PHONE Call #1 to The VIEW, Wednesday, Apr. 18 2012, 11:06am: "Hi. This is Hank Bangser, the Superintendent of schools of Ojai. I believe we've met, if you're the same person I recall from The VIEW in the last couple of years since I've been here. Um I occasionally pick up your... uh your newspaper and I'm looking now at the March 2012 Issue 44 Page 3.
Obviously you have the right to be both sarcastic and humorous, in this case at the expense of school administrators screwing in a light bulb... I’m not commenting on that. I do want to be sure you know however that, the implication that we have 101 administrators predominantly, and then some support staff. That of course isn’t true, and I’m sure you knew that. Now we actually have 16.6 fulltime equivalent administrators, but that’s not really why I’m calling.
"Uh, you seem to be a bit fixated on my daughter working at Cabrillo [Development, Santa Paula]. By the way my name is Bangser with an “s”... “s” “e” “r’s”. She works there part time. She has two children. She is a consultant....
[answering machine times up, limit ends, calls back: Phone Call #2 to The VIEW]
"...Yeah I’ll finish up here real quickly. At any case, she works very part time for Cabrillo and does many other things, including being a Mom. But I wanted to be certain that you understood that there is absolutely not one iota of truth that there’s any consideration of selling the Chaparral High School to Cabrillo. I’d be beyond shocked if they became a bidder, if we even go to bid. So I think it’s incumbent upon you to understand two things. 1. We’re very early in the process of even considering having all or part of the land over here uh placed uh before bidders for uh sale or lease. #1 and #2 Cabrillo can’t possibly have an interest in it here. I’ll call ya later on if they do, but just assume they don’t and so I don’t know what you do about corrections to your comments, but I thought you might want to get that one straight. Thanks.”
Phone Call #3 to The VIEW Monday, Apr. 23, 2012, 10:00am:
“Morning, Uh, it’s about 10 O’Clock and this is Hank Bangser, the Superintendent in Ojai. Following up real quickly on the message I left you uh a while ago uh, in response to the piece uh that you had in The VIEW where you were thinking, suggesting, writing that we would be selling the property to Cabrillo. I left my message regarding that. I don’t need to say any more about that, but what I did want to do is to give you the opportunity... and I would enjoy sitting down and talking with you specifically about what has occurred since you wrote that piece and since I responded to it.
"Uh we did have a board meeting on April 17th. We had an extensive presentation by a real estate attorney with whom we’re working... uh perhaps you saw the long article in last weeks Ojai Valley News about what went on at that meeting. Uh, I’d be happy to sit down and give you the information that is pertinent and accurate regarding our consideration, really our analysis of whether selling the property would even be... or leasing the property all or part of it would be a good idea. Uh I hope I’ve said... in the message... the first message I left you that I’d be happy to talk with you about what you wrote initially, but I certainly want to say that now. So my door is open if you’d like to come in and speak. and my phone number is uh 640-4300, extension 1012.
I would look forward to meeting with you if you want to get the information that I have to present to you following the board meeting.” – Dr. Hank Bangser, Superintendent
Editor ’s Note: The VIEW wholeheartedly apologizes for any administrative typographical errors, or otherwise, which it may have made. However, as originally noted in our March 2012, Issue 44, Page 3, Issue of The VIEW, (Sourced: http://www.localschooldirectory.com/districtschools/ 5672520/Ojai-Unified-School-District/ CA#district_information@students_faculty “Ojai Unified School District, District Information, Faculty and Staff (2009-2010) [Editor's Note: Sadly this Document Has Now Been Removed by OUSD officials], Total Full Time Equivalent (FTE) Teachers, 145. Total Administrators & Support Staff, 101.” We leave those posted 2010 figures to our illustrious readers to equitably distill. Why hasn’t OUSD used their now aquired Public Access Channel to broadcast OUSD Board Meetings to the Ojai Citizens?
It is crystal clear, still, to The VIEW that more Administrative cuts are necessary and required if real improvements are to be realized. Additionally, it is not beyond the realm of concern that OUSD would consider selling off Chaparral High School for a commercial retail venture with Cabrillo Development Corp., considering recent developments. Cabrillo friendly Dr. Bangser was conveniently located for OUSD hire by Cabrillo’s VP friend, a job/hiring headhunter co. Bangser’s predecessor, former Superintendent Dr. Tim Baird (currently with his hands full in a lawsuit in San Diego as Superintendent of Encinitas Union School District) had openly courted and advocated just such a venture, before his sudden surgical removal from Ojai. Bangser was his replacement.
It is The VIEW's view, and that of the Ventura County Grand Jury (report begins next [below] page), that public schools here and elsewhere cannot justify current no limit “pay-as-you-go” “substantial unfunded retiree health care benefit liabilities.” There are just too many bean counters in the kitchen and more who are retired and languishing on the sidelines. We also contend that administrative salaries are far beyond the pale, as compared to teachers, who do the real lifting with regard to prepping our nation’s youth for a sound future, within the public (and private) school systems.
Interestingly enough, Dr. Hank Bangser, Ojai Unified School District (OUSD) Superintendent, came to us from the Chicago school system just a couple years ago after he had retired. According to Chicago Tribune investigators, who published an article dated Jan. 29, 2011 (http:// articles.chicagotribune.com/2011-01-29/news/ctmet- superintendent-pensions-20110129_1_pension- rules-public-school-pension-state-pension), “Hank Bangser collects a $261,681 state pension after retiring as superintendent of New Trier Township High School District. Now, he’s a full-time superintendent in [Ojai] Southern California, earning $170,000 at a job he’d be barred from in Illinois if he wanted to keep getting retirement checks. His annual pension-salary combo: $431,681.”
Now, it seems, that if one declares “Retirement” in Illinois, then simply skips out of state to start a new career, continuing to receive that substantial retirement pension-sum while working.... this is simply pension abuse. The straight up thing to do, The VIEW suggests, would be to simply inform the New Trier Township High School District of a change in retirement status, and defer pension income checks until such time that a real retirement date is decided upon. The Tribune article points to another half a dozen Illinois School Administrators working the system the same way. According to the Tribune article, “Bangser said he moved to California to be closer to his daughter and granddaughter. Although his base salary is $170,000 at California’s Ojai Unified School District northeast of Ventura, Bangser said furlough days this year will reduce that to about $161,000.”
Note: A “furlough” is not a pay cut, but only an administrator (temporarily) working less hours for less pay.
Just because a loophole exists, which essentially allows for fake retirements that generate mass waste in pension funds, the reality is simply not fair, not ethical, and does not reflect responsible fiduciary policy, anywhere in any accountant’s spreadsheet. In fact, it appears so obviously glaring as one might almost mistaken it for an administrative error. Is this the type of executive-work-ethic lesson we should be teaching our small children in schools? No wonder the U.S. can’t get on its feet and is sinking deeper!
No wonder the schools are Broke, begging for more and considering selling off valuable historic resources. In Ojai, the property known as Chaparral High School, a cherished OUSD/Ojai undeclared historic landmark, was much loved long before the current trends of OUSD’s lack of accountability. The property is now being considered as prime sellable real estate to cover said admin salary/pension unfunded liabilities.
One can easily surmise why this true historic 1917 [*1895 Corrected Online: 5-7-12 - Ed.] Spanish Revival Architect’s dream has not been designated an officially protected “City of Ojai Historical Landmark.” Why indeed? But then, sloppy OUSD fiscal miscalculations began long before Dr. Bangser’s arrival in Ojai. Historically designated buildings can not be sold or torn down. So is that why Ojai’s Historical Preservation Commission has not even suggested historical status for Chaparral yet they can get a 3’ wall in the Rains parking lot declared a “Historical Landmark”? Something smells like... sell PUBLIC schools to pay for pumped up school administration pensions and salaries.
Now, The VIEW does not pretend to be versed in solving the United States, the world, or Chicago’s substantial public education-money woes, however when is “Retirement” really Retirement? According to Merriam-Webster Dictionary, “Re•tire•ment” is 1. a: an act of retiring: the state of being retired b: withdrawal from one’s position or occupation or from active working life.
We, at The VIEW, truly feel for Dr. Bangser’s former employer, that of Chicago’s New Trier Township High School District with their also severely unfunded pension liabilities. The Northwest Municipal Conference, a group that oversees changes in local government pension liabilities found that each local government unit in Illinois could face a $900,000 increase (in 2010) to their pension liabilities. Seems like viruses travel.
Nothing much has changed in Chicago, or Ojai; shaky bonds and more taxes try to keep the sick-system fed. Books and pencils are still expensive and we know New Trier still struggles, deep and painfully, with funding their schools. Bangser, at Ojai Unified School District, has less than 3,000 students and makes about 30% more (from OUSD) than his female counterpart that runs 35,000 students in the Oxnard School District (OSD). So, OUSD board members (Rikki Horne, Linda Taylor, etc., who have full on medical coverage by the way, where are you, Carol Smith?) with administration are trying to change the Zoning on public school lands from “P” for public to “C” for Commercial so they can then Sell and pay off the exorbitant salaries and pension benefit liabilities of OUSD. After the schools are sold, then what do they sell? The Ventura Grand Jury said OUSD should be shut down and combined with the Ventura district, due to it’s serious fiscal abuses.
The Tribune article concluded, “Jeremy Gold, a pension expert and New York-based consulting actuary, called earning multiple government incomes “indicative of sloppy governance and a cavalier attitude by those ‘public servants’ who exploit these loopholes selfishly.”
“Illinois is a poster child for pension abuses,” Gold said. “One of my colleagues calls this child abuse because our children must pay for our fiscal irresponsibility.””
Perhaps it’s time to move over and let someone else drive the OUSD wagon?
In the 1980s a study found that nearly 50% of 39,500 Chicago’s public school students in the freshman class of 1980 failed to graduate – they did not get a diploma. The study stated, this was “a human tragedy of enormous dimensions.” According to the study, cited in Education Week, Mar. 6, 1985, “These statistics about the class of 1984 reflect the destruction of tens of thousands of young lives, year in and year out.” The study was conducted by Designs for Change, a nonprofit research and child advocacy organization in Chicago, “Most of these young people are permanently locked out of our changing economy and have no hope of continuing their education or getting a permanent job with a future.”
Is it any wonder U.S. Public Schools have not been world class since the 1930s?
The 2009-2010 Ventura County Grand Jury (Grand Jury) investigated whether the 20 Ventura County Public School Districts (VCPSD), the Ventura County Community College District (VCCCD), and the Ventura County Office of Education (VCOE) (collectively known as the County School Districts) are in compliance with the requirements of Government Accounting Standards Board (GASB) 45 and determined the extent of their unfunded retiree health care benefit liabilities. [Ref-01 through Ref-07]
The Grand Jury found that 17 of the 22 school districts in Ventura County (County) have UNFUNDED RETIREE HEALTH CARE BENEFIT LIABILITIES.
The five School districts which are fully-funded are: • Briggs Elementary School District • Mupu Elementary School District • Oak Park Unified School District • Santa Clara Elementary School District • Somis Union Elementary School District.
The Grand Jury found that County School Districts have: • an estimated total unfunded health care benefits liability of $529,853,272 • a combined total estimated Annual Required Contribution (ARC) of $44,056,287.
The Grand Jury concluded that the substantial unfunded retiree health care benefit liabilities, combined with the funding reductions from the State of California (State), and the steady decline in enrollment over the past five years create a serious financial dilemma for the County School Districts and should no longer be ignored.
The Grand Jury Recommends: • that County School Districts abandon their current pay-as-you go approach and adopt a policy of pre-funding retiree health care benefit plans by establishing an irrevocable trust fund for employees’ health care benefits • that County School Districts leverage off of the economies of scale by acting as one bargaining unit and select a health care plan for all employees.
County taxpayers should consider this financial dilemma as a warning and a call to action. They should demand greater accountability from their school districts and take an active role in overseeing their public funds and elected officials.
The Grand Jury chose to investigate whether the County School Districts have complied with the requirements of GASB Statement 45 (GASB 45) and the extent of their unfunded retiree health care benefit liabilities.
Several private industries pension funds (for example Enron, WorldCom, Adelphia, and Tyco International) went bankrupt in the 1990s. This resulted in multibillions of dollars in unfunded liabilities; the Financial Accounting Standards Board (FASB) began requiring private sector companies to list pension liabilities in financial reports. [Ref-08]
GASB, which establishes and improves standards for financial accounting and reporting for state and local government agencies, concluded that many public agencies were facing a similar crisis regarding unfunded retiree health care benefits. GASB decided to require local governments to disclose the total cost of compensation, including compensation owed in the future such as retiree health care benefits, as an expense on their annual financial reports. On August 2, 2004, GASB issued GASB 45. [Ref-09 through Ref-12]
Other post employment benefits (OPEB), such as health care, dental, vision, hearing, life insurance, long-term care and long-term disability, must be recognized (but not necessarily funded) as a current cost during the employees working years. Thus, each public agency must identify and disclose OPEB as an expense and, to the extent that they are not pre-funded, list OPEB obligations as a liability on its financial statements. This liability must be calculated by an actuary. [Ref-13 through Ref-15]
GASB 45 provides those who use government financial reports with improved information about the cost of providing post employment benefits, the commitments that governments have made related to these benefits, and to the extent to which these commitments have been funded.
Prior to this change in accounting standards, disclosure of these liabilities was required to be noted only in the footnotes of the annual audit. GASB 45 requires all local governments, including school districts, to begin showing the accrued liabilities associated with OPEB on their financial statements, and whether, and to what extent, progress is being made in funding the liability.
It must be noted that the actuarial projections of retiree health benefit costs are highly speculative, especially over a thirty year period of time. Very slight changes in the assumptions related to costs and return on investments result in huge changes in the projected liability. The factors that actuaries use are the rate of return on investments, health care costs, mortality rate, health care insurance costs, and the demographic makeup of the employees and retirees which are all subject to change from year to year. This is why GASB 45 requires an actuarial valuation at least every two years for employers with OPEB plans with a total membership (including employees in active service, terminated employees who have accumulated benefits but are not yet receiving them, and retired employees and beneficiaries currently receiving benefits) of 200 or more, or at least every three years for plans with a total membership of fewer than 200.
The Grand Jury received information from all County School Districts regarding the extent of each entity’s costs and liability in providing benefits and health care for retirees. When all responses were received, the information was summarized for each district. A copy of the summary information was sent to the County School Districts requesting that they each validate the accuracy of the information and make any corrections or adjustments needed to ensure accuracy. The Grand Jury received validation from the County School Districts with only minor corrections which were incorporated. Additionally, the Grand Jury conducted internet and newspaper searches on this topic.
- F-01. Two important numbers to be concerned with are:
• the projected total health care benefits costs over the next 30 years which consists of the ARC and the normal costs for the year
• ARC, which represents an amortized payment that would remain the same for 30 years, after which time amortization payments would end - F-11. Ojai Unified School District (@3,152 Students – 9 Schools)
• the annual costs associated with health care benefits are $2,789,564: $2,450,719 for 59 active employees and $338,845 for 38 retirees
• the projected total health care benefits costs over the next 30 years are expected to be $60,000,000
• the retiree health care benefits plan remains open
• ARC as of June 30, 2009 was $1,149,918
• the health care benefits plan is not fully funded
• the unfunded health care benefits liability is $7,560,968 [$7.6 million]
- F-28. There are 17 school districts that do not have a fully-funded health care benefits plan [Ojai Unified School District (OUSD) is among them].
- F-29. Credit rating agencies have stated that they will consider OPEB funding status in their evaluations of government financial condition. [Ref-09, Ref-12 through Ref-14, Ref-16]
- F-30. Included in the required GASB 45 actuarial reports provided by the consultants were the following recommendations:
• that it is necessary or even desirable for an agency to establish a policy of funding exactly the ARC on a cash basis each year
• the agencies adopt a policy of pre-funding their retiree health care plan as soon as possible
• establish an irrevocable trust fund for employee’s health care benefits
- F-31. Student enrollment in the County as determined by the State through a complicated formula called Average Daily Attendance (ADA) has declined a total of 3,775 students over the past five years: [Ref-17, Ref-18]
- F-32. Several school districts are accepting out-of-district student transfers in an effort to increase ADA. [Ref-19 through Ref-22]
- F-33. On March 22, 2010, the California Department of Education placed 126 school districts on a fiscal early warning list, an increase of 17% over last year. [Ref-23]
- F-34. According to the State, the Santa Paula Elementary School District might not be able to meet its financial obligations over the next few years because of the ongoing budget crises and cuts to education funding. Santa Paula Elementary School District informed the VCOE that is was in fiscal trouble after realizing it was facing a $3.2 million shortfall this fiscal year. The District has increased class sizes, trimmed management, and eliminated 31 teaching and 46 classified positions. [Ref-23]
- F-35. The VCOE anticipates the next fiscal warning list will be even longer, possibly adding Hueneme Elementary School District and Rio Elementary School District to future lists. [Ref-23]
- F-36. The continued increase in the cost of health care and health care insurance can only be expected to contribute to the increase in the size of the County School Districts unfunded liability. Since 1999, health insurance premiums for families rose 131%, far more than the general rate of inflation, which increased 28% over the same period. Health care costs will increase 9% in 2010 according to Health Care Finance News. [Ref-15, Ref-24 through Ref-26] - F-37. C. F. Braun states that sole reason for a financial report is to serve the user. Accounting reports are a measuring report of performance. They must be easy to read and understand. [Ref-27] Conclusions
- C-01. County School Districts have a substantial unfunded health care benefits obligation of $529,853,272. (F-02 through F-24)
- C-02. County School Districts have a substantial ARC of $44,644,058. (F-02 through F-24)
- C-03. Failure on the part of the County School Districts to take steps to address these liabilities may result in downgrades to their credit rating, thereby increasing future borrowing costs resulting in increased costs to the taxpayers. (F-29)
- C-04. The County School Districts have been paying for retiree health care benefits in the year the benefits were used by the retirees. This is called the pay-as-you-go approach, which differs from the prefunding model where costs are funded in advance during employees’ working years and invested until paid to retirees. The pay-as-you-go approach has led to the accumulation of the financial liabilities to pay for future retiree health care benefits. (F-02 through F-30) C-05.
The County School Districts offer varying levels of health care benefits to employees and retirees. They have not joined together to form a single large bargaining unit. (F- 02 through F-24, F-34)
- C-06. The County School District’s half billion dollar unfunded liability should no longer be ignored; it will not decrease on its own. (F-30, F-33 through F-36)
- C-07. Based on historical data, the cost of health care and health care insurance will continue to outpace typical annual inflation. (F-36)
- C-08. The County School Districts have not been proactive in planning for or dealing with challenging financial conditions. (F-02 through F-24, F-33 through F-36)
- C-09. There may be unintended consequences as a result of the choices and decisions made by the County School Districts to address the half billion dollars in unfunded health care liabilities. (F-02 through F-36)
- C-10. The time for the County School Districts to make difficult choices is now. Regardless of the choices, the financial burden rests squarely on the shoulders of the taxpayer. (F-02 through F-36) Recommendations
- R-01. That County School Districts adopt a policy of prefunding their retiree health care benefits plans by establishing an irrevocable trust fund for employees’ health care benefits. (C-01 through C-03, C-06 through C-07, C-09)
- R-02. That County School Districts identify effective cost reductions that will allow the District to achieve their respective calculated ARC. (C-02 through C-03, C-06 through C-07, C-09)
- R-03. That County School Districts leverage off of the economies of scale by acting as one bargaining unit and selecting a health care plan for all employees. (C-05, C-07)
- R-04. That County School Districts use language in their financial reports so that the average County taxpayer, employee, and retiree can understand how tax dollars are being spent and recognize the extent of the district’s financial indebtedness. (C-06, C-08)
- R-05. That County School Districts place the entire district budget on the district website. (C- 06, C-08)
- R-06. That County School Districts schedule sessions to communicate and educate employees, retirees, and parents of students regarding the OPEB issue and how this is being addressed by the district. (C-01, C-02, C-05 through C-09)
- R-07. That the VCOE and the elected officials of the individual districts take a pro-active role in seeking solutions to the unfunded liability crisis and present these solutions to their districts. (C- 01through C-09)
- R-08. That the VCOE and the elected officials of the individual districts consider alternatives to resolve this serious financial situation, such as: (C-01through C-09)
• require greater benefit or premium cost sharing from retirees
• implement a new defined contribution type retiree health care program for new employees
• freeze the employer-provided portion of the retiree health plan at present levels for currently covered active employees.
Editor ’s Note: For More Information on Higher Education and to Read the Entire “Ventura County Grand Jury - 2009 - 2010 - Final Report - The Half Billion Dollar Elephant in Our Schools’ Closets - June 11, 2010”
Related Story: 2010: Education, Pilfering Our Children's Future
Related Article: Why Johnny Can't Read
Related Page: VIEW re-Education Page
LINK: Classic VIEW Website
LINK: NewVIEW Website