Westerville city, school leaders see fund loss, new expenses in pandemic
The Westerville City School District and city of Westerville leaders are pledging continued fiscal prudence while addressing continued costs associated with the COVID-19 coronavirus pandemic.
Lee Ann Shortland, Westerville's finance director, said the city's strict adherence to fiscal policies that require maintaining cash balances equating to six months worth of operating expenditures in the general fund provides a stable foundation.
"Furthermore, City Council and staff perform budget processes to update the five-year financial plan every six months," she said. "As financial trends are identified and while cash balances are stable, council and staff have sufficient time to amend budgets and (ensure) that fiscal health is maintained."
In the case of the pandemic, Shortland said, staff immediately identified potential operating and capital-outlay cuts for 2020.
"These were reported by (City Manager) Mr. (David) Collinsworth to City Council on April 9, and the vast majority of those expenditures were placed on hold."
Thus far, the city has spent $894,000 on items related to the pandemic, including $67,000 on supplies and services; $53,000 on encumbrances for EMS-related supplies and services; $502,000 on personal services (labor) costs directly related to the coronavirus; $22,000 on unemployment costs due to the coronavirus; and $250,000 on WeCan Business Grants.
Shortland said money from the Coronavirus Aid, Relief, and Economic Security Act will reimburse the city for all of those expenses.
She said the city provided a utility holiday in April for all residents and businesses, which resulted in a loss of revenue as follows: electric, $3.9 million; sewer, $700,000; water, $440,000; and refuse, $250,000; for a total utility holiday cost of $5,290,000.
"The city's enterprise-fund balances include a designation for 'rainy day' expenses, and the monies that allowed for a utility holiday were spent from the fund balances," Shortland said.
She said the lost revenue from the utility holiday is not reimbursable through the CARES Act.
"The city is making budget adjustments and managing costs to (ensure) that the utility-enterprise-fund balances remain within fiscal policy," Shortland said. "While we dipped into the fiscal policy to provide hardship relief to the residents and businesses of Westerville, these fund balances remain healthy and, with fiscal vigilance, will recover within the next year."
She said the city's history of fiscal stability is the result of adherence to fiscal policies, expedient planning and excellent stewardship of the financial resources provided by the public.
School district's budget
John Kellogg, schools superintendent, said the district is facing new and necessary expenditures at a time when it is experiencing cuts in state funding.
"We will meet these new challenges with a goal of working to support our families while maintaining an eye on the future of our financial resources," he said. "Our board and leadership team appreciate the support the community expressed last fall when it approved our ballot issue. We will continue to be good stewards of those financial resources even as new challenges are presented to us."
Nicole Marshall, district treasurer, outlined the financial effects of the coronavirus on the district's budget at the Aug. 10 board meeting.
As part of state budget cuts to offset the loss of tax revenue stemming from the coronavirus crisis, Westerville schools experienced a total reduction of $5.6 million as of July 31, with more state budget cuts anticipated for the future, according to Marshall. She highlighted one-time state and federal funds the district received to support coronavirus-related expenses, including:
* $2 million to maintain operations as part of the CARES Act. Those dollars, which must be used by September 2022, have been earmarked to offset the loss in state funds.
* $786,430 from the state that the district is using for the Westerville Virtual Academy and personal protective equipment for staff and students. The district must use the funds by the end of December.
Marshall said the district has $4.8 million in coronavirus-related costs to support teachers and schools with their remote- and blended-learning plans.
Expenses include online curriculum for the virtual academy; PPE; Virtual Student Success Coaches, who will provide support around remote learning; guest teachers, whose responsibilities are much like those of a substitute teacher; recess aides, who will need additional hours to help coordinate during lunch when students return to the buildings; bus drivers, who will need additional hours to allow for cleaning between each route; and all-day kindergarten fees, which will be reduced based on the educational model employed during the school year.
Marshall said sonme other budget components are still unknown, including state funding for the current fiscal year and the upcoming two-year budget, property-tax collections, future property values and health-insurance costs linked to the coronavirus.