City concerned about Dublin school debt

The city of Dublin has written state officials about concerns that Dublin City Schools is “insolvent” and cannot pay its current and future debts to the city.

“Considering the large debts the school district also owes to the state of Georgia, it appears that the school district is insolvent and does not have sufficient cash to pay its current debts,” City Manager Josh Powell wrote Friday in a letter sent to state School Superintendent Richard Woods.

The letter requests a meeting of stakeholders be held as early as possible to discuss “how the city should handle current and upcoming payments due from the school district in light of payments also due to the state.”

The Dublin school system has come under heavy scrutiny after state officials learned last month that the district owed almost $5 million in overdue payments for employees to the State Health Benefit Plan. After looking into the system’s finances, state education officials now project the system will face a $13.4 million cash flow shortage by the end of the current fiscal year.

The school district owes the city $192,433.93 in tax refunds paid on its behalf due to the first batch of appeals from the 2024 tax assessment. It has not paid within 30 days of invoice, according to Friday’s letter, 

“We have not received any communication from the school district indicating that it has the means or intention to pay it,” Powell wrote.

The letter also noted the city was generating an invoice Friday for a second round of appeals paid on the school district’s behalf of $112,106.20, bringing the total refunds to taxpayers of $304,540.13 with more appeals pending.

“The city will pay the taxpayer refunds on behalf of the school district regardless of whether the school district is currently able to pay or reimburse the city those funds,” Powell wrote.

The letter also outlined other outstanding payments due the city from the district:

• A sublease agreement for HVAC units at Dublin Middle School. The payments on this sublease agreement are typically paid by the 15th of each month. As of today’s date, the City has not received the School District’s September payment due in the amount of $31,245.12. The total remaining balance on the sublease is $307,357.06. 

• An outstanding unpaid invoice to the school district for school resource officers provided by the city. The past due amounts for the resource officers total $13,000 ($6,500 each for the months of July and September 2025). 

Due to the “significant past due invoices,” the city also reviewed its “total potential exposure in case of the financial failure of the school system.” In addition to the outstanding payments listed above, the financial obligations of the school district to the city also include:

• A financing agreement for HVAC units at the Irish Gifted Academy that has an annual payment due in February of each year in the amount of $72,186.50, with a total current balance on the agreement of $325,004.80. 

• In May 2026, the school district will owe the city $139,800 for internet data service provided in school year 2025-2026. Each month, the school district owes the city for utility services for water, sewer, natural gas and sanitation. These amounts fluctuate depending on consumption but are regularly over $30,000 per month. 

“As you can see, the city has a significant interest in the financial obligations of the school district and where its obligations to the city fall in relation to its other debts,” Powell wrote. “The mayor and council intend to work cooperatively with all parties to ensure that the financial issues with the school district do not disrupt the education provided to the students of Dublin. 

“At the same time, the city needs to gain an understanding of the impact the school district’s financial distress may have on the City of Dublin’s financial planning for this fiscal year and beyond.”

The school system’s finance director, Chad McDaniel, resigned last month. The system’s financial problems come after a 25 percent tax increase last fall that should have generated at least $3 million more in revenue over budget. The school board rolled back its millage rate, but not enough to offset the net growth in the tax digest following a long-overdue property revaluation.

At the time, school officials said the additional revenue was needed to cover massive increases in benefit costs from employees, for the premiums the system wound up not paying into the state plan.