Staff outlines final MGM settlement transfer, permanent-improvement needs and proposed termination-benefits fund

During the June 30 Montgomery Hills City School District work session, district staff reviewed the planned final transfers from the MGM settlement, spending priorities for the Permanent Improvement (PI) fund, and a proposal to establish an O35 termination-benefits fund to manage employee buyout payouts.

Staff reported the district has planned general-fund transfers tied to a prior MGM settlement and that the large transfer under discussion for the current fiscal planning was approximately $1,600,000. Staff explained prior MGM transfers (including a first-year transfer of about $3,465,000 into the PI fund) and walked the board through negative balances in specific activity funds that federal and state accounting rules require the district to address before the fiscal year closes. The presentation referenced the Uniform School Accounting System (UCAS) and compliance with the Ohio Revised Code as constraints on how the transfers must be recorded.

Why it matters: The transfers affect the district’s capital spending for roof, boiler and other facilities work and the clarity of the general fund balance. Moving designated settlement dollars into PI or establishing dedicated funds can prevent those amounts from being perceived as discretionary operating revenue.

Key financial and program points discussed

- Transfer amounts and balances: Staff said the current planning figure for a transfer tied to the MGM settlement is about $1,600,000 and explained how prior transfers and encumbrances produce the net amounts shown in their planning documents.

- Permanent Improvement spending: Staff noted remaining roof and boiler work that could consume the PI balance within upcoming summers and said a projected PI beginning balance (after the transfer) would be approximately $1,346,000 on July 1. Roof work was repeatedly identified as a near-term capital need.

- Boilers and energy strategy: Staff discussed an energy-grant strategy that would use lighting upgrades (LED conversion) to generate energy savings that could be applied to boiler replacement costs. Staff and operations personnel described exploring creative options to replace two aging boilers with a single, higher-capacity unit where technically feasible to reduce long-term operating costs.

- O35 termination-benefits fund: Staff proposed establishing an O35 fund (termination benefits) to segregate buyout obligations. District staff said the board will likely see a corresponding transfer (discussed in the meeting as roughly $500,000) after the fund is established; that transfer would add clarity to future-year operating budgets but will not change long-term net costs of the buyouts.

Questions and concerns

Board members and staff discussed timing relative to state budget actions and the visibility of settlement funds on the general-fund balance. A board member cautioned that the appearance of available funds in the general fund can be misleading because many monies are already allocated to encumbrances and future obligations. Staff agreed establishing dedicated funds (PI and O35) is a best-practice bookkeeping step to improve transparency.

Actions and next steps

No formal vote took place at the work session. Staff said they would present the formal transfer and the establishment of the O35 fund to the board in future meeting materials and include more detailed schedules and forecasts. Staff also said they would provide additional detail about remaining energy-bond payments, the expected final year payment schedule and the timeline for proposed roofing and boiler work.