School district faces tough choices

October 3rd, 2010    Author: Brett A. Roller    Filed Under: News

The New Richmond Exempted Village School District has been discussing the recent revenue lost when Duke Energy began disputing their taxable personal property evaluation in June, but the board of education has been discussing a much more significant loss of revenue since 2001.

At the time the General Assembly passed the energy deregulation bill in 1999, electricity providers were paying an 88 percent tax on their personal property.

For school districts like New Richmond, the tax proved to be a significant revenue stream. Then deregulation reduced the tax to 25 percent.

District superintendent Adam Bird points out the portion of New Richmond
Following deregulation the state agreed to subsidize the affected school districts for a period of 15 years beginning in 2001. For New Richmond that means that in 2016 the school will lose 30 percent of its annual revenue.

After discussing the issue for years, the board has invited Scott Henderson, Jeanie Williams and Joe Middeler from the New Richmond business community, and parents Laura Jones, Rich Grogan and Mark Miller to join a financial planning committee.

The goal of the committee is to develop a plan to compensate for the drop in revenue by January 2011. The committee meetings are open to the public and input from the community at large has been encouraged. The first meeting was held Friday, Sept. 24.

"We've been talking about this for nine years," district superintendent Adam Bird said. "We want to be open, honest, and transparent with the community. We want the community to know what we're facing."

Between the more than $8 million received from the state subsidy and the nearly $6 million received from current personal property taxes a total of 52 percent of the school's revenue comes from the energy industry.

Bird presented a list of potential cost cutting measures and ways to increase revenue put together by the board of education.

The committee and audience discussed the list and Bird explained it was designed to lay out all options on the table no matter how unlikely or unusual.

The list of cuts was the longer of the two and included everything from staff reductions and pay freezes to closing New Richmond Middle School and moving its students into New Richmond Elementary.

Bird said moving the middle school students would mean making renovations at the elementary school and some of the New Richmond Elementary students would need to be moved to other elementary buildings.

Board member Frederick Heflin pointed out that the district sold the Market Street building in 1981 but after a failed business venture they purchased it back for $1. Some audience members felt the district would have a hard time selling it again.

Staff salaries and benefits make up about 60 percent of the district's annual budget. Bird pointed out that any changes in staff compensation or reductions in staff would need to be negotiated through the unions.

Currently the district has about 23 more teachers than the state minimum for the number of students in the district which allows the district to have small class sizes, especially for kindergarten and Advanced Placement classes. AP courses allow high school students to earn college credit by performing well on an end of the year exam. Heflin said deciding how much residents in the district are willing to pay for more personalized, and higher quality education is something that will need to be decided.

"Any and all of these options are painful," Bird said. "The thought of taking some of these and pulling apart our school district is very difficult to stomach."

The options Bird presented for generating additional revenue were much fewer than potential cuts. The quickest way to get an additional two mills of levy revenue is to move inside millage. The last time the district ran or passed an operating levy was in 1977. A bond issue was passed in 1989 for the science wing of the high school and has since been paid off. The 1977 28.5 mill levy is now collecting the equivalent of 20 mills according to current property values. Heflin referred to this as a discount and explained that the district is allowed to move two of the mills up to current property values and generate an extra $1 million a year without a vote by the public.

"That's not something we want to consider right now because a lot of people consider that taxation without representation," Heflin said. "If we move that now it could hurt our chances of passing a levy in the future."

The district could consider an income tax or property tax levy to increase revenue. They could also introduce a pay to participate system for extra curricular activities, something several districts in the county have done in recent years.

The district has been considering the construction of a new music wing for the high school, something that Heflin is very passionate about. The board could consider placing a bond levy on the ballot to cover the cost of the addition.

Bird provided a list of districts in the state that are most similar to New Richmond. The list is compiled using a complicated formerly developed by the Ohio Department of Education and at the top of the list is Franklin City Schools in Warren County. Bird encouraged the committee and members of the community to review the list and decide which district they would most like to model in order to give some direction to their discussions.

Board member David Painter said it is important for the community to come together and make some very tough decisions before the 2016 expiration date.

"We have an opportunity to manage the situation, or the situation will manage us," Painter said. "We have to make up $8 million and we can't make it up in cuts alone."

The next financial planning committee meeting will be held 7 p.m. Thursday, Oct. 14 in the board conference room in the Market Street Building. The public is encouraged to attend.
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