Aging facilities, pandemic challenges cited in Nordonia school’s five-year forecast
NORTHFIELD CENTER – While there were some positives highlighted in the Nordonia Hills schools five-year forecast, such as getting back about $484,000 from the Bureau of Workers Compensation as a dividend, there are challenges ahead for the district.
“Our facilities are aging, and costs of maintenance continue to rise,” said Treasurer Karen Obratil during a presentation of the five-year forecast to the school board on Nov. 23.
For example, Matt Gaugler, the business director, said that the district recently had to replace the hot water heater at Rushwood Elementary School, which cost $3,784. In addition, the district will be replacing two boilers at Ledgeview.
“One doesn’t work and two are on the way out,” Gaugler said.
Replacing the boilers will cost the district $75,668. Earlier in the school year, the district had to replace two additional water heaters at the high school and Ledgeview Elementary, at a cost of $5,000 and $2,800 respectively.
“It was an expensive start to the school year,” Gaugler said.
The funds came from a 6.98-mill operating levy passed in May 2019 that generates about $7 million per year for the district. Obratil said the Nordonia Hills district is the only district in Summit County without a permanent improvements levy; the costs for repairs and capital improvements comes from the general operating fund.
The district also saw increased expenses due to the COVID-19 pandemic, Obratil said. For example, there was an increase in expenses for technology, classroom furnishings because of social distancing needs. Some of the costs were recouped through grants available for expenses related to COVID-19.
Additional funding was allocated to both food services and athletics due to anticipated shortfalls, Obratil said. Last year, about $100,000 was transferred to the food services program; this year, Obratil said about $200,000 was transferred “to swing between the athletic support due to the pandemic, or the food service program.”
Some funding has come back to the schools with the federal government sponsoring a program allowing all students to get meals through the schools for free, regardless of whether they are on the free and reduced meal program. “Hopefully that will help bail out the cafeteria,” Obratil said.
There has been a loss of revenue generated through tickets to sports games. This program was initially supposed to end in December, but it has been extended to the end of the school year.
Another increase is the money spent on sanitation and cleaning, Obratil said.
“We spent a lot of money on that,” she said. Thankfully, we got a grant for $181,000, which we used to offset some of the cost for cleaning and PPE. We should be getting that within the next month.”
One cost savings for the district was a project to install more efficient lighting through HB264, Obratil said. This was a program that allowed districts to purchase bonds to pay for energy conservation projects. Nearly $730,000 in bonds were issued in 2013,and were purchased through what is now Huntington Bank at 3.39% interest. The final payment is due Dec. 1, 2028. The money saved through the lighting project will be used to pay off the interest and principal, Obratil added.
Ultimately, while the district should be in the black through 2023, projections show the Nordonia schools having a negative cash balance of a little less than $4.3 million in fiscal year 2024, and nearly $13 million by 2025, Obratil said. The ending cash balance for fiscal year 2021 is projected to be about $11.9 million, for fiscal year about $8.4 million, and for fiscal year 2023, about $2.8 million.
“We are deficit spending,” Obratil said. “We knew that back in May. Our expenditures are outpacing our revenue. Typically, we try to keep about 30 days of cash on hand, which is about $4.5 million or $5 million.”
While there are other things that could help such as potential premium holidays, Obratil said she does not count them in the projections because this can’t be relied on. “We wait until we actually have it.”
About 68.5% of the district’s revenue comes from local property taxes; the Nordonia schools get 17.2% from the state, Obratil said. An additional 6.1 percent comes from the tangible personal property tax, or public utility taxes. Other revenue sources include tuition from other districts and all-day kindergarten, pay to participate and school fees, rentals and interest earnings on investments.
Of the expenses, projections show 51.4% of costs are from salaries, and 19.9% in benefits, Obratil said. Purchased services are projected at 20.3%. Purchased services include utility costs, transportation, teacher substitutes, pupil nursing services, special education transportation, data processing, and fleet and property insurance.
“Probably the biggest share is with our repairs, rentals and maintenance of our facilities,” Obratil said.
The district has more than 450 employees, not including food services, Obratil said. This includes administrators, teachers, counselors, supervisors, community interventionists, custodians and other staff paid out of the general operating budget.
The next school board meeting is Dec. 21 at 7 p.m.; whether it will be in person or virtual will be determined at a later date.
Reporter April Helms can be reached at firstname.lastname@example.org.