School board lacks plan to service debt

KINGSTREE—Options for the Williamsburg County School District appear to be slim as board members continue to struggle with the current financial crisis.

Financial and legal consultants told the board their options for new revenue are almost non-existent and that they will need to find a unified strategy soon in order to rectify the present situation.

Bob Damron of Ross, Sinclaire & Associates, a brokerage and investment-banking firm, said the district is poised to pay off their debt by 2023, but would require another tax increase to do so.

“We feel very comfortable going forward,” Damron said. “But again, these are estimates, and part of our job each year is to work with the auditor, work with the treasurer and make sure that these estimates are common to reality.”

The goal, Damron said, was to keep the district’s current mil rate, which now sits at 34.5, around that number over the next few years. While an increase might be necessary later on down the road, he said a responsible strategy based around use of that funding would be an advisable way of getting out of debt.

Advisors at the meeting also said means of accruing revenue through means other than an increase in taxes could be doubtful, given the current economic climate and the effect it has had on the ability of various groups of investors and institutions. The possibility of receiving additional federal stimulus money remains uncertain, though administrators said as of plans were being made to acquire some of that funding .

Based on the advice presented, Damron and others said should the board decide to service the district’s debt through additional tax payer means, such as a referendum, that will depend on how they feel citizens of the district will respond.

“A lot of this, again, goes back to the direction of what the board wants to do,” Damron said. “You guys are the ones who deal with tax payers every day… you know better than (the advisors) what they are willing to support and what they are not willing to support.”

The information presented last week did not suggest the board pursue matters of collecting revenue outside of the gradual milage increase the board has already begun to pursue, voting to increase the mils up to 34.5 during a meeting at the end of Sept.

A major point the that was emphasized by those making presentations was that should the district attempt to acquire additional funding through a referendum, which would require voters approval, they do so only if there is a sense of unity among its members. Even just one member speaking against a suggested referendum could kill its chances of passing.

“If you are looking at (a referendum) that’s something to start thinking about,” Damron said. “What I would encourage is that you be totally united if the board decided to do a referendum.”

The last time the board voted for a mil increase, the decision was anything but a united one. In Sept, the board initially voted down a proposal to increase mils in the county by 0.9 percent. Following an executive session, the board reversed its decision and decided to approve the increase from 34.4 percent to 34.5. At that meeting, it was discussed of eventually raising the milage up to 36.5 percent over the next two years. According to Damron, if the district plays its cards right the next increase would occur in 2018.

Those estimates may change with the economy of the area and depending on if the district makes sound financial decisions over the next few years.

Trustee Kent Evans said the board is running out of options and needs to consider other ways of both servicing the debt and continuing to offer educational opportunities at reasonable cost to the district.
“We’ve got to make some tough decisions,” Evans said during the meeting. “Like reducing the cost of operations of all these old buildings that are underutilized. We can take that money and reduce the debt so we can try and get another building.”

There was no indication after the meeting as to just what the board plans to do in the months to come.