By Dedra Cordle
The financial outlook for the South-Western City Schools District continues to be steady.
At the May 13 board of education meeting, Treasurer Hugh Garside gave his summarization of the five-year financial forecast and stated that the district is in better shape than previously indicated.
“We are in a better financial position than what was indicated in the five-year forecast presented in October,” he said.
According to Garside, the district is 2.6 percent above estimate on revenue and 1 percent below estimate in expenditures.
“That indicates to me that we are staying the course (financially) while still providing a quality education for our students,” he said.
If there is one cause for concern, however, Garside said it is the upcoming biennial budgets.
“Not only do we need to keep our eye on what is taking place with this upcoming budget, but we also need to watch the budget that is coming in two years,” he said. “The reason why this needs to be monitored closely is because we receive roughly 60 percent of our funding from the state.”
Though the budget has yet to be voted upon, Garside believes it will be favorable to the district.
“While we do not know what the official allocation will be, from what we have seen the district will be treated fairly.”
In addition to state funds, the district will continue to receive roughly $3 million in taxes from the Hollywood Casino.
The forecast that was presented estimates that the district’s revenue in fiscal years 2019, 2020 and 2021 will be $278 million, $279 million and $282 million, respectively.
The district will continue to see a rise in expenditures throughout the five-year forecast.
The biggest expense for the district is personnel services, which primarily consist of salaries and wages. Garside said roughly 80 percent of the district’s expenditures are for personnel services.
Purchased services are predicted to increase roughly 2 percent to 2.5 percent over the term of the forecast, as are supplies and materials. Garside said one of the reasons for the jump in the cost of supplies and materials are due to a technology replacement cycle and the replacement of textbooks.
“In regards to the textbook replacement cycle, much of the increase is due to inflation,” he said.
Garside said he believes as the district moves more toward the use of Chromebooks, the purchase of physical textbooks may become obsolete in the future.
“That is something many districts have been talking about,” he said.
The price of fuel is being closely monitored as well, with the forecast projecting that one-fifth of the overall supplies and materials budget stems from the cost of fuel. According to the financial report, every 30 cent increase in the price per gallon of fuel represents roughly $130,000 in increased cost annually.
The forecast presented estimates that the cost of expenditures for the fiscal years 2019, 2020 and 2021 is $256 million, $272 million and $286.6 million, respectively.
The district will continue to maintain a positive cash balance throughout the term of the forecast. It estimates the district will have a positive cash balance of $200 million, $206 million and $201 million in fiscal years 2019, 2020, and 2021. Garside said having a positive cash balance is vital to the health of a district as it can keep them afloat in uncertain times.
“It can help a district weather any storm that may come down the pike,” he said.