City school board asks state to forgive loans

By HAROLD GWIN

VINDICATOR EDUCATION WRITER

YOUNGSTOWN — The city school board wants the state to forgive all or part of the nearly $18 million the district still owes on the $25.4 million it borrowed to fight a budget deficit.

Four board members — Anthony Catale, Dominic Modarelli, Michael Murphy and Lock P. Beachum Sr. — sent a letter to Gov. Ted Strickland on Friday outlining Youngstown’s difficulties in dealing with what started out as a $15 million general fund deficit.

The district borrowed $15 million from the state through a solvency loan in fiscal 2007 and an additional $10,380,000 in fiscal 2008 to end those years in the black.

“We are asking that you consider some form of loan forgiveness,” the board members wrote to Strickland, pointing out they believe there was some precedent for that in what they said was forgiveness of state solvency loans for the Cleveland city schools in the 1990s.

Total forgiveness of Youngstown’s remaining debt would mean the district doesn’t have to go back to the taxpayers seeking approval of a 9.5-mill emergency tax levy to help curb the deficit.

Even getting half of the remaining debt forgiven would reduce the levy need to about 5 mills, the letter said.

The letter was signed by only the four members of the seven-member board, but the other three — President Shelley Murray, Jacqueline Taylor and Richard Atkinson — said they weren’t informed of the other board members’ plans to write to the governor.

They took the four letter writers to task for not including them and failing to make the letter a unanimous show of support from the board.

Catale, who came up with the letter idea, said there was no intent to leave anyone out. He said he spoke with Modarelli, Beachum and Murphy in separate casual conversations last week, and they thought the letter would be a good idea, agreeing to sign it.

Catale brought a copy of the letter to Tuesday’s school board meeting to inform the other three members of what had transpired, and a second letter to be sent to all local legislators asking them to support the first letter’s request.

Catale and Modarelli said they wanted everyone to sign the second letter.

Taylor and Atkinson declined, although they said they support the idea behind the effort to get the loans forgiven.

Atkinson said he would sign if he had an opportunity to have some input into its contents, but Catale said the plan was to mail the letter today.

Murray at first said she was undecided but later agreed to sign the letter to the legislators.

She said it was improper of the four letter writers to send the letter to the governor without consulting the three remaining members.

“We just wanted to show the community we are proactive,” Modarelli said, pointing out the district is under a time constraint to get the levy issue on the November ballot.

Everything must be in order by Aug. 21 for the district to seek a ballot slot, he said.

In a related matter, the board voted 4-3 to table a resolution of need showing that a tax levy of 9.5 mills is required.

The four letter writers voted to delay the action while the other three members felt the resolution should move forward so the district can be prepared to go with a November levy should the state not forgive the loans.

The board has to approve that resolution and a second one that would actually direct that the levy be placed on the fall ballot.

gwin@vindy.com