Berea City School District

The district, located in suburban Cuyahoga County southwest of Cleveland, serves the cities of Berea, Middleburg Heights, and Brook Park. The district is mostly residential with a mature, stable tax base as reflected in the district's modest 2.9% average annual growth in assessed value (AV) for real property since 2001. Recent triennial update of AV results for fiscal 2010, which show a marginal 0.5% growth from fiscal 2009, echo this trend.

Unemployment for Brook Park, the largest of the three cities, increased in September 2009 to 8.8% from 6.3% the year prior underscoring the weakened local economy due to the concentration of jobs with Ford, which operates three plants in the district and employs approximately 2,900 employees as of 2007. Although recent investments in a previously idle plant demonstrate the company's commitment to the area, the planned 2010 closure of its casting plant, which employs approximately 800 workers, may further weaken the local economy. However, the city's unemployment still compares favorably to state and national averages which equaled 9.7% and 9.5%, respectively, as of September 2009.

District finances mirror the cyclical nature of most other Ohio school districts, which track with electoral cycles as they await for voters to approve additional operating levies to offset increases in spending. The district benefits from the lack of expiring levies, which have resulted in a decrease in ballot issues and stable property tax revenues. In addition to stable property taxes, which represented roughly two-thirds of general fund revenues in fiscal 2008, the district's conservative management has prudently built up its reserves after its 2006 levy to better maintain financial flexibility through the down cycle. As a result, available reserves, including a reserve for property taxes, increased to $28.3 million or 36% of general fund spending in fiscal 2008 from $2.4 million or 3.5% of spending in fiscal 2006. According to the district's five-year forecast, expenditures are set to outpace revenues in fiscal 2010 resulting in a slight $1.1 million draw on reserves. Fiscal 2010 unreserved cash balances are projected to decrease slightly to $26 million or 31.2% from $26.6 million or 32.5% of spending in fiscal 2009. According to management, draws on reserves will trigger the placement of additional levies on the 2010 ballot pending board approval.

Net direct debt for the district is below average equaling 1% of market value or $835 per capita; however, the district's debt burden is expected to increase as the district plans to issue additional debt to fund consolidation efforts as a result of declining enrollment. Overlapping debt is low, equaling 1.8% of market value or $1,495 per capita.