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Updated Financial Forecast Reflects Fiscal Stability Resulting from Levy Renewal

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Westerville City School District (WCSD) Treasurer/CFO Bart Griffith presented Board of Education members with a revised financial forecast indicating at least five years of financial stability and the district ending Fiscal Year 2021 with a cash balance of $72.58 million.

The updated forecast reflects community approval of last November’s no-new-millage levy renewal request.  The prior forecast, filed with the state last fall before the levy renewal’s appearance on the ballot, projected the district would have only a $4.5 million balance in FY21 if the levy was allowed to expire or was not approved.  Community approval of the renewal brought added fiscal stability to WCSD’s financial picture while actually decreasing the district’s effective millage rate.

“Undoubtedly, the community’s permanent renewal of our emergency levy has ushered in a new era of financial stability for our schools,” said Treasurer/CFO Bart Griffith.  “This renewal made the levy current, maintains its state reimbursements, and allows for growth from new construction.  New construction growth already has improved our revenue estimates since our last forecast.”

School districts must file their five-year financial forecasts with the State of Ohio by October 31 and May 31 of each fiscal year.  These forecasts rely heavily upon past fiscal trends and future assumptions.  Griffith said this most recent forecast includes anticipated revenue from the state’s biennial budget for fiscal years 2018 and 2019, but those figures are far from final.

“Legislators continue to debate how much funding they will direct toward public education in the next two-year budget, so we have taken a fairly conservative approach to our estimates,” Griffith explained.  “If funding comes in better than anticipated, it will only improve our financial picture.  If state revenue comes in lower than projected, we will be able to account for this and manage its impact.”

Griffith noted that though the district has received increased state revenue in recent years, the state continues to impose a funding cap that prevents the district from receiving additional state revenue it is owed.

“This forecast models a 3 percent increase in state revenue for Fiscal Years 2018 through 2021,” Griffith said.  “However, we would have seen an additional $7.7 million in state revenue without the state-imposed funding cap.”

The district continues to maintain a $19 million reserve fund, which Griffith said is good fiscal stewardship and covers approximately 45 days of operating costs to address any unforeseen financial crises.

Due to Ohio’s school funding formula, school districts typically operate on a deficit-spending model.  Earlier forecasts indicated that district spending would exceed revenue as soon as FY16. However, even while rebuilding its programs and services from significant budget reductions five years ago, WCSD has stretched resources and now projects that it will spend less than it receives in revenues until FY19.

  “At the end of FY19 we are projected to spend approximately $700,000 more that we receive in revenue, and this grows to $15.5 million at the end of FY21,” Griffith said.  “That may sound like a lot, but in an operating budget of approximately $170 million, such shortfalls are manageable.”

Griffith said projected deficit spending could easily be erased should state funding come in slightly higher than projected.

“The bottom line, however, is that we must remain conservative in our approach and should not expect additional help from the state,” Griffith said.  “Therefore, we will continue our efforts to provide the programs and services our community desires while wisely managing the resources available to us.”

Griffith said the updated forecast also reflects the district’s efforts last year to renegotiate and phase out the 30-year-old “Win-Win” agreement with Columbus City Schools (CCS).

“The result is an annual 20 percent reduction to our Win-Win payments to CCS over the next four years until those payments are eliminated completely,” Griffith explained.  “No payments will be made from WCSD to CCS after FY21, and no property transferred in either direction as part of the agreement.”

The updated Five-Year Forecast and all other Board action items are available online through the district’s web site at www.wcsoh.org.  Visitors can obtain the information by visiting the Treasurer/Fiscal Services page under “Our Departments” or by navigating to BoardDocs via the Board of Education page.

Board meetings are broadcast on WOCC-TV.  Board meetings and presentations also are available to view at the district’s YouTube page at www.youtube.com/WCSDOhio.