During the Mentor Board of Education meeting held on November 19, 2024, the Chief Financial Officer presented a critical five-year financial forecast, highlighting significant challenges ahead for Mentor Public Schools. This annual requirement is essential not only for regulatory compliance but also for strategic financial planning, as the district grapples with a projected $3 million loss for the current fiscal year.

The forecast indicates a trend of deficit spending over the next five years, with the district's cash balance expected to decline significantly. By fiscal year 2029, the district anticipates a deficit of $3.5 million, which is not permissible under state law. The CFO emphasized the importance of managing expenses, particularly in salaries, benefits, special education, and facilities, which constitute the majority of the budget.

Key assumptions in the forecast include a projected increase in residential property values and a stable collection rate for property taxes. However, the district relies heavily on local property taxes, which account for 69% of its revenue. State funding contributes 22%, with the Fair School Funding Plan playing a crucial role. The CFO noted that while revenue is expected to remain relatively flat, inflationary pressures could exacerbate financial challenges.

Enrollment trends also pose a concern, with a decline in student numbers impacting funding and staffing levels. The district currently serves approximately 6,527 students, with projections suggesting a slight uptick but overall stagnation in enrollment. This decline could lead to increased costs in special education, further straining the budget.

The CFO urged the board to consider new revenue sources, suggesting that a levy may be necessary by the end of 2025 to address the anticipated financial shortfalls. Various scenarios for potential levies were discussed, with estimates indicating that a 5-mill levy could generate approximately $13.6 million, while a 6-mill levy could yield around $16.3 million. The board was advised to weigh the timing and type of levy carefully, as these decisions will significantly impact the district's financial health.

In conclusion, the meeting underscored the urgent need for strategic financial management and proactive planning to ensure the sustainability of Mentor Public Schools. The board is expected to convene for a special work session to explore the feasibility of proposed levies and to address the pressing financial challenges outlined in the forecast.