CADIZ Harrison Hills City School District Treasurer Roxanne Harding presented the five -year forecast for July 1, 2013-June 30, 2017 during Thursday's board meeting. The district has seen state level cuts, but local prosperity and good management have managed to offset the losses, with a tentative positive projection through 2017.
Harding noted it is a forecast showing three years of actual with five years projected. Beginning in Fiscal Year 2014 expenditures will begin to exceed revenue resulting in a decline of cash balance.
It is projected that the district will remain in the black through the five-year forecast. However, the district would have been in a better position if not for cuts in state and federal funding beginning in Fiscal Year 2012.
T-L Photo/ ROBERT A. DEFRANK
The Harrsion Hills City Schools Board of Education heard a report of the district's five-year forecast through 2017. Pictured, from left, are Treasurer Roxanne Harding, Board President Deborah Kenny, Superintendent Dr. George Ash and Board Member Melvin Allen.
The ending cash balance will be above the recommended 30-day reserve when the books are closed.
Harding noted that the greater percentage of the district's revenue comes from state sources, at 66 percent, and 33 percent through local sources such as real estate tax. However, state funding is tied to proposals such as House Bill 59. The bill has been introduced in Columbus but not passed. It would serve as funding for the next two fiscal years. Any cuts or changes to the present bill could have a negative impact.
"Right now we will be getting no new money. We're holding on our own," she said.
Beginning in 2012 the district lost state funding due to the loss of tangible personal property refund and state stabilization.
"Just within Fiscal Year 12 and 13 we lost $1.5 million. Over the term of this forecast it was over $3 million in state funding that we lost. In those two years that was equivalent to 5.88 mills of revenue," she said.
However, the district is growing in local revenue due to ongoing fracking operations. In calendar year 2013 the district saw an increase of $30 million in valuation for mineral values.
"That is just the beginning of what we're going to be seeing related to the fracking that's occurring in the county. That will continue to grow. We're not sure how high it will go. Eventually though it will fall off," she said, adding that the district does not yet know the value for any taxation of pipelines.
However, House Bill 153 eliminates tangible personal property reimbursement and state basic aid beginning Fiscal Year 2013 will flatline.
"We're hoping there won't be any erratic cuts in it," she said.
Local and property values are expected to increase with coming construction.
"That's good news for our school district," Harding said, noting that local tax revenues are expected to continue to rise.
In terms of expenditures, the majority is in the form of wages at 43 percent, benefits at 23.9 percent, and services at 24.4 percent. Costs are continued to rise in the long term, but with no one area substantially higher than another.
Harding noted that previous reductions have had a positive impact on the ending cash balance and the expedited phase out of tangible personal property has had an unexpected negative impact on revenue. There are two state biennium budgets in forecast. The potential new state funding formula could have a negative impact on the forecast.
In the short term, she recommended the district continue to operate conservatively and keep a close eye on energy developments and the budget through Fiscal Year 17.
She added that the district has only passed one new operating levy in 1991. All other levies are from 1964 to 1974. Since 1991, the district tried unsuccessfully to pass additional operating levies. However, due to strong management tackling difficult decisions they have been successful in operating within the budget when many other districts have had to seek levies every four to five years.
Harding said energy developments may allow the district to not seek new levies through Fiscal Year 2017 and potentially longer.
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