For Immediate Release — May 23, 2016
Contact: Janet Walsh, Director, CPS Public Affairs: (513) 363-0023, 207-8181, email@example.com
Business Group Shares Review of CPS Finances
Study Shows Responsible Spending, Need to Increase Resources to Meet Growth
A comprehensive study of the Cincinnati Public Schools (CPS) financial operations, commissioned by members of Cincinnati’s business community at the request of CPS, indicates that, despite fiscal accountability, the district faces a “structural imbalance, which is expected to grow” due to rising enrollment and flat revenue.
If the trend continues, Greater Cincinnati’s largest public school system could face, in just five years, an annual deficit of almost $60 million, the report warns. Even with the implementation of additional cost reductions recommended in the report, which have the potential to reduce the deficit by as much as $5-10 million per year, CPS will likely need at least $30 million annually in new money to bridge the average shortfall through FY21.
The Cincinnati Business Committee and the Cincinnati Regional Business Committee retained Parthenon/Ernst & Young, a leading global financial service provider and independent advisor with combined financial and education subject matter expertise, to serve as consultant on the project. Parthenon, additionally, has significant experience in assisting public school districts and municipalities in assessing and evaluating budgets, multi-year financial projections, and cash flow forecasts.
The review was overseen by the Financial Efficiency Review Steering Committee (FERC) which was comprised of business, civic, and education leaders. The report will be summarized at the Cincinnati Board of Education’s May 23, 2016 regular meeting in conjunction with CPS Treasurer Jennifer M. Wagner’s presentation of the school district’s five-year forecast.
“We are committed to financial transparency, which is why we welcome this review of our financial operations,” Wagner said.
The business community’s review showed that, over the past 10 years ,CPS had lowered spending and closed schools in response to declining enrollment. However, more-recent enrollment increases, which are projected to continue, are greatly adding fiscal pressure on the district, the review indicated.
Wagner confirmed that – despite state predictions of continued decline – district enrollment rose (for the first time in decades) in the 2011-12 school year, to 32,335; reached 34,104 in 2015-16; and is projected at 35,112 students next school year.
“We're pleased the report recognized the steps our district has taken over the past decade to cut costs, including closing schools in response to declining enrollment,” Wagner said. “We also intend to diligently pursue other cost-containment opportunities suggested in the report – because we want to ensure every possible dollar is working for students.”
“At the same time, now that CPS enrollment is increasing again, we agree with the report's conclusion that there is a growing structural imbalance that requires additional revenue to continue the momentum of progress we're experiencing in our schools," Wagner added.
The review also factored in the need for an additional investment of $15 million annually to expand access to quality preschool for 3 and 4 year olds – through CPS and community partners.
While stopping short of recommending a specific millage amount, the business community’s review confirmed a levy would be necessary to support continued CPS investment in quality teachers, educational technology, college and career readiness, and innovative strategies to advance progress for K-12 students – as well as make strategic steps to expand preschool in the Cincinnati community. CPS’ last new operating levy was passed in 2008.
Members of the Financial Efficiency Review Committee include: Alex Kuhns, (Former) Board President, CPS; Brian Ross, CPS Audit Committee Chair; Julie Sellers, President, Cincinnati Federation of Teachers; Ted Torbeck, President/CEO, Cincinnati Bell; Greg Landsman, Cincinnati Preschool Promise; Michael Rutz, Assistant Controller, GE Aviation; Pat Zerbe, Manager, Community and Government Relations, GE Aviation; Kevin McDonnell, President, Skyline Chili; Ben Russert, Chairman/Owner, Prosource; Mel Gravely, President/CEO, TriVersity Construction; Tim Fogarty, CEO, West Chester Gear; Tony Hobson, Vice President/Counsel, North American Properties; Julia Poston, Cincinnati Managing Partner, Ernst &Young; Geoff Zimmerman, Executive Director, Strive Partnership; Leslie Maloney, Senior Vice President, Haile/US Bank Foundation; Marcia Futel, Board Vice President, Parents for Public Schools; Helen Mattheis, Program Director, Greater Cincinnati Foundation; Ross Meyer, Vice President – Community Impact, United Way of Greater Cincinnati; Gary Lindgren, Executive Director, Cincinnati Business Committee and Cincinnati Regional Business Committee; Jennifer Wagner, Treasurer, CPS; Mary Ronan, Superintendent, CPS; Ericka Copeland Dansby, President, Cincinnati Board of Education.
Community partners who contributed funding to the review process include: The Carol Ann and Ralph V. Haile, Jr./U.S. Bank Foundation, Cincinnati Public Schools, GE Aviation, The Greater Cincinnati Foundation, and United Way of Greater Cincinnati.
Following presentations of the financial review findings and the district’s five-year forecast, the Cincinnati Board of Education will consider a resolution of “necessity,” the first step in placing a request for new operating revenue on the November ballot.