Schools chief hopeful draws a dire picture

Republican Tom Mullins says his research indicates the school district is on the brink of bankruptcy.

By BARBARA BEHRENDT

© St. Petersburg Times, published June 1, 2000

INVERNESS -- Tom Mullins, who is challenging a fellow Republican, Superintendent of Schools Pete Kelly, in the September primary, has called for Kelly's resignation, citing his own research that the district's finances are on the brink of bankruptcy.

In a strongly worded letter to the Citrus Republican Executive Committee delivered late Tuesday, Mullins told party leaders that Kelly was going to be an embarrassment to them and that he needed to resign.

"We can't wait for an election process to remove this cancer. We don't have time," Mullins wrote.

He also said that, if his allegations were proven to be wrong, he would himself step down as a candidate.

"I consider his letter a very, very serious allegation," Kelly said. He noted that his staff is preparing financial information to debunk the claims Mullins has made.

"If we're on the verge of bankruptcy, that's news to me. We've got $2-million in our reserves, and $2-million is not bankruptcy."

The district's finance director, Sara Perez, said Wednesday that the district has had financial problems but is improving the situation.

"I'm confident that we're taking the proper actions to prevent that, and no, we're not going to go bankrupt," Perez said.

Mullins said he is waiting to see what outgoing Assistant Superintendent David Hickey says during his press conference today announcing his candidacy for superintendent in the Democratic primary. Mullins said he will step down from the race if Hickey doesn't confirm the financial concerns.

Mullins said he has been frustrated because he doesn't believe people are grasping the seriousness of what he said he found during a review of the district's finances and from talking to officials in Kelly's administration.

Mullins accuses Kelly of hiding the facts from the School Board and the public and accuses the media of covering up the information.

For the last several weeks, Mullins has been talking to the public and the media about his contention that, since the district has spent more money than it has brought in, the school system was headed for a financial crash. Figures Mullins received from Perez reflect deficits ranging in the $1-million to $2-million range every year since 1994.

A consultant who has worked with hundreds of districts across the country, Mullins said in his letter that he knows "sick budgets and broken systems."

The Citrus schools have been deficit spending throughout Kelly's tenure and before, making up the difference by moving funds from other parts of the budget and drawing down the district's reserve fund.

Mullins contends that this year Kelly is taking $4-million in state dollars that he says should go toward pay raises and putting it into the depleted contingency funds.

"This is not illegal, but unwise and dangerous, if left to continue year after year," Mullins wrote. "In fact, the reserves are now nearly depleted and an imminent bankruptcy date can be predicted should these spending patterns continue."

He predicts bankruptcy and a take-over by the state in 12 to 24 months.

But finance director Perez disputes that assessment.

"This district has been on a financial roller coaster, and I want us to get back on a good, constant, steady financial position," Perez said. "Are we where we need to be? I don't think so, but we're on the road to recovery . . . and that's going to take time. Change is not simple."

One primary reason for the deficit spending has been that the district hired too many people. Two years ago, Perez said, the district brought 75 new employees on board, but student census growth did not require that many people. Because the number of students dictates the level of state funding, that hiring created fiscal turmoil.

Now, Perez, said there is a better system in place for determining when new staff is needed.

"We've made tremendous strides in improving that from last year to this year," she said.

Kelly said some of the district's fiscal problems have been outside the system's control, including a $3-million shortfall just as Kelly was taking office and a $1-million loss due to changes in funding for exceptional students last year.

The $4-million in state funds that Mullins talks about have already been committed to pay raises and other expenses and cannot be directly put into the reserve funds.

Kelly said he has been working with his staff and the board to improve the district's bottom line.

"We've been saying this for a year, that we're going to do what needs to be done to fix the situation, and this year, we came out fine," he said.

Recently, state auditors finished their annual look at the district's budget position, and Kelly said he has been told that there were no serious problems found in that review.

Kelly also said he was disturbed by statements made by Mullins that his information about the district's dire fiscal outlook came from Kelly's own leadership team because that is not what they have shared with him.

Party leaders said they were disappointed with the letter from Mullins.

Weston Stow, chairman of the Citrus Republican Executive Committee, responded by telling Mullins that from the school officials he's spoken to and the fact that local newspapers have not written about the alleged crisis, he had doubts about the allegations Mullins has leveled.

In his letter, Stow challenges Mullins to prove his allegations and points out that the committee members take an oath stating that they cannot get involved in helping one Republican over another in a primary.

"If he has accusations, he has to prove them," Stow said. "I've looked into them myself and, to the best of my knowledge, they're unsubstantiated. . . . If he has a case to make, it needs to be with the public and not the executive committee."

Stow has even talked to Florida Education Commissioner Tom Gallagher, who praised Kelly and told Stow that there was no problem with the way the district was conducting its financial business.

Stow said he warned Mullins to be careful about what he was saying.

"I warned him verbally that if you make allegations that are untrue, this executive committee in the past has censured candidates, and there is a chance that that could happen again," Stow said.

Mullins said he just wanted to see the district run correctly.

"I think people need to live in the light of day and we need to get rid of corruption," he said. "We've got corruption in this government and in this school system, and the people who are suffering are the children."

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