By Dedra Cordle
The five-year forecast was presented at the Nov. 4 South-Western City Schools board of education meeting.
There were “no surprises” in the hypothetical representation of the district’s financial future, said Treasurer Hugh Garside, but there may be some cause for concern coming down the road.
According to Garside, the district’s revenue will continue to steadily rise throughout the projected forecast. This is due in large part to the recent changes made to how the state of Ohio funds schools.
“We are no longer considered a capped district,” he said.
The ‘capped’ designation had rankled members on the board in the past as it meant the district lost out on roughly $11 million of additional funds per year due to the funding formula previously used.
Under the biennial budget bill that was signed into law this summer, the district will see an increase in funding of 4.2 percent and 1.7 percent in the fiscal years 2019-2020 and 2020-2021, respectively.
The district will also receive additional funds through a newly-implemented Student Wellness and Success fund and an Enrollment Growth Supplement. Garside said he projects the district will receive $4.9 million and $7.2 million in fiscal years 2019-2020 and 2020-2021, respectively, through the student wellness and success fund.
The district will also continue to receive $1.8 million annually through a Tax Increment Financing agreement with the city of Grove City for the Buckeye Parkway Shopping Centre and roughly $3 million annually from the Hollywood Casino.
The projected revenue in fiscal years 2020, 2021 and 2022 are $281 million, $281.4 million and $289.7 million, respectively.
While the district’s revenue stream continues to rise, so too does its expenditures. It is projected in fiscal year 2021, the expenditures will begin to eclipse the revenue.
“It is definitely a worry that we might be in deficit spending in the next fiscal year,” said Garside.
He noted that just because expenditures are projected to rise each year of the forecast that does not mean they will be on ballot anytime soon.
“It’s just something that we need to monitor and make adjustments to the budget if necessary,” he said.
The district’s largest expense, Garside said, is personnel services which consist of salaries and wages. Last year, the district reached a new three-year bargaining agreement with the South-Western Education Association and the South-Western Administrative Association. Each contract calls for a 2.5 percent increase in base salary annually.
The district is also set to begin discussions on a new contract with the Ohio Association of Public School Employees when their current contract expires in fiscal year 2019-2020.
Purchases services have also been forecasted to increase roughly 2 percent to 2.5 percent over the term of the five-year forecast. Supplies and materials are also projected to grow roughly 2.5 percent.
The projected expenditures for the fiscal years 2020, 2021 and 2022 are $271.5 million, $281.9 million and $305 million, respectively.
The district will continue to maintain a positive cash balance throughout the forecast with $211 million, $209.6 million and $193 million in fiscal years 2020, 2021 and 2022.