A small rural Sebastian County school district persists despite financial troubles and concerns over low enrollment.
Leaders of the Hartford School District are working on a state-approved plan to fix its finances and continuing efforts to keep enrollment above 350 students, the state’s minimum.
“We had to squeeze through this year,” Hartford Superintendent Teresa Ragsdale said. “Next year is going to be better.”
If enrollment drops below 350 for two consecutive years, state law requires Hartford to merge with another district.
The Arkansas Board of Education classified the district in fiscal distress, which could also lead to closure orstate control if the district can’t complete its improvement plan to the satisfaction of state leaders.
“You lose a school district in a community the size of Hartford, you lose everything,” School Board President Mark Oliver said.
The coal-mining community sits in a valley between the Sugarloaf and Poteau mountains, about 30 miles south of Fort Smith.
Many families who live in the Hartford School District commute to jobs in Greenwood and Fort Smith, and for some, the nearby Hackett School District offers a more convenient location to enroll their children because it is on their way to work, school officials have said.
When Hartford’s enrollment fell to 340 students in the 2010-11 school year, the Arkansas Department of Education notified the district it would have to close and merge with another district if enrollment remained below 350 studentsfor a second year.
The district rallied the community to recruit students back to its schools, offering incentives such as free preschool, free after-school care and free lunches for all students.
Those programs increased spending and led to declining balances, and school officials anticipated falling onto the state’s fiscal distress list.
Financial problems were exacerbated when the nearby coal mine shut down temporarily, which reduced property tax revenue for the district, Ragsdale said. The mine has reopened, and the tax revenue should flow to the district next year, she said.
The district also saw some state and federal funds decline after a decrease in its percentages of students who qualify for free and reducedpriced lunches, Ragsdale said. Districts receive more funding when those percentages are above 70 percent. This year, the percentage rose to 74 percent, and Ragsdale anticipates those state and federal funds will rise next school year.
Arkansas Code Annotated 6-20-1904 requires the state Board of Education to classify districts as fiscally distressed if they meet certain criteria including declining end-of-year fund balances, audit violations, insufficient funds to cover payroll and tax obligations, or default on a debt obligation.
The designation authorizes the department to monitor the district’s finances and requires the agency to authorize all spending.
A report the district gave to the state board in October shows it ended the 2011-12 school year, when it spent extra money to attract students, with a balance of $290,040, a drop from 2010-11, when the district ended the year with $346,495.
Hartford plans to spend $2,845,774 in 2012-13, ending the year with a projected balance of $306,812, the report said.
Hartford has submitted a plan for exiting the fiscal distress program to the Education Department, said Hazel Burnett, the department’s fiscal distress coordinator. The plan is under review, and officials will not approve it until they are confident Hartford will be able to exit and remain out of fiscal distress, she said.
“We need to make sure that plan is sufficient,” Burnett said. “Not only do you want to see the balances increasing; you also want to see that they can sustain that balance.”
Districts have up to two years to improve, but department officials will intervene sooner if the situation jeopardizes the children’s education or the fiscal integrity of the district, Burnett said.
The fiscal distress program focuses on district spending on salaries, daily operations and debt. While in the fiscal distress program, districts cannot incur any debt, including teacher contracts, without approval from the department.
This year, as part of its plan to exit fiscal distress, the district cut a teaching position and went from two principals to one principal for kindergarten through 12th grade, Ragsdale said.
The district also started charging for some of the free programs it offered to recruit students. It is still providing free lunches for all children, but the after-school program is now $2 per day and the preschool program is $50 per week.
Ragsdale said the district is assigning paraprofessionals to classrooms when a teacher is absent instead of calling substitutes. It is also limiting field trips.
When teachers make requests for new curriculum materials or technology, Ragsdale challenges them on how they plan to pay the cost and asks whether the planned purchased is necessary, she said.
In September, the district sought voter approval for a millage tax increase. Ragsdale said she was not surprised that voters rejected the measure, but the goal was to increase revenues to put toward bills and debt.
“You always pray you don’t have a big expense just come up,” Ragsdale said. “It’s the constant stress of saying, ‘Dear Lord, please don’t let anything break down.’”
Northwest Arkansas, Pages 9 on 11/10/2012