School board to seek 16.4M loan

The state's deficit certification is considerably higher than the district's estimate.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- The Youngstown Board of Education will ask the state for a 16.4 million loan to offset a budget deficit for this year.
That's the amount of red ink the district will experience as of June 30, according to the Ohio Auditor of State.
It's considerably higher than the district's own earlier estimate of a 12 million deficit in a 114 million general fund budget.
Carolyn Funk, district treasurer, said the state auditors counted some items she didn't in figuring the budget shortfall. That includes 1.6 million in "carryover encumbrances," an estimate of outstanding purchases as of June 30.
Funk said it is her opinion that those expenses are already found in the expenditure side of the budget, but the state has put a 1.6 million additional cost to its estimate.
The state also added 1.2 million to the red ink in the form of rising fringe benefit costs, she said, noting that she had figured that amount would be covered by employee contributions on insurance premiums, but those payments didn't materialize this fiscal year.
The state included another 585,000 needed to cover revenue that should have been diverted from the general fund in the past to cover debt service but wasn't, Funk said. Further, the state included money to be advanced to cover federally funded programs that would be in deficit at the end of this year. Funk said that is really just a paper transaction as next year's federal funds will be available July 1 to cover any program shortfall.
What's behind this
The state put Youngstown under fiscal emergency last year when the district was projecting a budget deficit, and a state-appointed fiscal oversight commission has been controlling district spending over the past several months.
The board of education has scheduled a special meeting for 11 a.m. today to accept the state's audit number and apply for a 16.4 million solvency loan from the state Solvency Assistance Fund.
It will be an interest-free loan that Youngstown will have to repay within a two-year period.
The oversight commission, formally known as the Financial Planning and Supervision Commission for the Youngstown City School District, will meet in the district's central administration building at the same hour to accept the state auditor's certification of the deficit and also request approval of the solvency loan for the district.
gwin@vindy.com