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Elida Local Schools Financial Summit

Elida Local Schools Financial Summit. Report to Stakeholders Fiscal Year 2005-2006 Joel L. Parker,CPA. Summit Team. Lynn Metzger, Metzger Financial Services Bruce Opperman, WLIO Brenda Stocker, State Superintendent’s Parent Advisory Council Phillip Morton, WORTH Center

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Elida Local Schools Financial Summit

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  1. Elida Local SchoolsFinancial Summit Report to Stakeholders Fiscal Year 2005-2006 Joel L. Parker,CPA

  2. Summit Team • Lynn Metzger, Metzger Financial Services • Bruce Opperman, WLIO • Brenda Stocker, State Superintendent’s Parent Advisory Council • Phillip Morton, WORTH Center • Matt Huffman, State Representative • Pat Schymanski, General Dynamics • Peter Kesler, Ohio Foam Corporation • Cliff Barber, Citizens National Bank • David Anderson, The State Bank • Max Stover, First Federal Bank • Steve Boroff, Superior Federal Credit Union • Tim Niebel, Fifth Third Securities • Beth Jokinen, The Lima News • Mike Ford, Delphos Herald • Mike Klaus, EEA • Sally Ulrich, Elida Board President • Don Diglia, Elida Local Schools Superintendent • Joel Parker, Elida Local Schools Treasurer • Faith Lee, Elida Local Schools NCLB Director • Elida Accounting Students

  3. Goals • Review the financial condition of Elida Local Schools • Expand the knowledge base on school funding issues • Review data for future levies • Exchange ideas on “best practices” • Encourage dialogue on future economic trends • Have summit representative report to the Board of Education on current condition

  4. THERE IS NO BUSINESS LIKE PUBLIC SCHOOL BUSINESS • Ohio Revised Code • No Child Left Behind • Unfunded mandates • DeRolph case • Collective Bargaining • Tax structure • State Budget • Levies/Bond Issues • Phantom Revenue • Voters • Raw product - 100% accepted • Emotional Issues

  5. 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

  6. 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

  7. 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

  8. HOW MANY CLIENTS? • Students • Tax payers • Boosters • Parents • Business partners • Local officials

  9. WHO ARE WE? • Students – 2,478 • Teachers- 144 • Nurse –1 • Guidance – 4 • Professionals – 15 • Secretaries – 16 • Aides – 14 • Maintenance – 2 • Custodial – 12 • Food Service – 26 • Bus Drivers – 30 • 4 Buildings • 81 square miles

  10. PERFORMANCE INDICATORS • Profit Margin 1-5% • Strength of Carry-over - 60 day • 80% Rule on Salaries and Benefits • Debt to Total Assets • Residential Tax Rate

  11. 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)

  12. 60 DAY CASH BALANCE ALMOST A REALITY

  13. 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

  14. WHAT CHANGED? • Staff cuts • Administrative cuts $239,155 • Streamlined food service • Moved staff to PPO insurance plan • Moved to pay to participate • Passed a levy in 2005 to bring back specific programs

  15. General Fund

  16. General Fund Expenditures

  17. FOOD SERVICE

  18. 5 Year Forecast

  19. AUDIT REPORT • Performed every year • Cost to taxpayers $15,000 • Cash basis (saves taxpayers $10,000-$13,000 each year) • Tests are performed on accounts payable, payroll, compliance with ORC, fund raising, athletics, etc • Clean opinion • No adjustments

  20. Salary Data – Get the Facts!!

  21. 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)

  22. 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

  23. How does our 2006 residential tax rate stack up? • Residential Tax Rate 2006 • 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

  24. 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 $811 11.3% ADMINISTRATIVE EXPENSES Administration: Salaries for administrators, office staff, and office supplies

  25. 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% Elida $1,412 19.7% Delphos $1,326 16.8% BUILDING EXPENSES Building Operations:Utilities, maintenance, repairs, busses and lunchroom expenses

  26. Staff Support Expenditures Expenditures Per Pupil Percentage of Total Expenditures Lima City $389 4.2% State Expenditures $293 3.1% Bluffton $155 2.0% Elida $90 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 Expenses Staff Support: Teacher training and other professional development activities

  27. Pupil 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% Elida $669 9.4% Perry $623 9.0% Pupil Support Expenses Pupil Support: Salaries for librarians, counselors, and nurses

  28. Instructional 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% Elida $4,169 58.3% Bath $4,070 53.9% Shawnee $3,891 53.9% Perry $3,704 53.3% Instructional Support Instruction: Teacher and education professional salaries and classroom materials

  29. STATE FUNDING FLAWS • Over-reliant on property taxes • No inflationary growth on property taxes • Phantom Revenue • Unfunded mandates • System too complicated • Waste many man hours on levies(2000,2003,2004,2005,2006,2007) • One of the few ways voters can express frustration with taxes

  30. 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)

  31. 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

  32. 23 Mill Charge- Off • FY 2005 $7,383,852 • FY 2006 $7,870,054 • FY 2007 $8,226,035

  33. State Aid FY 2006 $7,520,508 FY 2007 $7,520,508 FY 2008 $7,458,619 FY 2009 $7,458,619

  34. TAX BASE

  35. STATE BUDGET BREAKDOWN • Primary & Secondary Education 35% • Medicaid 20% • Colleges 13%

  36. 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

  37. 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

  38. ELIDA BUILDING PROJECT • Elida High School $35,600,000 • Elida Middle School Addition $4,500,000 • Demolition $2,300,000 • Total $42,400,000 • 6.8 mills and ½ mill PI Levy

  39. WHY NOW? • Close two 90+ year old buildings • Take advantage of current construction costs (over 26 month period,cost went up $5 million) • Improve air quality and handicap accessibility • Expand community partnerships • Protect local and community real estate values • Better investment of tax-payer money • Excellent strategic planning • The need goes back to 1969---The time is now!

  40. DISTRICT WIDE REPAIRS

  41. Cost per building/per student

  42. 28 year savings when Gomer is closed • Repairs/Utilities $2,000,000 • Staff reductions $2,800,000 • Heating System $1,017,000 • Electrical $ 468,468 • Handicap access $ 432,232 • Total $6,717,700 • (Other potential repairs do exist)

  43. 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)

  44. Cliff S. BarberLima City PresidentCitizens National Bank “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. “

  45. “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. Anderson President - Lima Region The State Bank and Trust Company

  46. “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. Anderson President - Lima Region The State Bank and Trust Company

  47. “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. Anderson President - Lima Region The State Bank and Trust Company

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