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 Secret No Longer: CAB Reveals Major Debt

August 20, 2008 - During a special meeting last week, the Charles A. Beard Memorial School Corporation's new superintendent revealed something that prior administrations and school boards had chosen to keep from the public the past 18 months.

CAB Superintendent Gary Storie told board members at the Aug. 12 special meeting the school corporation owes between $750,000 and $800,000 to a special education coop in New Castle. He said that starting in 2007, CAB had simply stopped making its quarterly payments in a timely manner, falling further behind with each billing.

According to records The Banner obtained Tuesday morning from Karen Marcum, director of the New Castle Area Programs for Exceptional Children, CAB was billed a total of $1,290,592.10 from February 16, 2007, through July 14, 2008. During that same time period, CAB only paid $324,139.65.

"They just didn't have the money," Storie said at last week's meeting. "It just wasn't there. … You can't spend money you don't have."

Storie said one option for resolving this issue would be what he termed a "friendly" lawsuit. This would allow the special ed coop to obtain a judgment against CAB for the amount owed. He said CAB would then be able to get a general obligations bond that would permit it to pay what is owed. The general obligation bond wold then be repaid through CAB’s Debt Service Fund over the next couple of years.

"I feel really good having a strong superintendent who has … come forth and provided the information not only to the board in an open fashion but also to the public," School Board President Kevin Knott said about this issue during last week's meeting. He said this represented a turning point in the way the board and administration "look at accountability and responsibility."

Steve Dalton, the board's vice president, read a prepared statement regarding this special ed debt. While he said prior boards and administrations couldn't help the fact that there were not funds to pay what was owed to the special ed coop, he sharply criticized them for not making the matter publicly known, drawing a healthy round of applause when he finished.

"The amount of money we owe represents 15 percent of our general fund budget," Dalton said. "When I ran for this board, and when our superintendent, Gary Storie, was hired, we were completely unaware of the fact that we were walking into this financial situation. Our taxpayers, by and large, were also unaware of the debt that was hanging over their head, and I think that's completely unacceptable from a public knowledge standpoint."

Storie confirmed on Monday that what Dalton had said about him not knowing about this debt when he was hired was correct. Instead, he said he leaned about it during his first week on the job while reviewing financial matters with David Bundy, who became CAB's business manager in February 2007, about the same time CAB stopped paying what it owed the coop for special ed services.

Asked whether those serving on the school board prior to this May's election when Dalton and two other new members were elected, Storie said, "Yeah, I'm sure they knew it. I know at least the ones who were on the board prior that I had conversations with were aware of it."

Another of the new board members, Mark Fort, who was also elected in May with Dalton and Tim Wehr, also told The Banner that he was not pleased that this information had been kept from the public. Speaking to The Banner on Monday, his sentiments echoed those Dalton expressed during last week’s meeting.

“I’m pretty upset about it,” Fort said. “I can’t believe that past board members and a business manager did not tell the public what’s going on.” While he said it’s possible they might have been working on a plan that would allow them to repay the debt, he said, “You’ve still got to let the public where the the school system is and what they’re doing and how much they’re in debt.”

Like Dalton, Fort said he thought it was inexcusable for those who did know about this debt not to say anything. “None of that was ever brought up ... I just feel like the taxpayers were again duped,” he said. “Nobody was told. There’s no reason why they could not have come public and said, “Here’s our problem.’ ... and just be honest about it.”

At the time CAB began to fall behind on its payments, in February 2007, David McGuire was superintendent. Ray Pavy replaced him as interim superintendent in July 2007. School board members during this time included then President Mike Fruth, then Vice President Wade Beatty, Debi Ware, Ron Womack, Leah Kopp, Larry Selvidge and Knott.


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