Saving on expenditures and a proposed cap on the reduction of state foundation funds will allow Upper Arlington City Schools to delay a deficit fund balance by one year.

Saving on expenditures and a proposed cap on the reduction of state foundation funds will allow Upper Arlington City Schools to delay a deficit fund balance by one year.

Treasurer Andy Geistfeld last updated the school board on the five-year forecast in March, when he provided preliminary numbers in response to Gov. John Kasich's proposed biennium budget. Geistfeld predicted the district would see its first negative fund balance in fiscal year 2014.

The May five-year forecast, presented to the board May 23, reflects changes made in salaries, benefits and purchased services that will allow the district to delay deficit spending until fiscal year 2015.

Geistfeld said the five-year forecast is a "living, breathing document" that the district is required to submit to the Ohio Department of Education in October and May. The numbers are subject to change when the proposed biennium budget is finalized in June.

"Theoretically, we may not know where things stand with the budget until the last hour," he said.

In March, Geistfeld forecast a reduction of approximately $4 million in revenue for fiscal year 2012, based primarily on state budget proposals. House amendments, including a 20- percent cap on the reduction of state foundation funds, returned $1.5 million of the proposed cuts.

With the cap in place, Upper Arlington would lose $2.8 million in state funds, which is a reduction of 47 percent.

"This cap makes it less painful for us, based on what I budgeted," Geistfeld said.

The district has also implemented several cost-cutting measures that will help recover some of the state revenue loss.

In the area of personnel, the district outsourced payroll and human resources functions for substitute teachers to the Central Ohio Education Services Center. This allowed the district to shift $625,000 from payroll to purchased services.

"It's been a great way to use our subs efficiently and more economically," he said. "We'll see a savings by the end of the year."

The extension of the UAEA contract saves the district approximately $1.7 million over the next five years, and the elimination of the all-day kindergarten mandate reduces personnel costs by an estimated $1.5 million.

Geistfeld said the district has also taken steps to reduce benefit and utility costs. As a result of negotiations with OAPSE and UAEA, employees will begin to pay a larger portion of the premium for health care. The district locked into a group rate with other central Ohio districts for electricity, and already participates in a natural gas consortium.

With the proposed 20-percent reduction cap and the district's cost-saving efforts, revenue will still exceed expenditures for this year.

"We are fortunate to have a positive year four years out from a levy, but with increasing deficit spending, our fund balance will quickly get eaten away," Geistfeld said. "This is important as we start having levy discussions at the next board meeting. The longer you wait to do a levy, the more expensive it gets."

A larger fund balance will allow the district to ask for less millage, he said.

Board president Marjory Pizzuti said she wants to make sure the community understands "you pay now or you pay later."

"We've been responsible, exceedingly responsible, with the way we have budgeted and expended our resources so that we're in a good place. This will allow us to request the lowest possible millage," she said.

Geistfeld said prudent planning for the future will also ensure the district maintains its Standard & Poor's AAA bond rating, which can offer millions of dollars in savings over the life of a bond.

Geistfeld and Superintendent Jeffrey Weaver will recommend a millage amount for the November 2011 levy at the board's June 13 meeting.

"When we do go out for a levy, it will be an amount that we can certainly justify for our citizens," Weaver said. "It will still enable us to protect ourselves, and not have to go for the 6.9, the 7.9 and the 9.9 levies we see around us."