September 21, 2014

Medina
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Stepp ordered to repay illegally spent money

Medina City Law Director Gregory Huber has told Superintendent Randy Stepp to repay $4,121 that a state audit found he illegally spent. But Huber declined to comment when asked if he was considering filing criminal charges.

In a letter dated Nov. 1, Huber asked Stepp to make arrangements to repay the money within 20 days or face a civil suit by his office on behalf of the district.

On Oct. 22, a special state audit of district funds included a “finding for recovery” for $4,121 that the examiners said Stepp spent illegally.

The money included a $1,023 mileage reimbursement for a trip to Florida with his family to attend a National School Board Association Conference. Other board members flew to the conference at a cost of $284.

The findings for recovery also included a $557 hotel stay for the night of April 2 with his family at the conference. The conference ended on April 1.

The audit also questioned $172,000 in district funds that Stepp used to pay off his student loans.

Stepp didn’t disclose the payoff on his 2012 W-2 form, and the state said they will file an addendum to the audit when they get more information from the U.S. Department of Education on specifics of the debt.

An amendment to Stepp’s 2011 contract included a provision that the board would cover past college expenses. But school board members have said they did not know the total amount of the debt or “that it applied to all degrees” — a claim disputed by Stepp in a federal lawsuit he filed against the board in May.

But district officials claim they didn’t know about the student loan payoff.

Huber said one of the reasons he couldn’t comment on possible criminal charges was because the auditor was awaiting information from the U.S. Department of Education.

“I can’t comment on that,” Huber said when asked about potential criminal charges. “The audit’s not complete. The audit that’s been done is a partial.”

Stepp’s attorneys David Drechsler and Mike Matasich said they had no comment on how or whether Stepp planned to repay the money.

School district treasurer Jim Hudson said he had not yet received anything from Stepp.

The school board asked for the state audit in April and placed Stepp on paid leave pending the outcome.

The board voted to begin the process to fire Stepp on Oct 24 — two days after the audit was released — and placed Stepp on unpaid suspension Oct. 28.

The board began questioning Stepp’s spending following community protests over Stepp’s new five-year contract, approved by the board Jan. 7, that included an $83,000 signing bonus.

After inquiries were made into Stepp’s fringe benefits by union members and residents, school officials said they found Stepp had directed the college loan repayments and other education reimbursements for himself using district money kept at the Medina County Schools’ Educational Service Center.

The board voted to rescind Stepp’s contract April 16, saying it was invalid because the Jan. 7 meeting was not properly advertised as required by Ohio’s open meeting laws.

Stepp responded by filing a lawsuit in U.S. District Court in Akron.

The board filed a counterclaim that was amended last month to include a demand of more than $1 million in compensatory and punitive damages, including the $4,121 listed in the audit and $172,000 in student loan payments made by Stepp.

Pretrial motions in that case are set for July.

Contact reporter Loren Genson at (330) 721-4063 or at lgenson@medina-gazette.com.
Kiera Manion-Fischer contributed reporting.