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 State
Legislature is Conducting Inquiry Into Spending at IRESA
by Melissa Miller, Iosco County News Herald, February 23,
2004
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TAWAS CITY - How
state and federal funds are being spent at Iosco Regional
Educational Service Agency is the subject of an inquiry by the
Michigan House of Representatives sub-committee on intermediate
school district (ISD) review.
IRESA, responsible for helping vocational and special education
students, is one of ten ISD’s across the state asked to
volunteer information on technology spending and administrator
salaries to the committee, chaired by Rep. Ruth Johnson of
Oakland County.
Rep. Johnson, who is proposing legislation to reform ISD’s, said
the inqury will help the committee better understand how ISD’s
function.
"We’re looking for accountability," Rep. Johnson said. "We want
to make sure money that’s earmarked for kids gets to the kids.
IRESA was selected to take part in the study after a number of
people contacted her with questions about its spending, Rep.
Johnson said.
Superintendent Dr. Thomas Caldwell said he did not know why
IRESA was chosen, but that the district is cooperating with Rep.
Johnson’s request for information.
A lengthy response to her list of 11 questions was mailed to the
committee by the deadline, Friday, Jan. 30.
A copy of the district’s response also was obtained by the News
Herald.
Some of the information requested was easily available, Caldwell
said, but other items dated back to 2001 and print-outs could
not be generated because of a computer software change.
Rep. Johnson said she’s trying to determine how much of the
state and federal funding ISD’s receive actually goes into
classrooms.
About 85 percent of IRESA’s budget goes to instructional
support, according to Caldwell.
How much top administrators are being paid is a focus of Rep.
Johnson’s query, which asked for contracts for the
superintendent, second highest paid staff member, and the
district’s lobbyist. IRESA does not employ a lobbyist, Caldwell
noted.
Rep. Johnson also asked for details on other types of
compensation for administrators, including amounts paid by the
board of education for life insurance, federal social security
taxes, cash paid in lieu of health insurance, employee state
retirement obligations, bonuses, and vehicle allowances.
"We pay a competitive wage in Iosco County, because if you
don’t, you won’t get the top people," Caldwell said.
For this fiscal year, Caldwell was paid a base salary of
$130,424; and James O’Farrell, director of general and
vocational education, received a base salary of $79,000.
The board will pay Caldwell the following benefits during this
fiscal year: $16,829 to cover his state retirement plan employee
obligation, $2,795 in cash in lieu of health insurance, $7,413
for the employee’s share of federal social security tax , $1,429
in long-term care insurance and $468 for life insurance.
This year, O’Farrell will receive additional compensation
including: $10,252 to cover his state retirement employee
obligation, $6,043 for the employee’s share of federal social
security tax, and $369 in life insurance.
Rep. Johnson’s also asked for information about travel expenses
and district credit card use.
For this year, O’Farrell has travel expenses of $933, and
Caldwell’s report shows travel totals of $1,176. IRESA officials
pointed out that travel costs for other individuals are often
charged to the superintendent’s account.
Caldwell said the district is making efforts to save money on
travel expenses by leaving early in the morning before a
meeting, rather than staying in a hotel the night before, and
not going to some national conferences as in the past.
A review of IRESA credit card statements from May 2002, to date,
revealed numerous trips to hotels including:
A $440 stay at the Grand Traverse Resort in Traverse City in
September 2002, and a $508 stay at the Amway Grand Plaza Hotel
in Grand Rapids in February, 2003 charged to Caldwell’s credit
card account.
A $693 charge at the Amway Grand Plaza Hotel in Grand Rapids in
November 2002 charged to O’Farrell’s credit card.
A $454.67 stay at the Hyatt in Dearborn in November 2002 charged
to a credit card held by Board Member Robert Curry.
A $453 stay at Mackinac Island in May, 2003, and $603 stay at
the Grand Traverse Resort in Traverse City, in August, 2003,
charged to a card in the name of Board Member Brian Belleville.
A $895 charge at Crystal Mountain Lodging in Thompsonville, near
Traverse City, in Aug. 2003 charged to Special Education
director Kristine Adaline’s IRESA credit card.
Numerous charges to restaurants in Tawas, Oscoda, and West
Branch, ranging from around $16 up to over $100, also appeared
on IRESA credit card statements.
Copies of IRESA budgets for 2003 and 2004 were sent at Rep.
Johnson’s request along with audit reports dating back to 2001.
Over the past four years, IRESA’s state revenues have dropped 27
percent, impacting its budgets, officials noted.
The inquiry also asked about charges to local school districts
and parents/guardians for educational programs provided by the
districts.
"The Iosco RESA charges back to the local districts of Hale,
Oscoda, Tawas and Whittemore-Prescott tuition reimbursement for
career and technical education programs," Caldwell said. "There
are no other charges to local school districts or parents and
guardians of students for educational programs."
Tuition is charged because the district does not have a millage
to support vocational education, according Caldwell.
IRESA also has the lowest millage of any intermediate school
district in Michigan, Caldwell noted, at 0.8888 mills.
The tuition rate is $2,730 per student, per school year. Total
tuition to be charged to local districts this year is estimated
at $612,885.
Information about technology spending to develop fiber-optic
networks was requested by Rep. Johnson.
"I want to know who has them and if they are really working,"
Johnson said.
IRESA was at one time planning to install a $5 million
fiber-optic system, but that effort was abandoned several years
ago, Caldwell said.
Instead, IRESA contracted with First Virtual Corporation of
Santa Clara, Calif. to build a wireless network to provide
Internet access to local school districts and Tawas St. Joseph
Hospital at a cost of about $990,000, according to Caldwell.
While planning to have Ameritech install 98 miles of fiber-optic
cable to link school districts in Iosco County, grant funds were
used to purchase parts for a fiberoptic network at a total cost
of $350,000, Caldwell said.
Those devices were outdated by the time IRESA decided to go with
the wireless network, after Ameritech didn’t like the education
rate provision in the proposed contract with IRESA for the
fiber-optic network, according to Caldwell.
"We could use the system internally, but it would be cumbersome.
Technology evolves very fast and becomes obsolete quickly," he
said.
Iosco County school districts did not contribute funds for the
construction or maintenance of IRESA’s wireless network and do
not pay an access fee, Caldwell noted.
The intermediate school district in Oakland County, where Rep.
Johnson is from, spent millions of dollars on unsuccessful
high-tech projects and hired consulting firms employing the
administrators’ children to oversee the work.
Caldwell said he does not have any relatives employed by First
Virtural Corporation.
Rep. Johnson was motivated by abuses in Oakland County to push
for ISD reforms statewide.
"There are so many dedicated people working at ISD’s that get
frustrated with administrators’ mis-management keeping money
from going to helping kids," Rep. Johnson remarked.
Oakland County ISD administrators also charged taxpayers for
expensive trips, luxury car rentals, and even alcoholic
beverages, inspiring Rep. Johnson to draft legislation to bring
more accountability to intermediate school districts.
"I wish she’d take care of Oakland County and leave the rest of
us alone," Caldwell remarked.
Traverse Bay ISD was the only other district in Northern
Michigan to be selected, according to Caldwell, who said he was
disappointed Johnson did not contact local State Rep. Dale
Sheltron before sending IRESA the survey.
Rep. Johnson’s proposed legislation calls for the election,
rather than appointment, of intermediate school district board
members, and would give districts the ability to recall board
members.
"We need good laws that demand accountability," Rep. Johnson
said. "Laws with teeth in them."
The Intermediate School District Review Committee is scheduled
to hold public hearings this month.
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