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5/22/2007
Racine: The travesty of smoke and mirrors savings
If you’ve been reading FoxPolitics News lately, you’ve seen several news articles that talk about a brouhaha – a serious brouhaha brewing in the Racine Unified School District. If you go to the FoxPolitics.net website and search for “Racine,” articles pop up in the “Out-State” category, starting on May 8 and going through an article May 18.
The crux of the matter
In January, 2006 the school district hired the Public Business Consulting Group (PBCG) and its President Nick Alioto and agreed to pay them a percentage of any savings they found and could capture. PBCG has billed the school district more than $1.6 million in less than two years. Wow. Yes, that made me sit up and take notice. It also attracted the attention of Mark Lucas, Racine Unified’s coordinator of instructional technology who called attention to huge payments to the consulting firm.
Appleton Area School District’s Assistant Superintendent, Business Services, Todd Gray, has been following the Racine Unified story via FoxPolitics News. I guess you’d say he’s astounded at the goings-on. Well, flabbergasted, and some days, even a little worked up.
Asst. Superintendent Gray took a look at just some of the savings (detailed in this Journal Times article) claims made by PBCG. Here, with the list of alleged savings, are his helpful comments.
Health Insurance
Savings: Minimum of $6.9M, implemented on May 1st
Gray: Not real savings. Under QEO bargaining laws, a major portion of the savings must go right back into teacher salaries.
Energy Education Program
Savings: Estimated at $364,500
Gray: We have tried this and the savings are not real dollars, rather, they are based on ‘what if’ scenarios.
4- and 5-year-old Kindergarten Expansion
Savings: $5,469,404 in annualized surplus
Gray: Not a savings…. may generate new revenues but not until the third or fourth year of operations. Again, this is an old program implemented in AASD years ago.
Creation of Community Service Fund
Savings: $185,318 transferred from Fund 10 to Fund 80 this year
Gray: This can in no way be classified as savings…it is a 100% increase in property tax dollars. [For PBCG] [t]o get a commission on these so-called revenues would definitely be unlikely. If Racine taxpayers knew they were paying a 25% commission to be taxed more, it would not be pretty.
Transfer of Services Revenues
Savings: $1,868,450
Gray: Again 100% of these new so-called revenues come from new property taxes…same thing as the community service fund.
Gray summarized the “savings” by saying “The savings listed are silly…most districts have done those things years ago…so again, the prudent advice from the PBCG consultant should have been to hire a reasonably knowledgeable business manager… As public business officials we (should) work in the best interest of the taxpayers and are trusted by them to use their money wisely. The Racine situation gives cause for taxpayers all over Wisconsin to lose some trust in their business administrators.”
Surely seems like a big huge taxpayer rip-off. Seems as though Racine Unified’s Superintendent Tom Hicks and the School Board may have a bundle of auditing and explaining to do.
Perhaps taxpayers might want to check out the state statutes, 946.13(1), to wit:
Any public officer who does any of the following is guilty of a class I felony:
(a)In the officer's or employee's private capacity, negotiates or bids for or enters into a contract in which the officer or employee has a private pecuniary interest, direct or indirect, if at the same time the officer or employee is authorized or required by law to participate in the officer's or employee's capacity as such officer or employee in the making of that contract or to perform in regard to that contract some official function requiring the exercise of discretion on the officer's or employee's part...
Hmmm.
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