Treasurer Calls Finances 'Stable'

Board Hears Five-Year Financial Outlook
Posted on 10/23/2018
Image of GavelThe Akron Public Schools financial outlook for the next five years is stable, according to CFO Ryan Pendleton. He delivered his semi-annual, five-year financial forecast to the school board Monday, October 22, 2018, at the board's regular meeting.

Pendleton told the seven-member board that, by this time next year, Akron Public Schools (APS) will likely begin to see expenditures outpace revenues, however.

"Through consolidation of our facilities and other cost-saving measures, including health insurance for employees, we have effectively staved off the time where we might have normally gone to voters for a levy."

He continued, "People might think our initiatives that have been so innovative -- such as I PROMISE School, International Baccalaureate expansion, our new College & Career Academies of Akron, and our 1:World project that has equipped each and every student with a laptop computer -- would be costing us more. But they're not."

Pendleton told the board that the many innovations in education are funded by a shift in expenses. "We have saved millions of dollars by reducing our footprint and have poured much of that savings back into instruction and learning."

Superintendent David W. James said before the board meeting, "We've managed money well and, for the time being, we're maintaining this level of efficiency. I might add that our central office consolidation is a big part of the savings we are seeing."

James added, "Had we not actively managed the district's footprint as well as we have, we would have depleted our reserves much sooner. Our approach has given us many more years and extended the life, if you will, of those funds that came to us from the levy passed in 2012."

The district's most significant expenses continue to be payroll and benefits. But, according to Pendleton's numbers, the district has saved millions of dollars on operating expenses over the past three to four years as APS has balanced its budget each year. Pendleton puts that savings at more than $5 million.

Telling the board there are challenges ahead, as always, Pendleton emphasized his greatest concern continues to be the weak, local property value growth. Residential values are showing virtually, he said, no growth, making us more dependent on the state of Ohio.

APS enrollment has leveled off -- and has even seen a modest increase -- after years of decline. Charter school enrollment has seen a decline in Akron after years of increases. Since funding for charter schools comes out of the APS budget and has amounted to roughly $30 million per year, APS is seeing a benefit to its bottom line now that the so-called "community schools" are losing momentum.

The Akron school district is seeing only 2,500 students now at charter schools in the city instead of the 3,000 that once attended the schools.

"This alone has saved us," Pendleton said, "about $8.2 million over five years. That equates to the salaries of 125 teachers. That is significant for us."
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