MARGARETTA LOCAL SCHOOL DISTRICT ERIE COUNTY
SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE 30, 2022, 2023, and 2024 ACTUAL FORECASTED FISCAL YEARS ENDING JUNE 30, 2025, THROUGH JUNE 30, 2029

Margaretta Local School District Treasurer's Office
Mrs. Diane Keegan, Treasurer

November 18, 2024

MARGARETTA LOCAL SCHOOL DISTRICT Erie County
Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2022, 2023, 2024 Actual; Forecasted Fiscal Year Ending June 30, 2025 through 2029

	Actual
		Forecasted
	
Fiscal Year	Fiscal Year	Fiscal Year
2022	2023	2024
	Average
Change
	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
2025	2026	2027	2028	2029

Revenues
1.010     General Property Tax (Real Estate)	4,819,474	5,060,995	5,077,984 1.020     Public Utility Personal Property Tax	5,762,031	4,490,883	3,939,831 1.030     Income Tax                                                                                                0                          0                       0 1.035     Unrestricted State Grants-in-Aid	4,723,071	4,672,552	4,616,005 1.040     Restricted State Grants-in-Aid                                                        290,448                252,740              297,409 1.045     Restricted Federal Grants In Aid                                                              0                          0                       0 1.050     State Share of Local Property Taxes	1,019,660                883,051              774,874
1.060     All Other Revenues	1,444,454	1,709,443	1,949,078

2.7% -17.2%
0.0% -1.1% 2.3% 0.0%
-12.8%
16.2%

5,554,000              5,917,870              5,880,157              5,992,128              6,122,229 9,873,352              5,316,597              4,946,868              4,421,057              4,192,958 0                          0                          0                          0                          0 4,702,156              4,703,221              4,704,308              4,705,405              4,706,523 263,844                 263,682                 263,682                 263,682                 263,682 0                          0                          0                          0                          0 770,471                 840,758                 845,138                 868,463                 891,743
1,869,399	2,244,894	2,622,247	2,688,612	2,757,276
	
1.070 Total Revenues
	18,059,138	17,069,664	16,655,181
	-4.0%
	23,033,222	19,287,022	19,262,400	18,939,347	18,934,411

Other Financing Sources
2.010     Proceeds from Sale of Notes	0	0	0 2.020     State Loans and Advancements (Approved)	0	0	0 2.040     Operating Transfers-In                                                                      90,608              2,944,249           1,500,000 2.050     Advances-In	0	0                39,049
2.060     All Other Financing Sources	20,812	6,176	6,506

0.0% 0.0% 1550.2% 0.0%
-32.5%

0                          0                          0                          0                          0 0                          0                          0                          0                          0 14                          0                 750,000                          0                 770,000
3,811	0	0	0	0
6,506	6,506	6,506	6,506	6,506
	
2.070     Total Other Financing Sources
2.080 Total Revenues and Other Financing Sources
	111,420	2,950,425	1,545,555
	1250.2%
	10,331	6,506	756,506	6,506	776,506
	
	18,170,558	20,020,089	18,200,736
	0.5%
	23,043,553	19,293,528	20,018,906	18,945,853	19,710,917

Expenditures
3.010     Personal Services	8,309,921	8,520,049	8,617,188 3.020     Employees' Retirement/Insurance Benefits	3,426,984	3,386,312	3,664,281 3.030     Purchased Services	2,265,745	2,219,649	2,178,540 3.040     Supplies and Materials                                                                     546,059                815,963              719,485 3.050     Capital Outlay                                                                                     16,259                  47,512                19,381 3.060     Intergovernmental                                                                                     0                          0                       0
Debt Service:
4.010	Principal-All (Historical Only)	0	0	0 4.020	Principal-Notes	0	0	0 4.030	Principal-State Loans	0	0	0 4.040	Principal-State Advancements	0	0	0 4.050	Principal-HB 264 Loans	0	0	0 4.055	Principal-Other                                                                               144,000                149,000              155,000 4.060	Interest and Fiscal Charges                                                            55,483                  49,061                42,325
4.300     Other Objects	283,695	253,939	295,488

1.8% 3.5% -1.9% 18.8% 66.5% 0.0%

0.0% 0.0% 0.0% 0.0% 0.0% 3.7%
-12.7%
2.9%

8,940,603              9,007,348              9,336,435              9,678,305             10,033,238 3,942,460              4,156,754              4,437,530              4,739,791              5,065,115 2,204,714              2,258,405              2,249,797              2,276,922              2,306,839 652,678                 655,941                 659,221                 662,517                 665,829 54,575                  19,771                  19,968                   20,168                   20,370
0	0	0	0	0

0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0
162,000                 168,000                 175,000                 372,000                          0 35,283                  27,990                  20,410                   12,520                          0
294,992	301,272	300,824	307,289	306,892
	
4.500 Total Expenditures
	15,048,146	15,441,485	15,691,688
	2.1%
	16,287,305	16,595,481	17,199,185	18,069,512	18,398,283

Other Financing Uses
5.010     Operating Transfers-Out                                                               4,065,046              4,125,011           2,347,708 5.020     Advances-Out                                                                                            0                  39,049                 3,811
5.030     All Other Financing Uses	0	0	0

-20.8% 0.0%
0.0%

6,890,590              3,137,897              3,043,760              2,952,447              2,863,874 0                          0                          0                          0                          0
0	0	0	0	0
	
5.040     Total Other Financing Uses
5.050 Total Expenditures and Other Financing Uses 6.010 Excess of Revenues and Other Financing Sources
over (under) Expenditures and Other Financing Uses

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies

7.020 Cash Balance June 30

8.010 Estimated Encumbrances June 30
	4,065,046	4,164,060	2,351,519
	-20.5%
	6,890,590	3,137,897	3,043,760	2,952,447	2,863,874
	
	19,113,192	19,605,545	18,043,207
	-2.7%
	23,177,895	19,733,378	20,242,945	21,021,959	21,262,157

(942,634)	414,544	157,529

-103.0%

(134,342)	(439,850)	(224,039)	(2,076,106)	(1,551,240)

	
1,573,961	631,327	1,045,872
	
2.9%
	
1,203,401	1,069,059	629,209	405,170	(1,670,936)

	631,327	1,045,871	1,203,401
	40.4%
	1,069,059	629,209	405,170	(1,670,936)	(3,222,176)

	198	0	0
	0.0%
	5,000	5,000	5,000	5,000	5,000

Margaretta LSD - 046805	1

MARGARETTA LOCAL SCHOOL DISTRICT Erie County
Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2022, 2023, 2024 Actual; Forecasted Fiscal Year Ending June 30, 2025 through 2029

	Actual
		Forecasted
	
	Fiscal Year	Fiscal Year	Fiscal Year
2022	2023	2024
	Average
Change
	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
2025	2026	2027	2028	2029

Reservation of Fund Balance
9.010	Textbooks and Instructional Materials 9.020	Capital Improvements
9.030	Budget Reserve 9.040	DPIA
9.045	Fiscal Stabilization 9.050	Debt Service
9.060	Property Tax Advances 9.070	Bus Purchases
9.080      Subtotal
Fund Balance June 30 for Certification of 10.010 Appropriations

Revenue from Replacement/Renewal Levies 11.010      Income Tax - Renewal
11.020      Property Tax - Renewal or Replacement

11.300 Cumulative Balance of Renewal Levies 12.010 Fund Balance June 30 for Certification of
Contracts, Salary Schedules and Other Obligations

Revenue from New Levies 13.010      Income Tax - New 13.020      Property Tax - New

13.030 Cumulative Balance of New Levies

14.010 Revenue from Future State Advancements

15.010 Unreserved Fund Balance June 30

0                          0                       0 0                          0                       0
944,249	0	0 0	0	0 0	0	0 0	0	0 0	0	0 0	0	0
944,249	0	0

0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0.0%

0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0 0	0	0	0	0
0	0	0	0	0

(313,120)	1,045,871	1,203,401
	
-209.5%
	
1,064,059	624,209	400,170	(1,675,936)	(3,227,176)

0                          0                       0 0                          0                       0

0.0% 0.0%

0                          0                          0                          0                          0 0                          0                 696,463              1,266,296              1,266,296
	
	0	0	0
	0.0%
	0	0	696,463	1,962,759	3,229,055

(313,120)	1,045,871	1,203,401

-209.5%

1,064,059	624,209	1,096,633	286,823	1,879

0                          0                       0 0                          0                       0

0.0% 0.0%

0                          0                          0                          0                          0 0                          0                          0                          0                          0
	
	0	0	0
	0.0%
	0	0	0	0	0

0	0	0
	
0.0%
	
0	0	0	0	0
	
	(313,120)	1,045,871	1,203,401
	-209.5%
	1,064,059	624,209	1,096,633	286,823	1,879

Margaretta LSD - 046805	2

Margaretta Local School District – Erie County Notes to the Five-Year Forecast General Fund Only November 18, 2024

Introduction to the Five-Year Forecast
Aforecastis a snapshot oftoday. Based on historical trends, what we knowand future assumptions. That snapshot, however, will be adjusted because the further into the future the forecast extends, the more likely it is that the projections will deviate from experience. Various events will ultimately impact the latter years of the forecast, such as state budgets (adopted every two years), tax levies (new/renewal/replacement), salary increases, enrollment variances, or businesses moving in or out of the district. The five-year forecast is a crucial management tool and must be updated periodically. The five-year forecast enables district management teams to examine future years’ projections and identify when challenges will arise. This helps district management to be proactive in meeting those challenges. School districts are encouraged to update their forecasts with the Ohio Department of Education and Workforce (ODEW) when events materially change their forecast or, at a minimum when required under the statute.

In a financial forecast, the numbers only tell a small part of the story. For the numbers to be meaningful, the reader must review and consider the Assumptions of the Financial Forecast before drawing conclusions or using the data as a basis for other calculations. The assumptions are fundamental to understanding the rationale of the numbers, particularly when a significant increase or decrease is reflected.

Since the preparation of a meaningful five-year forecast is as much an art as it is a science and entails many intricacies, it is recommended that you contact the Treasurer/Chief Fiscal Officer of the school district with any questions you may have. The Treasurer/CFO submits the forecast, but the Board of Education is recognized as the official owner of the forecast.

Here are three essential purposes or objectives of the five-year forecast:
(1) To engage the local board of education and the community in long-range planning and discussions of financial issues facing the school district
(2) 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”
(3) To provide a method for the Ohio Department of Education and Workforce, and the Auditor of State to identify school districts with potential financial problems.

O.R.C. §5705.391 and O.A.C. 3301-92-04 require a Board of Education (BOE) to file a five-year financial forecast by November 30, and May 31, each fiscal year (July 1 to June 30). The five-year forecast includes three years of actual and five years of projected general fund revenues and expenditures. The first year of the fiscal year is considered the baseline year. Our forecast is updated to reflect the most current economic data available for the November 2024 filing.

Economic Outlook
The current economic recovery began in the fall of 2020 and remains robust through this forecast date. However, recent Federal Reserve Bank interest rate cuts foretell of a possible recession in the next six to twelve months from this forecast. The persistently high inflation that has impacted our state, country, and broader globalized economy has slowed to an annualized rate of 2.53% in August 2024 that is down from the 40-year high of 9.1% annualized rate posted in June 2022. Costs for goods and services in FY23 and FY24 were notably impacted in areas such as capital and durable goods, diesel fuel for buses, electric, natural gas, and building materials for facility maintenance and repair. Inflation affecting district costs is expected to continue in FY25. There is some good news, the Federal Reserve is projecting inflation to be closer to their target rate of 2% by calendar year end 2024 or early in 2025. It remains to be seen if the cumulative cost increases over the past two years are transitory in goods and services or will last over the forecast period.

3

The Federal Reserve Bank cut Federal Fund rates in September 2024 by 50 basis points (.5%) which indicates slowing inflation and a slowing economy. Employment levels have begun to fall. The unemployment rate was 3.8% in September 2023 and rose to 4.2% inSeptember 2024. Asurveyofprominent leading economistspredictsthere is roughlya 50% chance of a mild recession in the calendar year 2025. How this news impacts the state of Ohio’s FY26 and FY27 biennium budget deliberations and actions in late spring 2025 is unknown as this forecast is filed.
The state of Ohio has enjoyed economic growth over the past three years, and the state’s Rainy Day Fund balance is at $3.7 Billion. The new state funding formula is in the fourth year of a projected six-year phase-in. While increased inflation has impacted costs across Ohio, the state’s economy has grown, and many school districts received new funding in HB33 for FY24 and FY25. The ongoing growth in Ohio’s economy should enable the state to finalize the last two years of the phase-in of the new funding formula in FY26 and FY27 even if a cyclical recession occurs. Regardless of a recession, the state is well-positioned to continue state aid payments to Ohio’s school districts.

Since 2020, all school districts were aided in varying degrees by three (3) rounds of federal Elementary and Secondary Schools Emergency Relief Funds (ESSER). The most recent allocation of ESSER funds must be encumbered by September 30, 2024. The loss of these funds in FY25 and future years may create a “fiscal cliff” as any ongoing costs will likely be absorbed back into the district General Fund.

Data and assumptions noted in this forecast are based on the best and most reliable data available to us as of the date of this forecast.

Forecast Risks and Uncertainty:
A five-year financial forecast has risks and uncertainty not only due to economic delays noted above but also due to state legislative changes that will occur in the spring of 2025 and 2027 due to deliberation of the following two (2) state biennium budgets for FY26-27 and FY28-29, both of which affect this five-year forecast. We have estimated revenues and expenses based on the best data available and the laws currently in effect. The items below give a short description of the current issues and how they may affect our forecast in the long term:

I.	Property tax collections are the largest single revenue source for the school system. The housing market in our district is stable and growing. We project growth in appraised values every three (3) years and new construction growth with modest increases in local taxes as the pandemic ends and the economy continues its recovery as anticipated. Total local revenues, which are predominately local taxes, equate to 75% of the district’s resources. We believe there is a low risk that local collections would fall below projections throughout the forecast.

II.	 Erie County experienced a triennial update in the 2021 tax year to be collected in FY22. The 2021 update increased overall assessed values by $16.9 million, or an increase of 9%. A reappraisal will occur in tax year 2024 for collection in FY25. We anticipate value increases for Class I and II property to be $62.9 million, or an increase of 29.7%. There is, however, always a minor risk that the district could sustain a reduction in values in the next appraisal update, but we do not anticipate that at this time. Mineral values can decrease as rapidly as they increase, and the district is cautious in projecting large increases when a decrease may be as likely.

III.	Due to historic property value increases in reappraisal and update years the Ohio Legislature has considered various proposals since 2023 to help reduce non voted tax increases on taxpayers. Currently the Senate has proposed SB271 that seeks to limit growth through refund or reduction taxes to ensure annual income and property taxes do not exceed 5% of a qualified taxpayer’s income. If passed by the General Assembly this will result in lowering tax increases for our residents who qualify. We are watching this legislation closely.

In addition to SB271, the legislature developed a Joint Committee on Property Taxation and Reform in 2024 in response to the historic valuation increases. Their mission is to review Ohio’s property tax system and to make recommendations to the General Assembly on property taxation. The committee must report to the General Assembly by December 31, 2024. We are following any actions of the committee closely to determine what impact, if any, proposals could mean for our district to limit tax growth or to reduce taxes.

IV.       The state budget represented 25% of district revenues, which means it is a significant risk to the revenue. Thefuture risk comes in FY26 and beyond if the state economy stalls due to a possible recession or the last two (2) years of
4

the FairSchool Funding Plan is not funded in the next state biennium budget. In thisforecast, there are two unknown future State Biennium Budgets covering FY26-27 and FY28-29. Future uncertainty in the state foundation funding formula and the state’s economy makes this area an elevated risk to district funding long-range through FY29. We have projected our state funding in FY25 based on the additional phase-in of HB33 (the Fair School Funding Plan). This forecast reflects state revenue aligning with the FY25 funding levels through FY29, which we feel is conservative and should be close to what the state approves for the next two biennium budgets. We will adjust the forecast in future years as we have data to make an informed decision.

V.	HB33, the current state budget, continues to phase in what has been referred to as the Fair School Funding Plan (FSFP) for FY24 and FY25. FY25 reflects 66.67% of the implementation cost at year four of a six-year phase-in plan, which increases by 16.66% each year. FY25 will result in 66.66% funding of (FSFP), however, the final two years of the phase-in are not guaranteed and are dependent on legislative actions for the FY26 and FY27 state biennium budget. The FSFP has made many significant changes to how foundation revenues are calculated for school districts and how expenses are charged off. State foundation basic aid will be calculated on a base cost methodology with funding paid to the district where a student is enrolled to be educated. We have used the most recent simulations published by the Department of Education and Workforce for our forecasted revenues in FY25.

VI.	HB33 directly pays costs associated with open enrollment, community and STEM schools, and all scholarships, including EdChoice Scholarships.These costs arenolonger deducted from our state aid. However, education option programs such as College Credit Plus, Excess Costs and various tuitions continue to be removed from state aid, increasing costs to the district. Expansion or creation of programs not directly paid by the state of Ohio can expose the district to new expenditures currently outside the forecast. We closely monitor any new threats to our state aid and increased costs as new proposed laws are introduced in the legislature.

VII.	The State budget that ended June 30, 2023 continued the TPP Fixed Rate Reimbursement phase-out contained in Senate Bill (SB) 208 that lowered the payment we received each year by the amount raised by five-eights (5/8) of 1 mill based on the 3 year average of assessed district values. This phase out was finally discontinued in FY24.

VIII.	 The Nexus Pipeline valuation dispute has been a long process; however, the parties involved have reached a final settlement and we will be working closely with the county auditor’s office to ensure we fully understand how this valuation change will affect the district’s Public Utility Personal Property (PUPP) values. The process began when the Nexus Pipeline came online in tax year 2019, and it was a major increase to our PUPP valuation at the time. Nexus filed an appeal to the values with the Ohio Board of Tax Appeals to reduce the values for tax years 2019, 2020, and 2021. During the period that the appeals process took place, Nexus tender paid the tax payments to our district, which means that Nexus remitted payment based on the valuation they believed to be accurate. The Tax Commissioner issued a Final Determination on the pipeline’s valuation in June 2022; however, that Final Determination was appealed by the Lorain County Auditor in September 2022. As of February 2023, the appeal by the Lorain County Auditor has been dismissed as moot and without merit; therefore, the values remain at the levels set by the Final Determination from June 2022. Currently, the Board of Tax Appeals has chosen to delay making any further determination until the Ohio Supreme Court hears the Case 2023-0354, filed by the Lorain County Auditor against the Nexus Pipeline decision reached by the Board of Tax Appeals. The Supreme Court began hearings on the Nexus Case on October 24, 2023. As of August 2024, the Supreme Court of Ohio held that the Lorain County Auditor could not appeal the decision reached in the Final Determination ofthe State Tax Commissioner from June 2022. We will continue tomonitor these valuesclosely toensure these revenues are forecasted accurately.

IX.	Labor relations in our district have been amicable with all parties working for the best interest of students and realizing the resource challenges we face. We believe that as we move forward our positive working relationship will continue and will only grow stronger.

The significant lines of reference for the forecast are noted below in the headings to make it easier to relate the assumptions made for the forecast item and refer back to the forecast. It should assist the reader in reviewing the assumptions noted below in understanding the overall financial forecast for our district. If you would like further information, please contact Mrs. Diane Keegan, Treasurer at 419-684-5322.

5

General Fund Revenue, Expenditures and Ending Cash Balance Actual FY22-24 and Estimated FY25-29 The graph below captures in one snapshot the operating scenario facing the district over the next few years.

Millions
General Fund Revenue,Expenditures& Cash Balance $25

$20

$15	$1,209,950 Emergency Levy Expires 12/31/25

$10	Current 7.75 mill Levy Expires 12/31/26

$5

$-

Act. 2022	Act. 2023	Act. 2024	Est. 2025	Est. 2026	Est. 2027	Est. 2028	Est. 2029

$(5)

Revenue

Ending Bal. Without Levy Renewal

Expenditures

Ending Bal. With Levy Renewal

Revenue Assumptions
All Operating Revenue Sources General Fund FY25

General Fund Revenues Estimated 2025 $ 23,033,222

State Sources 25%

Other State
3%	Local Sources 75%

State Foundation 22%

Other Local 8%

Real Estate Taxes 67%

6

Real Estate Value Assumptions – Line # 1.010
Property Values are established each year by the County Auditor based on new construction, demolitions, BOR/BTA activity and complete reappraisal or updated values. Erie County experienced a triennial update for the 2021 tax year to be collected in FY22. Residential/agricultural values increased 9.6% or $16.2 million due to the update, led by an improving housing market.

For tax year 2023, new construction in residential property was up 0.5% or $1 million in assessed value, and commercial/industrial values increased $406 thousand. Overall values increased $2.5 million or 1.2%, which includes new construction for all classes of property.

Asexennialreappraisalwilloccurin 2024forcollectioninFY25, forwhich weare estimating a 30.6%increasein residential and a 22% increase for commercial/industrial property. We anticipate residential/agricultural and commercial/industrial values to increase $62.9 million, or 29.7%, overall.

Public Utility Personal Property (PUPP) values decreased by $2 million in tax year 2023. We expect our values to continue to remain constant each year of the forecast. The Nexus Pipeline tender paid the tax payments to our district, which means that Nexus remitted payment based on the valuation they believed to be accurate. The Tax Commissioner issued a Final Determination on the pipeline’s valuation in June 2022, which has been upheld by the Supreme Court of Ohio. This forecast includes the payment for all five years of past due payments to be settled and paid in FY25 and that they will pay the tax bill at the 58% settlement amount in the five years, given the Supreme Court ruled to uphold the settlement amount.

Estimated Assessed Value (AV) by Collection Years

Estimated	Estimated	Estimated	Estimated	Estimated TAX YEAR 2024 TAX YEAR 2025TAX YEAR 2026TAX YEAR 2027TAX YEAR 2028
Classification	COLLECT 2025 COLLECT 2026 COLLECT 2027 COLLECT 2028 COLLECT 2029

Res./Ag. Commercial/Mineral Public Utility (PUPP)
Total Assessed Value

$249,390,840 27,157,214 88,129,997
$364,678,051

$250,550,540 27,614,194 85,010,220
$363,174,954

$251,710,240 28,071,174 82,015,234
$361,796,648

$265,455,452 28,808,866 79,140,047
$373,404,365

$266,615,152 29,265,846 76,379,868
$372,260,866

Tax Rate Assumptions
The county auditor sets tax rates for each levy voted on to provide tax revenues for the school district. Ohio law (HB920) provides for “reduction factors” of all voted property tax levies to adjust the millage rates lower for the levy collections not to increase from inflation of property values for the taxes received by a district to that of the actual amount of the levy at the time of the election. The reduction factors are applied separately to Residential/Agriculture (Class I) and Commercial/Industrial (Class II), resulting in different effectivemillage rates. Thedistrict’s-voted rate for all levies is 58.70 mills while the Class I effective millage rate is 21.99 mills, and the Class II effective millage rate is 37.64 mills, before the 2024 reappraisal. The Ohio law has a provision that the reduction factors cannot lower the total millage rate for each class below 20 mills, which includes both the voted and the non-voted millage rates; this is called the “20-Mill Floor”. Currently, with the tax year 2024 reappraisal and updates, our district is now on the 20-Mill Floor for Class I, but not yet for Class II.

Estimated Real Estate Tax Collections - Line #1.010
Property tax levies are estimated to be collected at 94% of the annual amount. This allows for a 6% delinquency factor. In general, 52% of the Residential/Agricultural and Commercial/Industrial property taxes are expected to be collected in the March tax settlement and 48% collected in the August tax settlement.

Source

PropertyTaxes

FY25

$5,554,000

FY26

$5,917,870

FY27

$5,880,157

FY28

$5,992,128

FY29

$6,122,229

7

Levy Renewal –Lines #11.010-11.030
State law requires that renewal levies be removed from revenues on Line 1.01, 1.02 and 1.05 and shown on line 11.02 of the forecast. Please note that renewal levies do not bring in additional tax revenues to the district. The renewing levies are for the same revenue the district is currently collecting.

The district renewed its 7.75 mill current expense levy on May 4, 2021 with an 82.2% approval rate. This is a five-year term levy that the district has had in place since 1998. This levy is now due to expire on December 31, 2026. The district also has a $1.2 million emergency levy that is scheduled to expire on December 31, 2025. This is a 15-year term levy that the district has had in place since 2010. We were on the ballot to renew the $1.2 million emergency levy in the fall of 2024 and the renewal passed.

The continued approval of these levies is critical for the district due to the increased value of PUPP due to the Nexus Pipeline, whose taxes are assessed based on the higher, voted millage, not the lower, effective millage at which residential, agricultural, and commercial properties are assessed.

Source
Renew- CurrentExpense 1998 Expires 12/31/26 Renew- $1,209,950 EmLevyExpires 12/31/29 TotalLine # 11.020

FY25                     FY26 $0                       $0
0	0

$0	$0

FY27 $696,463 0
$696,463

FY28 $1,266,296 0
$1,266,296

FY29 $1,266,296 0
$1,266,296

New Tax Levies – Lines #13.010-13.030 No new levies are modeled in this forecast.

Estimated Tangible Personal Tax & PUPP Taxes – Line#1.020
The phase out of TPP taxes as noted earlier began in FY06 with HB66 that was adopted in June 2005. TPP tax assessments ended in FY11. The only amounts received after FY11 are from delinquent TPP taxes outstanding as of 2010.

The amounts noted beloware public utilitytangiblepersonal property(PUPP) tax paymentsfrom public utilities. Thevalues for PUPP are noted on the table above under Public Utility (PUPP), which are assumed to reach $88.1 million in assessed values in tax year 2024 and are collected at the district’s gross voted millage rate. Collections are typically 50% in March and 50%in Augustalong with the real estate settlementsfromthe county auditor. The valuesin 2024areassumed to increase 37.5%, or $24 million, following the settlement with Nexus. The forecast includes the assumption of a 4% depreciation factor on all PUPP assessed values, due to the historical rate of depreciation of Nexus to be averaging 3.9% depreciation on an actual basis for the first five years of collection of Nexus revenues. As stated above, Nexus Pipeline payments are now forecasted at the full settlement payment amount of 58% of the original tax bill, which is the value the company and the Tax Commissioner believes the pipeline should be.

Source Public UtilityPersonalProperty
TotalLine # 1.020

FY25 $9,873,352
$9,873,352

FY26 $5,316,597
$5,316,597

FY27 $4,946,868
$4,946,868

FY28 $4,421,057
$4,421,057

FY29 $4,192,958
$4,192,958

School District Income Tax – Line#1.030
No school district income taxes are modeled in this forecast.

8

General Fund Local Revenue Vs. State $20

Millions
$18

$16

$14

$12

$10

$8

$6

$4

$2

$-

Act. 2022	Act. 2023	Act. 2024	Est. 2025	Est. 2026	Est. 2027	Est. 2028	Est. 2029

Local Revenue	State Revenue

State Foundation Revenue Estimates – Lines #1.035, 1.040 and 1.045 Current State Funding Model per HB33 through June 30, 2025

Unrestricted State Foundation Revenue – Line #1.035
HB33, the current state budget, continued the Fair School Funding Plan for FY24 and FY25. We have projected the funding in FY25 based on the October 2024 foundation settlement and funding factors from the simulations provided by the Department of Education and Workforce.

Our district is currently a guarantee district in FY25 and is expected to continue to be on the guarantee in FY26-FY29 on the new Fair School Funding Plan (FSFP).

For a detailed overview of how foundation funding is calculated please visit the Ohio Department of Education and Workforce at: https://education.ohio.gov/Topics/Finance-and-Funding/Overview-of-School-Funding

State Funding Phase-In FY25 and Guarantees
The Fair School Funding Plan was presented as a six (6) year phase-in plan, the state legislature approved the first two (2) years of the funding plan in HB110 and extended the plan in HB33 for FY24 and FY25. The FSFP does not include caps on funding; instead, it consists of a general phase-in percentage for most components of 66.67% in FY25.

The funding formula includes three (3) guarantees: 1) “Formula Transition Aid,” 2) Supplemental Targeted Assistance, and 3) Formula Transition Supplement. The three (3) guarantees in both temporary and permanent law ensure that no district will get fewer funds in FY24 and FY25 than they received in FY21.

Future State Budget Projections beyond FY25
Our funding status for FY26-29 will depend on unknown two (2) new state budgets. There is no guarantee that the current Fair School Funding Plan will be funded or continued beyond FY25; therefore, our state funding estimates are reasonable, and we will adjust the forecast when we have authoritative data to work with. For this reason, funding is held constant in the forecast for FY26 through FY29.

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Threshold Cost Reimbursement
Threshold Cost (formerly Catastrophic Cost) reimbursement nearly doubled in FY22 due to increased appropriations, which are funded at the state level by a reduction in special education funding at the local level. These revenues are inconsistent year-to-year, and we are not projecting any growth over the remainder of the forecast.

Casino Revenue
On November 3, 2009, Ohio voters passed the Ohio casino ballot issue. This issue allowed four (4) casinos to open in Cleveland, Toledo, Columbus, and Cincinnati. Thirty-three percent (33%) of the gross casino revenue will be collected as a tax. School districts will receive 34% of the 33% of Gross Casino Revenue that will be paid into a student fund at the state level. These funds will be distributed to school districts on the 31st of January and August each year, beginning for the first time on January 31, 2013.

The casino revenue has recovered from the pandemic from closing the casinos in 2020. Total funding in FY23 was $113.1 million or$64.90 perpupil. In FY24, the funding totaled $114.18 million or$65.44 perpupil. Weexpectthe Casino revenues to have resumed their historical growth rate and are assuming a 1.5% annual growth rate for the remainder of the forecast.

Summary of State Foundation Revenue Estimates – Lines #1.035, 1.040 and 1.045

Source Basic Aid-Unrestricted Additional Aid Items
Basic Aid-Unrestricted Subtotal Threshold and Motor Fuel Refund Ohio Casino Commission ODT
Unrestricted State Aid Line # 1.035

FY25 $4,050,904
382,536 $4,433,440 $197,617 71,099
$4,702,156

FY26 $4,050,904 382,536 $4,433,440 $197,617 72,164
$4,703,221

FY27 $4,050,904 382,536 $4,433,440 $197,617 73,251
$4,704,308

FY28 $4,050,904 382,536 $4,433,440 $197,617 74,348
$4,705,405

FY29 $4,050,904 382,536 $4,433,440 $197,617 75,466
$4,706,523

Restricted State Revenues – Line # 1.040
HB33 has continued Disadvantaged Pupil Impact Aid (formerly Economic Disadvantaged Funding) and Career Technical funding. In addition, new restricted funds have been added under “Restricted Categorical Aid” for Gifted, English Learners (ESL), and Student Wellness. We have estimated revenues for these new restricted funding lines using current October funding factors and using the simulations from the Department of Education and Workforce for FY25. The amount of DPIA is limited to a 50% phase in growth for FY24 and 66.67% in FY25. We have flat-lined funding at FY25 levels for FY26-FY29 due to uncertainty about continuing funding of the current funding formula.

In FY24, HB33 set aside $64 million state-wide to subsidize the cost of high-quality instructional materials purchased by schools and districts aligned to the Science of Reading. The funds are provided to support both high-quality core curriculum and instructional materials in English language areas and evidenced-based reading intervention programs. The district received $17,881 from this one-time subsidy in FY24 and is required to maintain documentation as to how the funds were leveraged along with expenses incurred beyond the subsidy. Captured in the Other Restricted State Funds section below is an additional increase the district received for Highly Qualified Instruction Materials (HQIM) of $161.92. Due to the nature of these funds, we will continue to monitor, and update should future biennium budgets include one-time restricted funding from the state.

Source Disadvantaged Pupil Impact Aid (DPIA) English Learners (ESL)
Gifted
Career Tech Education Other Restricted State Funds
Student Wellness and Success Restricted Revenues Line #1.040

FY25 $72,772
418 40,966 30,428 162 119,098
$263,844

FY26 $72,772 418 40,966 30,428 0 119,098
$263,682

FY27 $72,772 418 40,966 30,428 0 119,098
$263,682

FY28 $72,772 418 40,966 30,428 0 119,098
$263,682

FY29 $72,772 418 40,966 30,428 0 119,098
$263,682

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Restricted Federal Grants in Aid – Line #1.045
There are no federal restricted grants projected during this forecast.

Summary Unrestricted Line # 1.035 Restricted Line # 1.040
Rest. Fed. Grants #1.045

Total State Foundation Revenue

FY25 $4,702,156
263,844 0
$4,966,000

FY26 $4,703,221 263,682
0

$4,966,903

FY27 $4,704,308 263,682
0

$4,967,990

FY28 $4,705,405 263,682
0

$4,969,087

FY29 $4,706,523 263,682
0

$4,970,205

State Share of Local Property Taxes – Line #1.050 Rollback and Homestead Reimbursement
Rollback funds are reimbursements paid to the district from the State of Ohio for tax credits given to owner-occupied residences.Credits equal12.5% ofthe gross propertytaxeschargedto residentialtaxpayersonleviespassedbeforeSeptember 29, 2013. HB59 eliminated the 10% and 2.5% rollback on new levies approved after September 29, 2013.

Homestead Exemptions are credits paid to the district from the state of Ohio for qualified elderly and disabled. In 2007, HB119 expanded the Homestead Exemption for all seniors 65 years or older or disabled, regardless of income. Effective September 29, 2013, HB59 changed the requirement for Homestead Exemptions. Individual taxpayers who still need to get their Homestead Exemption approved or those who did not get a new application approved for the tax year 2013 and who become eligible after that will only receive a Homestead Exemption if they meet the income qualifications. Taxpayers who had their Homestead Exemption as of September 29, 2013, will not lose it and will not have to meet the new income qualification. This will generally reduce homestead reimbursements to the district over time, and as with the rollback reimbursements above, the state is increasing the tax burden on our local taxpayers.

Tangible Personal Property Reimbursements – Fixed Rate
State budget bill HB153 slashed these reimbursements to our district after FY12, reducing our state revenue each year starting in FY13. HB64, the FY16-17 state budget, reinstituted the phase out of TPP reimbursements to districts beginning in FY16, which included a TPP Supplemental Payment for some districts. We were not eligible for TPP Supplemental Payments as our state foundation aid grew enough to offset the loss in TPP.

Beginning in FY18, SB208 amended HB64 and became effective February 15, 2016. SB208 provides that beginning in FY18, the TPP Fixed Rate funding will be phased out at 5/8ths (62.5%) of what one (1) mill would raise in local taxes on the three(3) year averageof assessed values. The TPP Fixed Ratereimbursements have been fully phased out for our district as of FY24.

Tangible Personal Property Reimbursements – Fixed Sum The district does not receive fixed sum reimbursements.

Summary of State Tax Reimbursement – Line #1.050

Source Rollback and Homestead
TotalState Share ofLocalPropertyTaxes #1.050

FY25 $770,471 $770,471

FY26 $840,758 $840,758

FY27 $845,138 $845,138

FY28 $868,463 $868,463

FY29 $891,743 $891,743

Other Local Revenues – Line #1.060
All other local revenue encompasses any revenue that does not fit the above lines. The primary sources of revenue in this areahave beeninterest on investments, tuition forcourt-placed students, student fees, Payment In Lieu ofTaxes, and general rentalfees. Since FY22, anyopen-enrolled students since havebeen counted in ourEnrolledADM numbers forstate funding and are not separately funded.

Interest income is based on the district cash balances and increased interest rates due to the Federal Reserve raising rates to curb inflation. The Federal Reserve Bank cut interest rates by 50 basis points in September 2024. While interest income in FY25 should remain steady due to laddered investment strategies, the rate cuts will begin to have an impact on earnings in FY26 and future years. We will continue to monitor the investments for the district.

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The first payment for the Solar PILOT payments has been moved from FY25 to FY26. This is due to a delay in finalizing the opening of the solar farm.

Another key source occurs due to the district sponsored Townsend Community School (TCS). The district receives funds from Townsend two ways - shared support services, and a statutory Sponsor Fee of 3% of the TCS received State Aid. The district rents space to Townsend, including a land lease to allow for the construction of a Learning Center on the Margaretta High School campus. The district provides shared services to cover maintenance of the building, transportation for Townsend students and staff support services. It is forecasted that this TCS funding would shrink through the five-year forecast in part due to the decline of their ADM numbers, based on the ODE Settlement agreement that restricts TCS enrollment. All other revenues are expected to continue on historic trends. All investments are held in accordance with Board Policy 6144. At this time, we will continue monitoring this line of the forecast for future projections.

Rentals have begun to return to pre-pandemic levels. All other revenues are expected to continue on historical trends.

Source Rentals

FY25                      FY26                    FY27 $5,400                  $5,400                  $5,400

FY28                    FY29 $5,400                  $5,400

Solar PILOT Payments Interest
Other Tuition SF-6, SF-14, SF-14H Shared Services & Preschool
Other Income, Class Fees, and Other Adj Total Other Local Revenue Line #1.060

0 35,283 733,146 381,899 713,671
$1,869,399

320,790 27,990 755,140 393,356 742,218
$2,244,894

641,579 20,410 777,794 405,157 771,907
$2,622,247

641,579 20,410 801,128 417,312 802,783
$2,688,612

641,579 20,410 825,162 429,831 834,894
$2,757,276

Short-Term Borrowing – Lines #2.010 & Line #2.020 There is no short-term borrowing projected in this forecast.

Transfers In / Return of Advances – Line #2.040 & Line #2.050
These are non-operating revenues, which are the repayment of short-term loans to other funds over the previous fiscal year and reimbursements for expenses received for a previous fiscal year in the current fiscal year.

Source Transfers In- Line 2.040 Advance Returns - Line 2.050 TotalTransfer &Advances In

FY25                     FY26 $14                       $0 3,811                         0
$3,825	$0

FY27 $750,000 0
$750,000

FY28                   FY29 $0             $770,000
0	0

$0	$770,000

All Other Financial Sources – Line #2.060
This funding source is typically a refund of prior year expenditures that is very unpredictable. For future years we are estimating an amount of refunds that are in line with historical collections.

Source Refunds ofa PriorYearExpenditure

FY25                     FY26 $6,506                 $6,506

FY27                   FY28                   FY29 $6,506                 $6,506                 $6,506

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Expenditure Assumptions
The district’s leadership team is always looking at ways to improve the education of the students, whether it be with changes in staffing, curriculum, or new technology needs. As the administration of the district reviews expenditures, the education of the students is always the main focus for resource utilization.

All Operating Expense Categories - General Fund FY25

General Fund Operating Expenditures Est. 2025 - $16,287,305

Salaries and Benefits 79.1%

Wages 54.9%

Debt Pmts. 1.2%

Other 1.8%

Capital 0.3%

Services 13.5%

Benefits 24.2%

Materials 4.0%

Wages – Line #3.010
Due to unknowns surrounding the NEXUS Pipeline revenue, negotiations with Margaretta Teachers Association bargaining unit members were extended as a carryover one-yearcontract in FY25, which includes a 3% increase for FY25.Our OAPSE bargaining unit contract expires at the end of FY25, which includes 3% base wage increases for FY25. For planning purposes, this forecast assumes a 1% average yearly increase for education and steps. At this time, we are forecasting a 3% increase to base wages in FY26-29, for planning purposes.

Source Base Wages
Base Increases

FY25 $7,886,769
236,603

FY26 $7,944,896
236,603

FY27 $8,260,948
238,347

FY28 $8,581,904
247,828

FY29 $8,915,551
257,457

All Staff - Steps and Training Substitutes
Supplementals Stipends/OT/Board & Misc Severance
Total Wages Line 3.010

78,868 116,887 382,056 174,137 65,283
$8,940,603

79,449 118,056 385,877 175,878 66,589
$9,007,348

82,609 119,237 389,736 177,637 67,921
$9,336,435

85,819 120,429 393,633 179,413 69,279
$9,678,305

89,156 121,633 397,569 181,207 70,665
$10,033,238

Fringe Benefits Estimates – Line #3.020
This area of the forecast captures all costs associated with benefits and retirement costs. These payments and HSA costs are included in the table below.

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STRS/SERS will increase as Wages Increase
The district pays 14% of each dollar paid in wages to either the State Teachers Retirement System or the School Employees Retirement System asrequired by Ohio law. The district is required to pay SERS Surcharge, which is an additional employer charge based on the salaries of lower-paid members.

Insurance
The district realized an increase of 9.6% in FY24, and we are estimating increases of 12% in FY25, then 8.5% for the remainder of the forecast period, which reflects the district’s trend. This is based on our current employee census and claims data.

Workers Compensation & Unemployment Compensation
Workers' Compensation is expected to be approximately 0.29% of wages FY25 through FY29. Unemployment is likely to remain at a shallow level FY25 through FY29. The district is a direct reimbursement employer meaning unemployment costs are only incurred and due if we have eligible employees and draw unemployment.

Medicare
Medicare will continue to increase at the rate of increases in wages and as new employees are hired. Contributions are 1.45% for all new employees to the district on or after April 1, 1986. These amounts are growing at the general growth rate of wages.

Summary of Fringe Benefits – Line #3.020

Source STRS/SERS
Insurances

FY25 $1,299,805
2,464,385

FY26 $1,309,378 2,667,858

FY27 $1,357,504 2,894,626

FY28 $1,407,505 3,140,669

FY29 $1,459,421 3,407,626

Workers Comp/Unemployment Medicare
Other adjustments/Tuition
Total Fringe Benefits Line #3.020

26,205 133,266 18,799
$3,942,460

26,401 134,224 18,893
$4,156,754

27,365 139,048 18,987
$4,437,530

28,367 144,168 19,082
$4,739,791

29,408 149,483 19,177
$5,065,115

Purchased Services – Line #3.030
College Credit Plus, excess fees, and other tuition costs will continue to draw funds away from the district, which will continue in this area and have been adjusted based on historical trends. In FY26 there will be a new electric Capacity Charge that will be assessed on all electric bills to help expand Ohio’s electric generating ability. This charge will begin June 2025 and end June 2026. It is anticipated it will increase electric costs by 20% annually for just that twelve (12) month period.

The district is enrolled in a natural gas consortium to keep down costs and the district has initiated some energy savings by using capital funds to install LED lighting in high demand areas with the goal of reducing our utilities. In addition, the district joined Ohio School Council (OSC) to participate in Power 4 Our Schools electric rate program in order to reduce the risk of electric cost fluctuation.

Source Base Services

FY25 $427,045

FY26 $431,315

FY27 $435,628

FY28 $439,984

FY29 $444,384

Instructional Contracts Other Tuition and CCP Utilities
Professional Services
Total Purchased Services Line #3.030

596,953 227,029 226,025 727,662
$2,204,714

602,923 229,299 259,929 734,939
$2,258,405

608,952 231,592 231,337 742,288
$2,249,797

615,042 233,908 238,277 749,711
$2,276,922

621,192 236,247 247,808 757,208
$2,306,839

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Supplies and Materials – Line #3.040
Expenses, which are characterized by curricular supplies, testing supplies, copy paper, maintenance and custodial supplies, materials, and bus fuel. This line currently reflects a 0.5% increase each year. We are a one-to-one Chromebook district and we continue to replace on a rotational basis several grade levels Chromebooks per year.

Source

Supplies

FY25

$223,220

FY26

$224,336

FY27

$225,458

FY28

$226,585

FY29

$227,718

Maintenance Supplies Transportation Supplies Total Line 3.040

277,676 151,782
$652,678

279,064 152,541
$655,941

280,459 153,304
$659,221

281,861 154,071
$662,517

283,270 154,841
$665,829

Capital Outlay – Line #3.050
An overall inflation of 1% is being estimated for this category of expenses. The district passed a resolution on September 26, 2018, to establish a Capital Projects Fund (070) that will be funded with additional NEXUS Pipeline funds at least 50% of the Nexus incremental taxes, and other gifts to the district. This will be funded over a ten-year period for acquisition, construction, or improvement of fixed assets during this ten-year period. Two projects increased FY24’s expenditures by nearly $44 thousand. The first project was a replacement pipe for the FFA pond ($28 thousand), and the second project was roofing repairs ($16 thousand). The district will partially resurface the track in FY25, which is estimated at $35 thousand.

Source Improvements
Track Resurfacing

FY25 $19,575
35,000

FY26 $19,771
0

FY27 $19,968
0

FY28 $20,168
0

FY29 $20,370
0

TotalEquipment Line #3.050	$54,575	$19,771	$19,968	$20,168	$20,370

Principal, Interest and Fiscal Charges – Lines #4.010 and #4.060
In FY2008 the District incurred $2.7 million to make improvements to the Elementary building. The purpose of this project was to accommodate the consolidation of our PK-5 students into one building. The financing instrument is for twenty years and is forecasted to be paid off in FY28. In FY2016, the District entered a Lease Arrangement with Townsend Community School to assist in the financing of the expansion project of their Learning Center, this is completely paid off at this time.

Source PrincipalImprovementFinancing# 4.055
Source

InterestonBorrowing Line4.060

FY25 $162,000 FY25
$35,283

FY26 $168,000 FY26
$27,990

FY27 $175,000 FY27
$20,410

FY28                   FY29 $372,000                       $0 FY28                  FY29
$12,520	$0

Other Expenses – Line #4.300
The category of Other Expenses consists primarily of Auditor & Treasurer fees, our annual audit, and other miscellaneous expenses. County Auditor and Treasurer Fees are expected to increase at a rate of 2%.

Source County Auditor & Treasurer Fees Election Expense
Other expenses Liability Insurance
Total Other Expenses Line #4.300

FY25 $105,282
0 39,056 150,654
$294,992

FY26 $107,388 3,393 39,837 150,654
$301,272

FY27 $109,536 0
40,634 150,654
$300,824

FY28 $111,727 3,461 41,447 150,654
$307,289

FY29 $113,962 0
42,276 150,654
$306,892

Transfers Out/Advances Out – Line# 5.010
This account group covers fund-to-fund transfer and end-of-year short-term loans from the General Fund to other funds until they have received reimbursements and can repay the General Fund. The transfers ‘out’ in the forecast is the transfer of 75% of the Nexus payments into the 070 new facility reserve account to finance the building.

15

The Board has also passed a resolution to allocate 25% of the Nexus tax revenue to the general fund and 25% to a general fund reserve, which is capped at a balance no greater than 5% of the previous year’s general fund revenue, and 50% of Nexus to the 070 fund for capital improvements and buildings. If the transfer to the general reserve fund is capped by the 5% of the previous year’s general fund revenue, then the amount above the cap, not able to be transferred to the general fund reserve, will be included with the transfer to the 070 fund for capital improvements. However, the 50% can be reduced in any given year in order to keep a positive General Fund cash balance before adding in the property tax renewal.

Source OperatingTransfers Out Line #5.010 Advances Out Line #5.020 TotalTransfer &Advances Out

FY25 $6,890,590
0

$6,890,590

FY26 $3,137,897 0
$3,137,897

FY27 $3,043,760 0
$3,043,760

FY28 $2,952,447 0
$2,952,447

FY29 $2,863,874 0
$2,863,874

Operating Expenditures Actual FY22 through FY24 and Estimated FY25-FY29
As the graph on the following page indicates, we have diligently contained costs due to lower and flat state revenues. We control our expenses while balancing students' academic needs to enable them to excel and perform well on state performance standards.

General Fund Operating Expenditures Act. FY2022 Through Est. 2029

Millions
$20

$18

$16

Other $14	Expenses

Capital

$12

Material

$10
Services

$8	Benefits

$6	Wages

$4

$2

$0

Act. 2022 Act. 2023 Act. 2024     Est. 2025     Est. 2026     Est. 2027     Est. 2028     Est. 2029

Encumbrances –Line#8.010
Encumbrances represent purchase authorizations and contracts for goods or services that are pending vendor performance and those purchase commitments, which have been performed, are awaiting invoicing and payment. Encumbrances, on a budget basis of accounting, are treated as the equivalent of expenditure at the time authorization is made to maintain compliance with spending restrictions established by Ohio law. For presentation in the forecast, outstanding encumbrances are presented as a reduction of the general fund cash balance.

Source Estimated Encumbrances

FY25                     FY26 $5,000                 $5,000

FY27                   FY28                   FY29 $5,000                 $5,000                 $5,000

Reserve Assumptions
The district also passed a resolution on September 26, 2018, to establish a Reserve Balance Account within the General Fund (001) that will be funded with additional NEXUS Pipeline funds, and other gifts to the district. The purpose of this fund is to stabilize the district’s budget against cyclical changes in revenues and expenses. The amount of money reserved

16

in such an account in any fiscal year shall not exceed 5% of the revenue credited to the General Fund in the preceding fiscal year. Upon termination of the Reserve Balance Account, the balance therein shall be returned to the General Fund.

Ending Unencumbered Cash Balance – Line#15.010
This amount must not go below $-0- or the district general fund will violate all Ohio Budgetary Laws. Any multi-year contract, which is knowingly signed, and which results in a negative unencumbered cash balance, is a violation of O.R.C. §5705.412, which is punishable by personal liability of $10,000; unless an alternative 412 certificate, as permitted by HB153, effective September 30, 2011, could be issued. It is recommended by the Government Finance Officers Association (GFOA) and other authoritative sources that a district maintains a minimum of sixty (60) day cash balance, which is approximately $2.7 million for our district.
Source	FY25	FY26	FY27	FY28	FY29 EndingCashBalance                                                      $1,064,059             $624,209           $1,096,633             $286,823                 $1,879

True Cash Days Ending Balance
Another way to look at ending cash is to state it in ‘True Cash Days”. In other words, how many days could the district operate at year-end if no additional revenues were received? This is the Current Years Ending Cash Balance divided by (Current Years Expenditures/365 days) = the number of days the district could operate without additional resources or a severe resource interruption. The Government Finance Officers’ Association (GFOA) recommends that no fewer than two (2) months or 60 days of cash is on hand at year-end. Still, it could be more dependent on each district's complexity and risk factors for revenue collection. This is calculated, including transfers, as this is a predictable funding source for other funds such as capital, athletics, and severance reserves.

Ending Cash Balance in True Cash Days

24 25

19	20 20                                                                                                            17

15	12	12	True Cash Days

10

5

0
Act. 2022	Act. 2023	Act. 2024	Est. 2025	Est. 2026	Est. 2027

5

Est. 2028

0

Est. 2029

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Conclusion

The NEXUS Pipeline going online in FY19 could not have come at a better time for our district. In FY19, the district finished the year with 18 true days cash which was 42 days below the 60-day benchmark. The district will continue to maximize the value of these dollars to enhance the educational experience for our students.

Margaretta Local School District receives 25% of its funding for the district from state dollars which is very beneficial to the overall operations for the education of our students.

The district administration is grateful for the changes in the current state budget HB33 as it has reduced the amount that was deducted for programs that were not within the district’s control. However, future state budgets funding will need to be watched since the full amount of the Fair School Funding Plan was not totally implemented with this budget and there is no guarantee for future increases in state budgets for FY26-FY29.

As the administration plans for the future, they will need to make sure that the district is able to maintain a positive cash balance throughout the forecast. The expenditures will need to be reviewed based on the current revenues in order to obtain this.

As you read through the notes and review the forecast, remember that the forecast is based on the best information that is available to us at the time the forecast is prepared.

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