BW Board gets 5-year forecast; Drummey says levy will last
By LENNY C. LEPOLA
News Assistant Managing Editor
During Monday’s Big Walnut Local School District Board of Education meeting, school district treasurer Felicia Drummey presented board members with the district’s five-year forecast. Later during the meeting, board members unanimously approved the forecast.
The school district’s five-year forecast, required by state law, is a strategic planning tool used to assist the board and administration in painting a picture of the future based on a snapshot of today, and assumptions (a.k.a. educated guesses) about finances in future years to identify when fiscal challenges will occur.
There will be challenges ahead, Drummey said, but the five-year forecast was, for the most part, positive.
“We’ve made only minor changes to the assumptions that drives the forecast,” Drummey said. “Based on these assumptions, will the levy last? Yes.”
Drummey went on to explain revenue and expenditure projections used in the five-year forecast.
“Real estate taxes are the most significant source of revenue for schools,” Drummey said. “We anticipated a 5.6 percent loss in real estate value, but it only dropped by 4.3 percent, and that’s good news for us. Based on inflation numbers and new construction, I’m optimistic.”
Drummey said she anticipates a 1.25 percent increase in revenue from new construction during each of the next two years and 1.5 percent for 2015.
“I think things are going to slowly and steadily improve,” Drummey said. “I think in 2014 the real estate valuation change will be flat, but this will fluctuate if there’s a boom in construction and we will adjust the forecast accordingly.”
Drummey also said she is projecting 2 percent for inflation.
In November of 2010 district voters approved the current 7.5-mil emergency operating levy. Board of education members and district administrators promised to make that levy last for five years before asking for new money, but that levy evaporates inside the current five-year forecast.
“In 2016 we will no longer collect on the (7.5-mil emergency operating) levy,” Drummey explained. “The last year of assessment will be 2014, we will collect that in 2015; but by 2016 one half of that money will disappear. As we get closer we will be talking about a levy in 2015, but when we talk about it depends on how close you want to get to zero cash.”
Drummey said the school district is going to be positioned very well in 2015, with $4.6 million in the bank.
“But with $2.2 million each month in expenses, do we want to wait until 2015 and then not pass a levy?” she asked.
Drummey said the five-year forecast projects income tax revenue to increase 2 percent each year, and state aid to education is anticipated to remain flat.
“State aid will continue to find ways to back off on the guarantee,” Drummey said. “I’m projecting a 1 percent reduction each year until it’s at 95 percent of where it’s at today.”
Under expenditures, Drummey said there’s little that can be done with personnel costs, 80 percent of the district budget. She said she projects 4.8 percent yearly in salary increases, mostly new staff — nominal staff for the new Big Walnut Intermediate School plus one additional teacher each year to accommodate student population growth.
Then came the bad news – 14 percent per year in employee health benefit increases.
“The trend for health insurance is 1 percent to 1.25 percent increases per month,” Drummey said. “It’s our loss ratio. Medical Mutual is paying out more than we’re paying in premiums.”
Drummey said purchase services, supplies and equipment are more discretionary in nature. The district has the potential to save up to $600,000 from the early retirement program over the next five years and board members could choose to divert those savings to areas like capital improvements.
“We are strategically positioned very well,” Drummey said. “We’re always trying to reduce our expenses, but in 2014 we will cross the line where expenses outpace revenue – 2015 is our pivotal point.”
Drummey added that she is already modeling a replacement levy for a 2015 ballot that would begin collection in 2016.
District superintendent Steve Mazzi was concerned about the unknowns on both the revenue and the expenditure side of the five-year forecast.
“We don’t know what’s going to happen at the next governor’s election; we don’t know what reductions we’ll get in the next state biennial budget,” Mazzi said. “We don’t know what unfunded mandates will be thrown at us. These are the things we get hit on.”
In her monthly financial report, Drummey said in April the district received $1.6 million in income, and paid out it’s standard $2.2 million in expenditures, for a roughly $600,000 unfavorable balance. Drummey said the discrepancy was caused by a late Homestead Rollback payment the district received on May 8.
“The district has a $9 million cash balance,” Drummey said. “That seems extraordinary, but monthly expenses are $2.2 million. Major revenue doesn’t come in monthly. Two times a year the district gets property tax disbursements, income taxes are only disbursed four times a year.”
The good news, Drummey said, is the latest income tax disbursement was $45,000 more than anticipated.
“Employer withholding is staying steady, and that’s good; there’s no change from last year at this time,” Drummey said. “The bad news is, Ed Jobs (Federal stimulus Education Jobs Fund) money will run out at the end of this year, and that pays for four positions – three office assistants for the elementary schools and a high school industrial arts teacher.”
Board members held a first reading of a revision of the district’s Graduation Requirements Policy.
Currently, the school district requires 21 credits for graduation. The new policy, if approved at the June board meeting, would require only 20 credits for graduation — 15 core credits and five electives.
“This opens the door for student to do something beyond what we offer,” Mazzi said. “College classes or credit-flex, for current sophomores and those behind them who go to 20 credits.”
Assistant superintendent Gary Barber asked board members to approve a high school roof and gutter repair and water improvement program; $130,000 for the gutter system, $129,000 for grading and bio-retention cells to process roof runoff. Board members approved the expenditure.
“This will be done with bond money, not from the general fund,” Mazzi added. “This is like your own home, one of those things you don’t plan for.”
The project will get underway on May 28, and be completed by July 28, Barber said.
In other business, board members approved a negotiated agreement between OAPSE/AFSCME local4/AFL-CIO #524 (bus drivers, custodians and maintenance) and the Board of Education from July 1, 2012 through June 30, 2015. The agreement includes annual raises of 2.5 percent, 2.5 percent and 2.8 percent over the next three years, offset by cost-saving changes in the insurance plan design.
Board members approved the auction of 479 South Old 3 C Highway. (an absolute auction, as is to buyer), by Chip Carpenter Real Estate and Auction Company and Colliers International Greater Columbus Region for a commission fee of 6 percent of the property’s selling price plus advertising costs not to exceed $1,200. Board members tabled a similar resolution to auction off the Galena Administration Building by the same entities under similar terms.
Board members approved the tax budget for the Community Library of the Big Walnut Local School District in Delaware County, Ohio, for the year ending December 31, 2013.
Board members approved the Memorandum of Understanding between Big Walnut Local School District and the Delaware Area Career Center transferring the authority and responsibility for the Family Consumer Science program housed at Big Walnut High School to the Delaware Area Career Center.
Board members approved the agreement between Big Walnut Local School District and the Auditor of State for fiscal year 2012 GAAP Conversion and Financial Statement preparation, for a fee not to exceed $12,500.
Board members approved the Memorandum of Understanding between the Big Walnut Board of Education and OAPSE/AFSCME Local 4/AFL-CIO and it’s Local #524 regarding a one-time salary adjustment.
Board members accepted the resignation of the following certified personnel, effective at the end of the 2011-12 school year: Sue Hadden, fifth grade teacher, Souders Elementary, due to retirement, with an extended 18 days; Ann Gallagher, Family and Consumer Science teacher, Big Walnut High School, due to retirement; Alexandra Texler, first grade teacher, General Rosecrans Elementary; Wayne Moore, Chemistry teacher, Big Walnut High School, due to retirement; Sarah A. Yeagler, reading tutor, Souders Elementary.
Board members accepted the resignation of the following certified personnel, effective at the end of the 2012–13 school year, due to retirement: Ric Cavicchia, Guidance Counselor, Big Walnut Middle School; Donna Fulford, English teacher, Big Walnut High School; Margaret A. McNaughton, Intervention Specialist, Hylen Souders Elementary; Nancy McCracken-Bennett, Guidance Counselor, Big Walnut High School.
Board members accepted the resignation of the following classified personnel: Judy Lewis, Head Cook, Big Walnut Elementary, effective at the end of the 2011-12 school year, due to retirement; Gerald Bale, Custodian, Big Walnut Elementary, effective at the end of the 2011-12 school year, due to retirement; Jess Jackson, full-time substitute bus driver and mail carrier, effective June 8, 2012; Kay Snyder, Special Needs Assistant, Big Walnut High School, effective at the end of the 2011-12 school year, due to retirement.
Board members approved the following stipends for the 2011-12 school year: Mike Wion, Mohican Coordinator, $500; Jason Crawford, Mohican Coordinator, $500; Kelly Robinson, DC Coordinator, $500; Gigi Thompson, DC Chaperone, $375; Laura Conley, DC Chaperone, $375; Debbie Mayhew, DC Chaperone, $375.
Board members approved the following parent volunteer for the 2011-12 school year: Jeanne Seabrook, DC Parent Volunteer.
Board members approved the following price increase for school lunches: Elementary and Intermediate, increase .5 cents to $2.35; Middle and High, increase .5 cents to $2.65.
Board members approved the following extended field trips:
· Big Walnut High School Football Team, Ohio Dominican University Camp, June 25–26, 2012
· Big Walnut High School Spanish students, Spain, June 10–17, 2013
· Big Walnut High School Varsity Volleyball Team, Fayetteville, West Virginia, August 18–20, 2012
· Big Walnut Boys Varsity Soccer Team, University of Rio Grande, August 8–11, 2012
· Big Walnut Girls Basketball, Robert Morris College Camp, June 16–17, 2012
· Big Walnut Boys Basketball, Findlay University Camp, June 18–19, 2012
· Big Walnut High School Cheerleaders, University of Kentucky Camp, July 15–18, 2012
Board members approved the following donation: $600 to Big Walnut High School Challenge Day donated by Sunbury Lions Club.
The next regularly scheduled Big Walnut Local School District Board of Education meeting will be held at 7 p.m., Monday, June 11, at the Big Walnut Middle School Library.