Huron City School District fell into Ohio's fiscal emergency designation this week with a projected deficit of more than $1.6 million by the end of June, 2005.
The district, which overestimated revenue and underestimated expenditures in 2002 when it signed a teachers' contract granting 4 percent raises each year for three years, will ask for two levies on the Aug. 3 ballot. A new 6.9-mill, five-year levy would raise $2.1 million a year and renewal of its 1.35-mill, five-year levy would keep generating $400,000 a year.
Both levies would be for operating expenses in the district of 1,600 students; the requests were unanimously approved by the school board last week. Voters denied the same new operating levy request by 250 votes in March and a smaller levy by 70 votes in November.
The Erie County district is the only northwest Ohio school district on the list of nine districts in fiscal emergency; the other eight are in eastern Ohio.
Huron's fiscal emergency, the most severe stage of financial solvency for Ohio school districts, was declared by Ohio Auditor Betty Montgomery on Thursday.
The declaration of fiscal emergency triggers the appointment of a five-member commission to oversee district finances, instead of the school board, and allows the district to borrow money from the state.
The district's problems, according to Superintendent Fred Fox, go back to 2002. Then-Treasurer Don Breon, who has since moved to another area district, allegedly did not understand the relationship between local tax income and state aid and overestimated both, Superintendent Fox said.
Mr. Breon predicted the district would end June, 2005, with $600,000 and the district gave teachers a contract that Superintendent Fox said was similar to neighboring districts.
The contract's last 4 percent raise, which goes into effect Aug. 1, will cost the district an extra $360,000 a year. It will take the highest-paid teachers' salaries to $66,100 for 187 days of work, or $354 a day. The district employs eight to 10 teachers at that rate who have at least 25 years' experience and education above a master's degree.
Meanwhile, the administrators took a pay freeze last year, the support staff agreed to a pay freeze for next school year, and the district is making cuts. It cut $1 million from what would have been a $12 million budget for this school year by slashing 24 jobs.
The district now employs two guidance counselors instead of four and one librarian instead of two and no longer has an assistant high school principal, curriculum director, or technology director.
It may eliminate home economics, industrial arts, and at least one of its three foreign languages; it now teaches Latin, French, and Spanish, Superintendent Fox said.
District leaders said they hope to keep elementary classes at an average of 22 pupils.
The 6.9-mill levy would cost the owner of a $100,000 home $211 more a year. If that levy and the 1.35-mill renewal would be approved, the total annual tax bill on such a home in the city of Huron would increase to $1,413. The school district would get almost 70 percent of that.
If the new levy passes, it would give Huron City one of the higher tax rates in Erie County. The city has had one of the lower rates in the county, where total annual taxes on a $100,000 house range from $947 on Kelleys Island to $1,583 in the village of Castalia.
Some voters, whose properties increased in value in last year's reassessment, are likely to see the district's requested levies as a double blow.
The Erie County auditor's office increased the average home value in the school district by 14 percent last year.
Rising prices for milk and gasoline and the lack of recent raises for some taxpayers might also be a hurdle in the district's attempt to convince voters to support the August levies, Superintendent Fox said. The district plans a quiet campaign.
But he added, "I'm hoping people see that the kids of this district are their future."
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