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CFO warns Indian Hill forecast shows expenditures outpacing revenues; board told options are levies or cuts
Summary
Chief Financial Officer Mick Davis told the board that the district faces a structural imbalance over a five-year forecast, with expenditures exceeding revenues under current assumptions; he urged evaluation of revenue options and expenditure reductions, noting a levy expiration and several state policy changes that could limit growth.
Chief Financial Officer Mick Davis presented the district five-year financial forecast and said the central problem is that spending is projected to outpace revenue unless policy or operational changes are made. "We do see that our expenditures are exceeding our revenues," Davis said, summarizing the executive view of the forecast.
Davis outlined key calendar items that affect the district outlook: expiration of the current operating levy at the end of the calendar year, a final payment on a 2016 bond refunding on Dec. 1, 2027, and the collective-bargaining contract expiration on June 30, 2028. He also cautioned that no new operating revenue was assumed in the forecast and that a delayed county reappraisal (to tax year 2030) reduces near-term revenue upside. "The only 2 ways we can do that is we can increase revenues or reduce expenditures," Davis said.
Board members pressed Davis for context on what taxpayers actually see on bills and for clearer numbers on the possible revenue impact of state policy changes. Davis described recent state legislative changes he cited as House Bill 920 and House Bill 335, which apply inflationary caps to property-tax growth and can materially limit the revenue the district would otherwise receive. He gave an illustrative scenario in which a 20% increase in values could be capped to roughly 8 –8.5% growth for revenue purposes, reducing potential revenue over the forecast period.
The superintendent and board discussed options for addressing the gap, including timing and community readiness for a future operating levy and additional expenditure-management measures. Davis said the board has time but should begin public-facing planning and continue monitoring legislative activity that could further affect the district bottom line.
