By converting its two operating levies to continuing terms, Bowling Green City Schools can free up money
to spend on programming or debt.
At Tuesday’s board of education meeting, financial adviser David Conley gave a reminder on the benefits
of continuing levies.
The board later in the meeting approved proceeding with placing its 4.2-mill operating levy and its $1
million emergency levy on the March 17 primary ballot. The emergency levy will appear as a substitute
levy, which will allow it to grow along with construction growth in the district.
Both of the levies expire Dec. 31, 2020. The deadline to place an issue on the March ballot is Dec. 18.

By going to a continuing term, the district safeguards revenue that in the past has been renewed every
five years. That money — $3.4 million annually — will be lost if these two issues are not approved in
2020.
At the end of fiscal year 2019, there was about $17 million in the district’s cash reserves, with nearly
half on hold to protect the district if any of its three operating levies are not passed, Conley has
explained.
The 0.50% income tax expires in 2022.
By going with a continuing term, that frees up those millions that could be used and stretches out the
life cycle of needing new money, he said.
According to Conley, passage will give the district more flexibility instead of having money sit in the
bank, on hold, in case a levy renewal fails in the future.
The fund balance at the end of this fiscal year is projected to be $16.86 million but takes a sharp drop
to $1.39 million in fiscal year 2023 with the potential loss of these levies.
“It makes us much more stable in the long term,” said board President Ginny Stewart.
Despite the wording, neither tax will collect more than it is collecting now from existing residents.
“The substitute levy functions the same as the emergency levy in that your taxpayers don’t pay any
additional money – it doesn’t cause a tax increase,” Conley said. “But it creates an additional feature
you didn’t have before.”
Once it becomes a substitute levy, any new properties constructed in the school district from this point
forward pay the same tax as current homeowners, he said.
The emergency levy would gather only $1 million every year even as the district grows – and everyone’s
share drops. A substitute tax will collect more as homes and businesses not previously taxed are added,
but there would be no change to existing taxpayers.
“As your expenses go up, that will allow you some additional revenue to offset that,” Conley said.
Changing the levies to continuing also would preserve the rollback and homestead discounts now enjoyed by
homeowners, while negating the five-year tax structure.
“The goal would be to put to bed the fact you have to go back and ask voters over and over again,” Conley
said.
He said that “emergency,” in an emergency levy, means money is needed to keep a school district from
going into a deficit.
“An emergency levy is intended to allow districts to avoid an emergency or to simply to avoid a deficit.”

He said the district is no longer in an emergency as it not facing a deficit until 2024, if the levies
are not approved.
With passage of the continuing taxes, the district can also push the need for new operating money out
past 2024, Conley said.
Board member Bill Clifford said that the district has not asked for any new operating money since 2010.

“You have done a great job in maintaining spending which has allowed you to operate without having to ask
for new taxes,” Conley said.
“These are no new taxes and we would be conserving the rollback,” said board member Norm Geer.
With approval of continuing levies, the district can allow its fund balance to drop to around $7 million
“so you are able to get quite a bit more done from an educational perspective,” Conley said.
“We could direct some of that cash balance to other needs such as debt and educational programming,” said
Treasurer Cathy Schuller.
Schuller’s five-year forecast, which also was approved Tuesday, shows a fund balance of negative $10.01
million in fiscal year 2024 without passage of these two levies, and $7.78 million with passage.
The forecast also shows total revenues dropping by $6.21 million between fiscal year 2020 and fiscal year
2024 without passage of these two continuing levies.
Meanwhile expenses will continue to grow by $3.77 million in that same time frame.
The largest variables to revenue will be the Rover pipeline money and state funding, Schuller said.
Pipeline money, which will not go into the general fund and thus cannot be used to offset the loss of
levy money, is expected to be $1.71 million this year and $3.32 million in fiscal year 2024. By board
resolution, that money will be transferred from the general fund to a capital improvements fund. It is
expected to depreciate 3% every year. For example, collection in fiscal year 2021 is expected to be
$3.54 million and $256,000 less three years later.
This all is assuming the pipeline does not appeal its tax payments, Schuller said.
To date, pipeline money has been used to purchase modular classroom units and buses and make repairs to
several floors and boilers in at least three buildings, totaling $507,814, she said.
A workshop will be scheduled with Conley to discuss how to spend the expected pipeline funds.
State foundation is basically frozen for this year and next at $8.4 million, Schuller said, but she
warned it could go down in the next biennium if the state cuts funding in response to pipeline revenue.

General property taxes make up 54.64% of the general operating revenue, with 10.98% coming from the 0.50%
income tax and 24.62% from state aid.
Property taxes are expected to collect $17.1 million this year and drop to $13.18 million in fiscal year
2024 without passage of these taxes. The income tax is expected to collect $3.78 million this year, drop
to $1.91 million in fiscal year 2023 if the tax isn’t approved in 2022, and be gone the following year.

As the district outspends revenue — which will be hastened by the loss of the levies – it will dip into
its cash balance. This year, that amount is $16.86 million. In fiscal year 2024, without passage of the
levies, the district will have used up its reserves and be $10.01 million in the red.
“That’s how important these renewals are,” Schuller said.
With passage of the levies, the cash balance is forecasted to be $7.78 million in fiscal year 2024.
“With a balance, we really should be keeping $8 million because that’s about nine months cash,” she said.

“We’re a school district so we are a service industry,” Schuller said, explaining that personnel will be
the largest expense in the forecast.
Salaries are $17.54 million this year and $20.23 million in fiscal year 2024, and negotiated contracts,
staffing levels and health insurance are significant variables in these numbers, she said.
There also is a $1.28 million increase in employee benefits and retirements during that time.
Personnel expenses make up 75% of the budget. The next largest amount of 14.75% is for purchased
services, which include utilities, technical services and paraprofessional services.
Schuller warned the forecast is only a snapshot.
“As soon as I printed it, something changed.”