This time last year, the New Richmond Exempted Village School District’s Five Year Forecast indicated that without an infusion of additional revenue mixed with a large decrease in expenditures, the district would have a negative cash balance of over $10.5 million by 2023.
Thanks to the community’s support last March in the passage of the 9.4-mill property tax levy, continued budget cuts by the district, and through pursuing grant funding, that negative cash balance has now turned into a $5.5 million dollar surplus as exhibited in the Five Year Forecast presented by Interim Treasurer James Corbeil to the New Richmond Board of Education on Nov. 16.
“We are grateful to our voters for providing the district the revenue dollars needed to continue providing our students with a quality education,” Superintendent Tracey Miller said. “Passage of the operating levy was a great first step in reversing the district’s revenue challenge.”
“The five-year forecast still indicates that revenue challenges persist,” Interim Treasurer James Corbeil said. “While expenditures continue to remain relatively flat with a 3.61 percent increase in spending built-in for each of the next five years, the district forecasts revenues to continue their decline by 1.8 percent over the same time period,” he said.
Two times a year, all Ohio School Districts are required to submit to the state a five-year forecast. The forecast reflects the most current economic data available to us at this time for revenues and expenditures.
New Richmond Schools continue to be fiscally responsible with expenditures and is being proactive in finding ways to both reduce costs and identify other outside revenue sources, Corbeil said.
Since last October’s Five Year Forecast, the district has sold several properties that were no longer needed or used bringing in over $320,000. The closure and sale of properties are also saving New Richmond Schools nearly $70,000 in operating and maintenance costs, primarily on the Market Street property, he said. Earlier this year the district successfully sold at auction the Market Street building. Though the deal later fell through, the district retained the $40,000 non-refundable deposit from the original sale. Several new buyers have expressed an interest.
Also this past year, Superintendent Miller and Director of Student Services John Frye proactively worked with state elected officials to recoup at least a small portion of money lost by changes in power plants. As a result of their efforts, HB 164 was adopted and it provided $325,863 for the district. New Richmond received this payment in August and may see an additional payment in May or June of 2021.
The Bureau of Workers Compensation has also been a source of additional and unexpected revenue since last fall. The district was awarded grant dollars from the BWC for building security. Most recently, the district will receive an additional $326,380 dividend payment in December 2020.
As with everything else, the ongoing pandemic has been a significant drain on district resources increasing expenditures for online curriculum, health, and safety needs by an estimated $500,000. Fortunately, New Richmond has been successful in efforts to secure COVID-19 funds in the form of CARES Act dollars, Connectivity grant, relief funds, and funds from the Clermont County Board of Commissioners. The dollars are helpful in offsetting the cost of operating schools during the pandemic but fall short of covering all COVID-19 related expenses.
State funding, which provides a little over 44 percent of the district’s general revenue, has been reduced due to COVID-19. New Richmond Schools is also forecasting a $332,385 decrease in Electric Deregulation funding over each of the next five years which equates to a $1.66 million loss. Local funding, which provides the remaining 56 percent of the district's general revenue, was affected by the COVID-19 pandemic as well. We are seeing a decrease in income and property taxes, interest revenue, and casino taxes. Our Public Utility Tangible Personal Property (PUPP) revenue has been extremely volatile as this source of revenue is tied to our power plants.
Over the next few years, the district will continue with ongoing efforts to contain costs. New Richmond also needs to continue efforts to identify and secure new sources of revenue. Filling the $8 million annual gap which continues to increase every year due to the closure of Beckjord, reappraisals of Zimmer, and energy deregulation is a substantial challenge.
Additionally, while the forecast does not account for this as yet, the community recently learned that the Zimmer Power Plant is now slated for closure by 2027 or sooner. Zimmer will provide about $2.5 million in FY21 to the district in PUPP revenue. This amount will continue to decrease every year.
As a district, New Richmond Treasurer’s department will continue monitoring and assessing existing and projected changes in revenue.