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.

Posted by Gary Henery on May 16 2012. You can follow any responses to this entry through the RSS Feed. Both comments and pings are currently closed.