Elida Local Schools Financial Summit IV

1. Elida Local SchoolsFinancial Summit IV Report to Stakeholders Fiscal Year 2008-09 Joel L. Parker,CPA

2. 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

3. 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

4. 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

5. 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.

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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 we done to get lean?

12. 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

13. 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

14. 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

15. Fund Raising Efforts • Fieldhouse Renovation $350,000 • Concession Building $150,000 • Locker/weight room $50,000

16. WHO ARE WE? • Maintenance – 2 • Custodial – 14 • Food Service – 27 • Bus Drivers – 31 • Asst Tech Co-1 • Total 266 • 4 Buildings • 81 square miles • Students – 2,431 • Teachers- 149 • Nurse –1 • Guidance – 4 • Professionals – 17 • Secretaries – 14 • Aides – 6

17. 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)

18. 74Day Cash Balance! 60 DAY CASH BALANCE ALMOST A REALITY

19. 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

20. 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???

22. General Fund

23. General Fund Expenditures

26. FOOD SERVICE

27. Program Spending

29. Special Education Costs • FY 07 $1,310,212 • FY 08 $1,421,808 • FY 09 $1,544,590

31. 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

32. ADMINISTRATIVE EXPENSES Administration: Salaries for administrators, office staff, and office supplies

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

36. TAX BASE

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

38. 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

39. Cost per building/per student

40. 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????

41. 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

42. 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

43. 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

44. 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)

45. 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