The Medford School District has filed an ethics complaint with the state after Logos Public Charter School’s former director signed a lucrative consulting contract with the school shortly after he resigned.
The district raised concerns when the Logos School Board hired a for-profit consulting company called Western Collegiate Consulting, led by the school’s former director, Joe VonDoloski, to handle administrative functions, according to emails between the district and the school. The district also said Logos didn’t have a required cost analysis showing the savings associated with outsourcing administrative services.
While the district questioned whether VonDoloski might have influenced the process for his own financial gain, Logos insisted he was left out of the contract and the school “took great pains to do it right,” the emails showed.
VonDoloski submitted a bid for the five-year, $1.5 million consulting contract one day after his resignation as the school's director was announced. Logos' former business manager, Cassie Zimmerer, who is the daughter of the current Logos director, Sheryl Zimmerer, also is employed by Western Collegiate.
VonDoloski said Thursday he has committed no wrongdoing.
“I understand the complaint, but Medford School District itself said they don’t have allegations — just questions,” VonDoloski said in a phone interview. “And I’m happy to respond to any inquiry from Medford to help them see clearly that Western Collegiate is in compliance with Oregon law.”
Medford School District attorney Thad Pauck said the district would not comment on the complaint while it awaits the Oregon Government Ethics Commission findings. The district provided the email communications with Logos after the Mail Tribune made a public records request.
“We are not in the position to comment on the case, because it’s the confidential process,” Pauck said. “(The Ethics Commission) is the one that makes the decision whether there has been any violation taken place.”
The Ethics Commission received a complaint against VonDoloski on Sept. 28, Office Specialist David Hunter said. The commission is conducting a 30-day preliminary review before deciding whether to investigate the incident.
“Before that, everything is confidential,” Hunter said.
VonDoloski, a pastor with an education background in Texas and Michigan, co-founded Logos in 2010 with 200 students. The school works with home-schooled students, providing support and assessments on their work and classes in numerous fields.
The school, which reached its capacity of 1,000 students this year, had the highest graduation rate in the county at 91 percent in 2014-15 and 90.7 percent in 2015-16. The school currently has 75 employees, including teachers and staff — with a budget of roughly $6.45 million. School districts sponsor charter schools within their boundaries and set the maximum number of students allowed to attend.
According to its meeting agenda, the Logos School Board began discussing the idea of hiring a consulting firm to save money in 2014 and began finalizing it in March.
Its cash flow projection, included in the meeting agenda May 8, concludes, “Logos can make it without using a management company, however it is more financially sound if it pursues a company to provide staffing.”
Logos estimated savings of at least $190,000 in 2017-18 with a management firm. Current Logos Director Zimmerer said in an email Friday that Logos would have to cut benefits if it did not use a management company.
The board voted to move forward with the bidding process on May 8.
VonDoloski remained as Logos’ director throughout the drafting of the proposal and the subsequent advertising for bids on the contract. He was listed as absent for meetings on May 22 and May 25, when the board discussed the proposal, emails and meeting minutes show.
VonDoloski was present at the June 26 meeting, in which the board announced his resignation — a day before the competitive bid for the consulting job was due. The board, at the same meeting, agreed to contract with VonDoloski for an undisclosed amount as an independent consultant to “continue helping Sheryl (Zimmerer) with the new facility,” where he will “attend meetings and offer expertise,” according to meeting minutes. That contract is separate from the Western Collegiate agreement.
Less than a month later, on July 24, the board unanimously agreed to contract with Western Collegiate. Emails between Zimmerer and the Medford School District show Logos received seven letters of interest but ended up with only one bid — from Western Collegiate.
Under the current five-year contract, Western Collegiate manages Logos’ staff, distributes salaries and provides benefits while maintaining the same level of services for students. Its fee is 11 percent of payroll the first year — $339,000 — and 10 percent in the subsequent four years — for a total of at least $1.5 million. If salaries increase and the school adds staff to accommodate more students — which Logos has requested — the payments would increase accordingly.
“The Board ultimately undertook this path because continuing under the status quo would affect the feasibility of Logos reaching its administrative and legal goals,” Sheryl Zimmerer wrote in an email responding to the district’s inquiry. “Logos’ contract with WCC represents an innovative approach to meeting these goals under its current funding constraints, benefiting students, while also maintaining current and competitive staff compensation levels.”
Logos estimates it will save almost $600,000 by 2021, "a win-win for our staff and our students," Zimmerer said in her email to the Mail Tribune.
Western Collegiate Consulting, based at a property VonDoloski bought in 2011 in Eagle Point, registered with the state as a charter school consultant, according to Oregon Business Registry documents and property records.
On its website, VonDoloski is listed as the chief executive officer, and Cassie Zimmerer is the chief human resource officer. Cassie Zimmerer switched her Logos email to a Western Collegiate email as early as Aug. 15, according to an email exchange between her and a charter school specialist.
Emails between Logos and the Medford School District show that VonDoloski was “actively searching to add other schools including Bridges and other schools in the Medford School District, as well as Klamath Falls,” Sheryl Zimmerer wrote in an email on Sept. 20. VonDoloski said Western Collegiate has other customers besides Logos but declined to name them during Thursday's interview.
“That has nothing to do with the questions from Medford,” he said. “That’s all of the statement I have right now.”
While there was no additional information about the reference to Bridges school, a search shows that John VonDoloski, Joe VonDoloski's brother, is executive director of Bridge Charter Academy, which has schools in Bend and Lowell. The brothers were co-founders of Logos.
In its email exchanges, Medford cited specific statutes prohibiting use of official position for financial gain (ORS 244.040) and requiring a cost analysis that demonstrates hiring a third-party service would cost less than performing the service itself (ORS 279B.033).
“Our concern stems from the fact that Logos contracted with a for-profit company that was founded by Logos’ former director,” Medford School Board Chairwoman Karen Starchvick wrote in a Sept. 15 email to Logos. “We are concerned about (Western Collegiate) having insider information that was not provided to other prospective proposers.
“We are concerned about the lack of cost analysis showing savings or operating improvements that would be gained by outsourcing the services, and not just due to paying lower salaries and benefits to employees," she continued. "The appearance is that the outsourcing enabled Logos to pay (Western Collegiate) an 11 percent compensation for managing payroll and benefits that have been reduced from current levels.”
The cost savings effort also comes as Logos is building a new $5.3 million, 25,000-square-foot school in west Medford.
Under Oregon law and its contract with Medford, Logos has the authority to outsource services costing more than $250,000 if the school could prove the contractor would be more cost-effective than using its own personnel and resources or if using its own personnel is not feasible.
Sheryl Zimmerer insisted in her emails to the district that Logos didn’t mislead district officials.
“Regarding the ethics of contracting with (Western Collegiate), Logos was fully aware of and advised by legal counsel on this issue,” she wrote. “(VonDoloski) was not part of the process and did not attend board meetings when the (proposal) was discussed or voted upon.”
“Logos was in no way attempting to hide the fact that Joe VonDoloski was the owner of (Western Collegiate),” Zimmerer continued. “As it did not occur to (Medford) to ask, it did not occur to Logos to inform (Medford) of this.”
Logos already has made a payment to Western Collegiate of $22,611.
"We are not the first school in Oregon to do this. We are not even the first charter school in Medford to do this," Sheryl Zimmerer wrote to the Mail Tribune. "The school districts have been contracting out their food, buses, and now substitute teachers and staff for a long time. It's time for charter schools to get creative in order to survive."
— Reach reporting intern Tran Nguyen at 541-776-4485 or firstname.lastname@example.org. Follow her on Twitter at @nguyenntrann.