St. Marys Schools Discus Finances

Staff Writer

In a special meeting of the St. Marys Board of Education Wednesday evening, the board discussed the district's five-year forecast and it's individual account funds. The forecast has yet to be board approved and Treasurer Robin Lahman said she wanted to discuss it in open session to allow the public to be as informed as possible prior to the levy vote on Nov. 6.

The forecast detailed the school's income — including the emergency property tax and unrestricted grants-in-aid (state funds) — as compared to the district's expenses.

Despite the adjustments the district has made to it's expenses, without new funds, the district will begin falling short starting with fiscal year 2020. In the report provided by the treasurer, the district's fiscal year 2018 revenues and finances totaled $20,869,009 while the expenditures totaled $21,753,355. The difference brings the district to a negative spending amount of $884,346.

For FY 2018, the district was certified with $2,442,322 as it's cash balance. The cash balance equates to the district being able to operate for 41 days before it runs out of funds. By the end of FY 2019, the district is projected to only have enough funds for 30 days of operation.

Superintendent Bill Ruane explained that the fiscal health of a district is a large factor in attracting and retaining quality teachers, administrators and staff. St. Marys City Schools has been identified by the Ohio Department of Education as an unhealthy school district.
Board member Chris Falk asked if the forecast presented Wednesday was the same as the one submitted to the ODE.

"Yes, and we were red flagged because of our low cash balance and our deficit spending," Ruane said. "We were flagged [as a financially unhealthy district] by the state auditors and the ODE because of these numbers."

Because the district presented the state with a proposal on how to get out of deficit spending — by having the 1 percent earned income tax levy on the November ballot — the state performed a performance audit, at no expense to the district.
During the audit, the state evaluated the various funds under the board's control. These funds were also presented to the public during Wednesday's meeting.

Of the four accounts presented by the treasurer, only one — the technology account — can legally have funds moved from it to the general fund. The rest of them — Classroom and Facility Maintenance Account, Permanent Improvement Fund and Building Account — can only accept money from the general fund but cannot have money transferred from them to the general fund. The difference comes from the way the funds are generated.

The board then discussed the Classroom and Facility Maintenance Account, which covers the expenses to maintain classrooms and/or the building relating to classrooms.
The Permanent Improvement Fund is set aside for purchases that last at least five years. The PI fund includes revenue from property taxes as well as naming rights for parts of the facility, such as MTO having the naming rights to the basketball court and Minster Bank having the rights to the tennis courts. It's largest expense comes from the purchases of busses.

The need to maintain the school's 26-bus fleet is a constant task for the district because of the strict standards set by the state.

The district also purchased a new English and language arts program from the PI fund. The new program makes up for the gaps students had in their education because of the age of the former program.
Within the PI fund is a reserve account dedicated to replace the turf for the football stadium and to pay the loan to the City of St. Marys for the lights at the stadium. The turf is expected to have additional life, due to it's below average use since it was installed.
The lights were purchased by the city on a zero-interest loan that the school will pay back over the next 20 years.

"This is very, very similar to what happened in 1978 when the school and city worked out almost the exact same agreement for the lights at Skip [Baughman Stadium]," Ruane said.

The final account analyzed was the Building Account. The account was established through a locally funded initiative and a settlement from a contracting company used for part of the construction of the new school building.
The funds in the Building Account can be used for any capital improvement project.

While the board admitted they can legally transfer funds from the general fund into the PI or building fund, they said they will not do so because that would reduce the district's true-days cash balance.

The board will vote to approve the five-year forecast at it's next regular meeting — which was rescheduled during Wednesday's meeting — at 6:30 p.m. Oct. 9. The board also rescheduled the Nov. 14 meeting to Nov. 7.