Editor’s note: In preparation for the Nov. 8 general election on which the Sidney City Schools has placed a permanent improvement levy, the Sidney Daily News will publish a weekly question dealing with the levy and what it means to the district. The questions and answers have been provided by the PI levy committee.
SIDNEY — Every school district is required to submit an annual 5-year financial forecast to the Ohio Department of Education to show how healthy or unhealthy a school district’s financial well-being is. This forecast (estimate) shows the cash balance, or carry over balance, at the end of each fiscal year. The forecast is more precise the first two years of the financial picture because it goes along with the state biennium, which provides resources to school districts; the state biennium is updated every two years. Thus, in such a forecast, years 3 to 5 are much more difficult to gauge.
Even though the Sidney City Schools District, through good, sound management and fiscal responsibility, has a healthy cash balance of $19,000,000, it is important to avoid the position the district was in just a few years ago when it had serious financial concerns and the carry over balance was under $2,000,000 with a permanent improvement (PI) fund. The current 5-year financial forecast shows deficit spending in fiscal year 2018 and a reduced carry over balance by fiscal year 2020 to $7,000,000.
Unexpected expenses continue to carve away at this carry over balance since the district let the former PI levy expire in 2009. Most school districts have a separate PI fund for such expenditures as school bus purchases, roof repairs, window replacement, computer purchases and a variety of other tangible improvements with a shelf life of an estimated 5 years; PI funds cannot be used for salaries or benefits. Examples in the past several years of such unexpected PI expenses (paid for out of general or operating budget) include $416,000 to upgrade the school district network infrastructure, $104,000 for replacements of two roof sections at Sidney High School, and $20,000 to replace damaged cabinets and install carpet from the flood at Emerson. Replacing school buses costs the district upwards of $100,000.
A separate PI fund to pay for such expenditures is needed to prevent this carry over balance from further erosion. Through good, sound fiscal management, the district never wants to return to the days of just a few years ago when the financial picture was gloom and doom with teacher layoffs, curriculum cutbacks, salary reductions and pay to play.