Phoenix, Arizona - A public school district that serves a community dominated by a polygamist sect and whose teachers went unpaid for two months last year will be placed under state financial control and have two top administrators step down under an agreement disclosed Friday.
The agreement reached between the Colorado City Unified School District and the Arizona Attorney General's office is subject to approval by the state Board of Education, which will consider it Monday. Acceptance would cancel a hearing later in the week set for the board to consider a receivership petition filed by state officials.
The agreement calls for the Board of Education to appoint a receiver to oversee the district's financial administration. Also, the district's superintendent and business manager would retire and resign, respectively, on Dec. 31, and lose their administrative powers in the meantime if the state board approves the agreement.
"What we have is a very important step forward in terms of making sure that the law is going to be followed, the children are going to be served and that Colorado City joins the rest of the state as a law-abiding community," Attorney General Terry Goddard said.
The district states in the agreement signed by district board President Ralph M. Johnson that it does not admit wrongdoing but that it settled with the state to avoid the costs of litigation "and to ensure the continuity of educational services provided to the students of the district."
Goddard and other state officials filed to take over the district in August, alleging that taxpayers and students have been harmed by mismanagement that included purchase of a nearly $200,000 airplane, questionable dealings concerning buildings and equipment and poor fiscal practices that kept teachers from being paid for two months last year.
Colorado City, located north of the Grand Canyon in a secluded area of northwestern Arizona, is dominated by the polygamist Fundamentalist Church of Jesus Christ of Latter Day Saints. The sect, which has an estimated 10,000 members, dominates Colorado City and neighboring Hildale, Utah and also has enclaves in Texas' Schleicher County and in Bountiful, British Columbia.
The agreement also calls for the district to reduce its expenses and use its assets "in a fiscally prudent manner," including the possibility of selling the airplane, and to use a financial consulting service and to submit weekly financial reports to the consultant and the receiver. Goddard said the district is apparently $2 million in debt. One of the receiver's first duties would be to conduct an in-depth investigation of the district's finances, including a review to determine whether the district acted as a "cash cow" to provide jobs for followers of fugitive church leader Warren Jeffs.
A lawyer for the school district did not immediately return a call for comment.
Goddard filed the receivership petition Aug. 12 on behalf of state Superintendent of Public Instruction Tom Horne and the Board of Education's executive director.
Four months earlier, Goddard's office executed a search warrant of the district's offices in Colorado City and seized a truckload of records, computers and other material.
The district initially denied the petition's allegations but recently requested postponement of the hearing on grounds that it would be unable to defend itself against the receivership action because of an ongoing criminal investigation by Goddard's office.
Senior district officials were prepared to invoke their Fifth Amendment rights against self-incrimination if called to testify in the receivership matter, the district's motion said.
The district previously argued it acted responsibly and some of the circumstances that caused it money problems were outside its control. It also blamed the state, saying the Department of Education refused to make an expected advance distribution of state aid.
The district's enrollment is now reported at approximately 300 students, down from a peak of 1,200 in 2000, with a work force of 72, down from over 100 a year ago, according to the Mohave County school superintendent's office.
The receivership petition is one of several fronts in which Arizona and Utah authorities are placing pressure on the leadership of the fundamentalist church. The church was formed by former members of the Mormon church, which has publicly disavowed polygamy since 1896.
Arizona has decertified two Colorado City police officers because they practice polygamy, and Goddard has requested a federal civil rights review of Colorado City's entire police department.
In Utah, the state attorney general this year obtained a court order removing Jeffs and other church leaders from management of the United Effort Plan Trust, which holds the FLDS' real estate assets.
Jeffs is sought on an Arizona indictment charging that he arranged a marriage between a 16-year-old girl and a man who was already married.