Updated Financial Forecast Avoids Deficit Spending One More Year

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Westerville City School District (WCSD) Treasurer Nicole Marshall recently presented Board of Education members with an updated five-year financial forecast indicating that continued conservative fiscal practices have allowed the district to avoid deficit spending one additional year.

During the Board’s regular meeting on May 6, 2019, Marshall reported that the October 2018 forecast indicated the district would begin deficit spending in Fiscal Year (FY) 2020.  This latest update delays the start of deficit spending one more year until FY21.  Much earlier 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.

“Deficit spending is common for school systems, given the way school funding works in Ohio,” Marshall explained.  “The fact that our district has been able to avoid deficit spending for six years longer than first expected and still put 75 percent of the budget directly into classroom instruction is truly amazing.  It speaks volumes about the efforts that this Board and administration have made to strengthen district finances.”

Marshall said that district expenditures are trending about $1 million less than projected, and revenues are trending slightly higher than expected.  “The combination of these factors means we should end the year with about $4 million more than projected in last October’s forecast,” Marshall added.  

Marshall said the district also has worked hard to take advantage of improved interest rates, which generated about $1 million more than anticipated in revenue.  However, the forecast continues to take a conservative approach to future revenue given the uncertainty of the state’s next budget.

“All signs point to us remaining a capped school district, which means the state is withholding approximately $12 million annually that we otherwise would receive if the cap were removed,” Marshall explained.  “Despite this cap, which causes many school systems to go back to voters more frequently than if they had been receiving the state money they are due, we have worked hard to stabilize our budget and stay off the ballot for new operating money for seven years now.”

Marshall said that given the district’s current facilities needs and future operating needs, the district likely will need to seek voter approval of new funding soon.

“Our district has done a great job for taxpayers in managing the resources they provided as we emerged from a difficult financial situation several years ago,” Marshall said.  “We are at a point, however, where we will need to consider appearing on the ballot to avoid entering deficit spending two fiscal years from now.”

Marshall said the 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.

School districts must file their five-year financial forecasts with the State of Ohio by November 30 and May 31 of each fiscal year.  These forecasts rely heavily upon past fiscal trends and future assumptions.  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.