Missouri Revised Statutes
Chapter 161 - Department of Elementary and Secondary Education
Section 161.520 - Districts in financial stress, factors determining — notification to district school board, contents — board to prepare budget and education plan, contents.

Effective - 28 Aug 1993
161.520. Districts in financial stress, factors determining — notification to district school board, contents — board to prepare budget and education plan, contents. — 1. By October 1, 1992, and by each October first thereafter, the department of elementary and secondary education shall identify any school district experiencing financial stress. The commissioner of elementary and secondary education or his designee shall review the information submitted on the report required by section 162.821 to identify school districts experiencing financial stress. Further, the commissioner of elementary and secondary education shall be authorized to obtain such additional information from public school districts as may be necessary to determine school districts experiencing financial stress. Annually, a listing of school districts identified as experiencing financial stress according to the provisions of this section shall be provided to the governor, speaker of the house and president pro tem of the senate by the commissioner of elementary and secondary education. For the purposes of this section, a school district shall be identified as experiencing financial stress if it:
(1) Has a negative balance in its teachers' or incidental funds at the end of the most recently completed fiscal year and is not in compliance with the provisions of section 165.021;
(2) Has a combined balance remaining in teachers' and incidental funds of less than three percent at the end of the most recently completed fiscal year of the amount expended from such funds during the previous fiscal year; or
(3) Did tax anticipation borrowing during the most recently completed fiscal year for the period February first through June thirtieth to meet expenditures of the district because of insufficient fund balances or reserves.
2. For the purposes of this section, a school district may be identified as experiencing financial stress if three or more of the following conditions exist:
(1) For any of the district's funds for the most recently completed fiscal year, expenditures exceeded receipts because of costs to the district that are recurring;
(2) Has declining fund balances while the district is receiving state aid under the provisions of section 163.172 for the sole purpose of increasing salaries of teachers of the district;
(3) Has engaged in tax anticipation borrowing to meet obligated expenditures for the period October first to December thirty-first of the most recently completed fiscal year, and interest expense to the district exceeded interest revenue on district funds;
(4) For the most recently completed three tax years, there is a decline in the collection rate for current and delinquent taxes paid to the district;
(5) For the most recently completed three fiscal years, there is a declining trend of student enrollment without a proportionate decline in the number of professional staff, except in such districts where professional staff have been reassigned to reduce pupil teacher ratios in the elementary grades;
(6) For the most recently completed three fiscal years, there is a static or an increasing trend of student enrollment while the number of professional staff has been reduced;
(7) For the most recently completed three fiscal years, salaries paid to nonadministrative staff have not increased;
(8) For the most recently completed three fiscal years, administrative costs in the district have increased as measured by the percentage of total district expenditures; or
(9) Has a declining trend or recent significant loss of assessed valuation.
3. The department of elementary and secondary education shall notify by November first the board of education and chief operating officer of any school district identified as experiencing financial stress according to the provisions of this section. The notification shall be accompanied by a copy of the provisions contained in sections 161.520 to 161.529. Upon receiving the notification, the board of education shall develop, or cause to have developed, and shall approve a budget and education plan on forms provided by the department of elementary and secondary education. The budget and education plan shall be submitted to the department of elementary and secondary education, signed by the officers of the board of education, within forty-five calendar days of notification that the district has been identified as experiencing financial stress. Minimally, the budget and education plan submitted by the board of education shall:
(1) Give assurances that adequate educational services to students of the district will continue uninterrupted for the remainder of the current school year, and that the district can provide a minimum school term required by section 163.021;
(2) Outline a procedure to be followed by the district to report to district patrons about the financial condition of the district;
(3) Outline a procedure to be followed by the district to report to district patrons about the impact of the financial condition of the district on the educational services provided to students; and
(4) Detail the expenditure reduction measures, revenue increases or other actions to be taken by the school district to address its condition of financial stress.
­­If requested, the department of elementary and secondary education shall assist a board of education in the development of a budget and education plan required by this section. Upon receipt and following review of any budget and education plan, the commissioner of elementary and secondary education or his designee may make suggestions to improve the plan. Nothing in the law shall exempt a board of education from submitting a budget and education plan to the department of elementary and secondary education according to the provisions of this section following each such notification that a district has been identified as experiencing financial stress; except that, the commissioner of elementary and secondary education may permit a board of education to make amendments to or update a budget and education plan previously submitted to the department of elementary and secondary education.

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(L. 1992 S.B. 581 § 2, A.L. 1993 S.B. 380)

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