School districts can't spend more money than they take in.

School districts can't spend more money than they take in.

That's the bottom line an Ohio Department of Education (ODE) school funding director told the Northridge Board of Education and residents at a meeting on Monday evening.

Barbara Mattel-Smith, associate director for the ODE office of school funding, said it's never fun to talk to a district when there isn't enough money to operate the way they've been operating.

The Northridge district was declared in fiscal caution on March 20 by the ODE based on the possibility the district would end the 2009 fiscal year in a deficit as well as the potential for deficits in future years.

"We've been working with Northridge for a year now," Smith said. "One thing to understand is that a district cannot be placed in Fiscal Caution to help pass a levy. We don't want this process used just to pass a levy

"A district gets into caution, watch and emergency due to the problem of a lack of revenue," she said.

Sometimes, Smith said, the community needs to see drastic decreases in expenditures before they will support a ballot issue.

An Ohio district that was in fiscal emergency needed four attempts to pass a ballot issue, she added.

Smith said the declaration of Fiscal Caution by the State Superintendent is an indication of serious financial distress in the district.

"You now have a label as a fiscal distress district," she said. "You need to eliminate the conditions that led to fiscal caution."

Districts placed in fiscal caution have 60 days to provide a written Recovery Plan, showing how the district will discontinue or correct the practices that led to Fiscal Caution.

"We're confident we'll get a plan we can accept," Smith said.

Northridge has a May 20 deadline to submit that plan.

If financial conditions would worsen in the district, the auditor of state would declare Northridge in Fiscal Watch or Emergency.

"Watch is seen as much more serious (than caution), according to Smith. "Guidelines are more flexible for Fiscal Caution than for watch or emergency."

The worst case scenario would be the label of Fiscal Emergency. At that point, a Financial Planning and Supervision Commission would be established to develop and implement a Financial Recovery Plan.

The district's budget would be up to the commission, which would also have the right to override decisions of the local board of education. The district would also have access to an advance from the state's Solvency Assistance Fund.

Board member Lee Hatfield questioned if the state had ever dissolved a district or combined it with another.

"We've never run into dissolving," Smith said. "We've never had to look at needing to consolidate. We work hard not to get there."

Guidelines concerning fiscal caution, watch and emergency can be found on the ODE web site at www.ode.state.oh.us>Finance>School District Financial Status>Fiscal Caution, Watch and Emergency.

Northridge treasurer Felicia Drummey said the district has operated "very lean."

"There has been no fat," she said. "Cuts next year are cutting into programs."

In other action Monday, the board approved:

A $945.36 donation from Countryside Auto for all parts and labor to replace front brake pads and rotors on a district truck, replace rear brake pads and rotors on district van and donation of two new tires for a maintenance van.

The addition of a Student Activity Fund used to account for those student activity programs which have student participation in the activity and have students involved in the management of the program.

A transfer of funds from the Primary Principal Fund to the Safety Town Activity Fund in the amount of $194.90.

The 2009 graduation list.

Many certified and classified personnel items were also approved, including the non-renewal of 47 supplemental contracts and five non-renewed extended contracts.

The board also recognized second grade teacher Linette Benson and special education teacher Carey Maierle with the Golden Viking Award.

The next regular meeting of the board will take place at 7 p.m. on May 18 in the high school media center.