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State declares Niles schools in fiscal caution
By Jordan Cohen
NILES
Less than 16 months after successfully ending state-mandated fiscal watch, Niles City Schools’ finances have once again come under the scrutiny of the Ohio Department of Education.
A projected six-figure deficit has led the department to declare the school district in fiscal caution.
“At the present time, we [forecast] a $320,000 deficit by the end of the current fiscal year,” Superintendent Ann Marie Thigpen told The Vindicator on Monday.
“Fiscal caution requires us to submit a five-year forecast [free] of deficits.”
According to the ODE website, fiscal caution can be declared “if it is determined through the five-year forecast that conditions exist that could result in fiscal watch or fiscal emergency.”
Thigpen cited cuts in federal and state funding along with decreasing district enrollment as contributing to the latest financial difficulties. She said current enrollment numbers are 2,250, approximately 150 fewer students than in the previous school year.
The superintendent said the district is still in control of its spending under fiscal caution. Fiscal watch, however, is more serious, and Niles schools are all too familiar with it.
The district was placed under fiscal watch in 2003 and remained there for 13 years until June 2016 when state Auditor Dave Yost personally presented a Certificate of Fiscal Integrity to the school board and administration.
The latest state declaration comes in the midst of an intense campaign by the district and the Niles Levy Committee to build support for a 9.25-mill emergency operating levy on the Nov. 7 ballot. If approved, the 10-year levy would generate $2 million annually.
“If the levy is defeated, we would be $2.3 million in the red,” the superintendent said. The last time voters approved a school district operating levy was 2005.
“That was 12 years ago when our senior class was in kindergarten,” states a flier in support of the millage increase.
Should voters reject the increase, the state could return the district to fiscal watch “or worse,” according to Linda Molinaro, district treasurer.
The worst-case scenario would be a declaration of fiscal emergency, in which the state controls budgets and spending until the district produces a deficit-free, five-year plan. In the city of Niles, in fiscal emergency since October 2014, state-appointed fiscal supervisors and a commission review all expenditures.
Thigpen said the district has been proactively cutting spending. She cited the elimination of two administrative positions, successful negotiations requiring larger co-pays by employees for their health care insurance, and the elimination of busing for nonpublic and charter schools.
According to the ODE website, districts have 60 days to produce a written proposal. “A district in fiscal caution cannot be released in the same fiscal year in which the declaration was made,” it states.