By JAN LARSON McLAUGHLIN
BG Independent News
Bowling Green City Schools Treasurer Cathy Schuller presented a snapshot of district finances on Tuesday – and it was not a particularly pretty picture.
The five-year forecast update presented to the board of education predicts deficit spending in the coming years. That will likely cause the district’s cash reserve policy to trigger the need for a new money levy in 2024, Schuller said.
The Elementary and Secondary School Emergency Relief Fund, intended to address the impact of COVID on schools, will continue to reduce some impact to the district’s general fund through fiscal year 2024. But Schuller cautioned that continued proactive planning is needed to maintain operations.
Items that must be considered, according to Schuller, are:
- Rover Pipeline valuation and funding continues to be unpredictable. Current collections are based on the appealed amount. And parties continue heavy litigation, with no decision expected in near future.
- Future of state aid is uncertain. The Fair School Funding formula is expected to continue the six-year implementation, but it is currently only guaranteed through fiscal year 2023.
- Expenditures are increasing as revenues remain flat. As deficit spending continues, cash balances are reduced. ESSER personnel costs will impact the general fund starting in fiscal year 2025. Supplies and materials costs are up, including utilities, fuel and repairs to aging buildings. The Chromebook initiative has been federally funded so far.
The two options when deficit spending occurs are generating a new revenue stream or reducing expenditures, Schuller said.
The revenue outlook for the district is slightly better than when Schuller reported on the five-year forecast in November. Income tax collections have increased, with higher salaries in multiple industries after COVID. State revenue is down, with declining enrollment. Interest rates are better on investments, but earnings will decline with lower cash balances, Schuller said.
Property taxes make up 56% of the district’s revenue, and income taxes another 14.3%.
“Our reliance on local sources is remaining steady,” she said.
Meanwhile, the district’s expenses are increasing, with forecasted growth from 2023 to 2027 of 5.6%
Market adjustment and increased salaries were included in most recent labor contracts. The district saw a “significant” increase of 20% in health insurance costs. And supplies and materials costs have increased post COVID.
All of those factors lead to a chart showing expenses outpacing revenue, and a drag on the district’s cash balance. Schuller explained that the amount of expenditures higher than the amount of revenue is paid by cash on hand. The district’s cash reserve policy requires 105 days of cash.
“Managing our cash flow is crucial,” she said.
Also at Tuesday’s board meeting, the board approved the renewal of a lease for modular classrooms used at Conneaut Elementary. The modulars cost $1,998 a month, or $71,928 over the 36-month lease.
Superintendent Francis Scruci reported that he, Schuller and board member Norm Geer had met with DLR Group, the architectural firm handling the master plan for the district’s facilities.
“There’s a lot of work ahead,” Scruci said, noting that much must be done in the next few months to get a building issue on the November ballot. Scruci said he is encouraged to see a grassroots group working on community support for the schools, but discouraged by the number of school levy issues that failed across the state in the May primary election.
It won’t be easy, “but I have faith in Bowling Green, and I’m confident the community understands the need for new facilities,” he said.
In other business:
- Scruci announced that graduating seniors were recently awarded a total of $132,000 in scholarships.
- Scruci reported on the recent five-star rating earned by the district’s preschool program. “It’s a wonderful testament to the work you are doing,” he said.
- Board member Ginny Stewart thanked the community for making donations to the school district throughout the year. Last month, a total of $1,955 was donated for Junior Bobcat Basics, the After Prom, snacks for students, an American flag, school supplies, toiletries, and a contribution to the Lauren “Flex” Rex Memorial Scholarship. Stewart encouraged the community to stock up on items that would be helpful for the beginning of the new school year in August.
- The board voted to hire three intervention specialists at Kenwood Elementary – Emily Akuszewski, Cora Radtke and James Jones; one Middle School intervention specialist – Kaycee Noe; and one high school math teacher – Skyler Rose.
