District’s Latest Financial Forecast Continues to Reflect Conservative Revenue Projections

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Westerville City School District (WCSD) Treasurer Nicole Marshall, on September 24, presented Board of Education members with an updated five-year financial forecast that maintains a conservative approach to estimating future revenue while projecting an ending cash balance for Fiscal Year (FY) 2019 that is approximately $760,000 higher than just four months ago.

Last May’s forecast anticipated a General Fund balance of $96,006,378 for FY19, while the updated forecast projects a balance of $96,766,493. Marshall noted that because the forecast covers two years in which the legislature will approve a new state budget, as well as the election of a new governor, it is in the district’s best interest to remain conservative in its revenue projections.

“It’s virtually impossible to predict what will happen at the state level, but I am fairly certain that we are likely to remain a capped school district,” Marshall explained.  “I hope I’m wrong, because having this cap in place means the state is withholding approximately $12 million annually that we otherwise would receive if it were removed.”

Ohio legislators enacted the funding cap in FY14, a move that prevents WCSD and other districts from receiving additional revenue that the state otherwise owes to them.  WCSD would have received around $70 million in additional state funding since the cap went into effect.  When the state implements such measures, local taxpayers are left to make up the difference.   

Due to Ohio’s school funding formula, school districts typically operate on a deficit-spending model.  Much earlier financial forecasts indicated that district spending could exceed revenue as soon as FY15.  However, even while rebuilding its programs and services from significant budget reductions several years ago, WCSD continued to stretch its resources.  According to the latest forecast, the district has delayed deficit spending until FY20.

“Once a school district begins deficit spending, its cash balances deplete quickly,” Marshall said. “As the new Treasurer of this district, I’m impressed with the fact that Westerville City Schools has been able to delay deficit spending as long as it has.”

Marshall noted that after passage of an emergency operating levy in 2012, the Five Year Financial Forecast filed by WCSD in October 2013 projected that the district would end FY18 with a $31.5 million balance.  Instead, due to ongoing cost-controlling measures and community renewal of the expiring levy, WCSD ended FY18 with an unreserved fund balance of $91.4 million.

“You’ve done a great job for your local taxpayers in managing the resources they provided as you emerged from a difficult financial situation several years ago,” Marshall noted.  “As a result, the district is now projected to maintain an unreserved cash balance of $35.3 million at the end of FY23.”

Marshall said he district continues to maintain a $19 million reserve fund, which is sound fiscal stewardship and provides approximately 45 days of operating costs to address any unforeseen financial crises.

“By remaining conservative in this updated forecast, should revenue be better than anticipated, the district’s financial picture improves,” Marshall explained.  “Should projected revenue end up lower than anticipated, district officials are better able to manage the impact.”

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. This most recent forecast includes actual revenue from the state’s biennial budget for fiscal years 2018 and 2019.

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 and presentations also are available to view at the district’s YouTube page at www.youtube.com/WCSDOhio.