Bank freezes credit for Colorado City schools after checks bounce
 
By Caleb Soptelean
Kingman Daily Miner
 
KINGMAN – The Colorado City Unified School District is out of money.

The school district’s line of credit with Wells Fargo Bank was frozen Monday, when there were no funds to pay district employees, Mohave County School Superintendent Mike File said.

File said checks from the school district began bouncing Oct. 18.

"Wells Fargo will not be giving them any more money. They have no money in their cash treasurer’s account," File said.

The lack of funds is because United Effort Plan, which owns most of the property in Colorado City, is not paying its tax bills on a timely basis, File said.

Colorado City is a polygamous community controlled by the Fundamentalist Church of Jesus Christ of Latter Day Saints.

The school district has a $1.5 million credit line with Wells Fargo Bank, File said.

The lack of funds is affecting payroll checks for some 60 school district employees, including 40 teachers.

"My issue with this is my name is on those checks," said File, who signs checks for all of the public schools in Mohave County except for the Kingman Unified School District and charter schools.

"I’m not going to sign any checks. We’re going to print them and hold them," File said.

Debra Herbert of the Mohave County Attorney’s Office civil division confirmed on Tuesday that the district "has reached its credit limit." Herbert said school property taxes are due Nov. 1.

File said the district basically is just not balancing its checkbook.

"We’re taking steps to try to increase the cash flow to try to receive advance distribution of state appropriations," Alvin Barlow, the CCUSD superintendent, said Tuesday.

Barlow said the district is also trying to "expedite approvals of federal projects and programs so federal funds can be released." The district also is trying to increase the credit line with the bank.

"Most expenditures come at the first of the (school) year," Barlow said. "We had an issue a year ago where File stopped the paychecks."

File said, "Last year it happened, but they weren’t out of money. We held their checks for three weeks."

File explained that the Colorado City School District had money coming in last year but not enough to meet all of its obligations.

He said public schools get funds from three sources: grants, state equalization aid and local tax dollars.

File said he received calls from three district teachers on Monday about the situation. "Alvin’s staff pointed the finger at me," File said. "They were called into a meeting and told it was my fault."

Barlow said the district’s business manager and assistant business manager met with state Department of Education officials on Monday.

"We’re hoping within the week to have some resolution to it," Barlow said.
 
Kingman Daily Miner
Originally published October 28, 2004
 
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