Friday, January 10, 2014

Supplemental Materials for the January 13, 2014 School Board Meeting

Here are the supplemental materials provided in preparation for the regular meeting of the School Board, to be held Monday January 13, 2014 at 7pm at Ridgewood Elementary School. Note that this meeting will be preceded at 6:45pm by our annual organization meeting, during which officers will be elected, committee assignments made, and various annual resolution passed. Andy, Lisa and I will be sworn in for the new term.

Item C3 is the acceptance of the Treasurer's Monthly Report for November.

Item F1 is a resolution to authorize the President and Treasurer to sign a contract for the sale of 100 acres of the parcel on Cosgray. The buyer is Help All Kid's Play, Inc. (HAKP), and the price is $3.5 million, or $35,000/acre. These are the folks who want to build soccer fields there, and are who we hoped to sell the property to in the first place. Unfortunately, the first time around, they wanted the school district to provide the financing, and we could not accept their offer on that basis. This is a simple cash offer.

We've decided to retain title to 24 acres of this parcel just in case it makes sense to build a school there at some point in the future. In the meantime, it will be leased to HAKP for use as part of their athletic facility. This is an annual lease with automatic renewal unless either party gives 90 days notice.

The agreement includes a rider which states: "No portion of the Property shall be sold, leased, licensed, authorized or otherwise used for residential or multi-family housing or any related uses (the “Use Restriction”). The Use Restriction shall run with the land. No residential or multi-family housing building or structure shall be erected or constructed on the Property."   Besides the obvious desire to limit new residential development, this also keeps the buyer from just "flipping" the property to a developer at a tidy profit. We accepted a price lower than the $40,000/acre that Rockford Homes thought it was worth only because HAKP agreed to this condition.

A new set of Policy updates are getting their first reading. I've not reviewed them yet, but will be doing so before the next Board meeting. I encourage you to read these as well, and let one of us know if you have any feedback.


  1. I hope people take the time to read the policy updates. These documents hold the content which is the foundation of our district.

    1. The duties of the superintendent are now on par with the real world outside the sheltered workshop of gov employees. Who drafted this? The real question is why was this not done a long time ago. I will take the leap of faith that when review process for Dr M takes place we will see milestones and measures for "effective"

    While bothered that we funded a district which should have had duties for the superintendent listed like this, glad to see we now have it in place. While lacking these in the past, board members boasted how good we were and how great the admin was. This should serve as a reminder that we should always strech for higher levels.

    I once again support the boards selection for superintendent. I feel more secure in the leadership of our district every day, both board and management. However if only some board members had been bold enough to support my views and suggestions years ago, where could we be today.

    2. I wish the bus policy would contain some comments about the district responsibility to insure contractors follow policy and requirements like our owned fleet. We should audit any vendor to be sure they use a similar method of driver management.


  2. I need others opinions to help me understand our school board. I speak of the board as an ongoing body with the power of taxing property owners.

    First let me say I approve of the decision to sell the unused site of the then 3rd high school site. Like many other real estate investors, the district bought high and sold low. During this period many professionals and home owners did the same thing.

    The innovative idea of preventing more homes from being built and thus adding to the student population problem is one that I approve of, so what is my problem?

    The board as a whole is very different from the group that paid for the site to build complex #3. However this board has many members that were part of pass the levy and we will be accountable movement. However the sale cost and retention of some land places the loss a little over $2,000,000. I feel that the tax payers are owed a we are sorry for not using your money in a wise manner statement.

    The failure of this site was started in the usual manner of the super recommends and the board approves. The district did not have the pulse of the community for this location.

    It is my opinion the board should adopt a policy of never buying land to build on prior to passage of the levy to do the building. All hat is needed is we made an error and here is what we have done to prevent a repeat.

    When I have asked this question of several board members I was told they were not part of the board, they had no idea what the thoughts were of the board at the time. In addition I was informed they do not speculate what the board was thinking of at the time.

    Help me understand why my problem and request is so hard to do as there is no cost.


    1. Dave: My response is much the same: The five people we elected made that decision using the information they had available, in the context of the time. These were people many of us know well and had entrusted with several terms on the School Board: Libby Gierach (3 terms), Tom Calhoon (5 terms), Denise Bobbitt (2 terms), Linda Mirarchi, and Curt Bishop.

      I'm not going to criticize their decision to purchase this property, nor am I going to apologize for it. I think most of us would agree that a lesson was learned - it's best to secure the funding for both the property and the building construction at the same time. But I'm not going to suggest that it be made a policy because there may be future situations that I can't envision in which such a purchase is wise and prudent. I'll trust that the community will elect folks who can make that decision.

      An important concept in finance is "sunk cost." It's challenging for many to understand. What it means is that you can't undo past decisions - all you can do is take inventory of where you are now, and make good decisions going forward.

      For example, you've paid $1 million for a production machine that makes widgets for $5 each. A year later, a new machine becomes available that will make identical widgets for $2 each, but the machine will cost another $1 million It also renders the resale value of your old machine to $100,000.

      You decide to keep your old machine because you're aren't willing to take the $900,000 loss, but you'll still be making $5 widgets. Meanwhile a competitor buys the new machine, starts selling widgets for less than your cost, and you're out of business, losing your whole investment and your future income.

      That's what this hunk of real estate was - a sunk cost. Doesn't matter what it was worth in the past, only what it's worth today. So the question for this Board was: what's a good decision today? I think we came up with a pretty good answer.

  3. Interesting to see Hilliard as one of the lowest communities as far as home sale price increases in all of Central Ohio (in today's paper). I wonder if the increasing crime in the city is having an impact. Apparently our reputedly strong school system isn't doing much for home values, at least this past year.

  4. I read that the BOE sold the 124 acres (between Leppert/Cosgray and north of Hoffman Farms) to Schottenstein Homes. It looks like at least some of the property would be set aside for athletic fields. How much, if any, might be used to build new homes?

    1. Unknown at this time. That's a matter to be worked out between Schottenstein and the City of Hilliard. My feeling on this, and I believe it is shared by others, is that the only true limit on residential development in our school district is how many water/sewer taps the City of Columbus chooses to dole out. They could be on this property, on land developers already own along Alton-Darby Rd, or any of the thousands of undeveloped acres around us.

      So I processed the question this way:

      1) Is there anything the school board can do to limit or even influence the manner in which our community develops? Only to the extent that schools perceived as high quality attract buyers and preserve home values while schools perceived as poor quality dissuade buyers and lower home values.

      2) Is the value of the Cosgray property just "stranded capital" that we should monetize and use to the benefit of the taxpayers? Yes, we have a substantial need for cash to perform repairs and normal lifecycle replaces on the large set of physical assets which our community spent so much to construct in the past decades. Just as it takes money to maintain our homes, we must continually spend money to maintain our real property. The proceeds from this sale will free up cash on which we're already paying interest via a bond levy. How much will be used to retire debt and how much for property maintenance is yet to be determined.