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Sisters, Oregon
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School board wrestles with donations issue
By Jim Cornelius

The Sisters School Board and the Sisters Schools Foundation are changing the way they handle certain donations in the wake of inquiries into how contributions for sewer line upgrades were handled by School Superintendent Steve Swisher and school board member Bill Reed.

The foundation plans to eliminate the superintendent's discretionary fund. The school board decided in a special meeting on Monday, December 3, to review all district financial transactions before bills are paid.

Reed and fellow developers of McKinney Butte Ranch, Curt Kallberg and Bill Willitts, donated $22,450 to the schools foundation to pay for half of a bill from the City of Sisters to upsize sewer lines.

However, the funds were placed in a discretionary fund used for other purposes at Swisher's direction. The upsizing was paid for out of school district cash reserves. The rest of the board was unaware of the developers' donations and appropriated the full amount of $44,900 plus additional funds for hook-ups (see The Nugget, November 28, page 1).

Board member Steve Keeton thinks that keeping the board in the dark was misleading.

"Nobody told us that somebody was willing to pay half," he said. "I tell you, that makes no sense to me. If that's what we appropriated, that's the way it should have been used."

Swisher and Reed -- who was board chair when the donation was made -- defended their intentions, but both acknowledged that the board should have been told of the donation.

"Our (the developers') intentions were to reimburse the district for half the cost of the school line," Reed said. "It's something we didn't have to do that we thought was the right thing to do."

Board chair Heather Wester pressed Reed as to why he had not told the board the donation was available when they voted in December 2001 on the full appropriation.

"If I had done that, there wouldn't be this doubt cast over this process," Reed said. "In retrospect, I wish I had. But I didn't."

Board members thought the twists and turns of the transaction were unnecessary and gave the appearance of a problem even if the funds were not misused.

"We need to have accountability for discretionary spending," board member Glen Lasken said. "I don't know that a single penny was misspent, but I wish things had been done differently."

Wester put her views in stronger terms.

"We know there was a clearer way to do this," she said. "It stinks. This just stinks."

Schools foundation chairman Rod Morris said he plans to ask the foundation board to eliminate the superintendent's discretionary fund. That would leave the foundation with two basic types of accounts -- the general fund, where most donations including Sisters Starry Nights funds go, and targeted accounts, which allow individuals to contribute to specific programs.

The school board unanimously agreed to review and approve the district's bills before they are paid each month.

The meeting was often tense and contentious. Other questions about communication and trust were raised, including the disposition of a $25,000 loan from Bill Willitts to renovate district offices in the Monson Building.

Keeton and Wester said Swisher had told them the $25,000 was a donation.

"Originally, he had talked about forgiving the loan," Swisher explained.

At that time, Swisher said, he believed in good faith that the $25,000 was a gift. It wasn't. According to Swisher, Willitts requested that the $25,000 be considered a loan and the district repayed Willitts out of district maintenance funds.

The confusion over how funds were handled and whether board members were properly informed is symptomatic of what board members believe is a communication and trust problem.

"We've got to think of a better way to do our business, guys," Keeton said. "This kind of stuff will kill us."

Looming over the district is the possibility that Sisters voters will turn down the district's bid to annex the future high school property into the city. Annexation comes up for a vote in March.

If it fails, the district could be forced into a lengthy and expensive land use process that would likely diminish the planned school.

"I think it's really important that we pass this annexation vote," Reed told the board. "Everything goes really sideways if we don't."

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