Archive for Thursday, October 5, 2006

Capital Outlay Resolution survives protest period

October 5, 2006

There might be a light at the end of tunnel for the cash-strapped Baldwin School District.

The 40-day protest period for the capital outlay 8-mill resolution ended Tuesday without a protest petition filed, which would have forced the matter to a vote. The district now may have the answer for its cash shortage that was discovered in late July by new Supt. Paul Dorathy.

"Out next step then in dealing with the financial situation is that we need to bond against our capital outlay," Dorathy said. "That money we would use to help with our low cash flow problem, so that we can get through to January. In January, the new tax dollars would come in."

The Baldwin Board of Education re-approved the eight-mill capital outlay resolution Aug. 14. It had been approved last December, but it was only published once in the paper during then Supt. James White's tenure. In effect, it wasn't valid.

The second resolution was published on Aug. 17 and Aug. 24, which began the protest period. On Tuesday afternoon, Dorathy confirmed that was the final day to file a protest.

"Today was the 40th day from the last date of publication," Dorathy said Tuesday. "The petition period has ended as of tomorrow.

"Tomorrow my process is contacting the county clerk and then talking with him about what to do to get it certified," Dorathy said. "He has to certify the resolution, which is basically going back and making sure we did things properly."

Dorathy didn't know of any official protest being filed as of Tuesday, but he was still leery on the final day.

"The county clerk said he would contact me if anyone contacted him about running a petition," Dorathy said. "He has not contacted me yet. The other thing is that if you are going to get 500 signatures out of this district, someone is going to know about it. I think I would have heard something about a petition going around, but I have not heard that at all. That doesn't mean that it isn't happening. I will be relaxed tomorrow, not today."

Since the protest period is over, the school board will have the decision on how to fix the cash shortage. Dorathy has suggested bonding against the capital outlay.

"It's just like a loan," Dorathy said. "You have a certain period to pay it and here is what your payments are. Then you pay so much interest on that."

Dorathy had an estimate of $382,429 that the district would need from the bond to survive until January. That money would be used to help pay bills and leases.

"It will help us with our cash balances," Dorathy said. "We will use the bond money to pay for a lot of capital projects. We will use it to pay for all of those leases, dirt work out at the ball fields, architect fees, sound system at the junior high and a car that the board purchased. We will use it for a few of those capital things, mainly to take pressure off of the general fund, because it has been used to pay all of those bills."

He said he will be taking the proposal to the school board Monday, hoping that it votes in favor of the bond.

"They will have to decide Monday night if they want to do this and they will have to accept bids," Dorathy said. "We bid it out so we can get the best financing we can. The board will have to make the decision."

Dorathy said the bond against capital outlay must be approved or the district will be in serious financial trouble.

"This is what has to happen in order for us to get through or we might not have enough money for all of the bills that we have coming through," Dorathy said.

Soon after Dorathy took over after White retired, he found problems with the budget. He hired auditors to look at the 2005-2006 budget and soon discovered a major problem.

The auditors revealed the district overspent its budget by approximately $300,000. Dorathy then began to work on fixing the budget, which he did, but he was still left with a shortage of cash.

"Our biggest problem right now is cash flow and having enough money to pay the bills every month until we can get taxes in January," Dorathy said. "We became very cash short at the end of the 2005-2006 year."

Monday's school board meeting will begin at 7 p.m. at the District Office.

Commenting has been disabled for this item.