Windsor School District fell into negative financial status Tuesday and was assigned a fiscal minder after the Sonoma County Office of Education rejected key elements in the district's most current financial report.

Negative status means Sonoma County's fourth-largest school district will not meet its financial obligations for the current fiscal year or the subsequent year. A fiscal adviser, hired by the county office of education and who now has veto power over the district's spending decisions, has been hired to help Windsor School District navigate chronic deficit spending that currently has the district spending $44.5 million while only bringing in $42 million.

The district must submit a third interim financial report no later than June 1 or be considered a "lack of going concern" and likely require a state loan, according to Denise Calvert, deputy superintendent of business services for the Sonoma County Office of Education. Calvert praised Windsor's educational programs at Tuesday's school board meeting, but added "unfortunately those programs are not necessarily affordable at this time."

Trustee George Valenzuela called it a "crisis situation."

"We have to make sure that we don't sink this district with whatever decision we make," he said. "It's not something we can fail at."

Windsor issued preliminary layoff notices for 47 full-time teaching positions in March but has so far failed to come to an agreement with the 250-member teachers union to negotiate the impact of those cuts on the remaining teachers. That lack of a deal means county financial managers do not count those potential salary and benefits savings in the district's financial proposal.

In addition, county officials were critical of the district's accounting, saying that the budget savings won by those job cuts "appears overstated" because instead of using an average salary within the district's schedule, the budget assumed all 23.2 positions cut would have earned the top salary of more than $70,000.

Superintendent Tammy Gabel has maintained that while notices have been sent for 47 positions because of seniority and credentialing requirements, the district expects the final number of layoffs to be 23 full-time positions.

The district could still rise from negative to qualified status, Calvert told trustees, so long as layoffs are finalized by the May 15 state deadline, salary savings are re-calculated and a new agreement covering class sizes and other changes is negotiated with labor groups.

"Over 90 percent of our budget is in salary and benefits, so the only area where we can have substantial mitigation is in the area of salary and benefits," Gabel said.

Board member Oscar Chavez expressed frustration that no deal has been inked between the district and its labor groups, despite the district's increasingly dismal financial picture.

"We have an inability to sit down and make decisions and that concerns me," he said. "We are going to lose students to other districts."

But teachers union president Jeff Reed said members are increasingly frustrated by the changing budget numbers coming from the district office that have seen the budget shortfall balloon to more than $2 million.

The problem "is that funny numbers have been thrown around for so long that they don't trust those numbers," he said.

Still, Reed expressed hope that a deal could be reached by the June 1 deadline.

"I think our members would be willing to vote for a contract before the third interim is due," he said.

Staff Writer Kerry Benefield writes an education blog at extracredit.blogs.pressdemocrat.com. She can be reached at 526-8671, kerry.benefield@pressdemocrat.com or on Twitter @benefield.