Five-year forecast shows large deficit on the horizon
Ohio school districts face a continuing challenge to balance their books as operating costs rise and state funding for school districts diminishes.
Hilliard City Schools Treasurer Brian Wilson considered the challenge when presenting a five-year financial forecast to school board members at their Oct. 22 meeting, but the effort did not address the concerns of board member Paul Lambert, who was the lone dissenter in the board's adoption of the forecast.
"I am very concerned about the proposed five-year forecast before us tonight," Lambert said.
Ohio law requires school districts to approve a five-year forecast prior to Oct. 31 and update it between April 1 and May 31 each year. Wilson's overview outlined revenue and expenses for the current fiscal year through fiscal year 2017.
Lambert said he had full faith in the accuracy of Wilson's figures, did not dispute assumptions Wilson made concerning revenue and expenditures and was confident that the spending plan is consistent with the district's 2020 Plan and capital improvement project budget.
"But the amount of new money required to fund this plan is too much to ask of our community," said Lambert, pointing out that the forecast showed a $20 million gap between annual funding and spending by 2017.
According to the forecast Wilson presented, total expenditures for fiscal year 2013, at $165 million, barely exceed revenue estimated at $164.5 million. The district's cash balance was $17.5 million at the start of the current fiscal year and would drop to $17 million if the year ends as forecasted.
Wilson said the district should remain solvent until at least fiscal year 2014, and perhaps until 2015, which would keep with the pledge district officials made last year when voters narrowly approved a 5.9-mill operating levy. District officials said another levy would not be needed for at least three years.
Lambert said according to his calculations, not confirmed by Wilson, a levy of 7.7 mills would be need to be approved in 2014 to fund the forecast Wilson presented.
"That's about $235 more per year per $100,000 of (assessed property) valuation ... I very much doubt that our community has an appetite for a tax increase of that size," Lambert said.
"I think the time has come to start having some tough conversations about the breadth of our academic offerings and the services we provide. We need to think more about the extent of our extracurricular programming, and how much is funded by taxes versus participation fees."
Lambert said approval of the forecast would imply "everything is just fine."
"We need to recalibrate our expectations with what we are willing to invest and need to start doing that sooner rather than later," said Lambert, adding that the board should direct Wilson and Superintendent Dale McVey to submit an alternative forecast that requires a "significantly lower level of additional local funding."
Board member Andy Teater said the forecast was based on assumptions subject to change, a sentiment board President Lisa Whiting echoed.
"It's a forecast that our treasurer watches every day ... and that the board will watch," Whiting said.
Whiting asked Wilson whether Lambert's calculation of 7.7 mills was accurate, to which Wilson replied, "When you're ready to go on the ballot, I'll give you a number."
Board member Doug Maggied said while he did not disagree with Lambert, the district has a treasurer to guide the board in making the correct financial decisions.
Whiting and Teater both reiterated the forecast is subject to change and can be amended as necessary before board members voted 4-1 to adopt it.