School Board Divided Over Five-Year Financial Forecast

The Westlake School Board was divided over finances again on Monday night as members debated the approval of the district’s five-year forecast.

The forecast, required by the state of Ohio, projects spending through the year 2016 based on assumptions made today. Treasurer Mark Pepera said that while the district is projecting a large deficit by the year 2016, those numbers will change.

“We’re doing well with conservative budgeting,” he said. “[The deficit levels] legitimately can’t materialize to the level you’re seeing.”

The forecast shows a deficit of $27.5 million in five years, roughly half of the district’s budget.

“Logically, that can’t happen because we can’t operate that way,” Pepera said.

Board members Nate Cross and Tim Sullivan voiced opposition to the financial forecast because of the large projected deficit, saying that something must be done to cut spending.

“The rate at which the expenses are compiling is alarming,” Sullivan said. “We’ll never be in the hole $27.5 million because we’ll have a levy before that. That’s the way the regular taxpayer in Westlake thinks about this. It leads people to wonder, ‘What is this school board doing to us?’”

Cross raised concerns about increased expenses in the district over the last decade, particularly personnel costs, as well as the five-year forecast.

“This is an embarrassing forecast, and while it’s just a snapshot of where we’ll be in five years based on current year assumptions, it nonetheless represents our board’s fiscally reckless spending policies,” he said. “This projected deficit is a direct result of my colleagues’ inability to control spending, resulting in escalating employee personnel costs we can’t afford.”

Cross stated that he would vote no on the forecast, as well as any other expenditures related to this year’s budget.

“Taxpayers don’t deserve to be held hostage by a continual refusal of their elected officials to address the issue of spending with a massive tax increase as the only viable option to erase our negative cash balance,” he said.

Pepera told Westlake Patch that in over 13 years at the Westlake school district, he has always seen a projected deficit five years into the future, but it never materializes. He also noted that other districts in the area including Rocky River, Avon Lake and Beachwood, have a similar forecast with a large deficit.

“The farther out you’re going in the future, it's not going to be accurate,” he said. “Revenues don’t grow, and expenses will increase because of more kids or inflation, but you gain additional sources of funding. A levy is one way to mitigate some of the deficit but there are a lot of things we can do and that we will do.”

For example, the district recently joined a health care consortium that saved $1 million, and started a retirement incentive program that saved another $1.2 million. The district also just refinanced bonds from the Performing Arts Center construction in 2003 to save $571,000.

Board member Andrea Rocco argued that passing the forecast was a legal necessity, and that the board can work together moving forward to deal with the projected deficit.

“Approving this forecast is something that we have to do legally in the state of Ohio and I look forward to working with the members here to address whatever financial concerns we have because that’s always a very valid discussion,” she said.

The forecast passed three to two, with Mays, Rocco and Winter voting yes, and Cross and Sullivan voting no.