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Treasurer Presents Five-Year General Fund Forecast, 

Notes Expenditures Are Outpacing Revenues

Berkshire Board of Education – Regular Meeting, November 18, 2024 

Meeting Details: The meeting was held in the Auditorium of the Berkshire Local Schools Complex, 14155 Claridon Troy Rd, Burton, Ohio 44021 at 6:00 pm.  The meeting was in person only with no virtual attendance option.  A video of the meeting is posted here. View the agenda online and any attached documents here by selecting the meeting tab and then the meeting date.  The notation of minutes refers to the time posted on the video for the discussion of the item listed.

Board Members Attendance: The following members attended: John Manfredi, President, Jody Miller, Vice President and members Linda Stone and Bryan Wadsworth.  Dan Berman was absent.

Staff Attendance: John Stoddard, Superintendent and Beth McCaffrey, Treasurer

Meeting called to order at 6:00 pm

Pledge of Allegiance

Approval of Agenda - motion carried unanimously without discussion

Approval of Minutes - motion carried unanimously without discussion

7:00 min Student Presentation

Mr. Brian Hiscox, High School Athletic Director, introduced three teams who had major achievements in the Fall:  

• The volleyball team are back-to-back Chagrin Valley Conference (CVC) champs for the first since 2015

• The football team won their first playoff game in school history

• The girls’ soccer team is the 4-time CVC champ and made their first appearance in the regional final (elite 8).

Members of the volleyball, football and soccer teams spoke briefly about their seasons’ accomplishments.

14:15 min Public Participation/Public Comment – no public comment

14:21 min Treasurer’s Report

Financial Statements

The Treasurer submitted a statement to the Board and the Superintendent showing the revenues and receipts from whatever sources derived, the various Appropriations made by the board, the expenditures and disbursements and the balances remaining in each fund. The financial statements for the period ending October 2024 have been submitted subject to audit and include: Financial Summary, Appropriations and Revenue Summary, Check Register Recap, and Bank Reconciliation per ORC 3313.29.

 

Observer Note: See Financial Statement details in the meeting agenda available online.

 

14:55 min Donations

 

The Board unanimously approved a donation from:

 

Berkshire PTO         Student Lunch Fund          $50.00

 

Mr. Manfredi asked the Treasurer to let the Board know what the school lunch deficit is. 

Dr. Stoddard said the school has an account for cafeteria staff to draw on for students in need. He noted that an “angel donor” steps up almost every year to pay off lunch charges and that the school has never ended the year with a lunch debt.

Mr. Wadsworth asked if the students are aware that they can eat even if their account is empty. Dr. Stoddard responded that the staff has been advised not to turn anyone away. Mrs. Miller noted that Julie Sollars, the cafeteria head, is very receptive to questions and encouraged anyone who wants more information to contact Ms. Sollars.

16:58 min Financial Amendments- unanimously approved

 

The Board unanimously approved without discussion the following Financial Amendments:

 

Appropriation Changes - FY25

General Fund - Clerical Error, appropriated carryovers

that were deemed appropriated                                           -$543,636.42

Miscellaneous Grants                                                              -$10,000.00

Skills Trainer Project Grant                                                     +$7,934.02

17:50 min Infinite Campus Online Processing Fees - unanimously approved

 

The Board unanimously approved an increase to the Infinite Campus Online payment processing fee to 3.5% for credit cards plus $0.35 per transaction.

Mrs. McCaffrey explained that the school simply could no longer afford to absorb the processing fees.

18:35 min Presentation of the Berkshire Schools General Fund Five-Year Forecast

Mrs. McCaffrey presented the General Fund Five-Year Forecast, reminding the Board that:

• The forecast is an estimate, based on “what we know now” and represents only the district’s General Fund;

• The forecast numbers only tell a small part of the story. For the numbers to be meaningful, one must review and consider the Notes and Assumptions;

• Ohio school finance is constantly changing due to such factors as inflation, the state funding formula, and tax collections.

The purpose and objectives of the forecast are:

• To engage the Board and community in long range planning and discussions of financial issues facing their schools;

• To serve as a basis for determining the school district’s ability to sign the certificate required by O.R.C 5705.412, commonly known as the “412 certificate;” to certify contracts;

• To provide a method for the Ohio Department of Education and Auditor of State to identify school districts with potential financial problems.

Mrs. McCaffrey then presented a comparison between the May FY 2024 Estimate and Actual FY 2024 year-end in June.

The chart showed:

                                                Estimated                            Actual

                                                May 2024                            FY 2024 Year-End

                        

Beginning balance               $4,435,373                          $4,435,373

Revenue                              $21,120,166                        $21,272,060

Expenses                             $21,803,987                        $21,626,298

Annual Deficit                        ($683,821)                           ($354,238)

Ending Cash Balance           $3,732,552                           $4,062,135

Carryovers                                $150,000                               $566,782

Ending Cash Balance           $3,582,552                           $3,495,353*

 

*Mrs. McCaffrey explained that there was $87,199 less cash than forecasted because of larger than expected carryovers. Carryovers are payments that were budgeted but unpaid at year-end or payments that may have been accelerated into a purchase order for fiscal 2024. As an example, the school initially planned to buy two vans in 2025. However, the purchases were “accelerated” into FY 2024, but the money wasn’t spent. 

 

Other explanations of the chart included:

• Revenues were $152,000 higher than estimated due to a slight increase in real estate taxes. Mrs. McCaffrey reminded the Board that it’s important to keep in mind that $1.2 million in real estate tax delinquencies are not included in their forecasts. (This delinquency is discussed later in the presentation)

• Other revenue sources include the State Foundation. HB 33 keeps Berkshire “on the ‘Guarantee.'’’

Observer Note: Ohio’s school funding guarantee is a special subsidy for school districts that have historically lost students to private and charter schools. The program is intended to be temporary and transitional, but as of April 2023, the governor has proposed extending the guarantees through FY 2026. State foundation funding is a joint effort between the state and local school districts. The funding formula is based on such factors as the district’s ability to raise local taxes and a per student minimum amount the state determines is necessary.

• Enrollment growth doesn’t translate into increased state funding because they are on the Guarantee.

• Funding is still uncertain for FY 26-29 as the Fair School Funding Plan (the current school funding formula) is not funded beyond FY25; this may not have any impact on Berkshire since they are on the Guarantee.

• Mrs. McCaffrey sees 1% growth in their income tax for FY25 equaling $146,348

• Revenue growth in outside tuitions, primarily preschool and special education, is forecast at $180,200.

Observer Note: The Fair School Funding Plan is the new state school funding formula that establishes a base cost of educating a “typical” child in Ohio. See further information here.

  

FY 2025 Estimated General Fund Revenue

Mrs. McCaffrey presented a breakdown of the estimated general fund revenue for FY 2025 of $22,267,350:

• Local sources (real estate and Income taxes) - 68%

• State Sources - 32%

• Property Exempt from Taxation – 13% (e.g. Akron (5,000 acres with assessed value of $8 million) & Geauga Park District (2300 acres with assessed value of $3 million))

Public Utility Collections

Mrs. Caffrey explained that though public utilities are only 4% of the school’s total revenue, they represent 80% of their delinquent taxes. The Orwell-Trumbull Pipeline (OTP) has $942,671 in unpaid taxes. When the OTP filed for bankruptcy in 2021, revenues dropped as well. The company’s liability is still on the books, but there is no movement toward payment.

Mrs. McCaffrey noted that the loss of almost $1 million in revenue was a big hit to the school and underlines the difficulties of forecasting.

FY 2025-29 Estimated Expenditures Comparison May to November

Expense estimates for FY 2025-29 increased from May to November due to hiring 2 new administrators, 7 new teachers and 13 additional aids for high-needs students. Costs also reflect salary increases from the negotiated teacher agreement. Mrs. McCaffrey reminded the Board that costs for preschool teachers and aides will be offset by purchase services savings from keeping students in house.

The failure of the Permanent Improvement levy forced her to redirect transfers from the General Fund to pay for capital projects.

 

FY 2025 Estimated General Fund Operating Expenses

General fund FY 2025 expenditures are estimated at $21,884,877. 

Breakdown of Expenditures:

• Salaries – 52%

• Purchase Services (e.g. students with special needs) – 23%

• Benefits – 17%

• Other – 8%

Revenues, Expenditures & Cash Balance Projections

Mrs. McCaffrey stated that expenditures are outpacing revenue and, if the trend continues, by year-end 2027, the school is projecting only 34 days of cash on hand. 

 

Mrs. Stone asked what the minimum cash on hand requirement is. Mrs. McCaffrey explained that they have no cash minimum in place, but the Government Finance Officers Association recommends 60 days cash.

 

Mrs. Miller noted that the Cash Balance Projections charts looked a lot different before the Permanent Improvement levy failed for the second time. Mrs. McCaffrey agreed, saying $480,000 will be needed for the General Fund in FY 2026. They are working on strategies to offset that shortfall.

 

Threats to the Forecast

Mrs. McCaffrey presented several possible changes that would affect the forecast:

• Senate Bill 271 – This is a property tax reform bill that would give relief to taxpayers whose taxes exceed 5% of their income.

• State Budget – The school doesn’t know what the funding will be for FY26-29 because the state’s biennium (2-year forecast) is still up in the air.

• Unfunded Mandates – Actions required by schools without corresponding funds.  Examples are requirements to pay for transportation to parochial schools and standardized testing.

• Economy – the school has experienced the same higher costs as individuals.

31 min 31:05 What Now?

Dr. Stoddard said there are limited options for raising revenue for the district. He stated unfortunately, those are tax levies.

The school  will consider pursuing another levy, either an emergency levy, a traditional permanent improvement levy, or an income tax.

Dr. Stoddard noted that he and Mrs. McCaffrey are always looking for ways to decrease expenses. He used the example of the new preschool as an expense that will result in cost savings and additional revenue.

They are constantly asking principals to look for ways to save money. They investigate grants and different types of funding opportunities. He noted that one of the new administrators has brought in grants that total three times her salary. Another administrator has brought in outside tuition (students not residing in the District for whom tuition is paid.)

Dr. Stoddard will be meeting with Google to look at after-school Google tuition-based certification courses.

He noted that tax levies aren’t popular. He also noted that, though cutting staff is a potential way to cut expenses, those cuts can increase class size and hurt instruction. He thinks they’ve shown their educational model is successful.

He invited suggestions and said they will probably consider having public work sessions in early January to discuss possible pursuit of another levy in May or other options.

 

34:38 min Five-Year Forecast – unanimously approved motion to approve Five Year Forecast to submit to the State.

 

Observer Note: See video of November 18 meeting for more details about the Five-Year Forecast.

 

35:38 min  Superintendent’s Report

Personnel – Unanimously approved

The Board unanimously approved the hiring of the certified and classified staff. A full list is available on the November 18 meeting agenda online. 

Volunteers – Unanimously approved

The Board unanimously approved the following volunteers, noting they were very fortunate to have such high quality, dedicated individuals who have a big impact on their students.

Overnight Student Trips

The Board unanimously approved the following overnight student trips:

• Middle School Cross Country State Championship, October 19 - October 20, 2024, Columbus, Ohio

Dr. Stoddard noted the cross country trip happened between Board meetings.

• Defiance Wrestling Tournament, December 27 - December 28, 2024, Defiance, Ohio

Contracts - unanimously approved

The Board unanimously approved contracts for:

• The Credo Company

• ETLA (EdTech Leaders Alliance) Membership

Dr. Stoddard explained that the Credo Company is a professional lobbyist firm that advocates for the school in Columbus to procure additional funding. This company helped the school obtain the $915,000 grant from the State to renovate the Department of Transportation facility that will be used for their workforce development program and as their transportation building in the future.

ETLA is the EdTech Leader Alliance. The agreement is needed to respond to the new Ohio Senate Bill 29 that requires schools to track every program and app that they use to ensure it’s compliant with not selling student or family information to third parties. The agreement will help the school manage the contracts for the over 600 educational apps they use. According to the agreement, ETLA will provide the administrative and legal support required to negotiate privacy terms with software vendors and to secure signed data privacy agreements.

EdChoice Vouchers - Vouchers Hurt Ohio – unanimously approved

Dr. Stoddard officially requested Berkshire School District join the other districts in Ohio in the EdChoice lawsuit against the State to try to stop the use of the unlimited vouchers that he says are hurting public education.

Mr. Manfredi asked how many schools have joined the lawsuit. Dr. Stoddard didn’t have an exact number, but thinks it is about 2/3 of the public schools in Ohio. Most of the schools who haven’t joined to this point are like Berkshire, small, rural schools that had not seen the effects of the voucher system until recently. He noted that Berkshire has jumped from fewer than 10 vouchers accepted to more than 60 in a single year. Dr. Stoddard said that statewide more than “80% of all vouchers accepted are being accepted by people who never even set foot in a public school or never intended to go to a public school. Our tax dollars are starting to subsidize private education.” Dr. Stoddard said it was time to stand with the other schools and try to put a stop to it.

Mrs. Stone noted that the voucher money is coming out of the State’s General Fund that goes to public schools and that ”it’s lots and lots of money this year.” Dr. Stoddard confirmed the amount is more than one billion dollars.

Dr. Stoddard clarified that technically, the voucher funds are a separate line item from that for public education. However, the voucher funds are coming from what would have gone to public education. Dr. Stoddard does not think it is a level playing field, noting there is no financial reporting required from voucher schools.

Observer Note: The complete EdChoice Voucher Resolution is available on the November 18 meeting agenda online. 

43:00 min Old Business

Mr. Manfredi asked about the status of the State transportation building purchase and renovation. Mrs. McCaffrey said they just received phase 1 of the environmental impact study, and they are getting prices on phase 2. They are in the process of negotiating a lease. They also need to execute a purchase agreement with the State of Ohio which the school attorney is now reviewing. 

Mr. Manfredi asked if the State was satisfied with the school’s appraisal. ODOT accepted the appraisal. Dr. Stoddard said they have an “as is” purchase agreement. Their attorney felt it was appropriate to do a title search. Once the phase 2 study is complete and the school accepts the purchase agreement, the building can be turned over.

The school is meeting with Preston Auto to go over details of what the lease will look like when they’re involved. After that, they expect to move quickly. 

Mr. Manfredi asked about the delivery of modules for the preschool. Dr. Stoddard said half of the modules will be delivered tomorrow (November 19) and the other half will be delivered on November 21. The modules will be rough-set over three days and then water, sewer and electric connections will start and electric and internet will follow. They are allowing two to three weeks for the connections and then will start to move in furniture. The goal is to be running classes in the building after Christmas break.

46:20 min New Business

Auburn Career Center – 1 year Board Appointment

The Board unanimously approved the appointment of Dan Berman as a representative to the Auburn Career Center Board for the period January 1, 2025 through December 31, 2025.

Dr. Stoddard noted that Roger Miller represents the district on the Auburn Career Center Board but because Newbury dissolved into West Geauga and West Geauga does not feed into Auburn, there is an open spot that rotates. Next year will be Berkshire’s year to have 2 representatives. After that year, it will rotate back to the other 12 districts.

47:25 min Board Discussion

Next meeting will be December 9, 2024. All meetings are at 6:00 PM at the Berkshire Board of Education Auditorium, 14155 Claridon Troy Road, Burton, Ohio 44021

No Executive Session

48:10 min Meeting was adjourned

Observer: Rooney Moy 

Editor: Sarah McGlone

Reviewer: Gail Roussey

Submitted: 12/12/2024 

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