Elida Local SchoolsFinancial Summit IV

Report to StakeholdersFiscal Year 2008-09Joel L. Parker,CPA

Goals

Review data on the emergency levy 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

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

History – Emergency Levy

Passed May 3, 2005 7.7 mills 5 years $2.7 million(increase $996,000) Restore All-day Kindergarten Restore EMS Art Restore guidance services at EE and EMS Reduce pay to participate Provide additional buildings/grounds

maint.

Renew Emergency Levy

May 4, 2010 7.2 mills 5 years $2.7 million NO INCREASE IN TAXES NO ADDITIONAL REVENUE Critical to everyday operations 13% of operating budget = 50 people

Renewal Levy - Facts

We continue to work lean We recognize the state of the

economy We make no five year promise State and local revenue are

shrinking Good stewards

Concerns State budget gap- $5-$10 billion Projected loss to Elida FY 12- $1.6 to

$2.1 million(what is coming?) Tax delinquencies Loss in state aid Tax payer still hurting from

recession Unfunded mandates-HB 1

WHAT HAVE WE DONE TO GET LEAN?

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 Think long term Savings on Retire/Rehire Sharing on health premiums

Continued Withdrawal from ESC Alternative

Program - $7,000 Not replace mechanic - $58,472 Hire Psychologist - $9,923 2004-05 one less teacher at EE 2005-06 one less teacher at EE and

HS Partner with WCLA on software

$14,000 Review SF6 billing - $24,000

What have we done to get lean?

Review Staffing Meal Policy American Express Bus Idle Share Ins Increases Bulk Paper Bid

Property/Liability Diesel Grant Safe Route Grant Dir dep/email PO Hire maint. person

Turn down thermostats

Change drug company

No health ins R/R New health plans Auto lights

switches Bid projects MAC Grants Early bus buy

What have you done lately? Review set points $74,000 Reduce Teacher Academy $65,000 Re-route buses(4) $84,444 Reduce special ed teacher $76,102

What will you do next year? Consolidate choir position Reduce MS teacher-(technology

class) Move Central Office secretary to HS Reduce building budget Lean on grant $ for technology Work on reductions in health care Reduce bus route Review staffing

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 2009 State Budget Cuts HB 1 (Unfunded mandates) Next State Budget $5-$10 billion hole

Fund Raising Efforts

Fieldhouse Renovation $350,000 Concession Building $150,000 Locker/weight room $50,000

WHO ARE WE?

Students – 2,431 Teachers- 149 Nurse –1 Guidance – 4 Professionals –

17 Secretaries – 14 Aides – 6

Maintenance – 2Custodial – 14Food Service – 27Bus Drivers – 31Asst Tech Co-1 Total 2664 Buildings 81 square miles

PERFORMANCE INDICATORS Carry-over Growth 1-5%(update) Strength of Carry-over - 60

day(update) 85% Rule on Salaries and

Benefits(update) Review Levy Cycles Debt to Total Assets Residential Tax Rate Per Pupil Spending (vs. other schools)

60 DAY CASH BALANCE ALMOST A REALITY

74 Day Cash Balance!

Cash Graph

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1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Month

Gen

eral

Fu

nd

Cas

h

199920002001200220032004200520062007200820092010

June 30 Carry-Over: A New Cycle 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 2008 $4,071,288 76 days 2009 $4,127,565 74 days 2010 $3,656,565 64 days 2011 $2,492,978 43 days 2012 $590,254 10 days 2013 $(1,718,527) -30 days 2014 $(4,445,843) -78 days

Health Insurance 1/1/09 Medical Rate Increase 15% 1/1/09 Dental Rate Increase 20% 1/1/09 New Plan MDHP Developed 1/1/10 New High Deductible Plan 1/1/10 Medical Rate Increase 20% 1/1/10 Dental Rate Increase 20% Meeting this year to introduce HDHP plan Continue discussions on spousal coordination of

benefits What are you doing/seeing???

Elida Local Schools - Data Graph

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2005 2006 2007 2008 2009 2010

Fiscal Year

Dol

lars

Tax Revenue-Real

State Aid

Interest Income

Salaries

Benefits

Utilities

General FundRevenue Chart FYD as of June 30, 2009

42%

3%

37%

0%

9%

9%

Real Estate

Personal Property

State Foundation

State-Restricted Aid

State Reimb.-Homestead/Rollback

Other

General Fund Expenditures

Expense Chart FYD as of June 30, 2009

53%

19%

20%

4%

2%

0%

0%

2%

Salaries

Retirement &InsurancePurchasedServiceSupplies

Capital Outlay

Debt-Prin.

Debt-Int.

Other

Elida Local Schools - Data Graph

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

2005 2006 2007 2008 2009 2010

Fiscal Year

Dol

lars

Tax Revenue-Real

State Aid

Interest Income

Salaries

Benefits

Utilities

Elida Local SchoolsData Graph

2005 2006 2007 2008 2009 2010Tax Revenue-Real 6,852,071 7,354,275 8,177,224 8,439,846 8,374,682 8,389,617 State Aid 7,502,306 7,434,281 7,567,028 7,511,293 7,538,352 7,463,806 Interest Income 61,043 120,591 181,360 240,122 109,127 78,001 Salaries 9,322,548 9,731,655 10,221,067 10,429,896 10,852,446 11,269,418 Benefits 3,144,906 3,189,571 3,421,171 3,548,084 3,736,686 4,103,825 Utilities 346,954 423,099 425,259 481,129 435,568 425,259

FOOD SERVICE

Fiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Revenue Federal 243,346 234,529 223,494 278,530 243,644 239,122 320,161 279,240 386,010 430,062 State 10,072 10,092 10,756 10,706 12,630 13,207 11,028 10,954 11,001 11,507 Local 594,211 576,010 561,344 575,917 586,843 513,334 575,959 571,476 548,922 559,512

Total 847,629 820,631 795,594 865,153 843,117 765,663 907,148 861,670 945,933 1,001,081

ExpensesSalaries 325,736 332,741 345,760 353,996 350,154 276,396 283,380 313,751 317,182 335,930 Fringes 134,816 156,892 198,125 211,198 245,929 181,288 153,651 179,800 171,619 179,011 Purchased Service 9,128 8,421 5,285 5,011 4,507 7,022 11,485 13,657 16,928 15,275 Supplies 339,680 338,004 327,304 314,984 292,572 279,624 307,740 342,635 351,055 390,685 Equipment 9,333 12,348 20,709 - - 16,241 - - 2,105 -

Total 818,693 848,406 897,183 885,189 893,162 760,571 756,256 849,843 858,889 920,901

Net Gain/(Loss) 28,936 (27,775) (101,589) (20,036) (50,045) 5,092 150,892 11,827 87,044 80,180

Plus Advances - - - 48,636 40,000 54,000 - - (10,000) (15,000) Plus Beginning Bal. 111,602 140,538 112,763 11,174 39,774 29,726 88,818 239,711 251,538 328,582

Ending Balance 140,538 112,763 11,174 39,774 29,729 88,818 239,710 251,538 328,582 393,762

Program SpendingGeneral Fund Revenue General Fund Expenditures

Local Revenue Instructions Real Estate Taxes 8,374,681$ 41% Regular 11,703,262$ 58% Personal Property Taxes 635,757 3% Special Education 1,544,590 8% Vocational 2,281 0% Total Local 9,010,438 44% Total Instructions 13,250,133 64%

State Revenue Supporting Services Foundation 7,614,418 37% Pupil Support** 679,166 3% Homestead Rollback 1,905,561 9% Instr. Staff Support## 512,129 3% - Administration 1,356,766 7%

Transportation 1,246,318 6% Total State 9,519,979 47% Business/Maintenance 2,523,631 13%

Total Support Svcs. 6,318,010 31% - Other 1,906,096 9% Extracurriculars 517,228 3%Total Revenue 20,436,513$ 100%

Debt Requirements Principal/Interest 69,616 0%

Total Expenditures 20,154,987$ 100%

Elida Local SchoolsAllen County

Schedule of Revenues, Expenditures and Changes in Fund BalancesFor the Fiscal Years Ended June 30, 2007, 2008 and 2009 Actual;

Forecasted Fiscal Years Ending June 30, 2010 Through 2014

Actual Forecasted Fiscal Year Fiscal Year Fiscal Year Average Fiscal Year Fiscal Year Fiscal Year 2007 2008 2009 Change 2010 2011 2012

Revenues1.010 General Property Tax (Real Estate) $8,177,224 $8,439,846 $8,374,682 1.2% $8,309,000 $6,973,000 $5,646,0001.020 Tangible Personal Property Tax 1,230,346 826,456 635,757 -28.0% 440,000 340,000 240,0001.030 Income Tax1.035 Unrestricted State Grants-in-Aid 7,567,028 7,511,293 7,538,352 -0.2% 6,978,484 6,865,484 6,865,4841.040 Restricted State Grants-in-Aid 80,380 63,599 76,062 -0.6% 51,720 51,720 50,0001.045 Restricted Federal Grants-in-Aid - SFSF 475,613 475,6131.050 Property Tax Allocation 1,186,853 1,533,802 1,905,561 26.7% 2,100,000 2,200,000 2,300,0001.060 All Other Revenues 1,327,283 1,640,547 1,703,588 13.7% 1,750,000 1,775,000 1,800,000

1.070 Total Revenues 19,569,114 20,015,543 20,234,002 1.7% 20,104,817 18,680,817 16,901,484

Other Financing Sources2.010 Proceeds from Sale of Notes2.020 State Emergency Loans and Advancements (Approved)2.040 Operating Transfers-In2.050 Advances-In 55,511 12,000 31,398 41.6% 256,647 25,000 25,0002.060 All Other Financing Sources 9,700 202,5102.070 Total Other Financing Sources 65,211 12,000 233,908 883.8% 256,647 25,000 25,000

2.080 Total Revenues and Other Financing Sources 19,634,325 20,027,543 20,467,910 2.1% 20,361,464 18,705,817 16,926,484

Expenditures3.010 Personal Services 10,221,067 10,429,896 10,852,446 3.0% 11,269,418 11,403,451 11,539,0923.020 Employees' Retirement/Insurance Benefits 3,421,171 3,548,084 3,736,686 4.5% 4,103,825 4,332,927 4,579,4233.030 Purchased Services 3,707,597 3,916,011 4,083,617 5.0% 4,110,000 4,125,000 4,150,0003.040 Supplies and Materials 738,752 796,835 717,250 -1.1% 750,000 650,000 675,0003.050 Capital Outlay 311,707 388,544 381,339 11.4% 200,161 150,000 175,0003.060 Intergovernmental

Debt Service:4.010 Principal-All (Historical Only)4.020 Principal-Notes 50,883 52,924 54,985 4.0% 57,791 60,001 62,0514.030 Principal-State Loans4.040 Principal-State Advancements4.050 Principal-HB 264 Loans4.055 Principal-Other4.060 Interest and Fiscal Charges 18,734 16,692 14,631 -11.6% 12,318 10,025 7,6424.300 Other Objects 311,736 287,247 314,035 0.7% 303,944 315,000 320,000

4.500 Total Expenditures 18,781,647 19,436,233 20,154,989 3.6% 20,807,457 21,046,404 21,508,208

Other Financing Uses5.010 Operating Transfers-Out5.020 Advances-Out 2,000 16,398 256,647 1092.5% 25,000 25,000 25,0005.030 All Other Financing Uses5.040 Total Other Financing Uses 2,000 16,398 256,647 1092.5% 25,000 25,000 25,000

5.050 Total Expenditures and Other Financing Uses 18,783,647 19,452,631 20,411,636 4.2% 20,832,457 21,071,404 21,533,208

6.010 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 850,678 574,912 56,274 -61.3% 470,993- 2,365,587- 4,606,724-

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 2,645,694 3,496,372 4,071,284 24.3% 4,127,558 3,656,565 1,290,978

Special Education Costs

FY 07 $1,310,212 FY 08 $1,421,808 FY 09 $1,544,590

FY 2008 June June FY Percent FY 08 YTD FY 08 YTD FY 09 YTD Difference Change

RevenueReal Estate 8,439,846$ 8,439,846$ 8,374,681$ (65,165) -0.77%

Personal Property 826,455 826,455 635,757 (190,698) -23.07%

Unrestricted State Aid 7,511,292 7,511,292 7,538,353 27,061 0.36%

Restricted Grants - State 63,600 63,600 76,065 12,465 19.60%

Homestead & Rollback 1,533,802 1,533,802 1,905,561 371,759 0.00%

Other Revenues 1,640,547 1,640,547 1,703,586 63,039 3.84%

Sale of Notes - - - - 0.00%

Transfers - - - - 0.00%

Advances 12,000 12,000 31,398 19,398 0.00%

All Other Sources - - 202,510 202,510 0.00%

Total 20,027,542 20,027,542 20,467,911 440,369

ExpendituresPersonnel Services 10,429,893 10,429,893 10,852,446 422,553 4.05%

Retirement/Insurance Benefits 3,548,085 3,548,085 3,736,685 188,600 5.32%

Purchased Services 3,916,011 3,916,011 4,083,616 167,605 4.28%

Supplies and Materials 796,835 796,835 717,250 (79,585) -9.99%

Capital Outlay 388,546 388,546 381,339 (7,207) -1.85%

Debt Service - Principal 52,924 52,924 54,985 2,061 3.89%

Debt Service - Interest 16,692 16,692 14,631 (2,061) -12.35%

Other 287,246 287,246 314,035 26,789 9.33%Transfers - - - - 0.00%Advances 16,398 16,398 256,647 240,249 0.00%

Totals 19,452,630 19,452,630 20,411,634

Revenue Over/(Under) Exp 574,912 574,912 56,277

Opening Balance 3,496,376 3,496,376 4,071,288

Ending Balance 4,071,288$ 4,071,288$ 4,127,565$

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

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

ADMINISTRATIVE EXPENSES

-

200

400

600

800

1,000

1,200

1,400

Comparison Group-Administrative Expense Per Pupil

 

-

2,000

4,000

6,000

8,000

10,000

12,000

Comparison Group-Expense Per Pupil

-

5

10

15

20

25

30

Comparison Group-Report Card Data

State Aid

FY 2006 $7,434,281FY 2007 $7,567,028FY 2008 $7,511,293FY 2009 $7,502,152FY 2010 $7,454,097FY 2011 $7,352,109FY 2012 $5,079,869????

TAX BASETax Valuations

2003 2004 2005 2006 2007 2008 2009Values Values Values Values Values Values Values

Collected Year 2004 2005 2006 2007 2008 2009 2010

Ag/Residential 213,179,340 216,149,940 219,179,010 240,726,340 243,660,870 246,525,140 244,378,910 Commercial/Industrial 87,268,820 90,926,040 91,884,270 97,276,200 100,017,980 101,438,990 108,803,850 Sub Total 300,448,160 307,075,980 311,063,280 338,002,540 343,678,850 347,964,130 353,182,760

Utility Real 47,120 47,890 31,820 21,120 21,590 19,340 22,190 Total Real 300,495,280 307,123,870 311,095,100 338,023,660 343,700,440 347,983,470 353,204,950

Utility Personal 9,517,850 9,280,790 8,795,910 8,919,930 6,906,750 7,215,890 7,471,370 Tangible Personal 32,993,852 36,274,840 27,665,882 18,362,998 5,116,935 - - Total Personal 42,511,702 45,555,630 36,461,792 27,282,928 12,023,685 7,215,890 7,471,370

Total All 343,006,982 352,679,500 347,556,892 365,306,588 355,724,125 355,199,360 360,676,320

Exempt Values 20,946,010 24,203,770 24,291,910 69,828,126 69,828,126 69,828,126 29,657,730

Emergency 2,704,741

FullInside Millage 5.40 5.40 5.40 5.40 5.40 5.40 5.40 5.40Outside - Continuing 20.10 14.60 14.64 14.64 14.60 14.62 14.60 14.785Emergency Levy 7.35 5.00 5.00 7.64 7.14 7.35 7.34 7.24Permanent Improvement 0 0 0 0 0 0.999 1Bond Levy 0.82 0.00 0.00 0.00 0.00 6.39 6.56

Total Rate 32.85 25.82 25.04 27.68 27.14 27.37 34.73 34.985

STATE BUDGET BREAKDOWN

Primary & Secondary Education 35%

Medicaid 20% Colleges 13%

Real Estate Taxes

FY 06 $7,354,275 FY 07 $8,177,224 FY 08 $8,439,846 FY 09 $8,374,682 FY 10 $8,309,000

Cost per building/per studentFY 08 FY 09 FY 08 FY 09

Electric 9,665 9,945 Electric 32,267 35,860 Gas 47,672 47,958 Gas 27,336 22,893 Water/Sewer 9,069 7,011 Water/Sewer 9,670 12,223

Total 66,406 64,914 Total 69,273 70,976

Students 176 171 Students 892 936

Per Student 377 380 Per Student 78 76

FY 08 FY 09 FY 08 FY 09

Electric 63,195 72,505 Electric 41,508 42,378 Gas 28,473 21,539 Gas 124,803 83,396 Water/Sewer 8,514 7,749 Water/Sewer 10,346 8,643

Total 100,182 101,793 Total 176,657 134,417

Students 538 553 Students 777 771

Per Student 186 184 Per Student 227 174

FY 08 FY 09

Electric 13,731 14,400 Gas 30,273 24,550 Water/Sewer 59 278

Total 44,063 39,228

Fieldhouse

Gomer Elementary

Middle High

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 BUDGET GAP $5-$10 BILLION????

Levy Timeline-Future Dates

May 2010 Renew Emergency Levy Fall 2012, 2013 Renew PI Levy 2012, 2013 Levy Discussion 2012-2013 OSFC Issue 2014,2015 Renew Emergency Levy

Open Enrollment

FY 07 In $535,000 Out $1.3 million

FY 08 In $597,000 Out $1.4 million

FY 09 In $912,000 Out $1.5 million

FY 10 In $1.2 million Out $1.4 million

Funding the Future-Diversify Revenue Stream Medina-1st in state to pass Sales Tax

for schools Income Tax-Earned income only Continue to communicate-always in

levy mode Strategic Planning on future levies

5 Year Goals Evaluate HB 1 and unfunded mandates Study state budget gap($10 billion???) Continue to be lean/reduce spending Continue to monitor health insurance

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

Enhance customer service Maintain (–6%-0%) profit margin Continue to review staffing needs Monitor new legislation Diversify revenue streams(conversation) Others ???? (group discussion)

Items of Concern

Hole in state budget Loss of state income tax Loss in homestead/rollback

reimbursement Tax delinquencies Unemployment Unfunded mandates Health Care/BWC Increases Utility Increases Loss of tax valuation Special Education Increases