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  • Monday, October 13, 2008

     

    OUSD PREPARES FOR “TEMPORARY” BORROWING

    ORANGE Unified Schools INSIDE
    a news service of Orange Net News /O/N/N/
    Independent insight into OUSD

    Amid worldwide financial crisis…
    OUSD PREPARES FOR “TEMPORARY” BORROWING

    What a difference three weeks make. Just three weeks ago at the September 25th Orange Unified School Board meeting, OUSD Trustee Kathy Moffat (a confident Angel baseball fan) was asking the OUSD Board to consider moving the time of the October 30th OUSD Board Meeting because it would interfere with an “if needed” seventh game of an Angels' World Series bid. Moffat’s dedication to her favorite team left an uncharacteristically optimistic OUSD Trustee Rick Ledesma predicting “the Angels in four”. Three weeks ago that optimism also fueled the expectation that the OUSD Board would be voting at this Thursday’s October 16th OUSD Board meeting on refinancing a $53 million dollar account to provide $42 million for new school building projects. The sports metaphors aside, as Congress that same three weeks ago struggled with the $750 billion bailout legislation, even the representative of San Francisco investment banker Stone and Youngburg, speaking to the OUSD Board seemed flush with optimism as he delivered a long mind numbing financial soliloquy that included the statement “[There is] a lot of liquidity in the market place”. Fast forward three weeks later to this week, and the Angels season is over, the world economy is still teetering, and the Certificates of Participation refinancing will not be voted on this Thursday. The refinancing now appears on the OUSD Agenda as an Information Item (OUSD Agenda Information item 13 B, page 26).

    The Stone and Youngburg representative was appearing at the OUSD Board September 25th meeting expecting a preliminary-go-ahead vote for refinancing of a 2003 OUSD Certificate of Participation to obtain new financing for OUSD modernization projects. The Stone and Youngburg representative and an attorney from the firm came expecting the OUSD Board to be approving the refinancing, but instead found a cautious and speculative OUSD Board of Education finding comfort only in OUSD’s A plus financial rating and deciding to wait three weeks until the October 16th meeting to move forward on the complicated refinance scenario that uses “leverage”. The new “L” word is a word that has become as toxic in financial circles as the financial mortgage house of cards built upon what has amounted to a crumbling world-wide pyramid-like scheme built by Wall Street “leverage” experts.

    Basically, the scenario to fund the OUSD $54 million refinancing is to leverage existing funds now in a fixed rate account into a US Bancorp “Extended Rate” account. This variable interest account would have a low fixed rate payback for three years with three basic financial options available at the end of the three years: renegotiating another Extended Rate (at the future interest rates); converting to a weekly rate; or changing to a sure-to-be-higher fixed rate for the duration of the 31 year loan. The Stone and Youngburg representative assured the OUSD Board that US Bancorp did not have exposure to the now trash mortgage paper that has caused other banks to drop like dominos. As evidence, the representative commented that US Bancorp stock shares were a healthy $36 a share compared to failed banks Wachovia and Washington Mutual which he noted were below $5 a share each before they failed. (Three weeks later and the US Bancorp stocks have dropped to $30 a share as of Friday 10/ 09/08).

    Trustees Moffat, Ledesma and Kim Nichols questioned the financial experts who promised more information at the October 16th meeting when the refinance plan was scheduled to be back before the OUSD Board for procedural votes required to continue with the plan, or not. In answering an inquiry as to how the procedure will work, at one point the Stone and Youngburg representative stated “If the markets don’t improve, it’s back to the drawing board”.

    However, a financial plan is still being voted on by the OUSD Board at the October 16th, 2008 meeting. OUSD Resolution 16-08-09 is a Consent Agenda Item which is scheduled to be automatically approved without comment unless “pulled” for discussion by an OUSD trustee (Consent Agenda Item 14-A pages 33-34). Anticipating the State of California will have trouble borrowing a 7 billion dollar budget deficit in light of the current global credit crunch, the October 13th unprecedented resolution authorizes OUSD to “temporarily” transfer funds between OUSD “special or restricted” fund money accounts (in essence borrowing from itself) to forgo any cash flow problems that may result from a state credit crisis. The Education Code which authorizes this borrowing in a fiscal crisis also requires any funds borrowed from one school district account be repaid during the same fiscal year unless taking place during the final 120 days of the fiscal year, in which case the funds maybe paid back the next fiscal year. OUSD Superintendent Dr. Renae Drier noted that the California State budget had been passed, referring to it as a “flat” budget. Trustee Moffat later took exception to the term “flat” noting that while the budget remained “flat” in funding to education, the increasing expenses to OUSD and most California school districts have resulted in necessitating cuts.

    Ledesma calls for consulting costs to be part of Administration budget
    The Orange Unified Administration has touted a very low 2% total budget cost figure for the OUSD Administration as the lowest in Orange County. Trustee Rick Ledesma pulled the September 25th Consent Agenda Item 14A for $20,600 to pay three consultants suggesting that in the future like consultant fees be counted as part of the Administrative budget to give the community a truer picture of the administrative costs of the district. Moffat took exception to Ledesma’s suggestion stating that if OUSD included consultant fees and other districts did not, it would be comparing apples with oranges. Ledesma countered by pointing out that other districts may be having the services outsourced by OUSD to consultants, performed by their administrative personnel. The Consent Agenda Item 14A $20,600 in consulting costs was for two consultants to conduct a community workshop for the next community meeting to begin planning the next 3 year OUSD Strategic Plan. That includes $6,600 is for an artist from a company called Visual Ink to created a “mural” on paper of the day’s events. Visual Ink is a corporate communications company specializing in event murals (see photo).

    Visual Ink co-founder Kevin Woodson is currently working on a project for elementary school children:

    “Working in community organizations battling the AIDS pandemic, John Lipp and Kevin have seen the disease from hundreds of angles. As writers, Kevin and John were shocked to realize there is currently no picture book on the market that appropriately introduces the reality of living in a world with AIDS. As a result, John and Kevin created Aunt Imelda, and her 500 – word picture book for ages 5 – 10 that gently introduces children to the basic concepts of AIDS.”

    Trustees Rick Ledesma and Steve Rocco voted against the $20,600 consultant payment. Trustees Kathy Moffat, Melissa Smith, Kim Nichols and John Ortega voted for the $20,600 fees.

    To see what $6,600 in educational tax dollars buy in Consultant Art CLICK ON:
    VISUAL INK

    To see the bio on Visual Ink co-founder Kevin Woodson CLICK ON:
    KEVIN BIO

    To view the Kevin Woodson blog: KEVIN BLOG

    INSIDE the September 25th OUSD Board Meeting
    …More OUSD consultants to Nowhere!


    At the July 24th, 2008 OUSD Board meeting, the OUSD Board approved a $10,000 fee payment to consultant Dr. Dennis Parker. The Orange County Department of Education touted that Dr. Parker’s $10,000 workshops teach the Strategic Schooling Initiative. Never heard of it? For a mere $10,000 in educational tax dollars the Orange County Department of Education states that the Strategic Schooling Initiative will increase the schools API by 30-40 points. Apparently however, there is a hitch in the $10,000 fee already given to Parker. The October 16th Consent Agenda (Item 14 K Page 71) has OUSD taxpayers shelling out an additional $4,200 for two more days of “staff development training” for the Handy and Fairhaven staffs (each staff on a separate day) from Dr. Dennis Parker. We hope the staffs are well rested, because in ONE day according to the OUSD Agenda this is what Dr. Parker provides:

    “The training will include professional development for faculty and administrators, guidance and training for the site leadership team, demonstrations for staff, data analysis that identifies school strengths and next steps for improved scores, and coaching to ensure successful implementation of the Strategic School Strategies.”

    Wow! That’s one full day and a lot for those teachers and administrators to be “trained” in. Perhaps Dr. Parker also sells bridges on the side, perhaps if not in Brooklyn at least a Bridge to Nowhere…

    To read more about Dr. Parker’s $10,000 OUSD Consultant fee CLICK ON:
    Greater Orange News on PARKER

    OUSD 3 Year Strategic Plan lists Bond Plan as an official no-go
    The 1st Quarter Strategic Plan for 2008-2009 Year 3 is also on the October 16th Agenda (Information Item 13 A pages 19-25). On page 25 the potential OUSD Bond is officially put to rest under the PROGRESS section of Strategy #1 states: “OUSD decided not to proceed with a bond campaign at this time. Economic conditions are not favorable for a successful outcome.”

    INSIDE the October 16, 2008 Board Meeting
    Agenda 12 A (page 2): Opening bargaining proposal from the CSEA classified OUSD workers association
    Agenda 12 D (page 16) Williams Settlement Public Hearing

    INSIDE OUSD DONATIONS
    For a complete list of the $76,266 in donations see the Agenda page 30.

    Silverado PTA-$1,500 for computer aide; Villa Park H.S. Choir Boosters- $11,000 for an accompanist; Carl Karcher Enterprises- $481 for Panorama E.S. supplies; Canyon H.S. Band Boosters- $7,100 salary stipends.

    INSIDE the OUSD Budget

    INSIDE’s EDUCATIONAL TAX DOLLARS WATCH 2008:
    $799,300 Total

    2008 Attorney Fee Tally:
    6/19/08 Parker & Covert $ 60,000
    6/05/08 Miller, Brown & Dannis $ 40,000
    6/05/08 Parker & Covert $150,000
    6/05/08 Parker & Covert $200,000
    2/07/08 Parker & Covert $100,000
    11/15/07 Parker & Covert (for 1/08 to 6/08) $200,000
    TOTAL $750,000

    2008 Consultant/ Speaker Fee Tally:
    10/16/08 Dr. Parker 40 pt Consultant $ 4,200
    9/25/08 Visual Ink for Sadler Consultant $ 6,600
    9/25/08 Bob Sadler Consultant Fee $ 8,500
    9/25/08 Candace Simpson-Sadler Helper $ 5,500
    7/24/08 Dr. Parker 40 pt Consultant $ 10,000
    4/17/08 Dr. Kenneth Stichter Speaker Fee $ 6,500
    3/7/08 Dr. Kathleen Weigel Speaker Fee $ 8,000
    Consultant Total $ 49,300
    2008 TOTAL $799,300

    Former Superintendent Godley’s “golden handshake” bonus total (beginning 8/2008):
    $3,630*

    * The Godley Retirement Bonus presented here is an estimate of the amount in “bonus retirement” accrued since the Superintendent’s retirement on 6/30/08 using a 6% lifetime formula calculated at $1210 a month since 8/08. The actual retirement plan the former OUSD Superintendent opted to take is not public information and the figures presented are only as an estimate of the taxpayer costs after the OUSD trustees voted against an amendment to exclude Godley from the retirement program. The on-going estimated figure is presented as a reminder to the community of the high cost in educational tax dollars the OUSD Board vote to allow the former Superintendent to participate in the 6% retirement incentive cost the OUSD education community in tax dollars. Godley retired from OUSD on June 30, 2008 after he worked for the school district for a little over five years.

    Total for Watched Tax Dollars approved in 2007: $704,090.00
    2007 Consultant/ Speaker Fee Tally:
    4/30/07 Debra Ford Speaker Fee $ 4,090
    4/30/07 Danny Brassell Speaker Fee $ 3,500
    3/8/07 Dr. Daggett Speaker Fee $ 9,000
    9/27/07 Dr.Daggett Speaker Fee $ 35,000
    11/15/07 OCDE High Priority Consultants $115,000
    Total $166,590

    2007 Attorney Fee Tally:
    1/18/07 Parker & Covert (1/07 to 6/07) $175,000
    (6/07-12/07) $200,000
    2/08/07 Miller, Brown, and Dannis $ 7, 500
    2/22/07 Parker & Covert $ 45,000
    5/10/07 Miller, Brown and Dannis $ 50,000
    7/19/07 Parker & Covert $ 60,000
    Total $537,500

    2007 Administrative Conference/Travel: hidden since 6/8/06**

    **JUNE 8th, 2006 Trustees VOTE to Give OUSD Superintendent the power to APPROVE Travel Requests taking this item OUT of the PUBLIC AGENDA

    Total for Watched Tax Dollars approved in 2006: $849,717.00*
    2006 Consultant Fee Tally: Total $176,400
    2006 Attorney Fee Tally: Total Approved $655,000
    2006 Administrative Conference/Travel: Total $ 18,317 *

    * JUNE 8th, 2006 Trustees VOTE to Give OUSD Superintendent the power to
    APPROVE OUSD Travel Requests taking this item OUT of the PUBLIC AGENDA


    Total for Watched Tax Dollars approved in 2005: $978,300.00:
    Total 2005 Conference Administrator/Board Fees: $ 7,500.00
    2005 Attorney Fee Tally: $730,600.00
    Total Watched 2005 OUSD Consultant spending: $ 270,200.00

    Next OUSD Board Meeting October 16th, 2008 for more information
    CLICK ON: AGENDA

    OUSD CLOSED SESSION STARTS 6:30 PM, Regular Session: 7:30 pm
    For more information call the OUSD Superintendent’s office at 714-628-4040
    For budgeting questions call Business Services at 714-628-4015


    ORANGE Unified Schools INSIDE
    Independent insight into OUSD
    is an independent news service of /O/N/N/
    Orange_NetNews@yahoo.com
    “Independent Local Insight”

    Produced by the
    Orange Communication System /OCS/

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