Friday, April 30, 2010

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.


Anonymous said...

OMG, I can't believe that Judy Collins and Dale Henson have the monumental gall to ask to be re-elected after putting us in this hole! Now I understand why Stinson and Pellico hide from the media, too. They have betrayed not only our trust but also the futures of every child in the Decatur school district.

Anonymous said...

This is very important information. It is not surprising that Stinson and Baer and the board are very, very unhappy when this information is shared. The information needs to be discussed in every neighborhood and get people to the polls on Tuesday. The future of the schools in Decatur depends on stopping this now. The board, Stinson, and Baer just go on and on with putting blame on others. They either have no conscience or they don't have the knowledge to do their jobs. Either way, the kids are the losers if Coffey and Hire do not get elected. This is sad, sad, sad.

Anonymous said...

This is unbelievable! Every member of that schoolboard should be ran out of town and the Township on a rail.. They should be tarred and feathered!!! Oh yes all of this spending was the administrations idea but this schoolboard approved everything. They could have stopped this long ago. All they had to do was say NO!!!!!

How can any of them show their face to the taxpayers in this Township?

They should be so ashamed for what they have done to the Taxpayers.

The problem is they have no conscience or scruples.

They have raped this Township and robbed our children.

They should all resign immediately!!

Anonymous said...

I am not a resident so I cannot do this, but I think residents should copy this entry, make copies and hand it out in the community.

Anonymous said...

Everyone in this administration should turn in their resignations immediately!

Their contracts should all be rescinded and all of the perks taken away.

There is no way we should be paying Stinson severance pay when he hasn't even been dismissed.

There is no way we should be paying Baer 18,000 a year for the next 10 years for his insurance until he is 65.

There is no way we should be paying both Baers' 18,000 a year each for insurance.


Anonymous said...



Anonymous said...

Decatur Township Residents,

E-MAIL the address of this blog to everyone you know in the Township.

I am so afraid there are many people who do not know what is going on

Anonymous said...



Anonymous said...



Anonymous said...

Posted link on my FB. Tried in the last election to get some new people in there, Is the opposition posting blogs saying how great things are? What are Coffey and Hire going to do this next week to get their names out there. To be very honest I never even heard of them until the yard signs started popping up. Than I found this website. My wife actually knows one of them pretty well and did not know she was running until I found this site last night.

Had Enough Indy? said...

Thanks anon 12:01. Your comment caused me to root around in the Blogger gadget list for an easy way for folks to add this page to facebook or to send off a tweet. That gadget now sits just below Coffey and Hire's contact info on the left hand side of the main page.

Another contributor previously set up #DecTwpSch for Twitter.

Anonymous said...

The following persons subjected to these charges of IC 35-44-1 Chapter 1, Bribery, Conflict of Interest, and Official Misconduct are Members of the School Board: Donald Huffman, Judith Collins, Dale Henson, Cathy Wiseman. Superintendent Donald Stinon, Assist-Superintendent Jeffery Baer, Candace Baer, Susan Adams, Rosie O'Brien, and Gary Pellico.

IC 35-44-1-3
Conflict of interest
Sec. 3. (a) A public servant who knowingly or intentionally:
(1) has a pecuniary interest in; or
(2) derives a profit from;
a contract or purchase connected with an action by the governmental entity served by the public servant commits conflict of interest, a Class D felony.
(b) This section does not prohibit a public servant from receiving compensation for:
(1) services provided as a public servant; or
(2) expenses incurred by the public servant as provided by law.
(c) This section does not prohibit a public servant from having a pecuniary interest in or deriving a profit from a contract or purchase connected with the governmental entity served under any of the following conditions:
(1) If the:
(A) public servant is not a member or on the staff of the governing body empowered to contract or purchase on behalf of the governmental entity;
(B) functions and duties performed by the public servant for the governmental entity are unrelated to the contract or purchase; and
(C) public servant makes a disclosure under subsection (d)(1) through (d)(6).
(2) If the contract or purchase involves utility services from a utility whose rate structure is regulated by the state or federal government.
(3) If the public servant:
(A) is an elected public servant or a member of the board of trustees of a state supported college or university; and
(B) makes a disclosure under subsection (d)(1) through (d)(6).
(4) If the public servant:
(A) was appointed by an elected public servant or the board of trustees of a state supported college or university; and
(B) makes a disclosure under subsection (d)(1) through (d)(7).
(5) If the public servant:
(A) acts in only an advisory capacity for a state supported college or university; and
(B) does not have authority to act on behalf of the college or university in a matter involving a contract or purchase.
(6) If the public servant:
(A) is employed by the governing body of a school corporation and the contract or purchase involves the employment of a dependent or the payment of fees to a dependent; and

Had Enough Indy? said...

anon 11:27 - to my knowledge, all necessary conflict of interest statements have been filed by the various Board members. And, even though our Board hasn't voted on all the contracts as required by law, the Administration does not have that authority and gets a pass from (c)(1)(A).

The only alternative is to vote the Board out of office. That starts Tuesday.

Anonymous said...

To everyone reading this blog:

Start calling and e-mailing all of your friends, giving them this web address. Ask them to read through Pat's posts before going to the polls Tuesday. It is not too late to begin turning this around. It will be a tough job but if the current board is allowed to continue Decatur Township will become nothing but a tax burdened, depressed area with depleted home values. Our kids will not get the education every child deserves because 1 teacher per 40-50 kids is not even reasonable. Wonderful teachers have opted to retire and the teachers who are staying will always be looking for a better teaching environment. Natalie and Bobby are willing to take on this gigantic task so let's all get behind them, starting Tuesday. Vote for Coffey and Hire, who both believe that parents and taxpayers should be in the loop. We can and must make changes now!

Had Enough Indy? said...

To all: the webaddress will get you to the blog as well as the blogger address.

Anonymous said...

After reading an earlier blog I see Bob Harris, Baer and Susan Adams Hand picked and schoolboard approved replacement for Baer in a few short months has already recieved a raise!

So it looks like our new finance guy is planning to continue as Baer and our present schoolboard did stealing from our children.

Looks like business as usual.

Harris needs to go also. He should have refused an unearned raise when he is in training..

Anonymous said...

Hire is going door to door begging for votes. He needs to sit down assess his situation. His platform is for "CHANGE" and to fire the "SUPT". Well good luck, you don't have a clue what it's like to be a board member. Your platform never talks about the interest of kids. Your not getting my vote...THAT'S FOR SURE.

Had Enough Indy? said...

anon 9:16 - Hire is going door to door campaigning. As far as I can tell, Collins and Henson haven't knocked on door one - and I'm willing to bet not your's either.

If you want to keep the big time spend, spend, and spend machine going - while laying off teachers instead of selling excess property accumulated without the legally required appraisals -- then, by all means, don't vote for Hire or Coffey.

I suspect you haven't deemed it of importance to read the original reports published on the DOE website, the SBOA, website, or the DLGF website. So, vote from your cocoon however you please.

This blog is aimed at folks who will think about the independent information that is cited and who actually want the best for the kids and the community -- not the best illusion of progress at any cost.

Anonymous said...

Anon 9:16

If Hire and Coffey are not elected there is NO chance for change. I command Hire for going door to door and stating that he does not support continuing with this superintendent. He will learn a lot of information when he is elected. The people commenting on this blog have searched many sources of information. The school district is in very bad financial shape because the board, Stinson, and Baer did not act responsibly. The kids will not have a chance with the current board and administration. The facts for everyone to see on the Indiana Department of Education website verify that the kids have not had a chance since Stinson was hired and not held accountable by the board. Can only hope that there enough voters who have studied the information on this blog.

Anonymous said...

It is a real "slick trick" that parents are not being told where their children will attend elementary school next year. The board, superintendent, Candace Baer, and Debbie Sullivan know but they don't want to upset people before the election. They will not just be moving Lynwood students. They will have to move students from all of the buildings in order to house all the kids. At least it might be more fair to everyone if Collins and Henson are defeated and the entire community sees that things are going to change. Enough is enough.

Anonymous said...

I don't believe in Stinson...does that make me an atheist?

Anonymous said...

when kugelman runs for school board in 2012 who will he be running against?

Anonymous said...

anon 10:18am
maybe with him but not against him!

Anonymous said...

Well did they get the taxes from Bloomington Indiana for the child that lives there but rides to school with the spanish teachers so that he can play basketball at DCHS. I'm sure Jones, McWilliams and Oberle can explain that one. Oh that's right open enrollment is what they call it. Even though the township pays.