Budget forecast bleak: Wapak Schools projected to operate with a deficit in ’13
CRIDERSVILLE — Faced with decreasing revenues from the state and increased costs at the local level, a report prepared for Wapakoneta City Schools Board of Education members indicates the district will likely face a budget deficit during the 2012-13 school year.
School District Treasurer Susan Rinehart presented school board members with the district five-year financial forecast which includes a loss of $801,982 in tangible property tax and $2 million in stimulus funds. While the state is expected to increase the amount sent to Wapakoneta to $1.2 million from $551,387, Rinehart explained the net loss for the school is nearly $1.7 million in revenues.
“I wanted to bring to your attention our ending cash balance has been falling since 2009 and we are projected to have a deficit next school year,” Rinehart said during Tuesday’s meeting at Cridersville Elementary School. “We are currently spending more money than we are bringing in — our revenue has leveled off because of decreased state funding.
“We discussed at our Finance Committee meeting that our revenues are leveling off and declining while our expenditures have accelerated,” she said. “We have had a carryover and we had built up almost a little over $6 million over the last 15 years, but we are quickly spending that because of the declining revenue.”
Turning to expenditures, Rinehart explained the salary line item has remained stable as they have reduced staff the past couple of years from 308 to 280, but benefits have accelerated, nearly doubling in the past three years.
“In the last two years, our health insurance has gone up nearly $600,000 and our special education costs have gone up nearly $1 million,” Rinehart told board members. “So besides revenue leveling off, those expenditures have increased at very rapid rates that we did not expect.”
Fringe benefits is expected to increase to $6.7 million by 2015 from $5.2 million spent in 2010.
Reviewing a 14-page report with board members, Rinehart said she did not know if another source of revenue — an additional local tax levy — is an option. Statistics show approximately 60 percent of the residents in Cridersville and 40 percent of the residents in Wapakoneta are at or below the poverty level. She noted the last new operating levy passed was in 1991.
“I don’t know if our constituents have the ability to pay more in taxes,” Rinehart said. “So basically we are recommending selling more of our assets and seeing what we can do to reduce our fringe benefits costs and our special ed costs, if we can do some reprogramming in those areas.
“The three courses of action we have at our disposal are to make budget reductions, to ask for tax increases or to do a combination of both,” she said. “We absolutely need to have action by July of this next year in regard to decisions we have to make.”
Superintendent Keith Horner said he and Operations Director Mike Watt continue to work on ways to make the new buildings more efficient to cut costs in regard to utilities.
Horner also is working with Auglaize County Educational Service Center Superintendent Ann Harvey regarding programming and program costs.
They also are looking at selling the Pine Street facility and moving those operations to Wapakoneta High School grounds where the bus parking lot is located.
School administrators continue to work on controlling health insurance and dental insurance costs. During Tuesday’s meeting, board members voted to change health insurance to United Health Care from Anthem Blue Cross-Blue Shield and dental insurance to Superior Dental from Anthem Blue Cross-Blue Shield.
Rinehart noted Anthem Blue Cross-Blue Shield increased their rates by 18 percent for this current school year, while the new carriers submitted contracts resulting in a 7 percent increase for the school district.
Horner also suggested board members may want to consider raising assorted fees and instituting a pay-to-participate fee.