Opposing sides debate how to solve Monroe fiscal emergency

Both sides agree the Monroe School District has to deal with its financial issues. Why the problem exists and how it should be fixed appears to be where the two sides part.

Placed in “fiscal emergency” by the state auditor’s office in May, and facing a $2.2 million operating deficit and a bond retirement debt of $3.1 million, Monroe schools will ask voters to approve a five year, 7.05-mill emergency property tax levy during the the Aug. 7 special election. The levy will raise $2.5 million a year for the district.

The district is one of only 613 school districts in Ohio to be designated “fiscal emergency” by the state. According to board members, the financial problems were caused when bond retirement debt funds were moved by the school’s former treasurer without school board approval.

School Superintendent Elizabeth Lolli says the district has made all the cuts it can make.

“(If the levy fails), the district will have to continue to borrow from the state for its finances,” she said. “Without the levy being passed, we’re still going to be short on our revenue, even though we made $2.2 million in cuts. The borrowing will continue, and if it doesn’t pass this time, we’ll have to go up with even more of a millage rate the next time, because of debt increases.”

Lolli said the district is “very close” to minimum standards. The number of school administrators has been cut from 14 down to seven. She said there might be two or three teaching positions to cut, “but there’s no more to cut here. The cuts would have to come from other places, and the only other option when we’re operating at minimum would be for us to borrow more money.”

A state-appointed commission has been put together in order to create a recovery plan, but it has until Sept. 27 to do so.

Board president Brett Guido said the issue was put on the ballot before the state commission could make its recommendations in order to potentially bring in money to the district sooner.

“We needed to be proactive,” Guido said. “The deadline for the August election was in May before the commission was formed. (Waiting) would mean the possibility of not receiving the additional tax funds until fiscal year 2014.

“Since we knew additional funds were what it would take to recover and continue operations, we decided to act before the May deadline.”

If approved by the voters, the levy would cost the owner of a $100,000 home roughly $246 per year for the next five years.

Mike Irwin, a Monroe schools board member from January 2006 through December 2009, thinks the district needs to prove it is fiscally responsible before asking taxpayers for help.

“The main reason I’m against this, at this time, is because, it seems to me that all the board wants to do is do business as usual and avoid overseeing how the money is being spent. They don’t want the state to take over, I can understand that. But that wouldn’t be a problem if we hadn’t misled the public all these years as to what has been going on. There hasn’t been any fiscal responsibility. I believe that they haven’t approached this in a manner that would solve this problem,” Irwin said.

Irwin said the district needs to deal with its physical debt first, then figure out a way to pay that off over a sufficient length of time. Once those costs are brought under control, and if further money is needed for day-to-day operations, it is then that the district should seek tax payer help.

Guido said the board’s decisions were based on audits and financial reports that did not indicate a deficit of any kind.

“Over 80 percent of our spending is on salaries and benefits. … We hired and paid staff based on the information that was given,” Guido said. “It is likely that people asking these questions would have also made similar decisions with the information (that had been) presented to the board.”

In June, the state auditor’s office found 14 accounting errors in the latest Monroe School District annual report. The district has filed suit against then-treasurer Kelley Thorpe, the accounting firm Clark, Schaefer, Hackett & Co., and Ohio Casualty Insurance company that represents Thorpe’s work as a treasurer.

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