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School Board Divided Over Five-Year Financial Forecast

Members debate spending in the district and projected deficits.

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.

Cynthea Sabolich October 28, 2011 at 01:42 PM
Nate Cross ran on a platform of fiscal responsibility and reform. He openly expresses his reasons and rational. He adheres to his committment to that expensive projects may not be in the public interest. The citizens of Westlake who voted him in are continuing to hold him, an elected official, to that POV. I didn't vote for Nate then. At the time, I still had respect for Mrs. Rocco, but I've been awakened to his message and her, emm, not so much.
Sam Quint October 28, 2011 at 03:21 PM
There is always a deficit at teh end of a levy cycle no matter what city you live in. Westlake last asked for an operating levy in 2006. Levy cycles are every 4-5 years. By not asking until 2013 they will have stretched funds that were supposed to last 5 years to 6-7 years depending if you are using fiscal or calendar years. Getting 1-2 additional years out of a set amount of income while keeping taxes in Westlake lower than in Rocky River and Bay sounds pretty sensible if not outstanding
Cynthea Sabolich October 28, 2011 at 03:45 PM
The basic assumption is that this is just normal business as usual, that all schools operate with a pyramid of cash flow from levies. Money gets approved, cash goes up, money gets spent and levy needs renewal, cash goes down. This runs contrary to the fact that it was stated in the April school board meeting that FOR THE FIRST TIME, operating costs exceed income, and were projected to continue on an upward line well into the future. So we now have to play catch up with an every growing line of costs and expenses. When costs are kept below or at the income line, or match the growth of property values, then there is not a problem. When Gov. Strickland spent $8 billion dollars that had to be balanced, it could only come from those places in the budget that could be cut while keeping Ohio from becoming a toxic wasteland to companies doing business here. Why is it necessary to demonize those that are pointing out the obvious horizon based on the red ink being shown to the public?
Sam Quint October 28, 2011 at 04:47 PM
It is normal business. It is how every school system in Ohio works. 2016, and the projected $27 million deficit, would be a FULL TEN YEARS past the last Westlake operational levy. Just like you cant run your household for 10 years on 5 years worth of money you cant expect Westalke, or any school system, to not have a projected deficit 10 years since they last asked for a levy.
Sam Quint October 28, 2011 at 04:56 PM
It isnt deomnizing as much as it is pointing out a flawed thinking just for the purpose of scaring the people of Westlake into thinking costs are out of control. Using a projected deficit in 2016 is like saying that the Cleveland Browns wont have a team in 2016 because they only have 2 players whose contracts run through the 2016 season. Bottom line is you cant cut $27 million worth of fat out of the Westlake Schools. The Board is doing a great job IN SPITE of two Board members
Cynthea Sabolich October 28, 2011 at 06:02 PM
Sam, if it is normal business, then why did Dr. Keenan say it was not normal and it was the first time it crossed from solvent to excessive? The people of Westlake deserve the truth and all sides so they can come to their own conclusions. The red ink is NOT something every single 5 year project had before. It is new. It is deep. And it is a looming problem. According to you, the 2001 5 year projection showed red ink after 3 years, and ergo the 2005, or 2009, or select any year and we'd see it end in $10's of millions of dollars in red ink. But this is the first time? hmmm. One of these things doesn't equal the other. Please show me the 2006 5 year project and let's see if it is realistic or if it ended in a sea of red ink and $10's of million in deficit. Then maybe I will rethink my position.
Sam Quint October 28, 2011 at 06:31 PM
Source: The 2006 Westlake Levy website http://www.truwebs.com/wlake/faq/faq.asp Q: Deficit increase over the years Why does the deficit increase from $4.2 million in 2006-07 to $11 million the next year to $22 million the year after that? A: The projected deficits are a cumulative effect of our expenses in relations to projected revenue. If you look at the forecast, we are projected to spend $5 million more than we bring in next school year (2006-07). The following school year we will spend $7 million more than we bring in. The year after that, the district will spend $9 million more than we bring in. Every year we do not cover our "deficit" the amount carries forward to the next 12 months. Q: What is the school issue on the ballot this May? A: On May 2, 2006, voters will be asked to vote for a 6.9-mill levy for the Westlake School District. There has not been a levy increase in Westlake in six years and the District is facing a $4.2 million deficit in school year 2006-07. Without this levy, the projected deficit jumps to $11.3 in 2007-08 and $21 million in 2008-09.
Sam Quint October 28, 2011 at 06:36 PM
I will say it again....it is impossible for any school system to not have projected deficit 5 years out (2016) when you have passed an operating levy since 2006. Nobody can make 5 years worth of money last 10 years. Not a single school system and not a single resident of Westlake. Either certain Board member know this and are using it to scare the people of Westlake or they have no clue how school funding works.
Duane Gibson October 28, 2011 at 07:07 PM
Not happy with how school funding works? Contact YOUR Governor and instruct him to obey the Ohio Supreme Court which has ruled four times that Ohio's process is unconstitutional. Also ask him to send more than 9 cents of every tax dollar WE send him back and stop raping schools and cities. The sad fact is that Westlake receives a pittance in state aid compared to urban districts and southern Ohio rural districts. Do you think it's by design given the largely right swinging of those in southern cow town?
Duane Gibson October 28, 2011 at 07:09 PM
By the way Cynthea, if you haven't seen those past five year forecasts you might want to be careful what you wish for.
Westlake Resident-Joe Smith October 29, 2011 at 05:01 AM
Jeff, I recommend you put away the old history book (or at least check the author) or whatever radical literature you might be reading and pull out a good ole Merriam-Webster dictionary. You will find that team and dissident are quite the opposite. We need a group of 5 board members working TOGETHER to reach a common goal of EXCELLENCE for a BROAD SPECTRUM of issues. Dissension does not belong on our BOE.
Cynthea Sabolich October 29, 2011 at 01:04 PM
I'm not afraid of numbers and facts. I'll go to the office next week and get the last 10 years of projections to compare. Here is where they define how the projects are done and what the numbers mean http://fyf.oecn.k12.oh.us/ Last Thursday, I was at Temple Emanu El for a townhall meeting. One of the candidates for city council, and I can't remember if it was City of Orange or City of Shaker Hts., waxed on about how he loved his 'progressive' community, and his goal, even in tough economic times, was to create a shining city that was 100% "green". Is that what Westlake is? We are knocking down buildings so we can erect green monuments for a global community? I'm not anti clean but was the school board of 2008 and 2009 believe that prosperity was going to be a constant and that we were the Gucci of cities that could be progressive and green and cutting edge? Is that public school excess? These are the choices before the voters today. We can re-elect people who, maybe a few years ago, could be called visionaries but today, with forecasts showing millions of dollars in red ink, salaries and benefits overtaking the entire budget, and no safety net to keep these new buildings operating, we need practical and logical and critical thinkers. Replace Mrs. Winters and Mr. Mays with people who can make solid decisions for our children and our citizens; Geoff Rapp, Robert Bodi, and Michelle Albert.
Cynthea Sabolich October 29, 2011 at 01:14 PM
I'm not afraid of numbers and facts. I'll go to the office next week and get the last 10 years of projections to compare. Here is where they define how the projects are done and what the numbers mean http://fyf.oecn.k12.oh.us/ On Thursday, I was at Temple Emanu El for a townhall meeting. One of the candidates for city council, and I can't remember if it was City of Orange or City of Shaker Hts., waxed on about how he loved his 'progressive' community, and his goal, even in tough economic times, was to create a shining city that was 100% "green", regardless of the cost. Is that what Westlake wants? We are leveling the school buildings so we can erect green monuments for a global community? I'm not anti clean but did the school board of 2008 and 2009 believe that prosperity was going to be a constant and that we were the Gucci of cities that could be progressive and green and cutting edge? Isn't that public school excess? These are the choices before the voters today. We can re-elect people who, maybe a few years ago, could be called visionaries but today, in the current economic times, we need people who can look at all aspects and make decisions which are right for both the children and the citizens. Remember Westlake, this is public schools, where we are looking at excesses and spending to a wish list as if it were monopoly money. It isn't. We need Rapp, Bodi, and Albert on the board. It is your money they will need to make up those $10's of millions in debt.
Duane Gibson October 29, 2011 at 04:32 PM
Seriously, that's what you're down to? LOL Comparing our school building project to one individuals ideas from a city miles away that you can't even remember who he is or what city he is from. I'm not sure where or how you misaligned the concept of adequate facilities for all students, energy conservation, and healthy buildings into "green monuments for a global community", but that isn't unexpected given your recent rantings. The fact of the matter is that whomever was on the BOE for the periods where the building project came to fruition was indeed visionary. You can keep pouring money into inadequate facilities (and Westlake spent more than comparable districts and well above the state average), or you can build new buildings that are healthy, energy efficient, handicap accessible, and are up to date with current codes for fire and life safety issues. I think your CANDIDATES have spoken quite well for themselves and have made it very clear what their platform is.........destruction of public education in Westlake. What we need are people who act on behalf of Westlake citizens, students, and the District who have no other agenda except to maintain the excellence and improve the District. For that reason, I have already cast my ballot (even though Kasich is trying to take that away from me) for Mays - Winter - Falcone. Please don't waste your time replying Cynthea, to be honest this is the first time I have actually read your rantings in about a week.
Sam Quint October 29, 2011 at 08:58 PM
Wow I see the sky is falling,doom and gloom, scare tactics of 2 of the Board members and the 3 unwise people that you seem to support has worked on you. I hope you are aware that they can't deliver on what they claim because there isn't that much fat to cut in the schools and that what fat there is doesn't add up to much....certainly not 10's of millions. The "problems" Westlake has are the same that EVERY school system has. Avon Schools describe it as "a challenge but certainly not doom and gloom" but right next door in Westlake 5 people want you to believe that the world is coming to an end and that there is mismanagement. Check the Avon Press from 2 weeks ago for the article. No matter who is on the Board they ARE going to ask the people of Westlake for a levy and they are going to have projected deficits at the end of 5 year forecasts. The 2000 levey was supposed to last until 2004---- it lasted until 2006 The 2006 levy was a 5 year levy and it looks like it will be 2013 before the people of Westlake are asked again. That's 13 years on 9 years worth of revenue and you claim that they are spending it like monolopy money? Get serious. Clearly you are not grasping the fact that every school district in Ohio is insolvent after about 5 years since for schools their income is fixed but their expenses are not. Enjoy the Bodi Kool-ade just don't drink it and curb you car in front of a school like one of your 3 chosen ones is rumored to have done.
Robert Bodi October 30, 2011 at 12:19 AM
Let's think a little bit about this. Pepera is relying on the district passing a levy in the near future. There is no other major source of funding for Westlake schools. The state pie has been cut. We aren't getting any more. The only real source of funding is the Westlake homeowner. And they were tapped just last year for the bond issue. So what happens if Westlake goes the way of Brecksville and Strongsville, two similar districts that have repreatedly voted down recent levies? Both these districts have shown similar fiscal irresponsibility in the recent past, and the voters are punishing them. If that happens in Westlake, expect a huge cut in services and large numbers of layoffs. The recent layoff of 17 teachers and cuts in high-school busing is nothing compared to what is coming down the road. Not broke, Gail? Well, just wait a little time. Personally, I prefer to prevent things from breaking, rather they paying the much higher price to fix it when it's broken. But if we keep down this current path, broke is what the district will be. And very soon.
Robert Bodi October 30, 2011 at 12:20 AM
Just remember: Pepera is an employee of the Board. It is up to the Board to make the tough fiscal decisions. Neither Pepera, nor Keenan, can do so on their own. Thus, the Board is to blame for this mess, and only a new board can fix it.
Robert Bodi October 30, 2011 at 12:26 AM
Jeff, right on about being proactive rather than reactive. But again, blame the Board, not Pepera. It is the Board that tells Pepera what to do, as he works for them. The lack of transparency is the fault of the Board. It is the Board that should be clear and precise with the public, but this Board prefers to obfuscate the facts, rather than disclose them. My website is the best source of financial analysis around at this time: votebodi.com You can fix this problem on November 8 by replacing the Board with new membersw. Vote Bodi for school board, and I promise that transparency will return to Westlake schools.
Robert Bodi October 30, 2011 at 12:59 AM
Sam, don't you see a terrible pattern here? The deficits are growing exponentially. A $27M deficit comes to almost $2,000 PER HOUSEHOLD! That is not at all typical. It's no longer about getting a few more years, but about the massive increase in spending. We have about $24M in cash this year, that goes to zero in 2014, and then goes extremely negative in just a couple of years. We are digging a hole so deep, it will take massive cuts to get us out of this. All because the Board majority failed to make the hard decsions that Cross and Sullivan have been demanding for years. But Duane, Joe, and Sam prefer to kill the messengers, rather than fix the problems.
Robert Bodi October 30, 2011 at 01:02 AM
Sam, this is no longer how the taxpayers want the systems to work. Look at how many levies are going down. Look at Strongsville and Brecksville. If you think that the voters of Westlake are stupid enough to vote even more money to a fiscally irresponsible Board, then go ahead and keep your head in the sand. But for those of you who want real responsibility, I suggest voting in some new leadership, those committed to the ideals that Jeff lists above.
Robert Bodi October 30, 2011 at 01:05 AM
No, Sam, it is not "impossible". Keep expenses level, and we wouldn't need a levy for five more years. The district is not growing, inflation is very low, and thus costs should not be skyrocketing as they are.
Robert Bodi October 30, 2011 at 01:08 AM
Um, Duane, do you understand how this works? The state is NOT going to take money from Westlake just to give it back to Westlke. The unconsitutional part of school funding is that rich districts can more easily raise money than poor districts. Westlake is NOT a poor district. If anything, due to housing values, Westlake would be conisdered a rich district. Thus, if we fix the "unconstitutional" funding issue, guess what? The state will tax us to send money to districts like Cleveland and Youngstown. The idea that Westlake will ever get more money from the state under this "fix" is sheer lunacy! It will never happen.
Duane Gibson October 30, 2011 at 05:01 AM
Bob, you have again shown your lack of knowledge. The issue on unconstitutional state funding is that the state is required to provide BASIC education to all school districts. Taking my dollar and redistributing that dollar while giving me nine cents back will not allow me to provide that education. They rely on the ability of districts such as Westlake to levy taxes on citizens to make up the rest. Let me sum up the issue here. We all realize we face some financial challenges, we also realize you aren't the person we want to work through those issues. Your continued lack of knowledge scares me. You can rant and rave, but you're unqualified.
Sam Quint October 30, 2011 at 12:17 PM
Keep expenses level.....on paper that sure looks nice and it makes good campain rhetoric but it is something to cant follow through on. Freeze all salaries....the Board could do that. Control the cost of fuel for the buses, electricity, nat gas...nope Control the cost of educational materials (paper,ink,textbooks)......nope Control the cost of replacing/ new technology........nope So it appears your plan is to balance the budget on the backs of the very people who provide services for the children of Westlake. How very Kasich of you. The fed up Westlake taxpayer.....the same taxpayer who has seen their tax dollars stretched by the current Board while also enjoying LOWER TAXES than Bay and River. If your "vision" of cutting average salary by $10,000 is the solution you are going to come up way short. Roughly 300 teachers times $10,000 is $3million. Where is the rest coming from? There simply isn't the of control spending you claim.
Jeff Tock November 03, 2011 at 09:41 PM
I understand and respect your position Robert but I don't think you fully understand mine. I think Perpera is highly qualified and capable. However I think he has failed miserably in the area of transparency. My wife asked for last year's financial statements and he stated he didn't have to. All school district finances are opaque and buried on other websites with no reference to them on the board website. There are many qualified bean counters but to find one that makes the effort to fully disclose is a little harder to find- and one that merits my backing. Full transparency implies honesty. Opacity implies dishonesty. The logical place to start for me is Perpera- then we can go from there. I assume you believe this is the school boards' responsibility but I am not sure Perpera actually cares about transparency since I have seen no effort from the board or treasurer. Your campaign sign is in my front yard so if you don't believe in transparency, which I consider priority number 1, then let me know so I can take the sign down.
Jeff Tock November 03, 2011 at 10:07 PM
Sorry Sam, whoever told you levy cycles are every 4 years is just lying to you. This "4 year cycle" is a recent phenomenon directly attributable to employee contracts and accelerated benefit costs over the last 30 years. You might have noticed that voters Westlake just came to the voters for new buildings- some of which may have been needed and a high school that didn't. They didn't even bother to maintain it properly according to the pictures they trotted out in argument of a new building. On top of that they are tearing down the newest of the buildings first. Please enlighten me here. Bay & RR aren't my concern- nor are we theirs (they have their own problems and don't be surprised if there isn't talk about consolidation within 10 years). The school board should be aware that asking for a building levy is going to greatly influence the ability to float an operating levy a couple years later. This really isn't rocket science Sam. The probability of a levy passing in the next 3 years in slim to none and slim left town. Remember, there is talk of a second building levy also (which includes maintenance- pretty sly and underhanded eh?) You are right that there is always a deficit before a levy but I ask you to examine the management of these "cycles" and tell me if it makes sense. I obviously don't think so. The board has some 'splanin'" to do.
Jeff Tock November 03, 2011 at 10:42 PM
Speaking of ranting and raving Duane, what is your solution? You have not presented any ideas other than throw more money at it as often and as much as is necessary to sustain the status quo. If you have been paying attention, the status quo is not and will not work based upon increasing layoffs and reducing services. I suppose we can eliminate lunches next (that was one of my favorites from the CMSD lately). The present situation is a problem- so are you a part of the problem or a part of the solution? If you want to be a part of the solution then let's hear some legitimate ideas other than the "stick our heads in the sand" line. This is an interesting time for slowing growth communities such as ours. We can learn a lot from how the inner ring suburbs have (or haven't) addressed these problems.
Jeff Tock November 03, 2011 at 10:54 PM
You are flat out lying that Westlake spent more on building maintenance than other districts Duane. We are not even close to our surrounding districts or the ones we consider our peers. I wish I could say you could look it up on our Westlake BOE website but, alas, you will have to go to the state website and spend some time to find it. I wish I could post my spreadsheet- a spreadsheet says a thousand words.
Duane Gibson November 04, 2011 at 04:08 AM
Jeff, here it is. I posted this before, and I know you've read it, but check it out. This is the ODE report. It clearly states what Westlake spends and comparable districts along with state averages. (Note that we actually spent much more than other districts.http://www.education.ohio.gov/GD/Templates/Pages/ODE/ODEDetail.aspx?page=3&TopicRelationID=1214&ContentID=101209&Content=102437 That being said, you've finally made a little sense. There is much to be learned from other districts. But seriously, CMSD? I'm assuming you mean Cleveland. Do you really want to compare Westlake to Cleveland? The only thing they have in common is the lack of funding from the state. Cleveland hasn't passed a operating levy since 1996. Read Sam's comments on this above.
Duane Gibson November 04, 2011 at 04:08 AM
I think you know that Westlake's schools are inadequate, massively inefficient, etc. It's apparent that you have little knowledge of the OSFC or the State's building projects. What did you think they were going to take pictures of, shiny toilets and well trimmed grass? Their job is to evaluate the problems with the structures. The argument that the schools were not maintained might gather some force for those who don't know the facts, but those that do realize that the BOE did two very wise and thoughtful actions. #1 - Choosing to ask the voters to build now and #2 - not including the OSFC in the project. If you haven't seen the Ohio Design Manual for schools, which we would have been bound to comply with, it is a very large template that is great for large districts but would restrict a vibrant district like Westlake.

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