Bourg questions school board about district's loan

CENTERVILLE — In light of the current financial conditions in St. Mary Parish schools, C.E. Bourg II questioned the school board about repayment plans for a loan approved by consolidated District 2 during Thursday’s school board meeting.

Bourg requested public information regarding the loan approved at the January 2006 meeting from School Board Chief Financial Officer Alton Perry. Bourg also received a copy of the amortization schedule.

In the documents, Bourg said he found discrepancies.

According to January 2006 board meeting minutes, board member Mike Taylor, District 8 representative, asked the board’s permission to loan District 2 $3.4 million from the general fund reserves to be repaid over a 15-year period at an estimated $249,000 per year, with an interest rate of about 1.25 percent.

The funds were set aside for District 2 projects at Berwick and Hattie Watts elementary schools.

The cafeteria was replaced at Berwick Elementary. The project’s architect was Carl Blum.

A seven-classroom wing and additional space for the cafeteria were added on at Watts. The architect for this project was Jim Firmin.

Architectural service fees were to be deducted from the same funds, said Roland Verret in January 2006 board meeting minutes. Verret was board president at that time.

“Information on the financing from the general fund from District 2 construction projects were apparently done in 2010,” Bourg said.

Bourg asked Perry for the payment history on the loan of $3.4 million.

“His response was that the loan was not paid on for the first three years for 2010, 2011 and 2012,” Bourg said.

The monthly payment was supposed to be $20,724.84, Bourg said. There were partial payments made in 2013, 2014 and 2015 in the amount of $204,000.

These payments were not sufficient from the principal and interests due in those previous years. In the school year of 2016, there was an interest only payment.

“I am far from a bookkeeper or accountant but … District 2 on the general fund is in default in excess of $750 ,000 ,” Bourg said.

“The question I’m asking is how do you all plan to pay for the money that’s directed to the principal. Secondly, what should District 1 and District 3 do to ensure that the default on this loan not be overlooked?”

Bourg also mentioned District 2 apparently borrowed some money to build the new school under construction now.

“It appears they would be default at the time they borrowed the money to build a new school,” Bourg said. “My question is to the board in general, if the board needs the money why isn’t someone asking for it?”

Board member Pearl Rack, representative of District 4, responded to Bourg’s last question.

“I did ask about the money,” Rack said.

Bourg acknowledged that Rack and board member Anthony Streva, District 10 representative, asked about the money.

But Bourg continued with the definition of default.

“Default is when you fail to pay a financial obligation,” Bourg said.

He said this loan has been in default for years, not just this year, the years that according to the amortization schedule they should have made payments of over $2 million towards the original amount of $3.4 million.

“And to the reality, it’s only $2.7 million so there’s $700,000 that should be cash in the bank,” Bourg said. “What action is there to take to collect the money that’s due to general funds?”

Board member Mary Lockley, District 2 representative, clarified the money used to build a new Patterson Junior High School was because of a bond that passed.

Perry responded to “address the inaccuracies.”

“First of all, this has nothing to do with the new Patterson Junior High School,” Perry said.

The loan was taken out in a timeline of events in January 2006, Perry said. The board unanimously approved an intergovernmental agreement and this loan with an amortization of 15 years at 1.25 percent interest rate.

“The amortization didn’t start payment because the projects took several years to get started,” Perry said. “The projects were not completed until May 2011.

“The payment for 2012 was not paid. The last 3 years (2013-15) principal and interest has been paid.”

The principal will be deferred and interest will be paid by June 3, Perry said.

“We’re not default for anything,” Perry said. “First off, you can’t be in default on this entire transaction from the board. There’s no outside financial institution involved. So it’s impossible to be in default.

“This board may choose to do whatever they want and have control over those transactions. End of story, it’s not default. It’s paid. The last four years have been paid.”

In other news:

—School board members will vote on proposed consolidation plans for M.D. Shannon and J.A. Hernandez elementary schools at 5 p.m. March 21 at the Central Office Complex.

—The board recognized March students and employees of the month. Students of the month are 12th-grader Keonna John, Patterson High; eighth-grader Kaelon Smith, Franklin Junior High; and fifth-grader Brooklyn Doiron, Wyandotte Elementary. Employees of the month are Debbie Wade, Patterson High; Amy Gilliam, Franklin Junior High; and Carol Schaub, Wyandotte Elementary.

—In addition, St. Mary Parish Students of the Year were recognized. They are fifth-grader Sarai Jonelle Richardson, M.D. Shannon Elementary; eighth-grader Kate Hicks, Berwick Junior High; and 12th-grader Bria Burrell, West St. Mary High school.