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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."
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Oh, so that makes it OK to rip IBM off.
Well, "honorable" lawmakers, how many of your teacher's pensions are in IBM stock?
Or what about your investments?
Or some of your other constituents - many who are retired and are relying on IBM making an actual profit in order to make money on their retirement investments.
Not all stock investors are rich, fat, white, dudes who nobody has pity for.
Mental note: Do not give credit to the CA schools - cash only.
I prefer Flambe as apposed flamebait.
to a collection agency. Let the agency buy the loan at a discount and then harrangue state officials until they ante up. It would be good for the officials to experience the same kind of pressure and hectoring that they allow consumers to endure...
The contest for ages has been to rescue liberty from the grasp of executive power. -- Daniel Webster
To me this seems like gross mismanagement of funds on the part of the school board. And, frankly, forgiving their debt will not compel them to manage their funds any better in the future.
as mentioned in the comment section of the network world article:
"of course, it's worth pointing out that Contra Costa County is the predominant county and tax base for the East Bay -- a sprawling set of towns/cities full of people that work in downtown San Francisco, Oakland, and Silicon Valley. It's the same county where median home prices for most of the towns are well north of $500,000.
To quote the Contra Costa website: "Due to the presence of relatively high-wage skilled jobs and relatively wealthy residents, the County achieves high rankings among all California counties on a variety of income measurements."
This isn't the story of an impoverish[ed] county begging for debt relief from an evil corporation. Move along."
Which school board? The one 15 years ago that approved the equipment and then let it get stolen, or the one now that's stuck with the bill?
Except the school board isn't stuck with the bill. At least in that the individuals on the board don't have to pay it. It isn't going to affect their salary or anything in any way. The money will have to come from them cutting back on other educational expenses. So the people who are going to suffer are the kids who weren't even born when the deal was made.
Right. That's the problem. Now people who elect these school boards need to make informed decisions and not allow people of questionable character in public office. But the people who lose have little to do with anyone who made any of the decisions. Since it sounds like the computers walked off, the real answer might be to get the police dept on the case to see if there's any way they can figure out who took them. The statute of limitations might have expired by now, but a few criminal charges wouldn't hurt if they do find the responsible party. This kind of shit happens all the time in school and public utility boards with poor accountability. IBM might even have a share of the blame if they sold excess equipment on a public procurement contract with no sense that it was going to be useful to the district. Based upon that there's an argument for getting IBM involved in the solution to this other than just paying them back.
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.
The basic problem is, in 1992, they got a superintendant who was going to revolutionize everything. New schools, new ways of doing things, the works.
He turned out to be a corrupt bastard, but he disappeared without ever having to pay or atone for anything, and the people who use the schools have been paying for it ever since.
The school district is broke as hell, and quite honestly, will probably go bankrupt before they pay IBM (if by 'pay' you mean 'pay in the next 50 years').
All the other comments here seem to be going 'lol pay up already', but it's not that simple. IBM should forgive the debt, and everyone should learn a lesson from this:
Don't let public institutions pay with credit. The people who make decisions are not held responsible, and thus do not make responsible decisions. They will rip you off, and rip off the people they are supposed to be representing.
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.
Lessee, the school district has such lousy financial controls that they can't account for the systems, and they can't pay for them. Typically, the socialist argument is to not hold them accountable. I say bankrupt the district and put some people in who won't let $5M get STOLEN.
The problem with giving money to schools is that school administrators tend to *always* spend it on glossy paint, then when the money is gone they turn around and complain about the books that they didn't buy when they had the money.
A perfect example of this is the recent teacher pay raise in Utah. The teachers union (and basically everyone else) complained about teacher salaries so $100 million was raised to bump every teacher's salary by $2500 and give them a $1000 bonus. The school districts immediately began planning to spend that money on everything but pay increases. This has forced the legislature to audit the various districts to ensure that the teachers actually receive the money.
I am sure that the school districts planned to simply continue doing the same thing that they have done for years. The plan undoubtedly was to complain about teacher pay, get more money from the legislature, and then spend the new funds on everything but teach salaries allowing them to complain about teacher pay the next year.
What we really need are school vouchers. If there is one thing that public schools across the country continue to prove it is that the government does a poor job of providing education.
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.
It is the taxpayers fault, and they DESERVE to pay for it. Either by higher taxes or crummier education for their kids.
They had a inept, corrupt school system. 5 Million in computers go poof! Is their outrage? Who's head ended up on the block? Who had to pay for this? So far no one. IBM has been nice, and has made a 15 year 5 million dollar interest free loan.
People 15 and 20 years ago were responsible for this. The city, the school board, the voters and tax payers. They did not pay the piper....It has been put off till now. It is time to pay.
If the city had taken out loans, were improving the school district, etc. Then there was some big natural disaster, something beyond their control. I could see IBM feeling generous and forgiving the debt. But this is due to the school districts own stupidity.
If a car lot (yes another car analogy), sold you a car for $30,000.00, you have a million dollar home for collateral. Your worthless brother in law runs off with the car. You are having cash flow issues, and can't really afford to make the payments. Why should the car lot forgive you this loan?
They entered into a business deal with a party who had the ability to pay. Just the party mismanaged things and has the sob story, why should IBM have to eat it? Because "they can afford it" just does not cut it. IBM could also afford to cash out, take the money and run. To not sell hardware to anybody any more. But no, they are staying in business to do business. They are not extorting their customers. They should not have to eat it. Let the tax payers who allow such government pay for it.
vi +