The district has to come up with a financial recovery plan by May 2.

The district has to come up with a financial recovery plan by May 2.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- A state fiscal oversight committee was in Youngstown this week examining the city school district's finances.
The Ohio Department of Education put Youngstown city schools under fiscal caution last month based on the district's own prediction of a $4 million deficit this fiscal year, which ends June 30.
The district has until May 2 to present the state with a plan of financial recovery, but, in the meantime, the state sent a team into Youngstown to look at the district's financial picture and come up with some recommendations for spending cuts.
District Treasurer Carolyn Funk told the board of education Thursday that those recommendations could be forthcoming as early as next week.
She said the oversight committee agreed with her financial estimates and projections for this fiscal year.
Funk also presented the board with a written explanation of how the district, which was expecting a year-end balance of $2.7 million, is ending up with a projected $4 million deficit.
That $2.7 million projection was made in October based on state enrollment numbers and simulations for 2005-06, she said.
What changed
However, a number of things occurred to turn the financial picture around.
The district learned from its insurance consultant in November that it needed to set aside an additional $2.6 million this year to pay for its employee health insurance to keep that fund solvent.
That cut the anticipated year-end balance to just $836,000, Funk said. The district hadn't increased the funding level for the fund last year, she noted.
Youngstown learned it would be facing a deficit when the state subsidy estimates for the year were revised in January, halfway through the school year, Funk said.
The state said 380 children had moved completely out of the district and Youngstown's subsidy payment, which is based on enrollment, would be $6.7 million less than the state had projected in October.
There was no way to anticipate that pupil loss, Funk said, pointing out there had been no trends showing that was happening.
The recent opening of a federally subsidized housing facility in Boardman may have been a factor, she said, suggesting that some families may have moved there.
Also, in January, the district got its final real estate property valuation and personal property tax information and learned that revenue wouldn't be as high as expected this the year.
Total estimated revenues dropped from $110.5 million to $107.7 million, Funk said.
The district has been able to cut some spending but still is facing a $4 million deficit as of June 30, Funk said, noting that the state oversight committee agrees with that number.
Just where the district goes from here will be a subject for the board finance committee to address, she said.
Next year's situation
The district's financial picture isn't looking any better for the next school year. Funk has already projected an $11.7 million deficit, and the district is looking at ways to cut spending.
There is a plan developed to save $8.5 million by eliminating about 100 jobs.
A five-year tax levy is also a possibility, school officials have said, and, although final numbers haven't been prepared yet, Funk said it could be a double-digit levy.
Dr. Wendy Webb, superintendent, said any tax levy would be temporary to see the district through this rough period.
Youngstown hasn't had a tax increase to finance operations in 19 years, she said.
District finances should improve when Youngstown's $202 million building program is completed in four years, she said.
The district is closing some old buildings, and new and remodeled buildings will be cheaper to operate and require less personnel, school officials have said.
Webb said she is forming speaking committees to go out and meet with the public to explain the district's programs and finances.
gwin@vindy.com