A five-year financial forecast for Brookfield Local School District has raised optimism that the state will remove the district from fiscal emergency, and its resulting state oversight.
Craig Yaniglos
“We’re hoping in March to have the final answer,” said district Treasurer Craig Yaniglos.
Auditor of State Dave Yost will make the decision, said Nita Hendryx, the department’s chief project manager for the northeast region of the state.
Hendryx and Project Manager Tim Lintner presented the forecast to the board Feb. 21, and Hendryx cautioned the forecast is not a recommendation.
“This is step one in the process to hopefully remove the district from fiscal emergency,” she said. “Step one, as I say. We’re here tonight to present the forecast, which looks good.”
“This is my fifth consecutive year of presenting this report,” Lintner said. “I’m hopeful that this will be my last.”
The forecast shows the district spending less than it receives through the end of the 2021-22 school year.
While a reduction in state funding was part of the reason the district got into a financial mess, increased state funding could be a reason it gets out of fiscal emergency.
The auditor declared the district to be in fiscal emergency in May 2013 because of a looming deficit at the end of the school year. The district carried a deficit through 2014-15, but the trend is reversed. The last school year left the district with $295,000 in its fund balance, and that number is expected to balloon to $1.3 million by the end of this school year, and to $3.6 million in 2022.
Local property tax revenue has increased, and a $167,000 jump this year to more than $3.3 million “has a lot to do with the countywide reappraisal that was reported,” Lintner said.
Tim Lintner
Property tax proceeds are expected to continually rise to nearly $3.5 million by 2022.
State funding also is up, most notably a $225,000 jump this year in the money given based on enrollment. The state provides about 68 percent of the funding Brookfield uses to operate.
“The state funding, the first year of this forecast, fiscal year ’15, you got less than $5.5 million; this year, the state’s going to give you just under $6 million,” Lintner said. “That’s an enormous difference for doing nothing different.”
On the expense side, the district has cut nearly $2.5 million since 2015.
A sign of fiscal improvement this year was the district did not need to take out a tax anticipation loan, something Hendryx said was “huge for Brookfield.”
Such a loan is used to cover expenses at the beginning of the year until tax money comes in, and is paid back with interest. The district had enough money left over from last year.
“When you have a carryover balance, you can absorb some of these things as they change and adjust within time,” Yaniglos said. “When you don’t have that carryover and something big happens, we’re dead. Being able to adjust and having time to make changes is a better situation to be in.”
Looking ahead, the big expense gainers will be salaries through the step increases awarded to employees for years of service and increased education, and health care.
“The increases in the revenue does not match those increases in the anticipated expenditures,” Lintner said, meaning the fund balance is expected to grow, but by falling percentages each year through 2022.
The forecast projects expenses and revenues as they are right now. It does not anticipate hiring more employees than the district already has, awarding salary hikes or making large purchases, such as school buses.
It also cannot predict the Ohio governor and legislature funding policies over that time.
“The state got you on some things and took some money away,” Hendryx said. “That could drastically change this forecast. If that starts to go down, we have to do some adjustments on the expenditure side. Any expenditure adjustments you make, whether its salaries, benefits, any big purchases that you do, be cognizant of that, too, because that all affects that bottom line.”
Board member Kelly Carrier said she is heartened by the brighter financial picture, but also aware that it is not all due to the policies of the district.
“Some of it is, I think, us tightening our belts on these expenditures and making changes in some staffing decisions that we had, and then others is really outside our control, with the property taxes and state funding,” Carrier said.
It’s not time to loosen the belt, Hendryx said.
“It’s wonderful we’re sitting where we are, but I think the board needs to be cautious because the state aid could go away,” she said.
Brookfield Board of Education members Tim Filipovich, George Economides, Ron Brennan, Ronda Benekovic and Kelly Carrier.
