Wednesday, July 30, 2008

10TV on Credit Card Spending

Comments have begun accumulating on another post in regard to the recent report by WBNS-10TV about the use of credit cards by Hilliard City School officials, so I thought it would be better to start a post on just this topic. I'll copy the comments over as well.

My own reaction to this is that it is a symptom of a management that has not been held sufficiently accountable for its actions. The Board of Education is elected by the public not to rubber stamp the wishes of the administration, but rather to guide and monitor the performance of the management it hires to run the organization on behalf of the public. The Treasurer has a special role in this, as the Treasurer reports directly to the Board – not the Superintendent – and has a duty to the Board to monitor and question the spending of the rest of the Administration.

All kinds of questions are raised by this story. Why did both of our public relations people (one of whom has since been laid off) need to attend a conference in Arizona? Why was a staff meeting held at Dave & Busters, which I find to be one of the more expensive food places in our area? Mr. Wilson said, "I'm sure Dave & Busters has a room - a conference room off to the side - where they could meet uninterrupted and have their professional development." I've been to Dave & Busters many times, including business celebrations, and know of no such conference facilities, nor is it mentioned on their website. Anyone know for sure?

At the very least, it's another case of bad optics. I understand the need to keep team spirits up, especially in time of adversity, and especially when you have a great team that has taken years to assemble. But this is a tricky art. Special rewards can quickly turn into expected benefits, and the negative feelings created when they must be suspended might do more harm than granting the reward in the first place.

This funding crisis is something that has been looming for a long time – I've been writing about it for a couple of years now. Somewhere along the way, an effective leadership would have said, "sometime soon, we're going to have a very tough levy campaign on our hands, and we'd better be sure we've got our house in order when the scrutiny gets intense." At that point, the finances should have been inspected with a critical eye, and this kind of stuff put in abeyance until better times. Had that been done, it could have made for a positive public relations event - a demonstration of good stewardship and fiscal restraint.

Instead, it is a public relations disaster with just over 90 days from the election (60 days until early/absentee voting begins).

Has this changed the way you're leaning on the levy vote?


  1. The following was moved here from another post:

    I was quite saddened to see this story, since I was really trying to believe administrators when they said they had cut expenses. The board must ask harder questions on expenditures and not just accept the information given to them. At my former public agency, we (the senior managers) pooled our personal funds for "staff appreciation" gifts - we did not use public money. We also severly cut back to save jobs, including no travel that was not imperative, literally keeping strict watch on our supply of photocopy paper to get expenses down (really educating staff as to managing documents electronically and providing back up training on public records laws), and paying for parking/lunches, etc. even when on official business if able (required, no, but we were working hard to save our budget). We cut back enough to save critical staff reductions. Wonder what the Camp Joy folks now say about their efforts? How frustrating that the money could have been there instead of $11,0000 spent food expenses last August. Anyone hear of "brown bag lunch meetings?" That's what we've always done. To say the spending was legal doesn't mean it was in the best interest of spending taxpayers dollars (including grant money) wisely. It is all to be used for betterment of the district - not feeding staff repeatedly. Times have changed and no one in the administration has yet to realize how awful they have just come off to the electorate. Goodbye levy.

    -- Anonymous

  2. The following was moved here from another post:

    Can anyone link the newspaper article? Not sure who has seen it, but it's another nail in the levy coffin.

    by KJ

  3. KJ,
    Click on the highlighted 10tv link in Paul's original posting and it will take you to the article.

  4. These are the types of expenses the District must start cutting if they expect the passage of the levy. If the attitude is that it is such a small percentage of overall budget that it makes little difference, then they have their heads in the sand when it comes to PR (which they do!)
    Paul, I must say that I sometimes disagree with your reasoning that it is ALL about salaries (i.e. "not diesel fuel") when it comes to the budget. Maybe I take that out of context, but having run a small business that has faced tough economic times, we have looked where we can save EVERY dollar, and those dollars have added up to substantial expense savings. Plus, it shows our employees that we are not wasting money that could otherwise go to raises, which my employees have seen very little of over the last several years. As mentioned elsewhere, that $11,000 could have gone towards the Camp Joy program FOR THE KIDS; instead it went into the mouths of well-compensated staff. How depressing.

  5. Hillirdite:

    Thanks for the comment.

    I don't mean to imply that the little expenses don't add up. My comment about diesel fuel costs is in response to the school officials who bring it up in every conversation about why our expenses are skyrocketing, yet fail to mention the impact of the HEA/OAPSE contracts with 3% base and 4% step increases.

    In the same way, much has been made of the fact that HEA/OAPSE members are paying 6% of their health insurance costs next year while little is said about the fact that our health insurance costs increased 30%. I've had folks ask me how much less the district will spend on health insurance with the new contracts.

    The answers is - not a dime. Our health insurance costs will go up significantly, just not as much as if the employees weren't contributing.

    Yes, every iota of spending needs to be scrutinized. I remember a time in our early days at CompuServe when we would not be issued a new Flair pen (remember those) until we turned in the old empty one (you listening Dave?).

    But at the end of the day, all that stuff barely moves the fractions to the right of the decimal point in the levy amount.

    It's all about personnel costs, and the rate in which they increase.


  6. You are correct Paul. But it is also about perception vs. reality, and the perception counts just as much, if not more, when trying to win the hearts and minds (to say nothing of the money) of the voters. The contract is water over the dam, plus they really have no way to defend it, at least not that most of us will accept. If coming up with a reasonable explanation for the generous terms AFTER the last levy defeat is what is going to get the November issue passed, then they are out of luck. The only thing they can do now is promise us that they will do better in the future, and hope we believe it. Their track record does not offer us much in that regard.

  7. Some questions rattling around in my head...

    1) Do these type of expenditures happen in other districts *or* are they peculiar to Hilliard CSD?
    2) How many district operating dollars (not grants, etc.) were spent on staff-related rewards, team-building exercises, etc.
    3) What percentage of the budget do these expenses represent?

  8. Anon: The only answer I have to any of your questions is the last one - the percentage is miniscule. The issue is trust and accountability, not so much the dollars.

    Hillirdite: The HEA/OAPSE contracts are not the last word on compensation for the next three years. If the levy doesn't pass, the Board can certainly go to the union leadership and ask "are you willing to roll back compensation to preserve some or all the jobs of your least senior members?"

    I think that if I were a young teacher on the layoff list, I'd like to know the answer to that question.

    And if I were the HEA/OAPSE leaders, I'd want to see some (additional) sacrifices by the administrative leadership first. When things get tight in my business, my partners and I will (and have) skip paychecks before we ding the team.

    It's one thing to tackle these questions as a hypothetical, and quite another when it's real, which it may be after Nov 4th.


  9. According to the news story, the expenses in Hilliard stood out as exceptional to other central Ohio schools. Mr. Wilson's explanation is that the other schools are "hiding" these expenses by not using credit cards to pay for them. I think it's a big line of BS.

    I paid out of my own pocket when I wanted to provide pizza for my public agency staff - either for recognition, or because I was asking them to work beyond their required duty hours due to exceptional circumstances. The bottom line is, I can't justify using public money for this purpose. It doesn't matter to me what the percentage of my budget the expense is - it is just not right (though it may be legal). Grant money is no exception to the rule.

    Mr. Wilson, I bet the other districts just "get it" more so than you. Hope this story and its fallout provides the wake up call you and the others need. I wish it had aired before the recent community meeting. Would have been more interesting, certainly.

  10. My experience with using business credit cards is it becomes too easy to do things like send someone to Panera's for sandwiches instead of going to the cafeteria. Don't all our schools have cafeterias and kitchens? Even if admin feels like they need to provide food for in service days, meetings etc, it seems like it would be much less expensive to have food prepared and served on site. Yes, it's small change to the total budget. But if that $11,000 from last August alone continued over the whole year, it turns into 2 entry level teachers with benefits. I agree this is a public relations disaster ahead of a levy request. I am super-curious what else is out there considering the board's pleas that they have made big cuts. I hope 10tv keeps digging, because the responses they got from the district sound like BS to me and I hope it did to the reporter too.

  11. The food service in the HSD is contracted out to Aramark, whose staff use the central kitchen at Memorial to prep the food. They are not staffed during the summer months; however they are staffed fairly early in August. They actually do catering for groups other than feeding the students; some of the catering is totally outside of school functions but I believe some of it is for staff
    functions. Not at all sure how Aramark is compensated but I am sure it is not by credit card, and am also sure it is less than Panera or the Rusty Bucket on a per meal cost.
    As far as the responses from Mr Wilson, it is my experience that what he doesn't say says a lot about his answers. That was my distinct impression after the meeting last week. All I could think of was "spin" and that goes for Mr. McVeys' answers too.

    And Paul, yes I know the Board can go back to the teachers on the compensation issue but given the narrow passage of what to the rest of us looks like a great package, do you really think there is a snowballs chance that they would agree to reductions?

  12. As to anon. questions Does it go on in other districts, probably, and the bottom line is it a spending problem in the public sector and of course not unique to our schools

    Is it minicule, perhaps, but how many times 11,000 can pay for something

    Grant money, levy money, whatever
    it is still absolute misuse of public funds, especially when
    we are talking about cutting out
    programs, personnel

    This is basically just wrong !

    The sad part is this is last you will hear about it and I doubt the district or the board will say
    anything about it.

  13. I really think that the administration and school board need to speak about this to the public, whether it is in the local paper or at a board meeting. I'd like to see a list of these expenses that WBNS saw and also see an explanation of each. I do know that the news stations love to sensationalize and I don't really trust them either. I know that students are often given pizza as a reward for improved grades, perfect attendance and other accomplishments. Could this account for the pizza money or is this from different accounts? WBNS has raised the question, now I think it is up to the administration to give us some honest answers. If there has been irresponsible spending and it causes the defeat of the levy, a loss of jobs and a lower quality education for our children then some administrators should be replaced.

  14. I think a lot of pizza showed up for the kids, and freshman orientation last year had a lot of it. No big deal.

    All I know, I cannot afford to eat
    at Dave and Busters, Panera, and
    Rusty Bucket, and cup of Joe ???????????? please!!!

    I dont have a whole lot of confidence that we will hear much of a mea culpa
    from the board or admin.

    I see a need for a new levy, however the amount will need to be lower. The following challenges
    remain to get the levy passed

    1. Explaining away (no matter what the Ohio Law is) 7% raises and
    a premium medical plan
    2. The HEA job activity in the classroom during negotiations
    3.Communication issues.
    4. The district, HEA and adm. support for our current elected leaders at the statehouse, who
    taken care of their campaign contributors, and not the everyday taxpayer. They also stand by idly
    while the Ohio Dept of Educ creates more unfunded rules and regs.
    Remember this ! The Dept of Educ.
    was the only Dept who failed to submit a reduction in budget to the
    governor when requested. Thank goodness our Ohio Supt is gone and
    her spending habits as well.

    Here is what I expect from the District and the HEA, and the levy
    group. This is about the kids and if you vote no you are against the kids and education. If this happens expect a defeat in the
    55 to 45 range if not worse.

    This credit card fiasco, while
    miniscule in dollars, is huge in perception, a continued lack of confidence, and a total lack of awareness of what the individual taxpayer is dealing with right now.

    I am anxiously awaiting a response
    at the board meeting Monday evening
    Does anyone think this will happen
    Just curious as to everyones thoughts.

  15. Anon at 12:55 PM here...

    I agree with the previous poster's point that the HCSD administration and the BOE need to meet this head-on and speak to the public about it. In fact, I agree with quite a bit of that post.

  16. Paul-
    speaking of the State's part in solving our school funding mess, Cathy Wogan wrote in This Week Hilliard that Ted Strickland was in the back of the room at the Community Conversation. Did you see him? Did anyone talk to him? Did the district reps even know he was there? It sounds like he was not introduced, didn't speak, wasn't acknowledged. I find that very odd that he didn't at least say something to the people in attendance. I hope his take away is that it is time for him to get moving on school funding after almost two years in office.

  17. Cathy wrote in error: it was State Rep Ted Celeste who was sitting in the back of the room.


  18. Administrators fiddle while the district burns.

  19. Thanks Paul for the correction. You'd think the reporter or an editor would check the names before publishing. And we rely on these hometown newspapers for the facts.
    Thanks also to Hillirdite for info about cafes and kitchens. Having dealt with a food service company in a former life, I bet Aramark is none too happy about pizza for a few hundred Freshmen being ordered from Flyers instead of them!
    Has anyone contacted McVey or the board on these expenses/behaviors? Will they respond or just hope it goes away?

  20. Anon at 12:55 PM here...

    I should have specified that I agree with much of what the 8:03PM poster had to say.

    I'm a levy supporter and I'm quite concerned about what this could mean to the November vote. As I said before, a NO vote would really put us on a slide where Hilliard CSD is well on its way to the becoming the next South-Western CSD. Then, it will be definitely time to explore other options.

  21. There are SOME explanations for these credit card charges, but plenty of them don't make sense.

    For instance, I know each school has a "social" committee that is self-run by each building. All employees contribute a defined amount (usually around $30) and that is collected to be used for things like flowers when someone has a baby, surgery, or experience a death. Sometimes these funds are used for baby gifts or retirement lunches. However, all of the money is private money. The catch is that these funds are turned over to central office (don't ask me why, but it's something central office recently started doing) and the funds are then put into an account. When this social committee incurs expenses, the receipts are turned into CO with a purchase req and then the card is paid off (again, with the employees money) by the district.

    A few years ago, the staffs just used cash that someone held. For some reason, that policy changed and the credit card policy was inacted.

    Now, this doesn't explain away all the charges in August or the trips to Disney or even the Cup O Joe's charges. But I have a feeling if and when someone get's to the bottom of this mess, they will find that a portion will be linked to this type of arrangement.

    Again, I am not dismissing that something strange is happening. Just saying that there are legitimate charges that might look odd to the casual observer if they saw an itemized list of expenses. Say, Babies R Us.

  22. KJ,
    I always appreciate your posts and find something meaningful and informative to take away from them. Thanks again and keep posting on here!

  23. Hey thanks. I just try to see both sides of the issue and focus on the root problem.

  24. While we're on the topic of un-necessary spending, what about the Convocation that all employees are required to attend as well as the annual Exceptional Children's Month celebration. For those unfamiliar, Convocation is a huge self-indulging production for the district's superintendents and BOE under the guise of being a rah-rah pat-on-the-back beginning of the school year pep rally for staff. In reality it is a huge waste of time for teachers who would much rather be spending the three hour time block working in their buildings to prepare for the soon to be arriving students. Staff who would not normally work on this day (this year August 18th) are paid a stipend to attend. My question is; how much does it cost the district to pay for the services of nationally known speakers/presenters, this year a performance artist of some type? How about the flowers to adorn the stage? The identical t-shirts that each building purchases for their staff to be uniquely identified? The cost of set-up and tear-down and I am quite sure, what form of stipend reimbursement are the folks at Central Office collecting to pay themselves for the time spent planning this huge waste of human and financial resources? Additionally, what is the cost to the district for having hundreds of personal name embossed note pads and pens purchased for each of the hundreds of staff members nominated for 'exceptional person's week'? The cost of flowers, gifts and awards, set-up, tear-down, cooling, and stipends to the committee members who plan that event?

  25. All these little expenses do add up, and will (or should be) cut after the levy fails. Cutting $10 million from the budget will eliminate a lot of the current excessive, wasteful spending. It's time to start living within a fixed budget like all households must do. When the household budget gets tight, the extra (luxuries) are cut out. You pay for the necessities.

    I'm curious how many administrators, teachers and other staff actually live in the HSD and will be affected by the levy increase. Is the guaranteed step increases set to cover the cost of the levy? My annual pay raise will not cover the proposed levy increase even at the lowest estimated milage.

  26. From what I have heard, some majority of HSD employees actually live in the district. And simple math shows that even at the lower salary levels, the 3% raise, without the step, would cover the increased property tax for anything up to a $300,000 assessed value; it might not cover the 6/8/10% benefit contribution AND the increased millage, but it would be close. And that is for the lowest salary level, which I am thinking not many of our teachers are at. And if they are, their assessed home value is probably closer to the $170,000 average in the district. I know there is a fair representation of HSD staff in River Landings where I live, most of whom have been teaching here as long as I can remember.

  27. Honestly, I think if the district made some changes in leadership it would go a long way in helping correct some of the problems. Guilty or not, sometimes a change at the top is needed move in a different direction and to indicate to the community that change is happening.

    If that would happen and the new leader came in and announced a new plan for the district (credit card policies, school finances and spending, relationships with the community, etc) I think that would breath life into the district.

    Nothing personal to Dr McVey, but maybe its time for some drastic moves.

  28. Keep that thought in mind in Nov 2009, when the School Board seats currently held by Denise Bobbitt, Andy Teater and Lisa Whiting come up for election. I don't know if any of these three are intending to run for re-election, nor am I saying that they necessarily need to be replaced, but only once every four years do three of the five seats - the majority - appear on the ballot.

    It's not Dr. McVey by the way - he does not hold a doctorate.


  29. One would expect at least 2 of the 3
    to run for re election. The problem is that the status quo HEA< local
    city leaders, township leaders,
    police and fire. administrators,
    and the local GOP group will continue to support with huge campaign donations candidates that THEY can control.

    We are simply faced with 20% property tax increaes every 2 to 3 years.
    Start saving to pay for this now
    so you are prepared.

    If you really think the HEA, its members, and the district care,
    you are all badly mistaken.

    They are unwilling to make even
    a small adjustment or even talk about it. How many "teaching positions could be saved with
    even a 1% adjustment.?

  30. In response to Anonymous (Aug.1 at 10:03) I don't know about the cost of set up and tear down for these events, but our school definitely does not pay for any tee shirts or spirit wear. The teachers pay for those themselves.

  31. Rumor has it a list of proposed levy failure cuts was circulating in the district yesterday.

  32. There is a special School Board meeting scheduled for 7pm this coming Monday (Aug 4) at the Central Office Annex.

    My understanding is that Treasurer Brian Wilson is supposed to be presenting several scenarios with various levy rates and cutback plans. It should be a very interesting meeting.


  33. Treasurer Brian Wilson used the opportunity of the 8/11 Board meeting to address this matter:

    1. The pizza in question was purchased out of Federal grant money;

    2. Each school has a Principal's Fund, which comes from money collected in pop machines and other sources;

    3. There was no alcohol purchased with District funds;

    4. He admitted wiffing a couple of questions, but also said that the TV reporter distorted his answer with clever editing.

    He reassured the audience that the District financial operation is regularly audited by the State, and no irregularities have ever been found.

    I have no concern about there having been inappropriate spending on these credit cards. But it certainly made for some bad optics, and will undoubtedly cost some votes.