At the November Board of Education meeting, New Richmond Exempted Village School District Treasurer/CFO Matthew Prichard shared an updated five-year forecast that signaled a significant funding shortfall this year and for years to come.
NREVSD has entered into deficit spending in the current school year (Fiscal year 2025) of -$3.7 million. The bulk of the loss of income comes due to the abrupt closure of the Zimmer Power Plant in 2022.
That closure alone cost the district roughly $3.5-$4.0 million in total tax revenue each year. That, combined with the continuing reduction in deregulation payments from the state of Ohio, has led to an estimated budget shortfall of just over $3.7 million for this school year and approximately $4.5 million next year alone.
“The closing of the Zimmer power plant five years earlier than expected has dealt a staggering financial blow to our district,” Mr. Prichard said. “The Zimmer power plant provided $3.5-$4.0 million in revenue to the district annually and that money isn’t being replaced at all. It’s completely gone.”
That decreased revenue comes after decades of careful fiscal management throughout the district. In 2010, NREVSD operated with expenses totaling $31 million and a budget of approximately $29 million.
Twelve years later, despite rising costs on goods and services throughout the world, NREVSD’s operating expenses sit at approximately $27 million, a decrease of 12.9 percent. Revenue has dropped from a high of $31 million in 2011 to $26 million in 2024, a 16 percent decrease.
“This is certainly a revenue problem and not a spending problem,” Mr. Prichard said. “For a smaller district, we just can’t absorb around $4 million in revenue losses each year that Zimmer once provided. You also won’t find many districts like NREVSD that are spending less than they were 10-12 years ago, it’s almost unheard of.”
Typically, districts facing budget deficits combine spending reductions with the passage of levies to keep the budget balanced. NREVSD is no exception, cutting roughly $3 million from the budget in 2019 after the closure of the Beckjord Power Plant prompted the district to go to taxpayers for the first time in over 30 years in 2020.
“Unfortunately this is a similar road we traveled in 2019-2020 with the closure of the Beckjord power plant and revenue loss,” Mr. Prichard said. “We successfully balanced the budget by reducing millions in spending, closing an elementary school and fortunately having the passage of a tax levy to replace some of the revenue loss.”
The district has already begun implementing reductions for the current school year. Over the previous summer, roughly $700,000 in potential savings were identified. It’s crucial to begin that part of the process early, as those savings will accumulate over time.
Mr. Prichard recommended the district look to reduce expenditures an additional $1.4 million from the budget for next school year, which begins in August of 2025.
“These are very difficult decisions to make. This will be a combined $2 million in reductions from a district that already runs lean financially. We were running a balanced budget for several years after the levy passage and school closure in 2020, but the Zimmer closure changed everything once again.”
In addition to yet-to-be-determined spending cuts, Mr. Prichard also recommended NREVSD place a levy on an upcoming ballot. The type of levy (property tax, income tax, etc.) and timing of the ballot measure are still to be determined.
“All ideas are on the table for the board of education to consider as we attempt to balance our finances once again. For now, we are focused on reducing expenditures and minimizing the impact to the quality of instruction our students and parents have come to expect from NREVSD.”
To view the full presentation by Mr. Prichard at the November Board of Education meeting, please visit the district’s YouTube channel. The five-year forecast is available here.