By Michael D. Clark
The Cincinnati Enquirer

MOUNT HEALTHY - Financially strapped Greater Cincinnati school districts got more bad news when a national foundation that had sold hundreds of thousands of dollars of high-tech exercise equipment - along with a promise to reimburse schools - suspended payments.

PARTICIPATING

Two years ago Mount Healthy Schools in Hamilton County was the first of 119 Ohio schools to sign up for National School Fitness Foundation program. Among other participating schools: • Cincinnati Public • Fairfield • Talawanda • Edgewood • Middletown • Monroe • McAuley High School • Lebanon • Indian Hill • North College Hill • Wilmington • Three Rivers

At least a dozen Southwest Ohio school districts signed up during the last two years for the unusual purchasing plan offered by the Utah-based National School Fitness Foundation. The private, nonprofit organization was created in 2000 to, its founders said, improve the fitness of American youth.

In exchange for multiyear, contractual agreements for schools to install the foundation's equipment and health education curricula, compile detailed student fitness data, and cooperate in publicizing the foundation, participating schools were told they would be fully reimbursed for their initial purchase cost.

The foundation said reimbursements would come from money raised from private donors and government grants that support fighting obesity. But foundation officials recently announced to about 600 participating schools in 20 states - including 119 schools in Ohio - that the foundation was suspending reimbursements indefinitely.

The foundation is under investigation by the Minnesota Attorney General's office, which recommended that school officials in that state cease contracting with the foundation for exercise equipment. Ohio Attorney General spokeswoman Michelle Gatchell said Wednesday state officials are reviewing the foundation's contracts with Ohio schools.

Foundation President Cameron Lewis wrote in a recent letter to participating schools that the foundation "has done nothing wrong and we believe strongly that the foundation will weather the enormous disruption and expense of this investigation."

Lewis has had a string of failed businesses, a history of personal bankruptcy and used the foundation to give himself a $317,358 salary, an investigation by the Associated Press revealed.

"Going into this, it seemed almost too good to be true," said Mount Healthy physical education teacher Jon Sheehan, whose Hamilton County school system was the first in Ohio two years ago to join the foundation's new program by purchasing $150,000 worth of equipment.

Mount Healthy Superintendent David Horine said the district had until recently received regular reimbursement payments that covered $110,000 of the $150,000 initial purchase cost.

Horine said he is still optimistic the foundation will be cleared of any wrongdoing and his financially embattled district, which until last November's levy approval by voters had suffered four consecutive tax issue defeats, will recoup its remaining $40,000.

"But even if we have to eat the $40,000, we still come out on top because we're got $150,000 worth of equipment for that amount and we are very happy with the program," said Horine.

Lebanon School Superintendent Bill Sears echoed those comments, saying he was disappointed to hear the program is having legal problems and is concerned that his Warren County school system may not be fully reimbursed for its initial expense of $419,000 two years ago.

"It appears the foundation was betting more schools would jump into the program than actually have to date," said Sears.

Lebanon school officials so far have been reimbursed about $230,000 of their initial expense of $419,000. If the foundation is unable to continue the payments to Lebanon schools, Sears said the district will be able to handle the expense over a number of years.

Moreover, he said, "we have $419,000 worth of equipment for the $189,000 we would still owe and that is not a bad deal."

But for financially troubled Three Rivers Schools in western Hamilton County, school officials are more nervous, because the district entered into a contract with the foundation for $221,940 in January before its legal problems surfaced. The district recently cut $1.3 million in school personnel and programs - including the elimination of school bus service for high school students - after a levy defeat in March.

"We still owe $198,530 since we only received three reimbursement payments so far," explained Three Rivers Treasurer Scott Hiles. "The program is a real benefit to the students but without the promise of reimbursements, we wouldn't have done it."

The Associated Press contributed. E-mail mclark@enquirer.com