Court Opinion

ID: 3259842
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:31:44.07466+00
Date Added: 2024-06-11T13:40:37.633426
License: Public Domain

The Honorable Daryl A. Pace Representative 13470 Saint Andrews Drive Siloam Springs, Arkansas 72761-9610
Dear Representative Pace:
I am writing in response to your request for an opinion on three questions concerning the ability of school districts to enter into certain debt obligations. Specifically, you state that your questions are asked on behalf of the Gentry Public School District, which you note has been identified by the Arkansas Department of Education as being in "fiscal distress." You state that among the reasons given by the Department for this identification is the district's history of obtaining "cash flow" loans, which you state the district has apparently used to supplement fluctuations in revenue receipts. You pose three questions as follows:
  1. May an Arkansas public school district legally borrow money from a bank located in Arkansas if the term for paying back the loan extends past the end of the fiscal year in which the loan was secured?
  2. If the answer to the first question is "yes," are there any conditions or stipulations that govern such a transaction?
  3. If the answer to the first question is "yes" may any unused proceeds of the loan held by the district, on June 30th, the close of the school's fiscal year, be included as part of the district's net cash balance on hand? *Page 2
RESPONSE
I must decline to provide an answer to these questions, which were apparently posed in connection with the Gentry School District's April 21st, 2008 appeal of its "fiscal distress" designation before the State Board of Education. See A.C.A. § 6-20-1905 (Supp. 2007) (providing for a written appeal of fiscal distress status to the State Board); and Lana F. Flowers, "Gentry School District Appeals Fiscal DistressDesignation," "State Board of Education Hearing Set Monday," The Morning News, April 17, 2008. That appeal has been heard and was denied.See Dr. Randy Barrett, Gentry School Superintendent, "Chalkboard:District's fiscal distress explained," Gentry Courier-Journal, April 30, 2008 (stating that "[t]he appeal to the Arkansas Board of Education . . . was denied and the Gentry Public School District has been classified as being in fiscal distress") . The applicable statutes state in this regard that: "The decision of the state board shall be a final order, and there is no further right of appeal except that the school district may appeal to Pulaski County Circuit Court pursuant to the Arkansas Administrative Procedure Act, § 25-15-201 et seq." A.C.A. § 6-20-1905(f) (Supp. 2007). As Attorney General, I am not authorized, on behalf of a school district, to second-guess any administrative determinations made in this regard. See also Op. Att'y Gen. 2004-134
(stating that "this office lacks the authority to determine whether a school district is in fiscal distress" and that "there is a process of administrative appeal to challenge such a determination"). I must therefore decline to address the questions posed.
Sincerely,
  DUSTIN McDANIEL Attorney General *Page 1