Hourly Update

State officials prepare to seize control of Colorado City school district

Arizona Public Radio reports >> PHOENIX - State officials will move Friday to seize financial control of the Colorado City Unified School District on Arizona's northern border. The move - unprecedented in state history - follows an investigation that Attorney General Terry Goddard said shows "very serious story of mismanagement of public money." That includes an administrative payroll padded with members of a church that controls the community, unnecessary expenses and misuse of district property. "And the children who attend the school district, the schools in Colorado City, ultimately are the victims," he said. But Goddard said he could not act until a law permitting a district to be placed in receivership took effect. And that will not occur until tomorrowa. The petition filed with the state Board of Education charges that school board members, administrators and employees "have routinely charged personal expenses to district-issued credit cards." But Goddard said that isn't the only problem. He said there were more than 1,200 students in the district in 2000 before Warren Jeffs, leader of the Fundamentalist Church of Latter Day Saints, ordered followers in his polygamous sect to pull their children out of public schools. Goddard said while enrollment dropped to fewer than 250, the number of administrators - mostly FLDS members - not only remained the same but the district in 2002 bought a $200,000 airplane. Yet checks made out to teachers last school year bounced, forcing the state's Schools Risk Retention Trust - essentially an insurance fund for schools - to loan the district $1.4 million to cover payroll costs. Goddard also said the district leased five buildings for classroom space from the United Effort Plan Trust, controlled by FLDS leaders, paying multi-year contracts up front. In 2002, the district abandoned three of the leases, forfeiting about $190,000 in prepaid rent. Yet last year the district asked the state for a new elementary school to alleviate overcrowding. And the buildings abandoned in the lease, Goddard said, now are being used by an FLDS-controlled private school. That, said Goddard, shows at least an indirect subsidy of church-run schools by taxpayers. The district has 15 days after being served with the petition to respond, with the state Board of Education able to act no sooner than 20 days after that. Calls to the district office were not answered; a message left at the home of district Superintendent Alvin Barlow produced no response. Goddard said he presumes the district will challenge the petition. And, he said, school officials are entitled to use taxpayer dollars in that fight. There is no precedent in Arizona for having a receiver run the financial operations of a school district. State School Superintendent Tom Horne said his office is soliciting bids and already has one offer from a forensic accounting firm. Goddard said even if the state board approves the move, that still leaves the locally elected school board in place. He said members would remain free to make any decisions that do not involve finances. But it would be up to the receiver to decide whether to keep the superintendent. The receiver would have 120 days to come up with a plan to fix the district's finances, including repaying that $1.4 million to the school trust. But Goddard said he doesn't know how long the receiver would run the district or when the local board would be able to resume control.