Orange City School District Treasurer Todd Puster gave an overview of the fiscal year on Monday to the school board stating that the cash reserves are forecasted to decrease in the foreseeable future.
Cash reserves in this past fiscal year decreased by nearly $4 million, he said. “We’re having a planned spend-down of our reserves,” Mr. Puster said.
The district’s year-end cash balance is just shy of $30 million, the lowest level of operating cash during the past five years, according to Mr. Puster’s report. He said that there is more than $25 million in reserves, but the five-year forecast predicts a decline over the next few years.
In 2005, the Board of Education decided to always keep 90 days of cash reserves so the district could always pay its operating expenses. Mr. Puster’s five-year forecast indicates that without an operating levy renewal in 2021, the district’s cash balance would dip to $13.6 million in 2023, which is below the 90-day reserve level.
“We prudently manage those reserves,” he said.
Mr. Puster also gave an overview of the financial position of the district.
He said that property tax revenue makes up 75 percent of the funding for the Orange City School District at $37 million in fiscal year 2018-19. State foundation aid and state restricted aid comprised less than 5 percent of the district’s funding.
According to Mr. Puster, employee salaries and benefits comprise more than 80 percent of the district’s spending at a cost of $39.5 million in the 2018-19 fiscal year. He said that this percentage is similar to other school districts. Purchased services, which include contracted services such as technology support, legal counsel, utility costs and building maintenance, take up 10 percent of the district’s expenditures at a cost of $5.3 million.
Mr. Puster said that insurance benefits are the fastest growing area of cost. He said that every year, the district puts $400,000 into a benefits reserve fund to cover the benefits costs for retired employees. He also mentioned that Orange is the only K-12 school district in Ohio to receive the AAA rating from Standard and Poor’s Global Ratings and the AAA rating from Moody’s Investors Service. In addition, he noted a trend of decreasing enrollment at Orange, which leads to a higher cost per pupil.
“Most of Ohio is facing declining enrollment,” he said.
Mr. Puster also explained that Orange is the fiscal agent for the 19-member Suburban Health Consortium. Other member school districts pay into the consortium and purchase healthcare insurance.
The treasurer said that managing Orange’s finances is more than just a school district. He said that Orange operates a school district, insurance company and municipal recreation, referring to Orange Community Education and Recreation.