Whitehall City Schools' forecast finds black ink in fiscal 2021
Through a combination of increased revenue and reduced spending, Whitehall City Schools officials expect to have a positive cash flow for fiscal 2021, treasurer John Walsh said.
The fiscal news was part of a revised five-year forecast that Walsh presented to the school board Nov. 12.
The forecast is a revision of what was presented in May. State law requires school districts to present five-year forecasts each May and November, Walsh said.
The turnaround from a projected deficit of almost $1.9 million to a balance of almost $500,000 for fiscal 2021 is possible because the district received more public funding from the Ohio Department of Education that first projected, coupled with $1.2 million in Coronavirus Aid, Relief and Economic Security Act funding, Walsh said.
“CARES funding was not in the May forecast,” Walsh said.
The CARES Act is a $2.2 trillion economic-stimulus package enacted by the federal government in March to address the economic downturn caused by the COVID-19 coronavirus pandemic.
“The district also learned (since May) that our state-funding amounts will be at the same level as those we received (in fiscal 2020),” Walsh said.
That amount is $28.2 million.
The district’s expenditures for fiscal 2021 are projected to be $1.3 million less than estimated in May, and revenue is projected to be $1.1 million greater than estimated in May, creating a $2.4 million turnaround, according to Walsh’s report.
Of the $1.2 million the district received in CARES Act funding, about $900,000 was used to offset personnel costs, and the district further reduced spending by about $400,000 for supplies and services, resulting in decreased expenditures of $1.3 million, Walsh said.
On the revenue side, the additional CARES Act money and state funding in the amount of $28.2 million increased the district’s projected revenue for fiscal 2021 by $1.1 million, Walsh said.
The recovery of the economy also was a factor in the improved figures, Walsh said.
Together, the adjustments will increase the district’s cash reserve to $11.1 million at the end of fiscal 2021. It was estimated at $8.7 million in May.
Still, district leaders expect to begin deficit spending in fiscal 2022, which runs from July 1, 2021, to June 30, 2022, according to the five-year forecast.
The district projects a $1.9 million deficit in fiscal 2022 and a $3.8 million deficit in fiscal 2022, according to the forecast.
The district would have a negative cash balance in fiscal year 2024 if there are no interventions, Walsh said.
But a five-year budget is fluid, said Walsh, acknowledging that the final two to three years “is anyone’s guess” since they are based on future state biennial budgets.
Whitehall schools have not asked for an operating levy since 1995 although voters supported a bond issue in 2008 and a combined 3.41-mill public-improvement levy and bond issue in 2018.
Looking ahead, Walsh said, the district would benefit from a proposed school-funding formula being considered by the Ohio General Assembly.
House Bill 305 is known as the Cupp-Patterson bill for its primary sponsors, Rep. Robert Cupp (R-Lima) and John Patterson (D-Jefferson).
A companion bill, Senate Bill 376, is in the Senate, but either or both would require reintroduction next year, when a new General Assembly is seated, if no action occurs on the current bills by the end of the year, Walsh said.
“We are hopeful that (the bills) pass. If they do, our district will be in good shape (but) if they don’t we will have to go back to the drawing board and figure out something else,” board President Mike Adkins said.