LANCASTER CITY SCHOOL DISTRICT - - FAIRFIELD COUNTY IRN:

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1 LANCASTER CITY SCHOOL DISTRICT - - FAIRFIELD COUNTY IRN: Schedule of Revenues, Expenditures and Changes in Fund Balances ACTUAL AND FORECASTED OPERATING FUND Actual Forecasted Fiscal Year Fiscal Year Fiscal Year 3yr Avg Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Change Revenues General Property Tax (Real Estate) 17,535,095 17,689,396 17,848, % 18,120,820 18,280,814 18,428,731 18,560,660 18,659, Tangible Personal Property Tax 3,156,225 3,146,735 3,233, % 3,425,611 3,505,146 3,470,094 3,435,393 3,401, Income Tax 10,777,309 11,130,896 11,451, % 11,835,581 12,072,298 12,313,744 12,560,019 12,811, Unrestricted State Grants-in-Aid 20,846,099 23,560,911 24,675, % 26,691,911 27,649,587 28,751,196 29,902,713 31,095, Restricted State Grants-in-Aid 1,229,050 1,350,966 1,461, % 1,364,272 1,364,272 1,364,272 1,364,272 1,364, Restricted Federal Grants-in-Aid - SFSF % Property Tax Allocation 4,071,001 4,060,785 3,147, % 2,231,754 2,239,528 2,245,127 2,259,426 2,273, All Other Revenues 2,994,739 2,896,200 3,062, % 3,067,397 2,562,252 2,567,852 2,578,452 2,584, Total Revenues 60,609,518 63,835,889 64,880, % 66,737,346 67,673,896 69,141,016 70,660,935 72,188,716 Other Financing Sources Proceeds from Sale of Notes % State Emergency Loans and Advancements (Approved) % Operating Transfers-In 15,655 15,117 22, % 14,761 20,000 20,000 20,000 20, Advances-In 184, , % 0 100, , , , All Other Financing Sources 294,586 62,773 40, % 100,000 40,000 40,000 40,000 40, Total Other Financing Sources 494,823 77,890 68, % 114, , , , , Total Revenues and Other Financing Sources 61,104,341 63,913,779 64,949, % 66,852,106 67,833,896 69,301,016 70,820,935 72,348,716 Expenditures Personal Services 30,401,463 30,872,914 32,418, % 35,573,294 35,698,360 37,127,802 37,864,719 38,612, Employees' Retirement/Insurance Benefits 11,076,689 12,061,901 13,319, % 14,803,411 14,710,485 16,005,889 17,342,785 18,863, Purchased Services 10,256,482 9,260,205 9,698, % 10,338,247 10,744,664 11,157,440 11,587,673 12,037, Supplies and Materials 3,846,809 2,413,505 2,504, % 2,634,699 2,785,013 3,351,264 3,158,449 3,351, Capital Outlay 181, ,371 36, % 745, , , , , Intergovernmental % Debt Service: Principal-All (Historical Only) % Principal-Notes % Principal-State Loans % Principal-State Advancements % Principal-HB 264 Loans % Principal-Other % Interest and Fiscal Charges % Other Objects 758, , , % 759, , , , , Total Expenditures 56,521,379 55,784,443 58,752, % 64,854,889 65,105,063 69,151,168 71,119,714 74,081,636 Other Financing Uses Operating Transfers Out 57,394 2,677,117 8,852, % 900,000 1,779,905 2,320,950 2,815,588 2,764, Advances-Out 0 5, % 100, , , , , All Other Financing Uses % Total Other Financing Uses 57,394 2,683,096 8,852, % 1,000,000 1,879,905 2,420,950 2,915,588 2,864, Total Expenditures and Other Financing Uses 56,578,773 58,467,539 67,605, % 65,854,889 66,984,968 71,572,118 74,035,302 76,946, Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 4,525,568 5,446,240 2,655, % 997, ,928 2,271,102 3,214,367 4,597, Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 31,776,658 36,302,226 41,748, % 39,092,614 40,089,831 40,938,759 38,667,657 35,453, Cash Balance June 30 36,302,226 41,748,466 39,092, % 40,089,831 40,938,759 38,667,657 35,453,290 30,855, Estimated Encumbrances June 30 1,725,480 1,655,335 1,942,779 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000 Reservation of Fund Balance Textbooks and Instructional Materials Capital Improvements Budget Reserve DPIA Fiscal Stabilization Debt Service Property Tax Advances Bus Purchases Subtotal Fund Balance June 30 for Certification of Appropriations 34,576,746 40,093,131 37,149,835 38,389,831 39,238,759 36,967,657 33,753,290 29,155,782 Revenue from Replacement/Renewal Levies Income Tax - Renewal Property Tax - Renewal or Replacement Cumulative Balance of Replacement/Renewal Levies Fund Balance June 30 for Certification of Contracts, Salary Schedules and Other Obligations 34,576,746 40,093,131 37,149,835 38,389,831 39,238,759 36,967,657 33,753,290 29,155,782 Revenue from New Levies Income Tax - New Property Tax - New Cumulative Balance of New Levies Revenue from Future State Advancements Unreserved Fund Balance June 30 34,576,746 40,093,131 37,149,835 38,389,831 39,238,759 36,967,657 33,753,290 29,155,782 State Fiscal Stabilization Funds Personal Services SFSF Employees Retirement/Insurance Benefits SFSF Purchased Services SFSF Supplies and Materials SFSF Capital Outlay SFSF Total Expenditures - SFSF See accompanying summary of significant forecast assumptions and accounting policies Includes: General fund, Emergency Levy fund, DPIA fund, Textbook fund and any portion of Debt Service fund related to General fund debt

2 General Assumptions This is a forecast based on the data available at the time of preparation. The District is in the second year of HB64, the biennium budget for the State of Ohio for FY16 and FY17. HB49, the biennium budget for FY18 and FY19 will not be approved until June 30, Funds included in this forecast are: General (001) only. Revenues: General Property Tax Property values are established each year by the County Auditor based on new construction and complete or updated values. The most current certified reappraisal of district property values was for 2016 values collected in calendar year The next update of district property values will be for the 2019 values collected in calendar year Those amounts should be available late For 2016 (Update): Overall valuations increased 3.05% over The update increased property values 3.28% for residential/agricultural, 1.94% for commercial/industrial, and 5.81% for public utility personal. For 2017: Growth trends are estimated to be relatively flat for residential/agriculture and commercial/industrial. For 2018: Growth trends are estimated to be relatively flat for residential/agriculture and commercial/industrial. For 2019 (Reappraisal): Growth trends are estimated to be relatively flat for residential/agriculture and commercial/industrial. It is estimated that the reappraisal to increase property values 4% for residential/agricultural and increase 1% for commercial/industrial. For 2020: Growth trends are estimated to be relatively flat for residential/agriculture and commercial/industrial. Tangible Personal Property Tax Lancaster City Schools received an increase in TPP in FY11 and FY12 due to the Rocky Pipeline which increased valuations by $19.86 million. Enterprise Liquids laid a smaller pipeline for shale liquids along a similar path as Rocky (less pipeline running through our District), however, the pipeline is now carrying derivatives that are tax exempt; thus, the District will not receive the estimated $13 million in increased valuation in Tax Year We were expecting a third pipeline, the Bluegrass Pipeline, which was anticipated to increase valuations by $15 million in Tax Year 2016 however this project and associated capital spending was suspended in May 2014, thus the pipeline s valuation has been removed from this forecast. Depreciation of 1% on the pipelines has been calculated. Income Tax A ten year 1.5% earned income tax went into effective on January 1, The District renewed the income tax on a continuing basis the fall of Overall collections for FY17 were 3.35% more than FY16. FY18 through the rest of the forecast shows slow steady growth of 2% each year. 1

3 Revenues (continued): Unrestricted Grants in Aid Historically, basic state funding was based on a full-time equivalency (FTE) count of students, Average Daily Membership (ADM), during the first full week of October each year. Starting in Fiscal year 2015, a new count replaced the October count week and was based on the annualized FTE enrollment of each student. A student s FTE was determined based on the school calendar and their enrollment and withdrawal dates rather than a snapshot of one week in October. HB59 created a new funding formula calculation report referred to as the School Finance Payment Report (SFPR). Funding is based on how Districts compare to the state as far as valuation and income rather than a per pupil amount as with the previous budget bill. Details on the funding mechanism are available on the Ohio Department of Education s website ( Lancaster City Schools is not fully funded on the SFPR; therefore, the District is set to receive any cap increases that are approved per the biennial budget bills. FY16 FY17: FY18 FY21: Funding per HB64 increases funding 7.5% each fiscal year. Funding is anticipated to increase 4% each fiscal year. (HB49 in its current form is at a 5.4% cap) *Funded ADM includes community school students however a deduction for community schools will be taken within the expenditures. Due to the closure of the two sponsored community schools, the District received their cash balances which were made up of state foundation revenue (FY15: $631,134 LDA: FY16: $50,000 LFCS). Casino revenue was received starting in FY13. Revenue allocations from the casino tax are intended to supplement current state aid to schools districts. It is not supposed to supplant. This is not a guarantee that supplanting will not occur in the future. The amount calculated for Lancaster City Schools is $50 per student based on October enrollment and held flat through the forecast. Restricted Grants in Aid Starting in FY14, state funds generated by the economically disadvantaged student aid component of the new school-funding formula (HB59) must be reported as restricted. Funding must be spent towards an extended school day and school year, reading improvement and intervention, instructional technology or blended learning, professional development in reading instruction for teachers of students in kindergarten through third grade, dropout prevention, school safety and security measures, community learning centers that address barriers to learning, and/or academic interventions for students in any of grades six through twelve. Career Tech or vocational program funding, as well as catastrophic special education payments, are also classified as restricted grants and are expected to remain flat. Property Tax Allocation Rollback and homestead reimbursements from the State of Ohio are categorized in this line. Rollback and homestead reimbursements will generally grow with new construction, reappraisals, updates and new levies. In years when replacement and renewal levies go off the tax duplicate, revenues in this category will fall. 2

4 Revenues (continued): Tangible Personal Property Tax (TPP) direct reimbursements from the State of Ohio are also categorized here. HB 1, the 2010/2011 biennium budget bill, extended the period before the phase-down of the replacement payments for the loss of TPP to school districts began. HB153 (2012/2013) phased out HB66 payments from the state at a faster rate, not to exceed 2% of District s total 2010 revenues, until the funds are eliminated. Approximately half of all Ohio school districts lost all of their reimbursements in FY12 and FY13. With the current budget bill, HB64, direct TPP payments will once again be phased out. Our District received approximately half of the allocation we received in FY15 ($1.8million x ½) in fiscal year No allocations will be received beyond FY16. All Other Revenues The largest revenue items in this category are as follows: Tuition and open enrollment for students from other districts. Interest income. Pay-to-participate fees for athletics, fine arts, and clubs. Rental Income from Board owned property. In Lieu of Taxes payments. CAFS/Medicaid reimbursements. E-rate revenues Expenditures: Note: Fiscal year 2017 expenditures were originally based on the Permanent Appropriation Measure approved in September; however, now reflect current expenditures plus estimates for the next month and half. See our website for details of our expenditures in the FY17 Budget Document. Through the Ohio School Facilities Commission, the School District received approximately $28 million in state money to construct five new elementary buildings to replace the existing eight elementary buildings. Voters approved a 4.1 mill bond issue on March 6, We are currently operating in all five new buildings. Three elementary schools in opened the fall of 2016; one opened the fall of 2017 and the final elementary school opened January With the passage of the income tax on a continuous basis, the District pledged to construct two new junior high schools in conjunction with the Ohio School Facilities Commission. Bonds were sold in August Planning for the junior high schools is underway with tentative openings in August The total project is estimated to be $50 million. Personal Services FY17 budget includes average raises 2% and average step increases of 1.5%. (27 pays) (Note: There were 26 pays in FY16.) FY18 budget includes average raises 2% and average step increases of 1.5%. (26 pays) FY19 budget includes average raises 2% and average step increases of 1.5%. (26 pays) FY20 budget includes average raises 0% and average step increases of 1.5%. (26 pays) FY21 budget includes average raises 0% and average step increases of 1.5%. (26 pays) Additional personnel have been added in fiscal years to absorb any additional staffing needed to meet class size/special education/curriculum requirements. 3

5 Expenditures (continued): Employees Retirement/Insurance Benefits The largest expenditures in this category are employee health insurance, employee retirement system payments and workers compensation. Employee health insurance premiums increased 6% in FY17. Estimates going forward are: FY18: 0%; FY19: 15%; FY20: 15%; FY21: 15%. The District/employees were granted a one month insurance holiday in December 2012, 2013 and A one month health insurance premium holiday is equivalent to $500,000 for the District s General Fund. Purchased Services The expenditures in this category include, but are not limited to: all district utilities, maintenance and repairs, charter school payments, tuition, open enrollment, postage, and data processing services. Inflation in purchase services has been set at 7.5% each fiscal year. This line item decreased in FY15 due a change in staff hired via purchased services from Fairfield Medical Center for occupational and physical therapy becoming District employees due to changes in the retirement system. Community school payments and open enrollment payments make up the majority of this line item. As part of our technology plan (July 1, 2012 June 30, 2015) the District purchased ipads for high schools in the way of a $267,700/year four year lease purchase agreement with payments beginning July 15, For the FY18 school year the ipads will be replaced with Chromebooks and will cover more grades. Supplies and Materials The expenditures in this category include, but are not limited to: instructional and office supplies, fuel, library books, textbooks, and equipment valued less than $5,000 which do not meet our capitalization criteria. An annual increase of 6% has been applied to this line item for inflation. Textbooks, the largest expenditure out of this category, are purchased on a cycle and fluctuate between fiscal years depending on the subject. FY14 expenditures represent two year s textbook cycles due to timing of payments. The District postponed the adoption of textbooks in FY15 but resumed adoptions in FY16. A Capital Plan was devised and has been rolled into this forecast. Operational supplies and materials expenditures are included in this line item. Capital Outlay Expenditures in this category are for building improvements and capital assets valued over $5,000. A Capital Plan was devised and has been rolled into this forecast. Operational capital expenditures are included in this line item. Investment in a new program at the high school (Project Lead the Way) and upgrades in current career tech programs are included here. Timing of bus purchase expenditures explains the increase in FY17. Other Objects Expenditures in this category include audit fees, property tax collection fees, income tax collection fees, and dues/memberships. An annual increase of 6% has been applied to this line item for inflation. 4

6 Other Financing Options A Capital Plan was been devised and has been rolled into this forecast. It is broken down into three categories that are funded by the corresponding fund: Operating (General Fund), Permanent Improvements (Permanent Improvement Fund), and Capital Projects (Capital Projects Fund). Operating expenditures are shown within the appropriate categories of the forecast. Permanent Improvement expenditures are funded annually via a transfer. Capital Projects expenditures have been funded upfront for years FY16-FY21 via a transfer in FY16. With the passage of the income tax levy, the District has committed, in partnership with the Ohio Facilities Construction Commission, to building two new junior high schools without increasing taxes. Bonds will be sold in 2016 and payments will be made from the General Fund over 23 years via transfers to a bond retirement fund. Payments are slated to begin in FY18. Other transfers include covering the deficit of the TV Station, populating the Board Service Fund, and replenishing the Severance Fund. Advances Out is to cover deficits that may exist in any state or federal grant funds at fiscal year end. 5