Ten years ago.....the Akron Beacon Journal tells the story

Retired teachers applaud folk hero

Chillicothe school superintendent's persistence sheds light on excesses of Ohio retirement system

By Stephanie Warsmith
Beacon Journal staff writer

August 11, 2003 

CHILLICOTHE - To many retired teachers in Ohio, he has become a hero.

In Dennis Leone's mind, he is just a concerned, small-town superintendent who couldn't believe a persistent rumor: The State Teachers Retirement System was spending money lavishly while he and other Ohio school leaders faced shrinking budgets and difficult cuts.

The truth turned out to be worse than the gossip: nearly $20 million in employee bonuses in the past three years; $530,000 spent during that time by board members on travel expenses; and $94.2 million put into a new STRS headquarters in Columbus.

At the same time, STRS assets -- now at $47.2 billion -- were declining, and the 400,000 active and retired teachers who pay into the pension fund were being asked to pay more for health care benefits.

``The board's spending practices are completely foreign to the members they serve,'' said Leone, a 28-year educator who was a candidate for Akron superintendent two years ago.

Since Leone first uncovered the STRS spending practices, three bills have been introduced in the state legislature to provide more oversight, the pension fund's executive director has stepped down -- taking $550,000 with him -- and a financial audit of the fund has been ordered.

Many say the extraordinary turn of events might not have happened if Leone hadn't been determined to uncover the truth.

``He has been the crusader of this cause,'' said Sen. Kirk Schuring, a Jackson Township legislator who introduced one of the pending STRS bills. ``I think every member of STRS -- both the active and retired ones -- owes Dennis Leone a debt of gratitude.''

Budget crisis

At the same time that Leone was verifying rumors about excessive STRS spending, he was facing a budget crisis in his 4,000-student district an hour south of Columbus.

He needed to slash $1.7 million and knew that could involve school closings and layoffs. It was necessary because of state cuts and declining tax revenue from Mead Paper Co. -- one of Chillicothe's largest employers -- which laid off 500 people and closed part of its plant.

``The parents don't like it. I don't like it. It's the reality of what I have to do,'' Leone, 53, said recently as he headed to a middle school being converted into a massive elementary school to save money.

Leone said that facing what he describes as the most difficult time in his career made him more determined to probe STRS.

In early February, he wrote a letter to the STRS board asking 12 questions about rising health care costs for retired teachers and STRS spending practices. He waited six weeks and got no response. Then he went to the March STRS board meeting and voiced his concerns.

``I said, `My district is in difficult financial times and I expect to have to close some schools. I would like to know what you're doing to cut costs,' '' Leone recalled.

Two weeks later, Leone got an e-mail from Herb Dyer, the former executive director of STRS who stepped down Tuesday with a $550,000 severance package. Retired teachers and more than 100 state legislators had called for Dyer's resignation -- partly because of his manner in responding to their queries.

``When I have time to respond to such a long list of questions in writing, I will consider doing so. That is not apt to be any time soon, Mr. Leone,'' Dyer's e-mail said.

At the April STRS meeting, Leone read that response to board members. Ten weeks had passed since he first requested information.

``I looked at the board members and said, `Tell me what would happen to you if you or your principal responded to a parent like that,' '' Leone said to the eight-member panel that includes four active teachers and one retired teacher.

Leone asked when he would get answers. Board Chairwoman Deborah Scott turned to Dyer and asked: ``Well?''

By early May, Leone finally got the information he requested. Using documents he stores in an overflowing box in his office, he put together a report that educators statewide would read.

Shocking discoveries

Among his findings were:
• Administrative expenses at STRS climbed 17.4 percent per year between 1996 and 2002.
• 34 STRS employees received bonuses of more than $40,000 last year.
• $487,000 a year was going toward child care for STRS employees working in the new office building in Columbus.

Leone e-mailed his report to every Ohio principal and superintendent. Many chose to forward the e-mails to teachers and retired educators. Several who got the report had been asking similar questions about STRS spending and higher health care costs and -- like Leone -- were having a tough time getting answers.

Marilyn Gibbs and Marianna Lijoi, two Northeast Ohio teachers, were among them. Gibbs is a retired teacher from Plain Local Schools in Stark County, while Lijoi is a librarian living in Kent and working for Willoughby-Eastlake City Schools in Lake County.

The women, longtime friends, rallied others they knew and got in touch with Leone. They wanted to know what they could do to help.

``You don't just spend someone else's money and then tell them it's not their money,'' Gibbs said, referring to a comment Dyer made to another retired teacher when he said the STRS money was the board's to ``distribute as they see fit.''

As others contacted Leone, he built a network of about 20 teachers across the state who began urging local media outlets to investigate.

``I credit him with working hard to get the information,'' said Lijoi, who is helping to organize a rally at the Statehouse before the STRS board meeting Friday. ``He didn't assume anything. He went to STRS and made them talk to him.''

Motives questioned

Not everyone was happy with Leone's efforts.

In a letter mailed to union presidents statewide in June, Gary Allen, the head of the state's largest teachers union, questioned Leone's motives. The Ohio Education Association president also said Leone's logic was ``hard to follow.''

``Anyone can point fingers and create division, especially with the advantage of hindsight and when communicating about such an emotionally charged issue but the OEA refuses to operate in that destructive of a way,'' Allen wrote.

The letter angered many teachers, who e-mailed and wrote Allen. Gibbs and Lijoi even traveled to Columbus to meet with the union leader.

Allen declined to discuss why he questioned Leone's motives.

``I don't want to go into that,'' he said.

Allen said the OEA's main concern is about emphasizing the spending concerns about STRS, rather than focusing on the larger issue of health care.

Under state law, retired teachers are guaranteed a pension but not health care. Medical coverage has been provided using surplus money in the STRS pension fund.

The STRS board approved sweeping changes to health care coverage in May, citing investment losses and rising medical costs. Beginning in January, some retired teachers will be spending up to half their pension checks on health care. And that coverage is only for the next year.

``They have focused their energy on the culture and operations at STRS,'' Allen said. ``You can deal with all these things... and there's still going to be the issue of how to have adequate health care in 2004.''

Leone's supporters defend his motives and his work.

``He has 28 years in education and someday wants to retire and be able to afford health care coverage,'' Gibbs said.

Instant celebrity

The release of his report in May turned Leone into an instant celebrity among educators -- something he wasn't expecting.

The former high school and college javelin thrower has spoken to retired teachers across the state. Thick stacks of letters and e-mails grow daily.

Leone's wife, Nikki, said she was awakened one morning when a woman called because she hadn't gotten her pension check. She suggested the woman contact the company that issues the checks.

``It makes me feel very sad to hear the panic in the voices of elderly people who have worked hard all their lives,'' she said.

At the June STRS board meeting, several teachers mentioned Leone when they got up to speak. When he went to the podium, he got a hearty round of applause from the teachers in the audience.

``It was never my intention to seek publicity,'' Leone said recently as he drove to another retired teachers meeting.

More changes urged

Leone released a second report Friday to STRS board members, superintendents and principals. It outlined more than 30 recommended changes.

These included laying off 140 of 688 STRS employees, eliminating most bonus checks, selling the artwork in the headquarters and having no more lavish parties or dinners -- some that cost thousands of dollars. He said any savings should be used on retirees.

Leone said he will continue to watch over the STRS system, though he's not sure if he'll continue digging.

The superintendent, who earns $105,000 a year, would like to hand over his watchdog role. The state inspector general would be given oversight of STRS under a pending bill.

When the school year begins, Leone will have a lot to keep him busy. Two days after he released his first report on STRS, the Chillicothe Board of Education voted to close three schools and lay off 45 principals, teachers, cafeteria workers and custodians. The school board will vote this month to place a property tax issue on the November ballot.

Just as retired teachers worry about the future of the STRS fund and their health care, Leone is concerned about what will happen in his district. His hope is that STRS and Chillicothe schools surmount their challenges.

``I am very nervous about the future,'' Leone said. ``I don't know where things will be two years from now.''