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Schools' latest forecast has favorable change
(by Sue Hoffman - November 03, 2011)
Schools' latest forecast has favorable change
By SUE HOFFMAN
The Solon School District's latest five-year forecast represents a favorable change from the forecast in May, Treasurer Timothy Pickana told the school board last week.
Cash balances are projected to be positive each year of the forecast, which runs from fiscal 2012 to 2016. Year-end balances are estimated at $16.6 million in fiscal 2012, $19.2 million in 2013, $20.3 million in 2014, $17.8 million in 2015 and $12 million in 2016.
The latest forecast was submitted to the Ohio Department of Education in October.
Last May, the forecast showed negative cash balances at the end of fiscal 2014, 2015 and 2016. Revenues are cumulatively higher in the October forecast, and expenditures are significantly lower during each of the five years.
"It took a unified front by everybody," Mr. Pickana said, to achieve the significant changes in state funding and expenditures that occurred.
Last May, the district faced severe cuts in the governor's proposed budget, and the new teachers' contract was still in negotiations. The positive changes, Mr. Pickana said, occurred because of support from the community, state legislators and bargaining units.
"State funding changed a great deal from what we thought it was going to be," he said. "Another reason for the big change was the help from all our staff members, including our bargaining units and administrators."
The new teachers' agreement, approved in June, saves the district $5.3 million in pay freezes during the three-year contract period. It includes an additional $3 million savings from changes in employee benefits. The agreement with the Ohio Association of Public School Employees, representing nonteaching staff, last fall, also includes a salary freeze and reduced benefits.
Also essential to the district's financial health was the 6.9-mill operating levy approved by the voters in May 2010, Mr. Pickana said.
"While we carry positive cash balances, our net profit margin is very thin over the next few years," he said. That means the set amount of reimbursement of the tangible personal property tax must continue, he said, as well as the amount of state funding. "It's a delicate situation," he said.
"Thank you to the community in 2010 when they passed the levy," School Superintendent Joseph V. Regano said, "and thanks to them in 2011 for filling the auditorium." He was referring to the community meeting last April at Solon High School which launched a letter-writing campaign to the Ohio Legislature regarding the budget cuts.
School board member Dorothy Seibert summed up the district's past year as "one of the most challenging financially scary of all the years. Thanks to everyone's extreme hard work, it turned so many things around, which was acknowledged with our AAA rating. What a challenging year."
Board members Margo Morrow and Marilyn Thomas said the district must remain vigilant about changes that could affect the budget.
Board President Julie Glavin said how important it was for the district to be proactive by creating and leading the Coalition for Fiscal Fairness in Ohio, which was ready to spring into action. "Solon has been distinguished on the state level as a leading school district in that effort," she said.
In his forecast, Mr. Pickana pointed out expenditure reductions that have taken place since fiscal 2010.
Total general fund expenditures are projected at $64.5 million in fiscal 2012, $65.6 million in 2013, $66.8 million in 2014, $70.2 million in 2015 and $73.9 million in 2016.
Among revenues, he said, projected increases in real estate taxes are perhaps the lowest projections in the history of Solon city schools. "In order for projections to increase, a significant turn in the housing market is needed." The revenues are estimated at approximately $49 million each year. Other revenues include tangible personal property tax, which is being phased out, reimbursement for the tax from the state, and grants-in-aid.
Total general fund revenues are estimated at $70 million in fiscal 2012, $68.2 million in 2013, $67.9 million in 2014, $67.8 million in 2015 and $68 million in 2016.
Five-year forecasts are submitted to the Ohio Department of Education in October and May of each year.
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