Sioux Valley Gives Superintendent Oster’s Consulting Firm $6,000 to Search for New Superintendent

Tom Oster, Sioux Valley Superintendent, consultant extraordinaire
Tom Oster, Sioux Valley Superintendent, consultant extraordinaire

Former state education secretaries Rick Melmer and Tom Oster, both appointees of Mike Rounds, run a consulting firm, Dakota Education Services. According to one of their websites, Melmer and Oster are currently helping four schools search for superintendents: Spearfish, Arlington, Dakota Valley in North Sioux City, and Sioux Valley in Volga.

Tom Oster also works for Sioux Valley. He’s the superintendent that his consulting firm is helping replace.

Hmmm… wouldn’t one think that a school board could say to a retiring superintendent, “Hey, could you go through these résumés and pick the top ten for us?” as a normal part of the superintendent’s duties? Doesn’t it sound peculiar that a public employee would get to draw an additional check for outsourcing his public duties to his own private company?

It sounds peculiar to some Volga locals and Angela Kennecke:

The Sioux Valley School District is paying Oster’s firm $6,000 to find his replacement, and a retired teacher and her husband say that’s clearly a conflict of interest.

“It’s an obvious conflict of interest, when they hire a consulting firm made up of Dr. Melmer and the current superintendent to find his own replacement and pay him to do that,” Lyle Anderson said.

Lyle and Pat Anderson felt so strongly about it, they wrote a letter to the editor in the Volga Tribune voicing their concerns.

“But I also wonder if the board had any other options. Did they look at any other options or did they just take the first, easy opportunity that was there?” Pat Anderson said.

“We looked at other firms, but it was clear with Mr. Melmer’s experience as Secretary of Education under Governor Round’s cabinet, there was no one who had his connectivity, network and reach in the state in terms of knowing about highly qualified candidates to serve our students,” Doug Wermedal, Chairman of Sioux Valley School Board, said [Angela Kennecke, “Superintendent’s Own Consulting Firm Will Find His Replacement,” KELO-TV, 2015.12.17].

Sioux Valley is getting a deal: when Melmer and Oster did this same work for the Yankton school district in 2013, they charged the taxpayers $8,000. Perhaps it’s a return-customer discount: Sioux Valley engaged Melmer’s firm during its last superintendent search in 2011, which resulted in hiring Oster after Dennis Daugaard thanked Oster for his service as Education Secretary. After Sioux Valley hired Oster, Melmer made Oster a partner in the consulting firm.

Yes, we’re all friends here.

Perhaps someone is even better friends at Arlington. That school district 13 miles west of Volga is getting Melmer and Oster to do their superintendent search for just $5,500.

Dakota Educational Consulting uses this graphic to illustrate their superintendent search page... because your talent search isn't complete until a young male model in a suit climbs a ladder with a pair of binoculars.
Dakota Educational Consulting uses this graphic to illustrate their superintendent search page… because your talent search isn’t complete until a young male model in a suit climbs a ladder with a pair of binoculars.

Dakota Educational Services provides this list of past clients whom Melmer and Oster have convinced not to trust their own wits in hiring and mentoring:

  • Alta/Aurelia Community School Districts, IA – Superintendent Search
  • Sioux Valley School District, SD – Superintendent Search, Business Manager Search
  • Sibley-Ocheyedan Community School District, IA – Superintendent Search
  • Rock Valley Community School District, IA – Superintendent Search
  • Storm Lake Community School District, IA – Superintendent Search
  • Hartley-Melvin- Sanborn Community School District, IA – Superintendent Search
  • Canistota School District, SD – Superintendent Search
  • Britton-Hecla, SD – Superintendent Search
  • Estelline School District – Superintendent Search
  • Big Stone City School District – Superintendent Search
  • School Administrators of South Dakota – Executive Director
  • South Dakota Department of Education – Program Directors
  • Platte-Geddes School District – Superintendent Search and Mentoring Services
  • Lyman County School District – Mentoring Services
  • Chamberlain School District – Mentoring Services
  • Chester Area School Distrcit – Superintendent Search
  • Stanley County School District – Superintendent Search
  • Wagner Community School District – Superintendent Search
  • Viborg-Hurley School District – Superintendent Search
  • Aberdeen Roncali School District – Superintendent Search
  • Yankston School District – Superintendent Search
  • ASBSD Assistant Executive Director Search

Melmer and Oster have done some work (should that be in quote marks?) for the administrators’ and school boards’ organizations, and they jumped the secular line once to work (?) for the Aberdeen Catholic schools, but for the most part, they make their money by telling public school boards, elected and paid by the taxpayers, that we poor yokels can’t run our schools without Melmer and Oster’s vast experience and network connections, which were built, of course, as they enjoyed their own prominent public-sector jobs.

p.s.: Melmer and Oster are expanding their network by hosting Leadership South Dakota43 eager participants in the Leadership SD’s second year next gather January 7–9 in Sioux Falls to learn about the wonderful world of health care.

pp.s.: Lawyer Scott Swier promoted Dakota Educational Consulting’s new website in his September 2014 School Law Notes newsletter and on his Swier Law Firm website. Swier is the attorney for scandal-sticken Mid-Central Educational Cooperative, whose scandal includes hiring the forgetful Melmer to add value for Native American students with a six-figure moonlighting contract. Again, we are all friends here.


28 Responses to Sioux Valley Gives Superintendent Oster’s Consulting Firm $6,000 to Search for New Superintendent

  1. mike from iowa

    Political connections should be a disqualifying alarm bell not his educational background.

  2. Roger Elgersma

    If Melmer gets six figures from Gearup and it still does not work well, then he is one of those executives that is more attitude than success. If the state wants school districts to do what is best for the state(low teacher pay, consolidate etc.) and not what is best for the kids, then keep asking these people who should be your next superintendent. But if you want what Is best for your kids then chose your own superintendent.

  3. Government exists as a hog trough to feed your pals, didn’t y’all know that?

  4. As I continue to read the updates on EB-5, Gear Up, this….. basically all of the crony capitalism that goes on in this state, it brings me right to Gov D’s speech last week when he was talking about expanding Medicaid. And in his pained facial expressions, he said, (I’m paraphrasing here),

    “I just hate dependency. I hate it”

    We hate it too, Dennis. We hate it when all of the connected folks in this state, with trails right to leadership, “depend” on the nepotism, crony capitalism, and handouts that our government continues to give out to family members, friends, and others.

    Dependency in South Dakota. Yep, this state is good at it.

  5. In addition, ask the teachers in those districts what value those highly paid and connected Supes brought to their schools? They will tell you their real value. Would the boards see a conflict of interest if a teacher had a side business and they gave them the kind of $$$$ they are giving to Melmer’s consulting company? The Boards have no problem dishing out to the Supes …what does constitute “conflict of interest”?

    There is no question this is a dog biting its own tail with the supes getting their high priced contracts to serve the school, gallivant around the world (in the case of Graves, Witte et al), then know they can exit the scene stage right get paid extra $$$ to get out of their contracts and head on down the road to do it all over again.

    Oh yes, and anyone seeing any similarities in the letter Graves wrote to his staff a couple of months ago and the one Oster wrote to his? I call those letters, “firing one over the bow, so as to scare anyone considering speaking up”

    Wonder what kind of anti-bullying any of these guys have implemented?

  6. We used this group to hire our current Superintendent(We are not on the list you posted) and we have a good one. That’s not to say we wouldn’t have gotten the same one without this group, though. They basically have a survey, ratings forms to fill out after interviews, etc – I’m sure they use the same materials for every district.

    I would think if a community/school value your Superintendent’s opinions on his successor, the Superintendent should have the decency to provide that service in his final contract year(without extra pay). To me, that is part of his job until he is no longer under contract.

  7. ” The conflict in a conflict of interest exists whether or not a particular individual is actually influenced by the secondary interest. It exists if the circumstances are reasonably believed (on the basis of past experience and objective evidence) to create a risk that decisions may be unduly influenced by secondary interests.” Definition from:https://en.wikipedia.org/wiki/Conflict_of_interest

    Oster stop throwing your pork around threatening slander….good grief! You got caught with your hand in the cookie jar….keep your hand out of the cookie jar and do a decent day of hard work! Like your teachers!!!! Learn from them!!!

  8. Feeling Blue in a Red State

    A family affair?

    $78K for 32 hours per week.

  9. Feeling Blue in a Red State

    This link goes with the previous post: http://open.sd.gov/contracts/09/16SC090091.pdf

    Currently the family makes $76K for 26 hours
    http://open.sd.gov/contracts/09/16SC090091.pdf

  10. As a Cossack, Class of 2000, I find this particularly disgusting. Glad my kids aren’t in the school district. With SDSU, you’d think there’d be plenty of networking resources for finding talent, beyond this insane waste of public funds.

  11. I’m also a Cossack alumni, Class of 91. Glad you picked this story up Cory! Too bad there wasn’t a blogger in the general area of Volga that could look into this deeper… A blogger in Brookings perhaps.

  12. What twinsfan said. With Oster already on the clock the board should have simply assigned him the task of looking for his replacement.

  13. This is not a conflict of interest story, and I think that is the wrong way to go here. They are a good consulting firm, they do more then just hire, if you dig they also do the prep work to get them certified and so on. But that is not the story here.

    The story here is how much money consultants make and how many people in education have no problem throwing that around. Also how school districts have no problem allowing their high paid employees to essentially work for other school districts on the side.

    Oster and Melmer are easy targets here, the big problem should be the school districts and local school boards that don’t have the guts to make the decision on their own.

    However this is nothing compared to the school I worked for last year when they hired their superintendent, they had 2 applicants, one who was certified, one who wasn’t they picked the one who wasn’t, then hired a former superintendent to be his consultant while he gained his certification.

  14. Steve Sibson

    “all of the crony capitalism that goes on in this state”

    This is going on in “public education”. No wonder the NEA gave the South Dakota Chamber of Commerce $1 million to protect the Democratic/GOP system of legalized corruption from Initiated Measure 10 in 2008.

  15. As I have said in the past Oster, Melmer and others are all in on this horrific crime in Platte. I am absolutely shocked that the it seems like the “powers to be” can t connect the dots!

    I certainly hope that if the state of SD can t figure out the good ole boy network and how it works, that the feds and/or IRS take a serious look at these snakes! I can tell you from personal experience that these guys do not do whats best for students in SD! Disgusting!

  16. Joe, even if I accede to the contention that Melmer and Oster do good consulting work, I’ll still contend along with Oldhag, twinsfan, et al. that this “consulting” should fit under Oster’s superintendent duties and be rolled into his current pay, not be an extra contract from which he can profit. The situation is very much like Joop Bollen’s signing of a contract with himself to privatize his state job in 2008.

    The slander accusation Oster makes in that letter to his staff surprises me. It’s not slander to say that an individual has conflict of interest. Oldhag is right—throwing that word around seems a ham-handed effort to scare taxpayers and voters away from questioning his effort to double-dip at the public trough.

    Joe is right that we should look more into the consultant issue. Schools should be more conscious of this issue as we ask the 2016 Legislature to appropriate big bucks for teacher pay. These consultant fees may not add up to enough to substantially raise teacher pay (Hmm… $6,000 every five or ten years… divide among 38.7 instructional staff at Sioux Valley… that’s not going to get us to the $8,000 raise for every teacher), but we need to make every dollar count.

  17. Feeling Blue, thanks for pointing out that Mrs. Oster also makes good money as a consultant. Her $72K contract with the state Department of Health and Medical Services at least involves some management in her field of expertise, work that seems necessary to the chronic disease self-management program (someone has to coordinate the program, right?).

  18. Clyde, the superintendent search is not as rankly corrupt as what appears to have happened in GEAR UP and Mid-Central. But it is a facet of the same diamond: well-placed individuals persuade the powers that be that they need a couple more middlemen to do their jobs right.

  19. 22 school districts x $5,000 each for “connectivity, network and reach”. get hired as a public school administrator and while doing it spend your time on your next private gig. get somebody else to do your work.

  20. Roger Elgersma

    Even in Sioux Falls the school board hires consultants to chose the next superintendent. The board acts so qualified when running for office then spends taxpayers money to do the real decisions. After spending a lot of money they hired a man with less experience than the retiring woman who grew up in our system and ran the schools over ten years and paid a man from one third as big a district more money than she got after all that experience in a larger district. Just wonder how much money changed hands under the table. Didn’t have to have money under the table since the taxpayers are paying for it right in front of our noses.

  21. Porter Lansing

    In my little town the city council was famous for spending money on consultants to make their decisions for them. The voters got fed up and last cycle passed the rule that city council can’t spend any big money, hire any consultants or approve any projects (especially eminent domain) without a public vote. It’s now a trend in other Denver suburbs and not well taken by the entrenched. (CO has all mail in ballots and a public vote is minimal expense)

  22. School boards use consultants because many serving on boards don’t have the time or expertise to hire a superintendant. There are at least 2 consultants, the other being associated school boards of South dakota. They do the search and also make recommendations on who boards should interview. Usually giving a board 3 to 5 candidates to interview. I have been through the process and believe it is essential for boards who have not been through the process. It is more time consuming than it appears on face value. Boards are trying to get the right person hired. The right superintendant like any manager will save your district dollars in the long run more so than the 5 or 6k it costs to find him or her.

  23. Hmm… but now the voters are another step removed from control of their schools, as we privatize the hiring function. Isn’t there a danger of groupthink evolving in a system where superintendents at dozens of schools are all chosen by the same handful of profiting middlemen?

  24. Porter, you guys passed an ordinance like that? Cool! Can you send me a copy? Maybe that could be worked into a condition for the Blue Ribbon proposal….

  25. Porter Lansing

    I’ll research finding a copy of the ordinance.

  26. Porter Lansing

    I can’t see where it’s been written into the city charter as of yet. Here was the citizen initiative ballot question 300:
    Ballot Question 300
    The Citizen Initiative seeks to amend the City Charter to include the following:
    “Any council action approving or modifying an urban renewal plan pursuant to Part 1 of the Colorado Urban Renewal Law must be ratified by the registered electors of the City of Littleton if the approval or modification of the urban renewal plan proposes the use of or change to eminent domain, condemnation, tax increment financing, revenue sharing or cost sharing.”

    In simple terms, the approval of this language would require voter approval, not for projects but for urban renewal plans that include the use of eminent domain – the taking of private property. It would also require voter approval if any of our public tax dollars are going to be diverted from their intended use to urban renewal to give to developers to offset some of the costs of their private development. (Taxes would be diverted from Littleton Public Schools, Arapahoe County, South Suburban Parks & Rec, Urban Drainage and the City of Littleton.)

  27. Ah, it doesn’t seem to ban hiring consultants outright; it just bans that set of economic development projects. Is there any other language that prevents the city council from hiring consultants to guide such projects?

    I see one very encouraging bit of news in that article from Littleton: “Tuesday’s victory for Your Littleton Your Vote came despite being heavily outgunned by those challenging the measure, who operated under the name Littleton Strong. Opponents raised nearly $91,000 in campaign donations while backers raised nearly $3,000.” I would anticipate we’ll see a similar spread in spending on South Dakota’s payday lending initiatives next year, with the payday lenders spending seven figures to block our effort to regulate loan sharking while the good guys may not even reach six figures in spending. Let’s hope for similar results.