The Richland Springs Board of Trustees are taking immediate action to try to avert financial troubles that might have disastrous consequences for the school district.
RSISD Superintendent Travis Winn has announced that at the February 16th school board meeting, the Richland Springs Trustees called a bond election to refinance the lease-purchase on the school cafetorium. Winn said that the trustees, voting unanimously, hired Southwest Securities to assist the district with the clerical, legal, and financial planning for the bond, which will be on the ballot for the May 9th school board election.
He added that the cafetorium, completed in April 2006, was built following the creation of The Richland Springs Public Facilities Corporation. The corporation, made up of the original board members in 2006, signed an agreement to finance the building with a lease-purchase agreement. A lease-purchase is similar to a traditional mortgage and is not guaranteed by the permanent school fund or the State of Texas. The original board members served as the governing body of the corporation and to the present day, future boards were obligated to continue the corporation. The building project did not require voter approval.
The present board ( Barry Fikes, Thurman Saxon, Micah Shaw, Kay McKee, Tina Poe, Sally Gossett, and Jason Lewis) indicated that they felt the bond was necessary because the existing debt (lease purchase) is placing a great financial burden on the district. The yearly payment of approximately $58,000 comes out of the Maintenance and Operations (M&O) budget, where salaries, instructional supplies, building maintenance, transportation, and food service are funded. The $58,000 taken out of the M &O budget has greatly reduced the money available for student services.
The superintendent added that if the bond passes, the money for the payment will come from tax dollars added to the tax rate, and the $58,000 can be added back to the daily operations budget.
Winn also said that the bond money would help fund the district’s needs, but further measures must be taken to offset the loss of each student. Student’s attendance generates approximately $6,000. The district’s enrollment has gone from a high in 2007 of 215 to a low of 140 today. At best, the district will be short $200,000 this year. The deficit must be offset by cuts in personnel and services, or taken from the district’s reserves.
The reduced funding by the state due to student loss is further compounded by taxpayer relief enacted by the state when it reduced the tax rate from $1.50 to $1.04 with approximately $178,600 lost in the last two years.
Winn said that the board, local supporters of the school, and staff will hold public meetings to discuss and explain the bond. The board will also provide additional information in the media, and will be mailing information directly to district residents, as well as appointing a bond committee to help get the message out.
Winn said, “This is one of the most serious financial crisis in the history of Richland Springs ISD. Without significant student growth, it is going to take a bond and possible future financing for the school to survive. Without an input of new funding, the school will be close to bankruptcy in two years. It is going to be up to the voters of Richland Springs to determine the district’s future. Local tax dollars will be the only way to finance the school.”
Winn concluded that, “Consolidation would not be a good solution. If Richland Springs has to consolidate with another district, that district’s tax rate could be higher than Richland Spring’s tax rate. This means that the community could pay higher taxes and still lose its school.”