Note: This story appears in the Sunday, July 14 newspaper on Page A1.
The financial outlook is trending upward for a few school districts in Athens County, while others continue to face expected revenue deficits over the next handful of years.
This is a time of change for some districts — Athens has begun its massive facilities overhaul and Alexander finally passed a much-needed income tax levy following several failed attempts.
State law requires public school districts to submit to the Ohio Department of Education regular “five-year forecasts” of their respective financial statuses. These outline total revenues, expenditures and other main figures as calculated by district treasurers.
Each of Athens County’s school districts are projecting to have a deficit in at least one year out of the next five. This ranges from Trimble forecasting four years above water and a fifth underneath, to Nelsonville-York sliding deeper into the red. Increased costs to pay employees and their benefits remains a notable challenge to each district’s budget.
Here’s a snapshot of each district’s five-year forecast for Fiscal Years 2019-2023, in alphabetical order:
Alexander Local Schools
The Alexander Local School District’s finances resemble something of a roller coaster: the district had a deficit in Fiscal Year 2016 nearing $1 million, deep cuts got the district back above even, but more deficits are projected again down the road.
Alexander is expecting to see an increase in funding starting in FY2020 thanks to the passage of a 1-percent, 5-year earned income tax levy passed in May. The levy passed by a single vote, the Athens County Board of Elections reported.
New levy funding begins with around $100,000 for FY2020, rising to nearly $1.2 million a year later and $1.67 million for FY2022 and 2023.
The district still faces a similar challenge as others in Athens County: rising costs for personnel and their retirement/insurance benefits.
Alexander climbed out of the deficit hole in FY2017 thanks to a textbook spending freeze, cuts to staff and teaching positions through attrition, and activity fees for students to participate in clubs and sports. The district has also benefited from a Texas Eastern pipeline built through the area, which has accounted for hundreds of thousands of dollars in additional revenue.
The school board rescinded the latter fees following the recent levy passage. With rising costs to operate the district, though, deficits are forecasted for FY2021 and beyond — of $334,000 in FY2021, $934,000 in FY2022 and nearly $1.7 million in FY2023.
In that time, the district’s cash balance is projected to decrease from $4.6 million down to $1.6 million.
Athens City Schools
Officials at Athens City School District have high hopes for the coming years, aided largely by the passage of a facilities bond issue during the November 2018 election.
The bond issue will raise $60.5 million over the next 30 years toward renovating and reconstructing most of the district’s school buildings. As previously reported, the district is also receiving about $27.6 million in state funding to pay for the facilities projects.
This multi-year overhaul begins with the impending demolition and reconstruction of East Elementary. From there, the district will rebuild Morrison-Gordon Elementary; renovate The Plains Elementary; renovate Athens Middle School; and eventually build a new Athens High School.
There are some immediate benefits to this plan, as most building maintenance funds have been deferred. Because the buildings will soon be renovated or replaced, there is no longer a need for rigorous upkeep.
The deferred maintenance money has been transferred to the general fund, Treasurer Matt Bunting said during the May school board meeting, allowing him to provide a “healthy update” as to the district’s finances.
There is still “a lot of work to do,” Bunting added, but the district’s outlook is “a much better picture than it was in October.”
Nonetheless, the district faces a deficit of $487,000 for Fiscal Year 2019. The deficit is projected to grow each year, with a $2.4 million deficit estimated for FY2023. Personnel and benefits costs are expected to rise by several millions of dollars over the next few years.
The district does enter FY2019 with a cash balance of $10 million, diminishing to a projected $4.5 million total in FY2023.
Federal Hocking Local Schools
Large surpluses from the past are projected to become sizable deficits in the Federal Hocking Local School District, the forecast shows. However, this can largely be attributed to capital improvement spending that is planned for the next few years, and the district’s cash balance appears to still be healthy.
The district ended FY2016 with $1.5 million more in revenue than what it spent, with smaller surpluses of $308,000 and $104,000 projected for FY2019 and 2020, respectively.
The district is expected to break about even in FY2021, with two years of deficits after that ($115,000 in FY2022 and $621,000 in FY2023). There is an increase in capital improvement spending — from $500,000 in FY2019 to $1.3 million in FY2023 — that may explain that change.
The district’s cash balance is expected to remain nearly flat from where it is at the end of 2019, which is about $7.1 million, through the next five years.
The Nelsonville-York City School District also has deficits in the forecast, but appears to have enough of a cash balance to handle it.
The district forecasts a $460,000 deficit for FY2020, which will grow in size each year to just over $1 million in FY2023.
In that time, personnel and retirement/insurance benefits costs are expected to grow by the millions, while the district’s cash balance will decrease from $6.1 million to $3.1 million.
District Treasurer Sandi Hurd said it will be necessary in the upcoming years to address the expenditures of the district.
Trimble Local Schools
On paper, Trimble might have the brightest outlook of Athens County’s five school districts. Revenue is expected to consistently outpace the district’s expenses, at least for the next few years.
A projected deficit of $400,000 is on the horizon in FY2023, though the district expects to have a cash balance worth nearly $9 million by then to handle it.
Surpluses are forecasted to continue for the district — $371,000 in FY2019, up to $717,000 in FY2020, down to $465,000 in FY2021 and about $44,000 above even in FY2022.