By Linda Dillman
Canal Winchester Schools Treasurer Nick Roberts painted a picture in numbers in updating the district’s five-year forecast, which runs through fiscal year 2026.
The presentation, given at the May 16 Canal Winchester Board of Education meeting, is required by the state and provides an opportunity for the board and community to engage in long-range planning. It also serves as a vehicle for discussions of district financial issues.
According to Roberts, in fiscal year 2022 a revenue surplus is expected with expenditures projected to be less than revenue by more than $4.6 million. The beginning fiscal year balance was $37.7 million and is forecast to end with about $42.3 million.
In 2021, total actual revenue was $49.3 million contrasted with actual expenditures of $42 million. An emergency levy currently generates approximately $6.8 million in revenue and expires in 2024.
“Fiscal years ‘22, ‘23 and ‘24 are the easy years,” said Roberts. “We’ll do well from a cash balance standpoint…when we get out to fiscal year 2025 and we lose funds (if the levy is not renewed) and gotta start making decisions about using our cash to build facilities. In the coming years, those are going to be some big decisions and how we’re going to handle the cash balance. We’ve got this year and two more years and that’s what I’m focused on right now.”
Roberts said there are a lot of unknowns in the state budget, such as will education be fully funded and will the state continue to keep its funding formula as is?
Primary revenue sources are real estate and income taxes. In 2021, real estate taxes made up 31.5 percent of total revenue, and by 2026, it is projected to increase to more than 33 percent. Income taxes brought in over 11 percent of district revenue and are estimated to reach 13.6 percent in five years.
Roberts expressed concern with a revenue source impacted by COVID-19.
“The only real worry this year is a big drop in ‘other revenue’,” said Roberts. “Interest levels are down. Two years ago, we earned about $900,000 in the general fund from interest income. This year, we’re about $350,000, so it’s a $600,000 drop in interest. It took us 10 years to get from zero up to where we were. Then overnight, we dropped to zero with the pandemic. We’re slowly creeping our way back. It’ll take some time. We do have a long-term investment strategy, but we’re limited in what we can do.”
On the expenditure side, salaries and benefits consume the majority of costs followed by purchased services, capital outlay and supplies and materials. In 2021, personnel services ($23.8 million) were 53 percent of total expenditures and projected to hit 54.8 percent in 2026.
Employee benefits ($9.3 million) were nearly 21 percent of expenditures in 2021 and could jump another percent over five year period.
Supplies and materials represent 3.86 percent of total expenditures and increased at a historical average annual rate of 1.57 percent. However, the projections jump to an annual average rate of 5.72 percent through 2026.
According to Roberts, total expenditures increased 2.95 percent or nearly $1.3 million annually during the past five-year period and are projected to increase 6.77 percent or over $3 million annually through the duration of the five-year forecast.
Roberts gave a heads-up to the board that homes located in Fairfield County will undergo a property valuation update this year with the potential for an average increase of more than 30 percent. Franklin County property owners will see increases next year when the county conducts a full appraisal.
“Our valuations are going to continue to grow. Central Ohio is a hot place to live,” said Roberts, whose board report also included information on the district’s capital spending plan.
The five-year forecast includes annual transfers from the general fund to the permanent improvement fund to support short and long term capital projects.
In the short-term, land improvements include paving at the middle school and elementaries and the current high school stadium project, which is expected to be finished in August. Roofing projects at the high school, athletic field house, and maintenance barn are on the short list, as well as vehicle purchases and technical/capitalized equipment.
On the long-term projects list are gym and classroom additions at the middle school, a new performing arts center at the high school, a kindergarten classroom addition to either Indian Trail or Winchester Trail, and a new intermediate building to reduce student enrollment at the elementary buildings.