May 27, 2004

School district one of many taking hit with fitness deal

Like many area school systems, the Yellow Springs school district took a financial hit recently when a Utah nonprofit organization that had agreed to reimburse schools for its fitness equipment stated that it no longer would do so, leaving Yellow Springs schools with a large unexpected bill.

Other area schools affected by the news are Greeneview, Kenton Ridge, Northeastern, Wilmington and several Dayton-area schools, all of which had contracts with the National School Fitness Foundation (NSFF). The amounts owed by each school depend on how long ago it entered into agreement with NSFF, which has been making monthly payments to schools that signed its contract.

Yellow Springs schools agreed to pay the Fitness Foundation $236,432 in 2003 for equipment and curriculum currently used in the high school’s new fitness center, while NSFF agreed to reimburse the district over three years, in exchange for the school sending NSFF data.

Two weeks ago, Treasurer Joy Kitzmiller received an e-mail from NSFF stating that the organization could no longer make its payments. Because NSFF already reimbursed the district $76,681, the schools owe $159,751 on the equipment over the next two years.

“I think it’s unfortunate,” said Rich Bullock, current president of the Yellow Springs school board, who was a board member when the group entered into the contract with the NSFF in February 2003. “We needed to buy equipment anyway and it looked like a good way to do it at the time. We researched it. We debated it. It didn’t seem that risky but it turns out it was.”

At the school board’s May 13 meeting, Kitzmiller announced the unexpected loss of funds. She said that the district would cover next year’s approximately $70,000 payment to NSFF with interest from the schools’ construction fund, and the following year’s payment will be absorbed by the general fund.

Superintendent Tony Armocida stressed in an interview that, due to the construction project interest, the schools can pay the bill without jeopardizing any other programs.

Perhaps least surprised by the news is school board member Bill Firestone, who raised many concerns during the school board’s debate on the NSFF program last year and was the sole board member to vote against the agreement with the organization. According to his research, Firestone said on Monday, the organization’s finances looked shaky and the concept of getting sophisticated exercise equipment for nothing seemed too good to be true.

“It’s a painful thing. It’s bad news. We took a risk and we lost,” Firestone said. “I knew going into it it was a roll of dice. Whether or not it was worth doing or not is a different question.”

While the district has an unexpected bill, Armocida noted that it also has a new fitness center, which, he said, has proved a big hit with teachers and students. He also said that the district had to buy fitness equipment for the new center anyway, which was completed in the fall of 2003. According to Armocida, YSHS physical education teacher Kevin O’Brien and McKinney Middle School teacher Sarah Lowe are very pleased with the equipment and the curriculum that accompanied it. The curriculum, “Lift America,” seeks to instill in students the value of lifelong fitness and to combat obesity, according to NSFF materials.

“It’s been fantastic. It’s great equipment and a great program,” O’Brien said. “The program will continue. We’re making good use out of it.”

The program came to the attention of the school board in the winter of 2003, when O’Brien, who this year was named Ohio Physical Education Teacher of the Year, asked the board to consider the program for the new center. O’Brien said that he became aware of the program at a conference of physical education teachers, and then spoke with other area teachers using it, all of whom were very pleased with both the curriculum and the equipment.

Several board members were initially skeptical of the foundation’s offer to, in effect, provide $200,000 worth of free equipment, said board member Angela Wright. She said she supported the agreement because of the teachers’ enthusiasm. According to Kitzmiller, Armocida and several board members, the district researched NSFF, including studying its income tax returns, checking for legal actions against the organization and conferring with other schools that had been using the program. All research was positive, they said.

“We investigated thoroughly,” Armocida said. “It seemed like a high-quality program.”

NSFF officials said at the time that the foundation could reimburse schools for the equipment from monies received from corporate and federal grants and from private foundations. In return, participating schools provided NSFF with extensive data from the young people using the program.

At the time, Firestone said, his concerns about the NSFF grew from research that indicated it was “a nonprofit group set up to channel work to a select group of contractors.” He also believed the system looked like a pyramid scheme, in which NSFF paid off participants from monies received from new schools that joined the program.

While Firestone said that he shared his concerns privately with Armocida, he did not share them in board meetings, he said, because he believed it was inappropriate to accuse the group of illegal activity without proof. Instead, he based his public concerns on the restrictions NSFF imposed on the use of its equipment, which he believed took away local control of the program.

Before moving ahead, the schools also checked into comparative prices of other fitness equipment, said Armocida, but comparing NSFF with other brands was difficult because the foundation offered not only equipment but also a curriculum, defibrillators and two high-tech kiosks.

According to an article on the NSFF controversy in the May 4 issue of School Board News, the kiosks include “bioimpedance technology” that measures participants’ percentage of body fat and body mass index.

The school board agreed to enter into a contract with NSFF in February 2003. Firestone dissented and board members Bullock, Wright, Mary Campbell-Zopf and Tom Haugsby voted for the contract.

The agreement worked well until two weeks ago, Kitzmiller said, and the schools received a year’s worth of monthly reimbursements of about $6,400. Students use the equipment extensively and teachers are now beginning to use it as well, said Firestone, whose goal is to open the center to the community.

In their May 10 e-mail to Kitzmiller, NSFF officials said that they needed to discontinue payments to pay legal fees. According to the School Board News article, the Minnesota Department of Commerce has requested a hearing to determine whether NSFF should be allowed to continue business in that state. Currently, according to the article, 19 Minnesota school districts have signed on with NSFF.

The article reports that the Minnesota state auditor, Patricia Anderson, is concerned about the program because schools have to contractually acknowledge the “potential and business risk” that the foundation might be unable to make its “contributions.” Other concerns include the failure of schools to seek competitive bids before entering into contracts with NSFF, the “mischaracterization of the NSFF agreements as grants, and the lack of audited financial statements,” the article states.

According to the article, NSFF’s Internal Revenue Service reports from 2003 indicate that the organization received only 0.2 percent of its income from grants and contributions, and 99.8 percent from royalty payments from school districts. The article also estimates the market value of the NSFF equipment at about $75,000. School Board News reports that NSFF, which was started in 2000, currently has contracts with 610 schools nationwide.

Christopher Rees, vice president for public relations at NSFF, did not return two phone calls seeking comment for this article.

—Diane Chiddister