By Gail Peckler-Dziki
Correspondent
Salem Grade School District Administrator Dave Milz and Business Manager Susan Jarvis on Monday presented a financial forecast produced by Baird, which analyzed Salem School financial from this school year 2020-2021.
The Salem School Board saw the numbers at a special board meeting, but made no decision and plans to review the numbers, and may vote on a potential referendum at a Jan. 20 regular board meeting, if not before at a special meeting.
The district expects to retire debt in 2016-2017, which it had incurred to finance the most recent addition.
“Now is the time to go to referendum, before the mill rate drops,” said Jarvis. “After that, people don’t want to see the mill rate rise again.”
Without the referendum, Jarvis said the school faces the potential of short-term borrowing to pay bills and payroll in between receiving tax payments.
“That could become costly,” she told the board.
Board Treasurer Lisa Hinze asked Jarvis about the current rates for borrowing money were, however, Jarvis did not respond.
When the debt is retired, without a referendum, the mill rate would drop from $7.73 to $6.69 per $1,000 of property value.
The savings for a home valued at $100,000 would be $104 annually.
Currently, the district reportedly has a fund balance of $2.7 million and a budget surplus of more 2015-16 budget year.
The Baird forecast, created from numbers given by Jarvis, shows a 2016-17 budget deficit of more than $450,000, a decrease in the fund balance to $2.3 million.
The mill rate for both years is $7.73.
Baird has forecast an annual decrease in the fund balance, with a negative fund balance of nearly $900,000 by 2019-2020 and budget deficit of more than $1.3 million.
The forecast for a non-recurring three-year referendum recommended by Milz, shows an additional $870,000; $970,000 and $770,000 added to the school’s coffers in 2017-2018, 2018-2019 and 2019-2020, respectively.
It also shows the district maintaining an ever-decreasing fund balance until 2021-2022, when that account could have a $1.9 million deficit.
Even with a non-recurring operating cost referendum of those amounts, Baird forecasts that by 2018-2019, the district will begin running a budget deficit starting as $102,000 and ending up at $2.1 million by 2021-2022.
If the non-recurring operating cost referendum were to pass, the mill rate would ride from $7.73 in 2016-2017 to $7.79 for the next two years, rising to $7.95 and the dropping to $7.07 in 20-21 and $5.71 in 21-22.
Milz suggests an April date for the referendum, concurrent with the general spring election, therefore, saving the district about $10,000.
“We must give a 70-day notice to the Department of Public Instruction for the referendum,” Milz said. “And if we went to referendum for the primary and it failed, we could not make the deadline for April.”
Board member Steve Brown concurred, adding the April election brings a larger voting base.
“We should also have a large voter turnout,” Brown said, “since there will be elections for Salem Lakes Village Trustees and President.”
At an earlier meeting, before numbers were sent to Baird for the forecast, Milz told the board that Jarvis created a financial forecast that she felt was more accurate than the Baird forecast would be.
The Report requested those numbers but has not received them.