Personal use of vehicles, car allowances part of benefit package in some ISDs

ISDs own or leave 700-plus vehicles that aren't buses

vehicles owned by ISDs
At least a dozen intermediate school districts in Michigan provide vehicles for business and personal use by superintendents or other senior administrators, including this 2007 Buick Rainier, top, and 2004 Chevy Tahoe, below. The Rainier is designated for superintendent use in the Gratiot Isabella Regional Educational Service District and the Tahoe for superintendent use in the Clinton County Regional Educational Service Agency.

At least a dozen of Michigan’s 57 intermediate school districts provided a vehicle for business and personal use by their superintendent in 2007, while others paid a car allowance for use at the superintendent’s discretion.

While it isn’t the most expensive benefit that ISDs offer their top administrator, providing a vehicle earmarked for superintendent use and allowing personal use of that vehicle adds up to thousands of dollars in some districts.

School board members say they provide a vehicle or a car allowance for the superintendent because the job requires frequent travel, both to constituent districts and to Lansing. Depending on the miles traveled, providing a vehicle can be more cost effective than a mileage reimbursement, finance directors told Michigan Education Report.

The Saginaw Intermediate School District, which reported the lowest amount of personal use of a vehicle in terms of dollar value, provides a car to its superintendent primarily for business use, but allows personal use for efficiency, according to board treasurer Richard Burmeister.

"It (personal use) can be allowed, but it’s not standard practice. The superintendent is responsible for going to Lansing and being politically involved because of the districts we represent," Burmeister said. "Yes, he drives it home because he may go from home to Lansing or to another appointment. It’s a way to be more effective in his work."

Personal use of public vehicles came under scrutiny at the state and local levels in 2007. A majority of Michigan appellate judges gave up their state cars, though they continue to be reimbursed for business travel, and Gov. Jennifer Granholm also prohibited use of state vehicles for personal purposes.

Now a Michigan legislator has introduced a bill that would prohibit use of a publicly owned vehicle by any employee in local municipalities, townships or school districts.

Vehicle Lists Online

Intermediate school districts are required to list the vehicles they own or lease in an annual report posted at their Web site. The reports were first required in 2005-2006, after a legislative investigation of a financial scandal in Oakland Schools and other intermediate districts. Intended to bring more public scrutiny to ISD spending, the reports must list each vehicle as well as top salaries, budget totals, travel expenses, and lobbying and legal expenses, among other items.

The latest reports, filed in December, show that intermediate school districts owned or leased a combined 700-plus vehicles during 2006-2007. Most of those were pool cars for business-only use, maintenance vehicles, courier vans or vehicles that students use for practice in auto shop. Vehicles for top administrators are typically 2004 or newer sport utility or minivan models.

"I never know when I’ll be going out," said Superintendent Mary Vratanina of the Cheboygan-Otsego-Presque Isle Educational Service District. "This is a service agency. You can’t see people if you aren’t out there."

Vratanina’s district provides her with a 2006 Chrysler Pacifica for business and personal use. Based on mileage reports, Vratanina said her personal use added up to about half of the overall use of the vehicle in 2007. Most of that consisted of the 33-mile drive from her home to the district office in Indian River, she said.

Similarly, Superintendent Michael Hill said the 20-mile commute from his home in Maple City to the Traverse Bay Area Intermediate School District offices in Traverse City makes up most of his personal use of the 2006 Chrysler Pacifica the district provides for the superintendent.

"I don’t drive it all the time," he said.

Personal use of a public vehicle is considered taxable income by the IRS, and school districts must calculate a dollar value for that use and report it on the employee’s W2 form. In Hill’s case, the district business office calculated the value of his personal use of the vehicle at $7,750 in 2007.

Michigan Education Report asked districts that allow personal use of vehicles to provide the dollar value of that use for the latest year available. Figures provided by the districts’ finance offices include the Kalamazoo Regional Educational Services Agency (2005 Chevy Tahoe, $2,966); Oakland Schools (2005 Dodge Grand Caravan and 2005 Chrysler Town and Country, $10,836 combined); Clinton County Regional Educational Service Agency (2004 Chevy Tahoe, $4,900); Saginaw Intermediate School District (2006 Buick Lucerne, $574); Cheboygan-Otsego-Presque Isle Educational Service District (three 2006 Chrysler Pacificas, $13,200 combined); Traverse Bay Area Intermediate School District (2006 Chrysler Pacifica, $7,750); Gratiot-Isabella Intermediate School District (2004 Buick Rendezvous, $2,115); Hillsdale County Intermediate School District (2006 GMC Envoy, $698); Kent Intermediate School District (two 2006 Dodge Durangos, $2,316 combined, one vehicle provided for only half the year); Genessee Intermediate School District (2007 GMC Yukon, $3,777); Van Buren Intermediate School District (2005 Chevy Trailblazer, $5,857), and Washtenaw Intermediate School District (2003 Ford Expedition, $3,708).

About three-quarters of the miles put on the district-provided vehicles in Oakland Schools were for personal use, according to calculations by the district. Of 20,000 miles reported by Superintendent Vickie Markavitch, about 15,500 were for personal use. Of about 16,700 miles reported by Deputy Superintendent Robert Moore, about 12,000 were personal miles.

Three districts, the Wayne Regional Educational Services Agency, the Kent Intermediate School District, and the Alpena-Montmorency Intermediate School District, stopped providing a vehicle for the superintendent during the past year. As of July 1, Wayne RESA switched to providing business-only mileage reimbursement for all employees, while the Alpena-Montmorency board of education decided that the 2006 Chevy Trailblazer it leases will be available for business use by all employees.

"This year we just said that if the superintendent wants to schedule it, he can," explained Anthony Suszek, business manager in Alpena-Montmorency. "It stays in the parking lot at night."

Wayne RESA made the switch to a business-only reimbursement plan because it gives the district better control of the system, said James Beri, president of the district’s board of education.

"This way we can trace it a lot better and make sure we have control," he said, adding that the change was proposed by the district superintendent.

Aside from vehicle benefits, a number of intermediate districts pay for tax-sheltered annuities, life insurance policies and universal service credits on behalf of superintendents. Those extras pushed the total compensation for ISD superintendents in Michigan from $7 million for salaries alone to nearly $8 million.

Kent switched to a monthly car allowance of $500 for its superintendent rather than providing a vehicle, but retained a vehicle for the business and personal use of the district’s facilities director, according to Ronald Koehler, assistant superintendent.

"He (the facilities director) is on 24-hour call and we have 3,000 students on campus every day," Koehler told Michigan Education Report. "The last couple of days he’s been out at 3 or 4 in the morning to see if we should be open."

Other school board members said they provide a vehicle or car allowance because they expect their top administrators to travel.

"We have a rather large district and we require the superintendent to interact with local districts in our county," said Delores Myers, president of the Kalamazoo RESA board of education.

Other intermediate districts that provide car allowances to superintendents rather than vehicles include Jackson County and Monroe, which each paid allowances of $6,000, Lewis Cass, which paid $11,400, and Allegan County, which paid $14,000. Still other districts reserve a vehicle for the superintendent, but for business use only.

Other Benefits

Aside from vehicle benefits, a number of intermediate districts pay for tax-sheltered annuities, life insurance policies and universal service credits on behalf of superintendents. Those extras pushed the total compensation for ISD superintendents in Michigan from $7 million for salaries alone to nearly $8 million with added compensation. The average base salary was $126,000.

No intermediate school district, or any other local unit of government, could permit personal use of public vehicles under legislation introduced by state Rep. Brian Palmer, R-Romeo. House Bill 5506 would punish violators through reduced revenue sharing or school aid.

"Business use makes sense," Palmer told Michigan Education Report. "To use those cars on weekends … is absolutely unconscionable. We have the highest foreclosure rate in the nation (in Detroit). And what do we have? We have government still growing."

Vratanina pointed out that use of the vehicle is the only added benefit she receives as superintendent.

"I pay my own health insurance. I don’t get any annuities. The only monetary benefit I get is my salary," she said.

Van Buren Intermediate School District Superintendent Jeffrey Mills said he isn’t sure the ban on use of vehicles by judges and state employees will save much money.

"Here’s the number that will be interesting in a couple of years. How much are they turning in for reimbursement?" Mills said. He continued, "I travel a lot. I go out to every local school district to get feedback about what we’re doing."

The Van Buren ISD covers 725 square miles and serves 20 public and nonpublic school districts. Though intermediate districts vary widely in geography and number of students served, most, like Van Buren, offer programming or support in the areas of special education, career and technical education and early childhood education. Superintendents say their programs save local districts money and improve services by consolidating educational programs, in particular special education and career and technical education, as well as some business functions like payroll, data management, technology and purchasing. As of this year the ISDs are required to develop a plan for potential consolidation of noninstructional services among their local school districts.

Few Questions

Palmer said he believes the law requiring intermediate districts to post financial information on their Web sites has helped to put intermediate spending "on the radar screen," though several superintendents told Michigan Education Report that they have not received any questions or feedback from the public on the numbers they posted.

"This is the first phone call I’ve gotten about it," Menominee ISD Superintendent Larry Godwin told Michigan Education Report. It’s more common for school board members at the intermediate and local levels to raise questions about the budget than to hear questions from the public at large, he and other superintendents said.

Lenawee ISD Superintendent Steve Krusich said posting the numbers is "excellent public policy," but one that has not been applied equitably to all publicly funded programs.

"If it makes sense, it makes sense in a broader application," he said.

Ray Wilson, president of the Kalamazoo County Taxpayers Association, said intermediate school districts do not receive enough public scrutiny, mainly because their board members are not elected by the public at large, but by school board members of the constituent districts.

"The ISDs spend tens of millions of dollars with very little public oversight," he told Michigan Education Report. "There’s no way for the public to enforce accountability."

In addition to superintendent vehicles, the reports list vehicles for other uses, often reflecting the variety and scope of programming in a given district. (The reports do not include school buses.)

The Saginaw intermediate district has one of the largest fleets of vehicles in the state, with 27 cars and vans used to transport students with disabilities from school to community work sites and back. An additional 13 vehicles are used to transport food, families and employees to Head Start sites which the intermediate district operates throughout the region.

Bill Hartl, the director of special education, said no employee is allowed to use the special education transportation vehicles for personal use, a policy enforced through the use of global positioning systems.

"I can tell where those vehicles are every 17 seconds," he said.

Conversely, the system defends drivers in cases when parents claim the bus never arrived, giving Hartl proof that a vehicle was at a certain driveway at a certain time.

The Lenawee and Allegan County intermediate school districts each maintained a fleet of motorcycles used in safety education programs during 2006-2007, though the Allegan district has since discontinued the program.

The Lenawee district owns 11 motorcycles, all of them donated or paid for through a state grant. The motorcycle driver safety program is one of a large number of adult and community education programs the district offers at its Vo-Tech Center.

"We believe we belong to Lenawee County. While our primary mission is education, we believe our mission also is to make Lenawee a better place to live every day," Krusich said.

The Allegan County Intermediate School District discontinued its motorcycle safety program in 2006-2007 after a teacher left.

"It was providing a service to the community, but there wasn’t really a student benefit," administrator and instructor Jon Gates said. "The direction our technical center is headed for is work-based learning."

The Traverse Bay ISD leases 33 vehicles for use in the MichiganWorks! program, which it administers through a contract with the Northwest Michigan Council of Governments. The ISD provides workforce development services to adults, youths and local businesses in a 10-county region, with funding from federal and state sources as well as a local grant from the United Way.

"I see it as a very efficient model," Hill said. "If there are ways we can help this region through collaboration, I will push our agency to look for those areas, and this is one example."

The district also owns or leases 15 vehicles for maintenance and business-related use by staff or students in its other programs.

Fund Balances

The vehicle list and the Traverse Bay ISD budget in general have prompted questions from Maynard Wheeler, a Lake Leelanau resident and member of the Leland Public Schools Board of Education. Leland Public Schools is within the Traverse Bay ISD. Wheeler, a retired corporate executive, told Michigan Education Report he believes many intermediate districts can and should funnel more money directly to struggling local districts.

"We’re sitting here with a 7- to 8-percent fund balance," he said of the Leland district, while the Traverse Bay ISD intermediate district has a general fund balance equal to about 37 percent of general fund expenditures.

"Our ISD is no different than the others," Wheeler said. In correspondence between Wheeler and the Michigan Department of Education, Wheeler was told that Michigan intermediate districts had a combined total fund balance of about $780 million as of June 30, 2007, of which about $600 million was restricted for use in special education, vocational education or capital projects. In their general funds alone, as of 2006, 34 of the 57 districts had a fund balance equaling 50 percent or more of their expenses.

"They could offer half of that (to local districts), easily," Wheeler said. "The dollars you can get closest to kids are the best dollars you can spend."

In letters to Wheeler, the state department noted that general operations funding from the state to ISDs reduced by 15 percent in recent years, though an inflationary increase was provided in 2007.

Hill responded that one reason for the higher fund balance at the intermediate level is to pay for initiatives like its special education transportation consortium. Ten of the ISD’s 16 districts participate in the consortium as a way to save transportation dollars. The seed money to begin the program came from the ISD general fund, Hill said. The ISD also pays for 70 percent of the cost of a digital videoconferencing system that saves districts money by providing for distance learning programs for both students and staff.

"When you look at our fund balance, we’ve positioned ourselves to meet changing needs. We take that role very seriously," Hill said.