LT article 7/26/08

Folks,

This is one of my favorite articles in this series in that it definitely shows that Klaus, Olson, O'Brien and Evans all agree that there was NO motion to approve the stipend at age 53 and that their "modus operandi" routinely was to have these little "sidebar" discussions to make decisions in the operation of the district. The fact that other members of the BOE approved the contract without even reading it is NUTS and, again, highlights how unprofessional this has been for so many years under the leadership of Olson, Klaus and O'Brien (with Evans and Kneer and Wogahn as their biggest cheerleaders).

Also, the fact that the multiple and overlapping contracts that gave Klaus so much security over a number of years that is just plain ILLEGAL in the state of Wisconsin upholds my previous statements that our highly paid and "Interest Conflicted" legal counsel, Steve Weld of the Weld Riley firm were NOT EVEN DOING THEIR JOBS while collecting the big bucks and protecting their buddies on the board.

Maria
Updated: 7/26/2008 11:07:01 PM
Klaus tells police stipend talk was 'side debate'
By Julian Emerson
Leader-Telegram staff
Perhaps the strongest evidence that the Eau Claire school board never formally approved allowing former Eau Claire school Superintendent Bill Klaus to access his retirement stipend last summer comes from Klaus himself.

During an interview with an Eau Claire Police Department investigator in May, Klaus acknowledged that no board member made a motion to change Klaus' contract to allow him to begin receiving his $267,209 retirement stipend starting last August.

Instead, Klaus told police that discussion of his stipend took place as one of numerous "side debates" occurring during the January 2007 closed-session board meeting where alterations to Klaus' contract were contemplated, according to a 400-page investigative report of the Klaus stipend matter.

"Deputy Chief (Eric) Larsen asked Klaus if there was a specific motion made by any board member approving the early stipend.

"Klaus said there was not," the report states.

The board's failure to formally approve the change allowing Klaus to obtain his stipend runs contrary to common governmental practice that stipulates that any expenditure of taxpayer money - such as Klaus' stipend - requires an official motion and approval by a governing board. Stipend payments are paid to retiring administrators and teachers on top of Wisconsin Retirement System benefits they receive. New school district hires no longer will receive stipends when they retire.

Klaus believed that the board's approval of his contract on Feb. 5 to move from superintendent to become principal of Northstar Middle School included approval of the early stipend provision. But legal experts familiar with Wisconsin school district law said Klaus' obtaining that money required a motion by a board member to move up the stipend payments, followed by discussion of the topic by the full board and vote on the matter prior to final contract approval.

"That's just the way that governmental bodies are supposed to conduct business," said Ronald Rutlin, a lawyer with the Ruder Ware law firm in Wausau, who has worked with school districts for three decades. Several other attorneys who work with school districts contacted by the Leader-Telegram agreed with Rutlin but asked not to be identified.

The lack of formal discussion and documentation of Klaus receiving his retirement stipend early not only veers from accepted practice but might explain board members' differing accounts about whether they approved Klaus accessing that money at age 53 instead of age 55 as previously stated in his contract. Klaus turned 53 last July.

Three board members - Carol Craig, Brent Wogahn and Trish Cummins - said the board never discussed Klaus receiving that money early. Board member Mary Kneer said she doesn't remember whether the board approved that provision.

In contrast, former board members Carol Olson, JoAnne Evans and Mike O'Brien, who were present at that meeting, said they believe Klaus' obtaining his stipend early was part of the contract they approved.

However, in their accounts to police, none of the former board members said they remember the board voting on the stipend issue. Instead, they described the board's action regarding the stipend in more vague terms, saying Klaus' receiving his stipend "was not made clear" and that his obtaining that money "could very well have been the intent" of the board.

Klaus' lawyer, Thomas Guelzow of Eau Claire, blames the board's "shoddy procedures" for the mix-up involving Klaus' stipend and said Eau Claire County District Attorney Rich White's decision not to file criminal charges in the matter shows there is a lack of clarity regarding Klaus' contract.

Granting Klaus his stipend is not mentioned in board minutes of Jan. 8 and Jan. 22, when changes to Klaus' contract were discussed.

Adding to confusion about the contract is the fact several board members said they didn't review Klaus' contract before voting on it. The contract was signed by Olson and Evans, but which other board members, if any, reviewed the document before it was finalized remains unclear.

Klaus' stipend payments became an issue after an April 19 Leader-Telegram story detailing how former board President Olson, at Klaus' request, signed and backdated a document allowing Klaus to begin receiving his monthly stipend payments last August, two years earlier than called for in previous versions of Klaus' contract.

Olson was no longer a board member when she signed the document, and other board members said they were unaware of the contract change. Klaus did not receive his stipend payments, and the board voted in October that he is not eligible for them until age 55.

Stipend questioned
The accounts of Olson, Evans and O'Brien to police cast further doubts about the validity of Klaus receiving his stipend before age 55.

Those former board members told police that when they learned of Klaus' request to access his stipend early, they consulted district Personnel Director Jim Kling about changing the wording of the stipend portion of Klaus' contract to make those payments happen.

However, Kling told Klaus in July 2007 - five months after Klaus' contract was approved - that he needed further documentation besides Klaus' contract before granting the early retirement stipend, according to the police report.

"It was determined that although (Klaus') age in the contract for (stipend) eligibility was 53, more authorization was needed before I would approve stipend payment to begin," Kling told police.

Kling disputed the notion he was involved in crafting the early retirement portion of Klaus' contract. He told investigators those board members did not seek his input on that topic and that "he is certain he was not present for any such conversation" at meetings when Klaus' contract was discussed.

Kling and the board reached a resignation and retirement agreement on Monday, prompted in part by Kling's role in the Klaus contract matter.

No retirement
The attempt to pay Klaus his retirement stipend is also questionable given that he didn't officially retire.

According to Klaus' contract, he was eligible to begin receiving his monthly stipend payments upon "district retirement" and age 53. Backers of Klaus receiving that money say the "district retirement" phrase inserted into the contract referred to Klaus' retirement as superintendent.

But others said that phrase refers to the fact that Klaus must retire from the school district before receiving those payments. No other district employee contract has a similar phrase.

Retiring and then continuing to work in the district isn't uncommon. For instance, four district administrators last school year - interim Superintendent James Leary, Deputy Superintendent Gregg Butler, Business Services Director Dan Van De Water and Kling - held those positions despite having previously retired.

However, before working for the district they had officially retired and left school employment for 30 days as required by state law. In contrast, Klaus did not file for retirement and has told the Leader-Telegram he did not intend to retire.

Long-term contract
It's not just the retirement stipend portion of Klaus' contract that is questionable.

In approving Klaus' contract on Feb. 5, 2007, the board ran afoul of state statute 118.24, which limits school district administrator contracts to three-year terms, typically negotiated as two-year terms with the option to add a third year part-way through the first year.

In a sense Klaus' contract does just that. The board approved his employment from July 1, 2009 through June 30, 2011, with the addition of one year later if the board didn't object.

The problem, school law experts said, is that contract was negotiated on top of an existing two-year contract, giving Klaus five year's security at the time the deal was negotiated.

Having consecutive two-year agreements in place is highly unusual, legal experts said, violating the spirit of state law by providing Klaus with such lengthy security.

The longer contract could hinder a possible settlement between Klaus and the board as the two sides look to resolve the contract matter. Guelzow has said any settlement agreeable to Klaus would have to include buyout of the contract and Klaus receiving his stipend.

Emerson can be reached at 830-5911, (800) 236-7077 or julian.emerson@ecpc.com.