MANSFIELD — Mansfield City Schools isn’t out of the woods, fiscally speaking.
But treasurer Tammy Hamilla said she believes the district can correct its finances with some smart management.
“We can fix this,” Hamilla told board members Tuesday evening.
“We just need some consistency in the treasurer’s office. We need somebody monitoring budgets.”
Hamilla began working as the district’s treasurer in January, becoming the fifth person to hold the position in the last 13 months.
Her remarks followed a presentation of the district’s newest five-year forecast, which the board approved.
Five-year forecasts provide a snapshot of the district’s finances based on historical trends and future assumptions. The forecast includes the most recent three years of actual financial data and a projection of the next five years.
Ohio’s public school districts are required to submit two forecasts each year to the Department of Education and Workforce (ODEW) — typically in November and May.
Hamilla said the forecast is a tool to engage the school board and community in long range financial planning.
ICYMI: Board approved reduction in force in March, April
Several factors have complicated the district’s financial situation in recent years, from declining enrollment and overstaffing to a high percentage of students with special needs.
In March, the school board approved a reduction in force (RIF) of 62 non-administrative positions (equivalent to 57 full-time positions). An additional eight teaching positions and a school counselor job were eliminated in April.
Due to retirements, resignations and reassignments, officials from the Mansfield School Employees Association estimated that around nine people ended up involuntarily unemployed as a result of the RIF.
Most cuts won’t take effect until next school year, though a dozen administrative employees were terminated at the end of March.
It’s also a tool ODEW and the Ohio Auditor use to identify school districts with potential financial problems — which is how the Mansfield City Schools ended up on the state’s radar last year.
The forecast showed improvement in the Mansfield City’s financial outlook following a series of recent staff cuts.
The district’s projected operating expenditures for next school year went down by close to $4 million as compared to the five-year forecast from November.
The November forecast also projected five consecutive years of deficit spending. But Hamilla’s updated financial outlook showed slight operating surpluses during the 2025-2026 and 2026-2027 school years. It also included a positive ending cash balance through 2028.
Treasurer outlines strategies for additional savings
As part of her presentation, Hamilla reviewed problems and potential solutions in some of the district’s biggest spending categories — wages, benefits and purchased services.
“The focus really needs to be on addressing those three big pieces of the pie right now versus waiting until later on,” she said.
According to Hamilla, wages make up 51 percent of the district’s operating costs.
Hamilla said the RIF was a part of the solution — but the district also needs to have better policies in place to “right size” staffing in the future.
“We need to be monitoring enrollment and staffing needs before positions are filled in the future, which we’re planning on doing,” she said.
“It’s much easier to right-size the district a few positions a year as necessary. What we did this past spring was very difficult . . . We don’t want to do that again.”
She also said the district needs better policies and procedures regarding absenteeism, including disciplinary action for staff who don’t meet attendance requirements.
“We need to look at limiting overtime, requiring pre-approval for overtime and create a policy on dock days,” she said.
“We’ve had a lot of absentee problems across the board in this district,” she added. “When we have that, we’ve got a lot more overtime costs and a lot more sub costs.”
Benefits make up nearly 30 percent of the district’s expenses. Hamilla identified several problems related to the district’s self-funded insurance plan. She did not offer specifics, but listed premiums, employer-versus-employee contribution rates and board’s health savings account contributions as problems.
The district recently put out a request for proposals for health insurance brokers, which Hamilla said could lead to lower costs. Entering a cost sharing consortium is another option.
“The nice thing about a consortium is somebody else is helping you assume the risk,” she said. “I’m not saying consortium is the way to go, but it’s something that we’re looking at, because that may be a way to save some money.”
Hamilla said addressing employee contribution rates and the health savings account would need to occur through conversations with the employee union.
The next largest slice of Mansfield City School’s budget is purchased services, which make up about 14 percent of expenditures. Problems include inflation, the rising cost of utilities and increased costs for special needs services.
“One of the things that we’re working on right now is creating departmental budget limits and strictly adhering to those,” she said. “I myself am going to be doing a monthly monitoring of revenue and expenditures.”
Decisions in Columbus could impact school’s state, local funding
While five-year forecasts are a helpful tool, they also have their limitations.
One is no treasurer can say for certain how enrollment may fluctuate, how many residents will pay their property taxes on time or what decisions on school funding will be made at the state level.
According to Hamilla’s forecast, local real estate taxes make up just under 30 percent of the district’s revenue. Meanwhile, the district receives more than 61 percent of its funding from the state — primarily through state foundation funding.
State foundation funding is calculated using a formula approved in each two-year budget cycle by the Ohio legislature. Enrollment is a primary factor in the formula, but a district’s percentage of students with special needs, career tech enrollment and even area income are all included.
The Ohio legislature is currently hashing out its next biennial budget, House Bill 96. The bill must be approved by the end of June and will take effect July 1. Once signed into law, the bill will outline how state funds are spent for the next two years.
“The state budget process will not be finalized until the end of June. Our forecast has to be filed by the end of May,” Hamilla said.
“Any changes which could be significant to the funding and property taxes will need to be accounted for in the November forecast.”
Hamilla said several provisions in House Bill 96 have the potential to impact school funding — not just the formula.
“There are 14 — nine House and five Senate — proposed laws right now that are impacting local property taxes and/or valuations that could reduce local funding in public schools in Ohio,” she said.
One proposal calls for capping property tax collection for school districts with a carry-over balance exceeding 30 percent of its annual operating budget.
“Not that that’s an issue for us, but it is an issue for a lot of districts,” Hamilla said. “The property tax implications of House Bill 96 would be devastating to public school districts.”