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Five year budget forecast approved by BOE amidst state uncertainty

The Bay Village Board of Education approved an updated five-year forecast with several question marks as to how district finances could change in the next few years at its April 25 meeting.

One problem with predicting a budget for the next five years? Not knowing what will happen after a state budget is approved in Columbus, and how that budget will affect school districts.

Board member Mike Caputo, who handles political contacts for McDonald-Hopkins, said Bay Village may see a change in state aid based on the current state budget proposal, and questioned whether the board should let that process play itself out before submitting a five-year forecast.

“It’s curious to me how, when we’re in such a state of flux in terms of what we’re going to be receiving out of Columbus, that we’re going to be able to forecast when not even they know (what’s going to happen),” he said.

Treasurer Deborah Putnam said she can submit a five-year forecast as many times as she wants, but she is required to submit one in October and one by the end of May.

“If the numbers would change and we want to look at it again and address it, I could send another one in at the beginning or end of June,” she said.

Board President Amy Huntley said when the board passed a 6.9-mill levy in November they were anticipating a 10-percent reduction from the state. Now they will likely see a 22-percent reduction.

“A good chunk of what we approved at the ballot is now being taken away by the state,” she said. “It’s very frustrating.”

Putnam said they will lose $938,000, the equivalent of almost 2 mills, in fiscal year 2012 as a result of the reduction in what the state is spending on public education.

“We just approved 6.9 mills and basically 2 of it is being removed,” Huntley said. “But the taxpayers aren’t going to see any reduction in their taxes; it’s still the same. When we did the millage we were trying to keep it as low as possible and put on what we needed to get by, and now the state is taking more than we expected.”

The numbers used for 2012 and 2013 were given to the school system by the state less than a month ago, Putnam said, but there is still no way of knowing how everything will play out in Columbus.

A 2 percent decrease was not calculated in the retirement portion of the budget, Putnam said, because the state budget bill has suggested that employees will possibly pick up 2 percent of their retirement.

Putnam said if this does end up happening, it would be a positive amount to the school’s budget and not a negative amount.

Personal services for 2011 were

calculated person by person using no step-ups or salary increases for the 2012 fiscal year, Putnam said. These amounts are $17,638,283 in 2011 and $17,557,258 for 2012.

For fiscal years 2013, 2014 and 2015, Putnam said, she went with salary increases of 1 percent plus a step-up of 1.5 percent.

By fiscal year 2014, the fund balance will fall a little under the $3 million reserve, Putnam said, and by 2015 the fund balance will be at $76,807. The fund balance for fiscal year 2011 is $5,691,844.

Board member Bill Selong said the revenue side can’t necessarily be controlled, but the expenditure side can always be looked at.

“Our objective is going to be to try to match our revenue with whatever our expenditures are, and that’s what this (forecast) does,” he said.

Bay Village will not be as affected by the state budget as some other districts, Huntley said, because they have never had much of a tangible personal property tax since they have very little commercial industry – Bay Village is 95 percent residential.

Huntley also said Superintendent Clint Keener and Putnam have been doing a very nice job of managing finances and trimming expenditures wherever possible in anticipation of changes at the state level.

“We were doing what we needed to do to get by anticipating a 10 percent cut,” Huntley said, referencing the passage of a 6.9 mill levy. “There was no fluff and we didn’t put a lot of cushion in. Now the state cut us more and we’re going to have to go back and make what’s tight even tighter.”

Total revenue and other financing sources for 2011 is $28,459,646, and total expenditures are $27,981,503.

 

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