Solvency loan set for city schools

Treasurer hopes district can avoid using the $3.7M

STAFF REPORT

COLUMBUS — The state Controlling Board released nearly $3.7 million in the form of a solvency loan Monday to help the Youngstown City School District cover costs during the current fiscal year.

The funds will come from the Ohio Department of Education, through the state’s School District Solvency Assistance Fund.

But William Johnson, city school district treasurer, said Youngstown hopes it won’t have to take any of the state’s money.

“We’re trying not to. We’re within a couple hundred thousand dollars of making it,” he said, referring to efforts to balance the 2008-09 budget by June 30.

The district has been operating under a state fiscal emergency declaration since November 2006, and the latest advance would be paid back to the state over the next two fiscal years.

A forecast certified by the state auditor’s office late last year projected an operating deficit of nearly $9 million for Youngstown in fiscal 2009.

The actual year-end deficit is expected to be substantially lower, Johnson said.

Youngstown already has borrowed $5.2 million from its own school building bond fund to help cover the red ink and needs only to find between $200,000 and $400,000 more to balance the budget, he said.

That might be achieved by delaying the payment of some bills until the next fiscal year beginning July 1, he said.

If the district needs more, it is looking at borrowing from its own self-insurance and food-service funds to provide that additional funding, rather than accept another state solvency loan, Johnson said.

The $3.7 million would be the third advance the state has provided the Youngstown district, Greg Dennis, legislative liaison for the Ohio Department of Education, told Controlling Board members.

Others were provided in 2007 (for about $15 million) and 2008 (for about $10 million). The state has been fully reimbursed for the former and repaid for about half of the latter, Dennis said.

He added that he expected the latest request to be the last one, with district cost cutting and a new four-year, 9.5-mill tax levy that will produce about $5.3 million in additional revenue levy providing adequate funding to remain solvent.

“Their five-year forecast right now looks pretty good,” he said.

In other business, the state Controlling Board released more than $1 million for renovations at Kent State University’s Trumbull County campus and nearly $34,000 for projects at the Northeastern Ohio Universities Colleges of Medicine and Pharmacy in Rootstown.

The Kent funds will go toward improvements at the main building in Champion, which houses administrative and faculty offices, classrooms, a lecture hall and science labs.

The project covers about 34,000 square feet and includes asbestos removal and upgrades to cabinets, work surfaces and mechanical, electrical and data systems.

The NEOUCOM money includes $21,000 to design improvements to a storm-sewer system to alleviate flooding in three academic buildings during heavy rainfalls and $12,625 for evaluation of buildings for additional repairs.