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State Auditor declares Niles schools in fiscal emergency
By JORDAN COHEN
NILES
State Auditor Keith Faber declared Niles schools in fiscal emergency because of projected six- and seven-figure deficits the next five fiscal years.
The anticipated deficits exceed $500,000 in the current fiscal year, $1.1 million in 2020 and nearly $3 million in 2021.
“The school district failed to comply with [its] state-approved financial-recovery plan,” Faber said in a news release Tuesday. In December, the Ohio Department of Education recommended a fiscal emergency declaration for Niles schools.
“We knew it could come any day now,” Superintendent Ann Marie Thigpen told The Vindicator shortly after receiving notice of the declaration by certified mail.
Under state law, a fiscal-emergency declaration requires creation of a financial planning and supervision commission to oversee recovery and creation of a recovery plan. The state auditor will appoint fiscal supervisors who will review finances on a regular basis.
Thigpen said a recovery plan, submitted by the district after it was declared in fiscal watch by then-Auditor Dave Yost in June, had been approved by ODE.
“Some of the items we would have to negotiate with the unions, and we don’t begin negotiations until this spring,” Thigpen said. “We were allowed to put those [reductions] in the plan, but [ODE] could not recognize the savings for fiscal 2019.”
The savings referred to by Thigpen consist of “reductions in salaries ... and decreases in benefit costs and supply expenditures,” according to the five-year forecast. Salaries comprise 47 percent of projected expenditures, and employee benefits more than 24 percent in the current fiscal year, it states.
Thigpen said the district previously cut three administrative positions, seven teaching positions and increased employee costs for their health insurance to reduce expenditures.
Adding to financial woes, however, is a significant reduction in state funding due to declining enrollment. Treasurer Lori Hudzik said pupil population, now less than 2,300, has dropped by nearly 700 in less than two decades.
“Our budget really took a hit,” Hudzik said.
The district has a 5.6-mill renewal levy on the May primary ballot, which would generate $1.3 million annually. Voter approval, however, is anything but a given for the school district. Voters rejected operating levies in 2017 and 2018 and a substitute levy that would have combined them in November.
“If the levy doesn’t pass, it will only make the deficit much bigger,” the superintendent said.