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New Richmond Exempted Village School District could soon face major budget cuts, according to the district’s most recent 5-year forecast.
“Currently things are fine with the district, it’s just as we look to the future that we have concerns,” said NREVSD interim treasurer Mike Mowery.
While the school district continues to see strong results in its cash balance, which increased by $800,000 to $22,721,308 in fiscal year 2015 due to increased revenues and decreased expenditures, there are some known concerns and a great deal of uncertainty regarding other matters, according to Mowery.
“This is because two of our primary funding sources, state per pupil funding and the Public Utility Tangible Personal Property reimbursement, are unknown beyond the two year state biennium budget,” Mowery said in a statement posted on the school district’s website.
He added, “Further, our negotiated contracts with our unions end on June 30, 2017, making it difficult to assess personnel costs.”
The district has seen significant increases in revenue from open enrollment and is anticipating an increase of $140,000 this year to a total of $1.9 million per year, according to Mowery.
“These revenues are wholly contingent upon students continuing to enroll with the district and therefore outside of our control,” Mowery said in a statement posted on the school district’s website.
PUTPP payments are reimbursements to school districts with electrical generating facilities that lost tax revenue when the state deregulated electric production.
Ohio’s biennium budget for fiscal year 2015/16 and fiscal year 2016/17 included reinstatement of the phase out of the PUTPP reimbursements from which New Richmond currently receives $7.1 million per year, according to the school district’s website.
Mower said that while there is a movement to have the full $7.1 million paid to the school district, as currently enacted, they will see a reduction of $700,000 in fiscal year 2017.
“This is the most significant assumption in the forecast,” Mowery said in a statement posted on the school district’s website. “If the reimbursement were to stay at the $7.1 million we would have an additional $6.5 million added to our June 30, 2020, cash balance.”
The W.C. Beckjord Station closing will also have an effect on the school district’s revenue.
The current fiscal year should see a reduction of approximately $700,000 in revenues, and by fiscal year 2016/2017, the school district will see an annual loss of loss of $1.5 to $1.6 million, according to Mowery.
“We do have that working against us,” he said.
While the cash balance is forecast to grow to $22,973,322 by the end of fiscal year 2016 on June 30, Mowery anticipates it to begin falling to $20,501,110 in fiscal year 2017, $17,321,548 in fiscal year 2018, $13,095,578 in fiscal year 2019 and $7,780,026 in fiscal year 2020.
The 5-year forecast included no additional staff hires for the next four years beyond fiscal year 2015/2016. The salary schedules include no increases in the base salary amounts beyond labor agreements that expire after fiscal year 2016/2017, but do include future step increases, according to Mowery.
Mowery projected health insurance costs to increase by a conservative two percent this fiscal year, and building and departmental budgets are projected to remain almost unchanged for the next four years, except for variances for textbook and technology allocations.
“We’re not in a financial straight,” Mowery said. “We are however concerned about the longer term.”
He said that while the forecast may be alarming, it’s vital to share the information with the community.
“I think it’s always important,” Mowery said. “Communication is important, so people are at least aware of what’s going on.”