MCS is “Fiscally Impaired”; BSU to Thieve Prime Real Estate

By: Todd Smekens

State Declares MCS, “Fiscally Impaired”

Muncie, IN BLOG – The latest saga with Muncie Community Schools (MCS) unfolds as SB-567 was passed by both houses and moves toward the governor’s desk for his signature. In a nutshell, MCS district has been taken away from locally elected board members, replacing them with a Distressed Unit Appeal Board (DUAB). The state-appointed board will appoint an “emergency manager” (EM) to carry out immediate plans to reduce the deficit. Our board already voted to close three elementary schools earlier this month, but will not be part of the implementation.

Muncie residents and our elected representatives were extremely vocal about a state takeover. It certainly helped as Republicans decided to just focus on MCS’s weak financial position, leaving academics alone. From a sports perspective, Muncie Central has lost several key coaches the past several weeks. Teachers have already been leaving while others warn about more departures if the current “morale busting” superintendent is chosen by the state to lead the school district’s downsizing plan.

A further look at SB-567 reads:

Muncie Community Schools is designated as a fiscally impaired school corporation. The school corporation’s designation as a fiscally impaired school corporation terminates on January 1, 2018. The school corporation’s designation as a fiscally impaired school corporation is not a designation of the school corporation as a distressed political subdivision for purposes of this chapter. The school corporation’s designation as a fiscally impaired school corporation is effective regardless of whether the school corporation has submitted a petition under this section requesting to be designated as a fiscally impaired school corporation. The board shall appoint an emergency manager for the school corporation.

I would agree that MCS is “fiscally impaired.” However, the looming questions are:

  • Will closing schools save the district enough money to avoid becoming a “financially distressed unit”?; and
  • What actions will the state take if the $10 million fund hasn’t been repaid to avoid a bond default by MCS triggering a lower credit rating for MCS and other Hoosier schools?

As a quick reminder, MCS unethically borrowed monies from capital projects funds to keep from bouncing checks. They borrowed from a sponsorship grant and also from advanced school monies.

We’ll know in December 2017 when the state holds a determination hearing.

The proposed bill grants substantial powers to the “emergency manager”; with particular interest is this clause:

Align the school corporation’s personnel and facilities with the anticipated revenues and enrollment of the school corporation.

MCS and MTA have been unable to do this for well over a decade. As I’ve pointed out elsewhere, Anderson Community Schools realigned their school corporation in the early 2000’s based on their new fiscal reality. After more than a decade, the school district now needs to raise $50 million for expansion. The EM will now work with the DUAB to accomplish

I believe current Superintendent Steven Baule will be appointed as EM by DUAB. Earlier this month, Baule requested the closing of NMS, but the board didn’t grant his request. They want a referendum offering the community a one or two middle school option. Sorry, but this is a waste of time. Close the middle school and send the kids to Southside, and then prepare for the loss of even more students.

Officials Steal MCS Owned Property

One note expanding upon my last article, SB-567 alters the existing charter school law which requires a school district to offer the building to a charter school operator for $1.00 (this penalizes the community who funded the construction of the building). What they propose in SB-567 is even more self-serving thievery, but I suspect many of our local representatives support this decision. In this case, they revised the law to allow Ball State University to have “right of refusal,” or more specifically:

If the emergency manager sells real property, any political subdivision that has territory where the real property is located and institutions of higher education with real property located in Indiana shall be given a thirty (30) day first right to make an offer to purchase the real property. Ball State University shall have the right of first refusal for any property sold, transferred, or leased under this subsection. The emergency manager shall determine whether it is appropriate to accept one (1) of these offers and shall negotiate the terms and conditions of the sale of the real property to the offeror.

While some might see this as a better plan than selling to a charter school, it’s very short-sighted and fails to explore more lucrative alternatives.

Anthony administrative building was stolen from MCS, and I suspected at the time, the end game was also Northside Middle School. In anticipation, I sent an email for Rep. Tim Brown (R) once I learned amendments were forthcoming which were favorable to Ball State. Representative Brown led the assault on MCS at the state level and was already discussing a state takeover in committee before the Fact Finder released their conclusions to MCS. Further evidence of negotiations occurring behind closed doors in Muncie and Indianapolis.

My question to Mr. Brown and his media consultant remains unanswered. If the state is concerned with the financial position of MCS, “Why not amend the law allowing for the sale of the property to a commercial developer via an open bid process?’

What about potential tax income from converting this site to an income producing property? Allowing a bidding process would have been more beneficial for MCS’s fiscal deficit and local taxpayers. However, I suspect local and state officials worked tirelessly to ensure Ball State could have the property for nothing (the lead photograph was taken on Oakwood facing both school properties with Scheumann Stadium in the distance).

The theft of school-owned property by a state-run university is a classic example of a Kleptocracy.

Kleptocracy – a government with corrupt leaders (kleptocrats) that use their power to exploit the people and natural resources of their own territory in order to extend their personal wealth and political power. (Wikipedia)

The MCS debacle has a growing list of opportunists preying on our floundering school system – union leadership, retired administrators, vendors, bus provider, ambitious city council members, Ball State University, and even state officials who’ve orchestrated the demise of government-run educational institutions within our state.

Just imagine if all these actors had used their energy and resources to avoid the crisis while focusing on educating our young minds.


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Todd Smekens

Journalist, consultant, publisher, and servant-leader with a passion for truth-seeking. Enjoy motorcycling, meditation, and spending quality time with my daughter and rescue hound. Spiritually-centered first and foremost. Lived in multiple states within the USA and frequent traveler to the mountains.

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