Big Banks screw over school districts

[marmar]

from Bloomberg:





Hidden Swap Fees by JPMorgan, Morgan Stanley Hit School Boards

By Martin Z. Braun and William Selway

Feb. 1 (Bloomberg) -- James Barker saw no way out. In September 2003, the superintendent of the Erie City School District in Pennsylvania watched helplessly as his buildings began to crumble.

The 81-year-old Roosevelt Middle School was on the verge of being condemned. The district was running out of money to buy new textbooks. And the school board had determined that the 100,000-resident community 125 miles north of Pittsburgh couldn't afford a tax increase. Then JPMorgan Chase & Co., the second-largest bank in the U.S., made Barker an offer that seemed too good to be true.

David DiCarlo, an Erie-based JPMorgan Chase banker, told Barker and the school board on Sept. 4, 2003, that all they had to do was sign papers he said would benefit them if interest rates increased in the future, and the bank would give the district $750,000, a transcript of the board meeting shows.

``You have severe building needs; you have serious academic needs,'' Barker, 58, says. ``It's very hard to ignore the fact that the bank says it will give you cash.'' So Barker and the board members agreed to the deal.

What New York-based JPMorgan Chase didn't tell them, the transcript shows, was that the bank would get more in fees than the school district would get in cash: $1 million. The complex deal, which placed taxpayer money at risk, was linked to four variables involving interest rates. Three years later, as interest rate benchmarks went the wrong way for the school district, the Erie board paid $2.9 million to JPMorgan to get out of the deal, which officials now say they didn't understand.

``That was like a sucker punch,'' Barker says. ``It's not about the district and the superintendent. It's about resources being sucked out of the classroom. If it's happening here, it's happening in other places.'' .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ay5LDbjbjy6c

[MadHound]

1. School districts have been getting screwed over for a long time now

What with cuts in state and federal funding, unfunded mandates like NCLB, taxpayers who don't think it is necessary to invest in the education of our children, parents who don't give a damn, this is but the latest in a long line of burdens schools have had to bear. My only hope is that when public schools are finally driven into the ground, people will at least, finally realize how good they had it before privatized education, or complete ignorance take over.

[Red Zelda]

2. No, no, no

Every high school I see is a huge palacial expanse with athletic fields galore and giant football stadiums that NO ONE else in the community may use. Fuck the school districts. When they concentrate solely on in-class education, then I'll feel sorry for them. Until them, they are robbing taxpayers.

[MadHound]

3. You've been hanging out in the 'burbs too much

The vast majority of high schools, and middle, junior and elementary schools for that manner, are getting by on a shoe string budget, cutting programs, cutting teachers, trying to do more with less. Sure, there are those schools with the big athletic field, but you know how they get those big new athletic fields? The get parent and business donations earmarked specifically for athletics, while academics rot on the vine.

But hey, thanks for writing off an entire generation of students with your attitude. You assume much, and in your anger deny students that which you hold dear. Congratulations, you're part of the problem.

[LWolf]

4. I'll second that. n/t

[Red Zelda]

7. Cutting programs? WTF?

Not anywhere I've been. Sure, I agree that urban districts are having a tough time, but the suburban districts, which have many more students, have been raping taxpayers for years. ALL scholastic sports, etc. should return to community-based organizations and sell hoagies to fund their programs, like the Little League does.

Here in Pa., I can show you hundreds of districts with giant placial buildings, mega-computer labs and fields with artificial turf. These districts have multi-million-dollar budgets. Some pay football coaches more than I've made in my lifetime.

DON'T preach to me about the poor ol' schools. I'll show you property tax bills that would make hair grow on your grandaddy's dry old scalp.

[proud2BlibKansan]

10. As the daughter of a high school coach, I call bullshit

Unless of course you can provide a link to your claim that "Some pay football coaches more than I've made in my lifetime." And it should be easy since school districts post their salary schedules online.

I'll be waiting for that link. :hi:

[Red Zelda]

11. Coach of what? Field hockey?

Did he ever have a private-sector job?

[proud2BlibKansan]

13. LOL My dad coached three sports, was a referee, and worked THREE jobs

for 40 years. From September to May, he was rarely home. He worked part time retail on the weekends for years, and he worked every summer too. His typical schedule was off to school by 7 am, teach till 3 and then practice till 6. Then he would often officiate games in the evenings or he had to go to meetings and trainings to keep his officiating license current. On the weekends, he worked retail either all day both days or in the fall, in the mornings and then he would officiate college football games on Sat afternoons. On Sundays during football season, he worked on the officiating crew at the KC Chiefs games, where he earned all of $25 a game. Since he was a basketball coach, he worked over Christmas and Thanksgiving vacations too, since they always played holiday tournaments. And in the summer, he worked more hours at his retail job and worked all day at a summer camp. He also drove the bus for the camp to make a little extra money.

In my district, coaches are paid $3000 a year above their teaching salary for their coaching duties. That is fairly standard.

Like I said, I call bullshit on your claim but will apologize as soon as you post a link proving that the coaches in your area earn more than you do in your lifetime.

On edit, you are talking to a girl who played field hockey in high school. Two of my sisters are field hockey officials and play on an area semi pro field hockey team. So you are really on a roll here! Congratulations!!

[Red Zelda]

14. He sounds like a great guy

But one cent of taxpayers' money going to a football coach, or any coach, is too much. There are even poor districts here in Pa. that can barely pay qualified teachers that go and drop thousands of dollars on football coaches who are already making executive salaries to be gym teachers (or athletic directors). At a time when seniors and even younger people are overwhelmed with property tax bills, scholastic sports must find their own funding streams. And leave schools to teaching.

I coached sandlot baseball for years. We worked hard to raise every penny of our budget ourselves. We even got the sponsors for the field. No tax money ever went to our program. Of course, the overfunded local high school got taxpayer-paid new uniforms every year. Our coaches did it because we loved the game. No pay for it.
It's time we closed the door on taxpayer-funded scholastic sports.

[proud2BlibKansan]

16. My dad used to say

that there are a lot of kids who show up for school at 8 am only because they have practice after school. So I disagree with you. We absolutely do need high school sports. And many kids get college scholarships because they are such good high school athletes. I personally know literally dozens of kids who would not have gone to college without a sports scholarship.

The truth is education is expensive. And if we want good schools, we have to pay for them. And we need to have programs at our schools that make our kids want to come to school. You can't really put a price tag on a good education.

Also even people who don't have children should value a well funded public school system. It enhances your community and has a huge impact on local property values.

[MadHound]

17. Go check out the funding for the suburban athletic programs,

Go see what percentage of those athletic programs get substantial programs from the public? Quite a bit.

And now you're complaining that they schools have nice buildings and state of the art computer centers. What is wrong with that? What, you want the kids in drafty old building still using slide rules:eyes:

As far as HS coaches go, somehow I doubt your statement about their pay. They aren't paid in the seven digit, or even six digit range. Most of them are paid the same as most teachers of their tenure rank, generally in the tens of thousands. If you haven't made that during your lifetime, then that's your problem, not the schools.

I'm sure that there are some high property tax bills, but those bills are due from people who own lots of property and generally have the means to pay for it. And sadly, it is the voting public who control how much those property taxes are. If you have a complaint, then take it up with your fellow citizens. My complaint along these lines is that many, if not the majority of voters see no benefit to having a well educated public, so they go out and vote down tax increases for schools, consigning the future generation to being undereducated. What's sad is the attitude of the childless, that not having well educated children won't effect them, and they feel no social responsibility to future generations. Let me guess, you fall into this category.

Sorry, but I find your complaints to be baseless and groundless. You're simply another one of those haters who resent the relatively few bucks that schools get in tax revenue. You refuse to see the great things that the public school system in this country has accomplished, and being ill informed you voice baseless complaints, whining and complaining about that which you have no clue about. Tell you what, the records are all public, why don't you go down and do the math yourself, do the research, then get back to about how schools are these vast moneypits paying extravagant salaries.

Besides, what is your solution, private schools:eyes:

[Red Zelda]

8. Business donations?

Again, nowhere I've been. These football palaces are funded by TAXPAYERS who are being raped twice in Pa.: Property taxes AND local earned income taxes. In my house we pay almost as much to the fucking school district as we do the federal government. That is one fucked up system, friend.

Oh, and we have no kids. Do it right. Have a base tax to cover school necessities and make the rest a USER'S fee.

[MadHound]

18. LOL, I should have read down the post, my speculation in my reply up above was correct.

You have no kids and are pissed about having to fund schools, not recognizing in your own narrow little world that an educated public benefits everybody, including you. What, you don't think that you, or the rest of the public benefits from having an educated populace?

People like you, greedy and shortsighted, utterly disgust me. You bitch and whine about taxes, claiming you receive no benefit when those benefits are all around you if you would but open your eyes and see. Narrow minded, short sighted, utterly clueless. Oh, and where did you get your education in K-12? Yeah, most likely in a public school, yet here you are, selfish and ungrateful for the benefits that you received.

And again, you don't seem to realize that it is your fellow citizens, not the school district, who voted in those property taxes. But it's just easier, if not logical, to complain about the schools rather than your fellow citizens.

And again, in regards to the football stadiums, I really suggest that you go check out the public records. I'm sure that you'll find that a substantial part, if not all of the price paid for that astroturf was paid for with donations. If not, and if you have a problem with it, you have the solution in your hand, run for your local school board and do something. But let me guess, it's just easier for you to whine and moan and make baseless complaints on an anonymous internet chat board:eyes:

[proud2BlibKansan]

12. Here's a third!

:hi:

[MadHound]

19. Hey you, congrats on your Jayhawks

But we'll kick Jayhawk butt come football season.

But here's hoping KU takes it all.:toast:

[proud2BlibKansan]

20. Yes that was a great game

I honestly didn't even expect them to win, much less tromp on NC.

And it was wild here last night. They were shooting off fireworks. :bounce:

[proud2BlibKansan]

9. Wow come visit me TOMORROW

My elementary school is 94 years old. We have no AC and the boiler is about to go. Of course the district can't afford to replace it. Most of the windows are stuck shut so we educate in a balmy 90 degree building year round.

And on a clear day, I can stand on our playground (of course we have no swings or playground equipment) and see the beautiful stadiums our tax dollars built for our pro sports teams! Gotta love the priorities in this community!!

Here is a book you need to read. It illustrates perfectly on a national level what has happened to our public schools, especially the buildings, and how inequitably we fund our schools.

http://books.google.com/books?id=UEJ3QAukj9oC&dq=savage+inequalities&pg=PP1&ots=ExxpJUJdTa&sig=vP9QCz4bwBaI7xfQ6-ruzbNJ4xI&hl=en&prev=http://www.google.com/search?q=savage+inequalities&sourceid=mozilla2&ie=utf-8&oe=utf-8&sa=X&oi=print&ct=title&cad=one-book-with-thumbnail

[flashl]

5. 'Subcrime' extended to schools ... More from the article ...

"It's a serious issue, not only in Pennsylvania but across the country,'' says Cox, 55, who has headed the SEC since 2005. ``That is what we have seen repeatedly. More often than not, the municipalities aren't configured to have financial sophisticates in charge of these offerings -- and the result is that the firms are the only ones who know what's going on.''

Exchanging Payments

In a swap, two parties agree to exchange payments over a period of time that can last as long as 30 years. Typically, one agrees to pay a fixed rate and the other to pay a variable rate that changes with a benchmark index or formula defined in the contract.

Note: 'Subcrime' borrowed from Fed-Up

[OzarkDem]

6. When are Congressional Dems going to rein in banks?

Are they getting a lot of political contributions from them that they can't live without? What's the problem?

Should Barney Frank resign as head of the committee with oversight?

[lonestarnot]

15. Continual budget override after override here.