South-Western Subject Matter: District's financial outlook looking good
As the treasurer/chief financial officer of the South-Western City School District, I presented the five-year forecast for the current fiscal year 2020-21 through fiscal 2024-25 at the Oct. 26 school board meeting.
The forecast is a standardized planning tool required by the Ohio Department of Education to be completed annually. The forecast provides detailed information regarding actual and anticipated revenues, 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.
Fiscal years for Ohio’s school districts run July 1 to June 30.
Based on these assumptions, the forecast indicates that the district will have a positive cash balance through fiscal 2024-25. During the 2009 levy campaign, the school board made a promise to the community that the levy funds would last through fiscal 2012-13. The forecast currently projects a positive cash balance 12 years beyond what originally was promised. The board, administration and employee groups have worked together to manage operating expenditures in such a way that enables the district to stretch the levy funds further than promised.
State funding currently represents roughly 57% of the district’s general-fund operating revenue. The district anticipates receiving roughly $155 million in fiscal 2020-21 from the state to support general-fund operations. Under the current state funding formula, all school districts receive the same funding as they did in the previous fiscal year. It is important to note that during the previous year, fiscal 2019-20, the state funding formula was reduced for all school districts. Due to this reduction, the district’s state funding was cut by $3.4 million last fiscal year. This reduction was carried forward to the current fiscal year.
Fortunately, the district has received funds from the federal government through the Coronavirus Aid, Relief, and Economic Security (CARES) Act that have helped shore up the budget decrease that was realized in state funding. In addition to stabilizing the overall budget reductions from the state, the CARES Act funding has provided the resources for the district to purchase Chromebooks to provide electronic access to all students. It’s a vital resource to implement the district’s necessary virtual-learning platform due to the COVID-19 pandemic.
The district consistently has forecasted revenues 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 biennial budgets starting on July 1, 2021, and July 1, 2023, respectively, that are completely unknown and that could have a significant effect on future revenues.
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 South-Western City School 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. If you would like additional details on the five-year forecast, please go to the district’s “Financial Information” section on its website at swcsd.us. Additionally, forecasts for every school district in the state can be found on the Ohio Department of Education’s website at ode.state.oh.us.
Hugh W. Garside Jr. is the South-Western City School District treasurer/chief financial officer.