WILLIAMSBURG — An apparent misunderstanding over money coming from a business has officials in the Williamsburg Local School District grappling with an unexpected deficit that exceeds 10 percent of the district's budget.

        The district built $700,000 into its budget — twice, as it turned out. The actual deficit, which could be a lot less than that, won't be known until the end of February. The Clermont County district, with a $6.5 million annual operating budget, is considering potential cuts. “The money had been appropriated in different categories, and we're looking at to what extent it's been expended and where we can freeze that to minimize the deficit,” said Superintendent Robin Wiley. “Naturally, our salaries and all of our contracts are protected for the year.”

        The problem was discovered when the district received its annual report from the Clermont County auditor on Dec. 27. The final revenue figures didn't mesh with estimates.

        Because a fiscal audit is under way, the district doesn't know its deficit yet. When the local share of school finances shifts or decreases, the state share increases. The deficit will be offset by the local/state share recalculation, which has not been determined, Mrs. Wiley said.

        The school district and auditor's office differ on how the mix-up occurred. Mrs. Wiley provided this account:

        In 1998, Milacron, which makes plastic injection mold machines in Williamsburg, applied for foreign trade zone status through the federal government. Foreign trade zone status allows exemption from general personal property or inventory tax, allowing the business to export and import without tax penalty.

        The business is not bound by law to make any payment to the district to make up for lost income, but Milacron offered a $700,000 payment in lieu of taxes. The payment is made directly to the school district.

        The problem arose while building the fiscal year 2001 budget from the county auditor's estimated available resources. The district was assured by the county auditor's office that the general personal property figure did not include Milacron's usual inventory tax payment, Mrs. Wiley said.

        And so, she said, the treasurer used the number certified by the county to build the budget.

        “To make a very long story short, the money was calculated twice,” Mrs. Wiley said.

        Clermont County Auditor Linda Fraley said no one from the district notified her office of Milacron's payment in lieu of taxes.

        “The auditor's office did not get formal notice of what that payment was and when they'd be receiving it,” she said.

        “We estimated their resources based on their valuations, based on the rates and the information we had,” Ms. Fraley said. “Our estimated resources included Milacron as they normally paid. They (school district) should have deducted that amount from the estimate we had given them.”

        Mrs. Wiley said the district doesn't blame the county auditor's office because it's such an unusual circumstance.

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