Board receives financial plan

New Richmond’s Board of Education has been presented with a plan to use attrition and ask district voters to approve a future capital improvement levy to offset the projected loss of $8.1 million the New Richmond Exempted Village Schools will experience after 2016 due to Ohio’s deregulation of electrical utilities.

The contingency plan, submitted by New Richmond superintendent Adam Bird at a combined school board work session and meeting of the district’s Financial Planning Committee Dec. 6, anticipates savings of $4.7 million per year by 2017 by not replacing 35 teachers and 14 support staff personnel expected to retire in the next five years.

Click here to read the plan

The plan received the endorsement of the financial planning committee, which includes Scott Henderson, Jeanie Williams and Joe Middeler from the New Richmond business community, and parents Laura Jones, Rich Grogan and Mark Miller. Bird and the committee were asked to come up with recommendations by the board’s January meeting.

When Ohio deregulated electrical utilities in 2001 and reduced their assessed value from 88 to 25 percent, the state began taxing utilities on a kilowatt per hour basis and agreed to share that revenue with affected school districts for 15 years in the form of deregulation payments.

“This plan was born out of necessity,” said Bird. “These changes are being considered because of our financial forecast.”

The plan is based on a district retirement survey made in September. Bird noted that there’s no guarantee there will be the number of retirements anticipated and for that reason he included a reduction in force (RIF) clause in each year of the 5-year plan.

“A reduction in force will be used if anticipated retirements do not occur,” said Bird.

The plan also calls for a change in school day starts in 2011-12 to make the transportation department more efficient, changing Locust Corner Elementary and Monroe Elementary into P-4 buildings and New Richmond Elementary into a grade 5-6 building in the 2014-15 school year and go to a three-tier busing system and discussing a permanent improvement levy with the community in the next five years.

“Attrition is the way to go,” noted board member Kevin Walriven, who pointed to reductions of $2,272,474 in operating expenses over the past 10 years with the reduction of 25 positions due to attrition. “When you RIF you don’t lose the experienced teacher, you lose a beginning teacher.”

Since 2001 New Richmond schools have reduced administrators from 16 to 12, classroom teachers from 179 to 163 and classroom support staff from 41 to 36.

If all the retirements materialize over the next five years, New Richmond will need to transfer teachers based on their certification to fill openings.

New Richmond also faces a possible additional loss of $1.4 million per year should Duke Energy prevail in its request to the state to have the value of its non-generating property (meters, poles, substations) lowered.

A 5 mil permanent improvement levy could be considered in the next five years and would generate $2.5 million annually to be used to maintain school facilities, purchase computers, buses and textbooks, and capital expenditures.

The changes in planned spending and increased revenue of $7.2 million over 5 years will come to within $2.3 million in managing the 2016 shortfall in revenue.

Bird said the second phase of the plan to address the remaining $2.3 shortfall will be addressed by examining every appropriation to make sure it is essential, continue to lobby legislators to replace deregulation payments with additional kilowatt tax revenue funding, and to closely monitor the State Foundation Program as it develops in the biennium budgeting process.

“There will be three Ohio biennium budgets, two presidential elections and another gubernatorial election before that decision is necessary,” said Bird.

Ohio’s biennial budget could become a problem long before 2016.

Ohio faces an $8 billion shortfall in its next biennium budget in June and governor-elect John Kasich has said the shortfall will be made by budget cuts. The cuts may mean a 10 to 20 percent cut in state aid to schools. New Richmond receives 15 percent of its current $26 million in revenue from the state, compared to 43 percent for Batavia, 57 percent for Goshen and 66 percent for Bethel.

“What was once an asset of having two power stations in the school district could become a liability to the community in 2017,” said Bird. “The assessed value of the generating plants inflates the total value of the school district upon which school foundation payments are based and the district receives less state aid.”