Board approves 5-year forecast

By Melanie Speicher - [email protected]

SIDNEY — The financial future of Sidney City Schools was a focus of the board of education during its Monday, May 18, meeting. Treasurer Mike Watkins reviewed the 5-year-forecast, which was accepted by the board following his presentation.

The forecast, said Watkins is for fiscal years 2020 to 2024. The forecast is submitted to the state twice a year.

“With the current environment,” said Watkins, “with us trying to pass a levy this year — and we’ve already had one try that was unsuccessful — and the coronavirus” and how it’s affecting the state, he shared the financial history of the district.

Watkins went back to 2009, which was when voters approved a new tax levy for the district. That year, he said, the district had an ending cash balance of $1,688,565. That year a tax levy was passed, which gave the district $2,350,000 in half year collections.

“Without the passage of the levy, our cash balance would have been negative,” said Watkins.

After the passage of the levy, the district saw pay freezes for employees, along with pay reductions.

“In 2018, we saw a peak of $20 million for our carryover balance,” said Watkins. “In 2018, our expenses started exceeding our revenues.”

The same held true for fiscal year 2019, he said.

“We’re two months away from the end of fiscal year 2020 and it’s going to go down even further,” said Watkins. “This current forecast shows it trending down to 2023 when we’ll have a negative balance.”

Watkins compared the changes of revenue and expenses between 2009 and 2017, and then 2017 and 2020 Total revenues in 2017 were 14.54% more than in 2009. However, he said, revenue in 2020 was only 1.25% more than in 2017.

Total expenses for the district in 2017 — which includes salaries and benefits, purchased services, supplies and capital outlay — was 4.4% more than in 2009. Expenses, he said, were 12.47% higher in 2020 than in 2017.

If there’s no new tax levy, he said, the ending cash balance will decrease each year of the five year forecast, ending in a negative balance in 2023 and 2024.

If a levy is passed, the cash balance will decrease but maintain a positive balance.

“If you push it out another year (2025), we’re going to see a negative balance,” said Watkins, even with the tax levy on the books.

“We want to invert the curve (for cash carryover balance),” he said.

New developments which will have financial implications for the district are associated with the coronavirus. those items include Gov. Mike DeWine’s stay-at-home order; the loss of $866.5 million in sales and income tax receipts; and the reduction of the state’s general fund of $775 million, which included a $300 million cut to K-12 education.

For fiscal year 2020, Sidney lost $646,286 in foundation monies in one May payment and the two upcoming June payments. Watkins aid the formula reducing state funding to schools will e used to determine how much the districts will lose in 2021, which begins July 1.

Looking ahead, Watkins said the district’s property ax revenue will remain flat.

“There are projects going on in the city … but they are associated with tax abatements,” he said, so the district is not seeing an increase in revenues.

“Assuming the 7.3 mill emergency operating levy passes in calendar year 2020, we’ll begin collecting it in January 2021,” said Watkins.

On the expenditure side, the district is entering into the last year of the contract with the teachers and classified unions, he said. For the forecast, Watkins used a 1% increase each of the remaining years. Negotiations will determine what the actual percentage for salaries will be after 2021.

Health insurance will increase by 7.5% in 2021, he said. He’s estimated it will increase by 10% for the remaining years.

Estimates for the remaining expenditures sees a 5,34% increase in purchased services; maintaining current level of expenditures of supplies, which includes eliminating $200,000 textbook allocation; reducing the capital outlay by $100,000 each year and maintaining current level of costs for all other expenditures.

The future for foundation monies will be determined by how long the stay-at-home/stay-safe-at home measures last, if the governor use the “rainy day fund” to help education, legislature has already established the methodology for the education to the foundation and they won’t change that, and the underlying economy before COVID-19 in Ohio was good and how long will it take it to bounce back.

Watkins also outlined what could happen to the district’s foundation money for fiscal year 2021 if the reduction lasts 4 1/2 months, six months, 7 1/2 months or 9 months.

In other business, the board:

• Approved a contract with the Sidney-Shelby County Health Department for health services for the 2020-21 school year at a rate of $37 per hour.

• Adopted new/revisions to the board’s policy book.

• Approved student handbooks for Sidney High School, Sidney Middle School, the K-4 buildings and Whittier Early Childhood Center.

• Approved paper/pencil testing for third-grade ELA test and online testing for third-grade math, alternate assessments and Ohio English Language Proficiency Assessments for the 2020-21 school year.

The board’s next meeting will be June 15 at 6 p.m.

By Melanie Speicher

[email protected]

Reach the writer at 937-538-4822.

Reach the writer at 937-538-4822.