District finances are balanced and stable
At their May 2019 meeting, the Board of Education approved the district’s Five Year Forecast. The 5-year forecast shows the District has a balanced budget. The forecast also shows that the district is projected to be in deficit spending beginning fiscal year 2021.
Deficit spending means that the district’s expenditures will exceed the district’s revenues in a given fiscal year. During deficit spending, it is important that districts have a sufficient cash balance to offset the deficit. Through careful fiscal practices, the District has been able to avoid deficit spending and have been able to increase its cash balance.
The District projects that it will have the necessary cash balance to offset the spending deficit for several years. This surplus cash balance will allow the district to continue its operations and the budget will remain balanced.
The last time the District asked for an operating levy was in 2013. With the passage of the levy, the District promised that the funding would sustain operations for three years. Through careful stewardship of taxpayer funds the District has been able to make that 2013 levy last six years, and it is projected to last at least two or three years more.
There is a common misunderstanding between “deficit spending” and “deficit cash balance.” If a budgeted forecast projects a “deficit cash balance” that means there is not enough funding available to cover expenses. If a school district is projected to have a deficit cash balance, then that district may be placed in “Fiscal Caution” status by the Ohio Department of Education. That is not the case in Milford because we do not project to have a deficit cash balance.
Milford will not be placed under “Fiscal Caution” by the state. As explained above, Milford is projected to begin deficit spending in fiscal year 2021 but has enough cash balance to offset the deficit spending. The May 2019 Five-Year Forecast shows a $33 million cash balance at the end of fiscal year 2023.
