Five-year forecast looking solid for Milford Schools

As the district’s 2014-15 fiscal year heads to a close, our budget is looking very solid. We are projecting a 3% savings vs. budget, as well as a $25 million balance in the General Fund. Last year, we invested $5 million cash, which did so well, we have added an addition $5 million to that investment fund.

The approximately $3.6 million additional in the General Fund at the end of this year is due to a combination of unexpected revenue and lower expenses. Because it is an unexpected amount, it is an easy way to cover some of the overages in building costs we are seeing. Treasurer Debbie Caudle recommended we move $4 million into the building fund to cover construction overages. If we do not use the full $4 million, the balance can be returned to the General Fund. The board approved this suggestion.

Our goal is to keep at least a 3-month carryover in the bank at all times. This equates to $16-18 million over the next 5 years. According to our most recent 5-year forecast, we will spend less than we take in for the next two years; then, we will move into deficit spending mode.

This forecast only includes money we know is coming from the state. Depending on what happens with the Governor’s school funding plans, our income could increase. As soon as we have confirmation of what we will be receiving, we will adjust the forecast. However, even without any additional revenue, our 2013 levy will last at least until 2019, a total of six years. The levy was expected to last three years, and the board and administration promised it would last four. Stretching it to six extends that promise by 50%.

Here is the presentation Mrs. Caudle presented at the 5/21/15 meeting.

Note: school districts need levies on a regular basis because the vast majority of levy funds are not subject to inflationary growth. This is due to the way school funding is structured in Ohio. For instance, if a levy generates $1 million when it is passed, that is all the district is permitted to collect for that levy. Even if property values go up, the district still receives just $1 million off that levy. Even if inflation is 2% a year, the district will not receive $1.02 million the following year, and $1.04 million the next year, etc. Instead, the collected amount is static at $1 million.

However, just like in any business, school district expenses increase every year. We have increases in things like health care, transportation, supplies, etc. In addition, we have increases in personnel costs – our largest portion of the budget. New levies are the only way to address the increases we see in our annual expenses.

Advertisements

One thought on “Five-year forecast looking solid for Milford Schools

  1. Pingback: Highlights from 5/21/14 school board meeting | Andrea Brady's Blog

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s