Eureka debates budget options

Tuesday, February 1, 2011 ~ Updated 10:31 AM

EUREKA SPRINGS -- In the latest of the Eureka Springs School District's wrangling with the Arkansas Department of Education (ADE) over what the state claims are excess millage revenues it wants returned, the ADE is threatening to withhold approval of the district's budget for the current school year.

In a letter dated Jan. 12, ADE Assistant Commissioner William Goff wrote the department had discovered a "deficiency requiring correction" in Eureka's budget.

That deficiency is that Eureka's revenue "exceeds State Foundation Funding by $803,004.94."

The state has given Eureka Springs 30 days to respond and said it will not approve the budget, which it normally does in March every year, until the school district reduces its budget by that amount.

Further, it says, the expense side of the budget "should be reduced, if necessary, to maintain a sufficient ending balance."

"They say they can hold our federal money. I don't think they can," Superintendent Wayne Carr told the school board at its Jan. 24 meeting.

"I don't see how they can withhold the money until we don't meet the deadline to repay it," said board Chairman Rusty Windle.

"If we sign off on that, we would be falsifying the budget," said board member Tom Freehling. "We've already spent it."

In earlier correspondence, the state gave the school district until June 15 this year to repay the first year of the $824,000 amount it claims are excess millage revenues beyond the foundation funding amount of $6,023 per student.

Eureka Springs is one of four districts facing such a demand. The districts have been talking to attorneys and state representatives to see what, if anything, can be done.

Carr said he had met with attorneys in early January, who suggested he meet with State Commissioner Tom Kimbrell.

Carr said he and other districts had separate meetings with Kimbrell and Deputy Commissioner Tony Wood, but in every case, "they wouldn't budge."

"Now they're saying we need to set up a payment schedule for this year," Carr said.

He said a bill is being drafted to state that excess millage belongs to the school districts and not to the ADE. He said another bill is being drafted to have the $824,000 payment for this year forgiven.

"I asked Kimbrell and Wood if legislation came up for us not to pay it back, would they oppose it," Carr said.

"Tony Wood said, 'I definitely would oppose anything for you not to have to pay it back.'"

If the state is successful in recovering the excess millage revenue, it will receive around $4 million from the four districts involved this year.

None of that money will go directly to any school district, as no district gets more than $6,023 per student. Those districts who fall short of generating that amount of millage revenue have the difference made up by the state from other taxes.

In other business, the board:

* Heard a request from Susan Tharp of Golden Days Carriage to lease a piece of ground and put up a storage shed behind the gym at the high school for her and her husband to store a horse-drawn carriage when not in use. The board took no action but said they would consider it.

* Heard an update on the new high school construction. Morrison Architecture said they hope to have all approvals back from the state by the end of February and start bidding by mid-March, with construction starting in April. Construction will take 14 months. Andrew Mincks of Kinko Constructors, Inc., said construction costs will be affected by the rising costs of steel and oil. Carr said the district had spent $966,000 so far on the new school, which includes architect fees.

* Approved applying $500,000 in stimulus fund money to payroll. District treasurer Wanda Stanford said she had applied Jobs Fund money to payroll also, and that fund has been used up.

* Approved a contract with BankcorpSouth to handle the district's liability policy that covers board members and teachers.

* Reviewed handbook changes so that all three handbooks contain consistent information, according to state requirements, about attendance, graduation requirements, parent-teacher communication and transfer students.

* Approved the 2011-2012 school calendar. School will begin Aug. 19; Thanksgiving holiday will be Nov. 23-25; semester break will be Dec. 21-30, with school back on Jan. 2; Spring break will be March 19-23; and the last day of school will be May 18. Snow days may extend school to May 25.

* Returned from executive session to extend Carr's contract one more year, to 2013 and to designate custodian Jamie Rosell as a volunteer coach rather than a paid coach, consistent with Athletic Association rules requiring stipended coaches to be certified teachers.

The board held a special meeting Jan. 26 and approved purchasing "for sale" signs for the current high school and approved handbook changes reviewed at the regular meeting. The board also reviewed, but tabled action on, a revised set of board policies.

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