School Bonds Shot Down

The Arkansas Board of Education last week denied a request by the Pulaski County Special School District to issue $81.4 million of second-lien bonds to replace two aging schools.

The board, which split 4 to 3, said the district had not developed an adequate plan for ensuring it could make debt service payments on the proposed bonds. Board members asked district officials to develop a more comprehensive plan.

The district has asked the  Board of Ed to reconsider the request.

The bonds would have doubled the district’s annual debt service to $11 million from $5.5 million. The district said it would come up with $4.4 million of the increase by removing two work days from annual employment contracts, eliminating extra pay to teachers for school bus duty, cutting the number of assistant principals, and reducing staff positions.

Interim district superintendent Robert McGill told the board that the cuts were tentative, but they were made official by the district trustees the next day.

State education commissioner Ken James recommended that the board turn down the request for bonds because of the lack of a solid financial plan ensuring the total debt service.

“In my five years here, we have not approved things of this magnitude without some real clear-cut delineation,” James said at last week’s meeting.

After the rejection, school district trustees voted to cut five administrative positions and reduce teachers’ work year from 192 days to 190 days, the minimum required by state law. The district said the shorter term would save $190,000 a year.

Bond proceeds were to be used to build a $65 million high school in Maumelle and a $15 million middle school in Sherwood. Officials said the current facilities will be inadequate by 2011.

The district’s debt, which is covered by the state’s school bond enhancement program, is rated A by Standard & Poor’s and A1 by Moody’s Investors Service.

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