Funding the future: How MCS found its way into — and out of — fiscal oversight

Today continues a five-part series called “Funding the Future,” which examines the financial picture of the Mansfield City Schools.

Here is how the series will unfold. Stories will publish each day at 10 a.m.:

Monday: An overview with the recent financial history in the district
Tuesday: How MCS found its way into — and out of — fiscal oversight
Wednesday: MCS enrollment declines, deficit-spending continues
Thursday: Five things you may not know about MCS finances
Friday: How can you get involved in the effort?

MANSFIELD — Mansfield City Schools leaders decided to try something different after a “new money” levy failed at the ballot box in May 2007.

They put the levy back on the ballot that November. Then they raised the stakes.

The school board and then-Superintendent Lloyd Martin signed a contract with the community committing to certain academic and financial actions. All voters had to do was pass the levy.

In that contract, the district pledged not to seek new operating funds until the district hit certain academic benchmarks, capped operating expenses at 5 percent annual growth and subjected itself to additional community oversight.

Voters approved the levy.

That’s how Mark Brunn, an Embarq employee and local dad, found himself on a committee, poring over Mansfield City School’s finances.

Brunn had long been an involved community member. In the late 1990s, he and his wife spearheaded a community study to determine where to build the district’s new high school.

“Our kids all went to Mansfield City Schools and we were very active. My wife was volunteering at Woodland School pretty much every day and active in their sports,” Brunn said.

“The community was saying, ‘Are you really doing well with our funds?’ So the levy coordinators said, ‘We’ll create this committee, staff it with people from the community who can kind of do a fact check on how we’re spending our money.'”

The Financial Accountability Committee consisted of community members and financial experts with no history of employment at Mansfield City Schools.

The group’s nine members were appointed by different parties — three by the district superintendent, two by the mayor of Mansfield, two by the chamber of commerce and two by the president of the Mansfield School Employees Association.

The FAC had no legal or official authority. But members met with school officials on a regular basis and issued annual reports to the public, which weren’t subject to edits by school officials.

Brunn chaired the FAC for years. As he recalls, the group had a respectful working relationship with Mansfield City Schools administrators. But they also weren’t afraid to challenge them — particularly on administrative costs.

“We saw some significant changes in the operations of the school district and reining in administrative costs and reducing the personnel count in those areas,” Brunn said.

“Certainly these were all people that (Martin) probably felt were needed, but it was costing the school a lot more for administration. And we wanted to focus on, ‘What are we doing in the classroom?'”

Declining enrollment, administrative scandals plagued the district in the 2010s

A little over a year before the formation of the FAC, the Ohio Department of Education declared Mansfield City Schools to be in fiscal distress.

The state’s oversight started with a fiscal caution designation in August 2006. The district moved to fiscal watch four months later.

In the decade that followed, Mansfield City Schools went through multiple rounds of staff cuts and building closures.

The biggest came in 2007, after the school board voted to close Ranchwood Elementary, Carpenter Elementary and Simpson Middle School.

Mansfield City Schools also experienced several high-profile administrative scandals that hurt its public image.

Former Supt. Scott Gordon, who retired at the end of the 2005-2006 school year, made headlines for purchasing alcohol on his school district credit card and starting a for-profit education consulting firm while working at Mansfield City Schools.

Local media reports revealed Martin, superintendent from 2007 to 2009, used his school computer to apply for jobs outside the district.

The district settled lawsuits with former administrators like Ruth Kotler and Al Warner, who received payouts of $200,00 and $33,841, respectively.

Enrollment issues further strained the district and its finances. At the turn of the century, more than 6,300 students were enrolled at Mansfield City Schools.

Ohio legislators created the EdChoice scholarship program in 2005. The program allowed students from certain “underperforming” schools to attend non-public schools using state-funded vouchers. Those funds were then transferred out of their public schools district.

By 2009, that number had dropped by nearly 38 percent to 3,910 — which meant less funding from the state.

Legislators expanded the EdChoice program, first in 2013 and again in 2023, essentially allowing all Ohio students to enroll in non-public and charter schools and take their share of state funding with them.

Nevertheless, the district did manage to improve its financial situation and eliminate its operating deficit.

In June 2012, a fiscal consultant with the Ohio Department of Education wrote to the state auditor’s office recommending the district be removed from fiscal watch.

A few months later, Brunn and his fellow committee members issued their fourth annual report, lauding the district for being “fiscally and academically responsible.”

Then, residents threw the school district a financial curveball.

‘It was a huge shock’

On Nov. 6, 2012, residents of the Mansfield City School District voted down a $4 million operating levy. It was a renewal levy — which meant it wouldn’t have raised taxes.

“We were shocked the levy didn’t pass last November,” board President Chris Elswick told Richland Source the following year. “We are not sure why it failed because we are making progress both academically and financially.”

The district managed to pass a new operating levy in November 2013, but it wasn’t enough to stave off fiscal emergency.

On Nov. 22, 2013, the Mansfield City School board members passed a resolution stating they were unable to develop an acceptable fiscal watch recovery plan due to “contractual obligations and recent shortfalls in tax collections.”

The board “reluctantly” requested state intervention, according to an article on the district’s website. At the time, the district was facing an operating deficit of $4.5 million by the end of the fiscal year.

A five-member Financial Planning and Supervision Commission was appointed to govern the district’s financial affairs.

Brunn was part of that commission, too. It had to approve nearly every decision made by the board of education, though Brunn said the group was less involved than the FAC he’d been part of years earlier.

The state commission was essentially an extra layer of oversight, double-checking decisions made by the school board to ensure they were financially feasible.

That commission also helped develop a plan to get Mansfield City Schools back on track financially. That plan included reducing the district’s staff by 148 employees and closing Newman Elementary, according to a report by then-auditor of state Dave Yost.

After implementing that plan, Mansfield City Schools was released from fiscal emergency in December 2016. Former Treasurer Robert Kuehnle said district finances would remain solid for the foreseeable future, as long as two upcoming levy renewals both passed. (They did.)

Then-state auditor Dave Yost, now the state’s attorney general, attended a Mansfield City School board meeting to congratulate the district.

He also issued a word of advice, urging the board to pay attention to the treasurer’s financial reports and five-year financial forecasts.

“This forecast is your early-warning system,” Yost said. “Watch these numbers as you go. Continue to show the discipline and courage that you have the last three years.”

(Coming Wednesday: Deficit spending hounds Mansfield City Schools.)