Columbiana District has not seen any windfall
COLUMBIANA – The Columbiana School District isn’t looking to earn much revenue through the oil and gas industry or Ohio casino money, district Treasurer Lori Posey said.
The district has not received any oil and gas money since leasing 65 acres to Chesapeake Energy two years ago, she said. The district received a $155,000 signing bonus on the lease, but the company has not recovered any oil and gas from the property and the district only receives more money if oil and gas is found.
“It is not flowing at this point in time. We do not anticipate our residents have received any money. The only district in the county I’ve seen that received revenue is United Local and that was $29 for burn-off revenue,” she said.
Burn-off is when the natural gas extracted as a byproduct of hydraulic fracturing is burned at the wellhead and released into the atmosphere.
United Local received $288,830 on its signing bonus in 2012 for the $2,000 per acre lease.
Posey also said she doesn’t believe the Columbiana district will see much money from casino revenue in the coming years either.
It is expected to receive $52,000 this year, which she said is one-half of 1 percent of the district’s total income.
“It’s not quite the windfall of money that is being touted in the media that casino money is going to save our schools. That is not going to be the case,” she said.
Schools began receiving money in January from the Ohio casinos that opened last year, and the first portion of money to the district was $22,000, Posey said.
She made the comments after presenting the five-year financial forecast to the school board this week.
The forecast shows the district’s overall cash balance is anticipated to decrease from $2.35 million in 2014 to $1.57 million in 2018.
While the district is expected to remain in the black over five years, deficit spending is projected for the last three years, with expenditures over revenue by $99,700 in 2016.
The forecast is only an estimate and is adjusted as money is received and spent.
Posey said the forecast reflects a “conservative increase” in income tax revenue through hoped for economic recovery and new construction in the district.
From fiscal year 2014 through 2018 estimated income tax revenue will account for $1.7 million to $1.9 million.
Posey said she budgeted $500,000 as a contingency should the $4 million bond issue on the Nov. 5 election ballot not pass.
“If it doesn’t pass and the board chooses to replace the roof and use how much more, those dollars would have to come out of the general fund. My concern is I only have the roof built in. There are many more things that need to be done at the middle school in order to get it up to operation,” she said.
She went on to say the school could become a “virtual money pit over the next several years” unless other things are repaired, such as the outdated heating system.
She noted that if the bond issue does pass the cost to taxpayers will be adjusted as property values change over the 29 years, and that could result in less of a cost if values increase.
The district did save some money through closing a portion of the middle school building. Money was saved through the restructuring of the custodial staff as a result, retirements and resignations, and not replacing some positions, she added.
However, those savings are not enough to keep the district from deficit spending later, she noted.
The board approved the forecast.