FHSD Releases Annual Five-Year Forecast Financial Report

Forest Hills School District Treasurer Alana Cropper presented the annual Five-Year Forecast Financial Report to the Board of Education at the November 2024 meeting. Each November, Treasurer Cropper presents a five-year forecast that serves as a planning document to assist with fiscal management and accountability by showing historical and projected revenue and expenses.

This document provides estimated financial projections and will adjust over time to reflect changing factors that impact the district’s finances. For example, an updated version of the five-year forecast is released each May to include additional data that becomes available throughout the school year. Any changes or adjustments at the state level in regards to school funding can rapidly change projections in the forecast between updates.

You can view Treasurer Cropper’s slideshow presentation here, view the full Five-Year Forecast Financial Report here and watch the presentation during the Board Meeting here.

The forecast analyzes the district’s General Fund, which is used to pay for staff salaries and benefits, purchased services from outside contractors and supplies and materials that support classroom education. The General Fund accounts for approximately 83% of the school district’s total budget and supports the majority of the day-to-day operations for FHSD. Other funds include permanent improvement, food service, bond retirement and more.

Calendar year 2024 marks the first period of collections for the combination levy that voters approved in May 2023. Tax revenue that has already been collected this year is accounted for in the November 2024 forecast, as well as anticipated future revenue from the levy. The total annual amount of tax revenue will remain the same year-over-year, regardless of any potential changes in home values in the school district. Revenues from the most recent operating levy will go into the General Fund to support existing academic programs and other operations of the school district.

Based on projections in the forecast, the General Fund is expected to see its cash balance increase over the short-term. However, costs are also expected to continue to rise due to factors outside the district’s control. Inflationary increases in the cost of items like food, fuel, energy and more continue to impact the district’s financial bottom line. General Fund expenditures could exceed revenues as early as fiscal year 2027.

The five-year forecast is simply the district’s best estimation as to what will happen in the future. Many variables that affect the five-year forecast are currently unknown and out of the district’s control (i.e. state funding, inflation and others) and the forecast will be updated as those unknowns become known. Despite those challenges, Forest Hills School District remains committed to responsible fiscal planning and anticipates being able to stretch the funds from the most recent levy beyond the promised timeframe of three years.

The new Five-Year Forecast Financial Report provided information about how the current forecast differs from the most recent report. Expenditures under the current report are only 0.4% higher than previously expected, while revenues are currently projected to be 1.3% higher than what was detailed in the last forecast. As explained above, these changes reflect the new information and data that is being taken into account over time.

Treasurer Cropper also presented information about where the district’s funding comes from and how that is changing over time. Currently, nearly 73% of General Fund revenues come directly from local taxpayers. State funding accounts for about 25% of the General Fund revenues. As recently as 2019, the local share was approximately 64% and the state share was about 32%. As state funding struggles to keep pace, the local community is forced to shoulder more of the burden.

In terms of General Fund spending, salaries and benefits account for approximately 84% of total expenditures, which is on par with similar school districts. Nevertheless, district leaders continually search for ways to operate more efficiently while still delivering an extremely high-quality education to students in the community. By regularly reducing staffing costs through attrition and other cost-saving measures, FHSD is working to meet its obligation to taxpayers to be strong stewards of public dollars.