Responses (January 2021)

I spoke at the January 2021 school board meeting and asked to be appointed to the policy committee in order to help review current school policies and recommend changes to the school board. I received an email from Karen Springer stating that they do not allow public appointments. 

I sent a follow-up email to school board members with four questions. I received a response from Alan Karpick, School Board President. The questions I emailed to the school board members are given in bold, the responses are in italics, and my thoughts are in regular text.

#1 – I was disappointed that Karen Springer was not receptive to my offer to help on the policy committee stating that “there is no public appointment to this committee.” To push back on that statement, I believe that our community views Doug Masson’s service over the past 4 years on the policy committee as a public appointment. He was appointed to the school board and when his term ended he was asked to continue serving on the committee as a public appointment. Making a second public appointment to this committee would not violate any rules.

Per the policy committee, Karen has given her response and the board officers support her position.

#2 – In my comments to the school board, I also mentioned one of the policies that I believe our community would like changed, bylaws policy 0143. This policy prevents public access to materials contained in the school board packet. I would like to advocate for changing this policy. What steps would you prefer that community members follow to effectively advocate for changing a specific policy?

With respect to the bylaws regarding board packet availability and procedural role of the school board, we asked our attorney Bob Reiling to outline the specifics (attached) of how the board functions as a governing body. It is something often misunderstood by stakeholders, but serves as an important guideline as we strive to do the work of the school board for the district.  Please know we are researching how other Indiana school districts are making certain documents in advance of school board meetings available to the public.

The attached outline from Reiling is a 5-page document that lists more than a dozen areas where Indiana laws govern how schools operate, including: hiring, licenses, salaries, performance evaluations, the discussion committee, buying and selling properties, capital projects, and issuing bonds. This doesn’t relate to my question and it appears that he was just copying and pasting something he wrote for some other purpose. Then, at the bottom of page 3, there is a paragraph that may be relevant to my question about how community members should advocate for changing a specific policy:

In regard to recommendations regarding day-to-day matters, the school corporation is not obligated to open those matters to public discussion. The school board, in its discretion, may permit public comment but is not required to do so. School Board meetings are not a “Town Hall” forum as the Board, typically, is approving the Superintendent’s recommendations regarding day-to-day operations. Consequently, the Board President provides background information regarding various day to day recommendations of the Superintendent and outlines the reason for these recommendations. 

#3 – I would also like to know when school board members discuss the topics on the agenda. After the administration provides school board members with the agenda and packet of information, when and where do school board members ask questions and discuss? The school board calendar lists work sessions that are held as needed. Are these work sessions typically held and is this where the discussion takes place? I don’t want to be critical of the school board for not asking questions during school board meetings if there is some other time and place where these discussions are taking place.

Pages 4 and 5 of the attached “outline” from Reiling is a list of how the school district responded to the COVID pandemic. It lists all the steps that school administrators took to develop the reopening plan. None of it had anything to do with my question about when and where school board members discuss the proposals the administration is putting forward. I used to think that there were discussions between school board members going on before the school board meetings, but I now think that it is more likely that there are just no questions being asked. It appears as though the school board simply votes yes on every proposal the administration puts forward without discussing the reasons or implications. 

Bob Reiling’s 5-pager didn’t answer my questions and I’m not sure why Alan Karpick thought that it was relevant enough to forward along to me. However, it is very interesting to read what our school district’s lawyer thinks is important. The top of page 3 is focused on defending the school district’s financial decisions and insists that they followed all the rules regarding the bond hearings the school district is required to hold in order to approve borrowing funds for the construction projects:

These public hearings are advertised and placed on the agenda. It is interesting to note that over the last five years no patrons have commented at any hearing regarding funding . . . Historically, WLCSC has conducted Town Hall meetings regarding the projects in question and also discussed the financial impact of the projects on the tax rates of the community. During the election it was suggested by one candidate that the WLCSC uses a “shell” corporation (implying inappropriate conduct). In fact, school corporations are required to retain debt in building corporations as governed by IC 20-47-2.

Reiling is correct that there were several community forums in 2015 about the proposed school construction/remodeling projects. In a J&C newspaper article about one of those public forums, Superintendent Killion said that the construction and renovation “would cost less than $50 million” and that  “alumni donations could cover a large portion of the cost.” Killion also said that “the new projects will not increase the local property tax rate.” However, at the bond hearings over the next several years, the school board unanimously approved somewhere between $83 and $94 million in new school district borrowing. Rather than advertising these bond hearings, as was done with the public forums, the school board only provided the minimum notice required by law (posting a public notice in a newspaper and taping a notice to the admin building door). Community members didn’t know that big financial decisions were being made. I first learned about the much larger debt during the 2020 election and have questions about how our school district is planning to make the payments. For example, this year’s debt payment is $6.4 million and our school district’s projected debt service property tax revenue is just $4.9 million (see this spreadsheet from school board member, Brad Marley). Also note that the debt payments increase rapidly up to $7.4 million in 2034 and stay at that level until 2038. Even with optimistic assumptions, property tax revenue does not get close to what the school district needs in order to make the payments without raising taxes.

A question I have been asking is why our school district decided to use lease agreements through a building corporation rather than just issuing bonds the way it has in the past. In elections between 2015 and 2019, 58 Indiana school districts sought voter approval in construction referenda in order to borrow to finance school construction/remodeling projects. Indiana law requires public approval in an election in order for school boards to issue bonds that exceed property tax revenue – so why didn’t our school board do this? The answer seems to be that the school board used legal loopholes. By dividing the projects up into groups costing less than $15 million with at least a year between bond hearing approval votes and using lease agreements through a building corporation, the school district avoided holding a bond election. An Indy Star article explains: “A school district sets up a nonprofit building corporation, which takes on the debt needed to fund big projects instead of the district. When the nonprofit issues the bonds, the security is a lease agreement with the district. Meaning, the land, or building in need of renovation, is sold to the nonprofit and leased back to the district. Then the land or building is returned when the bonds are repaid using the district’s lease payments. That lease agreement is not technically counted as school debt. Therefore it doesn’t count toward the district’s debt limit.” My view is that for decisions this big (deciding to borrow around $90 million rather than the $50 million we were told) the community should be told in advance and be given the opportunity to vote.

On a side note, Reiling seems to strongly prefer the term “building corporation” rather than “shell company” to describe the new corporation that the school district set up to hold the school district’s debt. I’m not an accountant, but I’m pretty sure that this type of building corporation is a shell company. Here’s the definition: “A shell corporation is a company or corporation that exists only on paper and has no office and no employees, but may have a bank account or may hold passive investments or be the registered owner of assets” (Wikipedia)

#4 – Finally, after sending out my summary of the January 4th school board meeting, several community members wrote to me wanting to know more about the funding for the construction celebration events scheduled for June. Could you provide information about the projected budgets for both events, the amount of money coming from the school district fund, and the amount coming from the foundation?

Finally, regarding the construction grand opening event, we are in the very early stages of this. No specific budgets have been set.  The Rose Hedrick donation is being used for construction and a possible event honoring donors.  Two business classrooms are being named in honor of  Hedrick.

It is good to hear that part of the donation will be used towards our construction debt. With the announcement at the school board meeting that the donation was going towards opening event costs as well as announcing the dates, I had the impression that they were planning something special. However, the impression I now get from Karpick’s response is that they haven’t done much planning yet. On the other hand, he calls it a “grand opening event” rather than a “ribbon cutting” like we had when we opened WLIS, so I’m not sure. My view is that it’s not a great idea to spend a lot of money on a grand opening event when our school district already has so much more debt than we can afford.

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