Nevada County Picayune and Gurdon Times Newspaper Archive

USF&G Pays Prescott School District 55% Of Fire Claims

Promised raises to all school staff will get another look before being handed out this year.

The Prescott School Board met Monday night and went over figures prepared by superintendent Don Johnston concerning the school's financial woes.

The district could give the proposed raises, and again implement the state's salary guidelines for the 1997-98 school year without many problems.

The biggest problems lie in the April 1996 fire which the district has not been fully compensated by its insurance carrier, USF&G.

The district has incurred several loans for the reconstruction of the burned portions of Prescott High School.

The loan payments and non payment from the insurance company could result in the district going broke in three years.

Its only options at that time could be to release staff, including teachers, and/or raise its millage rate, a lot.

Johnston and board president Jim Franks met with their attorney, Arkadelphia lawyer Ed McCorkle, and a USF&G representative in January to see how much the district will be paid.

The insurance company and district officials are within a few thousand dollars of agreeing what the total tab will be - just over $1.4 million.

But, USF&G has paid the district 55% of the losses since the meeting.

A check for $240,000 has arrived since the meeting and with monies paid since USF&G began paying claims last summer - the district has been paid 55% of the loss.

Prescott School District had $8 million worth of insurance with USF&G at the time.

USF&G has maintained that the district did not have insurance equal to at least 90% of the value of the property per their evaluations or assessments.

District officials have denied that fact from the beginning and say they have figures from the Arkansas Department of Education which reflect its numbers are correct.

The school board was told by the insurance company that they would send a representative to the school to assure there was enough coverage.

Before the board agreed to the proposal, a representative of the insurance company did come and inspect the property.

USF&G has hired two companies to evaluate the district's personal and real property. Each was responsible for one evaluation. These took place in November and December 1996.

Upon receiving the evaluation, the district found several significant mistakes, including the square footage in several buildings, in particular the Prescott Elementary School's activity center.

The district has maintained the USF&G was responsible for these evaluations before the insurance was purchased or a reasonable time thereafter, not nine months after the fire.

Lawsuits could and probably will be filed by the district within the next two to three months.

A land for timber swap is being done by the district and the Bluff City Church of Christ.

Johnston told the board the church showed an interest in buying the property for $1,500, but the district had a $4,000 bid for the timber on the 1.53 acres which used to house the Bluff City School.

The district has been given the timber on the church property to also be sold in exchange for the land owned by the district.

The board agreed to the swap, authorizing Johnston to see over the deal.

The district had a $4,000 offer on 10 acres also in Bluff City from the Arkansas Forestry Commission, once the timber has been sold off the land.

Johnston said he has been working with the commission for over a year on the deal.

Rick McGough told the board property owners in the area want a chance to buy the land.

The district has agreed to seek bids on the timber and land separately.

The board heard reports from all three school campuses on the year's action.

After meeting in executive session, the board agreed to renew the contracts of all three district principals.

The district hired Roy Hodges as maintenance supervisor and accepted the resignation of Kent Williams in the same position.