The territory transfer of Ledgemont to Cardinal School district, if approved by both school boards, will change Cardinal’s financial landscape over the next two fiscal years.
Cardinal Treasurer Merry Lou Knuckles recently presented assumptions that show the expected financial results if the districts combine under the Cardinal name.
Knuckles told Cardinal Schools Board of Education last Wednesday it is likely the revenues and savings will outweigh expenditures, keeping the district in the black until 2018.
“These rough estimates and known figures will get us about $200,000 in additional revenues for FY 2016 with the transfer in place,” she said in her assumptions. “This transfer has the potential to keep us in the black for the next three fiscal years, as shown in our current forecast, but with a larger cash carryover balance.”
Savings in payroll, materials and services are all likely once the transfer is complete in July, providing both school boards vote in favor of the proposal at the Nov. 5 special meetings both are planning.
Knuckles touched on a number of considerations to the fiscal year 2015 budget and fiscal year 2016 forecast if the transfer follows the state-mandated timeline.
These are some of her assumptions if the transfer takes place:
- Besides not having to pay back the loan to the state ($642,000 a year), state funding may increase if property value assessments increase, Medicaid reimbursement monies could go up and casino revenues currently allotted to Ledgemont would go into Cardinal coffers;
- It is unknown if open enrollment students going elsewhere will increase or decrease, but the expense to Ledgemont’s budget for their students coming to Cardinal would be eliminated;
- The $127,000 tangible personal property tax loss value makeup payments to Ledgemont likely would be eliminated;
- Salaries and wages may decrease due to retirements and the elimination of administrative positions at Ledgemont;
- Cardinal salaries are higher than Ledgemont’s so there may be an increase, but the impact could be minimal due to retirements;
- No savings are expected on benefits for two years because the districts are committed to different consortiums;
- More than $430,000 in transportation costs may be saved if services are not contracted out;
- Utilities should go down if Ledgemont High School is shut down (sports events would be held at Cardinal);
- Costs for special education, speech and nursing could decrease;
- Ledgemont’s technology services, virtual learning labs and Spanish teacher expenses would be eliminated;
- There should be a significant decrease in costs for legal services, network fees and professional fees;
- Bulk purchasing of supplies and warehousing at Cardinal as well as not having to maintain the Ledgemont High School will save money; and
- The potential to sell the high school could provide permanent improvement funds for Cardinal.
The figures are flexible and some are still unknown, Knuckles said.
“We will still need to renew our 9.7-mill levy by January of 2018 to avoid a small deficit cash balance at the end of fiscal year 2018,’ she said. “This outlook does not change our current forecast expectations; it just gives us more cash at the end of the fiscal year. “
If the board vote on Nov. 5 to go ahead with the transfer, voters in the enlarged Cardinal school district won’t be asked for new taxes for three years, Knuckles said.
“With the addition of Ledgemont to our district, we have a very good chance at pushing out our need to go to the voters for new money until 2017 for collection in 2018 at the earliest,” she said, adding that unknown issues and increases in special education services will have a negative effect on our forecast regardless of the transfer.