Debt service discussed

A nearly $1.5 million debt service payment was discussed during Thursday’s called work session of the Patrick County School Board.

The Patrick County Board of Supervisors recently approved a measure to take over the school division’s total debt service of $2.6 million, beginning in the upcoming fiscal year which starts July 1.

When the vote was taken, county officials assumed the school division would prepay the nearly $1.5 million portion that is due on July 15, according to Alan Black, county attorney; and Rickie Fulcher, vice chairman of the supervisors.

Both attended the work session along with Tom Rose, county administrator; Geri Hazelwood, assistant county administrator, and Sandra Stone, treasurer.

The debt service has been prepaid since 2005, according to discussion at the work session.

“I know you had a plan in place” to pay the amount due” before the supervisors voted to take over the total debt service, Stone said. “My question is where is that money you were going to pay the debt with?”

“We had a plan to pay as much as we could this year, and (to pay) the rest in July,” Schools Superintendent Bill Sroufe said.

He explained on Friday the school division prepaid the debt service when the payments were a little more than $342,000.

But that changed after the county refinanced the debt. Then, the amount of the debt service significantly increased. The due dates of the payments also changed, from September and March to January and July.

Because the division could not prepay the entire amount in the last fiscal year, the payment was split. A portion was paid in June and revenues from a new fiscal year were tapped to pay the balance due after the July 1 start of a new fiscal year, he said.

The division also has paid the debt service in the current fiscal year, Sroufe said. He estimated the school division has $600,000 it can put towards prepaying the debt service in the fiscal year that starts July 1.

The division will put more funds toward the payment if possible, he said.

Fulcher asked school officials to provide the county with a firm amount of their contribution as soon as it is available.

Katina Hylton, the division’s finance officer, said the school division has forecast it will have $1.1 million on hand to pay current bills and expenses.

Officials also discussed other ways to address the issue, including a potential budget amendment and/or postponing when the county takes on the debt.

For the county to make the payment now in an already tight budget year “will exceed the cash we have on hand” in the county’s coffers, Black said.

“It’s not that we’re not trying to pay it,” Sroufe said, adding the division is not trying to put the county in a bind.

“It wouldn’t put us in a bind. It would bankrupt us,” if the county must pull funds from its dwindling $1.3 million contingency fund to prepay the debt service, Rose said, and agreed the amount of the payments increased after the debt was refinanced.

“The ethical thing here, the big thing is, the two boards need to work together to make sure we all get paid,” Stone said, adding that the school division still has payroll to meet for May, June and a second one in June for July. The county also must meet payroll for other employees, she said.

“The tax rate wasn’t raised, the bills have increased, salaries have increased and we’re really tight” financially, Stone said. “If we can get through this year with wisdom, then I hope we can come out of this. I hope the county doesn’t have to borrow any more money” to meet obligations.

In other matters, school officials:

*Approved a meeting calendar for June, July and August. The board will meet twice in June: on June 7 at 6 p.m., and a close out meeting June 21 at 10 a.m.; July 12 at 6 p.m. and August 9 at 6 p.m. All of those meetings will be held in the central office on Rucker Street in Stuart.

Board members directed Sroufe to look into the possibility of holding monthly meetings in various schools for September through November meetings.  Those meetings are scheduled to begin at 6 p.m., at a location to be determined.

*Met in closed session to discuss a personnel report.


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