ThisWeek CW 10/16/2014
http://www.thisweeknews.com/content/stories/canalwinchester/news/2014/10/13/groveport-madison-schools-swartz-district-financial-forecast-much-improved.html
The Groveport Madison school district is looking at the best financial forecast it’s seen in years, thanks to cost-savings measures and voter approval of an operating levy and bond issue in May, according to Treasurer Tony Swartz.
At the Oct. 8 school board meeting, Swartz outlined his biannual, five-year financial forecast, a budgetary document required by law to be filed every October and May.
“It’s a pleasure to talk about the five-year forecast with you tonight,” he said, noting that the district’s main revenue sources are property taxes and unrestricted state grants.
“Property tax, which was about $25 million in 2014, will be about $27 million for 2015, which is due to the levy, and we’ll receive a half-year of that, so in 2016, we’ll collect a full year of the levy and it’ll remain consistent after that,” he said.
Once property taxes level out, Swartz forecasts that the district will receive about $30 million annually.
The unrestricted state grants, which equaled about $30 million in 2014, are expected to remain steady at about $33 million.
Swartz said the three largest expenditures in the forecast include personal services, which include staff and contractor salaries; employee retirement and insurance benefits; and purchased services, which includes contracted costs such as busing and nearly $10 million annually paid to charter schools.
The $10 million covers payments made to any charter school where a Groveport student transfers to instead of attending Groveport Madison public schools.
Expenditures, he said, are expected to continue to rise slightly over the next five years, from about $67 million in 2014 to nearly $70 million in 2019. Due to anticipated changes in tax laws, including the loss of Ohio’s tangible personal property tax and estate tax, the forecast shows general fund expenditures being higher than revenue in 2019 by about $1.2 million.
However, Swartz said the actual general fund balance is projected to grow through 2018 to $8.2 million and end at just over $7 million in 2019.
Board member Libby Gray asked if the forecast includes expenses related to strategic planning and any leeway for new negotiations on collective bargaining agreements.
“Staff salaries do not include any new negotiations, so any increases that would come from that would negatively affect our bottom line,” Swartz said. “Beginning in 2016, as part of a levy campaign promise, (Superintendent Bruce Hoover) said that he wants $1 million set aside for facilities needs throughout the district, and that is included in here, but nothing other than that,” he said.
Also accounted for in the forecast, is the property tax advance the district receives every year, which is about $5.2 million annually. In previous years, that money has been used regardless of actual tax revenue, leaving the district with little to no carryover cash balances at the end of the fiscal year.
Beginning in 2015, Swartz forecasts a modest carryover of $31,182 which will grow to about $4.1 million by 2016.
“The trick now is to not give it all away,” he said. “We still have to be good stewards of the money and be cautious, because money can go in a hurry, but I think this is a big step in turning the district around.”