Budget Cuts", the dragon lady refuses to give keys or floor plans to the officers, as recommended by national standards promulgated by the Department of Homeland Security. Now she is being promoted over Security, which she believes can be handled by cameras and custodians. This is unbelievable.

As mentioned in comments to other blog entries, the custodians and the bus drivers are not the only employees in the District who are enveloped by this culture of fear. The teachers also must watch their backs and do not feel that they can afford to speak up or speak to the Board about mistreatment. Don Stinson, through Susan Adams and Jeff Baer, has created a hostile work environment, paid for by good hearted, hard working Decatur taxpayers. This culture is not in keeping with the attitudes of our community, and at some point we have to ask why the School Board allows it to continue.

Why YOU Should Run for School Board

Over at Ogden on Politics, the header statement is this quote from Haile Selassie, Emperor of Ethiopia :
“Throughout history, it has been the inaction of those who could have acted; the indifference of those who should have known better; the silence of the voice of justice when it mattered most; that has made it possible for evil to triumph.”

Now that might be quite a bit of hyperbole for School Board, but consider it for just one moment.

"The inaction of those who could have acted..." That's YOU, my friend.

The existing situation at the Metropolitan School District of Decatur Township is roundly criticized in our community. We have the perfect opportunity to put a new majority in place on the Board - to right the wrongs, make the necessary changes, and put our District on a fiscally secure path whose end goal is the best education for Decatur's youth.

Rumor has it that we have two candidates out gathering the necessary signatures - one in district 1 and one in district 3 (see "How to File to Run for School Board" for a map of the districts). That leaves one more seat - a person from either of those districts - to fill. That's YOU.

Let me pause just a moment here, to thank all of the folks who have expressed an interest in running, only to find that they are not qualified this time around because they live in district 2. We must have had 10 people make serious inquiry. That bodes well for the school board race in 2012 and for the ultimate chance to make long lasting improvements in our School District.

Back to YOU and why YOU should run.

The current school board is violating state law by not reviewing bids in public.

It is violating state law by not voting on and signing contracts entered into by the District.

It has violated state law by not requiring appraisals on property it intended to purchase and by overpaying for property.

It has overlooked the practice of nepotism in hiring of Administrators, mechanics, and others in the district and even participated in the practice itself.

It overlooks intolerable working conditions for the District's custodial staff.

It has signed off on the obscenely bloated salary of Don Stinson and other Administrators.

It refuses to discuss in open meetings, issues raised by the public.

It sat by while Superintendent Don Stinson and Assistant Superintendent Jeff Baer dug our district into a $8.4 million hole. Add to this the 3% cut ordered by Governor Daniels, and we have to come up with $9.8 million. Our entire yearly budget only runs about $75 million - so that's a huge hole this irresponsible Administration and rubber stamping Board have dug.

They are content to close the ECC, move Kindergarten to Lynwood, and thereby increase class size throughout grades 1-6.

They are content to keep the Southwest Pavilion (former Concentra Building), and let the Administration move into its palatial offices.

They turned over authority for budget cuts to Stinson and Baer - washing their hands of any real accountability to the community.

They allowed the Central Office to suffer no real cuts in Administrator positions while pushing $3 million in undefined cuts onto the Teachers Union.

And nothing they have done has improved the education of Decatur's children. NOTHING.

All YOU have to do is want to correct one of those things and our School District will be better off with YOU on the Board.

With a new majority, the first step should be for the Board to hire a lawyer obligated to them, not the Superintendent, and get back to acting in compliance with state law. That lawyer should be present at all meetings of the Board, ready to give advice when asked and to review legal matters such as contracts on behalf of the Board.

The new majority can reset priorities and use its authority to keep Lynwood open.

The new majority can insist that the Board will have an open door policy to confront the fact that we have employees afraid to speak out, parents who have legitimate complaints, and a public who needs to be heard on these matters.

That's just the start.


A new majority only takes YOU to take action. The deadline to submit the forms with signatures is noon Friday. We will all help you gather those signatures. We'll take the forms downtown if YOU can't get off work to do it yourself. YOU must be a registered voter in either school board district 1 or district 3. YOU only need to want to improve our School District on behalf of our community for YOU to be the person we need on the School Board.

My email address is hadenoughindy@gmail.com

"The inaction of those who could have acted..." That's YOU, my friend.

Decatur School Board Should Demand More Administrator Cuts

The MSD Decatur Township School Board meets this Thursday night, beginning at 7:00 pm in the Board room at the Central Office. If you plan to speak, you will have to sign up.

At that meeting, further cuts will be voted on - this time in full view of the public. But, the cuts made on January 28 were insufficient. You will recall that at the public comment meeting on the evening of January 27, the public was told that the following evening would be only a work session and that public comment would not be taken. That, as it turns out, was false. It was an executive session followed by a special session followed by a work session - all held outside of the regular Board room - which was a violation of state law.

At the special session the Board voted to cut Superintendent Don Stinson's salary by 15 %, although the district press release would have us believe he asked for a 20% cut. The Board should vote to increase Stinson's salary and benefit cuts to 20%. Number 1 - he got us into this financial mess. Number 2 - he likely will resign before the cuts go into effect, anyway. Number 3 - Stinson is the 2nd highest paid Superintendent in Central Indiana, which is ludicrous. Cutting 20% would still give him over $166,000 in salary plus cash benefits.

On the 28th, the Board also voted to cut all administrator salaries by 5%. They should up that to 15%. Alternatively, they could cut all administrators back to $100,000 a year - saving even more.

Also at the meeting, the Board voted to cut two positions in the Central Office -- and the press release said that Asst. Superintendent Jeff Baer's resignation counted for one of those. For those who do not know, Baer's successor has already been named. So, there really is only one administrator job cut in the Central Office. There can easily be more. Lets say that Candice Baer's position is the lone cut already offered. She is intent on leaving and the position was created just for her anyway. But, we can add Dave Rather's retirement as another position. I have already made the argument that we can get professionals to fill Susan Adam's and Gary Pellico's positions (head custodian and public information officer, respectively) for a fraction of their salaries.

This should be the first order of business for the School Board on Thursday night; bigger cuts in Administrative positions and salaries. That is a real loss of 2 positions and a downgrade of 2 others. And, lets face it, this still leaves the Central Office fat with 9 Administrators making huge salaries. Compare that with closing one of our four elementary schools and it seems downright generous.

see also: More Violations of State Law by Decatur School Board and Administration
Decatur School Board Votes at Work Session
Top Decatur School District Salaries for 2008-2009 School Year
How to Minimize the Impact of Decatur School District Cuts

More Fiscal Mismanagement at Decatur School District

The fiscal mismanagement at the Metropolitan School District of Decatur Township is mind boggling. Between the spending spree Superintendent Don Stinson and Assistant Superintendent Jeff Baer have been on and the rubber stamping School Board, our School District has come to face a nearly $10 million hole.


As I noted in my last blog entry, I have been reviewing the minutes of the School Boards regular meetings, which are posted on the District website. At issue in this post is the interest paid on a 2008 tax anticipation warrant (termed by Assistant Superintendent Jeff Baer as a 'temporary loan').


As background, a couple of years ago, you will recall that Mitch Daniels threw out the property value Assessment done by the various Assessors in Marion County. All properties had to be reevaluated for value and thus we began several years of delayed assessments. Since there were no official assessments, property tax collections had to be delayed. As you also are aware, with the property tax bills payable in 2010, we will finally be back on schedule.

But, during these few years, all governmental units in Marion County (and elsewhere in the State) had to get loans, called Tax Anticipation Loans or Warrants. These loans were for the amount of property tax revenues that unit expected to eventually receive. Once the property taxes for that year were finally collected, the money was delivered to each governmental unit, which then repaid the loans. Interest on the loans had to be paid from other funds in each unit's bank account. Not a good situation, but a common situation nonetheless.

In the minutes for the regular School Board meeting on March 11, 2008, Superintendent Don Stinson said that due to the delay in Assessments and property tax receipts, the district had to borrow money in 2007. "The interest on this borrowed money cost Decatur $900,000. If it is necessary to continue borrowing money this could impact the schools by $1,500,000 to $2,000,000 in the 2008 school year."

Later that year we find the following mention in the October 14, 2008, minutes:

"Dr. Baer asked permission to begin the process for pursuing temporary loans in the amount of $23,000,000 for 2009. He explained that because of the status of the state budget and the fact there has been no collection of property taxes it has become necessary to borrow against local tax monies. At present, the school corporation is not scheduled to receive any property tax money until June of 2009."

There was never mention of the Board receiving information about the terms of the loan, like interest rate.

Okay - fine - the District got a $23 million temporary loan to make ends meet until the property taxes for that year were collected and distributed. But, here's the shocker. We see in the March 4, 2009, minutes:

"Dr. Baer presented claims 6953 through 7137 in the amount of $12,291,264.24 for board approval. He explained that $10,000,000 of this claim amount was for reimbursement of interest on the temporary loans."

What? How did the interest on a short term, temporary loan of $23 million get to be $10 million? Where did they get their loan? The nearby Payday Loan place? What's wrong here?

For comparison, I asked the City Controller for Indianapolis and Marion County, David Reynolds, what the principle and interest had been on their tax anticipation loans for the past few years. His Deputy Controller, Jason Dudich, replied with the numbers. For 2008 they borrowed about $282.5 million and paid about $5.2 million in interest. For 2009 they borrowed about $212.8 million and paid about $3.1 million in interest. And in 2010 they expect to borrow about $163 million and expect to pay about $2.5 million in interest.

But here in Decatur we are supposed to believe that we borrowed $24 million but paid $10 million in interest ????? Given the City's principle and interest figures, we should have been paying no more than about half a million in any one year.

The fiscal mismanagement has been staggering and each revelation shows that mismanagement to have been even worse than we imagined previously.

Nepotism Should Be Banned

The next School Board to be seated in MSD Decatur Township should immediately establish a policy that bans nepotism. Hiring relatives gives the appearance of favoritism, cronyism, and outright payback, to the community and to the employees of the school district. Banning nepotism is a small price to pay for a demonstration to the overall community that all employment decisions in the district will be above reproach - only the best qualified will be hired.

We all know about the current state of affairs in the Decatur School District. Lets start with the School Board. Dale Henson, to my knowledge, has never had a relative who was hired while Henson has been on the Board. That is good. Doug Greenwald, to my knowledge, has never had a relative who was hired while he has been a Member of the Board. That also is good. Cathy Wiseman has had at least one son on the payroll since being elected. Judy Collins has a daughter on the payroll. And, most famous of all, Don Huffman has a grandson on the payroll - which actually necessitated the ouster of an employee from his position to accomplish. Hiring relatives gives the appearance of favoritism, cronyism, and outright payback.

Now lets turn our attention to the Administration. Candice Baer was hired into a position created just after she lost her job as Superintendent of Center Grove Schools. Candice is married to Assistant Superintendent for Business, Jeff Baer. Hiring relatives gives the appearance of favoritism, cronyism, and outright payback.

Now, I will presume that all of these folks are highly qualified individuals who could have gotten a job in any School District in the land. Well, then let them. Employing relatives of highly placed individuals brings baggage with it. Unnecessary baggage. Nepotism is banned by law in other units of Government and should be banned in School Districts as well. Until State law bans nepotism in School Districts, the School Board should create a policy banning it in our District.

Here is what I would propose for a policy.

Any individual may run for and be seated on the School Board if their relative was already an employee of the District at the time of that person filing to be on the ballot.

After filing to be on the ballot or after being seated on the Board, no relative of a School Board member may be hired by the District until one year after that Member leaves the Board.

No relative of any Administrator (central office or building level) may be hired by the District while that Administrator is employed by the District and for one year after that Administrator leaves the employ of the District.

No relative of the leadership of the Teachers Union may be hired by the District while they are in positions of leadership and for one year after they leave those positions. Nobody in a leadership position of the Teachers Union may be hired into an Administrator position within the District for two years after they leave that leadership position.

No relative of a head of Security, Transportation, or any other department headed by a non-administrator, may be hired by the District while that department head is employed by the District and for one year after they leave that position.

Qualified people can find a job in a nearby District. Public trust in the system is eroded when nepotism is allowed to flourish as it has in the Decatur School District. A 'no nepotism' policy created by the new School Board would improve this District and its reputation.

Decatur School Board Votes at Worksession

A message has been sent out from Gary Pellico on behalf of the MSD Decatur Township School District. It seems the School Board actually voted on some budget restructuring items at last night's work session.

Here is the text of the message:

MSD School Board Moves on Administrative Fiscal Restructuring Plan

The MSD Decatur Township School Board began the process of fiscal restructuring at a special session last night approving a plan for the administrative cuts. Although the Superintendent had recommended a 20% reduction in his salary to lead the way, the board amended the recommendation to a 15% reduction. They then proceeded to accept the 5% reduction in administrative staff salary and capping insurance benefits. The board also voted to reduce five administrative positions effective for the 2010-2011 school year. These positions included 4 building level administrators and one central office administrator which results in two central office positions including the retirement of Dr. Jeff Baer.

In other action, the board voted to continue conversation about ways to make the Pavilion profitable and remain open to the public. They will look at plans and ideas presented during the community input session earlier in the week. The board also listened to an update on plans to have a district-wide celebration of unity and support in the spring. This event is being planned by the parent organizations and student council groups from schools throughout the district.

The board will meet in Executive Session on Thursday, February 4 to consider additional steps necessary for fiscal restructuring. This meeting will be held in the board room of the administrative offices at 6:00 p.m. Executive sessions are not open to the public. The next regular school board meeting will be held on Thursday, February 11 at 7:00 p.m.

My first reactions: Stinson supposedly wanted a 20% cut, but the Board said "NO - 15% is enough"???? What is wrong with that picture - let me count the ways. Exactly how does cutting Jeff Baer's position while simultaneously replacing Jeff Baer result in a loss of an Administration position??? Candice Baer already was leaving the district, so losing that position, created specifically for her to begin with, is no hard hit on the Administration. Yup, taking care of the Administrators first. These reductions are minor.

Shutting the Public Out of the Armstrong Pavilion

One long term bright spot for the Decatur community has been the Armstrong Pavilion. It was built expressly for the community under the former MSD Decatur Township Superintendent Montgomery. The Pavilion is a metal building construction that houses a running track, some ball courts and a room with fitness equipment. Decatur residents can become members of the Pavilion for a token $5 per month, with a discount beyond that for our senior citizens.

Schools also use the Pavilion, but the community is the primary user of the facility.

As you all know, the School Board is now left to deal with the financial mess created by current Superintendent Don Stinson and Assistant Superintendent for Business, Jeff Baer. Under the proposed list of cuts offered by Stinson in his "Fiscal Restructuring Plan", he suggests that closing the Armstrong Pavilion to community members will save the district $170,000 a year.

First of all, I can't see how you can save money if you still have the building open for school uses, but are losing the revenue from selling memberships, no matter how modest the dues are.

Ignoring that, though, one does have to question Stinson's priorities.

Why take away from the community what was built expressly for them? Why close the Pavilion to the community when Stinson still fully intends on moving the Central Office Administrators and staff over to the plush digs of the Southwest Pavilion Office Building (former Concentra Building)? Why try to save $170,000, even if its possible, when Stinson and Baer refuse to look at selling off their considerable real estate portfolio first? That portfolio is worth about $6 million and would go a long way to covering the $9.8 million shortfall, which is almost all due to Stinson and Baer's profligate spending. If they sold off just a small lot, they could keep the Armstrong Pavilion open to the Community.

What's Behind Closing Lynwood Elementary ?

As regular readers of this blog know full well, the MSD Decatur Township Superintendent Don Stinson and his trusty Assistant Superintendent Jeff Baer, abetted by a rubber stamping School Board (notably Dale Henson, Don Huffman, Cathy Wiseman, Judy Collins and former member Larry Taylor), dug the District into a hug financial hole.

THE RECAP :

Stinson and Baer broke state laws in purchasing property, clearly overpaying in at least one instance. They broke state laws in spending millions more from District funds than appropriated by the Board. They played fast and loose with credit card receipts. And, they broke even more laws in signing a long term lease for the Mitchell Building PLUS they pay out $810,000 a year for three educational enterprises that should be self-sufficient.

Stinson has proposed a 'Fiscal Restructuring Plan' that is poorly written, inconsistent, and contains suggestions that are clearly unvetted for either possible implementation or fiscal impact. One suggestion was to pull all of the students from Lynwood Elementary and assign them to other schools in the district AND make the Intermediate School a grade 1-6 building along with the three remaining elementary schools AND move the Early Childhood Center (ECC) out of its building and into the vacated Lynwood building.

Not to be lost in the recap -- Stinson's Plan does NOT suggest the District sell off its unneeded properties, including the Southwest Pavilion Office Building (former Concentra Building). Stinson fully expects to move the Central Office crew, who will suffer very minor cuts in big paycheck Administrators under his Plan, over to the cushy confines of the Southwest Pavilion as soon as possible.

THE LYNWOOD ISSUES

The background in all of the proposals swirling around Lynwood and the ECC are these.

Lynwood has failed the provisions of No Child Left Behind for three years and Stinson fully expects a repeat this year. One of the penalties for failing NCLB for 4 years is that all of the students must be allowed to attend any other elementary school in the District.

Stephen Decatur Elementary can still accept students. Valley Mills and West Newton Elementary Schools filled up and enrollment capped a couple of years ago. Even if a new student moved in next door to one of these schools, they would be forced to attend either Stephen Decatur or Lynwood.

The ECC has a mold problem that the District has not remedied. They need to either spend money to fix that problem, or find new digs for the Kindergarten.

THE UNSTATED EFFECTS OF CLOSING LYNWOOD

Stinson's Plan to close Lynwood as an elementary school does several things that he does not mention in his Plan.

There is not enough room in the remaining elementary schools, including a converted Intermediate School, to absorb all 26 Teachers currently assigned to Lynwood. Even if he intended to keep them all on the payroll (the Plan suggests in one place that the District might be able to avoid any teacher layoffs - and in other places suggests teacher layoffs regardless) there are not the requisite number of classrooms. Therefore - and this is most important - CLASS SIZE WILL RISE.

There were 430 students enrolled at Lynwood last year (the latest information available on the State DOE's website). Given the enrollments at the other schools, one can calculate an increase of up to 26% in class size. This is the very last thing that should be done. Even though Stinson is trying to package it as an advancement in the educational practices at Decatur Schools, it clearly is not. It is the very worst thing that can happen in educational practices.

The ECC is a fairly new operation. The building was renovated from a goodly portion of the old Middle School about a decade ago. It is outfitted with diminutive hardware that matches the size of its students. The idea that the District has squandered money and spent like sailors in port on other things and neglected the mold problem at the ECC is unconscionable.

AN ALTERNATIVE PROPOSAL

I have to give credit to Mike Kugelman, a former School Board member, for this idea.

Redistrict.

He's right. Redistrict to realign the enrollment and keep Lynwood open as an elementary school. Swapping all of the 1-4 graded and 5-6 graded schools to 1-6 schools is always a good thing. It is even possible to free up more space by returning the 7-8 middle school to a true 6-7-8 middle school. But, redistricting is the key component.

Poll the families whose children attend Lynwood to see how many want to take advantage of the school choice option. It may not be all that many. Then redistrict to leave as much room in every school as possible.

Money would have to be spent to clean up the mold problem at the ECC - but it is better than abandoning yet another good building to rot away as they have done with the old high school that sits just in front of the ECC.

FROM WHERE WILL THE MONEY COME ?

Stinson's Plan says that the District could avoid all teacher layoffs if the Teacher's Union agreed to a 5% cut in pay and benefits AND 17 teachers retired. My counter proposal asked for the 5% cut AND 5 teacher retirements, which is more feasible. The Union may be more inclined to accept the cut if they knew they were saving Lynwood Elementary School and keeping class sizes down.

Stinson's Plan says that closing the ECC will save $624,690 a year. Although his Plan comes up one million dollars short of the needed $9.8 million, he also must find someone to take over his long term lease of the Mitchell Building, saving $810,000 a year. Under my counter proposal, which saves the entire $9.8 million, I had suggested going along, reluctantly, with the Lynwood closing and get Ivy Tech to cover its own rent, saving $624,690 and $164,000 a year respectively.

But with the redistricting idea of Mike Kugelman, I would amend my proposal to the following. Keep Lynwood and the ECC where they are. Redistrict to free up space in all schools - even after accounting for expected transfers from Lynwood. Put forth a full court press to a) get Ivy Tech to cover its own rent in the Mitchell Building, b) get the Challenger Center finances straightened away so it pulls in revenue rather than gobbles up $380,846 a year, and c) realign the finances of the Decatur Discovery Academy so that it is self-sufficient through the Charter School funds already provided, instead of draining $265,501 a year from the rest of the District. I did not include the last two items in my counter proposal because accomplishing them relies upon Stinson's business acumen, which has proven to be non-existent. But, it is better than closing Lynwood as an elementary school, raising class size, and permanently closing the ECC building to rot. We have talented people in our Township. A small group of actual experts can be pulled together to get the Mitchell Building money pit situation squared away, as long as Stinson sits it out. When the three tenants of the Mitchell building pay their own way, as all were intended to do, then the District will save $810,000 a year - more than covering the $624,690 savings proposed for the vacation of the ECC.

THE WINNERS

This is an extremely bad financial situation that Decatur Township Schools face. By keeping Lynwood open as an elementary school, keeping class size down, and fixing the mold problem at the ECC, the STUDENTS will suffer the least in the process of fixing the financial mess Stinson, Baer, and the School Board made. That is what should matter.