Indian Hill Five-Year Forecast November Update

Mick Davis

At the Indian Hill Board of Education Meeting Tuesday, November 24, I shared an update to the District’s five-year financial forecast. Presented twice a year, this important planning tool is required by the Ohio Department of Education. The forecast aligns our income and expenses to our District’s current and future goals with respect to academics, operations, and facilities. I want to address three specific areas with you we shared within the forecast: COVID-19 impact; Energy Savings Program; and operations and facilities.

COVID-19 Impact
To offset the loss of state funding due to the COVID-19 pandemic, the District examined our capital outlay planning tool, which is used to analyze capital needs and to plan future projects. The District removed all items other than technology and transportation purchases from the current year’s plan. The expectation is that when next year’s Capital Plan is approved the District will do the same procedure. This frees much needed cash to help sustain dwindling balances. However, this could potentially exacerbate current facility needs; all carpeting, furniture purchases, and other general maintenance was delayed. 

Our District is always looking for opportunities to reduce expenditures. The Board of Education voted in May 2020 to restructure custodial operations through outsourcing services. The District will save approximately $325,000 annually as a result. 

Energy Savings Program
This fall, the Indian Hill School District partnered with Motz Engineering and Energy Optimizers in developing a fiscally responsible Energy Savings Program to make District-wide facility upgrades that are good for the environment. District school buildings will be equipped with LED lighting designed to provide students and staff with an improved learning environment. Along with the brighter, clean light in classrooms and hallways, the District has a building-by-building plan to improve facilities with a focus on integrating energy-efficient systems, improving air quality, and conserving water. Certain end-of-life equipment replacements are being incorporated as well as installing air conditioning in the high school gymnasium. 

This plan does not address many of the serious and substantial facilities issues we face within our District, however, this is one way we can continue to maintain our buildings in a fiscally conservative manner – by utilizing a lower rate and shorter term loan than a bond could provide. As part of this Board-approved plan, the Indian Hill School District is investing $3.7 million to make the facilities upgrades. The improvements will result in a guaranteed energy savings of $154,528 annually.

Operations and facilities
As we have communicated with you previously, Indian Hill has been actively, closely examining our need to bring revenues in line with expenses. We continue to anticipate near-flat revenue growth (near one percent per year). One percent per year is well below the rate of inflation mark. Inflationary costs affect us on the revenue side, as well as the expense side as things get more expensive over time but we do not see a corresponding increase to match on the revenue side. Because of this situation with our operating funds, and because of substantial issues within our facilities – both in terms of significant maintenance needs and necessary safety upgrades – we continue to see the need to raise additional funds for operations as well as a substantial facilities project. 

We anticipate our Board of Education will begin to work toward placing an issue on the May 2021 ballot before the end of this year. We need to act now to protect our future. The last operational levy for the District was on the ballot in 1993, while the last facility project was in front of the voters in 2001. Protecting and maintaining our world-class programs is our priority. The Indian Hill School District ranked No. 1 in the state and No. 7 in the country according to Niche; we are ranked No. 5 in the state by U.S. News and World Report. We have received the “Best Communities for Music Education” the past six consecutive years. 

We are proud of what our students and staff accomplish; we know you are, too.

Like you, we work to maintain excellence and operate with fiscal responsibility. The Indian Hill School District tax rate remains the lowest in Hamilton County. The District also did a great job managing the last bond issue and has structured the refinancing of bonds to achieve taxpayer savings of $8.5 million. That savings for residents comes in the form of reduced millage paid toward the bonds. In addition, a significant share of what residents pay on this bond expired at the end of 2018 – reducing the bond debt and providing our residents a savings of $304 annually on a $500,000 home. We will see an additional 1.4 mills of existing bonds experience in 2027, again lowering taxpayer payments. 

We will continue to provide you timely financial updates. As always, I thank you for your continued support of the excellent educational services we provide within the Indian Hill School District. Should you have any questions about our District’s finances, please contact me. 

Sincerely,
Mick Davis
Treasurer
Indian Hill Exempted Village School District
Posted November 25, 2020