CADIZ The Harrison Hills City School District heard a presentation Thursday by Roxanne Harding outlining the forecast for the next five years. Fiscal difficulty is expected unless the district begins to reap taxes from the area's energy boom.
The district is projected to begin spending more than it is bringing in beginning in Fiscal Year 2014, with revenues between $15 million and $20 million and expenditures closer to $20 million.
The ending cash balance and unencumbered cash balance for Fiscal Year 2014 is expected to decline until 2018, when funds will be in the negative between $1 million and $2 million. Exact numbers have not been determined, since some factors have not been accounted for.
Estimated general fund revenues for 2014 will derive 63 percent from the state foundation, with other state sources coming in at five percent, for a total of 68.1 percent of funding from state sources. A total of 29 percent of local sources is accounted for by real estate tax. General fund revenues estimated for 2014 come to $16,070,570.
Harding noted the expected revenue cuts in 2013 and beyond, which is expected to remain between $10 and $12 million. She noted the state may not be a growing partner in the district's funding.
In terms of local funds, she noted that due to energy developments local values rose by $33.7 million during Tax Year 2012, but taxes actually fell from $5,076,221 in 2011 to $4,737,901 in 2012. Harding noted that local taxes are the only source of growing funds.
She concluded that TPP state cuts in Fiscal Year 2012-2013 are still affecting the district. State funding is expected to flatten in Fiscal Year 2014 and beyond based on House Bill 59. She noted that tax collections are not expected to keep pace with assessment values and called this a significant problem. Furthermore, the rise in values means the area appears rich to the state in the funding formula, so no increase in funding can be expected.
If this trend continues, the district will likely be in financial difficulty by Fiscal Year 2018.
In terms of the district's expenditures, wages and benefits are estimated at 65 percent of the 2014 expenditures of $16,542,562. She noted expenditures are being kept under control.
However, costs are expected to continue to rise in the long term, with operating expenses estimated to be topping $18 million by 2018.
Harding also pointed out that two new state biennium budgets are in the forecast.
In the short term, she recommends that the district continue to operate conservatively and monitor energy developments to determine why tax revenues are not increasing.
With regard to levies, she pointed out that the district has passed one new operating levy for new money since 1991. Due to strong management, it has not been necessary to as for new money in more than 22 years. Many districts seek levies every four or five years. If taxes are collected from new energy developments it will probably not be necessary to place a new levy on the ballot.
Superintendent Dan Snider noted that records for incoming funds are not finalized. She added that the district was awaiting word from the county auditor to verify what funds will be coming in, how and when they will be generated.
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