In our previous article, we discussed the need for Lakewood’s residents to renew one of the two emergency levies. The 2013 emergency levy provides $2,300,000 toward the daily operations of the district. Renewal of that levy will ensure the district’s ability to continue to provide educational programs at their current level. In July 2016, the Board of Education entered into a contract with Rockmill Financial Consulting, LLC to assist with setting up the internal financing of the Lakewood Stadium Project. With the successful completion of that financing, Mr. David Conley, President of Rockmill Financial, has continued to work with the District, and is leading the District Finance Task Force.
In Mr. Conley’s review of the District’s financial performance he concluded that the District’s finances are being managed extremely well. Mr. Conley, who has worked with over 100 school districts in Ohio describes Lakewood’s financial condition and performance as “one of the best he has ever reviewed.” This is largely based upon the very careful control of expenses, which has allowed the District to live within its budget for almost a decade. As a result, the primary operating fund is very stable.
The stability of the General Fund is a goal most districts in Ohio struggle to maintain, and is the primary reason school districts continually return to the voters for “new” taxes. Lakewood’s financial stability should allow it to operate for many years to come without the need to increase taxes for its primary operations.
Lakewood however isn’t without exposure to two primary risk factors. The District is reliant on the community to maintain its current funding of two emergency levies through the renewal process, and the District is reliant on the State of Ohio to continue providing funds at the current funding amount. The loss of either emergency levy will have a significant impact of the financial strength of the District. Likewise, to a lesser extent, but equally concerning is the possibility the State could reduce the funding they send to Lakewood.
To prepare for the risk of losing either of these sources of funds, the Board of Education maintains a general fund balance sufficient to allow the District to operate for a short time if the two emergency levies were not renewed by the voters. While the district is hopeful it can pass the renewal of these levies in the future, there are no guarantees and maintaining a reserve balances is a smart way to prevent the need to make major immediate cuts to programs.