A Look at Lakota's Five-Year Forecast

A Look at Lakota's Five-Year Forecast
Posted on 12/10/2019
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This article by Lakota's Treasurer/CFO Jenni Logan appeared in the Dec. 8, 2019 issue of Today's Pulse.

At the Nov. 18 school board meeting, I presented the five-year forecast for Lakota Local Schools which looks ahead through fiscal year (FY) 2024. The forecast documents the prior three years’ financial performance, as well as a five year projection. We use the forecast for long-range planning and as a management tool with regards to how we do business.

Lakota continues to be in sound financial shape. We have operated with a balanced budget for seven consecutive years and project that to continue for an additional three years. This has allowed our cash balance to grow. Our projected cash balance at the end of this year is over 7 months. The effective millage, or what we collect from our taxpayers, has returned to pre-levy 2013 numbers. 

As you look at your individual tax bill, any increase you may have seen is a direct result of an increase in your property value or a levy from another entity. The percentage attributed to the school district from your tax bill has not increased. In fact, as your home and property values increase, the millage rate is reduced for our taxpayers so that Lakota Local Schools effectively collects the same amount. 

Finances for a public school district is a very complex topic and one that I take very seriously as the treasurer/CFO for Lakota Local Schools. The five-year forecast is a snapshot financial report that is based on information we have today, meaning, as assumptions change so does our forecast. This is why the State requires it to be updated twice a year, in November and May.

Thirty-three percent of Lakota’s operating budget is state-funded. This accounts for the district’s second largest revenue source and it has flat-lined, meaning the amount we received this year is the same as last year. The State further supports programs such as mental health and social/emotional wellness. These funds are earmarked and may not be used for general operating expenses.

With the base forecast, we are projecting a balanced budget for the 10 year period of 2013-2022. FY 2023 does project a spending deficit.

The five-year forecast, approved by our Board of Education members, includes the base forecast plus transportation projections for our freshman students. This additional expense results in a $1.3 million deficit in FY 2022. Through the board’s direction, our superintendent and I have been instructed to reallocate funds to alleviate this deficit. The reallocation will balance the FY 2022 budget, keeping the spending deficit to year four of the forecast. 

A projected spending deficit in our operating budget does not mean that we will ask our taxpayers to approve an operating levy in the near future. A spending deficit indicates that we will need to dip into our cash reserves to offset the district’s expenditures. The fact that it appears in year four gives us time to plan - to evaluate our expenditures and projected revenue and determine what we need to do in order to return to a balanced budget.

We must continue to have conversations about our finances. We must continue to engage with our community, which is why we have community members on our finance committee and why we recently held a community conversation on this topic. 

I believe that there is more common ground than most people realize when it comes to the beliefs about Lakota’s finances. If you have questions, I encourage you to reach out to me. I would be happy to have a conversation with you.

Jenni L. Logan is the treasurer/CFO for Lakota Local Schools. Follow her on Twitter @LakotaCFO.