By Dedra Cordle
Staff Writer
With future biennial budgets on his mind, South-Western City Schools Treasurer Hugh Garside says this is a dangerous time to prepare a five-year forecast for the district.
“A lot of things could happen (within the course of preparing the next two biennial budgets),” he said during a presentation of the forecast at the Oct. 10 board of education meeting.
He cites changes to the formula of allocating state funds and a possible change in state leadership as reasons for uncertainty.
“It’s a volatile time in forecast projection,” he said.
However state politics and funding allocations may change in the future, he said he feels comfortable about the state of the district when it comes to its finances throughout the next five fiscal years.
“We’re steady,” he said.
According to projections, the district’s revenue will remain flat through fiscal year 2021.
Traditionally, the main revenue sources for the district are property taxes and state funding.
The forecast states little to no growth is projected on existing real estate values; it projects steady growth in commercial and industrial property tax. The district will also continue to receive roughly $3 million annually in taxes from the Hollywood Casino.
As for state funding, Garside said the district will likely see an increase in state funding due to a growth in enrollment.
“Our current figures show the district has an enrollment of 21,647 students this year, which is an increase of 401 students from last year.”
He said that trend will continue and that is due in part to the popularity of all-day every-day kindergarten.
According to the forecast, the district’s revenue will be roughly $244 million through fiscal year 2020. It is projected to rise to $245 million in fiscal year 2021.
With the district’s expenditures, the forecast predicts a rise in expenditures due to recent bargained increases in salary of personnel as well as increase in retirement and insurance benefits.
Garside added that the district will have to hire more staff to meet the demands of a growing student enrollment. The forecast anticipates the district will have to increase the staff by eight to 10 positions per year.
Purchased services are predicted to increase 2.5 percent over the term of the five-year forecast. Supplies and materials are also anticipated to grow 4.5 percent over that time. The cost of fuel is cited as the reason for the rise as every $0.30 increase in the price per gallon of fuel represents $130,000 in increased cost annually.
According to the forecast, the district’s expenditures will be $235 million in fiscal year 2017, $247 million in fiscal year 2018, $258 million in fiscal year 2019 and $270 million in fiscal year 2020.
As for the cash balance, Garside said the district is in good shape.
The forecast predicts the district will have an ending cash balance of $147 million in fiscal year 2017, $143 million in 2018, $128 million in 2019, $101 million in 2020 and $60 million in 2021.
Garside said the positive cash balances throughout the next five fiscal years is due to prudent financial decisions made by the board of education.
