St. Joseph property tax levy on the November ballot in wake of district scandals, deficit spending
October 26, 2017
By Sam Zeff
Editor's note: This is the first in a multi-part series of stories that Ballotpedia will publish over the next month regarding the St. Joseph School District and its property tax levy. Click here for the second installment.
There is a property tax levy increase on the November 7 ballot in Missouri’s St. Joseph School District. If you think it’s just about how much to spend on the district’s 11,000 students, you would be mistaken.
It has as much to do, if not more, with problems that stretch back to 2014- problems that include an FBI investigation that sent a former superintendent and school board president to prison, the worst report on a school district ever written by the Missouri State Auditor and ongoing deficit spending that is steadily depleting the district’s reserve funds.
Part of the district’s property tax levy was already scheduled to sunset after the scandals broke and the board decided to forego trying to renew it. The thinking was that the public simply wouldn’t grant a district in turmoil more money. The district started to draw down its reserves, but the money is running short after three years of deficit spending.
The ballot proposal is for an extra $1.15 in property taxes for every $100 of assessed valuation. That’s about $218 per year more on a $100,000 house, which amounts to a 38 percent hike in property taxes.
Nobody suggests the district doesn’t need more money. Continuing to drain the bank account is unsustainable. But there is debate over just how big a property tax hike the district needs.
There’s debate over the numbers, but in the end, this election boils down to trust. Has the district changed enough, both in how it operates and who administers it, to satisfy residents enough that they will vote to raise their own taxes?
“It was a culture of entitlement. A belief in entitlement,” says Superintendent Robert Newhart. Newhart was hired in July 2015 with one mission. “I was brought in to clean up a mess. We’re stabilized. That culture, especially in this downtown building where the majority of it existed, has been stabilized,” he says.
Some residents disagree that things have stabilized, but everyone agrees Newhart inherited a mess.
Much has changed since March 2014, when a scandal came to light over unauthorized stipends paid to administrators. Former Superintendent Fred Czerwonka (now director of school services in the Caruthersville school district in Missouri) secretly used an insurance rebate to pay $5,000 stipends to 54 different administrators without board approval. However, Czerwonka did seek permission from the school board’s then-president, Dan Colgan. There was a quid pro quo, though. Colgan agreed to the stipends in exchange for Czerwonka’s pledge to give Colgan’s son a $15,527 raise, according to a Ballotpedia investigation.
Czerwonka quickly picked up a nickname: The Candy Man.
The Candy Man stipends led to the discovery of other unauthorized stipends to teachers and administrators. Charges of nepotism surfaced. It wasn’t just Colgan’s son who had a high paying job. Czerwonka’s wife, Wendy, directed the district’s homeless program. The wife of district human resources director Doug Flowers, Tammy, was the district’s early childhood coordinator.
All these people are gone. Czerwonka was fired. Flowers was demoted then resigned. After a Ballotpedia investigation, Colgan was charged by a federal grand jury with wire fraud. He pleaded guilty and had to repay the state $660,000 in ill-gotten pension payments and was sentenced to a year in prison. He was recently moved to a halfway house in Kansas City, Kansas, and will be released on November 16, according to the federal Bureau of Prisons.
FBI documents obtained from a Freedom of Information Act (FOIA) request show Colgan, Czerwonka, and Flowers drew early attention from the FBI. On April 8, 2014, all three top administrators were highlighted in a document the Bureau calls a “letterhead memorandum.” Which is, essentially, agents asking their bosses for permission to pursue the case.
In the letterhead memorandum, the agent writes that he “intends to interview Czerwonka, Colgan and Flowers as soon as possible to lock them into their stories regarding the unauthorized payments and promotions.”
In an executive session, the board would retroactively approve the stipends, as directed by Colgan and Czerwonka. This action was discovered on an FBI 302 form, the form agents fill out after an interview. This was from an interview done with former board member Susan Wagner. “During the closed meeting, Czerwonka told the BOE (board of education) there were essentially three alternatives: 1) retroactively approved the issuance of the $5,000 stipends; 2) have the recipients of the stipends pay back the money; or 3) some other alternative Wagner could not recall.”
The board decided to retroactively approve the stipends, which derailed that part of the FBI investigation. However, the FBI would eventually nab Colgan for wire fraud connected to his inflated pension.
Two other central characters in the St. Joseph School District drama are also gone.
Beau Musser had been on the job as the district’s chief financial officer for only a few weeks when he uncovered The Candy Man stipends. When he blew the whistle, the district tried to discredit him by fabricating sexual harassment charges. However, Musser had recorded his conversations with district lawyers. Musser sued the district for slander and settled for $450,000. He worked for the district for just 28 months before resigning in September 2015 and taking a private sector job.
The other whistleblower was school board member Chris Danford. She had been on the board for about 18 months, after a 25-year career as a teacher and counselor in the district, when she heard from a parent at a high school basketball game that the district was handing out those $5,000 bonuses.
Danford says she didn’t believe it at the time, but that conversation not only changed the district and led to the current battle over the property tax levy but also changed her life.
Danford was attacked by many in St. Joseph who were upset that the way the district had been doing business for decades was changing. She also became a media darling who was regularly interviewed by local and Kansas City reporters. Danford was the only person from the school district in the federal courtroom where Dan Colgan was sentenced to prison.
In the end, the stress became too much for Danford. She resigned from the board on February 16. She called her decision “agonizing” but felt it was best to part ways with the district after so much turmoil.
Her retirement from public life didn’t last long. She’s now leading the opposition to the property tax hike. She doesn’t believe the district has been cleaned up enough. “You can’t move forward without dealing with past transgressions,” she said on a KFEQ radio talk show.
For someone who spent her life in public education, she says, this was a brutal decision. “There’s nothing pretty about putting a vote no sign in your yard. It will be the first time in my life that I will have voted no for something I’m so passionate about. But that’s where I stand on this. That’s how important it is to me.”
Next week, we’ll publish part two of this follow-up investigation into the St. Joseph School District. We’ll be looking more closely at the property tax levy proposition itself and dig into the state of the district’s finances and budget.
Sam Zeff covers education for KCUR in Kansas City, Mo. He's won a National News Emmy for investigative reporting, four National Headliner Awards, and four Edward R. Murrow awards. Zeff has managed newsrooms in Minneapolis, St. Louis, and Kansas City. He was educated at the University of Kansas.
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