June 29, 2016

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Survey: Paying school administrator’s college debt unheard of

David Knox and Nick Glunt | The Gazette

A survey of Ohio’s 33 largest school districts failed to find an administrator’s contract with the most controversial fringe benefit awarded Medina Superintendent Randy Stepp — elimination of his old college debt at taxpayers’ expense.

Randy Stepp

Randy Stepp

Stepp’s three federal student loans, totaling nearly $172,000, were repaid in full in January 2012 — two months after the school board amended his 2009 contract and agreed “to pay the costs associated with the Superintendent’s acquisition of past academic degrees.”

The payoff of his student loans and other educational costs by the district — totaling more than a quarter-million dollars in the past three years — are the focus of a continuing controversy over how Stepp was able to get the board to agree to such generous benefits.

The public furor prompted board President Charles Freeman to resign earlier this week and dimmed hopes of passage of a 5.9-mill levy on the May ballot.

Of 24 school districts that responded to The Gazette’s survey, none had contracts providing for payment of student loans or reimbursement for tuition or other educational costs run up by superintendents before they were hired.

“Where do you draw the line? I’d hate to see the industry adopt that practice as a whole.”

—Penny Rucker, treasurer of Columbus Schools

Stepp received two of his three degrees from Ashland University — a bachelor’s in education in 1993 and a master’s in 1998 — before becoming superintendent in 2006.

He received his doctorate in 2010.

Many officials voiced surprise that a school board would agree to pay for past degrees.

“I have never heard of a retroactive reimbursement,” said Steve Maag, treasurer of Beavercreek City Schools southeast of Dayton.

Beavercreek, with an enrollment of about 7,500, was the state’s 27th largest district in the 2011-12 school year.

Medina, with 7,066 students, ranked 34th in enrollment among Ohio’s more than 600 school districts.

Treasurer Penny Rucker of Columbus Schools — the state’s biggest system with nearly 50,000 students — also knew of no other district in Ohio that covered the cost of old degrees.

Rucker added that she hoped that fringe benefit would not catch on.

“I could not point to any other district that would have that — not that it doesn’t exist. I’m just not aware of any.”

—Rob Delane, deputy executive director of the Ohio School Boards Association

“Where do you draw the line?” she said. “I’d hate to see the industry adopt that practice as a whole.”

Stepp’s contract may be unique in the state.

Rob Delane, deputy executive director of the Ohio School Boards Association, could not cite a similar provision in a superintendent’s contract.

“I could not point to any other district that would have that — not that it doesn’t exist,” he said. “I’m just not aware of any.”

Theodore Kowalski, a professor at the University of Dayton and a national expert in educational administration, said he did not know of any superintendent anywhere whose college loans were paid off.

“I’ve done a lot of research on superintendents, and I’ve never come across this,” Kowalski said.

But Kowalski and school officials who responded to the survey said it was fairly common for school boards to pay for additional education of their superintendents.

Stepp’s contract also provide for that: Stepp earned an executive master’s in business administration from Case Western Reserve University at a cost to the district of nearly $94,000.

The payments for Stepp’s education have continued to fuel public protests that began nearly a month ago, when rumors began circulating that the board had approved a new contract for Stepp that included an $83,000 signing bonus aimed at discouraging him from taking another job.

“I’ve done a lot of research on superintendents, and I’ve never come across this.”

—Theodore Kowalski, national expert in educational administration

Stepp has apologized for including the bonus in the contract, which the board approved at a Jan. 7 work session without publicity. He also has agreed to give back the bonus in biweekly installments through the end of the contract, in 2019, and to forgo $36,000 in merit raises.

But Stepp has rejected criticism of the payments for his education despite last week’s acknowledgement by board members that they “were not aware of the extent of the reimbursement or that it applied to all degrees.”

Nor did they know that the loans were paid off because the Jan. 9, 2012, check to the U.S. Department of Education was cut by the treasurer of the Medina County Schools’ Educational Service Center and not the Medina Schools treasurer.

Stepp directed the payment be made from a “carryover fund” containing district money left over after paying for services provided by the service center.

The boards of the school district and service center have agreed to adopt measures to provide greater oversight and accountability over the carryover funds.

But questions remain about how Stepp’s controversial fringe benefits — which include a pledge in his latest pact to pay “any tax liabilities” resulting from his educational payments — got into his contract.

No lawyers are listed as being present at any of the closed-door executive sessions where the changes to Stepp’s 2009 or his new contract were discussed.

An email sent Tuesday by The Gazette to district spokeswoman Jeanne Hurt and school board members asking whether the board sought legal advice during the negotiations on Stepp’s contracts in 2009, 2011 and 2013 had not received a response by Friday.

But an email sent last week by Hurt to resident Floralyn Morata provides some possible answers.

“Charley Freeman asked me to respond to your question regarding who drafts Dr. Stepp’s contracts,” Hurt wrote.

“When Dr. Stepp was first hired as superintendent the search firm Finding Leaders drafted his contract. They were then modified through the negotiations process between the Board and the Superintendent.”

Reporter Kiera Manion-Fischer contributed to this story.

Contact reporter David Knox at (330) 721-4065 or dknox@medina-gazette.com.

Contact reporter Nick Glunt at (330) 721-4048 or nglunt@medina-gazette.com.

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The Gazette is Medina County's daily local news source, serving the community since 1832. Contact The Gazette's news department at (330) 721-4065 or areanews@medina-gazette.com.