IMPORTANT UPDATE ON THE NEW RICHMOND EXEMPTED VILLAGE SCHOOL DISTRICT FINANCIAL FORECAST
December 9, 2016
The school district recently learned that the sale of the Zimmer power plant by Duke Energy to Dynegy Inc. will have a significant financial impact. As part of our ongoing dedication to remain transparent with the community regarding issues that will impact our district, we wanted to provide you with the information that we have now and assure you that we will continue to inform you of any new information that becomes available.
NREVSD Treasurer Mike Mowery explains the details. “Dynegy filed tax documents with the Ohio Department of Taxation in October 2016 indicating a $42.5 million reduction in taxable values for the Zimmer Plant. This is significant to the schools as this will represent a reduction of $1,350,000 per year in revenues beginning in 2017. The school district is very concerned about the long term effect of this loss of revenue, especially coming so soon after the closure of the` Beckjord power plant in 2014 that will ultimately reduce district revenues by another $1,6000,000.”
In relation to the public utility values and the planned closing of the Beckjord plant, the school district reduced expenses beginning in 2010 in order to accumulate a cash balance that would provide funds to operate in future years. Ultimately, however, between the loss of the Beckjord plant and now the Zimmer devaluation, the district is forecasted to exhaust the cash balance in the next five years. The school district is currently considering what measures can be taken and looking at options to enable us to continue to provide our students with a high quality education.
Superintendent Adam Bird emphasizes the urgency behind our planning efforts. “Mike Mowery and I met with Chief Deputy Auditor Chuck Tilbury about this new information regarding the financial impact on NREVSD. We had started planning for Beckjord’s closing, but the Zimmer plant’s lower valuation occurred suddenly and will have a significant effect on our finances. We will make this an immediate priority and strategize with our Board of Education on the next best steps for the district.”
GOAL 5 in our Strategic Plan highlights Strategic Initiatives, with 5.4 being to “Maintain financial management and stewardship practices that ensure focused spending within the district budget”. The members of the committee that is addressing this goal will continue to meet through winter and spring.
This is just the first of many communications that you will receive from us regarding the Financial Forecast. We will continue to bring you new information as it becomes available.