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Jan
24
2022
Yellow Springs School Board

Budget deficit forecasted for Village Schools

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After finishing the last two fiscal years with revenues higher than expenditures, Yellow Springs school leaders anticipate a return to deficit spending this fiscal year (FY), which ends June 30, 2022, according to the district’s latest five-year financial forecast. If shortfalls continue in the next several years as expected, the schools will need a new influx of money at about the same time two operating levies are due to expire.

District Treasurer Tammy Emrick presented the new forecast Thursday, Nov. 11, during the school board’s most recent regular monthly meeting. The treasurer compiles the forecast each fall for submission to the county auditor in November, and then prepares an update in May.

“The district is able to maintain a positive cash balance until the end of FY 2024,” the 23-page document concludes.

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“In the fiscal year 2024–25 time frame, we’re looking at [needing] new additional operating money, depending on how our expenses turn out and how the tax revenues and state foundations go,” Emrick told the board Thursday.

The district’s two operating levies both conclude at the end of 2025 and are eligible for a renewal vote in either the spring or fall elections of that year. One, a 10-year, 7.9-mill levy, raises $1,060,000 a year; the other, a seven-year, 7-mill levy, raises $915,000. The timing of the levies were modified when last renewed so that they would end concurrently, in order to give district leaders the option of combining them into a single, larger levy if deemed necessary.

As anticipated in 2018, the district began outpacing its revenue in fiscal year 2019, and leaders projected the deficit spending to continue for the next several years. But the pandemic, which closed the school buildings to most students for nearly a year, along with some belt-tightening efforts, temporarily reversed the negative budget trend. Fiscal year 2020 ended with a budget surplus of $2,323, and FY 2021 ended at $202,192 over. If not for taking in about $500,000 more in revenue than anticipated for 2021 and finishing the year with expenses about $500,000 under budget, the district would have faced a shortfall of about $800,000 at the end of the last fiscal year, according to district records.

Emrick now anticipates ending this fiscal year with expenditures outpacing revenues by more than $822,000. The anticipated losses grow exponentially greater in subsequent years, with $1,220,839 for FY 2023, $1,299,208 for FY 2024, $1,722,617 for FY 2025 and $2,076,153 for FY 2026.

Each year of deficit spending cuts further into the district’s cash balance, which was $5,219,4892 at the end of FY 2021. If the losses continue as forecast, the district’s cash balance will fall to $4,397,290 this fiscal year, $3,176,451 in FY 2023, $1,877,243 in FY 2024, $154,626 in FY 2025 and post a deficit of $1,921,527 in fiscal year 2026.

The board approved the forecast without comment.

In presenting her monthly update, Emrick noted that for the first four months of this fiscal year — July through October — revenues were slightly down from what was expected, while expenditures were about $200,000 under, putting the district about $191,000 ahead of projections.

“Overall, at this point in the year, we’re holding our own,” she said.

Other actions from Thursday’s meeting will be reported in a future issue of the News.

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