The notification, dated March 11, 2026, indicates that Fairfield City Schools’ most recent five-year financial forecast includes a projected cash balance deficit in Fiscal Year 2028 of approximately $1.07 million. As a result, the district has been placed in what the state defines as a “precautionary” financial status, which is designed to prompt early planning and intervention.
It is important to clarify the distinction in this notification:
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The state’s designation is based on a projected negative cash balance in FY28
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However, the district is already deficit spending now and throughout the forecast period, meaning annual expenditures exceed annual revenues
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This structural imbalance is what eventually leads to the projected negative cash balance if not addressed
The letter also confirms that:
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The district is not projected to have a negative cash balance in FY26 or FY27
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The concern is focused on depleting cash reserves, leading to the negative cash balance in FY28
In response to these long-term financial challenges, the Board of Education has already developed a two-part plan aligned with state expectations:
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Plan A: Placement of a 1.25% Earned Income Tax on the May 2026 ballot to stabilize district finances and maintain current programming
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Plan B: Approximately $4.5 million in expenditure reductions, already identified and approved by the Board, which would be implemented if the ballot issue is not successful
“This notification reflects a real issue; our expenditures are exceeding revenues by a significant margin, creating a structural imbalance that will deplete our cash reserves and lead to a negative cash balance by FY28 if not addressed,” said Treasurer Jay Phillips. “We have been proactive in our planning. The Board has identified both a path to maintain services through new revenue and a contingency plan that includes significant reductions if that revenue is not approved.”
Under Ohio law, Fairfield City Schools is required to submit a board-approved written plan by April 30, 2026, outlining how the district will eliminate the projected future cash deficit.
The Ohio Department of Education and Workforce requires that this plan:
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Demonstrate proactive steps to align expenditures with revenues
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Include both a primary strategy (Plan A) and a contingency plan (Plan B)
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Provide clear timelines and measurable financial impact
Fairfield City Schools will continue to:
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Engage the Board of Education in detailed financial discussions
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Communicate transparently with staff and the community
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Provide clear information regarding both the ballot issue and potential reductions
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Prioritize protecting student opportunities and experiences whenever possible
“This process is about planning ahead and being transparent with our community,” Phillips added. “We are committed to making responsible decisions and ensuring our district remains financially stable long into the future.”