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

Columbus City Schools FIVE YEAR FORECAST NOVEMBER 2019 FISCAL YEARS 2017 – 2019 ACTUAL FISCAL YEARS 2020 – 2024 FORECAST (FISCAL YEARS 2025 – 2027 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, OCTOBER 9, 2019 Board Services & Government Affairs BOARD OF EDUCATION PRESENTATION, NOVEMBER 6, 2019 Erik Roush, Ph.D., Supervisor, Policy And BOARD OF EDUCATION ADOPTION, NOVEMBER 19, 2019 Government Affairs

“Forecasting is very difficult, especially if it’s about the future.” ─ Niels Bohr, Nobel Prize-winning physicist November 2019 Five Year Forecast

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

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

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.” November 2019 Five Year Forecast

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

Our Forecast is … • A snapshot of what we know today coupled with a long list of assumptions about the future … and is subject to change . November 2019 Five Year Forecast

November 2019 Five Year Forecast November 2019 Five Year Forecast

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

Since May 2019 Forecast • Revenue Forecast – FY20 – FY23 – Property Taxes • Changes to 1 st half / 2 nd half collection percentage • Revenue estimate moves from one fiscal year to the next • Overall unchanged during FY20 – FY23 November 2019 Five Year Forecast

Since May 2019 Forecast • Revenue Forecast – FY20 – FY23 – State Aid • Previously assumed: – Formula – Capped – +4% annual growth in cap November 2019 Five Year Forecast

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

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

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

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

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

Since May 2019 Forecast • Expenditure Forecast – FY20 – FY23 – +91.3 FTE November 2019 Five Year Forecast

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

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

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

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 0 0 0 0 0 34.007 Total $31.803 ($2.900) $1.600 $14.000 $15.200 $27.900 $59.703 November 2019 Five Year Forecast

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

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

November 2019 Five Year Forecast

Revenues November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

Expenditures November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

Ending Cash Balance November 2019 Five Year Forecast

November 2019 Five Year Forecast

November 2019 Five Year Forecast

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

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

Unknowns / Uncertainties • State Funding • Academic program changes • Operating Levy November 2019 Five Year Forecast