Some Ohio schools battling financial crises

DAN SEWELL

Asso­ci­ated Press

MONROE — The blue-and-gold mas­cot of the Mon­roe Fight­ing Hor­nets was depicted on the school room wall, hov­er­ing over lists instruct­ing chil­dren how to behave in the hall­ways, bath­rooms and on the school bus.

The hor­net looked mad.

Stand­ing next to the lists was David Neeley.

He looked mad, too.

He was there to speak to the newly appointed com­mit­tee that will over­see the school district’s spend­ing while devel­op­ing a plan to dig it out of the hole that had just got­ten it declared by Ohio’s audi­tor to be in state of fis­cal emergency.

Many Ohio schools are strug­gling to stay with their bud­gets after the reces­sion sapped hous­ing val­ues that pro­vide local school tax bases, the state cut fund­ing, and the rough econ­omy made it harder to get tax­pay­ers to pass new levies. And some dis­tricts just can’t make the books bal­ance. Eleven Ohio dis­tricts have fallen into the emer­gency sta­tus since 2007, and Mon­roe in May became the sixth Ohio school cur­rently in that finan­cial cri­sis mode.

It’s a not a good place to be — it usu­ally means lost jobs, reduced classes, activ­i­ties and ser­vices for stu­dents, and higher fees and taxes for residents.

“That was dev­as­tat­ing to me,” Nee­ley said, describ­ing when he first read about Monroe’s fis­cal cri­sis a few months ago. He blasted school offi­cials for not being cau­tious with their bud­get, not fol­low­ing “sim­ple math — you don’t spend more than you have.”

Kelly Myers, named to rep­re­sent Mon­roe par­ents on the five-person emer­gency com­mit­tee, said she can under­stand peo­ple being upset.

“You look around in the crowd. … It kind of breaks your heart from all ends of this,” Myers, a long­time school vol­un­teer who has an insur­ance agency in this south­west Ohio city of some 13,000 peo­ple. “It’s going to be a hurt­ful sit­u­a­tion. Nobody is going to be happy.”

Ohio edu­ca­tion offi­cials say there have been 38 fis­cal emer­gen­cies — Ohio has 614 school dis­tricts — since the sta­tus and a state fund were estab­lished some 15 years ago so trou­bled school could bor­row money with­out pay­ing banks’ inter­est and fees. The new price the schools pay is yield­ing finan­cial con­trol to state-appointed com­mit­tees that over­see aus­tere spend­ing and a plan to get and stay sol­vent and to pay back the loans. Typ­i­cal moves: cut admin­is­tra­tive, teach­ing and sup­port staff jobs; slash bus ser­vice; trim art, music, and for­eign lan­guage offer­ings; jack up pay-to-participate fees.

“It gets ugly,” said Roger Hardin, assis­tant direc­tor of finance pro­gram ser­vices for the Ohio Depart­ment of Edu­ca­tion. The typ­i­cal stay in the sta­tus is three-four years; the urban East Cleve­land schools and rural Meigs County South­ern Local schools needed sev­eral years longer to get out.

But the sta­tus gives the schools a chance to plan and fig­ure out what they need to do to resolve prob­lems that oth­er­wise would only get worse.

“Most dis­tricts, when they emerge, come out stronger fis­cally,” Hardin said.

He said given the recent weak econ­omy and state fund­ing cuts, hav­ing only six dis­tricts still in the sta­tus doesn’t seem too bad.

Unless you’re in one of them.

“We’re wor­ried about our children’s edu­ca­tion,” said Patti Hor­vat, mother of a Mon­roe high school stu­dent. “A lot of good teach­ers, a lot of good peo­ple had to be let go. Most peo­ple here are very strapped.”

Formed just 12 years ago in an area near Inter­state 75 where sub­di­vi­sions have been sprout­ing on for­mer corn­fields, the dis­trict and its new K-12 build­ing, top-of-the-line foot­ball sta­dium and other facil­i­ties have been a source of local pride. It has earned state “excel­lent” aca­d­e­mic rat­ings and the school hosted com­mu­nity gath­er­ings and state sports play­off games. Enroll­ment has dou­bled, to nearly 2,500 students.

Now the dis­trict needs more money — a lot more — and is mak­ing cuts as it faces a $2.2 mil­lion annual oper­at­ing deficit and a $3.2 mil­lion bond debt that must be repaid over five years. Rev­enues last year were some $18 mil­lion. Nine­teen jobs have been elim­i­nated, and pay-to-play fees jump from $300 a fam­ily per school year to $250 a child, per sport.

Nee­ley said flatly he opposes giv­ing another dime to the dis­trict after it got into such a mess. The retired elec­tri­cal worker, 72, said he will go door-to-door cam­paign­ing against the 7.05-mill August levy — if passed, it should raise some $2.5 mil­lion a year while cost­ing home­own­ers an esti­mated $262 more a year for each $100,000 of their property’s value.

Lead­ers in nearby Lit­tle Miami Schools are famil­iar with frus­trated feel­ings. Vot­ers in that area north­east of Cincin­nati rejected eight tax issues before last Novem­ber approv­ing a whop­ping 13.95-mill levy, adding $427 taxes on every $100,000 of home value. That should allow the dis­trict to emerge from fis­cal emer­gency later this year. The dis­trict had closed school build­ings, cut bus­ing, dropped classes and activ­i­ties, and raised pay-to-play fees to $651. The levy has allowed some restora­tions, but they still are under pres­sure from the emer­gency com­mit­tee — as well as their community.

“There are peo­ple who tell us ‘don’t spend money fool­ishly — we’re watch­ing every cent you use,’ ” said Bob­bie Grice, Lit­tle Miami school board pres­i­dent. “We’re not going to do any­thing that will make them not trust us.”

That’s the chal­lenge now at Mon­roe Schools, where offi­cials say most of the trou­ble stems from faulty finan­cial fore­casts and mis­taken diver­sion of build­ing con­struc­tion bond funds to every­day expenses, prob­lems that began years ago.

“It was shock­ing at first … very dis­heart­en­ing,” Eliz­a­beth Lolli, super­in­ten­dent since 2008, said of learn­ing the extent of the prob­lems. “The dis­trict is work­ing very hard to put safe­guards in place to make sure it doesn’t hap­pen again.”

Mike Wat­son, a retired Hilliard Schools trea­surer and state con­sul­tant who heads emer­gency com­mit­tees, said he wasn’t sent to Mon­roe to point fingers.

“It is what it is,” Wat­son said. “There’s a prob­lem. Let’s get it taken care of.”

Posted by AP News on Jun 24 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.