Schools Could Be Headed to 'Fiscal Watch'

Strongsville school Treasurer Bill Parkinson said he fears the Strongville School District has taken a step toward being placed under "fiscal watch" by the state.

Parkinson said during a School Board work session April 7  the state auditor's office canceled the district's plans to seek bids for an independent audit and instead will handle the audit itself.

"That tells me one thing," he said. "It potentially puts us on the path of fiscal watch."

Parkinson was out of town on vacation but attended part of the April 7 school board work session via Skype.

The state auditor declares fiscal watch if a school district "meets financial conditions that threaten its solvency," the auditor's website says.

Those conditions? They include a projected operating deficit for the current fiscal year more than 8 percent of the district's general fund revenue for the preceding fiscal year, with no tax levy in place to eliminate the deficit.

School Board President Jennifer Sinisgalli said the projected $8 million deficit in 2012 represents 11 percent of the 2010 general fund.

If the deficit reaches 15 percent, the state can declare fiscal emergency, which cuts programs to state minimums and takes operation of the district out of local hands.

"A fiscal emergency is the last and most severe stage of a school district's financial solvency problems," the auditor's website says. "Following a declaration by the Auditor of State, a commission is created that may assume all or part of the powers of the board of education. The commission develops a financial plan to alleviate the school district's financial crisis."

School officials said the deficit will grow to more than 15 percent the following year if a levy is not approved.

A 9.9-mill levy on the May 3 ballot would generate $14.2 millin a year and cost a homeowner $303 a year for every $100,000 in home valuation.

The last levy approved by Strongsville voters was a 6.5-mill issue in November 2007.

At last week's meeting, Sinisgalli made an impassioned statement to voters, saying school officials "completely understand families are strapped for funds," but that "we have no choice but to ask for money."

She said he comments were  "not threats" but a request for suggestions and a dialogue with the community.