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.

Decatur School Board Meets Tonight

The Decatur Township school board meets tonight to adopt the 2011 budget - without having held a single work session on the topic. A set of paper mache stand-ins would be as effective in representing the public interest as are Cathy Wiseman, Dale Henson, Don Huffman, Doug Greenwald, and Judy Collins.

Heaven help the taxpayers of Decatur Township.

More on MSD Decatur's Loan

I recently posted about the Decatur School District flopping a 2009 Tax Anticipation Warrant into a 4-year loan (see "Decatur Superintendent and School Board Abuse Public Trust"). I have been contacting various state agencies about this issue and have received some information that contains some good news and some 'Alice in Wonderland' news.

From the Department of Local Government Finance, I got this explanation of the actions of the school district:

The school borrowed $23 million from a private bank in 2007 in temporary loans. Instead of paying down this loan when they received tax distributions in 2007, 2008 and 2009 – they simply made payments on the loan interest. The school is now attempting to pay this loan off as quickly as possible over the next few years. The loan has not been converted to debt service debt but remains a temporary loan. Only the interest on the loan is included in the debt service fund, which is typical of all temporary loans. Keep in mind that the temp loans (with exception of interest) are being paid back within the limitations of the school “normal – maximum and cap rate” levies.

This debt – both the temp loan and interest – will not be treated similar to a referendum. An approved referendum project or tax levy would be outside of the circuit breaker caps. This debt – as it was not approved in a referendum vote – is still subject to the circuit breaker cap limitations.

The good news part, obviously, is that only the interest on the loan, 2.5%, can be paid from debt service, which is funded entirely from property taxes. The bad news is that Superintendent Don Stinson and the entire School Board, Dale Henson, Don Huffman, Doug Greenwald, Judy Collins and Cathy Wiseman, HAVEN'T PAID THIS BILL FOR 3 YEARS and are hoping to do so within the next 4.

These guys have been spending like sailors in port, and back when economic times were great they couldn't even pay off a tax anticipation warrant when it was due. Now, with the economy in the worst recession since the Great Depression, the chickens have come home to roost. They have no one to blame except themselves.

Decatur Superintendent and School Board Abuse the Public Trust

Last week I posted "Decatur School Board Pulls Superintendent's Arse Out of Fire", where I spoke specifically about the school board recklessly approving the sumptuous parting gifts that Superintendent Don Stinson handed out to retiring Administrators. Those golden parachutes were granted without prior board approval, against standing board policy, not required by any contractual obligations, and totaled over $800,000 plus an ongoing $100,000 in annual health insurance payments. The board recklessly supported Stinson's spending spree nearly one month after 3 of the 5 had already taken the cash and gone.

In that entry, I mentioned that this was the second time in July that the Board had approved action taken by Stinson without prior board approval - which is required as Stinson does not have the authority to approve finances, that lies with the Board as granted by state law.

The first time in July was even more egregious than the $800,000 in parting gifts divvied up between 5 people.

The short story is that on July 13, 2010, the Board approved Stinson's unilateral action to flop a tax anticipation warrant (often called a 'temporary loan' in Decatur's school district) into a four year loan. But, there is so much more to it than first appears.

A little background. Let's take a couple of minutes to talk about property taxes and the route that the money takes from your pocket to the school district and other governmental units in Marion County. Every year during budget season, each taxing unit sets their budget and figures out how much property tax revenue they need to fund that budget. The tax rate is calculated from the total amount of property tax revenue required, divided by the total value of all property in the school district (called the 'assessed value'). The County Treasurer sends out a bill twice a year to collect these property taxes. Once the money is collected, the County Auditor mails a check to the school district for their portion. The school district then can spend that money.

The last few years have been unusual in that Governor Daniels ordered Marion County, among other counties, to do its determination of the 'assessed values' all over again. This took time. The delay in determining the assessed value caused a delay in determining the tax rate which caused a delay in sending out the property tax bills, which caused a delay in paying the property tax bills, which caused a delay in sending the property tax revenues to the school district. But the school districts, and other taxing units, still had to pay for their operations during the delay. So, they got short term loans called 'tax anticipation warrants', which this district often calls 'temporary loans'. The school district would eventually receive the property tax money; they would just receive it about one year late. The TAW would be repaid once the County Auditor sent the property tax check to the district. It is kind of like a payday loan. As soon as you get your paycheck, you are supposed to go in and pay off your loan.

The public has a right to assume that a 'tax anticipation warrant' will be paid off as soon as the tax money has been received.

Well, Don Stinson got Board approval on October 14, 2008, to arrange a TAW for the upcoming calendar year, 2009. The Board minutes state:

"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. Mr. Huffman moved that the Board approve begin the process of pursuing temporary loans for 2009. Mrs. Wiseman seconded the motion. The motion carried unanimously."

It is questionable whether the district should ever have taken such a large loan or TAW, since the State Department of Local Government Finance only authorized them raise $18 million from property taxes in 2009. There is still an outstanding issue here on the $23 million, but it is not the main point of this blog entry. On January 13, 2009, the TAW was finalized and the $23 million was received by the District.

In June, half of the $18 million authorized for property taxes would have been sent to the school district by the County Auditor, and the rest sent in December. So, by the end of 2009, the district had $18 million in order to pay back the TAW. They should have paid it back then.

But, they did not.

The public has a right to assume that a 'tax anticipation warrant' will be paid off as soon as the tax money has been received.

On December 8, 2009, the Board approved a 6 month extension of the TAW, pushing the due date to June 30, 2010. The minutes of that meeting state:

"Dr. Baer presented a Resolution for a Tax Anticipation Warrant Rollover to 2010. He explained this was the same process used in 2008 and this would allow repayment of debt to be carried over to the end of June 2010. Mrs. Wiseman made a motion to approve the Resolution. Mrs. Collins seconded the motion. The motion carried unanimously."

The money to pay back the 2009 TAW had been received by the school district during 2009, but it was not used to pay off the loan. Instead, on July 13, 2010, the Board approved turning $19 million of this $23 million TAW, or "temporary" loan, into a 4 year loan. Please note the date -- July 13, 2010. The 2009 TAW was due on June 30, 2010. The resolution passed by the Board on July 13 states that:

"...on June 30,2010, the School Corporation executed and delivered to Regions Bank, ...documents evidencing the extension of the final maturity of the Obligations to February 15, 2014..., and [Regions] has accepted the Extension."

The School Corporation did not have the authority to give such "documents evidencing the extension" because there had not been any Board action to create such documents. Again, Don Stinson acted unilaterally, usurping the authority of the Board... and the Board again pulled his arse out of the fire.

What does all this mean to the taxpayers? This means that the school district should have paid off the 2009 TAW with the property taxes paid by residents in 2009. Instead, Stinson and the Board will make you pay even more taxes to pay off the new 4-year loan. YOU ALREADY PAID THE TAXES, but you will have to pay them a second time.

The public has a right to assume that a 'tax anticipation warrant' will be paid off as soon as the tax money has been received. The public trust should not be abused by keeping the money and floating another loan to pay off the first one and then foisting the tab for the new loan onto the backs of the taxpaying public. Its called "robbing Peter to pay Paul".

Where has the money gone? $18-23 million is very serious money. Where has it all gone?

In the end, it is also a devious and underhanded way to get the Decatur Taxpayer to pay more money to the district without ever having had a say. There was never a public hearing, the public notice was uninformative, and there has not been a referendum to increase our property taxes over the next 4 years. Roughly $5 million more money will have to be raised EACH YEAR, which will cause a roughly 25% increase in school taxes.

No vote. No hearing. No say.

The school board, Dale Henson, Don Huffman, Doug Greenwald, Judy Collins and Cathy Wiseman, have allowed our school finances to go from really bad to unsustainable. They are allowing Don Stinson to raise cash by not paying off our loans, when the money was available to pay off those loans. We are now in hock twice for the same money. This is reckless. And to approve this fiscal disaster two weeks after Stinson usurped their authority, is to have totally abandoned all responsibilities that they have as elected officials to serve the public interest.

Stinson and the Board were reckless in getting a $23 million TAW, when $18 million was all the State of Indiana authorized them to raise in property taxes for that year. Stinson and the Board were reckless in not paying off that TAW in June of 2009 or January of 2010, when they had the money from the taxpayers to do so. Stinson and the Board were reckless to turn that 2009 TAW into a four year loan, making the taxpayers pay yet again for loan. This last point is where they have totally abandoned the voting public; they made a grab for more money and hoped the public would not notice that they never had a say on whether or not they wanted to give the district more money.

Stinson and the Board have acted without honor. They have abused the public trust.

Decatur School Board Pulls Superintendent's Arse Out of the Fire

Nearly one month after 3 Administrators retired from the MSD Decatur Township school district with wads of cash, extra years of service purchased from the State Teacher Retirement Fund, and a promise of paid health insurance until Medicare picks them up - all clearly prohibited by School Board policy and not a part of any contract - the School Board ratified the unilateral action by Superintendent, Don Stinson.

Remember these names -- Dale Henson, Don Huffman, Doug Greenwald, Judy Collins, and Cathy Wiseman.

I have called them a rubber stamping school board numerous times. But, to continue to do so is to do a disservice to rubber stamping school boards everywhere. They are eyeball deep in fiscal recklessness that makes their past behavior pale in comparison and should make every taxpayer in Decatur Township extremely nervous.

Dale Henson, Don Huffman, Doug Greenwald, Judy Collins, and Cathy Wiseman are now equal players with Don Stinson in running our school district into the ground. For the second time this month, the school board has unanimously approved unilateral action taken by the Superintendent without prior board approval. For the second time this month, the school board has unanimously thrown fiscal responsibility out the window, making the fiscal morass we are in far far worse than even I imagined it could or would be.

For this post I will discuss the action taken last Thursday, July 29, 2010, at a special meeting of the Board. Just as I speculated (see "Suddenly - Decatur School Board Calls Special Session"), the purpose of that meeting was to legalize the retirement packages given by Don Stinson to retiring Administrators Jeff Baer, Dave Rather, Pat Jones, Gary Pellico, and Janet Larch.

I have already shared with you the retirement package information (see "Decatur Administrator Severance Packages Really Sweet") that amounted to over $800,000 this year and, additionally, up to $100,000 in coming years for ongoing health insurance costs. I also shared with you the 2004 Board policy that specifically banned this type of retirement package (see "Decatur Administrator Severance Packages in Contradiction of School Board Policy"). This was part of a statewide effort to become more fiscally responsible and buy out the retirement promises made in contracts, but for which no money had been set aside. It cost Decatur taxpayers at least $8 million to buy out these unfunded liabilities.


But, Don Stinson gave his retiring pals some great parting gifts anyway. And the school board unanimously pulled his arse out of the fire, tossed the taxpayers arses into the fire, and approved these retirement packages - EVEN THOUGH 3 of the 5 LEFT THE DISTRICT nearly a MONTH before.


The agenda for Thursday's meeting simply said "Staff Report". Surprise Decatur. Not only did they approve Stinson's unilateral action, they increased the severance package for Jeff Baer by $1000, and for Gary Pellico by a whopping $22,030.66. Nice job Dale Henson, Don Huffman, Doug Greenwald, Judy Collins, and Cathy Wiseman.

We can't afford to keep Lynwood open as an elementary school, thereby increasing class sizes, but we can give these 5 people over $800,000 as a parting gift -- on top of the contract buyouts we paid for in 2004-2005 -- on top of the money we have been putting into the Indiana State Teacher Retirement Fund for them every year since -- on top of the money we have put into three other retirement funds for each of them every year since -- and which was rightly banned by School Board policy and which was not a contractual obligation.

Remember this Decatur taxpayers. Remember this Decatur parents.

Remember these names: Dale Henson, Don Huffman, Doug Greenwald, Judy Collins, Cathy Wiseman, and Don Stinson.

Below are the retirement packages awarded, as reported in the Resolution adopted Thursday:

	Added ISTRF Contribution	Health Insurance	Life Insurance
Baer	$149,966.50	$19,284 / yr	$365.00 / yr
Rather	167,733.55	16,428 / yr	365.00 / yr
Jones	160,727.87	16,428 / yr	365.00 / yr
Pellico	170,472.14	16,428 / yr	365.00 / yr
Larch	100,895.36	19,284 / yr	n/a

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.

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.

School Board Candidates Forum

Last night the Decatur Township Civic Council held its School Board Candidates Night. To my knowledge, this is the only forum on School Board issues before the election in one week. Here is my take on the main points that were discussed.

All five candidates were in attendance, but Cathy Wiseman, running unopposed in District 1, declined to participate in the forum and answer the voters' questions - although she did kibitz from time to time from the audience. All four District 3 candidates participated for a full hour of questions; incumbents Dale Henson and Judy Collins and challengers Natalie Coffey and Bobby Hire.

It was clear that all four are sincere people - but with very different takes on how the School District is doing.

Communication - The challengers felt that the School Board meetings needed to be changed. Coffey noted that the public cannot tell what is being discussed, have no detailed information on what items are even on the agenda, and that the public is "afraid to speak". Hire mentioned that the Board should do a better job of presenting what issues are being discussed, echoing Coffey's point that the public in attendance at the meeting cannot tell what is being discussed because of the way the Board is conducting its business. He suggested that comments could be taken during the course of the meeting, perhaps giving time limits to those who wished to comment.

The incumbents saw little problem with keeping the School board meetings as they are now. Collins expressed surprise that the public is afraid to speak up at these meetings. While both Coffey and Hire voiced interest in giving the public more opportunity to know what was being discussed at the meeting and a better format for the agenda to accommodate the public comments, the incumbents felt the meeting was 'their' meeting and 'it has always been done this way'. Collins suggested that perhaps they needed more public question meetings like those held recently, but noted that she would not change the regular meeting format, otherwise they'd "be there all night". Henson noted that they "seem to work alright".

I would say that the School Board meeting hasn't always been conducted this way. The public use to got responses from the Board members. And, I would add also, that if the current format of the Board meeting does not serve the public interest, then it needs to be changed. The public is speaking loud and clear that communication is not what it needs to be both between the Board and the public and the District and the public. I was not convinced last night that the incumbents yet get that point.

Graduation Rate -- The graduation rate and how to improve it came up several times during the evening. For those who do not know, the graduation rate since 2006 to 2009 has steadily been declining - from 81% to 73%. Meanwhile, the State average has been increasing steadily - from 78% to 82%. The incumbents blamed the formula for calculating graduation rates as it does not allow for inclusion of students who graduate after 5 years of high school. Henson wants the public to wait another 3 to 4 years to see an improvement in graduation rates because of changes the Board is implementing now. Collins mentioned that full day Kindergarten has caused the curriculum in first grade to be beefed up and that in turn has led to the curriculum in second grade to be beefed up and that eventually that will improve graduation rates.

The incumbents put a premium on improving graduation rates. Coffey noted that attendance rates decrease with increasing grade level and that we are not matching state standards or state averages on that score, either. She said that kids are being left behind, that we must get the teachers rehired and drop the class sizes. Hire echoed that the teachers need to get rehired because increasing class size makes it more difficult on the students and on the teachers delivering a quality education.

I would chime in that the other schools in this state have found a way to improve graduation rates NOW and maybe we need to ask what they are doing, rather than waiting 3-4 more years or, heaven forbid, waiting 10 more years for what we are doing to pay off in improved graduation rates. As for the formula for calculating the rate, all school districts are using the same formula so it does not put Decatur at a disadvantage at all. Its just another excuse.

Selling Property -- The topic of selling excess property brought a range of opinions from the candidates. Coffey thought that the Board should take a serious look at selling the property and how much of a loss would be taken on a sale. Collins doesn't want to sell any property, saying it is a one shot infusion of money and "what if you need to build an elementary down the road". Hire thought the property should definitely be sold so that the District can get the teachers back to work and that "you've got to sell the property to take care of the problem". Henson said no to selling the land, but was interested in selling the former Concentra Building - indicating that the District is actively looking for a buyer.

You all know I think we should sell the excess property, even if we lose money on the deal. This is a tough financial time for the district and this money will help get us through the worst of it. Its all about priorities. The Board didn't care that they were overpaying for the properties when they bought them. Now they are pretending to be prudent by not selling them for a loss. As for a one shot infusion of funds - true. And now is exactly when we need that infusion. We have been told that $3 m of the cuts are a one time deal - so there is some parity with a one time sale to fix a one time cut.

Class Size -- All candidates expressed a desire to get all of the RIFed teachers back on the job as soon as possible. The incumbents both mentioned that the Board had "charged" the Administration with not laying off any teachers. No mention was made as to how they evaluate his performance on this point. Collins that we just need to cut funds, that there are only so many dollars, and that we should "run the course" and "we'll get through this". Henson said he didn't want to see class size get any larger than it is today. He said they have already recalled 13 of the 61 RIFed teachers and will be bringing back even more. Even so, he said his calculations show that, in the worst case, class size would rise by only about 5 students and he doesn't agree with the figure of 49 students per class that has been mentioned by others.

Coffey said that smaller class sizes work for educating the kids and that all available funds need to be applied to rehiring the teachers. Hire noted that any time you have smaller class sizes, the kids will learn better and that we need to get the teachers back to work as soon as possible.

My two cents is that class size will rise if only because Lynwood is closing as an elementary school and there is no extra classrooms for the two dozen teachers there. Add to that the 23 retirement and the 61 RIFs and you will have a calamity - no matter what calculations you do. It is good that 13 teachers have been recalled, but we must not close Lynwood as an elementary and we must recall the remaining RIFed teachers. Again, $3 m was the savings goal the Board gave to Stinson - the Concentra building alone could bring that amount in and we will have bought at least one year of saving our class sizes with that one step.

There were other questions asked and answered. Overall I would repeat that all candidates were sincere. But, it is obvious that the incumbents still don't get the anger and frustration of the public, are not engaged in independent review of the Administration's job performance, not responsive to the public, and therefore are not looking to make the improvements that are so very much needed in this District.

The election is in one week. Talk with your neighbors and friends, make time to get to the polls or vote early, and lets wake up May 5 with a new Board of Education in Decatur Township.

Decatur School Board Feasts Just Before Putting Teachers on the Street

Prior to last night's regular meeting of the MSD Decatur Township Board meeting, the school board and the Superintendent, Don Stinson, feasted on a catered meal. Three carts of steaming hot food were wheeled into the meeting room at the Gold Academy for their dining pleasure.

This is just moments before they were to vote to lay off 61 teachers, even though 20 agreed to retire early. (I am so stunned by this news that I have submitted an open records request to verify that they axed so many despite their claims of caring about the education of Decatur's children.)

Back to the great catered meal that the Dale Henson, Judy Collins, Cathy Wiseman, Don Huffman, Doug Greenwald, and Don Stinson shared. How can a decent person spend even a penny of taxpayer money on such things - moments before putting other decent people into the unemployment line and leaving their family finances in shambles? How can they even swallow?

There is a reason that the phrase "Let them eat cake" has survived for over two hundred years. It has become the epitome of people who are so ignorant of the situation in the real world around them, that they cannot comprehend the excesses of thier own world view.

The excessive teacher RIFs, the unconscionable treatment of the bus drivers and custodians, the unwillingness to sell excess properties to help buffer the impact of digging out of a financial mess these folks created - these are all clear demonstrations that the Board and the Administration are ignorant of the situation in the real world around them and that they cannot comprehend the excesses of their own world view. These catered meals for the Board just before lowering the boom on other human beings is their version of "Let them eat cake".

Two Challengers Filed

Mark Tuesday, May 4, on your calendar with the note "VOTE VOTE VOTE"

As of right now, two challengers have stepped forward and filed to be candidates for Decatur School Board from District 3. Judy Collins and Dale Henson, incumbents, filed for re-election yesterday.

Noon is the deadline, and sometime tonight we should know if anyone else is running in Decatur.

The two challengers are Natalie Coffey and Bobby Hire, both of Camby.

For my part, I am putting some yellow ribbon on my shopping list. I intend to 'tie a yellow ribbon' around the trees in my front yard as a sign of solidarity with the challengers. The yellow ribbon, as you know, symbolizes an awaited homecoming. In this case, bringing Decatur schools back to the Decatur public. It irks me no end that only 1 administrator out of 28 respects our community enough to live here and educate their children here. It irks me further that it matters not to our incumbents.

Many thanks to Natalie Coffey and Bobby Hire for stepping forward for our School District and our community.

Decatur School Board Feted With Catered Executive Session

If you were worried that the drastic cuts being leveled at the Metropolitan School District of Decatur Township was going to negatively impact our School Board - fear not. They continued their tradition of having Executive Sessions as catered affairs. School cafeteria workers catered and served the Board and the Superintendent, Don Stinson, last night. As a extra special treat, the School Board ordered a special cake to be baked especially for Stinson. Isn't that sweet.

Ahhh !! Its a good life if you're Don Stinson, Dale Henson, Don Huffman, Judy Collins, Cathy Wiseman, or Doug Greenwald. No sense pinching pennies just because you are about to lay other people off.

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.

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.

The Mitchell Building Drains Funds From Decatur School District

The saga of dismal fiscal management by the Metropolitan School District of Decatur Township is typified by their lease of space in the Mitchell Building in Ameriplex Industrial Park. From breaking three laws regarding the lease and renovation of the space, to the continued use of district funds for three educational enterprises who use the space, all of which should be self-sufficient, we see what happens when there is virtually no oversight of the Administration of a school district.

The Indiana State Board of Accounts audit of the Decatur School District books released on May 29, 2008 (covering finances from July 1, 2005, to June 30, 2007), is a clear look at how Superintendent Don Stinson and Assistant Superintendent Jeff Baer, abetted by rubber-stamping School Board members, Don Huffman, Cathy Wiseman, Judy Collins, Larry Taylor, and Taylor's replacement, Dale Henson, ran the School District finances. I have already talked about the purchase of 4 properties during that time, without the required number of appraisals of the fair market value, clearly overpaying by 41% on one property - in violation of two aspects of state law. I have already talked about the reimbursement of credit card expenses without the proper receipts. And, I have already talked about how Stinson and Baer broke state law by spending millions of dollars more from funds than were appropriated by the School Board.

The audit released in 2008, which I again recommend all Decaturites review for themselves, speaks also to how Stinson and Baer broke state law by entering into the Mitchell Building lease contracts, broke state law by entering into a renovation agreement for the space, and broke state law by entering into a lease agreement over 10 years in term without the approval of the State Department of Local Government Finance (DLGF). In a single lease, they avoided the required review from the upper levels of government (the DLGF), and avoided the required review from the lower levels (the School Board), all in place to represent the best interests of the public and to protect the public from an overreaching or ill-informed District Administration.

Here's what the audit has to say about the Mitchell Building lease:

The School Corporation entered into a lease agreement with Mitchell Logistics Partners L.P. for the Decatur Discovery Academy. The original lease was signed by the Superintendent and was for a period of 127 months (10 years and 7 months). The School Corporation, in order to expand the Decatur Discovery Academy, paid $584,460 in 2006 for the renovation of additional office space owned by Mitchell Logistics Partners L.P. The Renovation Agreement was signed by the Assistant Superintendent of Business. The subsequent lease amendment for the expanded Decatur Discovery Academy increased the term by another 12 months and also was signed by the Assistant Superintendent of Business. No documentation was provided regarding approval by the Department of Local Government Finance for the lease to exceed a term of 10 years.

Indiana Code 20-26-4-8 states:
"Notwithstanding any other law, the president and secretary of the governing body of a school corporation are entitled, on behalf of the school corporation, to sign any contract, including employment contracts and contracts for goods and services. However, each contract must be approved by a majority of all members of the governing body. In the absence of either the president or secretary of the governing body, the vice president is entitled to sign the contracts with the officer who is present."

Indiana Code 36-1-10-5 states in part:
"Notwithstanding sections 6, 12, 16, and 17 of this chapter, the following procedure shall be followed whenever a lease does not contain an option to purchase:
(1) The term of the lease may not be longer than ten (10) years; however, a lease may be for a longer term if approved by the department of local government finance."

Indiana Code 36-1-10-10 states in part:
"(a) A lessor proposing to build, acquire, improve, remodel, or expand a structure for lease to a political subdivision or agency shall submit plans, specifications, and estimates to the leasing agent before executing a lease."

In entering into the initial 10 year 7 month lease for space in the Mitchell Building, Stinson and Baer violated two state laws -- one requiring prior approval of the DLGF and the other requiring the signature of School Board member(s) on the contract.

In entering into the $584,460 renovation agreement, Stinson and Baer violated two state laws -- one requiring the signature of School Board member(s) on all contracts and the other requiring detailed plans and cost estimates prior to signing the agreement.

In entering into the extension of the lease agreement for another 12 months, Stinson and Baer violated two state laws -- one requiring prior approval of the DLGF and the other requiring the signature of School Board member(s) on the contract.

The tenants of the Decatur School District's leased space are three enterprises that should be self-sufficient. All three are educational enterprises of which I highly approve; it is just using the District as a funding source that I strenuously object to.

First is Ivy Tech. Ivy Tech is in the business of education for a profit. Ivy Tech should be paying the rent on the space it uses in the Mitchell Building. Instead we find from Stinson's "Fiscal Restructuring Plan", that the District chips in at least $164,000 a year for Ivy Tech's space.

Second is the Challenger Center. Again, the Challenger Center was to become self-sufficient through charges for groups to use the facility. Instead, from the "Plan" we find that the District is covering at least $380,846 a year for the space and two teacher salaries.

And, third is the Decatur Discovery Academy, which is an alternative school that was created as a Charter School. Yet again, this enterprise should have been self-sufficient using Charter School funds. Instead we see that the District pays at least $265,501 a year for its space.

All together, the Mitchell Building lease exemplifies the fiscal mismanagement we see in the rest of the Decatur School District. State laws were broken to establish and extend the lease, state laws were broken to make renovations to the space, and the District is throwing over $810,000 a year at three worthwhile enterprises that should be self-sufficient. The long term lease agreement for the Mitchell Building space will run until at least 2016, draining much needed funds from the primary task of the School District - the education of Decatur's children.

Decatur School Board to Meet Tonight - Be Afraid Taxpayers

Brace yourselves Decaturites. The Decatur School Board meets tonight. They will meet in Executive Session behind closed doors beginning at 5:00 pm, followed by their regularly scheduled monthly meeting at 7:00 pm. The Executive Session is advertised as being for the purpose of discussing "a job performance evaluation of an individual employee". By law, that is all they are supposed to discuss for that hour and a half. Word is that the regular meeting will be moved to the High School Cafeteria as they expect a large crowd. If you are going, enter at Door 10 on the southwest corner of the High School Building.

On the agenda, which never lists action items, Patron Comments precede the discussion of Superintendent Stinson's proposal for changes to District finances and structure. Of course, this order of business limits the ability of community members to make cogent remarks as they cannot be sure what proposal will be put forth by the Superintendent. But, this is the usual course of things. If you plan to attend and make comments, be sure you sign up to do so as I understand the Board members can get rather snippy if you get out of line and do not sign up to speak.

If the School Board was truly interested in the community's opinion on these matters, they would let Superintendent Stinson announce the favored proposal and then give the community a month, a week, or even a day, to read about it and formulate their comments before the Board voted on the proposal. But, I'm guessing they will just vote on it tonight and not avail the community of the details before then.

Tonight's meeting is perfectly time for placing a referendum question on the May 4 Primary Election ballot. To place a referendum question on the ballot, the exact wording of the question must first be voted on by the School Board and then sent on to the City-County Council for certification at least 60 days prior to Election Day. For this timeline to work, the Council must act on the certification at its February 22 meeting and therefore introduce the issue at its February 1 meeting, which is the next meeting on their calendar, having just met last night. This is the last meeting of the School Board prior to February 1.

Any referendum question would ask the voters to approve an increase in property taxes to cover the financial mess Superintendent Don Stinson, Assistant Superintendent Jeff Baer, and the rubber stamping School Board members, Dale Henson, Don Huffman, Cathy Wiseman, and Judy Collins have gotten us into. Board member Doug Greenwald is getting a pass from me as he only joined the Board in July of 2008 and to my knowledge his only aggravating vote was on Don Stinson's extravagant contract that propelled him to the second highest paid Superintendent in Central Indiana and likely the entire State of Indiana.

Again, the School Board likely will not give the community any time to consider and comment on a referendum question being placed on the ballot. Likely they will haul out those trusty rubber stamps and just vote on it tonight.

Methinks a referendum has been the true aim of much of the work on enrollment and hand wringing over the finances, because anyone could see this coming ever since the property tax caps passed the Indiana Legislature in 2008. They'll close Lynwood Elementary School and lay off teachers. This will tick off the teachers. They'll change the remaining Elementary Schools and the Intermediate School to Grade 1-6 schools, increasing class size when absorbing the Lynwood students. This will tick off the teachers and any parent who realizes it will negatively impact the quality of education their children get in Decatur. They will allow any child to attend any Elementary School making transportation to and from school a nightmare -- they may even require parents to do most of the transporting or pay a huge fee for the school bus service. This will tick off the bus drivers, the parents and the kids. They will instigate fees for kids to participate in sports. This will tick of the parents and the kids. Meanwhile they will eliminate Candice Baer's position in the Central Office as a token loss in the Central Office ranks, even though she is already said to be leaving due to the acquisition of a new job elsewhere. The Central Office will be moved to the palatial and spacious digs over at the old Concentra Building. The Administrators will NOT be ticked off -- they will be even better off.

All of this ticking off of people will increase the chances of passage of the referendum. Passage of a referendum would sink Decatur Township's hopes of coming out of the recession along with the rest of Marion County and will sink the Township's hopes for move up housing and business location in our community for decades to come. Not that Don Stinson really cares about any of that.

I expect the Mooresville-Decatur Times will cover the meeting. If so, look for an article in either Wednesday's edition (which would be a very tight deadline for them) or in Saturday's edition of the paper. The online edition is password protected and available only to those who have subscriptions. So, be sure to pick up a copy and see what the proposal was and how the meeting went.

Decatur School District Demonstrates Loose Accounting of Credit Card Use

I have recently noted the purchase of 4 properties by the School Board of the Metropolitan School District of Decatur Township without the legally required number of appraisals, and in one instance, even with one of the two required appraisals in hand, overpaid for a property by 41%. This information came to light in a biennial audit of the School District's books by the Indiana State Board of Accounts. The one noting these illegal purchases was released on May 29, 2008,and covered the time period July 1, 2005 to June 30, 2007.

Many, many deficiencies in accounting for money flowing through the School District's hands are noted in the audit and I encourage everyone to read at least the "Audit Results and Comments" section of the report.

In this entry I want to focus on issues raised in the use of credit cards that show a long term disregard for the simplest of accounting principles - collecting receipts to show an expense was legitimate.

The audit report published in 2008 says that the credit card policy in place is inadequate.

The School Corporation is using credit cards in some instances to purchase items without an adequate approved credit card policy. A written credit card policy exits but does not specify the individuals authorized to use credit cards, the types of expenses which can be paid, and the internal control system over the credit cards.

The report notes that the same issue was raise in its two previous audits. One of these is posted online. It was published on September 20, 2006, and covers the two years from July 1, 2003 to June 30, 2005. In that report is the following:

The School Corporation is using credit cards in some instances to purchase items without an adequate approved credit card policy. A written credit card policy exists, but does not specify the individuals authorized to use credit cards, the types of expenses which can be paid, and the supervision and use. The policy states that "the Superintendent shall develop administrative guidelines", but guidelines have not been completed.

During both of these audit periods, Don Stinson was Superintendent and Jeff Baer was Assistant Superintendent for Business. As for School Board members, Don Huffman, Larry Taylor, Cathy Wiseman, and Judy Collins served throughout those years. Herb Bazemore served to June 30, 2006, and was replaced at that time by Dale Henson. Larry Taylor was replaced by Doug Greenwald in 2008, well after this time frame.

Getting back to the credit card issues reported in the most recent audit, published in 2008. This report keys in on travel expenses paid for by credit card. This is what the report states:

Records presented for audit included claims for travel related expenses paid for with a School Corporation credit card. Detailed documentation was not attached to the information presented for payment in all cases.

All claims, invoices, receipts and accounts payable vouchers, including those presented to the governing body for approval in accordance with IC 5-11-10, should contain adequate detailed documentation. All claims, invoices, receipts, and accounts payable vouchers regarding reimbursement for meals and expenses for individuals must have specific detailed information of the names of all individuals for whom amounts are claimed, including the nature, name and purpose of the business meeting, to enable the governing body to authorize payment. Payments which do not have proper itemization showing the business nature of the claim may be the personal obligation of the responsible official, employee or other person for whom the claim is made. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

Each governmental unit should adopt a written travel policy in conformity with applicable statutes. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

Reimbursement for lodging and meals should be based upon actual receipts for amounts paid unless otherwise authorized by statute. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

Just to have stated the obvious, receipts are a basic requirement for accounting as simple proof that the expense was legitimate. For instance, School Board members have School District credit cards made available to them, should they wish to make use of them, for travel to conferences and the like. Many times spouses accompany the Board members - but the expenses of spouses are not legitimate expenses of the School District, and ultimately the Decatur taxpayers. Meal receipts would indicated multiple meals on one ticket and inquiries could be made as to whose meal was how much. It is routine for organizations of all types and even households to keep receipts as proof of the validity of expenses paid.

Since the accounting for credit card use is clearly a long standing problem for the Decatur School District, it will be very interesting to examine the audit currently underway to see if these deficiencies have been cleared up. It is asking little of Superintendent Stinson and Assistant Superintendent Baer, as well as Board members to do the most basic of accounting for how the taxpayer's money is being spent AND in such a way that we can be comfortable that it is being spent within legal bounds.

MSD Decatur Township Should Sell Excess Properties and Cut Administrators

The Mooresville-Decatur Times reported on December 9, 2009, that the Metropolitan School District of Decatur Township must cut $4.2 million from its budget for fiscal year 2010, which begins in July. Superintendent Don Stinson and Assistant Superintendent Jeff Baer blew lots of smoke by blaming the crisis on temporary loans the District floated due to the reassessment ordered by Governor Mitch Daniels a couple of years ago. Did the District have to float those temporary loans? Sure it did. Is that what is breaking the bank? No way.

The crisis is brought about due to the unfettered accumulation of debt orchestrated for the District and the taxpayers by Stinson and Baer and rubber stamped by the hand-picked School Board members, Dale Henson, Don Huffman, Cathy Wiseman, Judy Collins, and former member Larry Taylor (replaced almost two years ago by Doug Greenwald). They have been on a buying spree the last 8 years. In addition to the construction projects (more on the $85 million High School project in a later entry), they pay $750,000 per year on a lease to own agreement with Ameriplex Office Partners, LP, for the purchase of the Concentra Building across Kentucky Avenue from the High School campus, bought property abutting Lynwood Elementary School, bought property abutting the Middle School, and bought a number of parcels spanning from Mooresville Road to Camby Road. Not content to live within the District's income parameters, they have also floated bonds so we could pay into their Pensions over time - with interest.

With the tax caps coming on, several changes are occurring this year. The State has taken over the entire payment for operating expenses; part of this used to be paid with property taxes. But, debt payments and transportation costs will not be paid by the state. Thus, if property tax revenues are not enough to cover debt and transportation, a District must use some of their operating funds to pay the remainder of the debt payment due. Debt must be paid first. With the property tax caps, thankfully, dropping to a cap of 1% of a home's assessed value, the property tax revenue will not be enough to make payment on Decatur School District's outstanding debt. This leads to the need for Stinson and Baer to dig deep into the Operating Funds supplied by the State to make the debt payments this year.

So is the response of Stinson and Baer to sell off property and cut back on Administrators and shut down their plans to move the Central Office over to the posh confines of the Concentra Building? Hell, no ! They blame comparatively small temporary loans and Jeff Baer announces his retirement. I mentioned in the last blog entry that they have brought mall cops in to protect the High School and to save money despite their lack of training for crises. More to be announced at the next School Board meeting. Unfortunately, the District website does not list any Board meeting dates for 2010.

In addition to the $4.2 million that needs to be cut because of the huge debt incurred by Stinson, Baer, and the rubber stamping school board members, Governor Daniels has announced a 3.5% cut in all K-12 school funds. This could amount to roughly $1.5 million more to be cut.

Here is a list of the items that should be looked at first in order to generate money and cut costs.

1) Scrap all plans to move the Administrators from the Central Office to the Concentra Building and move the technical staff to vacant rooms at the Junior High School, Lynwood or Stephan Decatur Elementary. Since they do not own the building, but are leasing to buy to the tune of $750,000 per year, they can sell their lease. They have been paying on this lease to buy for 5 years now. So, even if they have to sweeten the deal by throwing in one year's payment to a buyer, they still should be able to secure $3 million from the equity.

2) Sell the property at 4640 Sante Fe Drive. They tore down the house that used to be on the quarter acre property, causing a drop in assessed value from $83,200 to $13,800. But $13,800 is still real money that can help the cause.

3) Sell the two parcels at 5006 S. High School Road - just north of the Middle School. Combined it is almost 3 acres improved with a house and the zoning remains residential. Surely they can get $150,000 - $200,000 for the property.

4) Sell the 33 acre property at 7900 Camby Road. Farmland has been going for over $11,000 per acre. So, look for about $330,000 from that sale.

5) Sell the 73 acre property at 7820 W. Mooresville Road. At $11,000 per acre a sale would generate over $800,000.

6) Sell the 10 acre property at 7912 W. Mooresville Road - making about $110,000.

7) Sell the 41 acre property at 8106 W. Mooresville Road and get another $450,000.

8) Keep the 18 acre property at 8900 W. Mooresville Road. It was donated to the School District. Unfortunately Stinson picked a location that is mostly wetlands and the cost of development is prohibitive, making the property pretty much worthless.

Selling these properties should generate something like $4.9 million. That will go a long way is trying to make it through the year without laying off teachers.

But, there is more they can do with the Administrators. As mentioned, Jeff Baer is leaving and being replaced by Perry Township's Bob Harris, at $15,000 less salary than Baer. Rumor is that Candice Baer is also leaving. A duplicate Administrative position was created for Candice Baer, wife of Jeff Baer, when she was dismissed as Superintendent of Center Grove Schools a few years ago. That should save at least $175,000 in salary and benefits.

The District should give a pink slip to Susan Adams. Yes, the Susan Adams of Perry Township School Board fame gets an Administrator's salary to be the head custodian of Decatur Schools. She can easily be replaced with a real custodian for a savings of at least $100,000 a year. Likewise, Gary Pellico, a very likable fellow, who serves as the Public Spokesman for the District. You do not need a former Principal at a hefty Administrator's salary to communicate with the public. That would save another $100,000 a year.

Expect Dave Rather, Assistant Superintendent in charge of the building projects, to retire when the High School project is completed. Unfortunately, his salary and benefits have been coming out of the bond funds used for the project and the taxpayers will be paying his salary and benefits off, plus interest, for decades to come. No savings here.

The remaining Administrators should be asked to take at 10% cut in pay. This could save nearly half a million dollars a year. All totalled these Administrative changes could generate about $850,000 a year. Added to the funds generated by selling excess property we could see over $5.7 million this year - exactly matching the $4.2 million shortfall due to overextended debt and the $1.5 million due to the 3.5% budget cut ordered by Governor Daniels.

One more thing - no matter what, the School Board should demand that employees who live in Decatur Township should be the very last to be cut. This would mostly be the bus drivers, custodians, a couple dozen teachers, and one administrator.

Decatur Central High School - Budget Cuts Target School Safety

The budget for the MSD Decatur Township has been rocked by the profligate debt amassed by Superintendent Don Stinson and Assistant Superintendent Jeff Baer, abetted by the rubber stamp school board members Dale Henson, Don Huffman, Cathy Wiseman, and Judy Collins (the jury is still out on the newest member, Doug Greenwald). Among the cuts made are not the salaries of the uber-rich Administrators, nor have there been cutbacks to the plans to move the Central Office staff to the extravagant confines of the Concentra Building.

Cuts have been and continue to be inflicted upon the School District Security Staff. For months now, contracted, minimum wage, mall cops have been hired for Decatur Central High School. Highly trained Decatur School Deputies have been let go and plans continue to whittle the force to one or even zero.

The cheap hires are not trained in any school emergency situations. Should there be a natural or man-made disaster to occur on campus, there will be no Security personnel who are trained to deal with the initial moments of crisis until reinforcements from Homeland Security and/or IMPD can arrive. This is an intolerable situation for Decatur's students and should be raising alarms all over the Township about the quality of decisions coming from Stinson, Baer, and the rubber stamping members of the School Board.

The School Board should grow a spine and say enough is enough. They must insist that the trained staff of the Districts Security Department be returned to our schools and find other ways to balance the budget.