Despite continuing to be underfunded by the State of Ohio, the Westerville City School District’s (WCSD) most recent Five Year Financial Forecast continues to improve due to federal pandemic relief funds, conservative budgeting practices and, most recently, the impact of the state’s new two-year budget, also known as the “Fair School Funding Plan.”
Marshall presented the updated financial forecast to Board members during their regular meeting on November 22, 2021.
“I’m pleased to share that our school district’s latest financial forecast continues to reflect a positive trend in our General Fund budget,” said WCSD Treasurer/CFO Nicole Marshall. “The state’s most recent budget continues to underfund us, which remains a concern, but some measures in its ‘Fair School Funding Plan’ will have a positive impact on this and future forecasts.”
In the spring of 2020, just two months into the pandemic, projections indicated the district would be left with only $16 million in its unreserved fund balance by the end of Fiscal Year (FY) 2024. District officials immediately sought ways to curtail expenses, maximize the use of federal relief dollars, and lessen the effect of the pandemic on district finances. The result of these and subsequent measures allowed Marshall to increase the projected FY24 unreserved fund balance to $50.7 million in WCSD’s November 2020 forecast and to $69.1 million in the May 2021 forecast.
The May 2021 forecast also projected a $30.9 million unreserved fund balance at the end of FY25, which at the time was $20.7 million more than the November 2020 forecast’s FY25 balance projection of $10.2 million. Now, six months later, WCSD’s current forecast projects increased unreserved cash balances of $103.3 million at the end of FY24 and $74.9 million at the end of FY25. The latest forecast adds FY26, which reflects a projected unreserved fund balance of $35.3 million.
“Our efforts to proactively address the fiscal impact of the pandemic continue to be successful,” Marshall said, noting that the latest forecast does not yet reflect some of the federal Elementary and Secondary School Emergency Relief (ESSER) funding received by the district. “The impact of additional ESSER funds will not be reflected in future forecasts until their actual use and disbursement becomes known.”
In its new Fair Schools Funding Plan, the state now makes direct payments to charter and non-public schools. According to Marshall, these payments were automatically transferred to those schools through the previous formula and annually accounted for WCSD sending approximately $8.6 million to charter schools and private institutions. The new funding formula reflects a reduction in WCSD state revenue of that same amount.
Marshall noted that while the latest projections allow district officials to maintain financial targets, they are doing so despite a $4.1 million decrease in state revenue over the last two fiscal years when school budgets were cut due to the pandemic. The state also continues to underfund WCSD by approximately $7.5 million per year under the new Fair School Funding Plan.
“We truly appreciate the state legislature’s recent efforts and recognize that this is an improvement over the approximate $12 million annually withheld from our state revenues when we were capped in previous budgets,” Marshall said. “However, we would love to see the state fully fund its public school systems in future budgets as this would help reduce the frequency and amount of local operating levies that districts must request from their respective communities.”
Marshall noted that district officials aggressively lobbied the legislature for a better school funding model. Prior to voter approval of the district’s last ballot issue in November of 2019, WCSD was able to avoid a request for new revenue for seven years.
“Staying off the ballot for so long was an amazing accomplishment,” Marshall said. “We thank our voters once again for their support because without their approval of our last ballot measure, we would be talking about a much bleaker financial picture for our schools.”
The May 2021 forecast projected that WCSD would begin deficit spending (when expenditures exceed revenue) by $16.25 million in FY23. In this most recent forecast, however, deficit spending remains expected for FY23 but the projected amount is decreased to $7.78 million.
“The fact that we have again reduced the projected amount of our first year of deficit spending is a positive outcome from this latest forecast,” Marshall said. “We’ll continue our efforts to reduce this amount and are pleased for our local taxpayers that we are showing a positive unreserved fund balance for each of the five years projected in this report.”
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.