TAX LEVY … Delta School District facing deficit spending. (PHOTO BY BILL O’CONNELL, STAFF)
By: Bill O’Connell
During the Pike-Delta-York Board of Education (BOE) meeting in November, CFO/Treasurer Matt Feasel laid out the District’s Five-Year forecast for 2020-2024 and related to the Board that there were some tough decisions to be made in the very near future.
Mr. Feasel shared a spreadsheet showing revenue and expenditures dating back to Fiscal Year 2016-2017, the most recent period where the District realized a surplus, or when income exceeded expenses.
Actual numbers for the following two years showed deficit spending that cash on-hand balances were able to absorb.
However, in each of the five years in the forecast, deficit spending is projected to increase significantly every year. Cash balances are predicted to be exhausted sometime during Fiscal Year 2021-2022 and total debt of the District is expected to be $4,476,124 by the end of Fiscal Year 2023-2024.
As explained by Mr. Feasel in a post-meeting interview, a major factor in the shortage of revenue for the school is the tax abatements the Village of Delta is giving to local companies and property owners. He used the abatement given to Canadian company Nature Fresh Farms as one example.
Municipalities are allowed to give up to 100% tax abatements for a certain length of time to companies and property owners under the Ohio Community Reinvestment Area (CRA) program as a way to boost economic growth.
Generally, a negotiated “donation” of at least 50% of the tax being abated is given to the local school district so they are not negatively affected.
“With Nature Fresh, there was an original agreement among all the political subdivisions, the county, the township, the school, they would abate 100% of the taxes but required a 50% donation agreement for the schools,” explained Mr. Feasel.
Soon after, it was discovered that the CRA had to be with the property owner, Nature Fresh president Peter Quiring, and not the company itself which rendered the original agreement null and void.
The Village of Delta negotiated a new agreement maintaining the 100% tax abatement but excluding the 50% donation, which amounted to $3,200,000 over ten years, to Delta Schools.
According to Mr. Feasel, the Village did not inform the school of the change in the agreement. “We got nothing,” he said.
Another example of tax abatements hurting the schools given by Mr. Feasel was the construction of new homes. “Anybody that builds a new house here, all they have to do is once they get a bill is go up to the Village and fill out an application and the first ten years of their taxes are abated. They don’t pay anything.”
“If they bring two kids into the District and our average cost per pupil to educate a child is $10,000, that costs us $20,000 and we don’t get a dime from them,” he said.
“Currently, we have six residential properties that have been granted abatements.” Adding to the problem is that funding from the State of Ohio will not be increased in 2020.
What the BOE, Mr. Feasel and Dr. Ted Haselman, School Superintendent are looking for are opportunities to separately negotiate with local companies.
“All we’re asking for is to give us an opportunity to go to the table,” said Mr. Feasel. “Let us negotiate with these companies.”
When asked how the Village has responded to the issue, Mr. Feasel said he and other school officials have met with Village officials on numerous occasions and the Village maintains they are trying to build a community and the abatements, in the long term, will be beneficial to the Village.
“(Dan) Miller, the current Mayor, we’ve met with him and Brad (Peebles, Village Administrator) and tried to explain what it does to us. It’s fallen on deaf ears,” said Feasel. “We never heard of any kind of proposal. We’ve asked them to give us a proposal. We’ll look at anything. They never came back.”
What has been of some help is a new source of State funding called the Student Wellness and Success Fund or Fund 467 that has very few limits on where the money can be spent.
This fund was put in place by Governor Mike DeWine and is currently available for only two years.
As Dr. Haselman pointed out, however, is the funding will be applied only to existing programs instead of new ones given their current financial situation.
Another source of revenue could be taxes from the NEXUS Pipeline but that amount is currently unknown.
Bill can be reached at firstname.lastname@example.org
© 2019, Newspaper Staff. All rights reserved.
Source: The Village Reporter