FIVE YEAR FORECAST NOVEMBER 2019 FISCAL YEARS 2017 2019 ACTUAL - - PowerPoint PPT Presentation

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FIVE YEAR FORECAST NOVEMBER 2019 FISCAL YEARS 2017 2019 ACTUAL - - PowerPoint PPT Presentation

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Columbus City Schools FIVE YEAR FORECAST NOVEMBER 2019 FISCAL YEARS 2017 2019 ACTUAL FISCAL YEARS 2020 2024 FORECAST (FISCAL YEARS 2025 2027 PROJECTED) Treasurers Office Stanley J. Bahorek, Treasurer/CFO Michael McCammon,

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Columbus City Schools

FIVE YEAR FORECAST

NOVEMBER 2019

FISCAL YEARS 2017 – 2019 ACTUAL FISCAL YEARS 2020 – 2024 FORECAST

(FISCAL YEARS 2025 – 2027 PROJECTED)

FINANCE & APPROPRIATIONS COMMITTEE PRESENTATION, OCTOBER 9, 2019 BOARD OF EDUCATION PRESENTATION, NOVEMBER 6, 2019 BOARD OF EDUCATION ADOPTION, NOVEMBER 19, 2019

Treasurer’s Office Stanley J. Bahorek, Treasurer/CFO Michael McCammon, Controller Office of Budget & Financial Management Scott Gooding, Executive Director Board Services & Government Affairs Erik Roush, Ph.D., Supervisor, Policy And Government Affairs

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“Forecasting is very difficult, especially if it’s about the future.”

─ Niels Bohr, Nobel Prize-winning physicist

November 2019 Five Year Forecast

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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

November 2019 Five Year Forecast

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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.”

November 2019 Five Year Forecast

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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
  • f the forecast, such as state budgets …”
  • “…encourages district management teams to examine

future years’ projections and identify when challenges will arise.”

November 2019 Five Year Forecast

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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

November 2019 Five Year Forecast

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Our Forecast is …

  • A snapshot of what we know today coupled with a long list
  • f assumptions about the future

… and is subject to change.

November 2019 Five Year Forecast

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November 2019 Five Year Forecast

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Actual results for FY19

– +$10.5 million in revenue – +$31.8 million in expenditures – -$21.3 million in ending cash balance

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– Property Taxes

  • Changes to 1st half / 2nd half collection percentage
  • Revenue estimate moves from one fiscal year to the next
  • Overall unchanged during FY20 – FY23

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– State Aid

  • Previously assumed:

– Formula – Capped – +4% annual growth in cap

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– State Aid

  • For Nov Forecast:

– No Formula – Funding frozen at FY19 level (line N in SFPR) – “New Money” / Student Wellness and Success Funds (SWSF) »Distributed to a new fund (Fund 467) »Outside of the General Fund »Not reported within the forecast

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– State Aid

  • SWSF (Fund 467, not General Fund)

– $11.8 million in FY20 – $17.0 million in FY21

  • Assumed flat state funding for FY20 – FY24

– No new funding in General Fund reduced state aid in the forecast by $134 million (November compared to May for FY20 – FY23)

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– Property Tax Allocation (Rollback/Homestead Exemption)

  • Forecast revised upward based on history of actual vs. forecast
  • +$24 million FY20 – FY23

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Revenue Forecast – FY20 – FY23

– Other Revenues

  • Forecast for investment income and PILOTs revised upward
  • +$20 million FY20 – FY23

November 2019 Five Year Forecast

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Summary of Revenue Changes – May to Nov

$ millions

FISCAL YEAR 2019 2020 2021 2022 2023 FY20-FY23 TOTAL Property Taxes $0.005 ($3.900) ($2.200) $1.500 $3.900 ($0.700) ($0.695) State Aid 0.239 (11.600) (25.800) (40.700) (56.100) (134.200) (133.961) Property Tax Alloc. 0.166 5.512 5.704 6.152 6.502 23.870 24.035 All other Revenue 10.122 8.220 5.020 5.020 5.020 23.280 33.402 Total Revenue $10.531 ($1.768) ($17.276) ($28.028) ($40.678) ($87.750) ($77.219) November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Expenditure Forecast – FY20 – FY23

– +91.3 FTE

November 2019 Five Year Forecast

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Since May 2019 Forecast

May FYF Nov FYF 2020 2021 2022 Total 2020 2021 2022 Total Certificated

  • 117.50
  • 117.50

44.50 92.00 5.00 141.50 Classified

  • 42.00
  • 42.00

42.30 67.00

  • 109.30

Total

  • 159.50
  • 159.50

86.80 159.00 5.00 250.80 Difference 2020 2021 2022 Total Certificated 44.50 (25.50) 5.00 24.00 Classified 42.30 25.00

  • 67.30

Total 86.80 (0.50) 5.00 91.30 November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Expenditure Forecast – FY20 – FY23

– +91.3 FTE

– +3% assumed for base pay increases FY20-FY22, +1% FY23 – General Fund expenditures (personnel) reduced by SWSF funding

  • $11.8 million FY20
  • Additional $5.2 million FY 21 ($17 million)
  • $17 million/year thereafter
  • Total of $63 million

November 2019 Five Year Forecast

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Since May 2019 Forecast

  • Expenditure Forecast – FY20 – FY23

– Comm. Schools deduct reduced $10 million annually to better align with actual experience – No other changes in non-personnel projected expenditures

November 2019 Five Year Forecast

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Summary of Expenditure Changes – May to Nov

$ millions

FISCAL YEAR 2019 2020 2021 2022 2023 FY20-FY23 TOTAL Personnel ($0.895) $7.100 $11.600 $24.000 $25.200 $67.900 $67.005 Non-Personnel (1.309) (10.000) (10.000) (10.000) (10.000) (40.000) (41.309) Other Uses 34.007 34.007 Total $31.803 ($2.900) $1.600 $14.000 $15.200 $27.900 $59.703 November 2019 Five Year Forecast

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Impact of SWSF Funds

$ millions

FY20 FY21 FY22 FY23 Total Fund 467 "New" State Aid 11.80 17.00 ? ? General Fund Revenues Funding at FY19 level (11.60) (25.80) (40.70) (56.10) (134.20) Expenditures Assume Supplant to Fund 467 (11.80) (17.00) (17.00) (17.00) (62.80) Net Impact to Gen Fund Cash Bal. 0.20 (8.80) (23.70) (39.10) (71.40) November 2019 Five Year Forecast

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Summary of Impact on General Fund Ending Cash Balance

FISCAL YEAR 2019 2020 2021 2022 2023 FY20-FY23 TOTAL Revenues $10.531 ($1.768) ($17.276) ($28.028) ($40.678) ($87.750) ($77.219) Expenditures 31.803 (2.900) 1.600 14.000 15.200 27.900 59.703 ($21.273) $1.132 ($18.876) ($42.028) ($55.878) ($115.650) ($136.923) November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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Revenues

November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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Expenditures

November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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Ending Cash Balance

November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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November 2019 Five Year Forecast

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Early Warning Indicators

  • Expenditures begin to exceed Revenues in FY 2021

– Same in May FYF

  • Ending cash balance drops below 30-days cash FY2023

– 2 years earlier than in May FYF

  • FY24 First year with negative ending cash balance

– 3 years earlier than in May FYF

November 2019 Five Year Forecast

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Contributors to Decline Ending Cash Balance Since May 2019 Forecast

  • FY19 Actual Results
  • State Revenue

– No formula / No increase in General Fund – “New Funds” distributed to Fund 467

  • Personnel Increases

– FTE – Negotiated salary/wage increases

November 2019 Five Year Forecast

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Unknowns / Uncertainties

  • State Funding
  • Academic program changes
  • Operating Levy

November 2019 Five Year Forecast

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Columbus City Schools

FIVE YEAR FORECAST

NOVEMBER 2019

FISCAL YEARS 2017 – 2019 ACTUAL FISCAL YEARS 2020 – 2024 FORECAST

(FISCAL YEARS 2025 – 2027 PROJECTED)

FINANCE & APPROPRIATIONS COMMITTEE PRESENTATION, OCTOBER 9, 2019 BOARD OF EDUCATION PRESENTATION, NOVEMBER 6, 2019 BOARD OF EDUCATION ADOPTION, NOVEMBER 19, 2019

Treasurer’s Office Stanley J. Bahorek, Treasurer/CFO Michael McCammon, Controller Office of Budget & Financial Management Scott Gooding, Executive Director Board Services & Government Affairs Erik Roush, Ph.D., Supervisor, Policy And Government Affairs