School boards OK agreement

• Advocate staff report
• Published: Jun 23, 2009 - Page: 1B

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CENTRAL — The Central Community and East Baton Rouge Parish school boards have approved a settlement agreement that will give land and cash to Central and dismiss all pending litigation between the two systems arising from Central’s separation from the parish school system two years ago, officials said late Monday.

At the center of the larger of the two lawsuits is a facilities improvement tax approved by parish voters in 2003. The proposition listed seven schools to be built with the funds, including a new middle school in Central.

But East Baton Rouge Parish school officials stopped the $18 million middle school project after Central got approval to create its own school district.

The second case centers on a dispute over whether the $3.6 million in Central property tax revenue collected in 2007 should go to the Central system, the parish system or be split between the two systems.

The parish system argues it deserves at least half the money, because it operated the four schools in Central and educated Central-area students until June 30, 2007, when the Central system took over.

As part of the settlement agreement announced Monday, the Central Community school system will receive an immediate $7 million cash award, enabling it to earn money from interest and create a cash reserve that school board members can leverage to earn lower interest rates on general obligation bonds and sales tax bonds soon to be issued to build a new middle and elementary school and to make life-safety repairs at other facilities, Central school officials said in news release.

The school district could save more than $8.5 million with the anticipated lower interest rates, while at the same time, earn approximately $1 million over the next five years from interest gained on the cash reserves, Central Superintendent Michael Faulk said in the news release.

Additionally, the news release says that as part of the settlement Central will acquire approximately 150 acres of the Indian Mound Tract north of La. 64. Central school board members said they will propose — and parish school board members said they will support — legislation to include the 150 acres within Central’s boundaries. This property is located adjacent to approximately 200 acres previously transferred from East Baton Rouge Parish to Central.

Faulk said the $7 million cash award includes $1.6 million in property tax revenue collected in Central in 2007.

“The settlement’s value is close to the $18 million budgeted by East Baton Rouge Parish for the new Central Middle School. With $7 million in cash, 150 acres in property, and more than $8.5 million in anticipated savings and other benefits, the agreement is a win for the Central Community; and the timing of the settlement just prior to the bond sale is optimal,” said Sheri Morris, an attorney for the Central School Board.

The litigation could have continued for another three to five years had the current agreement not been reached,  Morris  said in the news release.

Attorneys for the East Baton Rouge Parish school system were unavailable for comment late Monday.