The Pulaski County Special School District's application to the Arkansas Board of Education for permission to issue more than $20 million in construction bonds has hit a roadblock, at least temporarily.
District leaders want to issue second-lien bonds and use the money generated to finish paying for the construction of the new Mills University Studies High and Robinson Middle schools, and the relocation of what was Fuller Middle School into the former but refurbished Mills High site.
All three buildings opened to students and employees this past August.
The application to issue $20,485,000 in second-lien bonds was included in the state Education Board's December agenda for approval, but Anita Sacrey, controller in the state Department of Education's fiscal and administrative services office, said in response to a board member question Thursday that agency staff had withdrawn the agenda item.
That was done, Sacrey told the board, in anticipation of the state's bonds and loans committee meeting with school system leaders next week.
Second-lien bonds do not require voter approval. The bonds are paid off with interest over multiple years using district money that is over and above what the district needs to pay previously issued bonds.
Charles McNulty, superintendent of the Pulaski County Special district, said Friday that he and his staff will make a presentation to the state agency on Monday.
"We just need to present to the loan committee what our plan is -- how we will use the loan and how we are going to maintain our fiscal health," McNulty said.
"I think that given the fact that we just came out of state control, they want some assurances," McNulty added.
The district was taken over by the state in 2011 for financial mismanagement uncovered by an audit, and for spending practices that would result in illegal deficit spending if left unchecked. As a result of that takeover, the district's school board was disbanded and the district's superintendent was replaced with a state-appointed chief executive.
The district was returned to the control of a locally elected school board in late 2016.
"I'm not concerned," McNulty said about the holdup on the application."I think they just want to see a visible plan."
He said he will provide information to the state committee that is similar to what he provided the district's School Board earlier this fall.
In September, McNulty announced the start of a multiyear plan to cut district expenses and increase revenue with a goal of a reserve fund equal to about 12 percent of the district's operating budget, which this school year is about $140 million.
The district's financial plan includes not only issuing second-lien bonds to offset overruns in school building construction costs, but also cutting expenses in food service, employee overtime pay and utility costs. McNulty said in September he expects to require a 3 percent reduction in all department and school costs as well as a reduction in employee positions.
Additional components of the plan call for enhanced instructional programs that will reverse recent student enrollment declines.
Those include the expansion of the district's "Driven" school of innovation program in which high school students can learn online at their own pace and in a setting of their choice, using mentors, one-to-one student-to-electronic devices ratios and identified career pathways. The model is being used at Mills and Maumelle high schools this year.
Other programs to draw students could be a new virtual school and the newly approved plan to incorporate the national Advancement Via Individual Determination or AVID program in district schools to support students in preparing for college -- including students who would be the first in their families to attend college.
Denise Palmer, the district's chief financial officer, has said that the district would draw about $6 million from the $20 million bond money to reimburse construction costs already paid out of the district's operating budget. More than $13 million will be put in the district's building fund to complete the projects.
Metro on 12/15/2018