TORKELSON COMP. $168,641
Contract $98,000; Benefits $15,000
2nd highest paid of state's 424 admin.
Wis. DPI Supt comp. $121,307
Cost per student Mercer $25,281;
Wis. $12,942; Nation $10,667
Mercer ACT & School Report Card
scores lowest of 21 N. Wis. schools

Wednesday, July 11, 2018





MILWAUKEE JOURNAL SENTINEL SLAMS TORKELSON

Reports on Years of Mismanagement, Misspending
The Pulitzer Prize-winning Milwaukee Journal Sentinel has done it again – this time reporting on Mercer School District Administrator Erik Torkelson’s “inappropriate” spending of taxpayer dollars and the history of other questionable management practices.  Widely acclaimed Journal Sentinel educational writer Annysa Johnson did another masterful job in researching and writing the expose.
 In this recent article she referenced an earlier page-one story she authored when Kelly Kohegyi showed the sexually explicit movie “Fifty Shades of Grey” to a group of young Mercer school girls.  That incident gave Mercer a big black eye when the story went viral and was used by broadcast and print media around the world.   
This latest article will most likely receive similar widespread notoriety because the Journal Sentinel is a member of the Gannett Co. family of hundreds of broadcast and print media outlets, including USA Today.  As a Pulitzer Prize- winning newspaper, the Journal Sentinel does not print articles without thorough researching, fact checking and top professional writing.  So, we can rest assured that Annysa’s article is 100% correct.
Read the following text of the page one Wednesday, July 11, Journal Sentinel article.
Tensions boil in tiny Northwoods district

New board member digs up spending discrepancy 

Annysa Johnson
Milwaukee Journal Sentinel USA TODAY NETWORK – WISCONSIN 

One way to make enemies in a smalltown school district, it turns out, is to start sniffing around its finances. 

Christa Reinert was hardly welcomed when she joined the Mercer School Board in 2016. She’d run, at least partly, in protest after two girls basketball coaches — one a sitting School Board member at the time — allowed players to watch the sexploitation flick “Fifty Shades of Grey” on a road trip. 

But things got worse, she says, when she started asking questions: Why, for example, were board members approving staff contracts they’d never seen? 

Why was the district administrator’s salary higher than his contract stipulated? 

And why had the community recreation fund in this tiny Northwoods district — with 151 students in a single K-12 school — ballooned in the years after the administrator’s arrival from about $3,000 a year to more than $200,000 on average over the last seven years. 

District Administrator Erik Torkelson and School Board members — one of them his mother-in-law — were openly hostile, she said. Torkelson directed his staff to stop providing her documents without an open records request and payment upfront.
So Reinert took her concerns to the state Department of Public Instruction. 

DPI issued a finding late last month that the Mercer School District
inappropriately spent about $175,000 from its community programs and services account — otherwise known as “Fund 80” — over the 2015-’16 and 2016’17 school years. Most of that was used to boost wages and benefits for a small group of employees, including Torkelson, without adequate documentation, according to the letter. 

DPI also admonished board members for voting on bonuses for administrators, including $11,000 for Torkelson, in closed session. 

As a result, the department has issued a “revenue limit adjustment” for an equal amount, meaning the Mercer board will have to slash spending or tap its reserves to balance its 2018-’19 budget. And a second hit could follow if it doesn’t change its practices for the coming school year, according to the state. 

“They still have time to demonstrate ... that their funds were spent properly. But they did not provide that (documentation) to us,” DPI spokesman Thomas McCarthy said.

Torkelson and board President Noel Brandt have declined repeated requests for interviews over the last week. But Torkelson said in an email to the Journal Sentinel that he and the district’s attorneys “vehemently disagree” with the agency’s findings and will be filing an appeal.

Reinert said she takes no satisfaction in the ruling.

“At this point, it’s going to hurt the kids in the school,” said Reinert, who owns Flambeau Flowage Sports and the adjacent Looney Beans Coffee shops on Highway 51, the main drag through this Iron County town of about 1,400.

“They’re blaming this on me,” she said of Torkelson and his supporters on the board. “But I didn’t take the money. I didn’t pay people over contract. I didn’t approve any of that,” she said. “I was the one questioning it over the last two years, because it sounded exorbitant to me.”

The DPI probe focused on how the tiny school district spent its Fund 80 dollars for recreation including pickleball and community programming over the two years. Torkelson said in a January interview that the district offers a broad array of programming — child care, senior meals, yoga, art and music classes — that have “transformed the culture of our district.”

Critics dismiss it as a handful of sparsely attended classes and a “walking track” through the halls of the school.

The DPI ruling is the latest turn in an ongoing community squabble that appears to have begun with a controversial school referendum in 2013.

Mercer is considered a property-rich school district, one of a number of districts in resort communities around the state where high-end vacation homes skew the property values, effectively reducing their access to state dollars.

Most of its $3.5 million annual budget comes from local taxpayers, who can be sensitive to spikes in their property tax bills. And many revolted when a 2013 referendum, which was expected to raise taxes by $11 per $100,000 in home value, came in at more than 10 times that amount. Since then, a small group of residents has been raising concerns about the school district at meetings and online.

Complaints have run the gamut, from grade inflation and declining ACT scores to Torkelson’s relationship with the School Board and its financial operations.

Of keen interest has been Torkelson’s compensation. Torkelson was paid about $136,000 last year, though his contract was for about $98,000, according to his critics. He said he effectively buys back some of his benefits, including insurance and unused vacation days, but Reinert and others say that should total no more than $114,000.

And things could get heated. In 2014, a local blogger, Richard Thiede, sued the district for suggesting he was tied to a supposed hacking of the district’s email system. Reinert was slapped with a restraining order over the “Fifty Shades” fracas. Late last year, the board voted to consider legal action against anyone, including Reinert, who forwarded an email letter critical of the district.

“People have been intimidated, and there’s been outright vandalism of people critical of the School Board. Metal shards have been put in tires; I had it happen twice,” said Richard Kemplin, a local activist and Reinert ally who records board meetings.

When board critic Paul Juske ran against Kelly Kohegyi, Torkelson’s mother-in-law, vandals “smashed his mailbox, stole his campaign signs, sent out an illegal flyer,” Kemplin said. “The GAB found it violated election laws, but we couldn’t get the DA to prosecute.”

Tensions boiled over at the October 2017 annual meeting when resident Rick Duley tried to discuss what he called the district’s “pathetic” ACT scores. Shouting ensued. Brandt rose from his seat to confront him, and they were separated by Iron County sheriff’s deputies, who’d been called by Torkelson earlier because another resident was “becoming agitated.”

No charges were filed; Iron County District Attorney Matthew Tingstad said nothing in the deputies’ reports rose to the level of a crime.

Reinert and Duley, as well as one of the deputies, tried to obtain the district’s video of the meeting, but were not successful.

Months later, then-President Deanna Pierpont told the Journal Sentinel that she had erased it, and that Mercer no longer records its meetings.

“I didn’t like what I saw. ... People in the audience were yelling. Students were there. ... I just felt that I didn’t want that out on the website.”

Reinert was stunned when she heard, but not entirely surprised.

“Unbelievable. I was afraid they were going to do that,” Reinert said. “It’s illegal. You can’t just get rid of documentation of a public meeting.”

Reinert won’t say she feels vindicated by the DPI letter. But she does think it explains why she wasn’t welcomed by her colleagues on the board.

“They didn’t just dislike me. I got along with everyone at the school until the ‘Fifty Shades,’ ” she said. “They didn’t want me on the board ... because I wasn’t complacent. I wasn’t going to go along with the status quo.”





Monday, July 9, 2018



More Shenanigans

IT COULD ONLY HAPPEN IN MERCER

A school district administrator who acts without the required school board approval … a board president who ignores the law when asked to call a special meeting … mounting bad publicity about the misuse of school funds.

In any other community these events would have grave consequences.  But in Mercer they are commonplace.

The focus of the latest school board/administrator scandal is a Wisconsin Department of Public Instruction investigation into the misuse of $175,248 of taxpayer Fund 80 money.  The DPI determined that $145,916 of that amount wrongly went into the pockets of administrator Erik Torkelson and select staff members for duties Torkelson falsely claimed were needed to operate the community service programs. (Read the following Iron County Miner report and MSF 6/30/18 Torkelson’s Taxpayer Ripoff)  

When the DPI findings came out,Torkelson quickly contacted the school’s attorneys and, without the required school board approval, directed the firm to file an appeal with the DPI.  Of course, this is nothing new for Torkelson who regularly spends taxpayer money and acts without consulting the school board.  Not that his three board lackeys – Deanna Pierpont, Noel Brandt or Micki Pierce-Holstrom – would dare to challenge him.

But two members of the board – Christa Reinert and Karl Anderson -- who were elected to clean up the school board/administrator mess, asked for a special board meeting to decide what actions to take, if any, regarding the DPI findings.  Of course, Torkelson had already made the decision for them by contacting the attorney, even though the board is the contractual client.

Board president Noel Brandt denied the request for a special meeting.  Wisconsin statute 120.11 requires that “a special school board meeting shall be held upon the written request of any school board member”.

One result of a special meeting would be to remove Torkelson from his position, at least while the DPI continues its investigation into the misuse of funds in other years. Then, too, there is the probability of other legal action.

The board also needs to be concerned about the legitimacy of any information or documents Torkelson might submit if he is allowed to appeal the DPI findings without board involvement.  He has refused to provide the documents earlier demanded by the DPI.

Get ready for some more big bad news about Mercer – bad for Torkelson and his complicit board members, but good for Mercer taxpayers and the students.










Saturday, June 30, 2018


The DPI Investigation
TORKELSON’S TAXPAYER RIPOFF DRAWS FIRE
The long-awaited Wisconsin Department of Public Instruction’s investigation of Mercer School Administrator Erik Torkelson’s illegal use of taxpayer Fund 80 money has resulted in damaging “findings” that could cost taxpayers additional money or cause a reduction of funding for the children’s educational programs.
The DPI issued 12 “findings”, 10 of which charged that Torkelson had misused Community Programs and Services Fund 80 to the extent of $175,247.92.   The other 2 “findings”, which the DPI said were eligible Fund 80 expenditures, were based on false information given to the DPI.
Mercer taxpayers and students will pay the price for Torkelson’s illegal use of Fund 80 money as the result of a state law-imposed revenue limit reduction penalty.  Such a reduction means that the district will have $175,247 less to spend in the 2018-19 school year or that Mercer taxpayers will need to approve another tax increase referendum to pay for Torkelson’s blunders. 
The DPI “findings” are for the school years 2015-16 and 2016-17.  The revenue limit reduction, or allowable tax levy, could climb even higher as the DPI investigate Fund 80 misspending for the 2017-18 school year and for earlier years.
A large share of the misused $175,247 - $145,916 – was for salary and benefits which Torkelson illegally paid himself and several select staff member for duties he falsely claimed were needed to operate the community services programs.  The DPI disallowed the phony claims and said that “no documentation was provided indicating the salaries and benefits of the District employees were the actual, additional costs to operate community programs and services”. 
The remainder of misspent money, close to $30,000, was for new flooring and fitness equipment which Torkelson claimed were needed for the community services programs.  But, the DPI said “no’, and declared the phony expenditures ineligible as Fund 80 costs.
The DPI also charged that the Mercer school board reported holding a closed “executive session” on Sept. 28, 2015, to allegedly approve performance bonuses for the administrative staff.  Not only was the closed meeting illegal, but, according to the DPI, the minutes of the meeting did not contain mention of the performance bonuses.   The Mercer school board had previously been put on notice by the Iron County district attorney for holding an earlier illegal closed session.
School board members Christa Reinert and Karl Anderson have demanded a special public meeting of the school board, along with the board’s legal counsel, to discuss the DPI findings.  Board chairman Noel Brandt is required under state statutes to grant their request but, to date, has refused to call a special meeting.
Read the following complete DPI report and learn how Mercer taxpayer money was illegally used and what it means to taxpayers and students. 

WISCONSIN Department of
PUBLIC INSTRUCTION
                                                                                              Tony Evers, PhD, State Superintendent

June 26, 2018 

Erik D. Torkelson
District Administrator
School District of Mercer
2390 W Margaret St.
Mercer, WI 54547 

RE: Department of Public Instruction's Findings Related to the Review of the School District of
Mercer's Fund 80 in 2015-16 and 2016-17

Mr. Torkelson,

The Wisconsin Department of Public Instruction reviewed the documentation related to the
School District of Mercer's Fund 80, Community Programs and Services. The information
submitted by the District included the general ledger expenditure detail for Fund 80, the payroll
check history for selected employees, labor distribution reports for Fund 80, requested
documentation to support certain payments, and descriptions of the Fund 80 activities. Upon the
review and analysis of the District's Fund 80 Community Program and Services, the Wisconsin
Department of Public Instruction (DPI) made the following findings and related financial
impacts.

Finding 1: DPI requested and received the supporting documentation for check # 00055054
totaling $20,758.50 to Action Floor Systems. $10,379.25 of this check was recorded as an
expenditure in Fund 80 in 2015-16. This check was a payment for non-slip flooring. The invoice
provided had a note that the flooring was for the library, entry way, and the hallway.

The response provided by the Mercer School District on June 11, 2018, for Findings 1 and 2,
states, "The purchase of the non-slip flooring is an actual, additional cost to operate community
programs and services." However, the invoice provided had a note that the flooring was for the
library, entry way, and the hallway. Each of those common school building areas are used by
students and staff, as well as visitors to the school, senior citizens and activity participants.
Therefore, the purchase of the non-slip flooring is not ail. actual, additional cost to operate
community programs and services. Wis. Admin. Code § PI 80.02(3). The District would install
the flooring if Fund 80 did not exist. Wis. Admin. Code § PI 80.02(4). State law requires a
revenue limit reduction of $10,379.25. Wis. Stat. § 121.91 (4)(r) and § 121.92(2)

Finding 2: DPI requested and received the supporting documentation for check # 00055497
totaling $5,565.40 to Action Floor Systems. $2,782.70 of this. check was recorded as an
expenditure in Fund 80 in 2015-16. This check was a payment for non-slip flooring in the main
entrance and cafeteria/activity center per the explanation provided by the district.

The response provided by the Mercer School District on June 11, 2018, for Findings 1 and 2,
states, "The purchase of the non-slip flooring is an actual, additional cost to operate community
programs and services," However, the Mercer School District responded to the DPI on May 1,
2018 that the non-slip flooring was for the main entrance 'and cafeteria/activity center. Each of
those common school building areas are used by students and staff, as well as visitors to the
school, senior citizens and activity participants. The purchase of this non-slip flooring is not an
actual, additional cost to operate community programs and services. Wis. Admin. Code § PI
80.02(3), The District would install the flooring if Fund 80 did not exist. Wis. Admin. Code §PI
80.02(4). State law requires a revenue limit reduction of $2,782.70. Wis. Stat. § 121.91(4)(r) and
§ 121.92(2).

Finding 3: DPI requested and received supporting documentation for check # 00055228 totaling
$18,360.00 to Stalker Sports Floors. $6,996.02 of this check was recorded as an expenditure in
Fund 80 in 2015-16. This check was a payment for sanding and sealing a gym wood floor and
adding extra lines to the gym floor. The District's explanation was that the floor was permanently
relined to include the appropriate line and court markings for the Community Pickleball League.

The response provided by the Mercer School District on June 11, 2018, fat Findings 3, states,
'The additional expenditure for the re-lining of the floor is an actual and additional cost due only
to the presence of community programming (pickle ball and the youth basketball league."
Without the presence of these programs we would have simply resurfaced the gym floor (sanded
and sealed) as we do annually." No additional documentation was provided related to the actual
and additional costs to the District to operate the community programs and services. Resurfacing,
sealing and "re-lining" of the gym floor are general building costs and are completed on regular
basis. Therefore, because the sanding and sealing of the gym floor are completed as part of the
District's ongoing maintenance of the facility, those expenses are not an actual additional cost to
operate community programs and services per Wis. Admin. Code § PI 80.02(3). State law
requires a revenue limit reduction of$6.996.02. Wis. Stat. § 121.91 (4)(r) and § 121.92(2).

Finding 4: DPI requested supporting documentation for the $9,373.761'ecorded in account
80E800-551-200000 in 2016~17. The district provided documentation for the original amount
recorded in this account of $58,928.30 which included the purchase of a defibrillator, fitness
equipment, and a tractor with accessories, A journal entry was posted to this account on June 30,
2017, reclassifying $49)554.54 and removing the amount out of account 80E-800-551-200000.
($58,928.30 $49,554.54 = $9,373.76.)

On June 11, 2018, the Mercer School District submitted an "Expenditure Detail Report by
Account" report. This report is similar to an earlier document entitled "Expenditure Detail
Report by Account” which the District submitted to the DPI on May 1, 2018. No new
information was provided in the report submitted on June 11, 2018. Therefore, the DPI is not
able to determine the detail of the expenditures remaining in the Fund 80 account after the
journal entry ($58,928.30 - $49,554.54 =$9,373,76). Therefore, this purchase is not an actual,
additional cost to operate community programs and services per Wis. Admin. Code §PI
80.02(3). State law requires a revenue limit reduction of $9,373.76. Wis. Stat. § 121.91 (4)(r) and
§ 121.92(2).

Finding 5: DPI requested and received supporting documentation for payments to Best Buy
totaling $5,091.19 in 2016-17 coded to account 80E-800-551-222500. This payment was for
computer equipment. The computer equipment is used exclusively in the computer lab used by
the community. Students do not use this lab. -The lab is not used for school curricular or
extracurricular activities. The $5,091.19 is an eligible community service fund expenditure.

Finding 6: DPI requested documentation to support a journal entry posted to account 80E-
800415-257220 totaling $10,217.50 in 2016-17. The District provided supporting documentation
that included a computation of lunches provided to community members which totaled
$10,217.50. Community members were also served breakfasts. DPI did not identify an entry or
an expenditure recorded in Fund 80 for breakfasts served the community.

On June 11, 2018, the Mercer School District submitted additional documentation indicating the
number of lunch and breakfast meals served, by date and month, to community members during
fiscal year 2016w17. The District also provided general information from the DPI's School
Nutrition Programs. The additional information provided to the DPI provides documentation
supporting the handwritten note; which calculated the number of breakfast and lunch meals served,
as well as the pricing documentation, for both community members and students. Therefore,
eligibility of the cost of the aforementioned meals in Fund 80 is acceptable. The $10,217.50 is an
eligible community service fund expenditure.

Finding 7: DPI reviewed the payroll information provided by the District for Adam Kussard. DPI
staff received a contract that included proper supporting documentation for Adam's 2016-17 base
pay and 2016-17 tax sheltered annuity amount. The District also provided the documentation for
Adam Kussard's 2016-17 vacation payout. However, the $2,500 performance bonus for 2016-17
was only supported with an email from the District Administrator to the Business Manager.

No documentation of school board action approving the performance bonus for the 2016-17 fiscal
year was received. No documentation was provided related to the community programs and
services provided by Adam Kussard. Wis. Admin. Code § PI 80.02(3). State law requires a revenue
limit reduction o f$2,500. Wis. Stat. § 121.91(4)(r) and § 121.92(2).

On June 11, 2018, the Mercer School District responded, "No supporting documentation, revenue
reduction appropriate.

Finding 8: DPI reviewed the payroll information provided by the District for Lori Boltz. DPI
could not match the District's computation of the gross pay for Lori Boltz. The District provided a.
contract for Lori Boltz for the period starting July 1,2013, and ending July 1, 2015. DPI received
a letter dated February 23,2015, that accepted renewal of this contract for the 2015-16 and 2016-17
school years. The annual salary for the 2013-14 school year was included in the contract
received. Lori Boltz would have received the 1.62% Consumer Price Index (CPI) increase for the
2015-16 school year. Documentation approving other pay increases for Lori Boltz was not
received by DPI. The contract received included a $1,500 annual flex plan contribution and a
$2,520 deferred compensation contribution, The District contributed $2,520 to the deferred
compensation plan in 2016-17 per documentation received from the District.

DPI staff could not determine the Board's approval of the $2,520 payment to Lori's deferred
compensation plan. No documentation was provided related to the community programs and
services provided by Lori Boltz. Wis. Admin. Code § PI 80.02(3). State law requires a revenue
limit reduction of $2,520. Wis. Stat. § 121.91 (4)(r) and § 121.92(2).

On June 11, 20187 the Mercer School District responded, "No. supporting documentation, revenue
reduction appropriate.

Findings 9, 10, 11, and 12 ~-Relates to the Payroll of Several Individuals
The overall summary for Findings 9 through 12 can be found in the attached document "Summary
of Mercer SD Findings FY 2016 and FY 20 17 June 26 20 18.xlsx". No documentation was provided
indicating the salaries and benefits of the District employees were the actual, additional costs to
operate community programs and services. Wis. Admin. Code § PI 80.02(3). State law requires a
revenue limit reduction of$67, 789 .84 related to 2015-16 and $72,906.35 related to 2016-17. Wis.
Stat. § 121.9l(4)(r) and § 121.92(2).

Finding 9: DPI reviewed the payroll information provided by the District for Erik Torkelson. DPI
received a contract for Erik Torkelson that started on July 1, 2011. The contract contained a salary
amount, a flex plan contribution amount, a TSA contribution amount, and a payment in lieu of
insurance amount. The District has not provided documentation for the 2015-16 and 2016-17
school years vacation and personal day payout that would include the computation of the payout
made to Erik Torkelson. DPI received. a contract renewal letter for the 2015- 16 and 2016-17 school
years signed by Erik Torkelson. The District provided a letter, dated May 1 ,2018, explaining that
the 2015-16 school year performance bonus was approved, but not included in the school board's
minutes. DPI received no documentation approving the 2016-17 school year performance bonus.
Erik Torkelson also received a Consumer Price Index (CPI) increase for the 2015-16 and 2016-17
school years. A letter from the District Clerk, dated May 3, 2018, addressed the 2015-16 CPI
increase. DPI received no documentation approving the CPI. increase for 2016-17.

Finding 10: The District provided a computation of the 2015-16 CPI increase for Erik Torkelson.
This computation includes a base amount of $122,173 based on the wages reported on the 2015
W-2. Base wages typically exclude any other forms of compensation such as a performance bonus
and vacation payouts. The base year should also be reviewed. Typically, a 2015-16 school year
pay increase computation would use the 2014-15 school year wages. District staff will have an
incorrect computation of a pay increase if the wrong base year and base wages are used.

Finding 11: DPI received a letter, dated May 1, 2018 that was signed by five board members.
The letter stated that the September 28, 2015, executive session school board minutes were missing
the approval of the performance bonuses for the administrative staff. Per the Wisconsin Open
Meetings Law, no action should be taken in the executive/closed school board session. Closed
session is usually for discussion only. The District should review the proper process for
parliamentary action and compliance with the Open Meetings Law.

Finding 12: The District provided four Memorandum of Understandings (MOUs) between the
District and the administration staff. The MOUs state that additional duties related to community
services must be assigned to Mercer administrative staff and that the additional duties are assigned
as separate positions. The District must also have additional costs for the expenditures to be
recorded in Fund 80. The District must also substantiate the percentage of the salaries and fringe
benefits charged to Fund 80. This could be done by having job descriptions that define the specific
job duties for each position. The District has not provided documentation to substantiate the
percentage of each administrative employee's payroll that is recorded in Fund 80. Per Wis. Admin.
Code § PI 80.02(4), the District must be able to document that if Fund 80 ceased to exist the full
time status of these positions would be reduced.

On June 11, 2018, the Mercer School District responded to Findings 9,10, 11 and 12, as they relate
to the payroll of several individuals. However, the documentation did not provide a clear
description of the duties, number of hours worked to complete their duties relating to community
programs and services (Fund 80) and/or responsibilities that each of the employees who were paid
with Fund 80 revenues, based on the MOUs (Memorandum of Understandings). No documentation
was provided indicating the salaries and benefits of the District employees were the actual,
additional costs to operate community programs and services. Wis. Admin. Code § PI 80.02(3).
State law requires a revenue limit reduction of $67,789.84 related to 2015-16 and $72,906.35
related to 2016-17. Wis. Stat. § 121.91(4)(r) and § 121.92(2).

The overall financial impacts of Findings 1 through 12 can be found in the attached document
"Summary of Mercer SD Findings FY 2016 and FY 2017 June 26 2018.xlsx". In total, state law
requires a revenue limit reduction of$87,947.81 in2015-16 and $87,300.11 in2016-17. Wis. Stat.
§ 121.91(4)(r) and § 121.92(2). . 

Sincerely,

Robert A. Soldner, Director
School Financial Services Team 

Attachment: Summary of Mercer SD Findings FY 2016 and FY 2017 June 26 2018.xlsx
                     Appeal Rights

c: Noel Brandt, Mercer School Board President
Brian Pahnke, Assistant State Superintendent, Division for Finance and Management