VIDEO INCLUDED: A Forecast of our Financial Future

A Forecast of our Financial Future
Posted on 10/18/2018
Mick Davis presenting five year forecast October 2018.

At the Indian Hill Board of Education Meeting Tuesday, October 9, I presented the District’s five-year financial forecast. Approved that evening by the Board, the forecast is a tool that aligns our income and expenses to our District’s current and future goals with respect to academics, operations, and facilities; it is an important planning tool for us and it is required by the Ohio Department of Education.

Communicating with you about our District’s financial health is important for our schools. Within the forecast there are several important items of note and we continue to keep a careful watch on those. 

First, within the forecast, we are seeing continued near-flat revenue growth (less than one percent per year, within the forecasted timeline). Less than one percent per year is well below the rate of inflation mark. This is important because it means that our revenues are not keeping pace with inflation, all the while expenses that we have keep pace or outpace inflation. We are continuing to monitor this as it does cause concern for us into the future.

As another important revenue stressor, Indian Hill receives minimal state education funding – in fact, just a little more than four percent of our revenue is from this source, and we do not anticipate that ever increasing. The majority of our revenue comes from property tax – around 90 percent. Many of our residents may not realize our last operating levy was passed 25 years ago, and it was not renewed by the Board of Education in 1998. During these 25 years, our schools have had to absorb funding cuts, changes in tax laws, and inflationary cost increases. This strains our District’s ability to maintain current educational services, facilities, and learning opportunities that are key to the mission of our District. We continue to operate from levies passed in the 1980s and earlier with a near-zero inflationary increase. The Indian Hill Exempted Village School District has the lowest tax rate in Hamilton County.

Second, in addition to inflationary increases on the expenditure side, our District is absorbing more needed capital improvement projects that come with aging facilities and systems at some of our older buildings like Indian Hill Middle School. Right now, at the Middle School alone, we are spending approximately $150,000 each year to fix leaks to the near three football fields of flat roofing. More needs exist at the school including serious structural issues. In fact, that is in part why we recently launched an extensive, community-based facilities committee.  

Finally, within the forecast, it is evident that the District did a great job managing the last bond issue and has structured the refinancing of bonds to achieve taxpayer savings of $8.5 million. That savings for residents comes in the form of reduced millage paid toward the bonds. In addition, a significant share of what residents pay on this bond expire at the end of 2018 – reducing the bond debt by more than half of the current 3.24 mills.

I will continue to provide you timely updates. I thank you for your continued support of the excellent educational services we provide within the Indian Hill School District. Should you have any questions about our District’s finances, please contact me directly.

Mick Davis
Indian Hill Exempted Village School District

Please see the District-produced video of Mr. Davis presenting the financial forecast: