By LINDA M. LINONIS
Liberty schools are in fiscal emergency for failing to come up with a plan that satisfies the state auditor’s office to eliminate a $2.5 million deficit projected for fiscal year 2012.
The district had been placed in fiscal watch on May 26 by state Auditor Dave Yost.
A financial planning and supervision committee will be created to assume all or part of the powers of the board of education. The commission must devise a plan to address the district’s financial crisis.
Diana DeVito, school board president, said the board has taken multiple measures to reduce costs, but these haven’t been enough to stave off a financial crisis.
The situation also is complicated because the district is undergoing an audit to straighten out its records.
DeVito, in her fourth year on the board, said the district has made more than $1 million in cuts. “We’ve cut what we could,” she said. “Cuts alone won’t result in financial stability.”
DeVito said the board will have to look at “much deeper cuts into instructional services.”
Yost’s office deemed that the board “failed to submit an acceptable recovery plan to the superintendent of education,” though it did make certain changes. The auditor’s office also wants the district to have plans for new revenue.
But DeVito said that two school levies on the ballot in the last few years have failed. “The tough economic times didn’t help,” she said.
The district has changed hospitalization to a self-funded program. That alone, she said, was a projected savings of some $400,000. The board also eliminated the 10 percent contribution toward the superintendent’s pension.
DeVito also pointed out Superintendent Stan Watson’s salary is in the $70,000 range, considerably less than other superintendent in Trumbull County. She said Watson and two other administrators are retirees who were rehired at lower salaries.
DeVito cited Ohio’s inadequate funding formula for schools as contributing to the problem. “Consider all strains that Ohio has put on schools, the fact that schools depend on tax revenue and recent levies have failed — and the fact that Education Choice takes money away from public schools.”
Watson, who noted that the district has an excellent academic rating, said it will be a challenge to maintain that ranking if cuts start to affect instruction. He noted that the state mandates certain programs, such as special education, but there is no accompanying funding.
Yost’s office said the Ohio Department of Education placed the district in fiscal caution on Jan. 18, 2010, based on potential deficits in fiscal years 2010 and 2011. The district’s five-year forecast, filed with the Department of Education on Oct. 28, 2010, projected deficits of $293,000 for fiscal year 2011 and $2,565,000 for fiscawl year 2012.
The auditor’s office determined that the district’s financial records were unauditable on Feb. 7 and the district was later placed in fiscal watch. The school board passed a resolution June 14 requesting the state place the district in fiscal emergency. The board meets on July 25.
DeVito said three teams of auditors are studying the district’s financial records and noted there is no sign of criminal activity.
Tracey Obermiyer, the district’s treasurer, resigned April 29; James Wilson is the interim treasurer. He estimated the 2010-11 budget at between $16 million to $18 million.