Archive for Thursday, March 21, 2013

Baldwin USD 348 superintendent wary of state, federal actions

Baldwin USD 348 Board of Education

Baldwin USD 348 Board of Education

March 21, 2013, 1:00 a.m.

Updated: March 21, 2013, 1:00 a.m.

Baldwin USD 348 Superintendent Paul Dorathy provided the board of education Monday with a 2013-2014 budget update that focused on three state and federal actions that could affect district finances.

The superintendent said much was still in flux and he would provide monthly updates to keep the board and community informed.

The first federal action of concern was the Affordable Health Care Act, Dorathy said. The district’s decision three years ago to extend health insurance to all employees reduced the consequences of the act’s mandate that employers offer health insurance to all employees, he said.

But, he noted that the East Central Kansas Cooperative in Education — Baldwin is a member, along with the Eudora and Wellsville school districts — would have to expand coverage to paraprofessionals.

The superintendent, however, said he wasn’t sure yet what expanded coverage would cost the district. Initial conversations with cooperative officials indicated USD 348’s share would be more than $200,000, Dorathy said. But USD 348 board member Chad Christie and Sandy Chapman, the district’s liaisons to the cooperative, said revised numbers placed the Baldwin district’s share at $100,000.

The second federal action with an effect on the district is the sequester, the automatic spending cuts that became effective this month when officials in Washington, D.C., did not reach agreement on long-term deficit reduction.

The district would lose $8,000 federal money for title 1 funds used to help with salaries to teachers for students who struggle with reading, Dorathy said.

Finally, Dorathy addressed the ongoing tax debate in the Kansas Legislature. It’s too early to know what would ultimately be passed, but he noted the Kansas Senate moved tax legislation last week that maintained the state’s 6.3 percent sales tax rate, which will drop to 5.7 percent in July unless the Legislature extends the half-cent increase passed in 2010. Gov. Sam Brownback supports maintaining the sales tax at 6.3 percent so the state can meet its responsibilities while moving forward with income tax cuts the governor favors.

But Dorathy said the debate was far from settled and many in the Legislature opposed extending the sale tax hike.

“If they get rid of the sales tax (increase), there is a potential we will see cuts in state aid,” he said. “There are a number in Topeka who say ‘schools need to be cut.’”

Board member Sandy Chapman flagged yet another concern: The possible decline in the district’s valuation. If that’s the case when the district gets final valuation numbers in late June, a mill would produce less than the $74,000 it yielded in this year’s budget, she said.

Dorathy said funds with fixed mill levies, such as the capital outlay fund that is capped at 8 mills, would produce less revenue if the overall property valuation declines. Mill levies in support of bond and interest payments would increase to cover the require payments, he said. A mill is $1 in taxes for every $1,000 in valuation.

In other business, the board:

• Approved a three-year contract with Reflective Group to provide the software the district uses for core functions. The software was originally developed in-house by Casey Morford, who now is a partner in Reflective Group.

The agreement gives Reflective Group the intellectual rights to the software in exchange for providing the software and support for the 2013-2014 school year. The district will be charged $1.60 per student for use of the software and support in 2014-2015. That contract price would continue for 2015-2016 if the local company can afford to keep the software active by marketing it to other districts.

Dorathy recommended the board approve the contract because of the expense of shifting to a different system and the “tremendous level of support” the district received from the local company. The contract was approved 5-2 with board members Chapman and Ruth Barkley voting no.

• Rescheduled its April 15 meeting to April 22.


greyghost 7 years, 7 months ago

Crafty way of getting a no-bid contract here.

I should also ask an uncomfortable question: If the software was originally developed in-house, on school property, using school equipment, and on school pay, shouldn't this continue to be property of USD 348? Or, should it just default to the personal property of the school employee's LLC?

Did Morford develop this software as a partner in this LLC, or as the systems engineer for the district?


1776attorney 7 years, 7 months ago

I'm not sure why you feel that is an uncomfortable question, GreyGhost. I would suggest it is a serious question that taxpayers demand the superintendent and school board answer.

"IF" the software was developed by a school employee who's salary was paid for by taxpayers, then the software is the legal property of the school district. If the software was developed and utilized by the Baldwin City school district prior to offering it to other school districts, then this fact clearly shows it belongs to Baldwin City taxpayers.

The superintendent has no right to "give away" school property, then sign a contract to buy back the use of said property. So taxpayers paid to have the software developed, the superintendent gave it away for free, then signed a contract whereby taxpayers will pay all over again for using the software (that they owned) after the 2013-2014 school year.

Refective Group is receiving software that they paid nothing to develop and can now sell the software to school districts all over the USA and earn a profit off Baldwin City taxpayers.

At the very minimum, Reflective Group should be required to purchased the software from Baldwin City taxpayers.

Is this a surprise? After all the old elementary school and high school property was appraised at $1.2 million by Douglas County and $800,000 by an independent appraiser. The elementary school encompassed 2/3 of the total property and thus around $550,000 to $800,000 in value. So the superintendent and school board gave the property away for $200,000.

Or how about the $25,000 in playground equipment the superintendent gave away to a local church at no cost. Had he dipped into the school district bank account and gave away $25,000, he would be in jail. Somehow playground equipment is different?

If you think that this is the last straw for this superintendent, just wait until next year and they spring all the undisclosed costs that will come about involving the Apple iPad project. The superintendent and school board are either hiding these future costs or they are incredibly uninformed about the equipment and operating costs that will be required.

The sequester is a 2% reduction in projected "future growth" of the federal budget. It is not a "cut of funds" involving current spending. It is meaningless, unless you're a partisan.


greyghost 7 years, 7 months ago

It's an uncomfortable question if your name is Dorathy or Morford--or if you're one of the few people in this town that agree with every decision that comes out of the district administration, carte blanche.

Just thought I'd stoke the coals to see if any flames flared up.


bc 7 years, 7 months ago

It's amazing so many of you can be up in arms about Mr. Dorathy, yet we can't find enough people to run for school board. It seems to me the district shouldn't be in the business of owning software if they can't keep someone hired in-house to support the investment. At least Reflective Group is a local business, so if success comes from it that should benefit Baldwin by bringing outside dollars to town.


greyghost 7 years, 7 months ago

Yeah--there are many things underhanded about this contract, but at least the underhandedness will benefit a local company that is partly owned by the person who is being underhanded.

Please run for school board!


Mike Bosch 7 years, 7 months ago

All, Thank you for your comments. I felt it was necessary to post a comment in hopes of providing more transparency with regard to this transaction.

Morford was in fact an employee of USD 348 and built this software for the benefit of USD 348 about 7 years ago. This software allowed USD 348 to avoid costly ongoing support for several years; significantly more than offsetting Morford's salary.

A little over 2 years ago, we created Reflective Group (RG) working on custom software projects in the evenings and weekends, after our full time jobs. As RG grew, we had the capacity to take on a full-time engineer. However, we hired another engineer full-time before hiring our own partner because of a heart-felt obligation to support our local school district. Fortunately, we continued to grow and needed to have Morford full-time. Unfortunately, this left the USD without the ability to support this home-grown software. For months, both parties agonized over the uncomfortable situation.

The software needed ongoing maintenance to continue automating the non-value added administrative tasks of running a school district. USD 348 would need to switch to multiple software packages to come close to matching the functionality of Morford's home-grown software. The licensing and support of the multiple packages would easily run into the several tens of thousands of dollars per year. The impact of the soft costs of changing business processes and re-training staff would put further negative pressure on school funding.

We love our small town. Our kids go to USD 348. We kept asking the question, "how can we help?" Having USD 348 hire RG to maintain the software would be a clear conflict of interest, so we never considered the option. Instead, we offered to take over all current maintenance and future development at no cost to USD 348 during the first year. Internally, we're assigning one software engineer, one computer engineer, and a user experience engineer to completely re-write the software from the ground up. The software was never designed to support multiple clients. In order to commercialize the software, we need to re-write it. The $1.60 per student rate mentioned in the article is the maximum rate USD 348 will pay for year 2 and 3, which adds up to roughly $2k per year. Clearly, not enough to cover 3 engineer salaries.

Why are we doing this? Because we love small towns. We believe education is a critical component to building vibrant communities. And we're willing to "put our money where our mouth is."

Mike Bosch President & CEO Reflective Group


greyghost 7 years, 7 months ago

Okay. Thanks for the response. For me, your post raises more questions than it answers--questions that would be best answered by the district administration or school board.

Is Morford no longer employed by the district? The district website still has him listed:

Will the district hire a new systems engineer?

Will the new engineer have the aptitude to take over the support of the district's software?

Does Hemphill or Linenberger have the aptitude to support the district's software?

What will the contract price be in 2015-2016, and years after, if the Reflective Group cannot successfully market the district's software? According to Bosch, having Morford develop and support this software in-house has saved the district many thousands of dollars per year. Did the district think of what RG would be charging the district if they cannot market the software?

So, it is completely plausible that if the district replaces Morford with a new systems engineer and RG is unsuccessful in marketing this software to other customers, then we will be paying an employee of the district to sit by and watch RG charge the district tens of thousands of dollars for something that he/she should be doing in exchange for his/her salary.

But, at least we would be doing business with a private enterprise that loves small towns .....


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