When the County Commission shot down the budget proposal submitted by the Grundy County School Board last month everyone went back to the drawing table. The school board was forced to take a hard look at expenditures and the commission had to decide whether to help the board with a loan payment. At risk was the future of Grundy schools – if a school budget is not passed by October 1, the State Commissioner of Education will have the authority to withhold all state funds from the county, essentially shutting down schools.
On Tuesday, June 30, the finance committees from both the school board and the commission met at a workshop in an attempt to find a solution. The question to be answered at the meeting was who would make the yearly payments on the loan secured for renovations at Coalmont Elementary School.
“I’m glad we are at the table today, but we keep wanting to look at the past,” said County Commissioner John Hargis in reference to an agreement made in 2012 in which the commission would pay the $250,000 yearly loan payment.
School board member Mike Yates informed those in attendance that the county had agreed to make the loan payments at a meeting in 2012 that included then-Mayor Lonnie Cleek and then-Director of Schools Jodie Hargis. Putting the payments back on the school board has left the board “unprepared for what is happening now,” said Yates.
The school board’s finance committee feels the financial stress of making the loan payment will cause problems when faced with any emergencies during the fiscal year. They will be making decisions about the Affordable Health Care Act and determining schools that need new roofs this year. In addition, making the payment would leave them without needed funds in the event major maintenance work.
During a breakout session, both committees attempted to come up with a compromise. The school board considered paying half of the loan payment, $125,000, recognizing this would still put a strain on school system finances. Closing Palmer School was also discussed. While none of the committee members wanted to see a school close in the county, all recognized that closing PES would give them the funds needed to make the loan payment.
The commission proposed that the school board make the loan payment for the next six years, while the commission will pay the interest on the loan for the next six years. The commission would then make the final two loan payments with interest, in 2023 and 2034.
“With this proposal, the schools would be through making payments in 2021,” said Hargis. “The money they were paying could then be added back to the School Board Fund balance. By 2024, the school board would be back to where they are now with a fund balance of $4,023,697.”
With no decision reached, both committees agreed to take information gained from the meeting back to their full boards and meet again in hopes of reaching a solution before the October 1 deadline.
School Board Chairman Tim Spicer says the board will review the 2014-2015 budget and then consider the proposal from Hargis. “We greatly appreciate the willingness Commissioner Hargis and the County Commission to work toward a compromise.”