TIPP CITY — A look at the Tipp City school district’s latest five-year forecast shows the importance of levy renewal to the district’s future revenue, according to Treasurer Dave Stevens.
Stevens presented the forecast during the board’s regular meeting Monday night. The board approved the forecast, which will be submitted to the state.
“If we do not renew our levy, the cash balance at the end of 2023 will be at zero,” he told the board, referring to a five-year emergency levy passed in 2015 that will expire in December 2020. “The cash balance will remain positive through fiscal year ‘23 if that levy is approved.”
Stevens noted that expenditures will exceed revenue beginning in 2020, even with the levy renewal. The district will enter a period of flat revenue “unless state funding grows substantially” or if the student population grows.
“The levy renewal is the key to sustaining our financial viability,” he said.
The district receives 53 percent of all revenue from real estate taxes.
In the next few years, the levy renewal would help to keep the district’s fund balance within the recommended levels, he added. The Ohio Revised Code requires school districts to have a cash balance of at least 30 days of activity. Another state agency suggests that districts have a 60-day cash balance, he said.
“In fiscal year ‘19, we estimate that we will actually have a cash balance that covers 191 days, more than half of a year. But as the fiscal years move forward, by the end of 2023, we’ll only have 50 days,” Stevens said. “But with a five-year forecast, it’s hard to predict five years of revenues and expenditures.”
Going forward, he recommended converting the district’s existing emergency levies to substitute levies, which would allow the district to “capture new growth.”
Stevens explained that substitute levies retain the same millage rate, but include properties built after the levy’s passage. Districts can only put substitute levies on the ballot if there is already an emergency levy that it can be exchanged with.
“If we are able to make those substitute levies, it provides additional revenue that would grow with the district, which could eliminate the need to come back to the voters for new money sooner,” he said.
Board member Corine Doll added that substitute levies do not increase taxes for current taxpayers, but includes new properties in the tax rate.
Stevens also added that 78 percent of the district’s general fund expenditures are wages and benefits, which he noted was “pretty good” for a school district.
In other business, the board approved the hiring of an English as a Second Language (ESL) translator, Staci Hernandez.
The board also voted to purchase natural gas service from the lowest bid submitted to Southwestern Ohio Educational Purchasing Council for the period between July 2020 and June 2025.
Reach Cecilia Fox at email@example.com.