43
South Range schools forecast predicts a need for another source of revenue in 2018
NORTH LIMA
South Range Treasurer Jim Phillips said the school district will not be in deficit spending, despite the latest five-year financial forecast showing the district will be $128,740 in the red.
“I can say with certainty that we are not going to have a $128,740 deficit whether we have to cut the music program or not buy a new bus every year,” he said. “To be in deficit is against Ohio law.”
According to the assumptions for the five-year forecast: “The district’s revenue over expenditures shows the eventual need to raise revenue or make further cuts in expenditures.”
Total revenue is only projected to increase by 1.5 percent in 2017 to $13.1 million, 2018 to $13.3 million, and 2019 to $13.5 million.
A decrease of 2 percent is predicted for 2020 – $13,302,360.
The revenue decrease is a result of South Range schools no longer receiving a portion of levy money received in the years prior to 2020.
The district’s two biggest revenue producers are property taxes and open enrollment.
Phillips predicted a “conservative” 2 percent increase each year for property-tax revenue due to a market decline in the past, he said.
“When the market fell out a few years back we had negative growth,” Phillips said. “It’s coming back but not as strong as it used to be, which was 3 to 5 percent.”
For open enrollment, Phillips said he added 15 additional open-enrollment students per year from 2018 to 2020, despite bringing in 90, 100 and 266 in 2014, 2015 and 2016, respectively.
He said he predicted conservatively and calculated open-enrollment income by using the current rate for each student, $6,000. Open enrollment is expected to bring in about $1.8 million in 2017, $1.9 million in 2018, $2 million in 2019 and $2.1 million in 2020.
The school’s capacity, the amount of students it can sustain, will play a factor in open-enrollment student growth that is not predicted in the forecast.
For spending, the forecast shows a 5 percent increase resulting in totals of $12.9 million, $13.5 million, $14.2 million and $14.8 million for 2017, 2018, 2019 and 2020, respectively.
Some reasons for the increase include new bus purchases, insurance-benefit increases and wage increases.
Phillips predicted insurance rates to rise 9 percent each year based on averaging past trends.
Another purchase South Range has to make is for its transportation department.
“We have been delaying purchases of buses as much as possible to help deal with budget constraints, but we are now forced to replace older units as they become too expensive to repair,” the forecast states
Purchasing one bus per year will cost about $85,000 annually.
South Range teachers, who have been on a base salary freeze since 2010, will be receiving raises, increasing payroll costs by about 3.5 percent in 2017 and 2018 and 3 percent both 2019 and 2020.