In a recent article published by the Clermont Sun, you may have read that Mr. Gibson visited the Township meeting on March 13th. This article highlights not only how our district is doing financially, but also that our school district is as competitive as any other district in Clermont County when reviewing our state report card. Mr. Gibson also mentions that our athletic program is getting better, and that we are taking safety very seriously. Deputy Hurst is doing a great job keeping us safe every day! We will continue to make our way throughout the community to share a glimpse into the state of the school and discuss the great things happening here.
Because school finance is a little complicated, this letter is intended to expand upon the recent article published and go a little deeper regarding school finances and public utility tax. During the presentation at the township meeting, Mr. Gibson discussed the public utility sub-station located on Chilo-Cemetery Road and its impact to school funding. The school district took a hard hit due to this new sub-station. We lost approximately $400,000 in state funding this fiscal year due to the increase in public utility valuations. We were initially excited about the new sub-station, but due to this one-time $400,000 loss, it is currently a financial negative for our district rather than the expected positive. We have discussed the situation with our local representative, Doug Green, who has been in conversations with the Speaker of the House, Finance Chair and Finance Sub Committee Chair regarding the negative unintended consequence of Ohio law 3317.028 (the law that created the loss of revenue). Although the change in this Ohio Revised Code is needed, it will not reverse the loss of funding, but will hopefully keep it from happening again. This code was intended to help schools when large public utility companies de-value their power, but also had this unintended negative impact to our school district.
In addition to this one-time $400,000 loss in revenue due to the new sub-station on Chilo-Cemetery Road, the owner of the station, American Municipal Power, is appealing their original value to decrease it by $8.9 million. This decrease in value will once again negatively impact our school financially. The reduction in value will result in a decrease in our public utility revenue by $200,000 every year.
We also spoke to a Duke Energy representative and discussed the future impact of the new sub-station that was built at the corner of State Route 133 and State Route 774. The representative stated that this station will not be routing any new power into the district, but instead is re-routing power from other stations in the district to this new station. Unfortunately, this means that this new sub- station will not be generating any new public utility revenue to our district.
If you haven’t read the article in the Clermont Sun I encourage you to do so, but please note that the current information regarding the American Municipal Power valuation appeal and its continued $200,000 loss to our district and the impact of the sub-station located at State Route 133 and State Route 774 were not mentioned. Although we were able to absorb this current year loss with savings we’ve made over the past 5 years; public utility volatility and the recent loss the district sustained from this sub-station causes us great concern. For these reasons, the district has chosen not to rely on public utility revenue for operating purposes.
You can see the full impact of the items discussed above in the next Five Year Forecast which will be sent to the state in May. Stay tuned for an article published on our website as soon as it’s available. We are also anxiously awaiting the details of the state’s new biennial budget. We most likely will not have those details available until late June/early July. New Biennial Budget years always cause uncertainty as we are 64% state funded, so any changes to this budget can cause a big impact.
You can read the full article here:
https://www.clermontsun.com/2019/03/13/franklin-township-trustees-hold-march-meeting/