So far, so good : State Board of Education members react positively to latest developments for Decatur, Greenland schools
Posted on Tuesday, January 13, 2009
LITTLE ROCK - State education officials were pleased Monday with reports from two northwest Arkansas school districts that just a few months ago faced being shut down and broken into pieces.
Both the Decatur and Greenland school districts were brought under state control last summer because they had massive problems with their finances. The state takeover, which involved the local school boards being dissolved and state-appointed superintendents being hired, was an alternative to the originally proposed action - annexation of each district into neighboring school districts.
The districts are now required to provide quarterly updates to the Arkansas State Board of Education regarding their finances, and the second quarterly report was made Monday in Little Rock. The first report for the districts was in October 2008, and the next report will be in April.
Both districts, which had been expected to be at least several hundred thousand dollars in the red at the end of this fiscal year, are now showing that they will have ending balances several hundred thousand dollars in a much more desirable color when it comes to finances - black.
"The financial status, in my opinion, has moved from critical to stable to what some folks would call healthy at this time," said LeRoy Ortman, interim superintendent for the Decatur School District.
Roland Smith, interim superintendent for the Greenland School District, agreed in regard to his district.
"We are on the fast track to improvement," he said.
Ortman and Smith both shared information regarding their respective districts:
Decatur
Although the student enrollment numbers in the district aren't as high as they were two years ago, Decatur officials are still pleased with the small increases seen since school started. The district had lost more than 60 students because of concerns over the summer that the school district wouldn't exist come August, Ortman said. At the end of the first quarter, the district had 496 students. At the end of the second quarter, which ended at Christmas break, the district had grown to 509 students. During the first week of the third quarter, which was last week, the district had 521 students.
The districts receive about $6,000 per student, so when Decatur lost 60 students, it lost $352,560 in foundation funding. So the fact that the district is regaining some of its declining student numbers is deemed good news.
The district expects to have a projected balance of $243,559 in general operating funds at the end of this fiscal year, Ortman said. That doesn't include positive balances in the accounts that are dedicated for specific state or federal purposes.
The projected ending fund balance for June 2010, the end of the next fiscal year, brought several questions from state board members. The district is projecting an ending balance of $542,984. The questions were primarily about an estimated $295,000 of that balance, which would come from a proposed bond restructuring. Ortman said he believes that's more of a lastresort step.
"I don't think you can borrow yourself out of debt. I know some in the federal government believe you can, but I'm not convinced," he said with a chuckle. "(The bond restructuring) is a last-minute resort, but it's there if we need it."
Ortman said that based on several factors that were not presented in the report, he believes there could be an additional $150,000 saved each of the next two years. One reason, he said, is that energy costs have fallen during the school year, saving the district money.
Greenland
For the Greenland School District, the news was just as positive. The district projects an ending balance of $137,520 at the end of this fiscal year. That doesn't include several dollar amounts, however, including projected positive balances for state and federal funds and more than $80,000 remaining from private donations.
Smith presented 11 changes in the district's conditions that have occurred since the October report to the state:
· A revised fiscal-distress plan that summarizes actions taken to bring the district's finances into order;
· Monthly verification that the district's finances will result in a positive ending balance;
· Early payment of the operating loan, which had been a major factor in the district being declared fiscally distressed;
· Matching revenues with expenses so that a future loan will not be necessary;
· Increased assessed valuation in the district, which will mean increased revenue for the next fiscal year;
· Increased enrollment, which will mean increased state revenue for the next fiscal year;
· An increased millage rate, which will also mean increased revenue;
· Increased community donations;
· A significant increase to the projected ending fund balance for the next fiscal year;
· All other funds having been deemed "healthy"; and
· Successfully addressing all three major factors that led to the district being placed under fiscal distress.
Annexation still possible
Even though both districts were able to provide adequate reports that they are becoming financially solvent, the possibility of annexation of the districts still exists. The difference in attitudes now, however, seems to be more of "if this becomes necessary in the future," rather than board members planning imminent actions. Arkansas Department of Education officials had been previously asked to start the process of determining how each of the respective districts would be split up, with both likely being split among more than one neighboring district.
If either district is to be removed from fiscal-distress status, it must be done no later than June 2010. If the districts are not removed from fiscaldistress status, state law requires that they be annexed.
According to ADE officials, if either of the districts is annexed, the following deadlines have been set for the board:
· Finalize boundary lines and district maps by March 2010;
· Implement Reduction in Force policies by May 1, 2010;
· Finalize student enrollments by July 1, 2010; and
· Finalize asset and debt allocation by July 2010.
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
