Financial forecast predicts steadily declining revenue

The forecast assumes that two school levies will be renewed.
By PETER H. MILLIKEN
VINDICATOR TRUMBULL STAFF
WARREN -- The board of education has adopted a revised five-year financial forecast showing surpluses declining steadily.
These surpluses will fall from about $16.8 million this fiscal year to about $6.4 million in fiscal 2009, with a deficit of about $3.3 million in fiscal 2010 -- the final year of the forecast.
The district is now in fiscal year 2006, which will end on June 30, 2006. The board projects it will receive about $58.4 million in revenue for fiscal 2006.
Enrollment falls, too
The forecast, adopted Tuesday, assumes enrollment will decline every year due to students transferring to charter and parochial schools and moving out of the district. For every departing student, the district loses $5,283 annually, said Merri Smith, interim treasurer.
The forecast also assumes passage of two property tax levy renewals in fiscal 2007, declining revenue from the tangible personal property tax, which is being phased out by the state, a 2 percent annual increase in salaries and an 11 percent annual increase in employee health care costs, Smith said. Smith said she's confident the forecast closely reflects what will actually occur in fiscal 2006 and fiscal 2007.
State assisted
Smith prepared the forecast with the help of Joe Finia, an Ohio Department of Education consultant. Thursday is the deadline for submission of the forecast to the state.
The forecast is relatively favorable because the district closed Secrest Elementary School at the end of last school year, achieved $1.5 million in health insurance savings, froze administrative salaries for two years, offered retirement incentives and reduced staff.
"I'm happy that we were able to do this without cutting student programs. We've cut the space that people are in, but we haven't cut the programs," said board member Edward Bolino.
A financial forecast prepared in May by the district's former treasurer, Phillip D. Butto IV, showed the district plunging into a $7.5 million deficit in fiscal 2008 and a $17.8 million deficit in fiscal 2009.
Butto prepared the forecast before Secrest closed, saving the board $1 million a year, before the health care cost savings were achieved and before the number of retirees at the end of last year was known, Smith said.
Forecast is tentative
The forecast is subject to change due to uncertainties in enrollment, state funding, and fuel and other operating costs, schools officials said.
On Nov. 22, the board raised Smith's salary to $72,200 a year from the $46,200 she had previously been making as assistant treasurer. Butto was earning $80,580 when he resigned, effective Oct.12. Smith's pay raise is retroactive to Oct. 12.
Smith said she is unsure whether she'll apply to be the district's permanent treasurer.
milliken@vindy.com