School board OKs financial forecast
Despite a decrease in state funding, the South-Western City Schools District should maintain a positive cash balance through 2017.
At the Oct. 8 meeting, the board of education approved the five-year forecast presented by Treasurer Hugh Garside.
The Ohio Department of Education requires all school districts to submit a financial forecast two times a year. The forecast is an estimate of the district’s financial future.
Garside said district revenue is flat. There has been no growth. In fact, there has been a decrease of 5 percent in revenue.
Garside said revenue sources are mainly property taxes and state funding. According to the forecast, the district could face a loss of $1.4 million next year due to decreased property value. In addition, since 2006, the state has been phasing out tangible personal property taxes paid by private businesses.
Garside said the district has lost close to $10 million from the loss in tangible taxes.
“That is a pretty big hole to plug,” he said.
One aspect that may help district revenue is the Hollywood Casino that recently opened on the westside of Columbus.
Garside said the casino property should be appraised early next year. He anticipates the property would be worth approximately $250 million. If that figure is correct, the district could collect an additional $1.5 million in property taxes from the casino. Collection would not begin until fiscal year 2014.
“This would only improve our position as we move forward,” said Garside.
To offset the loss in revenue, the district has had to tighten its spending. Employee salaries and benefits make up approximately 80 percent of district expenditures.
In 2010, employee unions and the board of education agreed on contracts through 2013. Garside said collective bargaining should begin again near the early part of 2013.
For the forecast, Garside factored in a 2 percent base increase for employees for 2014 through 2017, along with annual step increases. The forecast also anticipates adding staff by approximately 5 to ten position per year to meet the increased needs of the special education population.
According to Garside, health insurance costs would increase about 5 percent in 2013. Employees on a single policy pay 10 percent toward their premium. Employees on a family plan pay 35 percent of their premium. As of October 2012, all dental policies require a 10 percent premium contribution.
Despite a decrease in revenue, the district should have a positive cash balance through fiscal year 2017.
The district would end fiscal year 2013 with a cash balance of $81 million and would end 2014 with $77 million. The district would have a cash balance of $41 million in 2016 and $8 million in 2017.
In 2009, school leaders made a promise to the community to stay off the ballot through 2013.
“Well, 2013 will come and go. We won’t be back on the ballot for operating needs,” said Garside.