May 2019 FYF / BOE presentation 5-8-19 5/7/2019 Columbus City Schools FIVE YEAR FORECAST MAY 2019 UPDATE FISCAL YEARS 2016 – 2018 ACTUAL FISCAL YEARS 2019 – 2023 FORECAST (FISCAL YEARS 2024 – 2026 PROJECTED) Treasurer’s Office Stanley J. Bahorek, Treasurer/CFO Michael McCammon, Controller Office of Budget & Financial Management Scott Gooding, Executive Director FINANCE & APPROPRIATIONS COMMITTEE PRESENTATION, APRIL 11, 2019 Board Services & Government Affairs BOARD OF EDUCATION PRESENTATION, MAY 8, 2019 Erik Roush, Ph.D., Supervisor, Policy And BOARD OF EDUCATION ADOPTION, MAY 21, 2019 Government Affairs “Forecasting is very difficult, especially if it’s about the future.” ─ Niels Bohr, Nobel Prize-winning physicist 1
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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.” 2
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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 3
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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 4
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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 5
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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 6
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 Revenues 7
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May 2019 FYF / BOE presentation 5-8-19 5/7/2019 Expenditures 12
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May 2019 FYF / BOE presentation 5-8-19 5/7/2019 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 18
May 2019 FYF / BOE presentation 5-8-19 5/7/2019 Unknowns / Uncertainties • Dominion-North-Brookhaven costs • State Budget and a possible new school funding formula • Collective Bargaining • Academic program changes 19
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