ELYRIA— Financial decisions related to employee salaries, health care costs and building needs will affect Elyria Schools over the next five years as the district spends down its cash reserve faster than projected six months ago.
The good news, said district Treasurer Joy Clickenger, is the district will maintain a positive cash balance into fiscal year 2021, contingent on passage of a levy renewal in 2018.
When Clickenger presented a financial look forward in October, the ending year balance for fiscal year 2021 was projected to be more than $11 million. On Wednesday night Clickenger presented an updated forecast that showed a balance for the same fiscal year at just under $5 million.
Clickenger said the fluctuation is due to a $2.8 million transfer from the general fund to the building fund, a 25 percent health care premium increase in fiscal year 2018 to build up cash reserves and larger-than-projected salary costs.
Clickenger said the recently negotiated three-year deal with the district’s teachers and support staff that included a 2 percent wage increase and brought back step and longevity increases shouldn’t be solely blamed for the decrease. She projected six months ago that employee salaries would grow by 2.48 percent annually for five years. On Wednesday night, she updated the growth projections to 3.4 percent annually for five years.
“Does it impact our forecast? It’s true,” said Superintendent Tom Jama. “But we believe it is a very fair wage increase that is still fiscally responsible and allows the district to attract the best talent, retain our best employees and do what is right for our children and community.”
Board President Greg Elek said the five-year forecast was positive, and he anticipates only good changes as it is updated every six months.
“I would assume with the structure of the new campuses and buildings we should see some savings in the future,” he said.
Clickenger agreed. She said she would have a better idea of the estimated savings from the district going from 11 elementary and middle schools to five in six months. The building plan voters approached in November is just getting underway.
Health care remains an expensive outlay. After no increase in fiscal year 2016, Clickenger said the district has to grow its health insurance fund and will likely implement a 25 percent premium bump in fiscal year 2018 and 8 percent increases per year in fiscal year 2019 through fiscal year 2021.
Having older school facilities has cost the district over recent years. In 2015 the district began to set aside $1.5 million in fiscal years 2015, 2016 and 2017 to address building and facility needs for a total of $4.5 million. To date, around $1.7 million of that has been spent on maintenance and building upkeep.
Clickenger said that leaves a balance of $2.8 million in the general fund that can be moved to the building fund. As the five-year forecast only details revenues and expenses in the general fund, the move is seen as a reduction.
A five-year forecast is built on history and trends that helps with long-range planning. In Elyria, with all current levies maintained, the district continues to trend toward a revenue shortfall that will lead to projected deficit spending as soon as fiscal year 2018.
A positive in the report is a look at student enrollment. While district officials anticipate losing 220 students each year, this year enrollment dropped by just 120 students. Clickenger said it is too early to see if that is indicative of a new enrollment trend.