Board seeks to stop shortfalls

The board will be able to certify the contract for teachers.
By MONICA BOND
VINDICATOR TRUMBULL STAFF
WARREN -- The board of education faces uncertainty in a five-year financial forecast it approved Friday.
The board is waiting to see how a legislative tax change, enrollment decline and costs for new buildings will affect the forecast. At the same time, the schools are looking for more ways to trim the budget.
"We want to take action now so that deficits don't happen," said Phillip Butto IV, district treasurer.
Butto explained that the cost of operations exceeds revenue and is tapping into the district's reserves.
Making operational changes, closing some buildings and negotiating savings in health-care costs have held off a deficit, for a $1.06 million balance in fiscal 2007.
"That's not a lot of wiggle room," noted Linda Metzendorf, board president.
This balance will allow the board to certify the first two years of the new three-year agreement with its instructional staff. The pact gives raises of 2 percent in the first two years, and 0 percent to 2 percent the third, contingent on finances.
The district has held off a deficit for eight years by being efficient, Butto said. As revenue continues to drop and expenses keep growing, however, the district projects a $7.5 million deficit in fiscal 2008 and $17.8 million in fiscal 2009.
These deficits could be trimmed by selling some properties and becoming even more efficient, Butto noted.
Tax could go
Further complicating his five-year forecast would be a change the Ohio Senate Finance Committee is considering. It would accelerate the planned phase-out of a personal tangible tax on business machinery and equipment. That tax now brings $4.9 million a year to the district.
Such a revenue loss could force Ohio schools to seek voter approval of additional levies.
"It shifts the burden of taxes from business to residents," Butto said. "Most people really don't understand that. It's very unfortunate."
Metzendorf noted it has been 11 years since the district sought more operating revenue, and said she doesn't want to do so. "We need to do a lot more with less," she said.
Butto said the Ohio School Boards Association is lobbying against the bill, House Bill 66, and encouraging the Senate to find a permanent replacement for the tax.
The bill has passed the House and may pass the Senate in three weeks, Butto said.
Discouraging numbers
Another factor is declining enrollment. Metzendorf said the school district has lost 121 students since October. "We've dropped below 6,500 this year," she said.
The drop is because of a declining birthrate and shrinking city and state populations, Metzendorf said. She said loss of 121 children means losing $625,000 in state revenue.
Butto also said the district must anticipate the cost of operating its new buildings, beginning January 2007.
The Ohio School Facilities Commission is providing 80 percent of the project cost, originally $170 million but reduced by about $17 million when the district decided to build four new schools for kindergarten through eighth grade, rather than five. District voters approved a bond issue to provide the local share.
Metzendorf said the district will have to pay double utilities while the new buildings are finished and students continue school in the old buildings.
The board tabled bids for abating hazardous materials at a house and a car lot on Elm Road, near where the new high school will be, and at the old Willard Avenue school.
The board set a meeting for 4 p.m. Tuesday to discuss the contracts. Hazards have to be abated before demolition can be considered.