Pine Bluff School District board members discussed a recent Arkansas Department of Education ruling that identified the district as being in fiscal distress at a filled-to-capacity meeting held Tuesday night.
“One of the ways that districts can be classified as fiscally distressed is from having a declining enrollment as well as other conditions that jeopardize the financial integrity of the district,” said PBSD Interim Superintendent Monica King-McMurray.
The PBSD received notification on Aug. 8 that the district has been identified as fiscally distressed under the Arkansas Fiscal Assessment and Accountability Program. The notification states that “this identification is based on the District’s declining fund balance, as well as other conditions that jeopardize the fiscal integrity of the District and negatively impact the continuation of educational services that the District provides.”
“We’ve discussed this way before receiving the correspondence, but usually when there is a declining enrollment, it becomes incumbent upon us to make the necessary adjustments to maintain the loss of funds and remain in financial good-standing,” McMurray said. “Over the years we have not done well in this area.”
The State Board of Education will consider whether to classify the district as being in fiscal distress at its meeting on Sept. 13. The meeting will begin at 10 a.m. in the auditorium of the Arch Ford Education Building, which is located at Four Capitol Mall in Little Rock.
McMurray said that the PBSD board members will go before the State Board at the meeting to share plans for straightening out the district’s finances.
“There are some things that we are going to have to do, such as district-wide staff cuts, looking at designating facilities, land, and we are also going to have to look at our vehicle fleet,” McMurray said. “We are making a total right-sizing plan that will balance our district and better poise us for the ’19-’20 school year. We don’t have any wiggle room, and all decisions have to be made that will be in the best interest of the students and the teachers in the community.”
According to Ark. Code Ann. 6-20-1907, a school district identified as being in fiscal distress may not incur any debt without prior written approval by the Education Department. “Any debt” includes any employment contract, vendor contract, lease, loan, purchase, or any other obligation that will increase the district’s financial obligations, accounts payable, or its liabilities. The PBSD is required to obtain this prior written approval from the Department effective with its receipt of this letter.
McMurray proceeded to call Doug Brown to stand before the board to provide a breakdown of the district’s finances and to show the loss of revenue as measured by the deficit spending to show how the district ended up where they are.
Brown said that he is present as a volunteer to the fiscal challenges of the PBSD for two reasons.
“The first reason is that I’m very concerned about the quality of education of the Pine Bluff students,” he said. “The second reason is that I’m very concerned about the jobs of the PBSD employees being in jeopardy because of the fiscal situation.”
Brown prepared a spreadsheet, which he provided to board members, that shows the decline in revenue and deficit spending from fiscal year ’10-’11 to fiscal year ’17-’18.
“In fiscal year ’10-’11 when Frank Anthony and several other staff members left, there was a non-federal, non-food service operating balance of $13 million,” Brown said.
The district closed with a balance of $4.5 million this current fiscal year of ’17-’18.
“That balance could possibly change because the fiscal year for ’17-’18 doesn’t technically close until the end of this month,” Brown said. “If it does change, it won’t change materially.”
Brown said that six of the seven past years have been deficit spending, which means that the district has been spending in excess of the revenue.
For the current fiscal year ’17-’18, the district has a deficit spending amount of approximately $2.5 million.
In fiscal year ’13-’14 there was deficit spending of $4 million.
Brown said that he has not yet figured out why the spending has dramatically changed over the years.
“The operating balance from July 1, 2011, to July 1, 2018, has gone from $13 million to $4.5 million,” he said.
He went on to state that according to the latest state aid printout the district has received, “the district’s state aid will be reduced approximately $1.9 million from the ’17-’18 fiscal year to the ’18-’19 fiscal year.”
Brown went on to say that the district has spent $90,000 more in July of 2018 than it did in July of 2017.
“Blending all of this together, I, as a Jefferson County resident, a graduate of the PBSD, and working with PBSD students, I bring you a picture that alarms and disturbs me,” Brown said.
In other news, two bond companies, The Stephens Group and First Security, presented proposals to partner with the district and help with the budgeting and finances.
The Stephens Group stated that they are an underwriting and private investment firm wanting to help the district, free of charge, through their time of distress.
First Security, whom the district has been partnered with for more than two decades, offered to be the financial advisor for the district free of charge. The representative stated that the only time they are paid is when the district gets a bond.
After the presentations, McMurray recommended that the district considers maintaining the services with First Security because “they’ve done a great job with the district and we want to continue to make decisions that are in the best interest of the district.”
The majority of the board voted to approve a continued partnership with First Security.
In other news, Harriet Warren from the Pine Bluff Education Association stood before the board and informed them that the association had met Monday evening and “for the first time ever, on time, every district was represented.”
“We want to let the board know that the teachers are concerned,” said Warren.
She went on to say that the association discussed teacher morale, duties and payroll dates at the meeting.
“Teacher morale is as low as it’s ever been,” Warren said. “Teachers are being told that they have to do duty in excess of their 60 minutes without compensation and that students don’t have to have recess,” she said.
She went on to say that this issue could be resolved by communicating with the school principals by sending a memo or scheduling a meeting.
“For the Aug. 3 payroll, teachers did not receive a paycheck,” Warren said. “This means that on July 15, 2019, we will only have received 25 checks instead of 26, which will complete our contracted salaries for the 2018-2019 school year.”
McMurray addressed the concerns by saying that principals were told that in allowing the elementary teachers to do duty, all teachers owe one hour without duty pay, meaning that the most of any week would be up to four hours. She went on to say that the information had been miscommunicated and clarification will be provided.
“Relative to the payroll, I did get that initial concern from our Personnel Policies Committee,” McMurray said. “I did contact our fiscal support office with ADE and Cynthia Smith reported back letting us know that all payroll checks were complete for that fiscal year of ’17-’18. We need to go back and look to see if the total of the payments received, rather than the number of payments received, reflect the total amount of the contract.”
In other news, the Community Empowerment Council stood before the board to present a proposal requesting to continue their partnership with the district.
According to their handout, the CEC in Pine Bluff, strengthens the infrastructure of support in the community, providing and facilitating an array of services to meet the needs of runaway and homeless youths and their families through partnership and collaboration. The CEC was founded and incorporated in August 2009 by Tony J. Anderson, a 1983 graduate of Pine Bluff High School. CEC has been partners of the PBSD since 2010.
One of the goals of CEC is to increase the enrollment of the PBSD by sending all clients from their residential and emergency shelter group homes to PBSD so they can receive the best educational tools to help them succeed in life.
CEC has enrolled over 280 youths in PBSD since 2012 and plans to enroll 52 additional youth. These youths are in the foster care program and the state pays the district for all youths coming from the program.
After the presentation from the CEC, the board voted to table the decision until the September meeting. The board will gain more clarity on how the funding will work for this program.
In other news, Chartwells, the district’s food service provider, presented a proposal for implementing an afterschool meal program.
The program expands the supper program to include all students on campus, supports parents and families who may struggle to provide a healthy, balanced meal between lunch and breakfast, ensures all children have access to nourishment needed for academic, behavioral and extra-curricular performance, drives engagement in afterschool programs, etc.
After the presentation, the board voted to table the decision until the September meeting so that unanswered questions and concerns can be addressed.