An estimated $864,000 deficit predicted by the 2019-2020 school year has Wellington superintendent Dennis Mock looking for ways to get the district out of the red.
Mock announced at the school board meeting Sept. 15 that he and treasurer Michael Pissini are working out a time to meet with Lorain County auditor Craig Snodgrass to discuss the district’s financial history and the best time to attempt a levy campaign.
Pissini also presented a revised five-year financial forecast at the meeting. He predicts the district will be in decent monetary standing this year and next.
But that trend quickly changes when the outlook is extended.
By the 2017-2018 school year, Pissini believes Wellington will be facing a deficit of about $118,000. The deficit is projected to climb nearly five times that amount by 2018-2019 to more than $586,000.
The district has several revenue sources such as property taxes, income taxes, and unrestricted grants and aid.
“Our revenue sources are fairly consistent,” he said. “We had a small jump in 2015 and that was due to revaluation, but forecasting out into the years to come we are going to steadily decrease as we lose our TPP supplement payments.”
That TPP — the tangible personal property tax — is being phased out by state officials earlier than had been anticipated. It previously taxed businesses on assets such as computers, furniture, and tools.
The district receives $600,000 in “state guarantee” money, meaning the amount that would be cut if Ohio strictly followed its ever-declining education formula to the letter.
Pissini said it’s up in the air whether that funding will continue.
“Revenues are going to be declining at a more rapid pace as we head into the coming years,” he said
While revenue is decreasing, district expenditures are increasing. Pissini’s forecast shows expenses increasing steadily from now through at least 2020.
There’s another big drain — since the district doesn’t have a permanent improvement levy on the books, officials transfer cash out of its general operating account to cover the cost of capital upkeep on everything from bus tires to textbooks to classroom computers.
“That puts a lot of strain on our general fund and that puts a lot of strain on our operating cash flow,” Pissini said.
The forecast also accounts for salary step and cost of living increases.
“It’s very conservative and it’s assuming the absolute worst for us,” Pissini said.
But all of his predictions are subject to change. Negotiations for classified and certified staff are coming up in the spring and could very well change the district’s financial outlook.
Pissini also has only two months of actual data for fiscal year 2016, and unexpected changes in revenue or expenses could come up.
Pissini believes the time to act is now to stave off huge problems.
“We have to be proactive in our decisions moving forward because as of right now if nothing changes, if we don’t do anything, we’ll be back in the same boat and operating at a negative cash balance,” he said.
He did not put forward any specific suggestions on what steps should be taken to keep the district afloat.
Kelsey Leyva can be reached at 440-647-3171 or @TWE_KelseyLeyva on Twitter.