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Cuts improve Poland schools’ budget outlook
POLAND
Poland Local Schools, although still in deficit spending, made some progress over the last several months in closing its projected gap between revenue and expenditures.
In a five-year financial forecast completed in May, the district projected that expenditures would exceed revenues by $1.8 million, $3.7 million, $6.1 million, and $7.5 million, respectively, in fiscal years 2018, 2019, 2020 and 2021.
According to the most-recent five-year financial forecast, submitted last month, deficit spending is projected at $270,000, $2.2 million, $4.5 million, $6 million, and $7.1 million for fiscal years 2018 through 2022, respectively.
Public school districts are required to submit these reports twice a year to the Ohio Department of Education. The forecasts project expected general-fund revenues, expenditures and fund balances.
Additionally, though the previous forecast projected that the district would have a negative fund balance by fiscal year 2019, the new projections indicate that the district will be in the black through fiscal year 2020.
The district administration attributes these changes to some cost-saving measures that have been implemented this school year.
“There were significant things that happened throughout the entire summer to try to close that gap,” said Treasurer Janet Muntean.
She pointed to, for example, expenditures on personnel services, which comprise approximately 50.9 percent of the district’s general-fund expenditures.
The district spent $11,407,875 on personnel services in FY 2016 and $10,799,196 on personnel services in FY 2017. In FY 2018, which ends in June, the district is projected to spend $10,278,285 on personnel services.
“Everything that took place over at the middle school/McKinley site this summer, we were able to not fill some staffing positions that were due to resignations and retirements,” Muntean said, referring to the continuation this school year of a building consolidation plan that closed part of the McKinley building.
The projections for fiscal years 2019-2022, incorporating expected salary increases, show an increase in spending on personnel services. A 2.7 percent increase is built into the projections for fiscal years 2019-22.
Employee benefits have increased each year. A 5 percent increase is projected for FY 2018, and a 10 percent increase is projected for fiscal years 2019-22.
Not reflected in the deficit calculations is a levy that was approved for renewal in the general election, which will further improve those numbers.
The district’s deficit-spending trend began in FY 2016, when the district spent $758,801 more than it collected in revenue.
In reports that accompany the forecasts submitted to the state, administrators have emphasized the importance of measuring this trend.
“This is the most important line on the five-year forecast; it is the gauge to a school district’s health,” Muntean’s most-recent report states.
The report also emphasizes that although the district’s bottom line is projected to remain in the black for the next few years, deficit spending will continue.
“As a result, the district’s cash balance will continue to decline,” the report states.
District officials have attributed the financial challenges to a number of factors. Among those noted is the lack of new development in the community.
The most recent report’s section on real-estate tax revenue notes that “new construction has been less than 0.5 percent the last few years, so a 0.25 percent increase is projected for the future years of the forecast.”
District officials have emphasized the need for future emergency levies to be renewed and for additional spending reductions.