Board approves Financial Forecast featuring greater cash balance, stretching Emergency Levy one more year


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Board also casts unanimous vote to reduce Pay-to-Participate, other activity fees

(October 27, 2015) Westerville City School District (WCSD) Treasurer/CFO Bart Griffith yesterday presented Board of Education members with a revised financial forecast indicating the district will end Fiscal Year 2020 with a cash balance of $26.97 million. Increased state revenue, continued belt-tightening measures by school officials and other factors have allowed the district to stretch the March 2012 emergency operating levy five years longer than originally projected.

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 noted that while the state established a new funding formula in Fiscal Year 2014 that resulted in additional revenue for WCSD, it also introduced a funding cap that is preventing the district from receiving additional state revenue it is owed. Without the state funding cap, WCSD would receive an additional $9.3 million in revenue.

Griffith said anticipated revenue from the state’s biennial budgets for fiscal years 2017 and 2018 is reflected in this latest forecast. However, calculating what may be included in any state budgets beyond those years, as well as any new restrictions that may be imposed, is a challenge for any school district and akin to predicting the future.

Superintendent Dr. John Kellogg noted that if one were to look at earlier financial forecasts and compare them to today’s figures, they would see that the district’s financial picture has significantly changed for the better. For example, the October 2011 forecast projected that WCSD would be spending approximately $158 million in FY16, while the forecast approved last night indicates $154 in total expenditures for FY16. Griffith and Kellogg both attribute reduced expenditures to changing business practices and operational efficiencies established by district officials. The result of these efforts continue to yield positive news for local taxpayers.

“According to our financial trajectory, we again find ourselves able to stretch emergency levy dollars an additional year, which means we’ve maintained a positive cash balance five years longer than anticipated,” Griffith said. “We’re working diligently to manage the resources our community provides and are pleased to share this good news with taxpayers.”

Griffith shared that the forecast continues to reflect a $19 million reserve fund. The Board of Education authorized the creation of a $13 million reserve fund in October 2013 and was able to increase the reserve amount to $19 million last year.

“A $19 million reserve provides us with about 45 days of operating costs to address any unforeseen financial crises,” Griffith explained. “Maintaining a reserve fund is good fiscal stewardship and one more proactive measure the Board has taken to strengthen its financial position and lengthen the time between levy requests.”

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, WCSD is projected to spend less than it receives in revenues until FY18. According to Griffith, the reason expenses are projected to exceed revenue at that time is because the forecast must reflect the expiration of the five-year emergency levy approved by voters in 2012. Griffith said renewal of the levy would continue to generate revenue for the district and expenses would not exceed revenues for several years thereafter. 

Griffith noted that because the March 2012 emergency levy was not a continuing levy, it will expire at the end of calendar year 2017. The district would still be able to operate through FY20 if the levy was allowed to expire, but officials would need to return to the ballot with a new levy request shortly thereafter.

Allowing the emergency levy to expire in 2017 and returning later with a new levy request, even if for the identical millage, would likely have a negative financial impact on taxpayers. Griffith said this is because the state recently added an income means test to homestead exemption applicants and eliminated property tax rollback provisions that help homeowners pay their property tax.

“The state no longer pays 12.5 percent of property owners’ tax bills on new levies or other new tax issues approved by voters,” Griffith said. “However, the homestead exemption and property tax rollback continues to apply to any existing tax issues renewed by taxpayers, which means the state would still pay 12.5 percent of the district’s emergency levy if residents approve its renewal.”

A healthy financial forecast has allowed district officials to begin addressing academic program needs and capital improvement needs that have been reduced or deferred over the year as officials worked to rebuild the district’s fiscal stability.

In other Board action last night, members voted unanimously to reduce extracurricular “Pay-to-Participate” fees, as well as phase in the suspension of fees for club activities and co-curricular activities in which students receive a grade.

High school athletes were paying $240 per sport and middle school athletes were paying $120 per sport. There was no reduction to fees for students playing multiple sports and there was no cap to the amount a family pays annually.

Under the newly-approved fee structure, families of high school student athletes will pay $150 for the first sport and $75 for the student’s second sport. At the middle school level, families will pay $75 for a student’s first sport and $50 for the student’s second sport. Students participating in three or more sports at either level would not incur additional fees.

If a family has multiple children playing multiple sports, athletic fees are being capped at $300 per year.

Revised athletic fees will take effect with this school year’s winter sports. Fees will not be reduced retroactively. Club fees will continue to be collected for the remainder of the 2015-16 school year, but those fees will be suspended beginning with the 2016-17 school year.

Fees for co-curricular activities such as marching band, orchestra, jazz band and choir, also will continue to be collected for the remainder of the current school year, but will be suspended beginning with the 2016-17 school year. Students participating in the theater program will pay a one-time $50 fee during the current school year, but this fee will be suspended beginning with the 2016-17 school year.

The Board’s ability to modify its fee structure and provide more general fund support for student activities stems from a healthy five-year financial forecast and ongoing desire to revisit program and service reductions made in 2012. The Board also approved policy language that requires its annual review of student fees, fines and charges.

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 Department” 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 on the district’s YouTube page at www.youtube.com/WCSDOhio. The Five-Year Forecast presentation may be viewed by clicking here.