The five-year financial forecast for the Canal Winchester school district looks healthy -- but onlyif voters approve at least a renewal levy by the end of 2014.
At the school board's Oct. 21 meeting, Treasurer Joyce Boyer discussed the current budget and financial scenarios for the next four years, based on known funding for the next fiscal year, enrollment and tax projections, and the anticipation of what may be in store for the district when the Ohio General Assembly wrestles with the state funding formula in two years.
According to the forecast, revenue for this year totals $36.3 millon. Anticipated revenue is $34.6 million in fiscal year 2015, $32.2 million in 2016, $32.6 million in 2017 and $33 million in 2018.
According to Boyer, the lower revenue projections in the final three years of the forecast are due to the expiration of a three-year emergency levy on Dec. 31, 2014; the decline in property taxes due to revaluations in Fairfield and Franklin counties; and the elimination of the tangible personal property tax by the state.
Boyer said that while the school district is receiving a 6.25-percent increase this fiscal year over last year and will receive a 10.5-percent increase in fiscal year 2015, she expects only a 1.5-percent increase in funding for the following three years.
"We do not know what the state funding formula is going to be like or what taxes are going to be like," Boyer said.
In terms of expenditures, the forecast anticipates that the district will spend $35.3 million this fiscal year. While revenues will exceed expenditures by about $1 million in 2014, anticipated expenditures for 2015 total $36.9 million and will increase to $38.2 million in 2016; $39.8 in 2017; and $41.6 million in 2018.
If this anticipated forecast holds true, Boyer said the district will see expenditures outpace income by $2.3 million in fiscal year 2015; $6 million in 2016; $7.2 million in 2017; and $8.6 million in 2018.
These expenditures would eat away at the district's reserves and by fiscal year 2017, would result in a $5.3-million deficit, Boyer said.
That deficit increases to $13.9 million in fiscal year 2018, she said.
The key factor that could ease the budget crunch -- and which is not presently calculated into the revenues -- is passage of a levy.
Superintendent Jim Sotlar summarized five options the board could consider to keep the district in the black.
These include seeking a new levy, a replacement levy, a renewal levy, a renewal levy with an increase or decrease in millage, or a substitute renewal levy.
Sotlar asked the board to keep in mind that renewal levies still carry with them a 10-percent homestead property tax rollback for all real property owners and an additional 2.5 percent rollback for owner-occupied homes.
However, he said, new and replacement levies do not permit the state to give school districts these tax credits.
"These tax credits are reimbursed to the district through the state and are calculated by applying appropriate percentages to residential and commercial property tax collections," Boyer said.
Since the district's $5.8-million renewal levy will expire in about a year, Sotlar said it is time to lay the groundwork now for a levy request. The filing deadline to place a levy on the spring ballot is Feb. 5, 2014. The board would be required to pass two resolutions before the filing deadline.
"I would recommend that we have a first resolution come December and a second resolution come January, which would give Joyce time enough to get down to the board of elections and get that on by Feb. 5," Sotlar said.
Board members asked Boyer to put together some figures for an 8:30 a.m. special board meeting on Saturday, Nov. 16, so they can weigh their options.