CADIZ - The Harrison Hills City School District met Tuesday and presented its five-year forecast from July 1, 2012 to June 30, 2016. The information reflects some tentative optimism since the district is expected to remain in the black for the immediate future, but some funding questions remain unanswered.
Roxane Harding, treasurer, outlined the forecast. She pointed out that the largest unknown factor by far was the lack of news from the state regarding the new budget.
"We're trying to forecast for five years based of off state monies for which they're only required to forecast two years at a time," she said. "We're in the last year of a bi-annual budget and we have no clue what they're going to do for the next two."
In comparing revenues with expenditures, Harding noted that in fiscal year 2009-10 expenditures had surpassed revenue. This was reversed due to district-wide reforms, but in fiscal year 2012 the schools took a hit with the loss of state monies including stabilization funds and tangible personal property tax through 2013. The stabilization loss is estimated at $1 million in one fiscal year and property tax at $1.6 million during the forecast.
The ending balance is expected to remain in the positive until fiscal year 2016 when the district would again be in deficit mode. She added that the district will cease to have a 30-day cash balance until fiscal year 2015.
For fiscal year 2012, the largest source of funding is the state.
"That's our foundation money," she said, noting that this accounts for 68 percent of the district's funding. She added that local funding accounts for about 29 percent. "We do rely heavily on our state funding."
Harding said the most significant concern was lack of news from the state level. She noted there was no funding formula in place beyond fiscal year 2013. She said while the state had hoped to have an initial bridge formula in place by July 1 of 2012, they were unable to produce one and now hope to present a plan by 2013.
She said currently the state estimates that next year's funding will match this year's, but that may change as well.
"The revenue is flat to decreasing," she said. "There's not a lot of positive to the revenue side of things."
She said the district can expect some increases from valuations and from natural gas and fracking operations. However, the county auditor is unsure how the taxation will occur or when the district will benefit. She added that surrounding counties are working together to ensure that taxation is consistent.
"There are still some unknowns there," she said.
The district has passed one new operating levy since 1991. Due to strong management, for the past 21 years they have operated without millage.
"We are doing something right here," she said.
In terms of expenditures, salary accounts for the majority with 67 percent. She added that the district is doing well in this regard, since the state does not like to see this percentage rise above 70. District reforms have reduced this percentage along with other expenditures.
"Our previous reductions have truly made a positive impact on our ending cash balance," she said.
Expenditures are expected to rise due to fringe benefits, special education projects, fees, and utility costs.
"We were fortunate to have a mild winter, but that may not be the case next year," she said.
In the short term, she recommended continuing to operate conservatively and keeping an eye out for word of the state budget.
DeFrank can be reached at rdefrank@timesleaderonline.com
