By M.B. Taboada
AMERICAN-STATESMAN STAFF
Thursday, July 15, 2004
The Leander and Thrall school districts are among hundreds across the nation that probably will have to pay for school gym equipment that they thought would be free.
Many districts opened state-of-the art fitness centers as part of a program designed by the nonprofit National School Fitness Foundation.
But in an e-mail sent this week to superintendents across the state, the Texas Education Agency warned that there are "ongoing investigations and legal action" against the foundation, which filed for reorganization under the bankruptcy code last month.
The agency is compiling data on how many districts in Texas had participated in the program and, as a result, owe money for gym equipment.
Leander and Thrall both owe hundreds of thousands of dollars for gym equipment.
"Apparently this has happened nationwide," said DeEtta Culbertson, a spokeswoman for the Texas Education Agency. "We sent out an e-mail to find out what the scope of it is in Texas. . . . We'll have to wait and see what (we) find."
With the stated goal of helping fight youth obesity, the foundation started the Leadership in Fitness Training program, known as LIFT America, four years ago. The program called for $300,000 workout facilities, complete with cardio machines, weights and computerized assessment stations. Participating schools would track and provide their results to the foundation, which would use the information to formulate national statistics.
Leander, which first heard about the program from a high school coach, was the first Central Texas school district to do so, starting a pilot at Vista Ridge High last fall. After hearing student success stories of weight loss and increased interest in exercise, the board expanded the program to Cedar Park High School last spring and approved renovating Leander High to make room for the gym equipment this fall.
Most districts took out bank loans and paid up-front for the equipment, thinking that the Utah-based foundation would reimburse them each month with money it got from grants and donations. Now, the districts are stuck paying the remaining balances for the equipment.
Leander still owes two banks $380,000 for its equipment and has not yet purchased equipment for its new space at Leander High. The Thrall school district, in eastern Williamson County, owed $235,000, but officials have renegotiated bank loans and now owe $136,000.
Schools across the country stopped receiving payments in April after law enforcement officials in Minnesota alleged that the fitness foundation was involved in a Ponzi scheme, paying back schools with licensing fees it received from districts that recently signed up for the program.
Until a bankruptcy trustee was appointed last week, the foundation had been "trying to work with a plan that would make payments to the schools that have already invested in the programs," said Grant Sumsion, the foundation's lawyer. He said he does not know of any criminal investigation of the foundation.
In a complaint filed in Utah's bankruptcy court against former foundation president Cameron Lewis and members of his family, the foundation alleges that he misappropriated about $4 million for such things as an airplane, political contributions and hunting trips.
Without the fitness foundation program, districts such as Thrall could not afford the equipment or the program, Superintendent Keith Brown said. Brown said district officials are trying to find a way to keep the program going.
Leander officials also praised program results and said they would like to continue to use the equipment for their physical education programs.
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