by Kristin Casale
Stow -- Additional budget reductions are on the horizon if the Stow-Munroe Falls School District does not obtain new funding by 2008, according to school officials.
Ryan Ghizzoni, who has been working for the district on a consulting basis since leaving his post as treasurer May 14, presented a five-year forecast of the district's finances to the Board of Education May 24. The forecast, which the Board approved that night, outlines the schools' projected financial situation through 2011. The state requires local school districts to submit five-year forecasts each May and districts must submit revised forecasts each October.
Ghizzoni presented good news and bad news to the Board during the presentation.
He said the district is expected to see a slight positive fund balance in 2008, but that balance will come from budget reductions and other savings.
The Board recently approved cuts to its budget because voters rejected a 4.17-mill operating levy May 8 that would have generated $3.9 million for the district annually for five years.
Ghizzoni said the cuts are expected to total $775,000.
"Without the reductions, we would consistently be going into further debt," he said.
More savings occurred from a $125,000 decrease in utility costs this past winter, and school officials reduced their workers' compensation costs by $100,000, said Ghizzoni.
He added the district also is slated to save $450,000 through 2009 when certain staff members retire. A cost reduction would occur if those employees are replaced by individuals who would earn lower salaries, said Ghizzoni.
However, he said, these cost savings will not solve the district's financial problems.
In 2009, the district will begin deficit spending unless a new revenue source is found, said Ghizzoni.
He also said the $775,000 cuts would affect only the budget for the 2007-08 school year, so without new money, additional and, most likely, larger cuts would be required in the future.
"It's important the district passes a 7.7-mill renewal levy in November 2007 to continue the current revenue stream," Ghizzoni recommended, adding a new levy of a similar value to the failed May issue also should be sought in March 2008. He recommended the Board should not ask voters to pass two levies in November.
Declining property values for new construction and flat-lined state funding are hampering the district's ability to fund its operations, said Ghizzoni.
Board President John Pribonic said school officials would prefer not to make cuts, but, "it was one of those decisions we had to make."
Boardmembers have not determined whether they will ask voters to pass a renewal levy in November or seek new money next March.
Copies of the five-year forecast are available in the district's central office on Allen Road in Stow.