May 2014 Five Year Forecast approved

At the May 2014 meeting, the board approved the revised five-year forecast, which must be updated every year.  The forecast shows revenues are up $3.6 million this fiscal year due to several different sources.  It also shows revenue increases of $3.1 million in fiscal years 2015-18, the other years covered in the forecast.  In addition, expenses for this year are down slightly over $600,000, but this is really a trade as textbook purchases of $636,000 have been delayed until next year.

For compensation, the current forecast includes the estimated amount for “steps” in the budget, which is appr. 2% of the compensation budget.  The district is currently in negotiations with the union for the next contract; the current contract expires this fiscal year.  We are estimating a 10% increase in benefits as a best-guess moving forward with the new self-insured health plan.

When the Milford school district community passed the operating levy last May, the district promised to work to stretch those levy funds at least four years.  Under this forecast, this is definitely possible.  Treasurer Debbie Caudle has been realistic yet conservative in her projections, and the forecast shows a balance at the end of FY2018 of $3.3 million – significantly better than it has been.

However, it is also important to note how tight our budget is:  even with the increases in revenue we received this year and expect to receive over the next four years, our ending balance in FY2018 is only just stable.  If these assumptions hold true, a levy will be needed no later than that year to carry us on in the black.

The current board and administration are committed to managing our funds wisely to continue to provide a high level of education while keeping expenses reasonable.

Here is the Powerpoint Mrs. Caudle presented to the board:  Five_Year_Forecast 2014 Board Presentation May 2014

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6 thoughts on “May 2014 Five Year Forecast approved

  1. Pingback: Highlights from 5/15/14 school board meeting | Andrea Brady's Blog

  2. As always the devil is in the details. So when the benefits jump a whopping 50% in just 4 years mostly due to medical insurance it raises some questions. For example, why is that much an increase way more than the national average? Just how generous are these plans? Are we paying the premiums for the employees’ adult children 18-25? Why are the employees not paying a larger percentage of those premiums? Presently the teachers pay about 15%. That’s less than half of what the private sector and federal government employees pay. Why are the administrators who are also beneficiaries of those benefits negotiating this with the unions?

    The purpose of a school district is to educate the children. That’s the top priority. It is not to enhance the financial comforts of the school employees or insulate them from the destructive policies they so enthusiastically supported like OBAMACARE!

  3. Tom, I asked Treasurer Debbie Caudle to answer your questions. Here is her response:

    Reasonable professional diligence and care has been exercised in the preparation of this forecast. This forecast document is designed solely to provide a general indication of the probable future financial position of the school district based on information currently available. Therefore, professional discretion, diligence and caution are required when using and interpreting forecast information.

    The increase in Five Year Forecast line item indicating ‘employee’s retirement and insurance benefits’ is an estimate of the next four years. In fiscal year 2014 the district had a large increase in insurance coverage (32%) effective 1/1/2014 due largely to several years of low increases. FY 2015 will be the first full year with this increased rate. The insurance companies needed to increase the premiums to cover the ever rising costs in the medical field. The next four years compound this increase and add 10% annually for each year’s potential cost in insurance coverage.

    On the same five year forecast in question, please see the actual figures for 2011-2013. You will notice the district was incurring reductions to staff and low insurance rates. The unions also agreed to no raises or increases for FY 2014.

    The five year forecast also includes an increased need in staff for specific grade levels due to enrollment in FY 15 which is compounded thereafter. As wages increase so do retirement benefits and insurance packages offered.

    The district intends to switch to self-insured insurance 1/1/2015. In order to make this transition each district within our insurance consortium (SWOOSH) must contribute to a contingency fund to cover any potentially large claims incurred prior to premiums available to cover them. This also inflates the FY 2015 figure. But until the transition is made and until we can accurately predict insurance increases, it is a conservative approach to reserving district funds. The District joined SWOOSH to reduce costs to the district and despite the increases you see for FY 2014, it has saved the district a considerable amount of money.

    Family plans for the district do include adult children as is required by state and federal law with restrictions.

    The District is currently in negotiations with the unions and the wages and benefits will be discussed, but are confidential until negotiations are settled.

    An attorney negotiates for the district as the Lead and is hired by the Board and assisted by the administrative team.

    It is Milford’s mission to educate children. We are a service industry so most of our costs will always be labor related. To provide a qualified teaching staff requires the district to remain competitive with other districts. Milford wages and benefits are mid-range compared to districts in surrounding counties. 70% of the FY 2014 budget was set toward salaries and benefits; much lower than many of the districts in surrounding counties.

    Looking at the same five year forecast for 2011-2013 you will see the district has been fiscally responsible and will continue to do so. The dollars entered for salaries and benefits are estimates which will be updated to more accurate figures as soon as they are available.

  4. Always Andrea, you get out the “we’re mid-range” broad brush to explain away every criticism of benefits generously lavished on school employees. It’s a meaningless statement. We are being forced to pay for their adult childrens’ medical coverages added on to their insurance plan. They are NOT dependants. That is NOT required by any law. Check it out. That portion of the premium belongs solely to their parents, not to the taxpayers.

  5. Actually, Tom, it IS law; an excerpt from an FAQ put out by the state is here:

    Both the federal government, through the Affordable Care Act, and the state government, through the budget that was passed in July of 2009, have passed legislation allowing older age children to remain covered under their parents’ coverage. The federal and state laws are not exactly the same. The federal law requires plans to extend the eligibility age for dependents to age 26. Under state law, the employee must be allowed to pay for extending coverage for their child until the child turns 28. This FAQ will discuss the requirements of both laws and how they should work together in Ohio.

    Who is Eligible?

    Under state law, the child must be unmarried and:
    (1) the natural child, stepchild, or adopted child of the employee;
    (2) have not yet reached their 28th birthday
    (3) a resident of this state or a full-time student at an accredited public or private
    institution of higher education;
    (4) not employed by an employer that offers any health benefit plan under which the
    child is eligible for coverage, and
    (5) not eligible for coverage under Medicaid or Medicare.

  6. Andrea

    I am WELL AWARE aware of what the law is.

    But as you say, “Under state law, the employee must be allowed to pay for extending coverage for their child until the child turns 28.”

    So who is paying for what? Are we the taxpayers picking up the 85% of that extra premium to cover an adult employee’s offspring? I don’t see anything in the law requiring taxpayers to pick up this charge.

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