Although the Perrysburg Board of Education has slashed more than 50 positions to reduce expenses, the district's financial future remains bleak.
Perrysburg's five-year forecast, presented to the board last week, is described by Treasurer Matt Feasel as one of the most challenging he's had to prepare.
Faced with reductions in local and state revenue, the district continues to struggle to balance its budget. It could wind up with a $150,000 shortfall at the end of June, and steps are being taken in case short-term borrowing is needed, Mr. Feasel said.
For the 2010-11 fiscal year, it is estimated that $15,000 of a $39 million budget will be left over after bills are paid, Superintendent Tom Hosler said.
Budget predictions in the five-year forecast come with question marks.
"Despite the growth in Perrysburg's student population, the state continues to demand more from those that can pay while giving us less and less in terms of dollars. We are very uncertain as to how Perrysburg will be funded next year," the treasurer's five-year forecast said.
The state has subsidized its reduction in funding to Perrysburg schools with federal stimulus dollars of $545,215, but the forecast notes there is no guarantee that stimulus dollars will continue beyond the current biennium.
"Until the state addresses how these dollars will be replaced, schools could be looking at 20 to 30 percent reductions in state funding," Mr. Feasel said in his forecast, noting. "The state continues to play the shell game with state dollars. It was conveyed earlier that Perrysburg would only see a 1 percent reduction in state dollars when in fact it was 6.78 percent."
Mr. Feasel's forecast notes, "In two years when federal stimulus dollars disappear, the state will have a massive hole to fill. I fully anticipate that will once again come back to the local level and we will be asked to request those replacement dollars from our local taxpayers. And once again, it will be perceived as the mismanagement of money by school officials."
The treasurer hopes the school board and administrative team can use the five-year as a planning tool to prepare to meet the district's educational needs.
Perrysburg's goal is a ratio of 80 percent of its salary and fringe benefits to projected revenue, he said. The current budget is at 87.68 percent.
With the elimination of 52 positions, next year's proportion has been decreased to 84.52 percent, but Mr. Feasel said that is still too high.
Salary and fringe benefits have been projected for the 2011-12 school year based on no increase in base salaries and no changes in insurance coverage. The only increase that has been factored in is those eligible for step increases. Salaries have increased an average of 4.91 percent during the last 14 years.
In addition to staff cuts, the district is looking at a 17 percent reduction in purchased services; supplies, materials, textbooks, and classroom equipment.
According to Mr. Feasel's forecast, "In order to meet the financial demands of the district over the next five years, we will have to either obtain an additional source of revenue or continue to reduce staff."
There are no plans to seek a levy to bring in more dollars, the superintendent said.
Mr. Feasel said no suggestions can be made about a levy request until Perrysburg school officials know what is going on with funds from the state. There is "too much volatility" now, he said.
"Overall we continue to operate a multimillion-dollar business with the funding that is available to us," the treasurer said in his forecast.
"That job is becoming tougher and tougher and this year has been one of the toughest. Next year does not appear to be any walk in the park either. Just when we think we perhaps are doing it right, everything changes and we are struggling to maintain."
The district, he noted, will have serious challenges throughout the next year. "Our local economy has experienced what is happening nationwide and has taken a downward spin," he stated, pointing out three significant changes of the last year:
The income tax collection declined nearly 20 percent, or about $1 million, the state removed $545,215 from the district's foundation formula and placed restrictions on how it can be spent, and health insurance increased by double digits.
"We have our work cut out for us. We will have to continue to review expenditure levels and staffing needs for next school year and future years. We have to establish a target budget and work to get to that point without damaging the programs that we currently have in place. With a more stringent budgeting process in place, we should see the percentage of expenditure increases decline to a more acceptable level."
Last month the board decided to send out layoff notices to nine teachers and 34 nonteaching employees. Most of the job losses will be at the high school and junior high levels, as officials worked to close a $3.1 million budget deficit that had been projected for the 2010-11 academic year.