Elida Local Schools

Financial Summit VIReport to Stakeholders

Fiscal Year 2010-11Joel L. Parker,CPA

Introductions

Economic OutlookFinancial UpdateRevenue Discussion

Goals 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

Discussion - Economy

Modest signs of economic recovery

Unemployment decreasing Housing Market – slight

improvement Rate of Inflation Rate of health care inflation

Concerns State budget gap Tax delinquencies Loss in state aid Loss of inventory tax Loss of interest income No inflationary growth in revenue Unfunded mandates Vouchers

“Everybody is ignorant, only in different subjects” Will Rodgers

OSBA Platform supports legislation that:

Provides a thorough, efficient education Provides for inflationary revenue growth Eliminates “Phantom Revenue” Eliminates over-reliance on local

property taxes Prohibits Federal and State unfunded

mandates Requires all sectors of economy to pay

a fair share of the cost of public education

OHIO TAX “SHIFT”

Remove Inventory Tax Reduce Corporate Franchise Tax Reduce Personal Income Tax Good for business Good for individuals

Result: Schools lose $3 billion

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

ADMINISTRATIVE EXPENSES

-

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Comparison Group-Administrative Expense Per Pupil FY11

 

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000Comparison Group-Expense Per Pupil FY 11

State Aid-Line 1.035Fiscal Year Actual 2% Growth ADM

2004 7,561,375  

2005 7,502,306 7,712,603 2470

2006 7,434,281 7,866,855 2454

2007 7,567,028 8,024,192 2478

2008 7,511,293 8,184,675 2383

2009 7,538,352 8,348,369 2472

2010 6,928,844 8,515,336 2472

2011 6,921,455 8,685,643 2505

2012 6,896,194 8,859,356 2541

Loss 665,181 2004-12

Tangible Personal Property Tax-Line 1.02

Fiscal Year Actual 2% Growth

2004 1,513,272 1,555,812

2005 1,463,699 1,586,928

2006 1,531,472 1,618,667

2007 1,230,346 1,651,040

2008 826,456 1,684,061

2009 635,757 1,717,742

2010 249,114 1,752,097

2011 305,801 1,787,139

2012 272,662 1,822,882

Loss

1,240,610

2004-2012

Real Estate Tax-Line 1.01

Fiscal Year Actual 2% Growth

2008 8,439,846

2009 8,374,682 8,608,643

2010 8,389,617 8,780,816

2011 8,298,226 8,956,432

2012 8,544,368 9,135,561

Gain

104,522

2008-12

Interest Income

Fiscal Year Actual

2008 240,123 2009 109,127 2010 53,639 2011 20,271 2012 14,045

Decrease 226,078 2008-2012

Tax Delinquencies 2004 $440,608 2005 $393,473 2006 $320,795 2007 $294,267 2008 $468,576 2009 $530,373 2010 $444,274 2011 $455,707 2012 $467,324 Total $3,815,397

Next 50 Years

Where will lost revenue come from? We cannot just increase fees like

hospitals, colleges or private sector Donner Budgeting Process Dual credit example

Total Expense Growth-Line 4.5Fiscal Year Actual CPI

2004 16,761,379 0.96% 2.68

2005 16,931,857 1.02% 3.39

2006 17,784,119 5.03% 3.24

2007 18,781,647 5.61% 2.85

2008 19,436,233 3.49% 3.85

2009 20,154,989 3.70% -0.34

2010 20,821,533 3.31% 1.64

2011 21,399,623 2.78% 3.16

2012 20,473,910 -4.32% 2.93

Increase 3,712,531 21.58% 23.40

2004-2012

(1.9m salary,1m benefits, .9 m other)

Cash Flow StormReal Estate Loss

(163,812)

State Aid Loss (680,147)

Inventory Tax Loss (1,219,505)

Interest Income Loss (223,972)

Expense Growth (3,793,189)

Negative Cash Flow (6,080,625)

Trend Data * No inflationary growth on any revenue stream * Inflation on every aspect of operations

* (Health care,fuel, utilities, wages, special ed, )

WHAT HAVE WE DONE TO STAY LEAN?

Looking back: 2003-04: Administrative cuts $239,155 Administrative Wages - 0% increase 2 yrs Streamlined food service – no general

fund $ Moved staff to PPO insurance plan Moved to partial pay to participate Reduced bus fuel consumption Cost sharing on health premiums

Continued 2004-05-06: Withdrawal from ESC Alternative Program

- $7,000 Attrition of one mechanic’s position -

$58,472 Hire Own 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

The Bottom Line: Constant Review of

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

Property/Liability Diesel Grant Safe Route Grant Dir dep/email PO

Turn down thermostats Change drug company No health ins R/R New health plans Auto lights switches Bid projects MAC Grants Early bus buy

Cost Reductions: 2009-10

Review set points $74,000 Eliminate Teacher Academy

$65,000 Re-route buses(4) $84,444 Reduce special ed teacher $76,102 Reduce MS Industrial Technolgy Reduce MS Home Economics

And more 2010-11: Consolidate choir position Reduce MS teacher-(technology class) Move Central Office secretary to HS Reduce building budgets Lean on grant $ for technology Work on reductions in health care Reduce bus routes Review staffing Pay off HB 264 Note early Reduce guidance position (HS)

Cost Reduction-Spring 2011/Update

Phase I- Cut 5 teachers, 1 Aide, 1 Guidance = $332,700

Phase II – Close Gomer Phase III – EMS re-configure

Wage Freeze -2011

Administrators – Another 2 yr freeze Adm-same pay FY 11-12,12-13,13-

14 All Others – 0 on base 2 years, steps

year 1, no steps year 2 Savings $823,000

Cuts, Cuts and More Cuts-FY 12-13

Librarian – position to 3 days a week Close Gomer Building Reduce Central Office Director Reduce Gomer Principal/teacher EHS-reduce Success Program EHS-reduce 1 teacher EMS – reduce 1 teacher EE- reduce 1 teacher Reduce 1 aide Reduce 1 secretary Reduce 1.5 custodians Total Savings $590,000

Alternative Funding:

Fieldhouse Renovation $350,000 Concession Building $150,000 Locker/weight room $100,000 Piano Fund Safe Route Grant BWC Grant – Buses $22,000

June 30 Carry-Over: A New Cycle

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 $3,454,672 60 days 2011 $2,845,756 48 days 2012 $2,153,235 38 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% 2010 - introduce HDHP plan 2011 - Spousal coordination of benefits Change in TPA and Consultant 2012 – 2 plans (mid and high deductible)

General Fund Expenditures

FY Ended June 30, 2011

Total Revenue: $20,821,610

Instruction: $13,664,960Instr.Staff Support: $ 496,088Pupil Support: $ 605,048

TOTAL $14,766,096

Special Education – General Fund FY Expense

97-98 604,533

98-99 1,063,717

99-00 1,062,413

00-01 1,274,183

01-02 1,318,855

02-03 1,650,698

03-04 1,651,644

04-05 1,442,321

05-06 1,349,258

06-07 1,310,212

07-08 1,421,907

08-09 1,544,590

09-10 1,680,792

10-11 1,511,852

Increase 907,319

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 $1.24 million Out $1.48

million FY 11 In $1.38 million Out $ 1.6

million FY 12 In $1.54 million Out $1.52

million

Tax Base

RESIDENTIAL

$100,017,980$101,438,990$108,803,850$105,507,940$108,714,380

TANGIBLE PERSONAL

$5,116,935-0--0--0--0-

20082009201020112012

DISCUSSION

How do we address declining revenue, remain

lean operationally, and still provide excellence

in education?

Levy OptionsEmergency Property Tax Levy - up to 10yrs set amountTraditional Income Tax - any yr,C -.25 incrementsEarned Income Tax -any year,C- .25 incrementsCombined Ballot Questions (property tax levy + earned income tax) - property tax-up to 10 or C, fixed amount plus .25 increment of earned income

tax will float with economy

Levy Timeline-Future Dates

May 2010 Renewed Emergency Levy Fall 2012 New money levy 2013 PI Levy Continuing 2013 or14 Bond Issue EE-OSFC 2014 Renew Emergency Levy 2016 Renew 2012 Levy 2019 Renew Emergency Levy 2021 Renew 2012 Levy 2024 Renew Emergency Levy 2026 Renew 2012 Levy 2029 Renew Emergency Levy