LITTLE ROCK — The Arkansas Department of Education has recommended that the Cutter Morning Star School District in Garland County and the Hermitage School District in Bradley County go in the “fiscal distress” program, which has led one school board to vote to reassign its superintendent.
The districts would join 10 others - Armorel, Dermott, Earle, Forrest City, Helena-West Helena, North Little Rock, Pulaski County Special, Strong-Huttig, West Side and Yellville-Summit - classified in some levelof fiscal distress.
Entering the state Education Department’s fiscal distress program means the agency closely monitors district spending. It also means the state education commissioner, at any time, could take over a district, removing a school board and superintendent from power.
The state agency sent each district a letter warning that because of their dwindling ending balances, it was recommending that each go in the state’s fiscal distress program.
If the state Board of Education votes Dec. 12 to put the districts in fiscal distress,each will have to come up with a financial improvement plan adequate to the state Education Department. The districts would also be prohibited from incurring any debt without prior approval.
The Hermitage School District is heading into fiscal distress for the second time in three years, Education Department documents show.
A letter dated Oct. 25, sent from the department to Superintendent Richard Rankin, cited “a declining balance determined to jeopardize the fiscal integrity of the school district” as the reason for the most recent distress declaration.
The district has no plans to appeal the measure, Rankin said.
“With our declining balance, we just don’t have any choice right now,” Rankin said. “We are overstaffed.”
Reduction-in-force letters will be going out in the near future, Rankin said, though he declined to say how many. The district will take other cost-cutting measures also, he said, again declining to go into specifics.
The Hermitage School Board will meet Nov. 21 to discuss the issue.
The 464-student district emerged from fiscal distress in 2009 but has faced continued financial troubles, Rankin said.
“We will be taking everything into consideration,” Rankin said when asked whether extracurricular activities such as football couldbe cut.
The department’s letter to Cutter Morning Star Superintendent Lance Robinson on Oct. 25 also lists a declining balance as the reason for the distress declaration.
The Cutter Morning Star School Board announced plans to hold weekly public sessions between the district’s staff, board and principals to discuss the possible financial improvement plan. The next meeting will take place at 6 p.m. Monday at the district administration office.
The district put up a suggestion box at the high school office for suggested cuts and also asked for ideas on a school Facebook page.
“We are looking at a [reduction in force] that will take effect over the winter break,” Robinson said. “We may also need to look at an additional reduction in force in the spring, depending on the bottom line.”
Robinson refused to say how many staff members or teachers were fired in the reduction-in-force plan, but he did say those employees were notified and have a 30-day period to appeal his decision to the School Board.
“It isn’t fair to those employees to publish their names, and I’m not going to do that,” he said.
Different numbers for that reduction have been mentioned during board meetings over the last two weeks, in the range of four to five staff members, and barring a successful appeal, those staff members will not return to the district after Dec. 21.
Seth Blomeley, spokesman for the Education Department, said the midyear layoffs under the reduction-in-force plans would not be an issue for the employee contracts if they are done for budgetary reasons.
Typically, school districts send layoff notices to certified personnel by May 1 of a contract year to let employees know that their contract won’t be renewed for the next school year. Those notices are sent out to abide by Arkansas Code Annotated 6-17-1506.
However, Arkansas Code Annotated 6-17-1507 says that a teacher may be terminated during the term of any contract when there is a districtwide reduction-in-force plan or an individual commits a firing offense.
The district is reviewing other areas where it can trim expenses, Robinson said, and teachers have been notified that all field trips or events that require bus transportation - excluding sports - are on hold. He would not be specific about the other areas where cuts are being considered.
According to minutes from board meetings in the past two weeks, Robinson also suggested the district sell its unused property. The board also discussed cutting the school week to four days, according to the minutes, but took no vote on that suggestion.
In those minutes, board members criticized Robinson for not telling them about the warning letter from the state Education Department that was mailed Aug. 31 until October.
The district asked voters for a 1-mill increase in property taxes to refinance bonds and free some money to transfer to the district’s operating funds in September. The referendum failed, and board members said if Robinson had been clear about the financial strain, they would have worked harder to encourage voters to pass the millage increase.
Several board members did not return phone messages seeking comment.
The board decided after a long executive session in a special meeting Oct. 26 to remove Robinson from hisposition as superintendent and find a different position for him in the school system, according to meeting minutes. Robinson refused to discuss the board’s decision, saying last week that he was too busy working to find the best solution for the district financially.
Because of the rules for fiscal-distress classifications, if the state board decides in December to affirm the department’s recommendation, the district will need approval to hire anyone for the position or to hire a search firm because of the financial obligation attached to those decisions.
A drop in enrollment is to blame for a large part of the financial issues facing the school district, Robinson said. The Oct. 1, 2010, enrollment listed on the district’s report card on the Education Department’s accountability website estimates student population at 687 students. Other numbers from semester enrollment reports list enrollment at about 636 students for the 2010-11 school year.
The official numbers for the 2011-12 school year were not available. Robinson estimated that the student population at the district hovered around 595 students, a loss ofbetween 40 and 90 students.
Many unknown factors played into the enrollment drop, Robinson said, but the loss was reflective of the economy in the state and the country. According to district report card numbers, however, the enrollment between October 2008 - the height of the economic downturn - and October 2010 dropped by fewer than 10 students.
The department does not keep track or require districts to track students who leave the district.
If the state board decides to place the districts in fiscal distress at the December meeting, the districts will have a short time to appeal that decision or to present a fiscal plan. The state Education Department would closely monitor the districts’ finances for two years and, if they make no improvements, the state could take steps to reconstitute, annex or consolidate the districts.
The state does not have to wait for those two years if there is compelling reason to initiate a state takeover, such as in the state education commissioner’s decisions to take over the Pulaski County Special School District and Helena-West Helena School District earlier this year, Blomeley said.
Arkansas, Pages 15 on 11/06/2011