Forecast shows district 'fiscally fluent' through 2016
The Gahanna-Jefferson Public School District is expected to be fiscally sound through 2016.
District treasurer Julio Valladares presented a five-year forecast to the school board Oct. 10, noting the district would be "fiscally fluent" through 2016. He said a deficit is expected in 2017 without additional revenue.
The forecast for June 30, 2014, through June 30, 2018, shows a negative fund balance of $2.3 million June 30, 2017, and $7.1 million in June 2018. The fund balance for certification is $5.6 million in 2014, $5.1 million in 2015 and $1.7 million in 2016.
Based on the forecast, Superintendent Francis Scruci said, the district wouldn't be on the ballot for additional operating funds in May 2014.
"However, we do have permanent improvement needs," he said. "We may bring needs to the board with having heating and cooling issues. As we come into the November election, it will be the understanding we're not on the ballot for operating money in 2014."
In looking at revenues, Valladares said, a small recovery has occurred in the real estate market.
"We're seeing the market coming back but not as fast as we would like," he said.
In a written report, Valladares said property revaluation for 2014 is showing an increase of $36 million over 2013 values, representing an overall modest increase of slightly more than 3 percent.
Beyond 2014, he said, the district is projecting modest increases partly because of a slow market recovery.
The largest factor affecting Gahanna-Jefferson's revenue projection and entire financial picture is the erosion of its tangible-personal-property-tax reimbursement base, according to Valladares.
He said many changes over the past three state biannual budgets have affected TPP tax reimbursements.
Under House Bill 153, for example, districts where TPP tax payments in 2011 constituted less than 2 percent of the district's total revenues would receive no TPP payments in fiscal year 2012 or thereafter. In districts where TPP payments exceeded 2 percent of total revenue in fiscal year 2011 (Gahanna was 7.4 percent), TPP payments would be reduced each year by 2 percent of the 2011 total revenue figure, beginning in 2012 and continuing until the tangible payment amount has been reduced to zero.
In Gahanna, Valladares said, the proposed phase-out will be three years, with a projected loss of more than $4 million.
He said House Bill 59 calls for the continuation of the TPP tax reimbursement at the same amounts received in fiscal year 2013 -- $2.3 million in Gahanna.
"The same amount will be received in both years of the biannual budget, but it's uncertain that those reimbursements will be continued in the future," he said.
Valladares said salaries make up the major portion of expenses in the district. He said the district lost 37 employees through retirement last year and an additional 19 to resignations. The retirements generally allow the district to hire new employees at lower salaries, he said.
Valladares said personal-services expenditures also reflect a decrease in salaries for outsourcing the information-technology staff of eight employees.
He thanked the teachers for continuing to work with the district regarding the new three-year labor contract (See related story on contract negotiations).
The last contract for fiscal years 2012 and 2013 included salary and step freezes, two furlough days and insurance co-payment increases.
Valladares said the district is being very conservative in its assumptions because of the slow recovery of real estate and unknown results for the December 2014 real estate re-appraisal values.
In other district reports, Scruci said the district's current enrollment is 7,246.
"It's up from what we were expecting," he said. "That doesn't include full-time JVS students."