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Delay Archbold School District Levy Until 2011?




Voters in the Archbold Area School District, who were told to expect a property tax levy in 2009, may get to wait until 2011 to face the issue.

That’s what David Deskins, Archbold Area School District superintendent, told members of the school board at the Monday night, Oct. 22 meeting. The information came during a discussion of the school district’s five-year financial forecast.

Several factors contributed to the improved financial situation. Voters passed a 4.91-mill levy in November 2006. There was an early retirement offer. District teachers and employees gave insurance concessions. In addition, there was general cost-cutting throughout the district.

As a result, the five-year forecast predicts revenues will exceed expenses until fiscal year 2011, which starts July 1, 2010 and ends June 30, 2011.

Deskins told board members the public must be aware that the district will eventually need to renew the 4.91-mill emergency levy, which was passed with a five-year time limit

A second option is to pass another type of issue that would raise additional tax revenue.

The state of Ohio requires the district to submit the forecast in October, after the board approves the document.

The board approved the forecast by unanimous vote.

The district faces a number of challenges besides the need to renew the emergency levy.

Funding A Problem “School funding in Ohio continues to be a problem,” Deskins said.

Christine Ziegler, district treasurer, said the tangible personal property tax, the tax on business equipment and inventory, disappears at the end of calendar year 2010, which is the 2011 fiscal year for the district.

Deskins said while its replacement, the commercial activity tax, or CAT tax, is generating more money than predicted, it is scheduled to end in 2013.

State support for the district is expected to decrease. Deskins said in fiscal year 2007, state support for the Archbold School District made up 25.8% of the school budget. For this fiscal year, 2008, state support will only make up about 17% of the school budget.

The cost of health insurance will continue to rise, he said. Personnel expenses make up 80% to 85% of the district’s total expenditures.

Buy Out

Deskins said seven school employees, including teachers and administrators, took the early retirement option.

Under the plan, the district offered to purchase two years of retirement credit for veteran employees who were earning relatively large salaries, if they agreed to retire.

The total expenditure for the early retirement program was $566,802.82. But, the district saved $151,133 by hiring lessexperienced teachers at lower wages, or by not hiring new employees.

Combined with additional retirements and staff cuts, which saved an additional $177,000, the total savings were $328,168 in the first year.

With a one-time expenditure of about $566,000 and savings of about $328,000, Deskins said the district will begin to realize a savings in fiscal year 2009, which will carry forward beyond 2012.

Cash

In fiscal years 2005 and 2006, the district was running in the red. At the end of 2005, the district had spent $942,994 more than it had taken in.

The following year, 2006, expenses exceeded revenues by $1,351,007.

To get through those years, school district officials drew against cash reserves, depleting the cash-on-hand total to about $2.1 million at the end of the 2006 fiscal year.

At the end of fiscal year 2007, the district closed its books in the black by $898,177 and increased its cash reserve to $2,994,725.

The five-year forecast predicts the cash reserve will grow, topping at about $4.18 million at the end of 2010.

Deskins said the district spends about $1 million a month, so a $4 million cash reserve is only enough to operate for about four months, he said.

Scott Miller, board member, said as board members examined the forecast, “we need to keep in the back of our mind that the further out you go (into the future), nothing is certain. Nothing is cast in stone.”

The figures, he said, constantly must be reviewed.- David Pugh


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