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‘Conservative’ 5-year forecast projects 2023 fund balance for Warren schools
By Ed Runyan
WARREN
Angela Lewis gave her final five-year forecast as Warren Schools treasurer, saying the district will reach a point of having only a $3 million fund balance in 2023 if lots of unexpected-but-possible bad fiscal situations occur.
Lewis, whose last day with the district is Nov. 16, will be replaced by Karen Sciortino, who has been working alongside Lewis and learning the ropes since April.
The district has not gone to voters for additional operating money – only a bond levy for new schools – since 1994.
And that’s good because it is difficult in a school district that is not affluent, like Warren, to get approval for an additional levy, Lewis said Wednesday.
For that reason, the district has “squirreled away” funds it has received since a 2014 change in the state funding formula that “has been driving funding to poorer districts,” she said. The district has a fund balance of $35 million in the current fiscal year, which ends June 30, 2019.
The district qualifies for the highest percentage of state funding allowed under Ohio Department of Education guidelines and gets 76.8 percent of its funding from the state.
The next-largest category of funding is real-estate taxes, which make up 13.5 percent of district revenue. Of the district’s $74.7 million in revenue this year, $10.1 million comes from property taxes.
In her presentation, which was attended by a school board member, a community supporter and a few school staff, Lewis showed the district’s real-estate valuation has dropped from $455 million in 2006 to $294 million in 2017.
Because of the way Ohio law “equalizes” real-estate taxes to ensure school district levies raise the same amount of money regardless of real-estate values, taxpayers pay more as property values drop. So it would be difficult to pass an additional levy in Warren, Lewis said.
The district has lost revenue from a former funding source called the personal tangible property tax, but it has controlled costs by having school staffing levels “mirror” the fluctuating student-enrollment numbers, she said.
Warren is a large-enough district to reduce staffing through retirements and resignations and has rarely had to make layoffs.
The forecast calls for district salaries to rise from $33.7 million now to $41.3 million in 2023.
One way she has made conservative estimates of district costs through 2023 has been to use the industry standard cost estimates for health care increases of more than 10 percent per year, even though the district’s increases have only been about 6 percent.
Those could skyrocket if a just a few expensive claims were made on the district’s self-insurance plan, such as a complicated pregnancy or cancer diagnosis, so she believes it’s wise to forecast the highest cost, Lewis said.
Sciortino has experience in corporate accounting, worked for accounting firm Julian & Grube, was a state auditor six years and worked under Lewis from 2006 to 2009.