Status to be downgraded to 'fiscal watch'

The education department found the district's recovery plan unacceptable.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- The city school district's financial status will be downgraded from "fiscal caution" to "fiscal watch" within the next several days.
A spokeswoman for the Ohio Auditor of State said Monday the actual date hadn't been finalized, but the Ohio Auditor of State will impose the downgrade after the receipt of a request from the Ohio Department of Education a week ago.
Youngstown was placed in "fiscal caution" by the Department of Education in March after school officials announced they are facing a $4 million deficit this year and an even larger deficit next year.
Getting put into fiscal caution required the district to come up with a financial recovery plan for submission to the education department.
The department, in a letter to the state auditor, said the district's plan was not acceptable and recommended that Youngstown be placed in "fiscal watch," just one step above "fiscal emergency," a designation that must be made by the auditor's office.
Requirements
Fiscal watch requires the district submit a version of a new acceptable recovery plan within 60 days.
In fiscal emergency, a five-member Financial Planning and Supervision Commission would be appointed to take over some or all of the local board of education powers to devise a plan to revamp the district's finances and eliminate the deficit.
The Rev. Michael Write, school board president, said the district is aware of the education department's request.
The district is working on a response, he said, adding that he didn't know yet if there was some oversight in the district's recovery plan that can be corrected or if a new plan will have to be written.
Education department officials were unavailable to comment on the department's request to lower Youngstown's financial rating.
M. Mike McNair, school district spokesman, said it is his understanding that, if the recovery plan doesn't take the district all the way out of deficit spending, it is considered unacceptable.
Youngstown's plan proposed $8.5 million in cuts that include the elimination of nearly 100 jobs, but it still showed an $11.9 million projected deficit at the end of the 2006-07 fiscal year.
School officials have said they are considering asking voters to approve a 12-mill, five-year emergency levy and a 2.5-mill permanent improvement levy in the November election. The two taxes would produce about $7.25 million in new revenue for the district.
Youngstown would still have to borrow money from the state to cover the rest of the budget shortfall next year, school officials have said.
gwin@vindy.com