South Routt School District encouraging treasurer, Peabody to find resolution |

South Routt School District encouraging treasurer, Peabody to find resolution

South Routt Elementary School teacher Mrs. Reeves reads to her first-grade class on the first day of school in 2015.

— South Routt Board of Education members have agreed to send a letter to Routt County Treasurer Brita Horn urging her to work cooperatively and quickly with Peabody Energy Holdings.

The board held a special meeting Thursday to discuss writing the letter after receiving a request from the Colorado Department of Education Oct. 21 to repay the state part of a $1 million loan the district was issued in July.

The loan to South Routt was authorized by the State Board of Education to help South Routt make payroll after unexpectedly learning that a large property tax payment from Peabody had gone unpaid in April.

“We’re explaining our financial situation and asking the parties to please come to a resolution,” Mohr said.

The $1 million accounted for about $565,000 to cover the taxes due in 2016 and an advance of $435,000 to cover the district’s share of estimated taxes due in 2017.

The district had agreed to repay the loan if and when Peabody paid its overdue taxes.

Peabody, which filed bankruptcy in April, was cleared to pay the overdue taxes in July, but Horn has refused to accept the payment unless it includes interest and fees on top of the $1.77 million in taxes, citing a legal obligation to accept the interest and fees at the same time as the payment.

Mohr said the board would also send a letter to Peabody seeking their cooperation in the speedy resolution of the situation.

“They just need to come together and get something done,” said board president Jules Palyo. “This is something that could drag on for a long time. We need a timeline.”

Horn on Thursday drafted a letter to the Colorado Department of Education explaining her position, which is that she is following Colorado law by not accepting what she feels is an incomplete payment from Peabody.

Horn said she and her attorneys had met with Peabody attorneys in early October and was hopeful that the complete payment from Peabody would come “soon.”

The South Routt school board Thursday began discussions of a possible contingency plan, with ideas that included using reserves, seeking donor funding or even going to a bank for a loan in order to pay back the state.

The district is eager to repay the state the first $565,000 of the loan, knowing that if Peabody fails to pay taxes again in 2017, the district might return to the state for another loan.

Palyo said he believes the state is sympathetic to the district’s unique position.

“At the end of the day, I can’t imagine that the state would demand their money back if it meant closing our doors,” Palyo said. “I think the state is with us. Hopefully, this is resolved fairly soon with Peabody, and this is in the past.”

Mohr said that if a resolution to the disagreement between Peabody and Horn isn’t immediately found, the board will have further discussion about next steps during its November board meeting, scheduled for 5:30 p.m. Tuesday, Nov. 15 at the district office, 305 South Grant St., Oak Creek.

To reach Teresa Ristow, call 970-871-4206, email or follow her on Twitter @TeresaRistow

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