HOPE – The Hope Public School Board met the requirements of a change in school finance law in a special session July 24; and, agreed unanimously to give all district employees a $750 gross one-time bonus.
Act 1105 of 2017 requires districts whose “net legal balance” for districts exceeds 20 percent of annual revenues to reduce the difference by a minimum of 20 percent annually over the next five years in order to avoid withholding of state funding.
“If we don’t comply by Aug. 1, the state withholds that from our funds,” Superintendent Bobby Hart said.
He said the district’s minimum requirement over the next five years is approximately $200,000 per year.
Hart said he has consulted with Stephens, Inc., of Little Rock, the district’s bond manager, which recommended the $200,000 per year over the next five years to comply with the law, and maintain healthy reserves for debt service purposes. He said many districts will likely shift monies into their building funds; but, the law generally requires those funds to be expended for facilities construction or repair.
He said the only project which significantly affects the Hope building fund is the completion of the Beryl Henry Elementary School expansion. The district will need to maintain about $2 million in its building fund until that debt is amortized.
“If we get into compliance with $200,000, we are in compliance,” Hart said.
That prompted the board to consider the idea of a one-time salary bonus for all district employees, which Hart said would be a legal and positive approach to the situation.
The board agreed to a $750 gross figure.
Most employees should receive an actual payment in the range of $422, since the Internal Revenue Service has informed the district that payments such as bonuses are subject to taxation at a 25 percent rate. Other regular withholding such as teacher retirement, FICA, and state income tax will also affect the actual payment.
The bonus payment will be considered by the district’s personnel policies committee and reported back to the board, with payment of the bonus anticipated by the beginning of fall classes.
Also, the board discussed information received from the district’s attorney, Allen Roberts of Camden, concerning the recent action by the Arkansas Board of Education to accept an “Opportunity School Choice” law appeal for a student transfer from the Hope Public School District. The board took no action on the information.