CROSBY – At the Monday Board of Trustee’s meeting of Crosby ISD as promised Dr. Scott Davis, new superintendent of the district presented his findings in a report.
About 60 community members who were in attendance. The report included information on recently discovered financial issues and he stated, “The district has been spending beyond its means.”
Later during the meeting the board concerned with the safety of the children held a discussion on school safety and security measures, specifically, the hiring of three additional school resource officers. At $98,000 to $99,000 each per school year.
This reporter checked with law enforcement from throughout the area and learned that about $40,000 of that is for a deputy’s yearly salary.
Sherman Eagleton at his fundraiser on Thursday stated to this reporter that he did not know what decisions the schools were going to have to make because funds are tight but “I am going to see after the well-being of these kids, that is a priority.”
According to the school district’s officials, “Dr. Davis and new Chief Financial Officer, Lesa Jones, discovered a cash flow issue that appears to date back to the Spring of 2017. This cash flow problem resulted in the district partaking in a short-term loan and internal fund borrowing from the district’s Debt Service and Construction Funds to cover operational needs and the district’s payroll obligations. Prior to Davis’ arrival, $5.65 million had been borrowed from the Construction Fund to cover the district’s payroll obligations. When Davis arrived in late June, he had to borrow an additional $1.99 million from the Construction Fund to cover expenses for the July 15th payroll. To date, the total amount borrowed from the Construction Fund stands at $7.64 million. Davis stated that the plan is to repay the $1.99 million he had to borrow by the end of November 2018. He and Jones worked closely with the district’s bond counsel to determine if there were any qualifying expenditures made in 2017-2018 that could be subtracted from the total amount due to the Construction Fund. Approximately $2.25 million of capital expenditures have been identified as potential qualifying expenses leaving $3.4 million outstanding that the District intends to repay by December 2018.
Recovery from the financial issues is expected to take 3-5 years. While additional short-term loans, also known as Tax Revenue Anticipation Notes (TRAN), will be required to subsidize the cash flow shortage, the plan will be to create a diminishing dependence on these loans over the next several years by implementing cost-saving measures including a 10-20% budget cut, absorbing staff positions through attrition and potentially a reduction in force, if necessary.
Fund Balance (more…)