Elida Local SchoolsFinancial Summit II

Report to StakeholdersFiscal Year 2006-2007

Joel L. Parker,CPA

Summit Team

Lynn Metzger, Metzger Financial Services Bruce Opperman, WLIO Phillip Morton, Elida Visionaries Matt Huffman, State Representative Mike Estes, Village of Elida Dennis Swick, Mayor of Elida Paul Basinger, Township Trustee Pat Schymanski, Elida Visionaries Peter Kesler, Ohio Foam Corporation Cliff Barber, General Dynamics David Anderson, The State Bank Max Stover, First Federal Bank Steve Boroff, Superior Federal Credit Union Steve Romey, Attorney Beth Jokinen, The Lima News Mike Ford, Delphos Herald Sally Ulrich, Elida Board Member Brenda Stocker, Elida Board Vice President Don Diglia, Elida Superintendent Joel Parker, Elida Treasurer Faith Cummings, Elida NCLB Director Jo Ellen Miller, Elida Information Director

Goals

Review data on high school bond issue Review the financial condition of Elida Local

Schools Expand the knowledge base on school funding

issues Review data for future financial planning Exchange ideas on “best practices” Encourage dialogue on future economic trends Have summit representative report to the

Board of Education on current condition

THERE IS NO BUSINESS LIKE PUBLIC SCHOOL BUSINESS

Ohio Revised Code No Child Left Behind Unfunded mandates DeRolph case Collective Bargaining Tax structure

State BudgetLevies/Bond IssuesPhantom RevenueVotersRaw product - 100% acceptedEmotional Issues

TYPES OF LEVIES

BOND LEVY – Used to finance permanent improvements, new construction or renovation (Per ORC-MAY NOT BE USED FOR OPERATIONS)

PERMANENT IMPROVEMENT LEVY- Used for repairs/fixed assets with a useful life of 5 years (can be limited or continuing) and can be renewed or replaced

TYPES OF LEVIES

OPERATING LEVY-Used for current operations (can be limited or continuing) can be renewed or replaced

EMERGENCY LEVY-Used for operations (limited to 5 years and generates a set amount) can be renewed but not replaced

RENEW=same effective rate

REPLACE=original millage

ELIDA BUILDING PROJECT Elida High School $39,750,000

6.46 Bond Issue and 1 mill PI Levy(38,250,000 Bonds + 1,500,000

Interest)

OSFC Ranking

Year Rank State Share 2006 386 36% 2007 393 35% 2008 399 34%

Building Project History Plan

Fall 2006 Spring 2007 Spring 2008 ReducedHigh School 36,000,000 36,000,000 35,600,000 400,000

Construction Inflation 2,670,000

Middle School Addition 4,500,000 4,500,000 - 4,500,000

Demolition and Abatement 2,300,000 1,900,000 1,480,000 820,000

Stadium Building 1,600,000 - - 1,600,000

Total Cost 44,400,000 42,400,000 39,750,000 7,320,000 16% Decrease

Bond Issue 41,000,000 39,525,000 38,250,000

Bond Millage 7.7 6.8 6.46 1.24 16% DecreasePI Millage 0.5 0.5 1.00 (5 years)

Total Mills 8.20 7.30 7.46

WHY NOW? Close one 90+ year old building Take advantage of current construction costs Improve air quality and handicap accessibility Expand community partnerships Protect local and community real estate

values Better investment of tax-payer money Great interest rate 4.25%-4.50% Hungry contractors(good time to bid) Excellent strategic planning The need goes back to 1969---The Right Plan

The Right Time!

Benefits to Community Protect property values Provide “Center Piece” for the

community Attract new families Retain old families Provide safe, healthy learning

environment Loss to open enrollment $834,000 Loss to community schools $506,000

Get The Message Out! Answer Every Question!

Newsletters Web Site Door to Door Town meeting Mailings to voters TV and radio shows Signs TV ads Newspaper ads Notes from teachers

Inflation Defined

1969 New High School $2,150,000 2006 New High School $37,000,000 2007 New High School $39,750,000 1997 - $92 per square foot 2007 - $211 per square foot (Review Trend Data)

Interest Savingson $40 Million New High School

7.0% - 28 years $51,000,000 4.5% - 28 years $30,422,000 A Great Time to Borrow!

Legislative Concerns/History HB 920 Tax Reduction Factor HB 152 Phantom Revenue Budget Reduction Order HB 95 Inventory Tax Phase Out HB 282 Favored Charter Schools HB 412 Mandated spending on

repairs/educational supplies SB 55 Increase in testing requirements NCLB Increase in testing 2008 State Budget Cuts

HOW MANY CLIENTS?

Students Tax payers Boosters Parents Business partners Local officials

WHO ARE WE?

Students – 2,458 Teachers- 145 Nurse –1 Guidance – 4 Professionals –

16 Secretaries – 16 Aides – 14

Maintenance – 2Custodial – 13.5Food Service – 25Bus Drivers – 31Asst Tech Co-1 Total 268.54 Buildings 81 square miles

Average Teacher Experience EHS – 19.1 years EMS – 17.0 years EES – 16.9 years EEK – 7.6 years

PERFORMANCE INDICATORS Carry-over Margin 1-5% Strength of Carry-over - 60 day 80% Rule on Salaries and Benefits Debt to Total Assets Residential Tax Rate Per Pupil Spending (vs. other

schools) ADM Per Pupil Spending

AUDIT LIST

Annual Financial Audit by Auditor of State

ADM Audit by ODE(every 5 years) Staffing Audit by ODE(5 years ago) Curriculum Review by ODE Annual Facility Inspection (Jared’s

Law)

60 DAY CASH BALANCE ALMOST A REALITY

Cash Graph

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Month

Gen

era

l F

un

d C

ash

1999200020012002200320042005200620072008

68 Day Cash Balance!

June 30 Carry-Over *Gaining Strength*

1999 $ 936,422 21 days 2000 $1,048,819 23 days 2001 $ 758,675 17 days 2002 $ 821,146 18 days 2003 $ 360,933 8

days 2004 $ 967,429 21 days 2005 $1,865,900 39 days 2006 $2,645,703 53 days 2007 $3,496,376 68 days

WHAT CHANGED? Staff cuts Administrative cuts $239,155 Administrative Wages-0% increase 2

yrs Streamlined food service Moved staff to PPO insurance plan Moved to pay to participate Passed a levy in 2005 to bring back

specific programs Reduce bus fuel consumption Savings on Retire/Rehire Sharing on health premiums

General Fund

Revenue Chart FYD as of June 30, 2007

42%

6%

39%

0%

6%

7%

Real Estate

PersonalPropertyFoundation

Restricted Aid

Homestead/Roll

Other

General Fund Expenditures

Expense Chart FYD as of June 30, 2007

54%

18%

20%

4%

2%

0%

0%

2%

Salaries

Retire/Ins

PurchasedServiceSupplies

Capital Outlay

Debt-Prin.

Debt-Int.

Other

Elida Transportation Data

0

100000

200000

300000

400000

500000

Fiscal Year

Am

ount

Expended

Gallons

Miles

Fiscal Year 2001 2002 2003 2004 2005 2006 2007

Expended 86,985 61,233 70,591 66,988 92,372 144,618 127,159

Gallons 83,123 67,209 63,354 60,504 57,217 62,220 64,631

Miles 428,886 440,673 415,682 376,971 372,549 402,349 398,107

1 2 3 4 5 6 7

FOOD SERVICEFiscal Year 2000 2001 2002 2003 2004 2005 2006 2007

Revenue Federal 243,346 234,529 223,494 278,530 243,644 239,122 320,161 279,240 State 10,072 10,092 10,756 10,706 12,630 13,207 11,028 10,954 Local 594,211 576,010 561,344 575,917 586,843 513,334 575,959 571,476

Total 847,629 820,631 795,594 865,153 843,117 765,663 907,148 861,670

ExpensesSalaries 325,736 332,741 345,760 353,996 350,154 276,396 283,380 313,751 Fringes 134,816 156,892 198,125 211,198 245,929 181,288 153,651 179,800 Purchased Service 9,128 8,421 5,285 5,011 4,507 7,022 11,485 13,657 Supplies 339,680 338,004 327,304 314,984 292,572 279,624 307,740 342,635 Equipment 9,333 12,348 20,709 - - 16,241 - -

Total 818,693 848,406 897,183 885,189 893,162 760,571 756,256 849,843

Net Gain/(Loss) 28,936 (27,775) (101,589) (20,036) (50,045) 5,092 150,892 11,827

Plus Advances - - - 48,636 40,000 54,000 - - Plus Beginning Bal. 111,602 140,538 112,763 11,174 39,774 29,726 88,818 239,711

Ending Balance 140,538 112,763 11,174 39,774 29,729 88,818 239,710 251,538

5 Year Forecast

Fiscal Year Fiscal Year Fiscal Year 2005 2006 2007

Revenues1.010 General Property Tax (Real Estate) $6,852,071 $7,354,275 $8,177,2241.020 Tangible Personal Property Tax 1,497,346 1,531,472 1,230,3461.030 Income Tax1.035 Unrestricted Grants-in-Aid 7,502,306 7,434,281 7,567,0281.040 Restricted Grants-in-Aid 64,011 126,781 80,3801.050 Property Tax Allocation 895,012 913,801 1,186,8531.060 All Other Revenues 1,129,184 1,191,073 1,327,283

1.070 Total Revenues 17,939,930 18,551,683 19,569,114

Other Financing Sources2.010 Proceeds from Sale of Notes2.020 State Emergency Loans and Advancements (Approved)2.040 Operating Transfers-In2.050 Advances-In 16,000 67,214 55,5112.060 All Other Financing Sources 527 9,7002.070 Total Other Financing Sources 16,000 67,741 65,211

2.080 Total Revenues and Other Financing Sources 17,955,930 18,619,424 19,634,325

Expenditures3.010 Personal Services 9,322,548 9,731,655 10,221,0673.020 Employees' Retirement/Insurance Benefits 3,144,906 3,189,571 3,421,1713.030 Purchased Services 3,226,038 3,445,327 3,707,5973.040 Supplies and Materials 475,893 631,558 738,7523.050 Capital Outlay 334,935 463,637 311,7073.060 Intergovernmental

Debt Service:4.010 Principal-All (Historical Only) 46,9424.020 Principal-Notes 65,821 10,511 50,8834.030 Principal-State Loans4.040 Principal-State Advancements4.050 Principal-HB 264 Loans4.055 Principal-Other4.060 Interest and Fiscal Charges 27,279 2,248 18,7344.300 Other Objects 287,495 309,612 311,736

4.500 Total Expenditures 16,931,857 17,784,119 18,781,647

Other Financing Uses5.010 Operating Transfers-Out5.020 Advances-Out 121,214 55,511 2,0005.030 All Other Financing Uses5.040 Total Other Financing Uses 121,214 55,511 2,000

5.050 Total Expenditures and Other Financing Uses 17,053,071 17,839,630 18,783,647

6.010 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 902,859 779,794 850,678

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 967,430 1,870,289 2,650,083

7.020 Cash Balance June 30 1,870,289 2,650,083 3,500,761

AUDIT REPORT Performed every year Cost to taxpayers $16,000 Cash basis (saves taxpayers

$10,000-$13,000 each year) Tests are performed on accounts

payable, payroll, compliance with ORC, fund raising, athletics, food service, grants, etc.

Clean opinion No adjustments

Salary Data – Get the Facts!!

Classified &Fiscal Year Teaching Admin. Health Ins.2002-03 5% 6%2003-04 4% 0%2004-05 1.5% 0%2005-06 3% 3%2006-07 3.5% 3.5%2007-08 3.5% 3.5% 50/502008-09 3.5% 3.5% 50/502009-2010 3.5% 3.5% 50/50TOTAL 27.5% 23%

The Lima News-April 1, 2007 Top 25 Lima Total $928,919(7 of top 25) Shawnee Total $915,855(5 of top

25) Bath Total $836,848 (5 of top 25) Apollo Total $829,174 (1 of top 25) Elida Total $760,064 (1 at 16th) Delphos Total $753,602 (3 of top

25)

The Lima News April 1, 2007-Superintendent Salary Data Lima $115,269 Crestview $108,159 Allen East $102,019 Delphos $101,457 Auglaize ESC $96,600 New Bremen $93,767 Lincolnview $93,711 Putnam ESC $93,565 Waynesfield $92,426 Elida $91,628

How does our 2007 residential tax rate stack up?

Residential Tax Rate 2007 31.44 Lima City 31.26 Allen East 31.15 Bath 29.76 Shawnee 29.23 Bluffton 27.86 Perry 27.09 Spencerville (Plus 1% income tax) 27.14 ELIDA 26.80 Delphos

Administration: Salaries for administrators, office staff, and office supplies

Administrative Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

Lima City School $1,228 13.1%

State Expenditures $1,143 12.2%

Spencerville $1,025 13.3%

Delphos City $1,005 12.7%

Allen East $961 12.9%

Perry $933 13.4%

Bath $882 11.7%

Bluffton $856 11.1%

Shawnee $831 11.5%

Elida Elida $811$811 11.3%11.3%

ADMINISTRATIVE EXPENSES

 Building Operations:Utilities, maintenance, repairs, busses and lunchroom expenses

BUILDING EXPENSES

Building Operations Expenditures

Expenditures Per Pupil Percentage of Total Expenditures

Bluffton $1,804 23.3%

State Expenditures $1,779 19.0%

Shawnee $1,749 24.2%

Bath $1,716 22.7%

Lima City $1,673 17.9%

Perry $1,664 23.9%

Allen East $1,567 21.0%

Spencerville $1,529 19.8%

ElidaElida $1,412$1,412 19.7%19.7%

Delphos $1,326 16.8%

Staff Support Expenses

Staff Support Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

Lima City $389 4.2%

State Expenditures $293 3.1%

Bluffton $155 2.0%

ElidaElida $90$90 1.3%1.3%

Spencerville $51 0.7%

Bath $35 0.5%

Allen East $34 0.4%

Perry Local $25 0.4%

Shawnee $24 0.3%

Delphos $12 0.1%

Staff Support: Teacher training and other professional development activities

Pupil Support ExpensesPupil Support Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

State Expenditures $935 10.0%

Lima City $931 9.9%

Delphos $907 11.5%

Bath $851 11.3%

Spencerville $806 10.5%

Shawnee $727 10.1%

Allen East $688 9.2%

Bluffton $672 8.7%

ElidaElida $669$669 9.4%9.4%

Perry $623 9.0%

Pupil Support: Salaries for librarians, counselors, and nurses 

Instructional SupportInstructional Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

State Expenditures $5,205 55.6%

Lima City $5,148 54.9%

Delphos $4,664 58.9%

Spencerville $4,299 55.8%

Bluffton $4,244 54.9%

Allen East $4,220 56.5%

ElidaElida $4,169$4,169 58.3%58.3%

Bath $4,070 53.9%

Shawnee $3,891 53.9%

Perry $3,704 53.3%

Instruction: Teacher and education professional salaries and classroom materials

STATE FUNDING FLAWS Over-reliant on property taxes No inflationary growth on property taxes Phantom Revenue Unfunded mandates System too complicated Many man hours on

levies(2000,2003,2004,2005,2006,2007,2008) Schools get viewed as “Big Government

Waste” One of the few ways voters can express

frustration with taxes

PHANTOM REVENUE Who is it?? State assumes we receive 23 mills

from local tax payers Elida actually receives 20 mills This 3 mill gap is a huge problem The State deducts 3 more mills than

we actually receive See SF3 handout (making sausage)

State Aid-Short Version

$5,403 x 1.00687x2,442.15=13,285,586

Less 8,226,036(.023 x357,653,735)_______________

$5,059,550

23 Mill Charge- Off

FY 2005 $7,383,852 FY 2006 $7,870,054 FY 2007 $8,226,035

State Aid

FY 2006 $7,520,508FY 2007 $7,520,508FY 2008 $7,458,619FY 2009 $7,458,619

TAX BASETax Valuations

1999 2000 2001 2002 2003 2004 2005Values Values Values Values Values Values Values

Collected Year 2000 2001 2002 2003 2004 2005 2006

Ag/Residential 164,693,830 175,352,850 179,161,050 182,378,550 213,179,340 216,149,940 219,179,010 Commercial/Industrial 70,131,360 70,709,240 72,432,590 73,126,890 87,268,820 90,926,040 91,884,270 Sub Total 234,825,190 246,062,090 251,593,640 255,505,440 300,448,160 307,075,980 311,063,280

Utility Real 40,220 45,900 43,010 45,410 47,120 47,890 31,820 Total Real 234,865,410 246,107,990 251,636,650 255,550,850 300,495,280 307,123,870 311,095,100

Utility Personal 12,149,290 11,460,990 9,296,660 9,603,630 9,517,850 9,280,790 8,795,910 Tangible Personal 36,829,336 37,055,024 40,797,097 39,268,817 32,993,852 36,274,840 27,665,882 Total Personal 48,978,626 48,516,014 50,093,757 48,872,447 42,511,702 45,555,630 36,461,792

Total All 283,844,036 294,624,004 301,730,407 304,423,297 343,006,982 352,679,500 347,556,892

Exempt Values 20,080,550 20,324,880 20,946,010 20,946,010 20,946,010 24,203,770 24,291,910

STATE BUDGET BREAKDOWN

Primary & Secondary Education 35%

Medicaid 20% Colleges 13%

State Budget Concerns-FY 2010 CAT $ 1.3 billion new Corporate Franchise Tax 1.1 billion

loss Tangible Property Tax 1.6 billion loss Income Tax 2.1 billion loss NET LOSS 3.5 billion in state revenue 10 year job loss – 210,000

manufacturing 10 year job loss- 4,000 Allen County

CONSTITUTIONAL AMENDMENT

High-quality education is a fundamental right for every Ohio child

Determine levels of funding based on student need Eliminate “Phantom Revenue” Exempt Ohio seniors and disabled from property taxes on the

first $40,000 of the market value of their homes Create an independent commission appointed by Ohio’s top

elected leaders(to monitor efficiency) Direct the commission to report annually to the governor Create and maintain a permanent local government fund to

support local government services Establish a system to fund colleges at no less than 2007

amounts and increases annually based on state’s personal income percentage

High Middle Elida School School Ele. Gomer

FY 1995-96 23,799 9,627 3,349 7,901 FY 1996-97 35,209 15,804 10,481 17,348 FY 1997-98 27,918 15,502 25,997 31,014 FY 1998-99 81,276 22,623 14,225 53,493 FY 1999-00 32,830 67,997 19,228 15,411 FY 2000-01 34,144 15,890 2,141 26,167 FY 2001-02 58,311 13,894 5,937 8,361 FY 2002-03 59,248 23,447 7,003 16,811 FY 2003-04 91,489 26,079 6,084 31,830 FY 2004-05 80,184 36,326 56,356 17,054 FY 2005-06 67,983 18,012 31,475 33,381 Total 592,391 247,189 150,801 225,390

PI Repairs-10 years 414,235

Total FY 96-06 HS 1,006,626

HS-11 Year Ave. 91,511

DISTRICT WIDE REPAIRS

Cost per building/per studentBuilding Data

FY 06-07

Gomer Elida High Heat

Repairs 13,178 Repairs 69,260 EMS 25,305

EE 24,941

Heat 33,361 Heat 122,339 GK 33,361

Total 83,607

Electric 9,524 Electric 102,557 EHS 122,339

Water 2,215 Water 8,951 Difference 38,732

Total 58,278 Total 303,107

ADM 171 ADM 820

Per Student 341 Per Student 370 ElectricEMS 65,598 EE 31,015 GK 9,524 Total 106,137

EHS 102,557

Elida Ele. Elida MiddleRepairs 32,411 Repairs 114,049 Difference (3,580)

Heat 24,941 Heat 25,305

Square ft.

Electric 31,015 Electric 65,598 EMS 86,283

EE 67,642

Water 11,405 Water 7,692 GK 47,320

Total 201,245

Total 99,772 Total 212,644 EHS 135,117

ADM 888 ADM 581 Difference (66,128)

Per Student 112 Per Student 366

5 Year Goals

Pass a building bond issue Continue to monitor health insurance

(Health Savings Accounts, Spousal language, Mandate Generic Drugs)…impact of state pool

Enhance customer service Maintain 0-5% profit margin Continue to review staffing needs Monitor new legislation Others ???? (group discussion)

Cliff S. Barber

“From a cost savings standpoint the bond issue is a "no-brainer". The annual maintenance cost for the old high school alone is over $100,000per year and that does not include the $122,000 per year in heating costs. Also, the addition to the

middle school will save $4.4 million in operating and personnel expenses over the life of the bond by allowing the district to

operate three buildings instead of four thus allowing the middle school addition to pay for itself. “

“I haven’t talked to anyone that won’t agree Elida NEEDS a new high school. I don’t think anyone could reasonably

argue otherwise. Both the high school and Gomer buildings are tired and costly. For example, over the past

10 years alone our school district has spent $4.80/sf, $4.39/sf and $2.87/sf on repairs at the Gomer building,

high school and middle school, respectively. By comparison that translates into $300,000 of excess costs being absorbed to keep the older buildings operational. If

a major problem presents itself at the high school or Gomer, which is highly probable, we’ll be forced to put more “band-aids on craters.” We need to take action

now. Waiting would cost everyone much, much more…and

we’re not just talking about money!”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company

“It is clearly documented that new school facilities improve attitudes and enhance

the education process. If we do not update our facilities we not only leave

money on the table (35% from the State of Ohio), we all but assure ourselves that future graduating classes will continually fall behind their peers that have access to

better technology and equipment that come with new buildings.”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company

“From an economic development perspective, we need to be aware that new business prospects care

about the quality of schools when determining where to locate. They understand that modern, well-

maintained facilities provide students with access to advanced technology and equipment that will be important to the future quality of their workforce.

Likewise, prospective new residents also make choices based on the quality of schools. Anyone who has ever

moved from one community to another knows that part of the process involves evaluating which school

district to move within. I know my family did when we chose Elida in 1994. With all the new school facilities now surrounding the Elida School District, what’s the

chance of new residents making that same choice today? Exactly! We need to take action now.”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company