BEVERLY - The addition of Duke Energy's plant to the tax rolls in 2014 is expected to keep the Fort Frye Local school district in the black for the next five years, according to a financial forecast presented to board of education members Thursday.
Previously, the plant's valuation was expected to result in annual tax revenue on par with the $732,000 fee-in-lieu-of-taxes Duke has been paying for the last 12 years as part of a tax incentive. But Treasurer Melcie Wells told the board she was recently contacted by Duke officials who indicated the actual revenue will be closer to $2.1 million a year.
As with any forecast, a lot can change between when the numbers are assembled and when the money actually comes in, Wells reminded the board and members of the public during Thursday's regular meeting at Beverly-Center Elementary School.
Still, "this is good news for us," Wells said.
The district is expected to spend more money than it takes in for the next two years while still finishing with a positive balance thanks to a $1.1 million carryover into the current fiscal year. Most of that money comes from placing about $1 million worth of previous Duke payments in the general fund instead of the permanent improvement fund, where they had been directed before, to cover projected deficit spending approaching half a million dollars.
The forecast predicts the district's revenue from the public utility personal property tax and other sources, like the state's reimbursement for the homestead exemption, will swell from $2.27 million in fiscal 2014 to $3.25 million in fiscal 2015 when the district starts collecting the new revenue from Duke. That number increases to $3.5 million the following year.
But in the final year of the forecast, the total heads in the opposite direction, dropping under $2.8 million as the impending closure of American Electric Power's Muskingum River plant takes effect.
"In that fifth year, when AEP starts to fall off, we're in deficit spending again," Wells said.
The district is still projected to be about $700,000 in the black.
The change in predicted valuation from Duke pulled the district's cash balance up from more than $1 million in the red, where it had been for the end of fiscal 2015 in May's updated financial forecast, to nearly $800,000 in the black. Board member Charlie Schilling said Wells' estimates then were based on the best information available, noting he too expected less revenue from Duke after meeting with company officials in March.
"Mrs. Wells is doing a fantastic job," he said.
Both Wells and Schilling emphasized the need to remain cautious about the district's finances.
That being said, "I will not stop being optimistic about these sorts of big-ticket items, and also AEP," Schilling added. "I believe good things still can happen."
Schilling said he thinks the board is focusing more on major issues like the Duke and AEP funding than day-to-day items that have bogged them down in the past.
"I'm happy to say that we are finally on a path where we're on top of these major issues," he said.
Superintendent Tom Gibbs noted there is still a lot of uncertainty hanging over the district's funding, with the impact of a new school funding formula expected to be introduced by Gov. John Kasich still unknown.
"Currently, Ohio does not have a school-funding formula," Gibbs said. "What we have is a bridge formula that says you can have no less than 'x' percent of what you had two years ago."
He encouraged board members and residents to lobby legislators and the governor's office to not reduce school funding further but keep it at the same level or increase it as the new formula is developed.