Clarke County Schools to Make $1 Million-Plus IRS Rebate Payment

The Clarke County School District Board of Education approved Thursday a payment of more than $1.18 million to the IRS to return excess investment earnings from the district’s 2022 bond issue. 

The full rebate totals $1.3 million, with $1.18 million due by Oct. 31.

Chief Financial Officer Chris Griner told the board the bonds had an effective borrowing cost of 2.56%, while investments in taxable U.S. Treasury securities yielded 3.19%. The district earned about $6.3 million, exceeding the roughly $5 million allowed under federal rules.

“I personally don’t like to give money back. Unfortunately, these are the rules,” Griner said.

He told the board the county has not had to do this in the past.

The payment stems from investments made with proceeds from the district’s $75 million general obligation bond issue in 2022. Federal rules require school districts to return excess earnings on tax-exempt bond proceeds to the U.S. Treasury.

“I think it was the timing, the market, the market rates,” Griner said after the meeting. “They kept getting higher, so we had that money invested. Even though we laddered it out, we still were getting great rates on it. It’s a lot of timing with the market.” 

Eight board members voted in favor, while District 2 representative Mary Bagby abstained. Bagby said she was uncomfortable with investing money intended to support students.

To me, to say we’re gonna invest in something, that’s like gambling. We should be using our money on the things that the children need,” Bagby said.

Griner said the investment decision predates his and Superintendent Jennifer Scott’s current positions. The district plans to consult financial adviser Raymond James about future investments that could reduce rebates.

The board also approved renewing the district’s charter system for 2027-32. The decision passed unanimously, despite concerns from District 3 board member Linda E. Davis. 

Davis questioned whether the plan would help its six schools with persistent academic concerns.

“I just can’t stand to see those same six schools continue down this path,” Davis said.

James Barlament, the district’s executive director of innovation, strategy and governance, assured board members that the application can be refined before its Nov. 2 submission deadline to the Georgia Department of Education. The renewal proposal includes literacy initiatives, potential year-round programming and expanded career education.

Superintendent Scott said charter flexibility allows the district to explore new instructional models in response to Davis. 

“I think that some of the work that we’re doing is definitely having the impact that we wanted it to have,” Scott said.

Scott also pointed to the district’s highest graduation rate in 15 years as evidence of progress. 

The board also unanimously approved $11.2 million in renovations to Bettye Henderson Holston Elementary School. The renovations will include major facility upgrades and a new gymnasium connected to the existing building.

The current school building opened in 2005, but its gym dates to the original 1957 building and requires students and staff to leave the main building to access it. The renovation is part of the district’s five-year facilities plan submitted to the Georgia Department of Education.

Sarah Bagley contributed to this story.