Tax revenue and reduced expenses should be enough to keep the Marysville Exempted Village School District in the black through the end of fiscal year 2012.

Tax revenue and reduced expenses should be enough to keep the Marysville Exempted Village School District in the black through the end of fiscal year 2012.

The five-year forecast approved at the Monday, Oct. 25 school board meeting showed better than anticipated balances at the end of the 2010-2011 and 2011-2012 school years, but the district will have tough decisions to make next year in order to balance the district's budget, treasurer Cindy Ritter said.

"We'll have to either cut programs or increase revenues in the next fiscal year," Ritter said.

The latest forecast shows a $2.3-million balance at the end of this school year, but a scant $220,000 is projected to remain at the end of FY 2012 a razor-thin margin for the district, which has an annual operating budget of more than $48-million.

In August, Ritter's projections showed that the district would have just $700,000 at the end of this fiscal year, but increased revenue from State Foundation Stimulus Funding helped boost that number.

"There were some different areas that we weren't real sure about at that point," Ritter said of the forecast as amended in August.

She declined to say whether the district might propose an operating levy in 2011.

"I'm not even going to speculate right now," Ritter said. "The finance committee is working on different options and thoughts right now and we'll be presenting that in the near future."

The projected budgets for fiscal years 2013 through 2015 show the district ending the school years in the red by $2.8-million, $10.1-million and $19.2-million, respectively.

Ritter said Monday that her projects are very conservative, representing the worst-case scenario for the district in terms of revenue with only modest increases in expenditures.

Notably, the budget holds the line on teacher salaries starting in 2012, allowing for no base salary increase after the current contract with the Marysville Education Association expires Dec. 31, 2011.

The deal, approved in December 2009, gave teachers salary increases of 0.5 percent starting in January 2010, 0.75 percent in September 2010 and another 1 percent in September 2011. Under the new forecast, step increases are projected to cost the district $611,521 in FY 2013, the first full year that projects a 0-percent base salary increase for staff. In addition, Ritter's forecast includes no new positions.

Purchased services - including utilities, mileage, data processing and tuition paid to other districts - is allowed a 4-percent inflationary increase. Supplies and materials, including fuel and other supplies, are allowed a 3-percent annual increase.

"We're at that point where we really need to start looking at everything," to see where cuts can be made," Ritter said Monday.

"We've got two levies coming up (for renewal) in 2014 and another that needs to be renewed in 2015," she said. "We've got to control our costs and start looking at other ways to bring in revenue."

District Superintendent Larry Zimmerman said the end balance in FY 2011 and 2012 is too small for comfort.

"This is a very tight budget. We're going to end up with two days or three days of true cash at the end of the next fiscal year and that's not a good way to be," he said.

The district finance committee, formed earlier this year to examine the budget and make recommendations on how to deal with the coming shortfall, will hold its next meeting at 6:30 p.m. Nov. 15 in the administration office, 1000 Edgewood Drive.