School district seeks federal bailout money

December 3, 2008 at 12:00a.m.

The Olmsted Falls schools chief said he feels ‘a moral obligation’ to apply for funds.

CLEVELAND (AP) — A financially ailing Ohio school district has joined the ranks of banks and automakers clamoring for a portion of the $700 billion economic bailout package.

Olmsted Falls Superintendent Todd Hoadley said Tuesday that if automakers and cities such as Philadelphia, Atlanta and Phoenix can ask for TARP money, schools should be able to follow suit.

“I feel a moral obligation to our taxpayers to make this attempt,” said Hoadley, who requested $100 million from the Treasury department last week. “This is a legitimate request. I’ll be frankly disappointed if something positive doesn’t come out of this.”

The district has buckled under rising enrollment and strained finances, with some schools forced to convert maintenance closets into classrooms. Two local ballot issues seeking additional school funding failed last month, and the district projects a deficit of $2.6 million at the end of the 2009-10 school year.

Treasury Secretary Henry Paulson has said the Troubled Asset Relief Program, known as TARP, was meant to stabilize financial institutions. The district submitted the request directly to him last week.

The request was also sent to the Federal Reserve Bank of Cleveland, which told Hoadley the same thing.

But Hoadley isn’t giving up — he’s also seeking help from U.S. Rep. Dennis Kucinich and U.S. Sen. Sherrod Brown in obtaining bailout dollars.

Several school associations were trying to determine whether other districts have sought TARP funding. Miami-Dade Schools chief Alberto Carvalho told The Miami Herald last week that Congress should consider bailing out the nation’s schools, but the district didn’t apply for funding.

Olmsted Falls’ total enrollment has swelled by 29 percent over the last decade to 3,800 pupils. The district would spend half of the $100 million in TARP money on building addition and renovation projects, and the other half would go toward operating expenses.

“We’re not looking at this from a bailout standpoint. We don’t want to be lumped in with failing corporations,” said Hoadley. He noted that Olmsted Falls has long been one of the state’s top-rated school districts.

Hoadley is encouraging others to make similar requests to the Treasury Department.

“Somebody has to be looking long-term,” Hoadley said. “The only way we’re going to dig ourselves out of this economic hole is investing in education.”

So far, the Treasury Department has committed about $270 billion in TARP money for banks and an additional $40 billion for the insurance company American International Group.

The Treasury Department and the Federal Reserve Bank of Cleveland did not respond to requests for comment.