In fiscal year 2010, the South-Western City Schools District will end with a cash balance of about $12.5 million. With decreased state funding and no new tax dollars, the district would see a $5.6 million deficit in 2011. In 2012, that number climbs to $33.5 million.
Treasurer Hugh Garside provided the figures to the board of education at the Oct. 26 meeting, while discussing the five-year forecast. Garside explained the Ohio Revised Code requires the forecast and it takes a hypothetical look at district finances.
“In 2011, our cash balance dips into negative numbers,” said Garside. “That is a pretty scary place to be.”
South-Western receives roughly $90 million each year from the state of Ohio. That funding amount is expected to decrease by 1 percent in 2010 and by 2 percent in 2011.
Garside reported real estate revenues have fallen flat. The district has 57.65 voted mills, but it collects 27.6-mills.
On Nov. 3, citizens will vote on a permanent 7.4-mill tax levy that would generate $18.5 million annually for the district. It would cost the owner of a $100,000 home about $227 a year or $18 per month. If approved, it would bring back high school transportation and the board would implement a pay-to-participate system for sports and extracurricular activities. The buildings would open in the evenings for activities.
If the issue fails, the budget reductions applied in May will remain in place and $8 million more in cuts would be made over the next two years.
Garside explained that about 81 percent of total expenditures are put towards salaries and benefits.
“That is a common figure on salaries and benefits,” said Garside.
He explained that in 2010, the district would spend approximately $114 million on salaries, but that is a $2.4 million decrease since 2006. Due to the defeat of the levies in May and August, 66 positions have been cut this school year. In the past three years, the district has eliminated about 300 positions.
The forecast model shows expenditures on salaries increasing over the next five years due to step increases, which are based on national educational trends. Some employees receive step increases each year as the state requires. However, there is no set amount for the increase. The base salary freeze for fiscal year 2009/10, agreed upon by all employee groups, has been factored into the forecast. The model shows a 2 percent pay increase after the year 2010.
According to Garside, the district would save about $2.5 million over the next four years as they make changes in health insurance co-pays and deductibles.
If the district cannot get additional dollars through the passage of the levy, the board would make about $3 million in immediate budget reductions, including further cuts in transportation and about 85 jobs lost.
In addition, the district would offer fewer electives and would eliminate two programs (Metro School and the Mosaic Program).
If voters approve the levy, the board and administration have promised to make the money last and keep expenditures low.
“We know it cannot be business as usual,” said Superintendent Bill Wise.
This is the district’s fourth levy attempt in a year.