The Olentangy Local School District is on track to keep its four-year levy pledge, an updated five-year forecast reveals.
New contracts for teachers and staff cut back on insurance spending this year, and forecasted premium hikes didn't materialize this fall, driving personnel costs down even more. Total savings amounted to about $10 million through 2014, compared with a forecast from May.
District Treasurer Becky Jenkins presented the updated financial forecast at the Oct. 9 meeting of the school board.
Jenkins still projects the school district will face an operating deficit starting in 2014 at the current rate of spending, but expenditures are expected to outpace revenue by just $2.4 million, compared with a $5.3 million operating deficit projected in May.
School board members said they'll identify more cuts to extend the life of the levy through at least the 2014-15 school year.
"Revenue remains pretty much the same, but on the expenditures side, we really saw huge gains this year," Jenkins said.
The district saw its biggest savings because its insurance provider, Medical Mutual of Ohio, waived insurance-premium hikes that were expected in September.
In July, officials projected premiums would jump 25 percent to 30 percent this fall after district employees filed an unusually high number of insurance claims during fiscal year 2012.
In fiscal year 2011, the district's insurance company paid out an average of $1,137 for claims per employee per month. In fiscal year 2012, that number has jumped to $1,177.
"We were expecting that 25 percent increase, so to have that waived was huge, and that's where you see most of the impact," Jenkins said.
Additional savings were realized when teachers and other staff agreed to contribute more toward their health-insurance costs under new contracts approved last spring.
The contracts slowed the rate at which insurance costs are rising in the growing district.
Between 2009-11, insurance costs increased 15 percent each year, but that portion of the budget will average just 9.7 percent growth through fiscal year 2016.
Changes to insurance and benefits offerings will save about $11.1 million over the new contract's three-year duration, the district estimated.
Teachers also agreed to forgo step raises in 2013 for a savings of about $1.8 million.
Altogether, an additional savings of about $18 million is needed through fiscal year 2016 to extend the life of the current levy to four years, Jenkins said.
"Over the next four years, you need to make changes that substantially impact the budget, and they have to be compounding," she said. "It can't be one-time savings."
The forecast assumes residential and real-estate growth in the district will remain slow due to the economy.
Much also depends on how long the district can put off opening new school buildings, with many schools already near capacity and proposals for new apartment complexes generating worries over an influx of new students.
The current five-year forecast does not account for a new elementary school, so officials said they'll look for ways to better use space in existing buildings in the next several years.