Despite Rover Pipeline payments still on appeal and a delay in the state funding formula, the Bowling Green City school district is in solid financial shape.
Treasurer Cathy Schuller presented her five-year financial forecast at the school board meeting on November 16.
She said she predicted the district would spend a deficit throughout the forecast years, in part due to pipeline revenues placed in an investment projects fund.
Schuller said the district will use up its cash reserves by fiscal year 2026. That balance is expected to be around $ 17 million by the end of that fiscal year.
This pipeline amount is approximately $ 1.9 million per year. Rover has appealed its assessment for the second time. The state tax commissioner confirmed the current assessment, but Rover appealed to the state tax appeal board. The hearing on this appeal is scheduled for May.
âWe’re still kicking this box out and waiting to see how that goes,â Schuller said.
The Fair School Funding Plan was adopted in July, completely overhauling the state’s funding formula.
Schuller said the state has delayed getting the actual funding model for schools until February, but may increase state support.
âWe’re still trying to work on state numbers with allowances, but we know there are going to be big changes in the way we record income and expenses,â she said.
The new formula will eliminate some free registration income. In the past, students who left the district on open enrollment took with them more state money than they received. Going forward, the state will pay the money directly to the other school district.
Schuller expects more restricted and unlimited state aid, including funds for student welfare and success.
For the current school year (fiscal year 2022), it has real estate income contributing to 57.2% and income tax to 11.9% of income. Another 3.7% comes from other local sources. The state will contribute 27%.
However, “the burden is starting to shift towards greater reliance on local sources,” Schuller said.
In fiscal year 2021, the state contribution was 29% and the local share was 73%.
Revenue for this fiscal year is expected to be $ 33,754 million, down $ 630,000 from last year.
Schuller predicted that revenue will increase 0.37% by 2026, to $ 34.376 million, and this is largely due to the state’s new funding formula.
Real estate income is expected to increase from $ 165,000 to $ 19.46 million in five years and tax revenue is expected to increase from $ 246,000 to $ 4.26 million over the same period.
The district’s spending ended the last school year $ 45,000 better than it had expected in May, Schuller said.
Personnel costs remain the highest expenditure at 77%.
âKeep in mind that we are a school district, we are a service industry, so personnel costs are going to be the biggest part of our budget. It’s normal, âsaid Schuller.
The agreements negotiated with the two unions in the district end on June 30, so there could be important variables for the 2023-2026 fiscal years. She predicted that salaries and benefits will increase by $ 3.5 million over the next five years.
General fund spending is forecast at $ 32.86 million for this fiscal year and $ 37.45 million in 2026.
Schuller predicted average spending growth from 2022 to 2026 at 2.8%.
âIt’s a forecast. It’s based on the way we operate today, âshe said. âIt can change. “
Board chairman Norm Geer asked about the pipeline call and how much is being paid.
Schuller said the Wood County auditor was billing the pipeline out of the amount appealed.
Rover entered service in 2019.
âOnce we win, then they will have to pay the extra amount that has accrued over the course of that year,â Geer said.
They will also have to pay interest and penalties, Schuller said.
The district was originally to receive about $ 3.4 million per year from the pipeline.