Oak Ridge schools may close Oct. 1 if agreement is not reached

Oak Ridge schools may close Oct. 1 if funding agreement is not reached

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By MIKE KRAFCIK
6 News Reporter

OAK RIDGE (WATE) – Oak Ridge faces a tough predicament with the city's school system.

Leaders have until October to put more money in the school budget, or they'll lose nearly $2 million each month in state funding. 

Oak Ridge Schools may be forced to close on Oct. 1 if an agreement on funding is not made with city officials, according to Superintendent Dr. Bruce Borchers.

It's a high-stakes battle between the city of Oak Ridge and board of education that could lead to a shutdown of the entire school system.  

"Oak Ridge is known for the schools, and that's where all our taxpayer money goes to, so it's very disappointing and scary," said Oak Ridge resident Kathy Boullie. 

Officials say Oak Ridge Schools were notified in August by the State Department of Education about failing the maintenance of effort test that requires local funding to remain at least the same from year to year. 

Tennessee law requires local governments fund local school systems by at least the same amount each year.

The state looks at local revenue generated by county property, sales and mineral taxes; local interest on investments and lease/rental income; Public Law 874, which is designed to help school districts that have lost tax revenue due to the presence of federally owned property; and city general fund transfers.

The budget must be amended by Sept. 30 to address this shortfall. If no resolution is found, the state will begin withholding $1.87 million dollars in Basic Education Planning funding per month.

That means the school system may be forced to temporarily close on Oct. 1 until a resolution is reached.

According to Dr. Borchers, a change to the city's 2013 fiscal year budget leaves the school system with a shortfall of $250,000, which he is asking the City of Oak Ridge to provide via a budget amendment.  

Karen Gaglino handles business related issues for the school system.

"We cannot generate the revenue ourselves, so therefore we are waiting for a response from the city," said Gaglino.  

Gaglino says the budget problems stem from a disagreement on how tax revenues collected from a 2006 countywide sales tax referendum are used.

"The city believes that all of the sales tax collected in all of Anderson County, a portion of that should that go towards high school debt when the school board doesn't believe that wasn't the intent of the referendum," said Gaglino.

The school system expected to close to $800,000 from the tax proceeds, but in May 2012, city re-allocated the money for its own reserve fund, to help pay off $ 66 million dollars in debt owned for the renovation of Oak Ridge High school.

"That's a responsibility and commitment by all us to make sure those payments are made," said Mark Watson, Oak Ridge city manager. 

Watson says he's working with leaders of the school system on a solution to avoid a doomsday scenario come next month.  

Watson is planning to meet with Superintendent Borchers and to try to reach an agreement.  

The Board of Education could take matters to resolve the problem at its meeting later in the month.

"We are not going to allow any detrimental effects upon our school system here," said Watson. 

Borchers says numerous meetings have taken place between city and schools staff, but no resolution has been made.

Any resolution would require two meetings each of the school board and city council, but no meetings have been scheduled.

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