State OKs takeover of Greenland district
Posted on Tuesday, July 15, 2008
The Arkansas Board of Education voted to take over the financially failing Greenland School District on Monday, dissolving the local School Board and ordering the appointment of a new superintendent reporting directly to the state’s education commissioner.
In doing so, the board rejected a more severe staff recommendation: merging Greenland with a neighboring school district and eliminating the Washington County district.
If the state can’t take Greenland’s books back into the black by April 2010, however, state law will require Greenland’s dissolution.
The nearby Decatur School District also joined Greenland on the state’s financial distress list Monday, setting the stage for another annexation hearing at the end of the month.
Greenland School Board President Bill Groom said he welcomes the loss of his elected position if it means the tiny rural town has a chance to save its schools.
Given the financial problems that forced his board to authorize $ 621, 000 in emergency borrowing to avoid ending fiscal 2007-08 in the red, loss of local control was “the best we could do,” Groom said.
“This way we still have a chance,” he said after the meeting. “If these guys come in and make even more cuts that we might not be able to, then that’s going to enhance the possibility that in two years they are going to be able to hand the reins back over to [Greenland ].” Greenland’s path toward Monday’s state takeover began in January, when state officials started examining the district’s finances closely. By April 21, the state board voted to classify the district in fiscal distress.
Eleven other schools are on the state’s fiscal distress list: Bald Knob, Bismarck, Clinton, Concord, Decatur, Gentry, Hartford, Hermitage, Mineral Springs, Murfreesboro and Westside Consolidated.
Bald Knob is also under state control because of its financial problems.
The state has taken over the Eudora, Midland and Helena-West Helena school districts in the past. Eudora was later merged with the Lakeside School District, while Helena-West Helena and Midland got back local control in April.
Greenland was previously placed on the state’s fiscal distress list in 2004 and removed in 2006.
The Omnibus Quality Education Act of 2003 forces the state board to correct Greenland’s financial problems within two years of its placement on the distress list or merge it with a neighboring school district.
Greenland’s financial trouble is so severe that Education Department staff began the meeting by recommending Greenland’s immediate annexation to one of six contiguous districts: Elkins, Farmington, Fayetteville, Mountainburg, Prairie Grove or West Fork.
Bill Goff, the Education Department’s assistant commissioner for finance and administration, said Greenland had only $ 973 in its general operating fund as of July 3.
The district would have had a negative balance if not for an emergency loan of $ 500, 000 taken out in January and another for $ 121, 000 June 30.
If spending stays exactly the same as last fiscal year, Goff said, Greenland projects to end this fiscal year on June 30, 2009, in the red by $ 427, 845.
None of the six neighboring districts wanted to take on Greenland’s students or its debts on Monday.
Representatives from all six districts said annexing Greenland wasn’t feasible, particularly with the start of school five weeks away. Most recommended giving Greenland another year to get its finances in order.
Kelly Carithers, Greenland’s attorney, pinned blame for the 927-student district’s money problems on Superintendent Ronald Brawner.
At two public meetings earlier this year, Brawner said Greenland would end its fiscal year with a $ 4, 000 surplus.
In a June 24 executive session, the School Board offered Brawner an ultimatum: Resign or be fired. Brawner, who was out of town to get married and did not attend the June meeting, has not resigned, Groom said.
The board replaced Brawner with Greenland Middle School Principal J. J. Gardenhire on an interim basis.
Brawner has two years left on his contract, which set his annual salary at $ 88, 034.
Julie Johnson Thompson, spokesman for the Arkansas Department of Education, said the department’s lawyers have not yet determined how to handle Brawner’s contract.
In past district annexations, superintendents were offered alternative administrative positions to avoid costly contract buyouts, but those superintendents hadn’t been terminated by local school boards before the state intervened.
Brawner was not at the Monday meeting and did not return a telephone message left at his home.
After the Greenland board discovered the district’s financial condition, Carithers said, it successfully asked voters on June 10 to approve a 2. 6-mill increase to restructure existing bonds upon the sale of new bonds.
The millage increase should net the district about $ 203, 000 in revenue annually, according to state data, while the bond restructuring should save $ 57, 000 more each year.
The Greenland City Council has also pledged $ 150, 000 to the district, Carithers said, and private donors have made about $ 43, 000 in pledges.
“We are asking for time and, frankly, the expertise of this board... to right our financial ship,” Carithers said.
Greenland Police Chief Gary Ricker; state Reps. Mark Martin, R-Prairie Grove, Marilyn Edwards, D-Fayetteville; and state Sen. Ruth Whitaker, R-Cedarville, all spoke against annexation.
Chris Arnold, a parent who has three children in Greenland schools, told the state board that the district’s teachers give his children an academic and moral education that they won’t find anywhere else.
“There’s no way to quantify what I’m trying to express,” he said, “But it’s as plain as the nose on your face to those who live in the district and see it happen.” Washington County Justice of the Peace Anne Harbison, a former Greenland teacher, was relieved to see a change of leadership.
Harbison and her mother are both Greenland graduates. She taught in Winslow for 37 years before it was consolidated with Greenland in 2004, and in the newly consolidated district for two years.
Despite her emotional attachment to the schools, she’s quick to criticize their leadership. Harbison wrote a letter to the Arkansas Board of Education on April 20, before plans for a possible annexation were announced, and asked the state to take control of the district she labeled as “grossly mismanaged.” District leaders poorly managed Winslow facilities, misspent annexation funding and overstaffed their schools, she wrote.
Harbison was relieved by Monday’s decision.
“I think once we get someone in there who can make the cuts that are necessary, they will see this is a viable district,” she said by telephone from Greenland. “There was no vision whatsoever. The lack of vision and gross mismanagement sunk the school district.” After hearing testimony from Greenland residents, Arkansas Education Commissioner Ken James made a rare recommendation to ignore the Education Department’s original annexation request and to assume state control.
James said he’d handpick a new superintendent for Greenland, who would report directly to him on the district’s finances. The commissioner, in turn, said he would report back to the board on Greenland’s financial health every three months.
At the same time, state officials will begin work on a plan to merge Greenland with a neighboring district or districts if the state cannot get its finances in order by April 2010.
After hearing the plan, the board voted unanimously to defer the annexation request and take over the district.
“This is going to be a very, very difficult fiscal situation, and it’s going to take close monitoring,” James said. “It’s going to take some tough decisions... we will make them to make sure solvency ensues.” The state board will now consider annexing 580-student Decatur, located north of Greenland in Benton County, on July 31.
The Decatur School Board voted to suspend former Superintendent Dave Smith with pay and replace him with high school principal Bobby King.
The board also hired former Gravette Superintendent Lee Ortman as a consultant to help King navigate the possible annexation process.
The state identified several accounting irregularities after the resignation of bookkeeper Tina Murray in June.
Neither Smith nor Murray were at Monday’s meeting. No one answered the telephone at Smith’s home Monday night.
An audit of the district’s finances showed about $ 2. 4 million in checks that had not been recorded, bank accounts that had not been reconciled for three years and unfiled Medicare and federal payroll taxes.
Goff said Monday that the district ended last fiscal year on June 30 with a negative balance of $ 150, 270, and the district’s debt is projected to grow to $ 784, 375 by the end of this fiscal year.
Like Greenland, the Decatur School Board pinned the blame on its superintendent.
Board President Michael Wilkins said Smith presented financial statements showing the district had about $ 1 million in the bank as recently as April.
Wilkins said Decatur would accept a state takeover like Greenland but only as a last resort to avoid annexation.
“We are just hoping for a chance,” Wilkins said after the meeting. “We were given false information and got left holding the bag.”
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