JERRY CITY – Elmwood Local Schools is expected to get to 2026 before spending its cash reserves.

Treasurer LuAnn Vanek presented her five-year forecast at the Nov. 16 board of education meeting.

“It’s very difficult to forecast right now,” she said.

The forecast shows flat real estate collections as the district moves some property tax revenues into a permanent improvement fund.

Vanek expects a 6% increase in income tax revenue in fiscal year 2023 and a 3% increase for each year after that, to total $2.33 million in fiscal year 2026.

“Our average in the district, except for the past couple years, has been anywhere between 2 and 4%,” she said.

Pipeline revenues, which are expected to be $2.11 million this fiscal year, will decline as the pipeline valuation depreciates. The initial amount from the two pipelines that flow through the district was $5 million but Rover appealed its valuation.

“They are going back on their promises and are appealing … so that’s why we’re not getting the full value of what we were promised,” board member Debbie Reynolds said.

“It’s not just Elmwood, that’s all the school districts that pipeline goes through,” said Superintendent Tony Borton.

“It may take years to settle,” Vanek said.

If it loses its appeals, Rover will have to pay its initial estimate plus interest. If Rover wins the appeal, Elmwood will have to pay back $203,953 in an overpayment.

Vanek flatlined state aid – it is $7.06 million each year of the forecast – but expects it to decrease as personal property valuation from the pipeline will impact the new state funding formula.

Total revenue for fiscal year 2022 is $16.04 million. That falls slightly to $16 million in fiscal year 2026.

Expenditures are expected to increase each year, from $15.85 million in fiscal year 2022 to $18.84 million in fiscal year 2026.

Salaries now paid for by grants will be added back into the general fund in the next five years.

Personnel services – salaries and benefits – account for $12.72 million of this year’s expenditures, or approximately 80%. Those expenses will grow to $15.38 million in fiscal year 2026.

Vanek said the negotiated agreement with the non-certified staff increased their salaries by 2.5% this year and 2% in years 2023 and 2024. Negotiations with the certified staff will begin in March and she forecasted a 2% increase from 2022-25.

Spending will pass revenues in fiscal year 2023 in the amount of $1.87 million due to the expiration of COVID relief grants and the pipeline appealed valuation, Vanek said.

At that time, the district will start dipping into its cash reserves, she said.

Those reserves are expected to be $7.41 million at the end of this fiscal year and be used up by fiscal year 2026.

“This forecast has been projected using assumptions based on the current information available at this time,” Vanek said, and added that all information is subject to change.