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Columbus City Schools
FIVE YEAR FORECASTMAY 2019 UPDATE
FISCAL YEARS 2016 – 2018 ACTUALFISCAL YEARS 2019 – 2023 FORECAST(FISCAL YEARS 2024 – 2026 PROJECTED)
FINANCE & APPROPRIATIONS COMMITTEE PRESENTATION, APRIL 11, 2019BOARD OF EDUCATION PRESENTATION, MAY 8, 2019
BOARD OF EDUCATION ADOPTION, MAY 21, 2019
Treasurer’s OfficeStanley J. Bahorek, Treasurer/CFOMichael McCammon, Controller
Office of Budget & Financial ManagementScott Gooding, Executive Director
Board Services & Government AffairsErik Roush, Ph.D., Supervisor, Policy And
Government Affairs
“Forecasting is very difficult, especially if it’s about the future.”
─ Niels Bohr, Nobel Prize-winning physicist
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Legal Requirement
• O.R.C. §5705.391 and O.A.C. 3301-92-04
• Adopt prior to November 30 of each fiscal year
• Update between April 1 and May 31 of each fiscal year
• Update when events take place that will significantly change the forecast
How to read a Five-Year Forecast(Source: Ohio Department of Education)
• “A forecast is somewhat like a painting of the future based upon a snapshot of today.”
• “…the further into the future the forecast extends, the more likely it is that the projections will deviate from actual experience.”
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How to read a Five-Year Forecast(Source: Ohio Department of Education)
• “A variety of events will ultimately impact the latter years of the forecast, such as state budgets …”
• “…encourages district management teams to examine future years’ projections and identify when challenges will arise.”
Forecasting Environment
• Numerous variables which are difficult to predict
• Exogenous variables over which CCS has little to no control
• Uncertainties of the future contribute to actual experience being different than projected
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Our Forecast is …
• Our roadmap of the future based on our best snapshot of today based on a certain set of assumptions
… and is subject to change.
May 2019 Update to the Five Year Forecast
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Since May 2018 Forecast
• Actual results for FY18
• Revenue– State Aid: Capped, +4% annually
– Very favorable Other Local Revenues for FY19
• Expenditures– Personnel running under plan
– Non-personnel running under budget
Since May 2018 Forecast
• Adjusting May 2019 FYF to reflect positive results – which carry forward into future years
• Removing a portion of the “conservative nature” of our forecasting
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Changes May ‘18 FYF to May ‘19 FYF
• +7.4 million actual FY18 ending cash balance
• +98 million increased revenue estimates over 5 years– ~$20 million/year, ~2% of total annual revenues
• +101 million decreased expenditure estimates over 5 years – ~$20 million/year, ~2% of annual expenditures
• $207 million improvement in 2022 ending cash balance
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Revenues
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Expenditures
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Early Warning Indicators
• Expenditures begin to exceed Revenues in FY 2021
• FY2023 projected ending cash balance = $173 million = 60 days operating cash
• Ending cash balance drops below 30-days cash FY2025– A November 2020 operating levy would be intended to fund 4 fiscal
years, FY2022 - FY2025
• FY2027 ending cash balance will be negative
NOVEMBER 2016 LEVY FUNDING NOVEMBER 2020 LEVY FUNDING
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Unknowns / Uncertainties
• Dominion-North-Brookhaven costs
• State Budget and a possible new school funding formula
• Collective Bargaining
• Academic program changes