Laurel seeks loan of as much as $3.64 million
Faced with compounded money woes, Laurel Highlands School District needs a loan of as much as $3.65 million. Fayette County Judge Gerald R. Solomon has set a Thursday morning court date to consider the school district’s request to float general obligation bonds, which usually are reserved for construction projects, to “fund the unfunded debt.”
“As the result of the unforeseeable decline in revenues and increase in operating costs, the municipal services of the school district will be curtailed, resulting in conditions dangerous to the public education; it is not feasible nor in the public interest to levy additional taxes in the current fiscal year; and the payment of the debt which funds the unfunded debt will not endanger the rendering of municipal services or require the levying of excessive taxes,” school district solicitor Gary Frankhouser stated in a petition for the authority to fund unfunded debt.
The school board in May voted to pursue this loan at the same time they passed a tentative $31.8 million spending plan for the 2002-2003 fiscal year that gave no indication of how much revenue could be expected.
The petition lists a number of factors that brought Laurel Highlands to this point.
At the top of the list is numerous successful tax assessment appeals as a consequence of the countywide property tax reassessment. The petition states the Fayette County Assessment Appeal Board has awarded reductions in taxes that resulted in $1.3 million in lost revenue to the school district. The Uniontown Mall, one of the largest taxpayers, was among those granted reductions, while Wal-Mart, Kmart and a cemetery have appeals pending.
Because of litigation at the state level, mercantile taxes of $645,543 were not received. Because of a low interest rate market, investment income was down by $224,276, Frankhouser indicated.
The petition states the district had unanticipated cost increases of $285,000 at the Fayette County Vocational-Technical School because of revenue not received according to the operating agreement with the vo-tech and that litigation is pending.
Also, state funding to the district went down, resulting in a loss of $329,221, the petition states.
The petition lists these unforeseen operating cost increases: $84,291 for special education, $35,588 for transportation to special schools, $263,131 for hospitalization premiums and $391,048 for cafeteria losses covered by the general fund.
The petition notes that tax dollars have not kept up with revenue losses and cost increases and that the corresponding factors were “not reasonably foreseeable.”
Frankhouser states in the petition that taxes yet to be collected and funds on hand will not cover what is due and owed without the district curtailing services. He asks in the petition for the court to give the school district the authority to issue bonds and cover the costs of the issuance in an amount not to exceed $3.65 million.
A hearing on the petition will be held Thursday at 8:30 a.m. before Solomon.