NILES CITY SCHOOLS Recovery plan approval prevents state takeover

School officials will still need to take further action to fully recover financially.
By SHERRI L. SHAULIS
VINDICATOR TRUMBULL STAFF
NILES -- The threat of a state takeover of the school district is gone, at least for another year.
Superintendent Patrick N. Guliano said he received word late Wednesday that the Ohio Department of Education had accepted Niles City Schools' financial recovery plan.
Submitted last week by local officials, the plan showed the state what cuts the schools were making and how officials planned to watch spending in an effort to reduce its debt.
But though the state agency decided not to place the schools in fiscal emergency status, they do remain in fiscal watch.
"As with the initial recovery plan, the updated plan leaves your district with an extremely tight budget for the next two years," wrote Paolo A. DeMaria, associate superintendent with the ODE.
"Further deliberations and actions are needed by your board of education in order for the district to fully recover financially."
The current five-year financial forecast shows the district will end the 2004 fiscal year with a zero balance and the 2005 fiscal year with a balance of $1,951. The document shows the schools will end the 2007 fiscal year with a negative balance of $300,939.
Widespread situation
Guliano said Niles schools are in a financial situation that's becoming more common throughout the state.
"The number of school districts being placed in fiscal watch is growing exponentially," he said.
Ohio schools are funded primarily through property tax, a method that's been deemed unconstitutional by the Ohio Supreme Court. That situation and funding cuts at the state level have put many public school districts in financial distress.
State legislators have made little effort to change the funding formula, forcing local districts to ask taxpayers to pass levies to make up the difference.
Guliano said state officials will continue to monitor Niles schools' fiscal situation, but for now will not appoint a supervision committee to oversee all financial matters.
"Our board is still in control," he said.
As part of its recovery plan, local school officials cited a tentative agreement with the 122 members of its nonteaching staff. The board was expected to meet this morning to approve the three-year pact.
Members of the Ohio Association of Public School Employees ratified the agreement last week.
The deal calls for wages freezes for the next two years, as well as an incentive bonus for employees eligible for retirement.
slshaulis@vindy.com