Last spring, school systems across the nation were challenged to quickly assess, address, and adapt to the worldwide pandemic. Whether implementing remote instruction models to keep students learning, modifying meal service to keep students fed, stockpiling personal protective equipment to keep students and employees safe, or shifting resources to maintain operations, these rapid adjustments left school leaders concerned about the overall impact the coronavirus could have on their respective districts.
Just two months into the pandemic, school treasurers around Ohio were preparing to file their updated five-year financial forecasts, which would include predictions of the coronavirus’s fiscal impact on their respective districts. Westerville City School District (WCSD) Treasurer/CFO Nicole Marshall at the time projected the district would be left with just over $16 million in its unreserved cash balance at 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.
“As a result of these efforts, the new financial forecast that we’re filing with the state projects an unreserved cash balance of about $50.7 million at the end of FY24,” Marshall said. “Since this update adds another fiscal year to the forecast, we’re also able to project a $10.2 million unreserved cash balance at the end of FY25. This means our efforts to proactively address the fiscal impact of the pandemic have so far been successful.”
Marshall presented the updated financial forecast to Board members during their regular meeting on November 23, 2020. She noted that while these latest projections allow the district to maintain its financial targets, the greatest issue remains the future of state funding.
“Legislators continue to debate a new school funding formula, and there will be a new state biennial budget for the 2022-23 and 2023-24 school years,” Marshall explained. “There’s quite a bit of uncertainty surrounding the future revenue we’ll receive from the state, so our forecast continues to project flat state funding.”
Marshall reminded Board members that for several years, WCSD has been a “capped” school district, meaning the state has regularly withheld about $12 million annually that the district otherwise would have received had the funding cap not been in place. Additionally, the current state budget effectively eliminated the school funding formula and cap by providing flat funding for public school districts across Ohio for two fiscal years.
“Even though the funding cap technically no longer exists, school district budgets were based upon already underfunded amounts,” Marshall explained. “In addition to being underfunded, our funds were cut by an additional $2.8 million last fiscal year due to the impact of the coronavirus on the state budget. That cut is being carried forward into our FY21 budget as well, which means we are losing a total of $5.6 million in revenue from the state.”
Marshall said the district has taken full advantage of federal funds available through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, as well as the district’s portion of the Bureau of Workers Compensation (BWC) $5 billion give back.
“We’ve been able to leverage the federal funds to supplant expenses that would typically come out of our general fund,” Marshall said. “This includes $2 million in one-time salaries that we have to add back into our general fund in FY22, but the net result is that it helps save some dollars for our taxpayers. We’re also expecting to receive $2 million from the BWC as a one-time dividend, which will help offset the state foundation funding shortfall.”
Marshall noted that prior to voter approval of the district’s last ballot issue in November of 2019, the district 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. “As we continue to lobby the legislature for a better school funding model, we must thank our voters once again for their support last November. Without their approval of Issue 8, we would be talking about a much bleaker financial picture for our schools.”
Marshall and Superintendent Dr. John Kellogg on November 17, 2020, presented testimony to legislators in support of Substitute House Bill 305 and the Senate's companion bill, Senate Bill 376. Approval of this legislation would reduce the state’s overreliance on local taxpayers to pay for public education and provide a more equitable state model for funding schools.
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.