Treasurer Andy Geistfeld presented a revised five-year financial forecast to Upper Arlington Board of Education members Sept. 10 that reflected losses in tangible personal property tax reimbursements, public utility reimbursements and state fiscal stabilization funds.
"We normally present a revised five-year forecast at the end of October, but we are doing this a month early, so we can make tweaks in October," he said.
Geistfeld said the state's last biennium budget, approved in June 2011, "surprised many school districts regarding the wide range of reductions."
The overall impact to Upper Arlington schools was a reduction of $2.2 million in state revenue, compared to fiscal year 2011, with an additional reduction of approximately $540,000 expected in fiscal year 2013, he said.
"When you are expecting a $2-million decrease every year for five years, it can add up to a significant loss," Geistfeld told school board members.
Geistfeld said he still does not want to include any casino money in the forecast, although some other districts are including projected funds from the casino.
"Schools are designated to receive 34 percent of tax receipts generated from the casinos," he wrote in the forecast document. "However, there is still much unknown about the formula and the amount of tax to be generated. If the district does receive funds related to the casinos, these funds will not have a significant impact on our overall revenue streams."
The numbers were better than the May forecast in some cases, though. Geistfeld said the district had abnormally low health insurance claims during May, June and July this year, which meant there was no increase in premiums for 2012. Premiums increased by 6 percent in 2011 and 8.59 percent in 2012. He said a change in providers in 2008 and 2010 still kept insurance premium increases in 2011 and 2012 lower than expected.
Geistfield said he expects a 10- to 12-percent increase in health premium costs after calendar year 2013, based on current insurance trends.
"The percentage of health insurance premiums paid by the employee will increase over the next five years," he said. "In calendar year 2012, certificated and administrative employees paid 10.2 percent of medical premium costs. The employee portion of those costs will increase to 12 percent in calendar year 2013 and 15 percent in calendar year 2014."
He said the teachers union's most recent contract included a freeze on base salaries for calendar years 2012 and 2013 and called for just a 1-percent increase on base salaries in 2014.
Geistfeld said he expects staff retirements to increase at the end of this year and in 2013 because of pending changes in the state pension systems.
"We had 25 retirements this year and expect 25 next year, which are the largest amounts in our recent history," he said.
He said the district would experience savings as retiring teachers are replaced by teachers with less experience, but that those savings will be offset for two years by costs associated with the retirements.
Geistfeld said the niew forecast shows expenses continue to exceed revenue. Total expenses at the end of fiscal year 2012 in June are listed as $77,544,140, with total revenues listed as $68,123,276.
An unreserved fund balance of $32,805,109 kept the district from a deficit at the end of the fiscal year, but that balance is projected to decrease rapidly as expenses continue to exceed revenue, Geistfeld said.
The forecast shows a deficit of $10.4 million by 2016.
Geistfeld said if voters approve Issue 51, the 5.8-mill operating levy on the Nov. 6 ballot, the school district should receive about $9.2 million in new property tax revenue.
If approved by voters, the tax issue would cost homeowners an additional $178 in annual taxes per $100,000 in property valuation, he said.