Archbold, OH
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Archbold Schools Will Need More Money, Or Reduced Spending

Christine Ziegler, Archbold Area School District fiscal officer, made it very clear.

In the future, the district will need either additional revenue or a reduction in spending.

In her comments to the Archbold School Board, Monday, Feb. 11, and in a later interview, Ziegler said district officials will be deficit spending from the general fund, even if a renewal of the district $1.1-million emergency levy is approved by voters.

Melanie Gilders, director of the Fulton County Board of Elections, said the $1.1- million levy expires in tax year 2020, which is paid in 2021.

Because the district operates on a fiscal year, Ziegler said the district will receive about half of the $1.1 million in fiscal year 2022, which starts July 1, 2021, and ends on June 30, 2022.

If not renewed, the district will receive the full impact of expiration of the levy in 2022.

Draw Against

Based on a five-year forecast presented to the board at the meeting, Ziegler said the district began spending more money than it took in starting in fiscal year 2018 (2017-18), when expenses topped revenues by roughly $70,000.

The district had a cash balance of about $5.1 million at the end of fiscal year 2018.

School officials can draw against that balance to pay bills until the balance is depleted.

For the end of 2018-19, expenditures outstrip revenues by more than $296,000, reducing the cash balance to about $4.8 million.

Ziegler expects fiscal year 2020 to end on a positive note by $35,515; but then in 2021, the district ends the year about $500,000 in the red.

The following fiscal year, 2022, with the loss of the emergency levy, the deficit is almost $1.7 million, pulling the cash balance down to about $2.65 million.

At the end of fiscal year 2023, Ziegler projects deficit spending of $2.9 million.

Without either spending cuts or new revenue, the cash balance drops into negative numbers.

Ziegler has said in the past the farther into the future any school treasurer tries to project, the less accurate those projections become.

What to do?

It’s too premature to come up with a definite plan.

“Yes, we’re deficit spending and we’re watching our bottom line,” Ziegler said.

“We definitely will need either additional cash revenues or a reduction in expenditures.

“But at this point, the board doesn’t have a definite plan. It’s certainly on their mind, though.”

Rover Pipeline

On the flip side of the coin, the district will receive an increase in revenue from the Rover Pipeline.

Ziegler said she can’t say exactly how much the district will receive. Pipeline money will come into the district through utility personal property taxes.

She can see an increase in that revenue, but she can’t say exactly how much is related to the Rover pipeline.

In 2017, payable 2018, district revenue from the utility personal property tax was $490,916.

For tax year 2018, payable 2019, the revenue from the utility personal property tax will be $1,745,851. That’s an increase of $1,254,935. Since the district operates on a fiscal year rather than a calendar year, she expects to receive roughly half of the increased revenue.

In a work session, Wednesday, Feb. 6, Ziegler said the board talked about taking some of the utility personal property tax money and paying off the remaining approximately $270,500 owed on the House Bill 264 loan. The board approved the action Feb. 11.

Under HB264, the district was able to borrow money for updates to school buildings to improve energy efficiency, and pay off the loan from energy savings.

There will still be money left, but Ziegler said there is no definite plan for it.

The utility tangible personal property tax can’t be used to shore up the general fund, because it’s not part of general fund revenue, she said.

The next meeting is Monday, March 11, 5 pm, in the high school media center.

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