1 / 28

Getting the Community Involved in Dealing with Current Financial Realities

Mohsin Dada CFP® CFO North Shore School District 112, Highland Park, IL. Getting the Community Involved in Dealing with Current Financial Realities. May 17, 2012. Objectives. Create Awareness of our available Financial R esources

renata
Download Presentation

Getting the Community Involved in Dealing with Current Financial Realities

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Mohsin Dada CFP® CFO North Shore School District 112, Highland Park, IL Getting the Community Involved in Dealing with Current Financial Realities May 17, 2012

  2. Objectives • Create Awareness of our available Financial Resources • Think of ways to Balance the District Budget, while maintaining the current level of services to our students • Address Significant Financial Impacts • Obtain Philosophical Agreement as to Budget Approach

  3. Financial Challenges • Revenues not keeping pace with expenditures • Historically low CPI • Declining new construction • Stagnant or declining federal/state aid • Rising personnel costs • Rising special education costs • Uncertainty of future military impact aid • Facilities Needs • Aging Buildings are Costly to Repair • Small Buildings are Inefficient to Operate

  4. North Shore School District 112Revenue by Type – FY12

  5. Factors Affecting Revenues As of December 2011 • Property tax levy is capped at CPI plus any new property growth • Low CPI in last 3 years: average 1.43% • Nominal new property growth • Declining Equalized Assessed Valuation (total property wealth of district) • Interest Earnings < 1% • No growth in state or federal funding

  6. Factors Affecting Revenues Property Taxes Capped at CPI Plus New Construction As of December 2011 Average CPI Increase, Last Three Years: 1.43% Historic CPI Average 2.50% Average New Construction, Last Three Years: .89% FY12 0.35% (estimated) FY11 0.94% FY10 1.39% 8 Year New Construction Average: 1.43% Investment earnings at Historic Lows

  7. Factors Affecting Revenues Property Taxes Capped at CPI Plus New Construction Average CPI Increase, Last Four Years: 1.83% Historic CPI Average (Since 1992) 2.53% Average New Construction, Last Three Years: .93% FY12 0.46% FY11 0.94% FY10 1.39% 10 Year New Construction Average: 1.43% Investment earnings at Historic Lows

  8. Factors Affecting RevenuesFiscal Year 2012 General State Aid

  9. State Categorical Reimbursements

  10. 10 YEARS OF DEFICIT - SURPLUS SPENDING Our Financial History Operating Surplus or Deficit after adjustment from Bond Proceeds, Capital Leases and Transfers

  11. Operating Fund Projections with Fund Balance Target Operating Funds – Education, Operations & Maintenance, Transportation, Illinois Municipal Retirement Fund, Tort and Working Cash

  12. North Shore School District 112Expenditures by Type – FY12

  13. Factors Affecting Expenditures • Salaries and benefits account for close to 70% of budget • Salaries have risen by more than CPI • Medical insurance rates have risen by an average 9.34% in past 3 years • Unfunded government mandates • Special Ed Costs • Transportation costs • ELL, NCLB, RtI • Repair and Maintenance of Aging Facilities

  14. Salaries by Staff Type

  15. Salaries • Increase in base salary 1.55% • Average step (with 0 base increase) 3% • Number of columns 11 • Lowest Salary $ 41,149 • Highest Salary $ 110,446 • Ratio of lowest to highest 268% • Total cost of teachers $ 31,271,907 • Retirement incentive for teachers 6% • Number of teachers on retirement incentive 30

  16. Cost of Lane Changes

  17. Medical Insurance Costs

  18. HMO/PPO Participation Ratio By Category 2011 All Employees

  19. North Shore School District 112Operating Statistics – Last Ten Fiscal Years

  20. North Shore School District 112Current Situation

  21. Compounding Effect of Expenditures Exceeding Revenues

  22. North Shore School District 112Summary of Major Expenditures Assumptions • No Shift of Pension Obligation to the local Board of Education from the State of Illinois • Pension Rate for Employer to stay at 0.58% • THIS (TRS Health) Employer Rate 0.66% • TRS Federal Fund pension rate 25.12% • Health Insurance increase 10% • Dental Insurance increase 6% • Enrollment no significant change • Staffing no change • No significant change in Impact Aid • Retirees FY13 – 5, FY14 – 6, FY 15 – 9, FY 16 – 0 • New hire replacement BA-Step 6 $48,435

  23. SCFAC Recommendations • District must address key cost drivers. Items the committee identified that can be addressed in the FY13 budget include: • Personnel • Consider further personnel reductions to obtain student/staff ratios that are more in line with district guidelines • Consider reviewing allocation guidelines for special education related personnel: teachers, social workers, speech therapists, classroom aides and paraprofessional staff • Compensation • Consider restructuring employee healthcare benefits

  24. Financial Strengths • Strong credit rating • High tax collection rates • High revenue per student • Engaged community perceives high value • Strong reserve balance • Strong tax base • Good financial management • Low debt level / Capacity for additional debt • Valuable real estate assets

  25. ANY QUESTIONS???

More Related