NTF ISSUE PAPER: OPPOSING THE 2018 OP$ BOND ISSUE

NTF worksheet: ops3.doc. 4-18.
NEBRASKA TAXPAYERS FOR FREEDOM ISSUE PAPER:
RATIONALE FOR OPPOSING THE 2018 OMAHA PUBLIC $CHOOLS BOND ISSUE.

BACKGROUND.
The Omaha Public School Board voted to place a $410 million bond issue on the May, 2018 primary ballot. After reviewing the financial conduct and history of recent and present OPS boards, the NTF executive committee voted to oppose this bond issue. We found several solid reasons for opposition. OPS boards, we believe, have served as poor stewards of taxpayer monies. NTF does not believe that board members have the intellectual integrity or competence to formulate a valid bond issue. Our organization urges a delay for a bond issue until a new school board demonstrates adequate management of OPS finances. Our decision to oppose this bond issue stems from inadequacies of the school board, not the administrative staff.

LAVISH SPENDING.
OPS boards in recent years have exhibited financial recklessness with taxpayer dollars. It recently voted a 3 yr. contract for a new superintendent at an exorbitant $300,000 salary subject to additional pay increases. This contract could extend for an additional 3 years. The package includes a $41,000 tax-sheltered retirement annuity of choice. Cash for unused vacation time upon leaving employment. A maximum of $15,000 for moving and temporary living expenses. $750 per day for consulting services prior to her start, for up to 20 days. Reimbursement for expenses at state, national, and local professional seminars. $12,000 annual transportation expense. $1,500 reimbursement for cell phone and Internet expenses. No limit on “payment for ordinary, reasonable, and necessary expenses.” Payment of all legal fees, if she faces lawsuits or incurs other legal expenses. Total package: $462,465! Her previous salary was $171,000 as Chief Academic Officer, earned at a Philadelphia school district having more than double the number of students. Thus, she will receive a 170% pay hike for administering fewer than half the students she previously supervised. Moreover, OPS teacher salaries and benefits rose 5.5%, or $13.8 million, for FY 2017-181, an inflationary figure much above the cost of living increase. The district refuses to join the private sector in requiring its employees to pay a higher percentage of their escalating health insurance costs.

FRIVOLOUS SPENDING.
A projected new high school would boast a fitness center and child care rooms. Social service community rooms at 2 elementary schools. The district complains about insufficient spaces for students. Yet, both NW High School and North High School are hundreds of students under capacity. The board voted to donate $50,000 to the Step-Up program, not part of the school district. The district spent $600,000 to renovate a warehouse. Ending or curtailing its non-mandated early childhood education programs would lessen projected costs. Many schools would not require central air conditioning, if the district did not begin classes during the hottest part of the summer.

POOR PLANNING.
There is no assurance against unexpected cost overruns. Recall the 2014 bond plagued with cost overruns that mounted steadily. The board then spent monies on projects not listed instead of spending the dollars on promised projects. OPS added features that increased the cost, and several estimates fell millions below actual costs. A new high school planned for only 1,500 students, yet population growth in this NW Omaha area dictates room for additional students. OPS consistently has built its schools too small to handle projected increases in students. It appears plagued by mushrooming numbers of portable classrooms. This unfortunate situation stems from poor planning for future growth. The district admits that the new bond issue would not totally negate the need for portable classrooms, further evidence of poor planning. The possible accelerated deportation of illegal aliens would lessen the crowding problem in South Omaha. Trust issues abound. The school board publicized a $377 million 2nd bond issue for 2018 but then increased the total to $410 million. The 2018 plan does not properly identify Supplementary Capital Improvements, projects that cost less than $10,000. Total and individual school costs not verifiable, because school committees can change scopes of work that would alter costs. If OPS ended its mammoth cross-town social engineering busing program that costs millions annually, those monies could fund needed reconstruction and renovations. OPS is calculating 6.58% of its total general fund budget, or $40 million, for transportation this fiscal year.2 Each day, OPS buses 20,000 students, 3 many unnecessarily.

PENSION FIASCO.
The district must increase mandated $15.8 million payments to handle its seriously underfunded retirement pension fund. This financial cataclysm caused by poor investing, missed fund payments, and bloated pensions. An OPS board of trustees managed this system until the NE Investment Council assumed control, leaving an unfunded liability of $713 million, funded at only 65%. OPS has managed payments by raiding its cash reserves and diverting $18 million from other programs. The district asked the Legislature for permission to issue $300 million in additional bonds to ameliorate the crisis, without a vote by residents, and in the current unstable stock market. This attempt failing, OPS may consider asking residents to authorize a tax levy override in addition to the $410 million May bond issue. OPS should change its defined benefit pension system to a defined contribution system, like the City of Omaha, to save taxpayers money.

POSITIONS ON LEGISLATION.
The present school board voted to support or oppose state legislation to the detriment of resident taxpayers. Board members opposed LB 295, which offered opportunity scholarships to middle class and underprivileged children to use at public, private, or parochial schools. Public school districts would save money, as children gravitated to alternative schools. The board opposed LB 804, a bill to offer full benefits from changes in the new federal tax law pertaining to state 529 educational savings plans, specifically the NE Educational Savings Trust (NEST). The new law in 2020 expands 529 plans to include tax-free distributions of up to $10,000 annually to pay for tuition at K-12 private and parochial schools. Still another vote, against LB 576, to place a moratorium on property valuation hikes, giving time for senators to pass a comprehensive property valuation relief bill. A vote against LB 662, a bill to create an A-F school grading and accountability system applicable to all public school districts in Nebraska. Also opposed, LB 829, which offered property taxpayers a 50% refundable tax credit on taxes paid their public school district. In addition, LR 290CA, a constitutional amendment to set property valuations at the price an owner originally paid for a property. Valuation would not change until property sold. The board further assailed taxpayers by supporting LB 1007, to allow school districts every year, by 2/3rd majority school board vote, to levy up to 3c per each $100 of valuation to maintain, rehab, and construct facilities. Also supported, LB 1077, a bill to eliminate tax levy limits for school districts. Its support of LB 548 would allow OPS to issue $300 million in bonds to bolster its pension system without a vote of residents.

SAFETY SCORNED.
The board unanimously voted to not allow teachers and staff trained in the use of firearms to carry concealed firearms in schools in order to safeguard our students. An OP$ teacher union leader acted likewise.

HIGHER TAXES.
Owners of a $250,000 home would pay an additional $175 property tax from this bond issue. Note that taxpayers must not only pay off the principal of this bond issue but also pay interest over several years.

TAXPAYERS SOAKED.
Successive OPS boards have ignored and trivialized suggestions from the taxpaying public on taxes, spending, and curriculum such as privatization. OPS taxpayers are still paying off $710 million principal and interest from previous bond issues. All OPS bond issues extend to 25 years. The 2014 bond issue payment schedule extends to 2040-2041.

ONE RESULT.
Currently, OPS parents opt out 6,049 K-12 children to 16 neighboring school districts, a higher number from middle school and high school age; others vote with their feet and move to other districts. Meanwhile, ACT scores at OPS high schools remain among the lowest.

TAKE ACTION NOW.
Omaha Public School Boards historically and currently have ignored the interests and plight of resident property taxpayers. Boards have served as poor stewards of taxpayer dollars. They treat property taxpayers like impersonal ATMs. We direct our criticism of finances and the 2018 bond issue at the OPS board, not the administrative staff. Join other overtaxed taxpayers residing in OP$ and fight the bond issue to stop another property tax gouging! Email netaxpayers@gmail.com to get involved. Our long-term solution: OPS should hire a chief financial officer to put its financial house in order and offer critical financial guidance for a future bond issue.

Research, documentation, and analysis for this issue paper done by Nebraska Taxpayers for Freedom. This material copyrighted by Nebraska Taxpayers for Freedom, with express prior permission granted for its use by other groups in the NE Conservative Coalition Network. 4-18. C.

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