Mariemont City Schools Community Finance Committee. April 2018

Transcription

1 Mariemont City Schools Community Finance Committee April 2018

2 Team Members Nan Dill Pete Findley Bill Flynn Phil Forbes Todd Pease Rusty Wilson

3 Finance Committee Objectives (1) Review District Finances to Assess Needs (2) Create a Recommendation for Operating Millage to Request (3) Review Mariemont High School Project Scope & Needs (4) Create a Recommendation for Project Budget

4 Finance Facility Team Objectives 1. Keep the combined operating/pi millage 9.9 or lower; ensure levy will last for 4 years 2. Clearly communicate value proposition 3. Incorporate energy efficient and sustainable design into the facility to maximize long term operating savings. 4. Pursue private funding options 5. Ensure viability of the site

5 Operating Budget Outlook & Needs State funding to the school district continues to be a concern. This fiscal year, the Mariemont Schools received a $750,000 reduction in funding. Because the school district receives little to no inflationary revenue increases, deficit spending is projected to begin soon will continue to compound in the future without additional funding. The current five-year forecast shows the district s cash balance dropping below the preferred 3-month operating balance without additional funding. Due to expected inflationary increases, additional funding will be needed to maintain existing staffing and programming.

6 Recommendation The school district should place a 3.0 mil operating levy on the November, 2018 ballot. This levy will generate approximately $1 million annually for the school district.

7 Rationale for Recommendation Although this operating levy request is smaller than typical for the Mariemont Schools (half the size of the operating levy passed in 2014), it is appropriate because the district has controlled spending in recent years (an average 2% increase in the last five years) reserving funds from the last operating levy for continued use into the future. The 3.0 mil request should adequately fund the school district s operating needs for four years. This means the school district should not need to return to the voters the same year a high school project is complete.

8 Project Budget Outlook & Needs The school district is exploring a hybrid renovate and replace project at Mariemont High School with a budget range of $43 to $53 million. Based on current estimates, 1 mil from a permanent improvement levy would generate approximately $7.5 million for a project, meaning the current budget range would require between 5.7 and 7 mils. Because the current estimates are very conceptual, it does appear there are opportunities for the project scope to be adjusted and refined to fit a needed budget and still meet the needs of the high school.

9 Recommendation The school district should place a 5.75 mil permanent improvement levy on the November, 2018 ballot. This levy will generate approximately $43 million for the high school project.

10 Rationale for Recommendation Given the project information known at this time, a $43 million budget seems appropriate to meet the needs of Mariemont High School. Combined with the needed 3.0 operating levy, the total millage would be 8.75 mils (operating & permanent improvement). This millage amount is consistent with the 2010 levy request used for previous construction and meets the objective of the Finance Facility Committee to be below 9.9 mils.

11 Why Now Makes Sense The request for operating dollars will never be lower to maintain the existing school district staffing and programming. Not passing an issue in 2018 would result in an additional year of deficit spending and a loss of at least one year of additional tax collection. Therefore, a later request would have to be significantly higher to make up for these losses. Any delay in the high school project would likely result in a greater cost to complete the project because of rising interest rates and increased construction costs. A delay would also increase the cost to maintain the high school facilities as more emergency repairs are needed. This will put additional pressure on the operating budget.

12 Why the Issues Need to be Combined The recommended operating levy request has no dollars built in for needed high school repairs and replacements; likewise, permanent improvement dollars cannot be used for staffing and programming. Therefore, one without the other would not accomplish the district s financial needs. A successful operating levy with an unsuccessful permanent levy would require a significant reduction in staffing and programming to do needed repairs and replacements to keep Mariemont High School safe and functional. An unsuccessful operating levy with a successful permanent improvement levy would leave the district with a functional high school space but inadequate staffing and programming.

13 Mariemont City Schools Community Finance Committee April 2018