State Official Says District's Financial Forecast is 'Reasonable'
An Ohio Department of Education financial adviser presented his findings after an audit of Twinsburg's five-year forecast
It seems the state finds no problems with the Twinsburg Schools' financial predictions.
Robert Foss, a fiscal consultant for the Ohio Department of Education, presented his findings Wednesday of an audit conducted back in April. Foss said he agreed the numbers are conservative, but there are no issues.
“I did find that it appeared reasonable, based on my financial opinion at the time,” Foss said.
In his analysis, he found that the district's revenues were decreasing each year, while its expenses keep increasing, trends Treasurer Martin Aho has been predicting in his five-year forecasts.
While these trends are true, Foss said his earlier calculations have been off. He was using the October 2011 forecast in his audit and did not take into account many of the cuts made last spring.
Foss said district made “considerable progress” in reduction of Fiscal Year 2012 costs. Payroll expenses were $1.6 million less than forecasted ($27.2 million) and benefits were $1 million less than forecasted.
He originally forecasted $38.7 million in FY12 revenue, however the actual was $38.4 million.
“The revenue has been flat or reduced when compared to historical averages,” Foss said.
The biggest difference was in costs.
Foss said the district’s expenses would be would be $43.1 million in FY12, but, the actual expenses came out to $40 million. That's $3 million less than Foss' April predictions and $1.5 million less than Aho's June prediction.
But the big issue is how these numbers affect the district's bottom line: The cash reserves.
As of June 30, the cash reserve balance was around $25 million. In Aho's last forecast, the balance was going to be more than $23 million.
Foss said the amount paid in wages was lower than was originally predicted, because of reductions in 2012 and moving forward.
While Foss didn't take the recent operational changes into account in his forecast, he did crunch some numbers regarding the district's upcoming levy. The 4.9 mill levy would cost the owner of a $100,000 home $150.06 annually. That would generate $3.8 million for the district each year.
His data showed that if the Nov. 6 levy doesn’t pass, the district will only have $1.3 million at June 30, 2015. If it passes, the district will have $1.8M as of June 30, 2016.
“To prepare in advance in that time is that the district needs to look at what they can do to be efficient,” Foss said.
The district must find new money, cut costs, or both, “to ensure adequate financial resources in the future,” according to Foss’ presentation.