Press Release – Gillman Congratulates TCAPS On New China Deal

For Immediate Release

Sept 09, 2013

A plaintiff in an Open Meetings Act case against TCAPS, today says the schools board seems to be now “doing it right”.

Former county commissioner Jason Gillman says “The process now being used meets the expectations of taxpayers and parents alike. This time they are doing it right, and have opened up the deliberative process for full public transparency. Specifically, TCAPS has posted on to its website, a proposed Memo Of Understanding, as part of the information packet for tonight’s September 9 regularly-scheduled board meeting. Not only is the public able to examine in full detail all the terms of this new deal (see attachment), but also the board is not rushing through and signing onto contracts that haven’t been fully reviewed by appropriate legal counsel and financial management.

Transparency was not the case with two agreements signed in China by administration on November 6 and 19th respectively, before being presented to the TCAPS board for the first time for their discussion and approval/resolution on November 26, 2012. The Record Eagle in an editorial titled “TCAPS board needs oversight” on the 25th of November, noted this. They said “Taken alone, the failed millage, the mailer and the China trip all would have been costly in terms of public relations. Together, they painted a picture of district officials who were out of touch with voters and unwilling to be up front with the public about public business. .. Cousins said after the trip the district didn’t want to “muddy the waters with anything” before the election. “Looking back, I think we should have done a press release,” he said. No kidding.

Gillman notes that as important as openness in the governmental decision-making process is, there also are major improvements in substance, too.

Specifically, how differently the risks and costs of potential liability are dealt with by TCAPS “then”, vs. “now”. At the bottom of page 3 of the MOU, indemnity and limiting its exposure are in stark contrast to the Cooperation Agreement dated and signed November 11, 2012 between TCAPS and the High School Attached to Dalian University of Technology which stated ”The host schools should assure the absolute safety of the students and teachers.” A contract which seemingly had no board oversight, and if so, was done so out of sight of taxpayers according to Gillman: “This is the basis of my current complaint,” Gillman says Its good to see that they are now acknowledging my concerns and that of district taxpayers with a far superior process and MOU. The light was turned on and the board saw the writing on the wall; that the potential for multimillion dollar liability claims existed without protection for taxpayers. Curiously however, all BOE members and TCAPS attorney STILL take the position that the first China contracts didn’t need BOE approval or consent.”

Gillman points out the relatively small Bodily Injury / Property Damage and Personal Injury liability insurance is limited to one million-dollar maximum/occurrence, and TCAPS general fund balance is only about $7 million total. He further notes this modified MOU likely provides protections from increased premiums for general liability insurance as well.

Gillman further notes that this proposed and now made-more-transparent plan might have a significant financial benefit to the schools as well. “There’s a potential to the district of potentially seven-figure $/year in new revenue. This is good,” He said. “Without this deal it seems TCAPS is facing an ongoing structural deficit which could bankrupt itself within the next two school years. What once was a healthy fund balance has been depleted by several years of structured operational deficits, which now threatens TCAPS’ credit and bond rating; a risk that carries additional cost that is always passed along to taxpayers. “

And it matters, as since the ‘bubble years’ of higher property valuations, operational revenues have declined. Other local governmental entities (such as TADL, on whose Board-of-Trustees Gillman currently serves) have been reducing their expenses through attrition and cost-savings projects, so as to keep “operating in the black” every year. Even though its millage revenue was also shrinking during those years. TADL’s board has committed strategically to “living within its means” financially, and maintains a safe 15%” rainy day fund” balance as a percentage of its operating annual budget. TCAPS has chosen not to cut costs to balance its operating budgets, in contrast.

Gillman sees this deal as a possible way back for TCAPS “This new China deal could substantially reduce if not eliminate the annual operating budget deficits that TCAPS has been incurring, which is at least a starting point for regaining good fiscal stewardship and respect for the local taxpayers.”

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Enclosed: Weiming MOU

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