As the 2018-19 school year nears its finish, the Olentangy Local School District (OLSD) provided an update to its five-year forecast during Tuesday’s Board of Education meeting. Treasurer Emily Hatfield presented the update and discussed how the forecast has changed since it was last discussed in October.
Under the October forecast, the district projected an unreserved fund balance of $74,597,498 for the 2019 fiscal year, which would be sufficient enough to fund the district for 117 days. In 2020 and 2021, the unreserved fund balance would dip to $59,648,412 and $34,427,175, an 88- and 48-day operational balance, respectively.
By 2022, a negative balance of $598,379 is shown. The negative balance would drop to $47,153,780 in the 2023 fiscal year.
Last October, Hatfield said that while the district didn’t carry a formal cash balance policy, the informal policy is to “really take a hard look at when we start to have two to three months cash balance.” At the time of the October update, 2020 was identified as a possibility for the district to go to the ballot with a new levy.
In the updated forecast, 2019 shows a fund balance of $84,445,347, which could support the district for 133 days. Balances in 2020 and 2021 increased to $74,353,655 and $53,643,730, approximately 109 and 74 days of operating costs, respectively. In 2022, with a balance of $21,556,682, the district would have funds for only 28 days. A negative balance of $23,837,109 is shown for 2023, around 29 days in operating costs.
The district’s revenue will exceed its expenses by $1,541,879 is 2019, according to Hatfield’s report, thanks to an $8.4 million increase in expected revenue and a $1.5 million decrease in expenditures since the October forecast. Given the increases and savings, the total number of days the district would be able to operate with its cash balance in 2023 improved from a 58-day negative cash balance to a 29-day negative cash balance.
“This is a great thing for the district,” Hatfield said of adding 30 days of operating costs over the five years. “It shows that we continue to be fiscally responsible and that we’re able to manage that over the five-year period.”
Expenses will outweigh the money coming in significantly beginning in 2020. The report shows the difference to be in the red by $10,041,692 in 2020. By 2023, the negative difference increases to $45,343,791.
According to the district’s “informal policy,” Hatfield mentioned 2021 as a possible ballot year. The board discussed various factors that could impact the timing of a levy, such as the pros and cons of a 2020 levy during a presidential election, and managing the “ask” or size of the levy.
The increased growth OLSD continues to see will factor heavily in the five-year forecast as well. Based on current trends, OLSD is expected to add 59 additional Pre-K students, 1,079 elementary students, 255 middle school students, and 440 high school students by 2023. In total, the district is on pace to exceed 23,000 total students in 2023.
At the last meeting, Chief Academic Officer Jack Fette discussed the increasing need for additional classrooms to accommodate the growth, particularly at the elementary and middle school levels.
Of course, the elephant in the room is the current state of the proposed “Fair School Funding” bill in the Ohio House. Currently, state funding makes up 5 percent of OLSD’s revenue stream or approximately $500 per pupil. If the proposed bill is ultimately passed, that number would jump to nearly $1,000 per pupil in 2019-20, and then to over $1,400 in 2020-21.
“We are a locally funded district,” Hatfield said during her presentation. “We heavily rely on local property taxes. It’s frustrating when we think about the current funding model that is in place for school districts. It has been introduced as being unconstitutional, but the fix just keeps getting pushed back.”
Given the affluence of the district, OLSD has long been capped on how much state funding it receives, with the assumption being that a wealthy community can afford to fund schools without help from the state.
The next OLSD Board of Education meeting, which will include the second reading of the five-year forecast, will be Thursday, May 23, at the Olentangy Administrative Office located at 7840 Graphics Way in Lewis Center. Meetings begin at 6:30 p.m.
Reach Dillon Davis at 740-413-0904. Follow him on Twitter @ddavis_gazette.