Friday, March 13, 2015

C. J. Huff kept board, public in dark for months about need for $29 million loan

Officials in the C. J. Huff Administration have known for months that they would need to take out a second multi-million dollar loan to get through the building program, but they never shared that information with the Joplin R-8 Board of Education or with the public.

Nor was the board informed about many of the spending decisions that forced the school district into a situation where it had to take out $74 million in loans just to complete construction...and construction is not complete yet.

The first mention of loans came last year when CEO Paul Barr spoke during a board meeting about the need to cover $8 million of "might-as-well" spending, spending that administration officials did when they came up with an idea and then said they "might-as-well" spend the money and do it. These expenditures included artificial turf for practice fields and the soccer field, lighting for all fields, a press box, four extra tennis courts and a track so the students would not have to go to Junge Field every day during track season.

The board never approved those expenditures and neither did R-8 voters, when they passed a $62 million bond issue, the largest in the district's history in April 2012.

Huff and Barr acknowledged to the board only recently that they knew they would have to have the $29 million loan that was approved Thursday during a special session even before they received approval last year for loans of $37 million and $8 million.

Half of the $29 million loan is being used to pay invoices for construction work that has already been completed, while the other half is being used to pay off the previous loans.

Huff attempted to convince board members that they had been told about the need for the $29 million loan, but Barr fell on his sword and said the board had not been told and took the blame.

This is not the first time that Huff has delayed letting the public know that the district needed to borrow money. When Barr first mentioned the might-as-well spending and the need for an $8 million loan, neither he nor Huff said anything about the need for a $37 million loan.

That was first revealed in an e-mail sent by Barr to Huff and the Board of Education after the Board approved the $8 million loan at its July 22 meeting:

The financing package we are putting together looks like this at this time.  The financing team, including US Bank, will continue developing the package targeting initial Board action on T 7/22.  Currently this is draft information:

Short term financing - offset by future collections from FEMA (75% of building projects), CDBG grant, 404 Safe Room grant, EDA grant  $37 million.  Cash flow projections reflect most of this to be paid off within 6-9 months.  Maturity date 6/30/15.  

Intermediate term financing - offset by future SEMA collections (10% of building projects) and lagging FEMA collections after all projects are closed out - received in the months following 7/1/15.  Estimated $9 million.  Collections during FY16 will pay this amount off.  Maturity date 6/30/16.

Long term financing - for additional building scope items at JHS/FTC - scope items not a part of destroyed buildings.  20 year lease purchase bonds - $8million.  Payable with approximately $600,000 of former capital outlay budget reduced for FY15 and future years for the short term.  Future new revenues to be set aside in pieces to grow to $600,000 for re-payment years 6-20 so the capital outlay budget can be replaced in about 5 years.

 Both the intermediate term financing $9m & the long term financing $8m are planned to bring to the BOE at the September meeting, with a closing in the first half of October.  

What has remained consistent throughout the financing process is that the board has had no input into spending decisions that drove the district further and further into debt and had little or no choice in approving Huff and Barr's loan proposals because otherwise the district would have been put in the position of not paying contractors for work that had already been done.

What is also evident is that President Anne Sharp and the board have absolutely no control over C. J. Huff and with the exception of board members Debbie Fort and Jim Kimbrough (and Kimbrough is leaving the board next month) no one has even challenged Huff.


Anonymous said...

The R8 board has let themselves completely abdicate oversight of the finances and, instead, be self-satisfied by meaningless, feel good presentations and choral entertainment put on by staff and students. The dog and pony shows run out the clock on board meetings. The R8 board is clueless....and it's their own fault for not focusing on the real issues: finance, program, and the performance of the superintendent (measured objectively on graduation rates, ACT scores, and other real metrics). Time to grow up and do the job you were elected to do. R8 board members need to act like RESPONSIBLE adults and hold Huff and his staff accountable for results. The financial result is clear: disastrous.

Anonymous said...

When it is said that the board did not know, it is not certain that select members were not privately informed. This is an old political trick. Put your opponent, say Fort, in a position where she is forced to support meeting the organization's obligations, at the risk of being labled a sell out. She put the good of the district ahead of appearances.

On a related (us v. them) note, several people have asked why the meetings have been moved from the evening, where working constituents are generally more able and likely to attend, to early afternoon. Fort has a day job. Queen Anne does not.

Anonymous said...

Heads would roll if this financial mismanagement and corruption took place in the private sector! If the R8 were a private corporation with voting shareholders, the Board of Directors would fire the CEO, CFO,and COO and then the shareholders would replace the board members. Lawyers might be involved to represent the shareholders.

Anonymous said...

Cj Huff never tells his board anything because until Debbie Fort got on the board the former members were too busy basking in the glow of the sainted one. It's embarrassing to have a district destroyed and a board too stupid to see what is wrong. Even Banwart, who had those stupid light bulb commercials and ran on a platform of new, bright ideas, has show that she really is Cj's newest boot licker and has become a rubber stamper like the rest. She will be voted out if she runs again, because she has not done a thing to save the district from its downward spiral. We need people with ethics and backbone. That puts out Sharp, Steele, Landis, McGrew, and now it would appear, Banwart. Good and Campbell will be just as bad. Pathetic bunch of thieves, including the sign from my property for a highly ethical candidate. For shame.

Anonymous said...

4:56: What makes you think that about Campbell?

Anonymous said...

Rumor has it that Weird Al Yankovic is working on a new song with CJ Huff called "Sunshine Law (Go Away Today)" and Ms Sharp will film the video for Youtube.