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Pettisville School Board Must Be Cautious With Expenditures, Lee Says



Chris Lee, Pettisville Local School District treasurer, said the district must be cautious in its spending.

In reviewing the district’s five-year financial forecast, approved at the Monday, May 17 special meeting, Lee said, “We’re in a time when we have to be cautious with our expenditures.

“Over the next few years, we have to be conservative,” he said.

The forecast shows the school district revenues shrinking, from about $5 million at the end of fiscal year 2010 (July 1, 2009 through June 30, 2010) to about $4.8 million at the end of fiscal year 2012. It climbs back to about $4.83 million at the end of fiscal year 2014.

Lee said the biggest reason for the decline is the phaseout of the personal tangible property tax.

Expenditures during Fiscal Year 2010 are expected to be almost $4.85 million, which district officials estimate will leave them $211,461 in the black, and add to the district’s cash balance.

A school district’s cash balance is a form of savings account. When district expenses begin exceeding its revenue, the district can take money from the cash balance to keep operating.

The forecast approved by the board shows a fund balance of $1,156,186 at the end of FY 2010.

Deficit Spending

Starting at the end of FY 2011, expenses, estimated at about $5 million, exceed anticipated revenue of about $4.96 million, and the school ends the year $44,527 in the red, drawing the cash balance down to $1,111,660.

It should be noted that the financial forecast is based on estimates and projections. The further into the future the projections look, the less accurate they tend to be.

But those estimates and projections show expenses exceeding revenue through 2014, and the cash balance continuing to shrink, to $804,369 at the end of FY 2012, then $414,146 at the end of FY 2013.

At the end of FY 2014 (June 30, 2013 to July 1, 2014) the district is anticipated to be over $60,000 in the red.

Unknown

There are some unknowns in the projections.

One deals with the district’s 1% income tax.

Lee said revenue from the tax had dropped, but the last collection showed “an increase (that was) ever so slight.” He projected the income tax revenue as “flat” (no growth, no decline), at about $389,000 a year.

“I hope we’ve seen the worst of it. I hope (income tax revenue) is at least as good as it was in 2009. We need to watch that and watch it closely,” he said.

Another unknown is state aid. Ohio school funding plan is undergoing major changes. As a result, school districts don’t know exactly how much money they can expect from the State of Ohio.

Another unknown is the impact of the new school building on the budget.

Lee said the building is not anticipated to require additional personnel.

Another unknown: the future of the state’s overall economy.

Lee said the school board has not discussed going to the voters for additional money, in the form of taxes.

“There are too many unanswered questions to make a decision,” he said.

While the forecast may look bleak, Lee said, “I can’t say I’m terribly alarmed.”


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