Director of Schools Mike Antrican told the board at its regular meeting that "the county has asked me to do some things," and asked what the board wanted him to do.
After a meeting on Monday, the County Commission asked Antrican to work with the county mayor and county attorney in studying a proposal to refinance county debt and to bring recommendations to the commission at a recessed meeting on Feb. 19.
"What do you want to know and what do you want me to do?" Antrican asked.
Board member Jeff Stapleton said he believes the county's financial strain is being blamed on the school board because of the recent construction of new schools, and he does not think the board should take that blame.
Antrican then presented the board with highlights from the county audit for the year ending June 30, 2006, and pointed out that the audit makes note of the fact that county expenditures exceeded total appropriations approved by the commission in the general fund of $175,798 and the drug control fund of $1,706. He also pointed out that the jail overspent by $252,059 and that Emergency Medical Services overspent by $103,126. The audit also pointed out that the net deficiency in the budget was more than $184,500.
Additionally, he pointed out that auditors had commented: "All bonds and other loans included in long-term debt as of June 30. 2006, will be retired from the general debt service fund."
Antrican pointed to other statements in the audit and said it appears to him that "some powers that be want the debt paid from tax ledgers rather than by some other means."
The director said in the proposal to refinance school debt, there is a provision to extend the payback rate until 2036 from the present date of 2027. The board has agreed to pay $541,000 annually until 2027 even though the debt is officially the county's. The system does not have an obligation to pay beyond 2027, and it would take a vote of the board to extend that payment the additional nine years.
In examining documents related to the proposed refinancing, Chairman David Jones pointed out that while the refinancing is being considered at a 4.5 percent interest rate, some of the documents state that it shall not exceed 6 percent. He further pointed out that in the past, the variable interest rate on the loan has been less than 1 percent and has averaged 2.5 percent.
"How is this going to help us?" he asked.
Antrican responded that while that did concern him, there were other aspects of the proposal that are attractive. He repeated that he is willing to do whatever the board directs.
Stapleton said he is concerned that the commission has in the past not held up some ends of previous agreements on school financing, and he is concerned this may happen again. Jones added his opinion that if the board doesn't go along with the plan, efforts could be made to blame the schools for the county's financial situation. Hugh Kyle Livesay eventually offered his advice that the board just continue to meet its legal obligations regarding school debt, honor its promises and document everything.
"We're outnumbered. They have 15 members, and we only have seven. Eventually questions will be asked, and we just need to be able to prove what we've done," he said.
After more discussion, Antrican agreed to continue working with the county on the plan, but to protect the board's interest in the situation.
In other matters, the board approved a fiscal monitoring review for special education, authorized Antrican to apply for a grant from the Tennessee Commission on Children and Youth, agreed to hear next month a proposal from the Sneedville Mission Clothing Centers for the organization to construct a small building on school property, tabled action on a request for dues to the Professional Educators of Tennessee to be deducted from teachers' checks, and tabled discussion on pursuing an architect for an auxiliary gym.