The Ballard school board adjourned their November monthly meeting with plenty to be thankful for, following a positive review of the district’s finances from Gary Sinclair of Forecast5 Analytics.
Forecast5 Analytics is a data-driven software company based in Naperville, Ill., with regional offices in Iowa, Arkansas, Wisconsin and Minnesota. According to meeting notes released by the Ballard school board, “The Ballard District contracts with Forecast5 Analytics to drive financial projections. Forecast5 utilizes thousands of data points, including district line-item budgets and state-reported data, to provide the most sophisticated and accurate view of current and future financial information.”
Sinclair presented a 32-page report to the board, which highlighted revenues and expenditures for the last six fiscal years, and an overall assessment and projection of Ballard’s financial future through 2023. The report also included a fascinating study of how Ballard compares to 11 other districts of similar size, which included: Bondurant-Farrar, Carroll, Perry, Knoxville, Spencer, ADM, Fairfield, Grinnell-Newburg, Vinton-Shellsburg, Washington and Winterset.
Good financial standing
The Ballard district has come a long way since 2012-13, when it ended the year with a solvency ratio of negative 3.28 percent. The solvency ratio is a figure that represents how much revenue is left at the end of the year that’s available, and as a ratio of its ability to meet long-term debt. The higher the ratio, the stronger the institution’s financial stability. That figure has climbed steadily each of the last four fiscal years as depicted as follows:
Ballard’s Solvency Ratio 2012-2017:
2012-13: -3.28 percent
2013-14: +6.16 percent
2014-15: +15.10 percent
2015-16: +22.57 percent
2016-17: +24.16 percent
In an era of historically low state funding, the turnaround the Ballard district has made the last four years provides reason for excitement. “What you have done the last four years is remarkable,” stated Sinclair. He was quick to note, however, that while the amount of progress has been substantial, there is still cause for concern in the next five years.
The five-year projection, as outlined in the report, makes assumptions on revenue and expenditures based on local and state reports and trends. These trends and projections include figures like enrollment, salaries, state and federal funding, and tax rates.
A Snapshot of Future Projections (By Forecast5 Analytics):
Enrollment 2017: 1,602 2023: 1,572
Revenue 2017: $17,853,057 2023: $19,439,230
Expenses 2017: $17,407,087 2023: $20,051,546
According to the report (based on data assumptions), the aforementioned solvency ratio will steadily decline from 2019 through 2023, all the way down to 2.24 percent. “There is no degree of management and cost-saving strategy that can overcome inadequate state funding,” noted the school board. “Even districts as strongly positioned as Ballard will face a budget reduction scenario at some point in the absence of funding from the state.”
Sinclair noted that it’s important for school districts to analyze the data available to them and to “respond and make budget adjustments three years out.” He also noted, assuming state funding will stay at critically low levels, the biggest impact on school districts like Ballard is the necessary development of commercial and industrial areas in their communities.
One of the most difficult projections to make, according to both Sinclair and Superintendent Ottie Maxey, is the enrollment figure, which has important implications for revenue and expenditures. Ballard’s enrollment has increased from 1,520 students in 2013 to 1,602 students in 2017. Based on the current new-housing construction boom in the area, one would hypothesize a continued upward tick in enrollment. However, the current projections predict a decline in enrollment by 2023 to around 1,572 students. Maxey stated the reason for this is because the two sources they use to predict enrollment don’t take into consideration new home construction or economic development statistics.
Another challenge when it comes to predicting enrollment is the statewide trend of open enrollment. Ballard’s current open enrollment nets between 145-170 students per year and is projected to stay at similar levels through 2023. As a “Net Transfers” percentage of enrollment, the Ballard district ranks #2 compared to its peers at plus 6 percent. Adel Desoto-Minburn ranks first at a clip of nearly 8 percent. Comparatively, Knoxville and Perry lose around 4 percent of their student enrollment as transfers out on a yearly basis.
Other Peer Comparisons of Note:
1. Ethnicity: Of the 12 districts compared, Ballard ranks as the second-least ethnically diverse at 2.93 percent, just behind Adel Desoto-Minburn. Perry ranks as the most ethnically diverse, with a percentage of nearly 54 percent.
2. Teacher and staff ratio: Ballard’s student to FTE (full-time equivalent) teacher and staff ratio is 18.2, which ranks eighth out of the 12 comparable-sized districts surveyed. Vinton Shellsburg ranks #1 at 15.7, and Bondurant Farrar ranks 12th at 19.4
3. Salary and benefits spending: As a ratio of dollars spent per student, Ballard ranks 11th out of 12 in its peer group at around $7,000 per student. Perry ranks #1 at just over $9,000 per student, with Vinton-Shellsburg a close second.
4. Special Education enrollment: Ballard ranks last in its group of 12 peers, with just under 8 percent of its enrollment classified as special needs. Spencer ranks #1 in the group with a figure of nearly 18 percent.
5. Solvency ratio: As a conclusion, and representative of the success the Ballard School District has had in turning around its finances the last four years, Ballard’s current solvency ratio of 22.57 percent ranks third among its peers. Winterset leads the way with a solvency ratio of 25.15 percent, while ADM is second at 22.62 percent. Knoxville and Bondurant-Farrar are at the lower end of the peer group with solvency ratios in the 7 percent range.