With the passage of the 3.85-mill levy in November, District Treasurer Ashley Brudno emphasized an improvement to Chagrin schools’ November five-year forecast compared to May, with deficit spending not expected until about 2023. This is right on target with the district’s commitment for a three-year levy cycle, Mrs. Brudno said.
The district originally expected to see deficit spending beginning by the end of fiscal year 2020, but due to school closures from COVID-19 as well as about $650,000 in expenditure cuts in the spring, the district managed a surplus of about $300,000, Mrs. Brudno had explained in the previous forecast last May. The looming threat of eating into the district’s reserves was merely pushed back to the current 2021 fiscal year without the approval of a levy, according to the forecast.
Voters came through on Nov. 3, however, with 69 percent approval of the levy that will replace the effective millage of bond from the construction of the middle school that will expire by the end of the year, Mrs. Brudno explained during the Nov. 18 Chagrin Falls Board of Education meeting.
“We have increased our revenue [into the general fund] because of the levy that was passed, and we have decreased our expenditures,” Mrs. Brudno said. “It’s looking like right about 2023, we’re going to start deficit spending here and start eating into the cash balance.”
The forecast shows revenue estimated to reach about $32.2 million and expenditures at about $31.8 million with a surplus of about $340,000 and an ending cash balance of $14.3 million.
By 2023, the district expects a small deficit of about $3,700, which jumps to more than $900,000 by 2024, according to the forecast. By 2025, this deficit is estimated to reach about $1.8 million. Estimated revenue for 2025 is about $34.2 million and expenditures at about $36 million with an ending cash balance of about $12.1 million.
Board member Mary Kay O’Toole said this equals about four months worth of expenditures for the district.
“This looks much better than last time,” Mrs. Brudno said, referencing the May forecast. She pointed out that the district’s ending cash balance is estimated to remain steady with a more gradual decline as compared to the sharp decline previously anticipated.
“Looking three years down the road, which is what we committed to, is where it starts decreasing and starts getting below where we want to be and where we need to start talking about a levy,” she said.
Property taxes make up about 77 percent of the district’s revenue, and by 2025, this is projected to reach about 80 percent, Mrs. Brudno said. The district saw a slight dip in revenue from property taxes from fiscal years 2020 to 2021 due to the downturn in the economy from COVID-19, but Mrs. Brudno projected a return to normal by 2022 with increase in collection rates.
Overall, “these numbers look a lot better than what I presented to you in May,” Mrs. Brudno told the board. “We have passed a levy, we have cut [a lot] of expenditures, we’re doing everything we can to keep this ending cash balance healthy. Looking out to fiscal [year] 2025, we’re looking at about a $12 million cash balance, assuming that everything that we built into the forecast actually happens.”