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Schools: District may use bonds to plug deficit
By Sarah L. Smith
A bill on track to pass in the South Carolina legislature will allow Georgetown County School District to use borrowed money for operating expenses in next year’s budget.
Rep. Vida Miller introduced the bill last week at the request of Superintendent Randy Dozier. It passed the House on Tuesday, and is on the uncontested calendar in the Senate.
It paves the way for money the district has from existing general obligation bonds for construction and renovations to fund salaries and supplies for the 2011 fiscal year.
The district’s bond attorney is trying to determine if there are any restrictions in federal law that would limit the use of the bond money for operating expenses.
Meanwhile, Dozier decided to get the legislature’s approval.
“I just don’t want to miss an opportunity because of some regulation or statute that would prohibit us from using those funds,” Dozier said. “I guess I’m trying to protect the district and protect us.”
If there are questions regarding state laws, Miller said the bill will “clear them up.”
The sooner, the better, Dozier said.
The school district has to complete its 2011 budget by June 30, but if get approval now to use bond funds, it can begin to fill positions and develop a more realistic plan for the next fiscal year.
“We’re desperately trying to get that,” Dozier said.
The district will have a $2 million or $3 million deficit in the upcoming fiscal year, according to Lisa Johnson, associate superintendent for finance. She said the financial situation is dire, but doesn’t want the district to use money from bonds unless it has no other alternative.
“It would be a back-up solution,” she said. “We are aware of it, but it’s nice for it to be a safety net for us if we need it.”
If the bill passes, Dozier said he will present the new funding option to the school board next month. The board needs to approve any transfer of funds from capital projects to operations.
Although board members were unaware of the bill, Dozier believes the board will be receptive.
“It would have been nice to know about it, but it sounds like a good idea to me. Any relief we can get in how we spend our money is going to be a help,” Board Chairman Jim Dumm said.
Although the bond money is traditionally used for capital projects, Dozier doesn’t anticipate postponing the district’s construction or renovation plans. He thinks the amount of money available through the bonds will fill operating and construction needs.
Waccamaw Intermediate School has asked the district for a gym, which is estimated to cost $2 million.
However, Dozier said he isn’t averse to delaying capital projects if it means funding education for the coming year.
“We’re kind of at a critical time, at least in the next year or two,” he said.
It is a pivotal time for the school district because the state is cutting the amount of money it gives per student, leaving districts trying to find a way to operate on the amount of money they had in 1995, according to the state School Boards Association.
Until the state can afford to fully fund education again, the district will continue to ask for more funding flexibility so money can be used to keep teachers and staff employed, Dozier said.