The Whitehall City School District is expected to begin dipping into its savings this year to stay afloat, but it won't run out of funds entirely until fiscal year 2017.

The Whitehall City School District is expected to begin dipping into its savings this year to stay afloat, but it won't run out of funds entirely until fiscal year 2017.

That's according to Steve McAfee, the district's new treasurer. McAfee presented his first five-year forecast to school board members earlier this month after coming on board with the district in August.

School districts are required by the state to submit a five-year forecast twice a year -- once in May and again in October. The document looks at a district's finances in detail over a five-year period.

According to McAfee's figures, the school district will fall into deficit spending this year to the tune of $668,489. Fiscal year 2012 ends June 30.

That deficit is expected to jump significantly next year, to nearly $3.5 million, but dropping slightly until fiscal year 2017, when expenditures are expected to outweigh revenues by nearly $4.2 million.

The district will dip into its savings, or fund balance, in an effort to continue operating until that fund balance is depleted.

McAfee told board members state funding is playing a big part in his forecast, which is based on enrollment and valuation, both of which have seen a significant fluctuation in Whitehall over the past few years.

Enrollment is up this year in Whitehall -- enough so that schools are shifting students to other schools in an effort to accommodate smaller classroom sizes.

In addition, the valuation of homes in Whitehall is down this year by about 13 percent to 14 percent, McAfee said.

The state provides funding to school districts via a foundation formula, which takes into account the ability of school districts to raise taxes locally, as well as a state-determined minimum amount necessary per student to provide an adequate education.

The formula is designed to provide a higher level of assistance to school districts with low property wealth relative to districts with higher property wealth.

Although Whitehall's previous treasurer, Tim Penton, did not account for changes in state funding according to the above fluctuation, McAfee did, he said, to allow the district to hold out one more year before depleting its savings.

"The state isn't going to fix everything," McAfee said. "We are going to have to come up with a plan."

That could mean returning to the voters for some type of tax increase. The last time the school district came to voters for operating money was in 1995, with a 13-mill levy request. The district promised taxpayers that it would not return for another levy increase for at least 10 years. That was 17 years ago.

The district also made a more recent pledge to voters in Whitehall not to return to taxpayers for any additional revenue before the district's five new school buildings were completed. Whitehall-Yearling High School, the last of the five to be built, is slated for completion next summer and will open its doors to students at the beginning of the 2013-14 school year.

In November 2008, voters approved a 6.87-mill bond issue by an overwhelming 65 percent to launch the $78 million construction project. Taxpayers are paying for 39 percent of the project to rebuild all five schools in the district, and the state is funding the other 61 percent.

An operating levy pays for the daily operation of a school district, and a bond issue pays only for the construction of new buildings and permanent improvements.

McAfee cautioned board members that his five-year forecast is based on predictions and could be subject to change.