By Matie Belle Lakish

Saguache County Commissioners rejected pleas by school officials for another week to work out a solution to allow both schools and Saguache County to benefit from Secure Rural Schools and Community Self-Development (SRS) funding for the next year.  Schools wanted to further research an option that would transfer SRS funding to schools. Schools proposed to then transfer some of those funds back to the County to use for the General Fund. Instead, Commissioners decided to accept the Payment In Lieu of Taxes (PILT) funds, forego the SRS money, but transfer to schools approximately $594,000. $500,000 of that will come directly from Road and Bridge funds, and roughly $94,000 from the county’s 25% share of SRS funds for 2012. While this is less than the school administrators were hoping for, it is considerably more than they would normally receive in a year without SRS funding.

The controversy began when County officials learned that SRS funds had been appropriated by Congress for one more year. Four years ago, when the Secure Rural Schools and Community Self-Development Act was fully funded for the first time, the County learned it was eligible to receive over 3 million dollars that could be used for roads and bridges and schools. However, in order to receive these funds, the County had to give up its normal PILT funding. This is significant because PILT monies can be used for any county need, whereas SRS funding is designated only for roads and schools.

Now, four years later, the Road and Bridge Department is well equipped, but other county departments are suffering. The county’s information system, for instance, is archaic (in electronic terms) and the entire county government was in chaos all of last week because of computer melt-downs. Public Health has had to lay off workers, as have the Sheriff’s and other departments. Infrastructure needs repair or replacement. Thus, commissioners made the hard decision to choose a smaller amount of PILT monies that are not “designated” rather than see the county structure continue to suffer.

In the meantime, our local schools have come to rely on the SRS funding to supplement diminished state funds and local tax revenues, and were unprepared to accept a shortfall of tens of thousands of dollars if the County does not receive SRS funds this year. Superintendents from Moffat, Center, and Saguache as well as School Board members, parents, and Director Kathryn Brady from the Charter School were on hand to help the commissioners understand their issues, and to ask for more time to work out some type of arrangement that would fund both schools and the county’s General Fund.

Both the commissioners and superintendents had been in touch with Colorado Department of Local Affairs Director Jarred Biggs, and each referred to his comments to justify their position. Schools believe that it would probably be legal to receive the SRS funds into their General Funds, and then to reimburse the county from another school fund, such as the State Equalization Fund, in the amount equal to the PILT funds the county is expected to receive. Alternatively, schools would consider in-kind donations of services, or paying the county for services the schools might otherwise have to provide. Moffat Superintendent Kirk Banghart, who acted as spokesperson for schools, said, “We believe we have a legal answer that is transparent and clear. We have a plan we believe is feasible. We would like to ask you to table this until the (September) 11th meeting.”

The county’s attorney, as well as their auditor, Wall, Smith, and Bateman (WSB), have told commissioners that they question the legality of that plan. According to a letter to commissioners, Attorney Ben Gibbons advised, “We have clarified (with Biggs), as suspected, that the school CANNOT give funds directly to the General Fund.”

Commissioner Linda Joseph said, “Our audit trail is very precise and vigorous.” She said that what she had seen of the school’s plan so far was “confusing and the wrong numbers were used”.

Commissioner Sam Pace said he would be reluctant to see the Title II and III funds not be available to the county, as they have funded important projects on the National Forest and provided jobs and mitigation for local residences. However, he continued, “the concept itself doesn’t pass the smell test”. He was asked by Mountain Valley Superintendent Corey Doss, “Do you know for a fact our proposal doesn’t pass the smell test?” Pace replied, “To get creative around how you disperse funds and have them dispersed back to you doesn’t pass the test.”

After some further discussion, Pace read the following statement: (excerpted)

“Saguache County has determined that it is in the best interest of all County residents to elect to receive PILT payments for the 2013 Federal fiscal year. This option will permit the County to replenish its general fund, which has been greatly reduced by the County’s selection of the SRS option during the past four years.

“The County Commissioners recognize that the selection of PILT fund option will result in a reduction in the amount that the school districts receive as opposed to the County electing to receive SRS funding for the 2013 federal fiscal year.”

“The County will contribute the sum of $500,000 to the school districts from SRS funds previously designated to road and bridge. This will be in addition to 100% of the 25% SRS funds received by the County in fiscal year 2013, which will be approximately $94,000.00.”





Joseph said, “We can help this year, but our General Fund took a hit of half a million every year. The schools need to develop a plan (for years in which SRS funds are not available).”

Randal Arredondo said Road and Bridge could provide these funds for this year, but cautioned that he will need to dip into reserve funds to service roads for next year. Commissioner Michael Spearman said, “We hope SRS gets reauthorized, and it will be up to future boards to make decisions about receiving it.” Dollars will flow to schools when funds come in, probably in February.

The total SRS funds for 2013, according to U.S. Dept. of Agriculture reports, is $1,776,440. According to the author’s calculations, under SRS funding with 50% going to both schools and county, each entity would have received $754,987. The total amount of PILT funds available to the county is not known at this time, but is estimated to be about $900,000 that can go toward general support of county departments.

Superintendents estimate the $594,000, which will be split between the districts according to this years student count, will keep them from having to cut staff or seriously deplete their mandated reserves. Moffat Superintendent Banghart said, “I’m disappointed that we didn’t get to look more closely at SRS, but I appreciate what the commissioners have done to keep us from having to cut more positions.”

At the time of this writing, an additional meeting of commissioners has been scheduled regarding these funds. This may not be the final word on the subject, and a change may occur which is not evident at this time.