Sunday, October 19, 2014

Michael Hicks’ Bankruptcy, And Why It Matters For A TUSD Board Member

Posted By on Sun, Oct 19, 2014 at 9:30 AM

Michael Hicks declared bankruptcy in August, 2007. From then until his Chapter 13 bankruptcy case was completed in April, 2012, he made payments in a court-approved plan to pay a portion of what he owed to creditors who filed a claim in the case. There’s nothing uncommon about the situation Hicks was in, and it normally wouldn’t merit mention. However, he is one of five members of the TUSD school board who oversee the district’s budget, which makes his personal financial responsibility a relevant concern. It’s especially relevant because Hicks has made the district’s finances a major part of his campaign, accusing Superintendent Sanchez of fiscal irresponsibility. He has also demonstrated a lack of care in reporting his campaign finances and recently made a statement to a group of students about college loans which was careless and irresponsible.

Here is a general picture of Hicks’ bankruptcy, taken from public records. I went over the documents with someone who understands bankruptcy documents and procedures far better than I do to make sure I presented the situation with a reasonable level of accuracy.

On August 2, 2007, Hicks filed for bankruptcy under Chapter 13 of the bankruptcy code, which provides for a court approved payment plan generally determined based on a debtor's "disposable income" after considering his living expenses, mortgage expenses, etc. At the time, he had debts totaling more than $225,000. In approximate figures (the exact figures differ on documents throughout the bankruptcy process), he owed a total of $150,000 on his home and his car, $47,000 in credit card debt, $16,000 in student loans, $7,000 in personal loans and $6,000 in medical bills. Three of the six credit card companies he owed money to sued him before he filed for bankruptcy, with one seeking garnishment. During the years he was paying down his debt, the bankruptcy trustee filed actions three times because he was delinquent in his payments. When he came out of bankruptcy on May 30, 2012, he had paid about 14 cents on the dollar on the debts other than the house and car, where he continued to make his normal payments outside of the bankruptcy plan.

Hicks has recently created a new one page campaign website, hicksis4kids.com. His earlier five page campaign website can be found at hicks4tusd.com. It includes a personal statement, part of which emphasizes “full disclosure,” “bringing transparency to the Tucson community regarding myself” and a commitment “to continue to bring fiscal responsibility to the district.”

”Those who know me, knows [sic] that I believe in full disclosure, and in bringing transparency to the Tucson community regarding myself and the business of TUSD.  It is my intention to call for and listen to public input on important matters, and to encourage fresh ideas from students, parents, teachers and tax payers.  I am confident that if we work together, we will be able to improve the TUSD experience for everyone, and provide our children with the best quality education they deserve.  I want to continue to bring fiscal responsibility to the district.”

Hicks raised the issue of fiscal responsibility at least twice during his campaign in recent weeks. He joined with candidate Debe Campos-Fleenor in telling the district how it should spend the money it hasn’t yet received — and may not receive any time in the near future — from the $317 million the court has ordered the state to pay to Arizona’s K-12 schools. Implied in the Hicks/Campos-Fleenor statement is that the two of them, along with Mark Stegeman, are the only ones who can stop the district from squandering the yet-to-be-paid funds.

He also wrote a letter to departing Deputy Superintendent Yousef Awwad asking him to give an overview of the district’s finances. Awwad’s response cautioned of a possible $15 million deficit for this school year, which was disputed in the most recent TUSD board meeting where the 2013-14 finalized budget was presented and $14 million in cash reserves were projected for the end of the 2014-15 school year.

Because Hicks has based so much of his campaign on his concern over district’s finances and his recommendations for the best ways for the district to spend funds, his recent financial problems take on a greater relevance.

Hicks’ reporting of his campaign spending indicates a possible lack of care when it comes to financial matters. Mark Stegeman made an in-kind contribution of $1,200 to Hicks’ campaign and to Campos-Fleenor’s campaign to pay for a petition circulator to gather signatures. Campos-Fleenor reported the $1,200 contribution in a timely manner on her pre-primary campaign finance report before the contribution was reported in the press. Hicks’ campaign finance report for the same period had zeroes in every box, indicating that his campaign hadn’t received or spent any money on his campaign. The $1,200 contribution was later included in the post-primary report he submitted in the middle of September after the information was in the press and Stegeman said publicly that he paid for the circulator.

Hicks recently gave a talk to a group of students and parents at Mansfield Middle School which was the subject of a KVOA news report because Hicks told the audience, “I got my degree from the University of Connecticut.” In fact, he received his Bachelor of Science degree from an online school, Charter Oak State College, in Connecticut. In another statement he made during his talk which wasn’t reported, he said that if anyone who wants to go to college needs help getting student loans, it’s no problem, he “knows lots of people who can help you with loans.”

“If you need help getting into college, let me know. I know lots of people who can help you with loans and all that, don’t worry about that.”

With all the recent reporting about the burden of student loans on college graduates, it’s irresponsible for Hicks to tell students and parents not to worry about taking out college loans. It’s doubly irresponsible given that part of his bankruptcy involved student loans of approximately $16,000, something which Hicks has not made public. That would have been relevant information to the parents in the audience to help them understand the importance of making careful, financially responsible decisions about how to pay for their children's college educations.

I called Hicks to see if he had any comments about his bankruptcy. He said he didn’t have anything to add, that everything is in the court records. “It is what it is,” he said.

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