Waxahachie ISD considers tax note, loan to pay employees
By 10/23/2003 00:00:00
District struggling with $300,000 deficit, finances
The Ellis County Press
WAXAHACHIE - Tax note is almost considered a four-letter word in Ellis County, but Waxahachie school board members considered the use of one to cover payroll and other expenses, as the district struggles with its finances.
The district could have opted to join in with other districts in an investment pool to receive funding from a state-issued tax note earlier this year, but they were too late to sign on.
However, they still can use a tax note next year if needed, trustees said.
Waxahachie needed the money because the state government has taken a hit in funding Texas' school districts.
Because of it, the district is faced with taking out a $5.2 million 'stand-alone' loan from a private bank in hopes their state funding will eventually come in to replenish their reserve accounts.
The reserves would be used to pay off the interest of the note, or loan.
As district finance officials see it, the stand-alone loan would require the district to take out at least $5 million and then 'hold' it for 90 days before spending it, trustees said.
Recently, the WISD has come under scrutiny for its handling of district finances, most notably, spending school bond election money on payroll and other expenses.
'Districts can use tax notes as long as they're paid of quickly, but we need to get where we borrow less and manage the budget more [efficiently],' said Superintendent Dr. Bobby Parker. 'They're mainly used by counties.'
Waxahachie officials can still use an investment pool's tax note next year while paying a low interest rate on the life of the note, which is equivalent to a short-term loan.
But, trustees concede something must be done now to make payroll in late November and early December.
'We're facing some weird financial times in the WISD,' said trustee Mark Price, former county treasurer. 'There's going to be a delay in getting the ad valorem tax revenue in [because] some people haven't even received their statements yet from the Ellis County tax assessor-collector.'
Investment pools are resources districts can enter to obtain health insurance, or money needed for basic district wide improvements, closely resembling a mutual fund.
The more districts send money to the investment pool, the bigger resources available for individual school districts, Price said.
Waxahachie is a part of the Lone Star Investment Pool, a revenue stream consisting of other districts and coordinated by the Texas Association of School Boards.
'This isn't just our district, it's happening all over the state,' said Price, referring to school districts' widening budget crunches.
'If we can't [find the money], we're going to have to keep cutting. We have a $300,000 deficit.'
Trustees voted to decrease the tax rate five cents this year because of the growth the WISD has been receiving, but because of a $10 billion budget deficit last session in Austin, many programs and services received deep cuts in aid, most notably education, therefore forcing local property owners to cough up the difference.
Trustee Bill Kelley asked why the school board was not told of the use of a potential tax note in the first place, but the superintendent could not tell him why.
'I have no answer,' Parker said.
Meanwhile, the district must now face allegations from several school board members that previous and present administrations have misused school bond election money and could have possibly operated side companies from district bank accounts, among other things, trustees said.
The school board voted last week to submit a request for a performance review audit, actions that could spur criminal indictments on several district officials, trustees said.
'I have not been apprised of any illegal actions,' Parker said.
'All actions with funds have passed auditors' tests on a yearly basis. If there are specific allegations, I would like to be made aware of them.'