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Superintendent Blog: West Clermont Words

Five-Year Forecast: Five Factors for Consideration

Five-Year Forecast: Five Factors for Consideration

by Daniel M. Romano, CFO & Treasurer
West Clermont Schools

Careful planning is required for long-term success. This is one of the reasons West Clermont Schools reviews and approves a five-year financial forecast every six months. Our most recent forecast, which was approved by the Board of Education last month, shows that we are on track with our previous projections.

However, if the last two years have taught us nothing else, it’s that life is unpredictable. As a result, we are keeping a close eye on five trends that could impact our expense budget long-term.

First, inflation is higher than it has been in 40 years. It was forecast to rise to 8.8% this year, up from 4.7% in 2021. I think it’s safe to say that everyone is feeling the effects of the added cost of food at the grocery checkout line, at the gas pumps, when making home improvements, and in their utility bills. The same is true for our schools, and only time will tell when this upward trend will stabilize.

Second, as we’ve shared with you in recent months through the State of the Schools and at Town Hall meetings, our projected enrollment is growing, increasing our operational costs and required facility upgrades. Our largest percentage increase in any subgroup has been students with special needs.

Third, workforce shortages are impacting every sector, including education. Related to this, our collective bargaining agreements expire in 2024. It was also just announced that the State Teachers Retirement Board is seeking legislation to increase the employer’s contribution rate.

Fourth, there is increased pressure on our general fund should any infrastructure emergency occur. Our Permanent Improvement Fund balance, which typically is our safety net for any emergency capital outlay, was substantially reduced with this summer’s purchase and installation of portable units at Merwin. Possible emergencies could include roofs, heating and air conditioning, and other building structures.

Fifth, there are essential instructional needs our students require for continued success in this ever-changing educational and societal landscape. Needs and supports such as additional counselors and specials for elementary students. We have been able to add or reintegrate these resources recently thanks to short-term funding sources, but our aim is to protect and keep these services to serve our students the best we can.

Our revenues in the short term are stable. The new state funding formula projects a funding level equal to fiscal year 2021. That equates to zero increase for our district moving forward.  Local property revenues are stable with a projected increase due to the upcoming property reappraisal in 2023. Any new revenue from this reappraisal will first begin in January 2024.

Uncertainty can be frightening, but here at West Clermont, we are looking to the positive side of our balance sheet. With these challenges also come opportunities, and we’re looking forward to continuing conversations with our community to ensure we are prioritizing our resources to remain a district that’s on the RISE.

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