CHARLESTON — Members of the Senate Finance Committee approved a bill to provide a financial lifeline for Hancock County Schools but made it clear to state Superintendent of Schools Michele Blatt that they want the funding paid back.

The Finance Committee met Tuesday afternoon and recommended a strike-and-insert amendment for House Bill 4575, making a supplemental appropriation to the West Virginia Board of Education, to the full Senate.

HB 4575 is a supplemental appropriation bill intended to provide $8 million to the Hancock County Board of Education to prevent a total financial collapse and missed payrolls at the end of the current fiscal year following the state’s intervention in the county’s troubled school system. The committee amended the bill to make technical corrections.

Hancock County Schools faces a nearly $3.1 million funding shortfall. According to the Department of Education, the district failed to implement a reduction in force, maintaining 143 staff positions over the state school aid formula, paying for them with temporary federal dollars and moving the employees to the general fund without a sustainable funding source.

The school district’s financial hole continued to grow thanks to decisions to fund an athletic facility upgrade, including a turf field. State education officials discovered the district bypassed the mandatory West Virginia Education Information System accounting inputs, opting instead to manage finances via manual spreadsheets that obscured their actual deficit.

The state Board of Education voted Jan. 16 for the Department of Education to take over Hancock County Schools, remove its superintendent and assistant superintendent, appoint a new superintendent and limit the authority of the Hancock County Board of Education.

“Past decisions … were made between the superintendent and the Hancock County Board of Education, which put them in a financial deficit,” said Blatt, who testified before the committee Tuesday. “They got into the situation where they could not make payroll in February. And so, we have had to front state aid funding formula for them.”

Finance Committee Vice Chairman Ben Queen, R-Harrison, said making the $8 million supplemental appropriation gave him pause, not wishing to create a precedent of which other county school systems might try to take advantage.

“I’m kind of frustrated,” Queen said. “We want to pay bills for our staff to be paid. But I’m nervous that we’re going to set some bad precedent here. And God forbid you all at the state board come and tell us again that another public education system is facing this dilemma.”

Blatt said there has only been one other county in recent memory that required a similar bailout, citing a situation many years ago in Boone County Schools where money was needed after the coal industry went through an economic downturn there.

She said the $8 million would provide a bridge to get Hancock County Schools through until the start of the next fiscal year on July 1. The appointed county school leadership team will begin reductions in force, which will help make additional dollars available to the school system.

“It will catch up next year as they’re paying less employees and less things throughout the course of the year as far as managing the contracts and the different things that they have in place,” Blatt said. “It’s going to be tight, and it’s going to be hard.”

Blatt told state Sen. Robbie Morris, R-Randolph, that no employees have missed a paycheck and funding was sufficient until June.

“It’s been suggested to us that this is imminent and that any day now employees could be without a paycheck,” Morris said. “And so, we’ve been pushed and pushed and pushed to do this because of the immediate nature.”

HB 4575’s companion bill, House Bill 4574, remains in the Senate Education Committee. HB 4574 establishes the “Temporary Shortfall Supplement Fund for County Boards of Education,” a new fund to provide loans for school systems categorized as either financially distressed or in a state of maladministration. The loans are limited to honoring personnel obligations and other essential operating expenses.

“Just from my perspective and from this chair … is that I envision this … as a loan and would like some type of payment plan and some type of repayment done from Hancock County,” said Senate Finance Committee Chairman Jason Barrett, R-Berkeley. “(A loan) that does not put them in a financial bind, but one that ensures the other taxpayers of this state that the money will be returned to the state.”

The county board must repay the loan amount with interest capped at 3 percent by Dec. 31 of the calendar year following the appropriation. Repaid funds would be returned to the state general revenue fund. Counties receiving the funds are required to follow all West Virginia Education Information System reporting requirements, implement the West Virginia Checkbook transparency portal maintained by the State Auditor’s Office and present their financials to the Department of Education upon request.

The bill also requires that any employee responsible for financial decisions in a school district receiving such a loan be prohibited from employment in a financial capacity in all county school systems for two years, with those employees being immediately removed from their positions. It also states that county board members could be removed from office for official misconduct, neglect of duty, or incompetence, citing already existing State Code for the removal of elected officials.

Queen criticized members of the Hancock County Board of Education for not attending Tuesday’s committee meeting to ask for the funding in person or answer questions.

“I’m disappointed that no one here from Hancock County Schools, whether they have power or not, are sitting here asking for money,” Queen said. “I’m disappointed that we have raised the red flag here and there’s no one here to figure out exactly what went wrong. If we’re recklessly spending things, we need to hold people’s feet to the fire.”