Department of Education seeks attorney general’s review of ESI

The Arizona Department of Education isn’t sure if Education Services Inc. passes the smell test.

“We’re looking to see if there is a conflict of interest right off the top,” said ADE Spokesperson Laura Penny.

ESI was created and is currently owned by Cottonwood-Oak Creek Superintendent John Tavasci, Assistant Superintendent Dave Osborn and Business Manager Sue Bring.

The C-OC School District currently contracts with ESI for the services of eight employees, including Assistant Superintendent Dave Osborn.

In July, Tavasci will become an ESI employee and will continue to serve in his position as superintendent to the C-OC School District.

The ADE has referred its concerns to the Attorney General’s Office, said Penny.

“Well, they can certainly investigate this, but ESI hasn’t received a single penny from the district,” said Tavasci. “ESI receives no benefit from its relationship with this district. It’s a free service under the conditions of our bid.”

According to the Department of Education, the issue of concern focuses on how a school board makes an informed and impartial decision regarding the hiring of staff.

“How does the board make decisions on how to lease or hire the superintendent without the input of these people they rely on for an analysis of the economic interests of the district,” Penny explained.

Tavasci counters that if he’s guilty of saving the taxpayers money while maintaining excellent teachers, then he’s guilty as accused. In fact, he says, he would be acting irresponsibly as a superintendent if he didn’t create a business that would create this kind of benefit to his district.

“It’s not the custodian that’s going to do it,” said Tavasci.

ESI’s business concept is intriguing, even to the ADE, but Penny says it begs for a thorough legal review.

“This could be a totally new revolutionary concept in education,” Penny said. “In that case, we’re all for it. But my concern is the use of these services by the district that employs the officers of the corporation.”

Currently, the C-OC district is contracted with ESI to provide compensation at 10-percent less than the employee’s salary before retirement.

And although ESI does not currently receive compensation from the C-OC School District for its lease of employees, Tavasci originally intended to charge a fee in the future for its services. “When none of us are associated with the district, there probably would be a charge,” he said.

He has since had a change of heart.

“It’s possible we were setting the stage for a later economic benefit,” Tavasci admitted. “If it’s ruled by our attorney or the attorney general that it’s inappropriate, we wouldn’t do it.”

“We are not joined at the hip to ESI,” said School Board Member Buddy Rhodes. “I never gave a thought about a possible conflict of interest and I am not concerned at this point in time.”

ESI’s future with the district, says Rhodes, will depend on its economic impact.

“If at some point in time it’s not financially feasible or profitable for the taxpayers, or more importantly the students, you sever the ties.”

Tavasci says he understands why there is concern. “Now I get it,” he said. “I will go on record that this would be a terrible conflict using my position to influence future gain and I will make certain if it’s inappropriate that it does not happen. We will never make money off this district.”

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