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BOE Talks Finances

February 13, 2012

ST. MARYS — A local board of education held a work session Saturday morning to discuss the financial state of the St. Marys City School District and the possibility of cuts and a levy in the future.

Treasurer Tom Sommer gathered financial information for the board to review in beginning its budget talks. Sommer gathered information starting from 2004, when voters passed the emergency levy. He also included the forecast that was recently approved by board members.

“The forecast is a cumbersome document,” he said. “It goes all the way to 2016. I’m not sure that myself as a treasurer put much stock in the projection five years out because there’s too many unknowns. We don’t know where we’re going with state funding yet.”

The general fund balance, he noted, increased from 2005 to 2008 and has been decreasing since.

“The general fund balance started out in 2004 with $3.5 million and increased as that emergency levy went on and we were able to accumulate some funds, but now we’re at the point where expenditures are exceeding revenues and the general fund balance is declining,” he said.

Board members also reviewed documents tracking the number of employees, salary negotiations and insurance premium costs for the past several years. Sommer noted that the district has decreased by 21 employees over the past few years.

By 2014, Sommer said, the district will be operating with a negative balance, according to the forecast.

“Based on this forecast that was approved in November, we have a positive operating balance through June 30, 2013,” he said. “In 2014, it goes to a negative balance and that’s given everything on this forecast remains perfect and there aren’t significant changes. We will be in the hole in fiscal year 2014.”

Sommer said if the board opts to put an operating levy on the ballot and it passes, the district would not collect until January 2013. An income tax levy, he said, could take up to 18 months before the district would see most of the money.

“You don’t see the full realization of income taxes until after a full calendar year is done and people are starting to file their income taxes,” Sommer said.

Superintendent Jerry Skiver said the district is not the only one facing this kind of problem.

“In a survey, two out of three Ohio school districts are facing budget shortfalls,” he said. “There’s over 600 districts in the state of Ohio, so over 400 are going to be going to the ballot. I’ve never seen this – in all my years, I’ve never seen anything like this.”

He noted that the district will likely not get more funding and the expenditures are going to continue to rise if nothing is changed.

Board Member Brian Little said the board needs to talk about what to do about the deficit.

“We need to talk about if we need to make cuts and the possibility that we’re going to need a levy,” he said.

Board President Lisa Tobin said she thinks the board will have to make cuts.

“I think we’re definitely going to have to make cuts regardless,” she said. “How significant those cuts are and whether these are the cuts we need to make but if we pass a levy, we won’t need to cut certain things.”

Skiver encouraged board members to also keep the building’s climate in mind when considering staff cuts.

“If you have things like that happen, that definitely affects the climate within that building. That in itself would be like a dark could hanging over the district and nobody wants that. We’ve got people that are really working hard with our kids and I think we have to look at how we can get ourselves out of this hole. Cutting and cutting and cutting is not going to do it. You’re going to reach a point of diminishing return.”

Board members discussed options that may need to be cut, including staff, all day kindergarten and introducing a fee for athletics.

Business Manager Kurt Kuffner noted the board will need to get a list of things to cut together and discuss the options. Board members decided to schedule a meet with attorneys to discuss their options.
 

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