Hilliard Northwest News

Updated forecast changes little from October version

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Hilliard school board members unanimously approved the district's five-year financial forecast April 28.

Treasurer Brian Wilson submitted a revised five-year forecast for fiscal years 2014-18. The Ohio Revised Code requires districts to submit a five-year forecast by Oct. 31 each year and a revised and updated forecast by May 31.

"There are not significant changes in the total revenue estimate since October (2013)," Wilson said.

Estimated revenue increased by 1.1 percent, from $168 million to about $170 million, he said.

"For the current fiscal year, the biggest difference is an additional $1.6 million ... (that is the) result of calculations in our favor for the new state school-funding formula and over one-half million dollars in a one-time Medicaid reimbursement," Wilson said.

The first deficit is estimated in fiscal year 2016 when revenue is projected at $172.4 million and total expenditures are expected to be $177.3 million, according to Wilson's report.

The forecast revision includes changes from the two recent union contracts.

"The variance in the total expenditures of the forecast is negligible," Wilson said.

He said personal-services expenditures are higher as he estimated lower wage increases prior to the latest negotiated contracts, but fringe benefit expenditures are lower than the October forecast as negotiated changes to the health plan resulted in reduced costs.

Expenses remained at about $165 million in both forecasts, according to Wilson.

However, the five-year forecast shows expenses increasing to about $192.5 million by fiscal year 2018.

Wilson also outlined opportunities and risks for both revenue and expenditures in the ensuing five years.

"On the revenue side, the items that could create the largest variances are the state funding of the new school funding formula in the next biennium," he said.

The current biennium has a cap of 6.25 percent and a cap next year of 10.5 percent, according to Wilson.

He said he had assumed a 3-percent cap for Hilliard.

Hilliard currently receives a 50-percent reimbursement of tangible personal-property tax equal to about $6 million annually.

"I have made the assumption that the phase-out of this revenue source will resume in 2016 with the total elimination by 2019," Wilson said. "This may not happen or it could be quicker than this assumption."

On the expenses side of the equation, Wilson said the Affordable Care Act is a wild card.

"I am not sure that anyone truly knows what will happen as a result of the Affordable Care Act," he said.

Changes made to the district's health-insurance plan delayed for several years the "Cadillac tax" that is part of the Affordable Care Act, Wilson said.

"We will continue to monitor the Affordable Care Act with an eye towards mitigating risk in future years," he said.

Wilson reiterated that the five-year-forecast is subject to change.

"It's a prediction of future events based on assumptions as we currently believe them to be (and) a tool to let us know when we need to be on the ballot or what we potentially need to do to stay off the ballot. ... It is not written in stone," Wilson said.

Board member Paul Lambert, who has in the past voted against the forecast, called the most recent forecast "good fiscal management."

Lambert said the district fulfilled its pledge to the community in 2011 not to seek another until at least 2014.

The district will not be on the ballot until at least 2015, district officials said last year.

"It's a great-looking forecast," Lambert said. "I'm glad to support it."

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