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Monday, October 1, 2012

"School board's deficit is irresponsible"

Great letter to the editor of the Clarkston News, Clarkston, MI, 9/26/12

See letter here:  http://www.clarkstonnews.com/Articles-Opinion-i-2012-09-26-248902.113121-sub14473.113121-Letter-to-the-editor.html

"School board's deficit is irresponsible"

September 26, 2012 

Dear Editor, 

At the Clarkston School Board meeting on June 25, the board approved the 2012-2013 budget by a 4-3 vote. The budget that was approved by four board members authorizes the administration to spend $3.2 million more from the general fund than it will take in.

At the time this budget was approved, it extended a track record of six out of the last seven years in which the district spent more than it has taken in by the following amounts: 2007, $4 million; 2008, not available; 2009, $3.8 million; 2010, $7.2 million; 2011, $135,000; 2012, projected $2.7 million; 2013, projected $3.2 million. The track record of deficit spending may be even longer; data for years prior to 2007 was not immediately available.

That's a total deficit of $21 million over six years. While it is well-known revenues have been falling, the board had seven years or more to reduce expenses to match declining revenues; however, they failed, a majority of four members choosing instead to draw down the general fund reserve.

For the long-term financial health of the district, the board has the responsibility to produce and live within a budget in which spending is less than, or at worst equal to, income just as every household does. And the answer is not to go back to the community with requests to incur additional debt and raise taxes.

Three board members understand that; the other four do not.

However, because those four board members constitute a majority and have shown a lack of interest in, or a lack of skill regarding, being fiscally responsible, it is the community's duty to elect people to the board who do understand the need to more properly manage the district's resources to benefit students, parents, teachers, the community and to ensure the long term financial viability of the district. Regrettably, fiscal responsibility is only one aspect of the poor leadership exhibited by these same four board members.

In November you will be asked to elect four school board members. Two of those four board seats are currently occupied by the individuals who continue to manage ineffectually.

While one of those, Mr. Barry Bomier, has wisely chosen not to run for re-election, this is an opportunity for voters to excuse the other, Ms. Cheryl McGinnis, from a responsibility that appears to be either beyond her ability or beyond her level of caring and to elect people who understand the need for effective school district stewardship and open communication with the community to whom they are responsible.

Two other incumbents are also running for re-election – Susan Boatman and Joan Patterson. These two fit the profile of effective leadership and open communication. The same can be said for one new candidate – Betty Reilly.

If you review events of recent years, I believe you will decide to re-elect Ms. Boatman and Ms. Patterson, and to elect Ms. Reilly, because they represent the district's best prospects for a successful future.

Lawrence Matta

Independence Township

4 comments:

  1. The one common thread throughout this whole time period has been Steve Hyer. The Al Roberts fiasco and most issue have been a direct result of his leadership or influence. His time has come to leave.

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  2. Anon,

    I could not agree more. Steve Hyer should resign. I wonder if he will decide to quit if Patterson, Boatman, and Reilly are elected in November... We can only hope.

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  3. Is there a certain amount of financial stabilty requird to self insure as the disctrict does? I seem to read about perfect storm and how dire times are budgetwise are they not as bad as we are lead to believe?

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    1. The district now has a very small fund equity because they have spent it down. The class sizes are large and they can't afford to cut staff any longer to cut expenses. They had better watch the balance on the checkbook!

      The fund equity varies during the year based on when money comes in to the district from various sources, when the district has to make payroll (and all expenses related to the employees), utilities, school and cleaning supplies, renewals on software licenses (like FastForWord, accounting S/W, the proposed new student grade system S/W, etc.), and other school district expenses (including expenses for Dr. Rock's pet project, "Project Zero"). Certain bills come due when there may be insufficient funds to cover the bills. The district does short term borrowing in those cases...

      The district opted in 2011 to go to a "self-insured health insurance" plan. The district really SHOULD be in a more financially stable condition (more fund equity) in order to take on the "self-insured health insurance" plan. Here's why:

      The self insured health insurance program was sold to the board by Anita Banach and Dr. Rod Rock. Supposedly there is a maximum dollar amount of medical expenses that the district would be liable for, for each employee, for each fiscal year. They said that an outside insurance company pays whatever is spent beyond that set amount AFTER THE END OF THE FISCAL YEAR. Therefore, the district would have to pay all actual medical expenses throughout the year. At the end of the fiscal year, the insurance company pays what the district over paid. That means if a few expensive medical treatment cases happened (long bed rest pregnancies, premature births, cancer treatment, stroke, a bad accident, etc.), the district could end up having to pay more than the medical insurance budget amount during the school year, have an insufficient amount of money in the bank to pay the bills, and have to take out a short term loan to pay the difference until the district is repaid by the insurance company.

      That is just another reason why the $20 million bond was a bad idea. That bond had the potential to be the straw that could have broken the proverbial camel's back. Trying to get a short term loan after the $20 million bond was in place (had it passed) may have been difficult (high interest rate and/or high loan fees) or impossible (DENIED!). Then where would the district have been? Insolvent?

      As it is, the district is continuing to spend more than it takes in. If the state makes any additional cuts to the district, the district takes a hefty medical bill hit, utility rates go up, or we have a cold winter, the district may not be able to get a short term loan... Can you say Emergency Manager in Clarkston Community Schools?

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