Katie Henes, TreasurerMay 20, 2015

October 2014

May 2015

Major factors/differences between October 2014 and May 2015 Forecasts

0.7% Revenue Variance – Increase in special education funding (55 more category 2 students) – Economic disadvantage funding increased– One-time Medicaid reimbursement

-2.0% Expenditure Variance – Negotiations are completed– Savings from one month insurance premium holiday used to help off-set

the 1% salary increase – 30 retirements at the end of the 2014-2015 school year. Savings from

retirements/replacements nearly $1M– Capital project, expenditures of $850,000 will carryover to 2015-2016.

Expenditures in the following school year will be increased by that amount

What does this mean….• Even with these significant savings and trends, the District’s costs are still

trending higher than revenues. This means that there still needs to be a diligent eye on the revenue short falls in order to promote long term sustainability.

Levy Renewal• The district has renewal

levies that must be maintained and will adversely impact revenue if not renewed.

• The gold area of the revenue bars to the left indicate the amount of district revenue subject to levy renewals.

• Approximately 20% of the district’s total revenue is generated from levies.

• One of the two levies must be renewed in 2018 for collection in 2019.

Enrollment

Enrollment Cont…..

• The average 3 year trend is a loss of 252 students per year. This trend is continued throughout the forecast.

• The district’s EMIS enrollment information shows that 2015’s enrollment is currently trending about 242 students less than just that of October of 2014.

• The district has lost over 2000

students since 2003.

• Not all of the decline is due to general population decline of school-age children.

• The district has 1,439 resident students being educated elsewhere (community schools, open enrollment, Choice).

• The general loss of enrollment reduces state funding and challenges the district’s long-term sustainability.

State Funding “What-if”

State Funding “What-if” Cont….• The state of Ohio is in deliberations regarding a new school funding

formula that would start in July 1, 2015.

• There are three versions – current forecast, house bill 64, and substitute house bill 64.

• Simulations prepared are favorable relative to the current formula/law that is used in this May, 2015 forecast update.

• Given that the district’s funded enrollment has declined since 2014 and was not calculated by the ODE until March, 2015, it is conceivable that the simulation are unrealistically high based upon 2014’s enrollment.

• Nothing is final, nor is it law at this point. The final results will not be known until June, 2015.

Summary

Summary Cont….• State funding revenue increased in 2014 and in 2015 which leveraged the

district’s operating cuts from 2012 through 2014.

• Long term sustainability is challenged by the fact that expenditures are trending higher than revenue.

• The cycle being exhibited in this chart is very similar to a typical levy cycle where the district’s revenue initially exceeds expenditures and then expenditures begin to outpace revenue.

• This either means that a District is on a five year levy cycle or if they do not plan to ask for additional levy funds then the process is one where they either obtain additional state revenue and/or expenditure reductions provide longer term sustainability.

• The district must renew one of its levies in 2018 for collection in 2019