General fund expected to slip into red over next few years

The financial picture should turn around by 2010 as the district closes schools.
By HAROLD GWIN
VINDICATOR EDUCATION WRITER
YOUNGSTOWN -- The Youngstown City School District's general fund is expected to dip sharply into the red over the next few years, according to a five-year forecast approved by the school board.
The numbers aren't much different than the five-year forecast last year, but, this time, there is light at the end of that fifth year, said Treasurer Carolyn Funk, who prepared the forecast.
Her projections show Youngstown should end fiscal year 2010 just over $5.1 million in the black.
This year, fiscal 2006, will also end in the black, but only because the district had an $8.8 million cash balance left over from fiscal 2005.
A number of factors have to fall into place before the financial picture improves, she said, not the least of which is the closing of six or more of the district's 21 school buildings, with a resulting reduction in staff.
Forecast
The district will have completed a $202 million building replacement and renovation program by 2010 and has already announced plans to close the Westside Upper Elementary, Wilson and Rayen buildings in June 2007 and the Southside Elementary building in June 2008, Funk said.
Hayes will close at the end of fiscal 2009, but any savings that might generate haven't been factored into the five-year forecast, Funk said.
She noted that the district is also looking at closing two additional elementary buildings although that decision isn't final yet.
The forecast shows that district employees will begin paying 10 percent of their health care insurance premiums beginning in fiscal 2007, an issue that must first be negotiated with the district's teachers and American Federation of State, County & amp; Municipal Employees union.
New contract talks with the 600 AFSCME employees are set to begin shortly, and talks with the 825 teachers are expected to begin in the spring.
Funk said the 10 percent participation should reduce the district's health care costs by more than $1 million per year.
The general fund should end this year in the black but dip into the red in fiscal 2007, 2008 and 2009, she said. A return to a positive year-end cash balance is predicted for fiscal 2010, she said.
The board adopted the forecast Tuesday, and Funk said it must be submitted to the state by Friday.
However, it is just a forecast, she said, explaining that the district will continue to work on reducing spending in an effort to avoid the projected deficits.
'Healthy' conversation
School board members have been anxiously awaiting the forecast, concerned about spending levels and what areas the district might have to cut to balance the budget.
"This kind of conversation is very healthy," said board member Jamael Brown, noting that Funk has indicated that a number of expenditure predictions may be higher than what will actually be spent, and there may be some savings there.
Funk cautioned that revising those numbers may reduce spending somewhat but not enough to eliminate the potential for red ink.
She said the forecast is predicated on last year's state funding levels, but the state doesn't set final current year reimbursements until December. It would appear that Youngstown will get less state money than it did last year because student enrollment is down, Funk said.
Board member John Maluso, chairman of the finance committee, said his committee will continue working on the spending issue in an effort to avoid deficit spending and will present its recommendations to the full board for action.