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Pressure Is On IBM To Forgive Millions In IT Debt
coondoggie writes to tell us that several California state legislators are pressuring IBM to release the Costa school district from some $5 million of long-standing debt as a charitable donation. "The back story on this tale is that the school district owes IBM for computers ordered in the late 1980s and early 1990s. For one reason or another the computers were never used and no one now seems to be able to locate either the paperwork or the hardware. The school district experienced hard financial times and ultimately never paid Big Blue for the computers. In 1993 the district and IBM negotiated a long-term settlement that said the school district would pay the first of four $1.25 million installments beginning in 2008. Payments were deferred until then because 2008 was the year the district was scheduled to finish making state loan repayments under its previous loan plan, according to the Contra Costa story."
No multi-billion dollar corporation left behind.
Wow, this is amazing. They ordered computers, which were never used... shouldn't that be an outcry? That school-district must have had a terrible administration at that point. I really don't see how the argument that they never used the equipment has anything to do with why or why not they should pay the bill. Afterall, IBM delivered, so why should they not get paid?
If it wasn't for the fact that the administrators that created this mess are probably all not working there anymore, I'd say they should pay the full amount, with interest, as punishment for wasting the taxpayers dollars!
I love that part. I wish I could just order $5M worth of computer equipment using the taxpayer's wallet and then blame IBM for being hardhearted and cruel for not forgiving the debt. Why is the media not reporting on the waste and/or fraud involved in the original contract? Obviously, computers that were never used were not "needed", since the school district is still there and is apparently serving students. Who signed the original deal and what did he/she get out of it?
Intron: the portion of DNA which expresses nothing useful.
Their concept of money has never really reflected the real world. Mix that up with "THINK OF THE CHILDREN" and the school district's own inability to deal with money, and you can see where this came from, at least.
IBM has been more than fair. They are owed their money. Mistakes are made, but unless the consquences are paid they will happen again.
Mod me down with all of your hatred and your journey towards the dark side will be complete!
Research suggests the county population is quite well off as compared to other counties. http://www.city-data.com/county/Contra_Costa_Count y-CA.html
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At what point does this cross over from "poor school district" to clever constituents trying to get out of a deal?
I doubt this would happen in, say, compton CA.http://www.city-data.com/city/Compton-Californ
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if IBM were smart, they would try to cut a deal with the CA state to buy more goods from them in exchange for forgiveness.
I prefer the "u" in honour as it seems to be missing these days.
This is exactly what I am thinking. I am a shareholder of IBM. I'm certainly not rich; I'm just a working stiff just like most other people. Why should I have to take the hit because of the idiots in that school district? (Yes, yes, I know that that $5 million has a negligible impact on my dividends due to IBM's size.) I am a reasonably charitable person, but I like to control who I donate money to. Mismanaged school districts do not seem like a worthy cause to me.
This school district has been able to defer this debt for over 15 years. Where is my 15 year, interest free $5 million loan? I want a piece of that action.
If we want to talk about bail outs, why not have the state of California bail out the school district? Why not have the citizens of that school district pass the collection hat round and round till they come up with the money?
I'm sure there are going to be lots of "think of the poor children" arguments about this. It is real easy to have sympathy when it isn't your $5 million at stake.
Even a cursory reading of the Founders' beliefs and thoughts on the US Federal Government was that states are individual entities, experiments in diversity of regional and local government (yes, right down to their budgets - otherwise, states and locales would've never been allowed to levy taxes, and everything would've been disbursed from Federal revenues all this time). The common bond was that they accepted and abided by a common set of rules (e.g. the US Constitution), and pitched in together on Federal matters (Defense, taxation/tarriffs, infrastructure, etc), each according to their ability and population.
Large-scale Disasters (Katrina), local debts incurred from assisting in (or cleaning up after) national emergencies (e.g. 9/11 or Oklahoma City), or debts incurred by the actions or mishaps any federal agency or branch makes in a locale (say, a fighter jet plowing into something accidentally)? No problem - totally cool with the Feds helping out in the money department.
Bailing out the bad decisions made by a pack of politicians at some distant city council? Nope: they dug their hole - they can float bonds or raise property taxes to un-dig themselves out of it. If I have no vote or say in how that California county spends its discretionary budget, why should I (some random taxpayer up in Oregon) be liable for their mistakes?
After all, if you or I do something dumb and run up a mountain of unpayable debt, the Feds certainly wouldn't be breaking their necks to bail us out... so why should cities and/or counties have such a privilege?
Quo usque tandem abutere, Nimbus, patientia nostra?
The 15 years was not entirely voluntary. The corrupt management of Walter Marks, the Superintendant at the time, drove the District into bankruptcy. As part of the debt restructering, IBM like every other creditor had to step aside and wait its turn.
i fied_School_District
See: http://en.wikipedia.org/wiki/West_Contra_Costa_Un
In 1990, the District was over $40 million in debt. Currently, they are still $7 million behind, not including the IBM debts. Make no mistake, they are trying to pay their debts, but they still have a long way to go.
It's not clear that the computers were ever delivered. No trace of paper work or the computers themselves can be found. Does IBM have actual delivery paperwork to prove the goods were actually delivered? Guess I'll go read the FA and find out.
I have no idea how it ended up that way, it's in norcal, not an area that is known for lacking money exactly.
So when you're place of employment is going tits up, it's not uncommon for the inmates to start taking more liberties. It's not right and it doesn't help the situation but we already know that this school district didn't have the best or most ethical management. I know a guy who took something like $50k in networking hardware when his ISP employer started to die, he just packed up hardware and took it home. I wouldn't at all be surprised if teachers and administrators all got new computers at home in 1990ish when their paychecks started becoming less reliable.
I'm guessing test scores went up and drug use among students went down during that time too and they produced a lot of lawyers and doctors and senators during that time too.
if you're local school districts cannot manage money folks, bitch and get involved before it's too late. It's not pretty when they bankrupt. Basically, if they cannot afford something, make sure it is really damn necessary before they take out a loan on it, if they cannot save up money to afford a new building, how are they going to afford the loan? A school with old equipment, buildings, and no cable TV is WAY better than no school or a bankrupt school. One district in my state bankrupted and teachers just abandoned their jobs... Kids showed up but there were no teachers.
I'm a former student of the Richmond Unified School District, which after a misappropriation scandal and a consequent bankruptcy, became the West Contra Costa Unified School District. The district, while newly named, continues to be plagued by financial misdeeds committed over 15 years ago. The suggestion in this thread to call for the teacher's union to concede pay cuts was actually mandated by the state in 1991, in order for the district to receive a $29MM loan. Teachers have not received cost of living increases commensurate with their colleagues in other unions since. Bear in mind, the RUSD, and subsequently, the WCCUSD, contain schools in some of the most violent and impoverished cities in California. Richmond is consistently in the top 20 most violent cities per capita in the US. It's hard enough to attract teaching talent to some of these schools, regardless of the fact that they're relatively underpaid.
When it comes down to the asshattery of the administration of the time..there's a lot to go around. The superintendent, Walter Marks, took whatever funds he could to further a pet project called open schooling, which may have been one of the forebearers of the proposed voucher schemes. The different campuses were given specific lines of study, and students were given the choice to go to the school that interested them the most. For example, Pinole Valley HS was given the Dramatic Arts line, while at the same time, all musical and arts classes were cut dramatically at other schools across the district. El Cerrito HS, if I remember right, was given Math & Sciences, while those same courses were underfunded at other schools. Parents could simply not afford to send their children to schools that weren't local, helping to foment serious student disenfranchisement and furthering dropout rates.
The asshattery continued in the state assembly, where Sup. Marks was given high praise by the Secretary of Education, William Bennett. Secretary Bennett felt that this disjointed and disenfranchising method of splitting the district was a model for urban school reform. Sup. Marks was given high praise nationwide for bankrupting the district. Marks was able to find a higher paying job in Kansas City after being fired at the height of the scandal.
All that being said, I still think that the district should pay the debt. The question is, where will the money come from? Can't get them from the teachers, or you won't have any teachers. Can't get an appropriate amount from property taxes, due to proposition 103. There's simply not enough cirriculum to cut back. I wish there was an easy answer that didn't affect students adversely, but I simply don't believe there is.
The school district could always cancel all athletic programs and sell the land the football field is on to a developer. Probably that would pay for the debt with no problems. Here in the midwest where I live, it seems there is no limit to how much money can be poured into the rathole known as sports.
Payments were deferred until then because 2008 was the year the district was scheduled to finish making state loan repayments under its previous loan plan, according to the Contra Costa story.
Also, I noticed the state got their money before asking IBM to forgive its debts. Why doesn't IBM ask the state to give their money back as well?
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