State withholds lunch, alternative program funds from Eureka schools
EUREKA SPRINGS -- In a new move against the Eureka Springs School District for not handing over nearly a million dollars in what it says are excess millage revenues owed the state, the Arkansas Department of Education will withhold $47,417 from the subsidized lunch program and the Alternative Learning Environment program for students with learning disabilities that was due to be remitted in April.
Superintendent Wayne Carr updated the board April 21 on the dispute with the state over millage revenues the state now says must be turned in each year for redistribution to other school districts that are unable to generate the $6,023 per student it has mandated.
For the 2010-11 school year, the state says that amount is $803,004.
On March 22, Carr and board chairman Rusty Windle attended a hearing in Little Rock before the House Education Committee to protest the ADE's demand.
"When we testified, they gave four school districts 15 minutes to talk," Windle said. "(Tom) Kimbrell (Commissioner of Education) stated the governor's office had 'graciously' given us 10 years to pay the first year back, which was news to us because we hadn't been told that from the governor's office because the governor's office will not talk to us."
The ADE is demanding the school district reduce the revenue side of this year's budget before the ADE will approve it, which it typically does in March or April, although the money has already been spent.
He said to change the budget is to falsify it, as the tax millage did indeed generate that amount of revenue with its 25 dedicated mills.
"Our revenues didn't go down, so how can we show less than we took in?" Windle asked. "We can't lower the money the 25 mills generated."
Following the hearing in Little Rock, Carr sent an email to William Goff, Assistant Education Commissioner, stating the district does admit that some money is due back to the state, based on the difference between the 94 percent tax collections the district actually received and the 98 percent the state guarantees. Since Eureka collected more than that last year, it agrees it owes back the 4-percent difference, or $177,000, Carr said.
He stated a lawsuit is being filed and asked the ADE not to take any action against the district by withholding funds, including categorically dedicated monies, until the matter can be decided in a court of law.
He said a lawsuit is due to be filed any day, with a request for injunctive relief to prevent the ADE from taking any action against the district.
The lawsuit is being filed by only two of the four school districts under attack by the state. One district, Armorel, was already in fiscal distress, with its finances under control of the ADE.
Another, Westside Greer's Ferry, was taken over by the state and placed in fiscal distress a month before the House Committee hearing.
"So now they can't be involved in the lawsuit because the state will never approve the funds," Windle said.
That leaves Eureka Springs and Fountain Lake.
On April 7, Goff countered the state is required to "suspend grants and aids to your district if your district's budget is deficient."
He said funds of $17,946 from the National School Lunch program and $29,471 from the Alternative Learning Environment would be withheld.
On April, Carr and District Treasurer Wanda Stanford called Goff and then amended the budget to show a reduction in revenue by the $803,000, but did so under protest and only to receive the funds for the two programs.
Carr said the amendment would be presented to the school district for its approval.
After a lengthy discussion the board members present (with Debbie Smith absent) unanimously approved tabling the decision until they hear back from attorneys that the suit has been filed and whether injunctive relief has been granted.
They agreed to hold a special meeting if needed to take action before the next regular board meeting.