Some members of the New Albany-Plain Local financial review and reporting committee said Oct. 23 they prefer the five-year forecast show the outlook district officials hope for rather than a "worst-case scenario."
The most recent draft of the forecast, a financial projection of the district's finances for the next five years, estimates a $2.18 million deficit by fiscal year 2016.
Ohio law requires school boards to approve a five-year forecast prior to Oct. 31 each year and update it between April 1 and May 31.
Treasurer Rebecca Jenkins said the forecast includes assumptions of revenue and expenditures, which means it can change the day after the school board approves it.
She said she uses realistic numbers in the forecast to show where the district's finances are headed.
Committee member Phil Derrow took exception to one of her assumptions in the most recent draft: a 3.8 percent step increase for teachers starting in fiscal year 2015.
Jenkins said the current contract with the Plain Local Education Association includes 2 percent step increases through fiscal year 2014.
She said the contract states if the district has not negotiated a new agreement by June 30, 2014, the district must return to paying 3.8 percent step increases, which were included in the contract signed prior to June 2011.
Derrow said the district should freeze the step increases at 2 percent in the forecast and devote the difference between a 2 percent and a 3.8 percent increase to extra programming.
He said using the higher figure for step increases could limit the district's bargaining power.
"Isn't it more powerful to say, 'Here's where we could be?' " Derrow asked.
Jenkins said she used the 3.8 percent increase because it's what the district will pay unless a different step increase is negotiated.
Committee member Dave Demers asked if the district could provide different incentives that are not tied to regular step increases.
School board member Mark Ryan, chairman of the FRRC, said board members are considering compensation packages that include a lower annual step increase, with part of the step increase tied to teacher performance.
At the board's Oct. 14 workshop, board members asked Jenkins to prepare different forecast scenarios based on lower annual step increases and provisions for performance-based increases, said board member Natalie Matt.
Derrow also complained about the district's rising insurance costs, which are projected in the forecast to increase by 9 percent annually in fiscal years 2015 to 2018.
Jenkins said insurance is part of the district's total compensation package for teachers. She said the district would have to review what other districts are paying for insurance and review local salaries before determining the benefit of those costs.
Insurance also is part of the contract negotiations, which, Jenkins said, typically take place in the spring.
Committee member William Neville said the district already should be talking to the education association about issues like rising insurance costs. Jenkins assured him the district talks about the issues regularly.
Jenkins said because the forecast shows a deficit in 2016, the district will not be able to sign more than a one-year contract with the union unless compensation is negotiated at a rate lower than projected in the forecast.
If that happens, it would prevent a deficit in fiscal year 2016 and would allow the district and the union to sign a contract for a longer term, she said.
The school board was expected to review and vote on the five-year forecast Monday, Oct. 28. Visit ThisWeekNEWS.com for updates.