ASHLAND — Amid contract negotiations with district teachers, the Ashland City School Board of Education is left to use its best judgement for its 5-year financial planning.
Board members expressed concern about the projected narrow margin between revenue and expenses, especially the projection for the conclusion of its 2020 fiscal year, when reviewing a draft of the district’s financial forecast for June 2020 through the end of May 2024 at Thursday evening’s work session.
The drafted document presented by district treasurer Susan Guthrie projected $87,441 as the year-end balance next December.
“The difficult part is how important this document is and how we don’t have accurate numbers to make good decisions, and how difficult it is that we have to discuss important things like salaries and negotiations and things of that sort in this legal system of executive sessions and behind the scenes without being able to discuss it openly,” board member Bryan Lefelhoc said. “However, we have to discuss the five year forecast openly.
“It makes it hard to ask the right types of questions to make the right types of decisions to move the district forward… I hope we can guesstimate accurately.”
The most prominent “unknown factors” include the outcome of contract negotiations and potential funding a second pipeline installation. The teachers' previous contract ran from 2016 through 2019 and expired June 30. Negotiations that started this summer have since spilled into the school year, and as for the possible pipeline funding, the first pipeline installed for Rover Pipeline Project dollars brought the district additional revenue in the form of one lump sum, but that may not happen again in the same way.
“It’s a forecast, not like looking into a crystal ball,” Guthrie said. “There’s still some unknowns.”
The board is expected to approve a revised version of the document Monday, Nov. 18 at its last scheduled meeting before the forecast’s Nov. 30 due date.
While the margin in thin, the district is expected to maintain operating expenses less than its revenue, when excluding construction expenses, Superintendent Doug Marrah said at the meeting.
“Right now, we’re spending just less,” he said.
School board president James Wolfe wondered if a levy would need to be placed on the ballot in the near future. He called it a “tough decision” for the next school board to make.
“There’s some discussion being held here about somehow we’re going to live within our means — and I’m fine with that concept — but I’m really increasingly convinced we’ve reached the tipping point of having to just say we’ve done as good as one could expect us to do,” Wolfe said. “The time is approaching where we probably need new additional operating funds.
“That’s an opinion I’ve been slow to come to. I think we have been good shepherds of the resources we’ve been given, but to make the right investments in our facilities and our employees, I think we don’t have enough money.”
He estimated that the last time the district asked for new money — with the exception of bond issues — was in the mid-2000s.
“ I don’t think there’s many districts around that can say they’ve gone 16, 17, 18 years without new money. We still have a job here to educate children to the best of our ability and I think we’re reaching the point we’re going to start compromising that if we don’t make some tough decisions,” Wolfe said.
A surplus of only $87,441 at the end of 2020 is “not a comfortable position,” he continued.
The year-end balance is anticipated to grow to $376,153 by the end of June 2021, $1,163,722 by the end of June 2022, $2,504,706 by the end of June 2023 and $3,353,163 by the end of June 2024, according to the draft version of the five-year forecast.
However, school board members had concerns about changes in expenses. They asked for the forecast to be presented again at their Nov. 18 meeting.
“We’re increasing expenses, and we’re not going to change that. Those raises and salaries are part of the plan. So if we don’t change that we need to increase our revenue... (But) we’re not asking for new money now. We’ve got a five year forecast in front of us right now that doesn’t require us to ask for new money right now, and we’ve got 2 to 3 million in increased expenses built in. That’s a good thing. And we’re showing black at the end,” Lefelhoc said.