South Range officials expect a deficit in 2012

By Amanda C. Davis

A renewal levy on the Nov. 4 ballot is critical for the district’s continued operation, officials say.

NORTH LIMA — Looking down the road five years, South Range schools’ Treasurer Jim Phillips says he sees a few rough patches ahead.

By 2012, voters will more than likely be asked to support a measure to drum up new money to help keep the district solvent in subsequent years.

In the meantime, voters in November will be asked to renew a five-year, 2.5-mill operating levy to generate $430,555 per year.

School officials stressed this week the renewal will not raise taxes and said fliers will be mailed to property owners, explaining the need for the renewal, which first passed in 1988.

“Our voters have historically been very supportive,” Phillips said.

In his five-year financial forecast, Phillips said trouble lies ahead in 2012, where his forecast shows a projected deficit of $2.1 million.

A balance at the end of the 2010-11 school year of $320,000 doesn’t allow for “a lot of wiggle room” if something were to happen, such as the breakdown of a boiler.

Though the forecast isn’t particularly optimistic, Phillips told the school board this week: “This isn’t the worst it could be.”

The district’s two main sources of funding are the state, which provides about 45 percent toward general fund operations, and local property taxes, which are based on property valuations.

In the last 17 years, Phillips said, valuations in the district have been “creeping up,” but the current housing market and economic crunch are having an impact.

Fortunately for the district, valuations in Green and Beaver townships aren’t dropping as much as other areas in Mahoning County, he said.

Two more levies will come up for renewal, one next year, and one the following, though the amount of millage will depend on valuations.

Phillips stressed the district’s quality educational programs were built over the years, and though “it takes a long time to build a house of cards, it doesn’t take much to knock it down.”

Construction began recently for a kindergarten-through-12th-grade building, expected to be complete in August 2010, with three separate areas for the high school, junior high and elementary school. The buildings will sit on 60 acres along state Route 46 and Green Beaver Road. District voters approved a 28-year bond issue to generate the local share of $18.3 million. The state’s share of nearly $20 million represents 52 percent of the total cost.

Phillips said he’s heard constituents ask why some of this money can’t be used to shore up the general fund in coming years. He stressed that when a bond issue is passed to help fund a project with the Ohio School Facilities Commission, it is separate and cannot be used for anything else.

Also complicating the financial picture for many local districts is that First Energy has asked for a rate increase. The Public Utilities Commission of Ohio has held hearings to determine how residents and business owners feel about the proposed increase. PUCO is expected to make a decision by the end of the year.

Special rates have been given to nearly 250 districts in a consortium, and Phillips said South Range has saved 13.4 percent on average per year, for the last 10 years. The savings have been put back into educational programs, he explained, and a hike would mean cuts would have to be made somewhere.

Superintendent Dennis Dunham told the board the district has taken measures like everyone else to trim spending. Cuts have already been made in areas including transportation, professional development and field trips, he said.

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