April 12, 2012 · 0 Comments
Hutsonville Schools Hoodwinked – by Superintendent Roger Eddy?
It’s amazing where one little meeting can lead you. Back in October 2011, the Hutsonville School board held a school board meeting. Hutsonville is the home of former state representative and Hutsonville School Superintendent, Roger Eddy.
What was discovered during that meeting? Bond concerns, of course!
No big deal, just about every school out there has bonds of some type for all kinds of reasons but something stuck out about this one. Have you ever had that gut feeling something just wasn’t right? I can’t explain it, but Watchdogs get that feeling a lot and so far our track record has been spot on!
FOIA Request for Bond Information
We did a Freedom of Information request for bonds referenced in the meeting. In just over a week we received our information. Shocked would be an understatement.
In the packet of information was a payment schedule for a $200,000.00 bond. That schedule reflects an INTEREST ONLY payment until the last two years of a 20 year note.
A few things make this matter very disturbing. First and foremost, a sitting state representative at the time informed me he was not sure how I was reading the document after I questioned the fact that it was an interest only bond for the first 18 years. He tried to explain it away with an explanation of this bond is part of the $1.2 million in bonds I had not looked at, YET.
After another e-mail trying to give the benefit of the doubt to Mr. Eddy, I was told I misunderstood the document, and then again more gobbly goop about the $1.2 million in bonds that had nothing to do with the 2004 document I was questioning.
Why was I questioning? Because our state is broke and to see what a sitting State Representative, in his school superintendent role does financially tells me a lot about what is or is not happening at the State Level. After the nationwide fiscal fiasco of interest-only home mortgages with balloon payments, it doesn’t take a financial genius to see that Hutsonville Schools could be headed down the same path.
I didn’t misunderstand the document at all. Quite the opposite, in fact. It doesn’t take too much to read the document and see what the payment schedule is and realize that in the last two years that little town of Hutsonville is going to have a whopper of a payment due. Where will Roger be in 2023 and 2024?
We compared them to our local Kansas school bonds and were pleased to see our Superintended was not only paying substantial principal but was doing it on a 15 year payment schedule instead of a 20 year schedule. I compared Hutsonville’s bonds toKansas’ because it was about as close as we could find as a comparable school student population.
So you can see for yourself, here’s the link to the $200,000 Hutsonville Schools bond:
What do you folks see? The second column is labeled PRINCIPAL. What does it say for the first 18 years? ZERO! That’s correct, ZERO PRINCIPAL payment on that bond. And if you look at the INTEREST payment you can see clearly a requirement of $11,000.00 each year.
I understood the document quite well. What Roger Eddy didn’t understand was I was not accepting the political paragraph of double speak trying to justify an interest only bond payment.
On February 24, 2012, I provided Roger Eddy with this statement after receiving the payment schedule explanation from the issuing Bank, First Midstate Inc.:
2004 Bonds reflect ZERO principal payments until the year 2023! That is from the very Schedule provided by Midstate!
Mr. Eddy’s response was priceless: “That is correct and the written explanation is also included as to why they are structured that way…”
So, it took Roger Eddy three emails to finally admit to what I had stated in the very first email, which was the fact the 2004 bond was an interest-only bond payment schedule up until the last 2 years of a 20 year bond. So one must ask why not just come out and acknowledge that to begin with?
This statement showed up 3/21/201 in the Daily News Online out of Robinson. The last paragraph was the red flag.
“He will also work with the finance committee to refinance construction bonds at a savings of around $50,000.”
I have to ask a simple question before we continue. If he is going to now work with the finance committee to refinance bonds at a savings of around $50,000.00 after resigning, why on earth didn’t he already do this while he was working? Are the people really aware of what they are facing in 2023 and 2024 with the bonds in question?
Lots of questions, not enough answers, yet! Stay Tuned for Part II
By Kirk Allen