Emergency Manager Report to Board 11/15/2017

Sale of Northside Middle School

The Emergency Management Team has completed the sale of Northside Middle School with Ball State University.  The sales price of $1.27 million matched the appraisal BSU obtained on the building and was higher than the appraisal of $870,000 secured by Muncie Community Schools.  No other parties submitted proposals for Northside, and we are pleased BSU officials offered a price that was equal to their appraisal rather than suggesting a sales price the average of the two appraisals.

BSU will lease the building back to MCS for a period of 5 ½ years through the end of the 2022-2023 school year at $1 per year renewable annually.  This provision will give the district the time it needs to solicit community support for the future realignment of school facilities and perhaps avoid a large exodus of students.  BSU also will pay the MCS $60,000 a year for maintenance for each year the district occupies the facility including $30,000 for the first six months, January – June 2018.

We believe the idea of selling Northside and leasing it for a period of time surfaced in the Board meeting last spring when the Board voted to close the three elementary buildings.

To guarantee title insurance can be obtained on the properties, William Hughes has indicated, based upon the statute which declared MCS to be a “fiscally impaired” corporation, no action by the Board of School Trustees will be required and presumably no signature on the conveyances.  What the underwriters of title insurance will need are:

  • Proof that the “right of first offer” provision has been complied with;
  • A legal opinion regarding the appointment of the emergency manager and its authority to convey property.  This will have to come from counsel to the Emergency Manager. (We are now securing).
  • A written waiver of the right of first refusal in recordable form from Ball State for any property not being conveyed to Ball State.

As has been indicated, the negative cash flow balance has been estimated to be $1.7 million in at the end of December.  This influx of $1.2 million dollars will help address that negative balance.

Delaware-Blackford Special Education Maintenance of Effort

Dr. Baule, in his Board report this evening, highlighted the fact the Delaware-Blackford Special Education Cooperative has now received the waiver for the Maintenance of Effort (MOE) requirement. This will permit the other school districts participating in the Special Education Cooperative to pay MCS on a semester basis for transfer tuition and shared costs.  This, in the long run, will not be additional money for MCS, but the funds will be received on a timelier basis.  With the cash flow shortages the district is experiencing this fall, receiving an approximate $400,000+ in additional funds in December will be very helpful.

As Dr. Baule pointed out, many folks assisted with obtaining the waiver for the MOE.  I was pleased to also assist and work with not only Jennifer Thompson from the Indiana Department of Education but also Lee Ann Kwiatkowski and Pam Wright.  Robin Peckinpaugh and I participated in two conference calls with representatives of the IDOE and U.S. Department of Education, the first on October 3rd and the last on November 3.  We laid out our case for the waiver in the call of October 3rd and received the official approval for the waiver in the November 3 call.

Teacher Contract Negotiations

Teacher contract negotiations are proceeding, and we are close to an agreement.  The deadline for contracts to be submitted is November 15.  We have had conversations with IEERB, and if not completed by Friday, will need to have IEERB declare an IMPASSE and give us a brief period to complete agreement.

We are close to settlement and should be able to get there soon.  One of the challenges, of course, will be the Thanksgiving Holiday and accommodating busy schedules next week.

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