As the Edgewood City School District prepares to celebrate the opening of its new high school, district officials are also celebrating a financial picture that may forestall a levy for at least the next two or three years, maybe longer.
The district will host a grand opening of the 217,000-square-foot high school on Aug. 12.
“When all this started back in 2008 and when we passed the bond issue in 2009, we were up front with the voters that we may need to pass an operating levy once the high school was finished,” said district spokesman John Thomas. “That’s normal for a lot of school districts, once you get a new building to need more money to operate it.”
But since that time, budget cuts and a couple of unexpected financial windfalls have put the district in a good enough situation to keep that from happening, at least right away.
“We took $5 million out of our operating expenses,” said Treasurer Randy Stiver. “We currently have between 60 and 70 fewer positions than we had in 2008 by making cuts across the board.”
In the meantime, the population growth in the district leveled out and the district has ended up with fewer students than anticipated, which allowed them to operate with one less building than they had anticipated four years ago when there was an apparent housing boom in the district.
Voters approved a 4.5-mill bond issue in February 2009 to pay for the new school on Busenbark Road outside of Trenton. The other half will be paid for by the Ohio School Facilities Commission.
And as a result of the housing boom in the early 2000s, the district entered into Tax Increment Financing program with the city of Trenton, a state initiative that enables municipalities to defer real property taxes on the new value added to land as a result of development in specified areas. Consequently, Stiver said, the district is now at the receiving end of a new money stream.
“We have just collected $106,000 from the city of Trenton for one of the developments and there are a few others that may start generating some money,” Stiver said. “We don’t expect to see that every year, but as new construction takes place in these zones, the old money comes in.”
Edgewood is also on the receiving end of unexpected new money as the result of the expiration of tax abatements granted to Duke Energy for the construction of new facilities 11 years ago.
Although part of the abatement deal, Stiver explained, was that Duke Energy would make payments of about $700,000 a year directly to the district during the 10 year period of the abatement.
“When I got here six years ago, I started questioning what was going to happen after that abatement expired,” he said. At first, he was told that because of changes in the tax law, the district would not be seeing any increase of money from Duke Energy’s tax bill, and so he kept that funding level on his forecasting.
But as it turns out, he had been misinformed about the nature of the taxes Duke Energy was paying.
“Bottom line,” he said, “we’re now told that we will be getting a $2.1 million payment in our September settlement, and $1.7 million of that will go into the operating fund.”
The district also had an unexpected opportunity to save $200,000 through partnership with Atrium Medical Center to provide athletic training services.
The accumulation of these new funds, plus the cuts the district has made in recent years, could forestall a levy for at least two or three years, Stiver said. The wild card, however, is the money that the district receives from the state of Ohio, which creates a budget every two years. This school year falls in the middle of the cycle.
“You never know what’s going to happen at the state,” Stiver said, “but when I plug this into our forecast now, it has a tremendous impact on our bottom line. Unless the state really reduces our funding, we’re doing okay, with what we know today.”
“Had we not done all of these other things, we’d have been on the ballot by now,” Thomas said.
The other good news, Stiver said, is that the construction of the high school came in $4 million under the projected $42 million budget. While 49 percent of that $4 million savings came from the state and has to be returned to the state, the other 51 percent can be used for capital improvements in the district’s other buildings.
“We built at a good time,” Stiver said. “Because of the economy at the time the bids went out, we had over 100 contractors bidding for jobs when there are usually 20 or 30. So material was cheaper than we anticipated, labor was cheaper, and our construction manager (Quandel Construction Group Inc.) has done a very good job on the project and keeping change orders to a minimum.
“We even had $2 million budgeted for contingencies and we’re going to be way under that.
The result has been resurfaced parking lots and sidewalk repairs, floor replacements to cover old asbestos tiles in several of the buildings, the replacement of air conditioning chillers, renovations to the athletic complex and renovations to building entrances to make them more secure and community-friendly, Thomas said.