School district taps foundation donations

Donations totaling $22,450 made by developers of McKinney Butte Ranch to upgrade the Sisters sewer line for Sisters High School never made it to the City of Sisters.

The line upgrades were instead paid entirely from school district cash reserves.

The donations, which were made to the Sisters School Foundation, were used for other purposes at the discretion of School District Superintendent Steve Swisher.

Swisher said the donations were used for expenses that would have otherwise been paid from the school general fund, including athletic club memberships that were part of employment contracts.

Board members were apparently not told donations totaling $22,450 were available when they voted on December 11, 2000 to transfer $44,900 from cash reserves to upsize the sewer line.

The Nugget began looking into the transaction after obtaining a copy of a January 3, 2001, letter from Swisher to City Administrator Barbara Warren, advising her that developers contributed to the sewer upgrade; however, the newspaper found no accounting record of this contribution.

According to correspondence beginning in June, 1999, the school district was negotiating with the City of Sisters to bring high school property along the McKenzie Highway into the sewer system boundary.

The school district was asked by the city for $44,900 to increase the size of the line through Sisters from a 15-inch line to an 18-inch line, with capacity increase of 44 percent, to accommodate the existing high school and any future school development.

In a letter dated August 29, 2000, to Richard Nored of HGE, the city's engineer, Swisher committed the district to paying for the upsized line.

Swisher also wrote to Nored "...we are actively seeking grant sources and Legislative relief to assist us in the project. We want to keep all options open for funding before we use Sisters School District general fund dollars, which would have a negative impact on our educational programs."

Among the potential sources of money were the owners of the 90-acre McKinney Butte Ranch, adjacent to the school property.

McKinney Butte is owned by school board member Bill Reed, developer Bill Willitts and builder Curt Kallberg. Each has been extremely generous to the school district over the years, donating thousands of dollars and many hundreds of hours of personal time.

According to Reed, "Steve Swisher was looking for help with the $44,900 figure."

Reed said the developers also recognized that they could some day benefit from the sewer line upgrade if they pursued rezoning of their land for higher density use, though that might not occur.

The McKinney Butte owners decided to contribute half the cost.

Each made a donation of $7,483.33, for a total of $22,450 to the Sisters School Foundation.

However, on December 11, 2000 the Sisters School Board, which Reed chaired at the time, passed a supplemental budget resolution that transferred $68,742 for sewer and water.

This included the entire $44,900 to pay for the sewer upsizing for the high school.

Apparently, the four school board members aside from Reed did not know that $22,450 from the McKinney Butte partners was available.

As a developer, Reed said he thought his donation would be used for the sewer line.

He also thought the developers' donations had been discussed by the board.

However, none of the other board members recalled any discussion that the $22,450 was available from non-school sources.

Swisher said he wished board members had been told of the donations, but explained that he arrived late for that meeting and was still recovering from his near-fatal auto accident in September.

The developers' money was not used for the sewer line. Instead, $22,450 went to a "discretionary" account at the Sisters School Foundation available to the school district for other purposes.

Swisher said that even though the money did not go directly to the city for the sewer upsizing, it was spent on items that otherwise would have been paid for out of the general fund.

Significant expenditures from the foundation account, following the December 14, 2000 deposit of developers' checks, include $5,000 for technology at the elementary school, $1,000 for high school "VICA" program, and $1,372 for softball field improvements.

Another $6,000 was drawn for a contract with the Sisters Athletic Club to provide direction and training of students involved in a "school to work" program.

Swisher said that although $6,000 had been transferred from the foundation to the school district, only $1,000 was spent on the athletic club contract and the arrangement would not be pursued.

The remaining $5,000 was still with the school district and would become a general fund resource for next year, Swisher indicated.

Another $1,068 went for memberships in the Sisters Athletic Club for staff members as part of their employment contract, according to the superintendent.

Swisher, who is secretary of the foundation and sits on the foundation board, said the discretionary account was set up for exactly this purpose, to offset expenses that would otherwise be paid from the general fund.

He emphasized that there was no negative impact on the district. Placing the donations with the foundation allowed maximum flexibility in distribution of the funds.

Contracts for service, such as that with the Sisters Athletic Club, save the district money, Swisher said, as opposed to hiring personnel.