By Dedra Cordle
An updated version of the five-year financial forecast was presented at the South-Western City Schools board of education meeting on May 7. It was summarized by Treasurer Hugh Garside as being on par with the projections made seven months ago.
“There were no surprises in the updated forecast, which is good news for us,” he said. “One thing you don’t want to see in the forecast is surprises.”
According to Garside, the updated projections show the district will see an increase in revenue and a slight decrease in expenditures. There is also projected to be a positive cash balance throughout the duration of the forecast.
“We are 1.3 percent over in our estimates in revenue, and .2 percent under our estimates in expenditures,” he said.
As per the May forecast, the increase in revenue is largely credited to the recent reappraisals of property values and the state budget that was signed into law on June 30. Sixty percent of the district’s revenue comes from the state and the budget called for increases of 5.5 percent and 5.8 percent in the fiscal years 2017/18 and 2018-19 due to its growing enrollment.
Despite the increase, Garside said he is keeping on an eye on the state’s upcoming biennial budget because what is decided could positively or negatively impact the district’s financial outlook.
“It’s something to keep track of,” he told the board.
The updated forecast, approved by the board of education, predicts the district’s revenue will be $265 million, $270 million and $273 million in fiscal years 2018, 2019 and 2020, respectively.
In regard to the expenditures, there was little change between the forecasts presented in October and May.
According to the forecast, 80 percent of the district’s expenditures are due to personnel services, which consist of salaries and wages. Additional staffing due to increased enrollment and the planned reopening of East Franklin Elementary School are reflected within the forecast.
Also included in the updated forecast is a rise of 2.5 percent in purchased services and a rise of 4.5 percent in supplies and materials. The forecast notes that for every $0.30 increase in the price per gallon of fuel represents roughly $130,000 in increased cost annually. Fuel makes up approximately one-fifth of the overall supplies and materials budget.
The updated forecast predicts the district’s expenditures for fiscal years 2018, 2019 and 2020 will be $244 million, $258 million and $272 million, respectively.
The overall cash balance will remain positive, said Garside.
The forecast projects the district will have a positive cash balance of $178 million, $190 million and $190 million in fiscal years 2018, 2019 and 2020, respectively.