LCS - The A,B,C's and Living within your means..

[William Gavette]

It seems to me that our  Lapeer Community Schools Board of Education members and Administration should be accountable for the results of their actions just as they expect our kids to be responsible for their actions and not "sweep things under the rug" when mistakes have been made.

 Just like corporations, banks, cities, counties and states, our school districts are evaluated on how efficiently and fiscally responsible they operate their districts. Our district has previously had very strong bond ratings of Aa3(triple A). But that has begun to slide. To quote Moody's. "The district's utilization of reserves to balance budgets has strained financial operation" Also according to Moody's "$52.9 million in outstanding parity debt is affected by the rating action" You won't find this information on the district website, or in the County Press, but is is extremely relevant to the parents and the taxpayers of LCS. (Read Moody's report on the downgrade HERE)

At the end of June, Moody's Investment service downgraded Lapeer Community Schools  in their bond rating from Aa3(Triple A) to Aa2(Double A). This may not sound like a lot, but it is the financial credibility of our district at stake. We currently have $52.9 million in outstanding debt. This is from our bond issue in 2007 that gave us our middle schools. Though I am told by the District that this wont have any impact on this debt, our district regularly borrows millions of dollars in short term loans. These are so that the district can make payroll in Aug, Sept, and Oct. School districts do not get their first state aid payments until the fall, so the district must borrow that money. Just as with any loan, the lower your credit score, the higher the interest rate you must pay.The downgrade WILL affect these rates.

In response to my inquiry about just what this downgrade might mean  to our district financially, I learned that the LCS was initially looking at a 2 level downgrade. This would have put us at a single A rating. According to our district, they were able to demonstrate that our district is working hard to get its fiscal house in order. This is supported by the fact that many of our neighboring schools had an even larger reduction in their bond rating than Lapeer did. Brandon Schools went from Aa3 to Aa. That was a 2 level decline. This reduction of our district "credit score" will certainly cost us more to borrow money and take money away that should have gone to educate our kids. The fact that we did this to ourselves is even more frustrating.

Had our board of education members insisted that our administration be more fiscally responsible over the course of the last 5 years, this downgrade might not have happened. Even though our board members are all elected by the people to represent us and are ultimately responsible for what happens in our district, they were never given the enrollment projections that might have lead to more sound decisions, We might possibly have not put millions of dollars into buildings that were destined for closure. It is also a fact that not one LCS Board member ever formally requested to see any of this available information.  But that appears to be changing.

At the June work session of our LCS school board, new Board President Mike Keller formally requested that the Superintendent work with the board to change the board policy so that the board of education members will be notified and given the same information that the Superintendent and administration have available to them as it relates to future student enrollment numbers and or projections. When this change in board policy is completed, we might take some comfort in knowing that those we elect to represent us on the school board will always be given the same facts and information that the Superintendent has so that they will make the most informed decisions possible. Up until now, this information has been at the discretion of the Superintendent.

How would an informed school board have impacted our district? Would Lapeer Community Schools have spent the money differently or made different decisions? No one can say for sure just what would have happened had they been given the information about where we were headed, but here are some facts that can not be disputed: 

• All school districts are funded by the state based on the number of students they have attending

• Our fund balance in June of 2007 was $9.3 million dollars. Today it is just over $3 million. A loss of over $6 million in 5 years.

• We have spent over $1.8 million in bond money in now closed elementary buildings that will cost the taxpayers between $2.4 and $2.8 million through the year 2037.

• The "best estimate scenario" from the 2006 five year student enrollment projections said we would have 6026 kids in 2012. We had 5996.

• Our school board members were never shown ANY of the student enrollment projection documents by the district. This includes 2003,2004,2005,2006,2010, and 2011 projections. This also includes our new Superintendent Matt Wandrie. Not until I personally emailed them a copy  of these documents were they aware that they existed.(Though I have spoken at least 4 times this year about their existence and shown them to the board.)

• Over the last 10 years, a 1 page chart in 2006  is the only information that our administration deemed fit to inform our board members to be made aware of about our future numbers of students.

• We kept Seaton open for an additional year, at a cost of additional hundreds of thousands of dollars to the district. Our board pinned their hopes on acquiring new students  to Seaton who were never there.

• LCS in June closed Maple Grove, this was the elementary building that we have spent the most money in of all our present and past elementary campus's in recent years. Between bond money and sinking fund dollars, over $2 million have been spent since 2006 on this building alone. 

Let us move forward in the process of educating our Lapeer Students in the best way we can. But to move forward, we must know how we got to where we are. It seems that some would not like the public to know just how much money we have in now closed buildings, or that elected representatives were never given full disclosure on where are student counts were trending.  From here on out, we must insist on accountability and full transparency. The days of being told what we want to hear must be gone, and we must insist on being given ALL the facts, good, bad, or indifferent. It is our RIGHT to expect that our elected officials be given all the information they need to oversee our schools. It is also our RIGHT to vote them out if they fail to ask pertinent questions to protect our kids interests. 

If a  manufacturing company had put $2.5 million into non needed manufacturing plants that would result in a loss, these plants would be forced to close and new company management would be appointed by the stockholders. If the city of Lapeer were to put money into buildings that would cost the taxpayers $2.5 million dollars and then had to sell the  buildings for lack of purpose, there would be an investigation and people would be held accountable. But I have had LCS administrators and board members tell me that even though Maple Grove had 1 Million in bond money spent and it only was used for 2 years, that that was not a waste. I would beg to disagree and I believe any responsible parent would. We can and must do better for the children of Lapeer Schools

I have just 3 words that will work in any school district:

• Honesty
• Integrity
• Accountability

Those should be requirements of all perspective board members, administrators, employees, and anyone who touches the lives of our kids. To expect any less is beneath us does not do our kids justice.

[William Gavette]

I apologize. You are correct. I should have paid better attention. It is Brandon Schools. I will correct this. Thanks for the heads up. For the record, there are many districts having trouble. Here is a link for more info.

http://michigan.municipalbonds.com/bonds/moodys_reports/sort:Moodys...

[David Edward Bloch]

William,

Nice article.  Thanks for the Moody's link.  However, I think you made a mistake regarding Davison Community Schools rating change.  I believe DCS 2012 rating of Aa3 is a two level UPGRADE from the DCS 2004 rating of A2.  In decending order Moody's investment grade bond ratings are, starting with the highest: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3.   Therefore, Aa3 is two levels higher than A2.  I live in the Davison Community School district and the superintendant admitted last spring that the teacher pay upgrades for those Davison teachers recently earning a masters degree would cost the district $600,000 per year in pay upgrades!  Yet the delapidated and unsafe Collins Field tract that is used by the Intermediate and Middle school students was merely "resurfaced" with inferior materials at a cost of approximately $50,000 instead of a new track installed with modern materials being used (probably a a fracton of the $600,000).  I call this crony unionism at the expense of students and taxpayers.

David Bloch