Delaware Senate Approves Loan for Christina School District - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Reported by Oren Lieberman

Delaware Senate Approves Loan for Christina School District

Wednesday night's Christina school board meeting was only open to the public for about 10 minutes before the board went into executive session, closing the doors and meeting in private. (Photo: WBOC) Wednesday night's Christina school board meeting was only open to the public for about 10 minutes before the board went into executive session, closing the doors and meeting in private. (Photo: WBOC)

05/10/2006 11:47 PM EST

WILMINGTON (WBOC/AP)- The state Senate on Wednesday approved two bills drafted in response to financial problems in Delaware's largest school district, which must find a way to close a $14 million deficit by the end of June.

Before approving legislation offering the Christina School District an interest-free $20 million loan to be repaid within five years, the Senate voted to extend the state's authority to control the finances of all school districts and charter schools in the state.

Despite Republican criticism that the state was usurping local control of school districts, the Senate voted 15-3 for a bill authorizing a state "financial recovery team" to take over the finances of a district deemed by the state to be in financial distress.

The bill also allows the Department of Education to develop a mandatory financial responsibility training program for members of local school boards.Time is running out for the Christina School District as it faces a $14 million shortfall through the end of the school year.  The district will have to act fast to find money to pay its employees.

The school board has already brought on a consulting firm to help manage the school's money, and the school board has asked the state for a loan to get it through the end of the year.  The school board says help needs to come before May 15, the deadline for laying off any teachers.  State lawmakers are trying to push that deadline back into June to give the district more time to sort out its finances.

Wednesday night's Christina school board meeting was only open to the public for about 10 minutes before the board went into executive session, closing the doors and meeting in private.  School board spokesperson Wendy Lapham said the school is optimistic about solving the shortfall in time. 

"We are moving forward to try to adjust our budget for next year so that we don't find ourselves in a shortfall situation again next year," Lapham said.

The school board has taken full responsibilty for mismanaging the district's money.  Now the board has asked the state for help.  Governor Ruth Ann Minner introduced draft legislation that would give the district a $20 million line of credit, but the legislation was not officially introduced yet in the House.  The district is also waiting on legislation to push back the deadline for laying off teachers.

But legislation was introduced Wednesday to allow the state to take over the district's finances, something that has never happened before in Delaware.

"Clearly, the district has acknowledged that they can't meet their obligations between now and June 30 and unless there is financial assistance in some form or another, there's a real risk that people won't get paid," said Jennifer Davis, director of the Delaware Budget Office.

Lapham said the school board has not yet seen the bill that offers the school a multi-million dollar line of credit.  School board members declined to answer any specific questions about what the board will do. 

Cristina Superintendent of Schools Lillian Lowery said, "We'll make no decisions until everybody can get at the table and have a conversation."

With the end of the school year looming one month away, the board will have to act quickly to figure out the district's finances.  Board members say they will release more information about Wednesday's meeting after they talk with the teachers' union.

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