The Useful Idiots

Supporters of the levy can be divided into two groups: those looking for a financial gain over their neighbors; and, those wanting to believe that school officials are looking out for the taxpayer. Let's take a look at the latter group.

The district loves to state that its building cost less than the Ohio School Facilities Commission standards. This certainly implies that the OSFC standards are the benchmark of efficient school buildings. Not even close.

During my service on the board, I attended one of the OSFC design review meetings -- meetings where the commission seeks public input regarding the Ohio School Design Manual. The Design Manual contains the state-recognized set of standards for new school construction. According to OSFC, "OSFC’s Ohio School Design Manual provides schools with standards of design and construction that assure a statewide standard of quality."

The key is this: If a feature (building size, technology component, etc.) is in the manual, the feature will be allowed in buildings funded through OSFC programs. And, if the feature is in the manual, it becomes part of the cost standard used by OSFC -- the same cost standard that the district quotes before each bond issue.

The meeting I attended was more "Name that Tune" than "protect my wallet." Those in attendance had a stake in the outcome. District representatives, vendors, and contractors, sat around one-upping each other. There was no one -- certainly no one on the commission -- saying, "What about the cost?" Instead, the commission employees were excitedly nodding their heads and noting recommendations.

The Design Manual is not a document listing efficient, tax-wise standards. No, it is simply the wish list of those looking to build school buildings at taxpayer expense. A form a taxation without representation.

I bring this up since the useful idiots of the district want to believe in their local officials. Of course, this desire to believe suits the district just fine.

Keep in mind that the state cost standard is not a mark of efficiency, it's the hallmark of inefficiency and waste. So, reviewing the expense of district schools and concluding that the district is cost-efficient simply because it beat the state standard of inefficiency and waste is a fool's errand, or idiot's errand, indeed.

Olentangy Levy: Parents Blinked

Frightened by your own board.

It certainly appears that threats work. But, to be threatened by your own elected officials and paid bureaucrats. Well ...

A little push and the board wouldn't have cut your busing -- it had no reason to cut that or any program. In your hearts, you knew it. Yet, you cowed under pressure of your own elected officials. Democracy at work, I assume.

Really, 10 parents in the boardroom are enough for any board to question its decisions. Make that 50 parents, and busing would have stayed, along with everything else.

Keep in mind that accountability is a two-way street. The community must be willing to stare down the board and administration every now and again. Otherwise, in their own minds, the board and administration grow more and more conceited. Olentangy saw that in the 90's, and I expect that we will see it again.

So, as the board and superintendent stared, the parents blinked. The result is this: Parents gave the board and superintendent a mandate to do whatever they choose. Whether the next issue is likely high salary increases, perverse books, or something else -- parents, do not complain. Your blink allowed whatever power you once held to pass from community to board and superintendent.

Transportation for control -- a Faustian bargain of sorts.

It was as simple as that.

Ouch! The Springer Stinger

You got to love this -- OFK is sending out an email refuting the issues and facts I've posted on this blog. As you read, ask yourself this: Why does OFK feel that their supposed $80,000 levy campaign (partially paid by district contractors) is threatened by this blog and its facts?

Let me start with my favorite.

Springer quotes a blog post over at SaveTheHilliardSchools.blogspot.com by some unverified poster named Dave. She does not provide Dave's complete comment. Here is a little more wisdom from Dave: "I think our Olentangy levy will not pass. I think they have asked for too much and threatened the voters. I'll be in favor of a trimmed down honest version." Unlike Springer, I've provided the link.

Then there are these whoppers:

-- Springer states that I was instrumental in developing the Davis contract. True. But the issue is not the original one. The issue is the amended contract approved last June, when I was no longer on the board. The board amended Davis's contract and changed his performance bonus to a guaranteed bonus. In fact, the board approved his bonus for this fiscal year last June. Did you get that? The board stated in June, 2007, that Davis already satisfied his performance for 07-08. In addition, the board added close to $400,000 in potential post-employment liabilities. Shameful for the board. Shameful for Springer. By the way, I posted his contract here.

-- Springer quotes Stacy Overly as some unbiased expert on school district cash management. Overly works for Baird, a company that will make hundreds of thousands from the bond portion of the levy. Unbiased? Huh.

But, read the Overly comment, he never states the next claim that Springer makes regarding bond ratings and cash balances. Why not? Because it's not true. The Overly comment is found here, click on Opinion on Cash Balances.

-- Springer disputes my claim that school-related local property taxes are rising at double inflation. She wants to know which time frame I used in making that claim. Look back 10 years. Or, look out 3 years. This levy is close to a 25% increase in your local school district property tax, and it will only last 3 years. That is almost an 8% annualized increase. More than double inflation.

-- Springer never refutes my claim that teacher salaries are rising by 6.5%. She only states that I never voted against such raises. Sure, I held my nose many times while serving on the board, but my past errors are no reason to continue down a faulty path. What you learn on the board is that the majority will spend whatever it can. The best the minority can do is fight for lower increases.

-- Closing schools. Yes, Springer and OFT love that threat. But the attorney only opined on the information provide by Davis. I tried to get clarification from the attorney and a copy of the Davis information from the district. Alas, no one is talking. You can read this sordid affair here.

Of course, there are the expected ad hominem. While such attacks make good politics, they are light on substance.

Really, just go back to the Dave comment to see the games being played over at OFK. Whatever happened to truth? Times change I suppose.

Kicking Churches Out of Schools

Pass or fail, I learned a lot during this levy campaign. One aspect of the campaign that troubles me most is desire of the superintendent and board to close school buildings to churches, should the levy fail. Why is this so troubling?

Many Christians lament the fact that God is no longer welcome in public education. They believe that a faceless government has done this, against their will, and against their beliefs. Yet, come levy time, some of these very same folks play God as a bargaining chip: "If we can't have our levy, you can't have your church!"

Think about that for a minute. The superintendent and board is looking to use God and His Church as a means to pass a levy. In this instance, need has no meaning. Such a stand is pure arrogance and disobedience. Christians threatening churches is an action to mourned. But they've done it, and they are doing it.

I noted the lilt and glee coming from the board during the discussion of the threatened cuts.[1] Not one defense of taxpayer, community, parent, or church. It was as if closing the schools to churches is a good thing -- or, at least a good threat. Shouldn't someone have protested? Alas, there was no voice in the wilderness.

There is no need for the proposed cuts, pass or fail. This district faced a situation that was much worse in FY03.[2] Yet, no cuts were made in FY04. Different board, different superintendent.

Instead of taking the high road and negotiating contracts in favor of the taxpayer, the district is claiming that it will kick churches out of its buildings should the levy fail.[3] That really troubles me. It should trouble you.

The next time that someone laments the removal of God from public education, remember that it's not always some faceless government doing this, it may just be our friends and neighbors doing it for some worldly reason.

Something to think about.

notes:
[1] The audio is available on the district web site.
[2] The deficit for FY05 was greater than the current deficit, and, the district's valuation was much lower. Greater deficit with less resources.
[3] As I have posted many times, the district cannot close its buildings to churches, or any organization for that matter, should the levy pass and the cuts enacted.

Olentangy Levy: Closing schools and rewriting law

Let me visit this one more time.

A comment was posted implying that the district can close buildings. Keep in mind that an opinion from a school-paid attorney is worthless.

If the superintendent was looking to be truthful, he would have asked the county prosecuting attorney for an opinion. Yost -- county prosecutor --- likely would have asked for a state attorney general's opinion. That is the proper way to obtain a legal opinion.

Ironically, that is the manner that was used in Morgan County when Davis was superintendent there (refer to the AG opinion noted below).

So, Davis knows the right way to get an opinion yet he games the system in order to have a worthless opinion in hand. Davis played Olentangy for Kids as well as district residents and churches.

I call that dishonest, but standard for this administration and this campaign.

But it's important to understand the level of deceit used to pass this levy. It also calls into question other "fact" being stated by the schools. I suggest that you read additional posts on this blog to get the facts.


Olentangy Levy: Closing schools and rewriting law
or, how Scott Davis spun a tale and Pat Schmitz opined nonsense

The Law

The Olentangy district and the Olentangy for Kids levy committee state that, should the levy fail and the proposed cuts be enacted, the district can close its buildings to the public next year. Never mind that Ohio law and opinions from the state attorney general have a completely different view, the district and its paid attorney have reinterpreted state law to their benefit.

I have previously posted that the district cannot close its schools to the public. This is the straightforward read of 3313.76 of the Ohio Revised Code:

3313.76 Schoolhouses available for educational and recreational purposes.
Upon application of any responsible organization, or of a group of at least seven citizens, all school grounds and schoolhouses, as well as all other buildings under the supervision and control of the state, or buildings maintained by taxation under the laws of this state, shall be available for use as social centers for the entertainment and education of the people, including the adult and youthful population, and for the discussion of all topics tending to the development of personal character and of civic welfare, and for religious exercises. Such occupation should not seriously infringe upon the original and necessary uses of such properties. The public officials in charge of such buildings shall prescribe such rules and regulations for their occupancy and use as will secure a fair, reasonable, and impartial use of the same.

Effective Date: 10-01-1953

District buildings must be available to the public as long as the activity does not "seriously infringe upon the original and necessary uses of (the buildings)." (emphasis added) Of course, the district must "prescribe rules and regulations for their occupancy and use as will secure a fair, reasonable, and impartial use of the same." It's all plain and simple.

The Opinion

When challenged, the district sought an opinion from its attorney, Pat Schmitz of the Scott, Scriven, and Wayhoff. The opinion reads:

Scott,

I am responding to your question about the use of school buildings by outside organizations. You indicated that the Board of Education has proposed closing its buildings after the school day as a cost-saving measure if the March ballot issue fails. An individual has claimed that Ohio Revised Code Section 3313.76 compels the Board to keep its buildings open for public use. You asked whether the Board may limit public use of its buildings after the school day. Based upon the information that you have provided to us, we believe the Board may do so.

Ohio Revised Code Section 3313.76 states, "Upon application of any responsible organization, or of a group of at least seven citizens, all school grounds and schoolhouses, as well as all other buildings under the supervision and control of the state, or buildings maintained by taxation under the laws of this state, shall be available for use as social centers for the entertainment and education of the people, including the adult and youthful population, and for the discussion of all topics tending to the development of personal character and of civic welfare, and for religious exercises. Such occupation should not seriously infringe upon the original and necessary uses of such properties. The public officials in charge of such buildings shall prescribe such rules and regulations for their occupancy and use as will secure a fair, reasonable, and impartial use of the same." (Emphasis added.)

The Ohio Attorney General has opined on several occasions that Ohio Revised Code 3313.76 does not give any organization a vested right to use school buildings. (See, e.g., Ohio Attorney General Opinion No. 2004-002 and opinions cited therein.) The Board of Education retains its discretion and authority to establish policies that limit building use, and the statute expressly allows the Board to limit any use that would infringe upon the "original and necessary uses" of its buildings. You indicated the Board has concluded that if the ballot issue fails it would be compelled to make a series of budget cuts to reduce expenses, and that limiting the public's use of its buildings outside of the school day would be one of many reductions made to pay for the School District's essential programs.

Boards are permitted to charge a "reasonable fee" for building use, but the fee typically cannot cover all the costs of usage, which include labor, utilities and other expenses. As such, the Board's proposal is consistent with Ohio Revised Code Section 3313.76 and the Board's broad discretionary authority to manage, control and make necessary rules for the government of its schools pursuant to Ohio Revised Code Sections 3313.20 and .47. Please note that if the Board limits public use of its buildings as part of its reduction package, the Board should amend its building use policy to reflect this decision.

In sum, for the reasons stated above, we believe the Board may limit public use of its buildings after the school day if the March ballot issue fails. If you have any other questions about this issue, please contact me at your convenience.

Pat
--
Patrick J. Schmitz
Scott, Scriven & Wahoff LLP
50 West Broad Street, Suite 2600
Columbus, OH 43215

Schmitz opined that the district can close its buildings to the public based on its fiscal condition next year should the levy fail; he reinterpreted the law. Very interesting.

In his opinion, Schmitz references Ohio Attorney General Opinion No. 2004-002. What does this opinion state?

The language of R.C. 3313.76 provides that certain public buildings must be made available to responsible organizations and groups for educational and recreational purposes, under reasonable rules and regulations for their occupancy and use, and with the limitation that providing such access “should not seriously infringe upon the original and necessary uses of such properties.” R.C. 3313.76. By its terms, this statute applies to school grounds and schoolhouses, other buildings under the supervision and control of the state, and buildings maintained by taxation under the laws of the state. It contemplates that the buildings to which it applies are being put to necessary use by the governmental entities that supervise and maintain them.

Ironically, the opinion relates to Morgan County Schools while Davis was still there. The opinion reasserts the "must" with regard to districts opening their buildings to the public, with the standard exceptions regarding infringement on the original and necessary uses of the buildings.

Though the opinion was based on issues that are not relevant to our current situation, viz., the use of a building where the then-current fitness and public uses had not yet been determined, the essense of 3313.76 stands.

Request for Clarification: a simple yes/no

Confused, I asked Schmitz for clarification. In essence, can a school district reporting an $8.5 million ending cash balance close its buildings just as he had opined.

Pat,

I read your opinion regarding the Olentangy district's claim that it can close schools, and I have a few questions:

You state that:

1. The district is "compelled" to make cuts when, in fact, the district only has to correct it's reported negative balance of $2 million for FY09. Compel is an interesting choice of words, the state does not "compel" cutting programs, only correcting the negative balance. And, it is an especially interesting choice of words given that ThisWeek Olentangy (Feb. 14, 2008) is reporting that Davis states "he is 'not claiming that state law is mandating' the cuts he's proposed."
   
2. Closing schools to the public will protect "essential programs" when, in fact, the district is reporting no savings from closing buildings. Since the district has never quantified any dollar savings from closing buildings (refer to the district website), any savings resulting from closing buildings is not part of the $10.5 million in proposed cuts, and, hence, has no impact on programming.

Just so that you are aware: though the district is facing a $2 million negative balance in FY09, it is proposing $10.5 million in cuts. Once these cuts are enacted, the district will be reporting an $8.5 million positive balance. Therefore, the cuts would put the district in a better financial position than most districts in Ohio. Closing buildings to the public will not affect FY09 programming under this scenario.

The $2 million can be corrected by any means, such as tighter negotiations with the unions. So, once again, the word "compel" -- as in compelling cuts -- does not apply in this situation.

Since general funds are more or less fungible, based on your opinion, Olentangy could have closed buildings years ago due to cost saving reductions. The district could make the claim that open buildings always impact programming since it could be argued that the district would have initiated program X if it could rid itself of expenses associated with open buildings, all the while reporting positive carry-over balances in its general fund.

And, if it were the case that districts can close buildings to the public based on these types of cost savings, no district would ever have to comply with 3313.76 in our world of scarcity and alternate choices. The law then has no teeth; it's invalidated by your opinion.

Is this what you are opining? That districts can close buildings on any claim
of supposed cost reductions and savings.

note: I recognize that you only opined on the information provided, but your opinion is being used based on the current situation in the district. Also, please refer to NCLB and Boy Scouts. Allowing the PTO's in the schools would require the district to allow Boy Scouts, unless, of course, the district is willing to forgo federal funding.

Respectfully,

Jim Fedako

The Response

A simple yes/no question deserves a simple yes/no answer. Yet, Schmitz equivocated:

Jim,

I have received your messages. If there is need for further discussion, I will let you know.

Pat Schmitz

Now, to be fair to Schmitz, he is employed by the district in this instance. But there would have been no reason not to have responded yes to my question, if yes was indeed the correct response. He didn't. Why?

A Records Request

In order to dig deeper, I sent a public records request to the treasurer. I wanted to read the story conveyed to Schmitz. The request reads:

(P)lease forward a copy of the letter(s) or email(s), along with all information provided, sent by Superintendent Davis or any other district employee to an attorney or attorneys at Scott, Scriven & Wayhoff LLP requesting an opinion regarding the district's authority to close buildings to the public.

A Response

The treasurer did some research and provided this:

Jim

We have no emails/written correspondence by any employee regarding the closing of buildings to the public.

Becky

Still at a Loss

So the conversation between Schmitz and the superintendent was via phone or some other means. But what was the message? Did the superintendent tell the true story? Did Schmitz rewrite Ohio law with his opinion? Or, was some other story told to Schmitz? A story that would necessarily result in the opinion that the district desired.

The Truth about Opinions

An attorney can only opine on the information provided: the tale. It's not his duty to research the validity of the claims -- in this instance, the fiscal condition of the district after the cuts are enacted, should they be enacted.

And, someone fishing for an opinion to hold in hand can obfuscate reality -- spin the tale. Certainly the opinion wouldn't stand up in court, but it looks impressive in hand, providing psychic cover for the levy committee.

What We Do Know?

This we do know: Schmitz appears to have opined new meaning into 3313.76; his name is on the opinion. Based on Schmitz's opinion and his unwillingness to respond to a yes/no question, I have no choice but to assume that he continues to claim that school districts can close buildings while reporting an $8.5 million cash balance. Schmitz is legal light years ahead of everyone else in Ohio

Maybe other Ohio districts will now use this opinion to threaten their voters. Or, just maybe, Schmitz will respond to a yes/no with a yes/no. Don't hold your breath.

The district cannot close its buildings to the public; it's a threat, plain and simple. But what about the ethics of a superintendent who will take any action, make any statement, with the exception of the honest, forthright one? Hmmm.

So a lot of time, money, and effort went into lying to churches. But, in the end, it's the district taxpayers who end up paying for nonsense opinions that end up being wielded as threats. Fiscal accountability. Huh.

What Olentangy for Kids is not saying

1. Local school district property taxes have been rising at an annualized rate of over 7%.

Is this rate of increase -- double inflation -- due to something special about education in Olentangy? Yes. The average employee has been reaping yearly salary increases of close to 6.5%, plus projected increases for health insurance of 12%; far, far above the private sector.

2. The levy on the ballot will increase operating millage by almost 30%.

That's a huge increase, isn't it? But, as I have previously written, the money is not for the kids, it's for salaries and benefits. The district is facing a $2 million deficit -- which can be covered by reduced salary increases and controlled insurance costs -- yet the superintendent plans to cut $10.5 million. Why such large cuts? To supposedly punish parents should the levy fail. All about the kids? Huh. It's all about the ego of the superintendent. Oh, and your hard-earned tax dollars.

3. The district does not need to cut $10.5 million.

Olentangy for Kids is supposed to be separate from the administration, yet they have appear to take marching orders from district officials. The district simply needs to balance its books for FY09. Since the treasurer just reported that revenue is up and expenditures are down, the district will likely show a positive cash balance for FY09 when it files its updated Five-Year Financial Forecast in May (read this previous post for more details). In addition, the district can also reduce expenditures by controlling costs as it negotiates with its unions. FY09 is safe: there is no need for this levy.

Olentangy levy: The Taxpayer Summary

There's really nothing more to say about the Olentangy levy. I am reposting my executive summary -- actually taxpayer summary. I encourage you to read all my other postings so you can understand that there is no need for the March levy.

Let's focus on just five of the things we know:

1. The $10.5 million in cuts is not required.
2. Bond investment is available and can be used.
3. The administration and board have no intent on negotiating tighter contracts.
4. Schools cannot be closed to the public, churches are safe.
5. The last year(s) of all district levies have deficit spending.

Additional explanation:

1. The cuts list is a threat; plain and simple.
2. The fact that there is bond investment income means that the district is not selling bonds only when bond money is needed. I don't think anyone wants the district to sit on a pile of bond money -- funded by tax dollars -- so that investment income can be earned. The board will consider this option after the levy fails.
3. The negative balance in FY09 is cleared by tighter negotiations. It's that simple. The district is not currently proposing this as a solution, but it will after the levy fails.
4. The district can't close schools to the public. Never could. State laws will not allow it.
5. Deficit spending in the out-years of a levy are normal, in fact all district levies are structured that way -- including the one on the ballot.

Olentangy Levy: Christmas in July

This is a reissue of an article I posted at the end of July, 2007. This is a reminder of the fiscal actions the board took while facing a deficit. (note: here is the link to the amended contract.)

July 30, 2007

Olentangy Residents,

Your board of education just celebrated a night of giving; giving the gift of taxpayer dollars of course.

The board amended the superintendent's contract effective July 17 and added almost $400,000 in salary and benefits. That's a lot of money given the cry for an additional levy. Actually, it's a lot of money no matter how you put it. Of course, it's all for the kids. Yeah, right!

Keep in mind that the superintendent was already one of the highest paid in Ohio. And, that was before the new amendments.

The new contract is a wonder to read. It removes the original accountability language and replaces it with guaranteed dollars.

In true double-speak, the bonus that was based on performance, and is now just another salary component, is classified in the contract as "at-risk compensation." At-risk? Come on, the bonus is guaranteed and is to be paid out before the school year begins.

Funny, the Ludwig von Mises Institute just published my article on such types of gifts; gifts where the elected officials stand proud as they give your tax dollars away in their name.

I really don't know what's worse: the board giving away your tax dollars; the superintendent accepting those dollars while whining about budget shortfalls; or, the spin that was placed on this whole mess. Some people have no shame at all.

Remember this as the board and superintendent discuss the "need" for a November levy; despite the fact that none is needed until 2009. That will, of course, hold only if the board stops giving away your tax dollars in their name.

Read the provisions of the contract (below). You will be amazed, shocked, and troubled. I was.

Olentangy Levy: the truth using district data

Given all the nonsense, threats, and lies coming out of the district, I decided to once again provide a simple explanation regarding the supposed need for a levy in March. And, I am going to use the district's own numbers so that you can easily verify what I am saying.

By law, the district must file a Five-Year Financial Forecast every October. Here it is: http://www.olentangy.k12.oh.us/pdf/finance/5YrFcst29Oct2007.pdf

Please note line 10.010 for FY09. That entry shows the ending deficit as $2,059,854 -- not the $10.5 million that the superintendent is claiming.

State laws requires districts to show no deficit in the first projected fiscal year; the fiscal year ending on June 30, 2009 (FY09). To remove the deficit, a district can make cuts, avoid new costs, find other funding, etc.

On page 7, you will note that base salary increases account for $1,929,246 million of new expenditures in FY09 (this does not include an additional approximately $270,000 that the district pays into state retirement systems due to these salary increases - page 7).

Also note that step and education increases provide $2.6 million for teachers, even without any base salary increase. So, teachers will still receive salary increases even with a zero percent increase in base pay. In fact, they will receive almost the 4% increase that is standard in the private sector.

By way of comparison: When the state was going through a period of fiscal problems, they negotiated a zero increase for all state workers. Zero; no step increase, no education increase, nothing.

In addition, health insurance increases account for another $2.4 million -- the district is assuming a 12% increase in its contribution per employee covered (page 8) -- note: taxpayers contribute $1005 per month for family coverage.

So, salary increases (base salary plus state contributions) and health insurance are the root cause of the deficit. It's not growth or any other factor. It's simply salaries and benefits.

To protect salaries and benefits, the superintendent is proposing cuts to programs. On top of that, he has created the illusion that he must cut $10.5 million in order to right the deficit.

Look for yourself, the deficit is only $2 million. The $10.5 million is a threatened punishment for not supporting the superintendent.

The district's financial situation is an expense issue, not a "district on the edge" issue.

It's all there in the district's Five-Year Forecast. The truth is easy to discern despite the district's spin and lies. A really convenient truth at that.

Olentangy Levy: Cutting services while costs rise

Last year (FY07), the district cut transportation for elementary students within one mile of school, based on sidewalks, speed limits, etc. So, you would expect that there would have been huge costs savings. Yet ...

District transportation costs rose between fiscal years 2006 and 2007, plus the district purchased additional buses; a $1 million worth. So, the district cut services, increased expenditures, and purchased buses. Doesn't say much for cost savings, does it?

Wouldn't it make sense for the district to reduce transportation expenditures under the current level of service, reaping the benefits of the updated walk policy? Such efforts would allow the levy to last another year. But, alas, the district just wants to continue spending your tax dollars; business as usual I suppose.

note: It's all reported in the district's Comprehensive Annual Financial Report (CAFR) for FY06 and FY07, available here for FY06 and here for FY07. (Search for "transportation.")

Olentangy Levy: True costs

Annually, school districts in Ohio create a Comprehensive Annual Financial Report (CAFR), an audited document that provides different views of costs, expenditures, and revenue. Olentangy's latest CAFR -- found here on the state auditor website -- provides a simply way to get beyond the spin and into true district expenses.

The administration and Olentangy for Kids have been touting the district's costs per pupil as if their number details the total cost of running district operations. But, the Ohio Deparment of Education figure being used does not include real costs that any business would consider in its financial reports; namely interest, depreciation, etc.

Using accrual-based accounting, district costs per pupil soar from the advertised $8,507 per pupil to the true cost of $11,111. Shocked?

Well, you shouldn't be. Note that, despite the spin coming out of the district and levy committee, you are taxed for both operating and capital expenses. [1]

Consider this contrived example: Ask the manager of the local Burger King what the cost is to produce one hamburger. He thinks, and then states (say) 50 cents. You question him on that number and he says that salaries, benefits, beef, bun, etc, total only 50 cents, as if there are no capital costs associated with his store. The manager has understated his costs, just as the district understates its costs.

Read the CAFR and learn the true cost of education in Olentangy, your taxes paid for it.

note:
[1] The district is ranked 31st highest for bond millage rate out of the 614 districts in Ohio.

Olentangy Levy: the simple solution

Public school districts in Ohio must file a Five-Year Financial Forecast [1]with the state department of education each October, with an update in May. This forecast lists revenue and expenditures for the current fiscal year, as well as the next four fiscal years. In addition, the district must list the assumptions used to create the forecast.

Fair enough.

So, the district files its forecast in October 2007 stating that it will have a $2 million deficit at the end of FY09. The assumptions show that the assumed increase in base salaries is $1.93 million. On top of that, the district pays an additional 14% of employee salaries to the state retirement systems. This means that the increased salaries also increase the district's employee retirement contribution by $270,000. Therefore, the total cost for FY09 salary increases is more than the FY09 deficit. Got that?

So, negotiating a zero percent salary increase clears the deficit. [2]

Isn't that onerous? Not really. Keep in mind that teachers will still see an average increase for next year of 3.7%, based on step and education increases. Given that an average salary increase of 3.7% is above the standard for the private sector, and given that the district assumes it will fund an additional 12% of employee insurance costs -- well above the private sector, it's obvious that a levy failure and the implementation of this simply plan will keep things business as usual; not the catastrophe that the superintendent claims it is.

A simple solution.

note:

[1] The district's Five-Year Financial Forecast is here.
[2] Or, the district could control healthcare costs and still provide a salary increase, in addition to the step and education increases.

Olentangy Levy: Short of repetition, there's nothing more to say

There's really nothing more to say about the Olentangy levy. I am reposting my executive summary -- actually taxpayer summary. I encourage you to read all my other postings so you can understand that there is no need for the March levy.

Let's focus on just four of the things we know:

1. The $10.5 million in cuts is not required.
2. Bond investment is available and can be used.
3. The administration and board have no intent on negotiating tighter contracts.
4. Schools cannot be closed to the public, churches are safe.
5. The last year(s) of all district levies have deficit spending.

Additional explanation:

1. The cuts list is a threat; plain and simple.
2. The fact that there is bond investment income means that the district is not selling bonds only when bond money is needed. I don't think anyone wants the district to sit on a pile of bond money -- funded by tax dollars -- so that investment income can be earned. The board will consider this option after the levy fails.
3. The negative balance in FY09 is cleared by tighter negotiations. It's that simple. The district is not currently proposing this as a solution, but it will after the levy fails.
4. The district can't close schools to the public. Never could. State laws will not allow it.
5. Deficit spending in the out-years of a levy are normal, in fact all district levies are structured that way -- including the one on the ballot.

Olentangy Levy: What we now know

Let's focus on just four of the things we know:

1. The $10.5 million in cuts is not required.
2. Bond investment is available and can be used.
3. The administration and board have no intent on negotiating tighter contracts.
4. Schools cannot be closed to the public, churches are safe.
5. The last year(s) of all district levies have deficit spending.

Additional explanation:

1. The cuts list is a threat; plain and simple.
2. The fact that there is bond investment income means that the district is not selling bonds only when bond money is needed. I don't think anyone wants the district to sit on a pile of bond money -- funded by tax dollars -- so that investment income can be earned. The board will consider this option after the levy fails.
3. The negative balance in FY09 is cleared by tighter negotiations. It's that simple. The district is not currently proposing this as a solution, but it will after the levy fails.
4. The district can't close schools to the public. Never could. State laws will not allow it.
5. Deficit spending in the out-years of a levy are normal, in fact all district levies are structured that way -- including the one on the ballot.

A Grand Insurance Plan

Your property tax dollars fund family heath insurance costs for district employees at over a $1000 per month ($1005.98 to be exact). Not a misprint! That certainly is a grand plan -- plus it's a lot of tax dollars.

By controlling these costs, the $2 million dollar deficit for FY09 disappears. A simple solution to the district's grand ol' cost problem.

This March levy is about spending more money. It's as simple as that.

Olentangy Levy: What about my current tax burden?

Glad you asked.

The Ohio Department of Taxation reports the tax effort -- burden -- for each district in Ohio. Tax burden is defined as the amount of local school district taxes collected as a percentage of personal income. Despite the spin to the contrary, Olentangy has a relatively high tax burden. In fact, the district is the 101st highest ranked out of the state's 614 districts based on the tax department's latest report. It's all right here in Appendix D.


note: School-related property taxes in Olentangy are rising at an annualized rate of over 7% per year, meaning that school-related property taxes are taking an ever-increasing portion of the incomes of district residents. In fact, the district tax burden has increased 61% over the latest seven year's worth of department data.

Olentangy Levy: Three Card Monte

OK, here is a screenshot of the district's latest Five-Year Financial Forecast.[1] You will note the red circle near the bottom. This figure, and this figure alone, is the negative balance that the district must clear in order to satisfy the state. [2]

In a true slight-of-hand, the superintendent has been showing reporters line 6.010 under FY08 [3] and stating that this is the amount the state requires the district to clear; Three Card Monte in the administrative offices.

note:

[1] This is just a screenshot and not a complete page. Click on the screenshot to see a larger version (still incomplete though). In order to see the full page and the complete forecast, click here (links to the district website).

[2] Clearing the negative balance can be done by negotiating tighter contracts; they all end at the end of this school year.

[3] Come on now, he's pointing to the wrong fiscal year for goodness sake. This is a classic con, or sting for that matter.

Lying to the churches

I really don't understand how the superintendent and his administration can look their community in the eye and repeatedly lie, with Olentangy for Kids smiling and nodding in agreement.

These folks are threatening churches and other local organizations that, should the levy fail, district schools will be closed to the community. It's a great lie to spread since it creates an immediate need and a reason for those groups to campaign for the levy, but it's absolutely false.

According to Ohio law:

3313.76 Schoolhouses available for educational and recreational purposes.
Upon application of any responsible organization, or of a group of at least seven citizens, all school grounds and schoolhouses, as well as all other buildings under the supervision and control of the state, or buildings maintained by taxation under the laws of this state, shall be available for use as social centers for the entertainment and education of the people, including the adult and youthful population, and for the discussion of all topics tending to the development of personal character and of civic welfare, and for religious exercises. Such occupation should not seriously infringe upon the original and necessary uses of such properties. The public officials in charge of such buildings shall prescribe such rules and regulations for their occupancy and use as will secure a fair, reasonable, and impartial use of the same.

Effective Date: 10-01-1953 (emphasis added)

The superintendent cannot legally close the schools, and he knows it.

Yet, the superintendent, his administration, and their levy campaigners are now lying to churches and other organizations.

What lesson is being taught? That it's OK to lie as long as you get what you want? What about ethics and personal integrity.

Lying to churches? Hmmm.

Spin heard along the way

Spin: Olentangy has a relatively low cost per pupil.

True? Not when you take into account all district funds.

An example: According to the latest data available from the state, Olentangy's bond millage is the 31st highest out of the 614 school districts in Ohio. 31st? Wow, that's expensive! And, it's bound to get more expensive should the levy pass.

It is correct that growing districts pass bond mills to pay for new schools, but they also use bonds to pay for things that other districts fund through their operating budget; items such as capital improvements and technology. And, districts with older building are more likely to incur such expense.

Olentangy has a relatively large demand for new buildings which is offset by a relatively low demand for capital improvements. It's just like a new house versus an older one. The new one has a large mortgage while the older house has high costs for upkeep; normal wear and tear (roofs, AC, etc.)

So, only including the general -- operating -- fund does not tell the true story; a story you recognize when your property tax bill is due.

Facts and Fictions

The following piece of fiction is from the district's levy FAQ page:

How Was the Cut/Reduction List Developed and What are the Cuts?

The list was developed using a combination of factors including the independent State Standard Analysis Report and the cut list from the 2004 operating levy. The superintendent stated that his intent was to protect core instruction as much as possible.

When asked, the district could provide no proof that the State Standards Analysis Report was ever used for planning purposes.[1] And, this is for certain, the board never discussed this report publicly. The board never once reviewed this report. That is fiscal irresponsibility.

Had the board reviewed this report when it was issued two years ago, they could have cleared with ease the $2 million deficit reported for FY09.

Yet, in the interim, the district carried on, business as usual, spending close to $300 million. Don't you think that with a little planning, the district could have found 7/10th's of a percent in cost savings over that time?

But here we are with a superintendent crying the end of the world, telling tales to get his levy passed. The reality is that, if the levy fails, the district negotiates a fair contract -- fair to teachers and taxpayers -- and programs remain.

Simple solutions to a superintendent's spending problem.

notes: I've posted on this report many times. It has as much chance of speaking its truths in public as Scott Galloway. The Galloway watch is fast approaching two weeks -- bunker mentality I suppose.