SPSD Shortfall

Published 12:00 am Tuesday, June 5, 2012

SP eyes shortfall, maxing millage over bankruptcy

By Rupert Howell

Trustees of the South Panola School District are moving forward with their 2012-13 school year budget request uncertain whether past due tax funds from the bankrupt LS Power generating facility will be paid in time to affect the current year’s budget request or the upcoming school year’s budget.

Trustees were told in a special meeting Friday that the district did not project  an increase for the coming school year over the current year’s funding. However, the approximate $1.8 million owed to the school district has yet to be paid and a new owner of the facility is not expected to emerge before a July 9 hearing in New York.

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The school deadline for budgets is August 15 while Panola County’s deadline is September 15. Local school funds are raised through county millage property assessments and with school millage capped at 55 mills for general maintenance funds not including bonded indebtedness.

“We know everybody’s millage will change. We will max out at 55 and get nowhere close to budget,” Superintendent Dr. Keith Shaffer told his trustee board.

“If tax money doesn’t come in,” Shaffer explained, “you ask for a shortfall (note) to relieve the debt over a three-year period.”

Shaffer further explained that the district currently has a shortfall note of $60,000 that should end this year and estimated that the new note to bring in funds to cover the budget would total approximately $440,000 for three years to cover the shortfall.

Shaffer said that the district can go into fund balance, a reserve fund balance required by the State Department of Audit but noted the shortfall has caused, “the hardest decision making time ever—especially for the county. . . We have had several meetings with Kelley (county administrator Kelley Magee).”

Local governments are owed approximately $4.5 million in past due taxes, of which $1.8 million is for the school from LS Power Company which claimed Chapter 11 reorganization bankruptcy earlier this year in Delaware.

Shaffer noted that the facility remains in operation and to the best of his knowledge all local vendors are current on payments.

Trustee Board president Sandra Darby, who is employed at the facility, said, “I wish I could just write a check and pay it all off.”