A five-year financial forecast is required of school districts, but it is no more than a best-guess
estimate.
David Conley, with Rockmill Financial Consulting, reviewed Bowling Green City Schools’ five-year forecast
at the financial task force meeting Thursday.
“If you’re wrong the wrong way, it can be disastrous,” he said about the forecast.
His goal was to educate the approximately 30 people in attendance on how a school operates financially.

Bowling Green is expected to come to voters for additional money in 2023, based on the projected revenues
and expenses over the next five years.
It’s not the group’s job to determine what has been spent, what is being spent, and what will be spent,
he said.
He explained line items from property tax, income tax and state aid revenues; to salaries, supplies to
capital outlay expenses.
“Never assume you are going to have the money to operate,” Conley said.
He said the district’s tax structure is “not voter friendly,” as tax issues appear on the ballot every
five years for renewal. The 4.2-mill current expenses levy and the $1 million emergency levy expire in
2020; the 0.05-percent income tax expires in 2022.
“Operating money is the lifeblood of the district,” Conley said, and if the next three levies aren’t
renewed, that is a $6.8 million loss to the district.
“If you don’t shore that up, buildings won’t matter,” he said, alluding to the work being done to pick a
facilities solution.
Every school district in Ohio has the same funding model, and most districts return to voters every three
or four years for more money.
Bowling Green has gone nine years since asking for additional funds from taxpayers, even with property
tax revenues and state aid revenues being mostly flat.
“Deficit spending is a natural phenomenon for schools,” Conley said.
The five-year forecast allows the state to monitor the health of the district; if a district deficit
spends, the state can move in and take over.
The historical three years of the forecast show revenue have increased by just $480,000; meanwhile,
expenses have gone up by $2.7 million.
In the next five years, revenues drop $5.4 million while expenses increase by $3.1 million.
The state requires a district to not assume passage of levies and show the loss of that revenue.
“Even though they won’t know if it will happen,” Conley said.
Steve Bateson asked whether the pipeline funds will be added into the forecast next year.
Those funds have not yet paid, so no, said Treasurer Cathy Schuller.
Bateson also asked if the pipeline pays the district $800,000 as expected, the need for the $1 million
emergency levy goes away.
Conley explained what likely will happen is the state reduces its aid and reallocates it elsewhere to
counter the district getting more local revenue.
As forecasted, the district will use up its cash balance in fiscal year 2022 and be in the red $8.6
million in fiscal year 2023.
That is without passage of the three renewal levies, Conley said. With renewals, the cash balance amount
is $1.9 million in fiscal year 2023.
Richard Strow said past five-year forecasts show the projected losses were not actual.
“The numbers come together much closer and don’t end up in the red numbers nearly as fast,” he said.
Strow also pointed out the personnel line item under expenses is flawed, as it does not account for the
loss of teachers.
Ten percent turnover was recorded this year, but Schuller has not figured in any turnover in coming
years, he said.
“You’re making the assumption that every employee that is here today is going to be here five years from
now. The numbers that you’ve got there … are completely and totally flawed,” Strow said. “That’s not
real world.”
“This forecast will look different the next time she does it. It is very difficult to come up with a
forecast that will likely happen,” Conley said.
What factors into the balance issue is can the levies be fixed from temporary to continuing to take away
the future risk if those levies go away; and what will the facilities configuration look like.
Former school board member Ellen Dalton said voters prefer renewal levies to support the district every
five years.
Conley said there seems to be a lot of people that believe five years is preferred because then a voter
can show support of a district. That is not an effective management tool, he said.
“Once you vote for a levy, you almost always have to continue to give it because expenses aren’t going to
go away.”
Coming back every five years becomes a nuisance, he said.
The next financial task force meeting will be Feb. 13 at 7 p.m. at Crim Elementary. The group is expected
to discuss the options forwarded from the facilities task force.