District Five Year Forecast

Lakota Balances Budget for 10th Consecutive Year
Posted on 11/30/2021
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Woman in suit with blond curly hairMembers of the Lakota Board of Education approved the district’s most recent five-year forecast by a vote of 4-1 at last night’s meeting, with board member Lynda O’Connor voting no. Jenni Logan, Lakota’s treasurer/CFO, presented the forecast, which is updated each November and May as required by the State.

 

A strong positive cash balance is forecasted through the five-year period. Logan also praised the district for a decade of balanced budgets, which has enabled Lakota to build up very strong cash reserves. While Lakota’s budget stabilization policy sets a minimum ninety day cash balance, the forecast predicts the amount will exceed seven months at the end of the current year, more than double the minimum set in policy.  Although a spending deficit appears in FY24, the cash balance remains healthy at the end of the forecasted period, with nearly six months cash balance available. The balance in this “rainy day” fund exceeds $7 million dollars. Logan believes these are examples of the district living up to the WE are Fiscally Responsible pillar of its strategic plan.  

 

“With Lakota’s cash reserves at an all-time high, I do not predict the need for an operational levy as a result of this forecast,” Logan said. “Our cash reserves, combined with strategic prioritization will help us align our resources to meet the needs of our 17,000 students.” The district has not been on the ballot since 2013 and has had a balanced budget for the past 10 years.

 

In the forecast, which is available on BoardDocs and will be posted on the district finances webpage, Logan notes, “This five-year forecast is being filed during the ongoing global health and financial recovery from the COVID-19 pandemic which began in early 2020.” While many districts throughout Ohio began the 2020-2021 school year remotely, Lakota returned in-person with a virtual option.

 

“The State of Ohio’s economy has steadily recovered over the past year, thus the full restoration of the original school foundation funding cuts from May 2020 are in our rearview mirror and a new funding formula, the Fair School Funding Model gives us hope for a much better future,” Logan continued. “While increased inflation impacting district costs are expected to continue over the next few years, the economy is also expected to continue to grow as the recovery from the pandemic continues.”

 

Lakota, like all school districts, has received federal assistance through three rounds of the Elementary and Secondary Schools Emergency Relief Funds (ESSER). ESSER III can be used through FY25. In addition to ESSER, the District’s forecast states that the “restored state budget cuts will assist our district in providing vital services to our students.”

 

Logan explained to the Board that the information contained in the forecast is based on the most reliable information that is available at this time. In addition to the State’s continued recovery from the pandemic, two biennium budgets for the State of Ohio will occur during FY24-25 and FY26-27.

 

The current issues facing the district include:


  1. At 67%, the largest revenue source for Lakota are property tax collections. With a stable housing market in West Chester and Liberty townships, continued growth in appraised values is expected every three years. Additionally, new construction continues to impact revenues with modest increases to local taxes.
  2. The full reappraisal during the 2020 tax year by Butler County increased overall residential assessed values by 13.33%. A triennial update will occur during tax year 2023. Logan and her team anticipate a 4.27% overall increase in residential and commercial value.
  3. Thirty-three percent of district revenues come from the State. Risk comes in FY24 and beyond if the state economy does not continue to grow, resulting in the Fair School Funding Plan (FSFP) to not be funded in future state budgets, or if there is a reduction in state aid.
  4. The release of the new FSFP will not be available from the State until December, which is after the filing deadline for Lakota’s five-year forecast. Logan noted, “Our state aid projections have been based on the best information on the new HB110 (FSFP) formula as calculated by the Ohio Department of Education.”
  5. Costs associated with open enrollment, community and STEM schools, as well as EDChoice scholarships, will no longer be deducted from state aid the district receives, per the new FSFP. However, programs such as College Credit Plus will continue to be deducted from state aid, increasing costs to the district.
  6. Both labor union contracts continue through June 30, 2024.

 

Logan also addressed recent questions related to transparency during her presentation. “Our finances are available on our website and are shared with the community in many different ways,” Logan said, referring to documents such as the Financial Prospectus, community mailers, Comprehensive Annual Financial Report and financial audit, among many other resources. The district also released a short video outlining how school finances work in August. “If any member of the community has questions about Lakota’s financing, I encourage them to reach out to me. I am always happy to answer any questions.”