By Dedra Cordle
The five-year financial forecast for the South-Western City Schools District was presented Oct. 8 at the board of education meeting. In a summarization, Treasurer Hugh Garside said the overall forecast is sound but an eye will need to be kept on what may happen in 2021.
“Our expenditures may slightly outpace our revenue but these are very conservative projections and things may change,” he said.
In regard to the district’s revenue, Garside said there will be modest increases due to reappraisals and state funding.
“Ninety-eight percent of our funding comes from property taxes and state funding,” he said.
He added that the state will draft a new biennial budget this year and he projects slight financial increases.
According to Garside, one hindrance of the state’s allocation of funds to the district is that South-Western has been deemed a capped district.
“We’ve been a capped district for quite a while,” he said. “We’re going on six years now.”
He said that due to the district’s classification as a capped district, they do not receive as much funding from the state as the state foundation aid formula says they should. Because of this, said Garside, the district has missed out on at least $73 million additional funds throughout that duration for their revenue source.
“I think this is something we need to think about when talking to our legislators,” he said.
He admitted he does not believe the capped classification will change soon, but said something needs to be done because the district has projected growth in enrollment in the upcoming years.
An additional source of revenue for the district is the Hollywood Casino, which opened in 2012. The district receives roughly $3 million annually in taxes from the casino.
Another positive in revenue and expenditure, said Garside, is the phasing out of the Win-Win agreement between the district and Columbus City Schools. Under the Win-Win, which was amended in 2016, the district was required to pay Columbus City Schools roughly $1.2 million annually but that is being phased down by 20 percent each year. By the end of 2021, the district will no longer have to pay per the amended agreement.
In regards to expenditures, Garside said they are projected to rise.
“Eighty percent of the district’s expenditures are for personnel services,” he said.
He said though that amount may seem high, they are on par or even a little below districts of similar size.
“Some district’s personnel expenditures are as high as 90 percent and that is where they tend to get in trouble.”
He added that the personnel amount also reflects collective bargaining agreements negotiated between the board and classified staff, administrative staff and certified staff, respectively.
According to Garside, there have been some changes to the drug program which will save the district some money through the use of mandatory generics.
Among the other expenditures are purchased services, which are forecasted to increase roughly 2 percent to 2.5 percent, and supplies and materials, which was forecasted to increase roughly 4.5 percent over the five-year forecast.
Respectively, the forecast predicts revenue of $273 million, $276 million and $279 million and an expenditure of $256 million, $270 million and $284.5 million in fiscal years 2019, 2020 and 2021.
Though Garside said the forecast has predicted the rise in expenditure versus the stream of revenue in 2021 there is no cause for alarm.
“As I said before, those are conservative estimates that may change when the May forecast comes out,” he said. “Overall, the district is in a great spot with our finances.”
He said one indicator of the health of a district financially is in its cash balance. In the forecast, the cash balance is projected at $194 million, $198 million and $191.7 million in fiscal years 2019, 2020, and 2021.
“We’re in a nice spot,” Garside said. “We’re not in panic mode.”