By Dedra Cordle
Staff Writer
South-Western City School officials say the financial outlook in the district is stable despite the loss of millions of dollars in state aid.
At the May 11 board of education meeting, Treasurer Hugh Garside presented the five-year forecast, which is a hypothetical representation of the district’s financial future based on historical trends and known facts. He said even with the reduction in aid, the district will continue to have a positive cash balance through fiscal year 2024.
According to Garside, the district receives 60 percent of its funding through the state, which recently announced more than $300 million in cuts to the education sector in order to balance its budget. Under the reductions, the district will see a loss of $3.4 million for the upcoming fiscal year. He warned that there may be more cuts to follow but said that will largely depend on how fast the economy recovers from the novel coronavirus that closed schools and businesses for months.
“We are fortunate to be in the (financial situation) we are right now, but we are not out of the water yet,” he told the board via a virtual meeting on Zoom.
He said what has helped offset some of the loss in state aid is the funding the district received through the Elementary and Secondary School Emergency Relief Funds, which is a component of the Congressional-approved Coronavirus Aid, Relief and Economic Security Act.
“We received $6.4 million which will be available to spend through the end of fiscal year 2022,” Garside said.
He added that the ESSERF dollars can be used broadly, which means the district can use the funds to shore up budget or revenue deficiencies should the need arise.
Garside also discussed property tax collection delinquencies, which are attributed to the temporary closure of businesses due to COVID-19, as well as the income tax collection that was pushed back to July 15.
“I think the collection and distribution will catch up eventually but the timing and how and when it happens will be the question,” he said.
He said the district will be closely monitoring the economic situation in the state.
In addition to the positive cash balance, which is projected to be $216.9 million in fiscal year 2020, $211.4 million in fiscal year 2021 and $164.6 million in fiscal year 2022, the district is also forecasted to experience a decline in revenue and an increase in expenditures.
According to projections, the district’s revenue will be $286 million, $274.5 million and $265 million in fiscal years 2020, 2021, and 2022, respectively. The forecast also projects the district’s expenditures will be $270 million, $279 million and $302 million in fiscal years 2020 through 2022.
With the expenditures expected to outpace the revenue, board member David Donofrio asked whether the district would be seeking to place an operating levy on the ballot in 2023 or 2024.
Garside said asking voters to approve an operating levy in the future has not been discussed.
“It doesn’t currently necessitate that,” he said.
However, he did say that the district will need to look at areas that could be “reduced or maintained.”
