The five-year forecast for the current fiscal year 2018-19 through fiscal year 2022-23 was presented to the South-Western City School District Board of Education Oct. 8.
The forecast is a standardized planning tool required by the Ohio Department of Education to be completed annually. It provides detailed information regarding actual and anticipated revenue, expenditures and cash balances for the general fund and is used as the financial roadmap for the district.
The forecast is prepared conservatively based on economic trends and known facts, which are detailed by category in the written assumptions that accompany the forecast.
Based on these assumptions, the forecast indicates the district will have a positive cash balance through fiscal year 2022-23.
During the 2009 operating levy campaign, the South-Western City School District Board of Education made a promise to the community that the operating levy funds would last through fiscal year 2012-13.
The forecast currently projects a positive cash balance 10 years beyond what was originally promised. The board of education, administration and employee groups have worked together to manage operating expenditures in such a way that enables the district to stretch the operating levy funds farther than promised.
State funding currently represents roughly 58 percent of the district's general fund operating revenue. The district anticipates receiving roughly $158 million dollars in fiscal year 2018-19 from the state to support general-fund operations.
Under the current state funding formula, the district is a "capped" district. Capped districts receive an amount less than what the actual school funding formula calculates.
One of the main inputs in the state-funding formula is student enrollment. Generally speaking, the state funds school districts by multiplying a per-pupil funding level by the number of students within the school district.
Under the current state funding formula, the district would have to realize a decrease in enrollment of over 1,500 students to see a decrease in state funding.
Over the last six years, the district has been impacted by the funding cap anywhere from $9 million to $14 million per year. If the cap was removed, the district would receive these additional funds.
Although the additional funds would be welcome, the district has consistently forecasted revenue and expenditures in a conservative manner, which has provided financial stability for the district overall.
The district is in the second year of the state's most recently enacted biennial budget.
With this in mind, it is important to note that the forecast has two biennial budgets, starting on July 1, 2019, and July 1, 2021, respectively, that are completely unknown, which could have a significant effect on future revenue.
It will be imperative to monitor the state's upcoming biennial budget approval process due to the district's heavy reliance on the funding it receives from the state.
The district will continue to closely monitor the progress of the forecast to ensure it is staying on track and utilizing the funds it receives in the most cost-effective manner.
Hugh W. Garside Jr. is treasurer of the South-Western City School District.