1. NEWBURY LOCAL SCHOOL DISTRICT FIVE YEAR FORECAST
Presented May 20, 2019
Treasurer: Sarah Palm

2. NEWBURY LOCAL SCHOOLS OBJECTIVES
Update Board of Education on any substantial changes from the October 5 year forecast
Changes in ending fund balance due to Reductions in Staff
Open Enrollment Out Update
Forecast includes Unemployment equal to 33% of the staff affected by reductions
May forecast still assumes that levies will not be renewed
Legislative Update-House Bill 166
Negotiated agreement updates

3. NEWBURY LOCAL SCHOOLS October 2018
This is the forecast that was presented at the October board meeting. As depicted at the time it was assumed that the ending fund balance for 2019 (this year) is $4,824,747 and for the end of 2020 is $3,697,577. The October 2018 forecast took into account a reductions of 6.50 staff members.

4. Staffing Update
Since the October 2018 forecast we have had 2 Certified Resignations that will not be replaced and 1 Classified Position that resigned and will not be replaced, and 1 Administrative Resignation
There has also been 1 Certified Retirement
There were an additional 10 Reductions in Force that took place in addition to the 6.50 that took place in the October Forecast. Two of the 6.50 positions that were built into the October Forecast were from Staff members that passed.
All together the total amount impact realized from these reductions and retirements will improve the forecast bottom line by approximately $900,000

5. 3.010 Personnel Services
This school year is the final year of the current district collective bargaining agreement. Base salary increases for this year 18/19 were 1%. Step increases are estimated to cost 3% per year. Next year 19/20 it was negotiated that base salaries will grow 2%. Because of declining enrollment, Newbury is reducing salary costs by about $640,000 at the end of the current school year with an additional $40,000 savings this year that occurred from open positions going unfilled. Also in the new negotiated agreement is a one time payment for those employees who currently hold health insurance but will be unable to utilize Cobra once the territory transfer is effective. This one time figure of $167,000 is built into the forecast.

6. 3.020 Employee’s Benefits
Health insurance rates over the last couple years have grown at high rates, about 20% in 2018 and 15% this year. Following two years with such high growth, we are expecting to slow back in a range of national trends with 8% in 2020 and 10% per year thereafter. There is an estimated to be about $190,000 in medical savings because of personnel reductions next school year.
Salary driven benefits are reducing at the same rate as overall salaries because of the personnel reductions . Those reductions are expected to cause the district to take on unemployment compensation costs next school year. Those costs are assumed to amount to 33% of salary reductions.

7. House Bill 166 Update
With the election of a new Governor in 2019, there has been much deliberation on the funding formula.  Representatives Cupp and Patterson have undertaken the task of assembling a committee of school district leaders throughout the State to re-think how school funding is accomplished.  They have formulated a comprehensive plan however at this time due to the uncertainty of State of Ohio dollars this formula will assume an increase in funding of about $25,000 as proposed by the Executive Level (Governor). The house is proposing between $28-$41,000 increase however those figures are unsure at this time as deliberations are ongoing.

8. Open Enrollment Out
Currently we have Open Enrollment out figures from West Geauga and we are set to lose 50 students to Open Enrollment next year. Additionally we have 13 open enrolled to Berkshire, however their Open Enrollment does not close until September 1st, so it is not unlikely to assume that we could lose another 5 students to Berkshire in that timeframe. We are projecting a student enrollment count to be at 275 students enrolled at Newbury for next year.
Additionally we have 13 students enrolled in Kindergarten for the 19/20 School Year.
This year the school district will lose $539, to open enrollment out to other school districts. Berkshire and West Geauga account for the 2 largest amount with Berkshire at 54% and West Geauga at 32%

9. Revenue comparison 2018 vs. 2023
Over the past 5 years revenues have grown by 4.25% , this was primarily driven by the emergency levy that was passed by voters in Over the upcoming 5 year period revenues are expected to decline by more than 6% because of the non renewal of the 2 levies that expire at the end of 2019.
Also state revenue is expected to decline in the future as falling enrollment in the district is expected to lead to a reduction in state guaranteed funding. Other operating revenue is declining because of drops in students open enrolling into the district.

10. General Property Tax Real Estate
Real property makes up 2/3 of the operating revenue of the Newbury Local Schools. About 60% comes from real property comes from inside millage levies, with the remainder coming from the 3 emergency levies. The forecast assumes that 2 of the 3 emergency levies that are not renewed at the end of The loss of these 2 levies is reflected in the forecast.

11. Unrestricted Grants-in-Aid
Newbury receives a little over $1,000,000 per year in unrestricted aid from the state. Under the current formula the district is guarantee funded. If enrollment trends stay the way they currently are Newbury would lose about 3% more funding in FY2020 and again in FY These potential losses are factored into the forecast.

12. Restricted Grants-in-Aid
Restricted aid from the state is primarily from reimbursements of catastrophic costs for students with disabilities. Last year, the district received about $93,000 from the state for these costs. The forecast assumes $90,000 per year going forward.

13. All other Operating Revenues 1.060
The largest source of other revenue for the district is payments from the state for students who are open enrolling into the district. In FY2018 the district received a little over $200,000 from these payments. That amount dropped about $175,000 this year because the number of students open enrolling into Newbury has dropped by seven from last year. If open enrollment drops again for next year this will further drop the revenue the district would receive.
The other main source of revenue is Medicaid reimbursements from the federal government and payments in lieu of tax abatements. These numbers are expected to stay steady over the forecast period.

14. Total Other Financing Sources
Other sources of revenue consist of return of advances to the operating fund and some miscellaneous payments. Other amounts are from Workers Compensation premiums from the state. The amounts were about $14,000 each year which are expected to recur in future years.

15. Expenditures Categories
The main cause of growth in expenditures this year are due to increased spending in purchased services and capital spending due to several issues with our well this year.
After growing an estimated 5.9% this year, total expenditures are expected to drop nearly 2% next year because of budget reductions

16. Purchased Services
60% of spending is to educate resident students who are attending school outside the district, primarily because of open enrollment and special needs
Special Education costs are estimated to grow by 4% over the next five years
Maintenance costs have grown by over 50% over the past 2 years but are expected to level off moving forward.

17. Capital Outlay
Items already built into the Capital Outlay category are a paving project and another round of Chromebook replacements.