BOE should better manage school funds

Now that the election is over, I think it time FutureHeights and the Cleveland Heights League of Women Voters open their eyes to the internal management decisions of the CH-UH Board of Education (BOE). I, like almost all residents of the school district, want our district to succeed. But I am concerned that higher taxes are a deterrent to attracting young families to the Heights.

CH-UH BOE members, past and present, have done grievous damage to the school system they were elected to oversee [by failing] to manage the funds entrusted to them, for the benefit of our children, in a practical manner.

The following items were NOT covered by the management letters presented to the BOE at the completion of the annual financial audit, but were uncovered through document requests made to Scott Gainer, district treasurer, who promptly complied with the law and responded to these requests.

1. Our teachers and administrators receive generous compensation packages. The administrators participate in SERS (State Employee Retirement System). The district pays 14% of salaries to SERS as its employer contribution. Did you know that the district also pays the EMPLOYEE portion—an additional 10%—to SERS? Yes, that is the full 24% contribution to SERS and the district pays all of it. Does your employer do that? This 10% means TAXPAYERS are incurring additional costs of more than $410,000 per year; over five years that is more than $2 million. The BOE recently gave layoff notices to eight teachers whose annual salaries total $417,390. If administrators paid their own employee portion of their contribution, these teachers could be retained to educate our students.

Teachers pay into STRS (State Teachers Retirement System). Teacher contribution is 14% of their annual compensation, which the BOE matches in full, but in addition to its 14% employer contribution, the board also pays 1% of the teachers’ contribution. I have [asked] what this 1% totals, but have not received an answer yet.

2. In addition to generous pay and retirement contributions, our teachers and administrators receive an unbelievable health care package. The annual cost for medical coverage for a [CH-UH district employee’s] family is $31,065.12. The employee pays only $1,850 annually, just 6% of the cost. The school district pays an astounding $29,215.12, 94% of the total cost. Does your employer do that? For an individual, the cost of coverage is $11,505.84; of that, the employee pays $700. If district employees were required to pay 16% of the annual premium, which is what most employers require, this would save in excess of $3 million per year. In other words, we would ask the single employee to pay $1,844 annually, and an employee needing family coverage would pay $4,970 annually/$414 monthly.

These contracts were negotiated on the BOE’s behalf by Treasurer Scott Gainer, Assistant Superintendent Paul Lombardo, and other employees of the school system, not the BOE. [A federal mediator is also involved in the negotiation process, as an independent facilitator.] 

No BOE member was on either negotiating team. The board has allowed the taxpayers’ money to be thrown away because the negotiating team receives the same benefits that are negotiated. This is an act of malfeasance and breach of each BOE member’s fiduciary responsibility to our students and citizens.

Anyone reviewing the Auditor of State’s management letters accompanying its audits for the past five years (2014–16) can clearly see that material shortcomings were noted. The board took no action [regarding] these shortfalls. Despite knowing this, the BOE gave increases to the individuals responsible for the board’s financial records. A search of the Ohio Auditor of State’s website finds the last performance audit was in 1999.