County, schools team up to bring federal funds to area
The San Juan School District is set to get $2.6 million over the next four years as a part of the recent federal government bailout of the financial services industry. However, a convoluted and complex funding formula means that financial benefit to the school district may come at a price to San Juan County.
Despite the risk, the San Juan County Commission approved a motion to accept the funding option at its November 3 meeting. In addition, the county and school district will pursue an inter-local agreement in which the schools will pay for a host of services that the county has previously provided at no cost.
The final bill signed by President Bush includes full funding for the Secured Rural Schools (SRS) and the Payment in Lieu of Taxes (PILT) programs. The little-known SRS program has brought $13,913 a year to the district in the past, but is set to burgeon to nearly $1.8 million a year for the next four years.
However, accepting the SRS funding comes at a risk to San Juan County, since the federal government announced that the SRS funds would offset funds from the PILT program. At risk is $800,000 a year that the county receives from PILT funds and which has been placed in the county General fund. While the new funding provides $800,000 for the county, it must be placed in the Transportation fund and not in the General fund.
County officials fear that the offset could leave the General fund in a deficit state. While they hope that the fully funded PILT program will increase from $800,000 to $1.3 million a year, the amount of PILT funds will not be known for several weeks.
Adding to an already confusing situation is the fact that the county and school had less than a week to address the issue. Officials first heard about the offset clause on October 29 and had a November 5 deadline to inform the state of their intentions. This set off a scramble around the state as counties and school districts made plans.
The San Juan School Board told Commissioners that they understood the risky situation the county faced and added that they had two goals: to mitigate the risk to the county and to maximize the total dollars that are available to San Juan County residents.
In an attempt to mitigate the risk, the entities discussed an agreement to have the schools pay in the future for services that are currently provided at no cost. These may include provided emergency services at sporting events, emergency response planning, and school resource officers. The agreement will total approximately $500,000.
School officials are pleased with the willingness of the county to accept the funding, despite the risk. The funding formula almost put the county and the school district at odds. The county could have chosen to continue with the current plan, which provides $13,913 a year, with no risk to other funding sources.