LICKING HEIGHTS LOCAL SCHOOL DISTRICT LICKING COUNTY, OHIO

Transcription

1 FINANCIAL FORECAST NOTES OCTOBER 2014 Nick Rberts, CFO/Treasurer

2 Licking Heights Five Year Frecast FISCAL YEAR 2015 Actual Frecasted General Prperty (Real Estate) 13,708,499 14,561,805 16,922,226 18,364,205 18,417,990 18,490,696 18,615,024 18,801, Tangible PPT 378, , , , , , , , Unrestricted Grants 7,679,562 8,373,555 9,195,855 10,039,990 10,337,374 10,643,642 10,959,059 11,283, Restricted Grants 481,354 88, , , , , , , Restricted Grants - SFSF 0 3, Prperty Tax Allcatin 1,826,575 1,964,304 2,259,371 2,427,887 2,452,166 2,476,688 2,501,454 2,526, All Other Revenue 2,484,641 2,443,242 4,241,983 3,124,581 3,933,806 3,537,244 3,919,315 4,088, Ttal Revenue 26,559,240 27,823,417 33,251,872 34,650,509 35,850,279 35,871,162 36,728,722 37,455, Prceeds frm Sale f Ntes 4,276, Operating Transfers - In 246, , , Advances - In 284, , , All Other Financial Surces 56,191 17, ,361 99,000 5,000 5,000 5,000 5, Ttal Other Financing Surces 587,019 4,678, ,872 99,000 5,000 5,000 5,000 5, Ttal Revenues and Other Financing Surces 27,146,259 32,502,373 33,703,744 34,749,509 35,855,279 35,876,162 36,733,722 37,460, Persnnel Services 15,914,789 15,237,858 15,693,799 17,029,635 18,176,489 19,054,987 19,952,376 21,351, Benefits 6,085,762 6,359,204 6,437,878 7,438,721 7,888,380 8,373,452 9,013,055 9,789, Purchased Services 4,750,051 4,853,763 6,519,526 6,719,809 6,854,423 6,990,812 7,129,928 7,708, Supplies and Materials 1,015, ,593 1,278,451 1,474,618 1,403,738 1,416,572 1,429,533 1,494, Capital Outlay 1, , , , , , , Principal - All Years 90,000 95, Principal - Ntes 1,050,000 1,070,000 1,085,000 1,095, Principal - HB 264 Lan 95, , , Interest and Fiscal Charges 17,488 13,900 65,979 47,359 28,424 11, Other Objects 334, , , , , , , , Ttal Expenditures 28,209,411 27,820,823 31,688,814 34,529,635 36,203,908 37,611,251 38,200,661 41,027, Operating Transfers - Out 138, ,947 1,196, Advances - Out 101, , Ttal Other Financing Uses 239, ,729 1,196, Ttal Expenditures and Other Financing Uses 28,448,988 28,262,552 32,885,669 34,529,635 36,203,908 37,611,251 38,200,661 41,027, Excess Revenue ver(under) Expenditures -1,302,729 4,239, , , ,628-1,735,089-1,466,939-3,566, Beginning Cash Balance 1,440, ,361 4,377,182 5,195,257 5,415,131 5,066,502 3,331,413 1,864, Ending Cash Balance 137,361 4,377,182 5,195,257 5,415,131 5,066,502 3,331,413 1,864,475-1,702, Outstanding Encumbrances 13,132 27, ,776 30,000 30,000 30,000 30,000 30, Fund Balance June 30 fr Cert. f Apprpriatins 124,229 4,350,149 4,999,481 5,385,131 5,036,502 3,301,413 1,834,475-1,732, Incme Tax - New Prperty Tax - New Cumulative Balance f New Levies Fund Balance June 30 fr Cert. f Cntracts, Salaries, etc. 124,229 4,350,149 4,999,481 5,385,131 5,036,502 3,301,413 1,834,475-1,732, Unreserved Fund Balance June ,229 4,350,149 4,999,481 5,385,131 5,036,502 3,301,413 1,834,475-1,732,416

3 1. Intrductin The missin f the Licking Heights Lcal Schl District is t enhance grwth thrugh learning. The quantity and quality f learning prgrams are related t the funding prvided and the effective, efficient management f thse funds. It fllws that the District s purpses can best be achieved thrugh prudent fiscal management. Licking Heights was nly ne f seven schl districts in the Central Ohi regin t receive all A s r B s n the Ohi Department f Educatin reprt card fr the 2014 schl year. Licking Heights five-year frecast is an estimate f the mst prbable financial psitin as a result f peratin and changes in ur financial situatin fr the future. Mst prbable means the assumptins have been evaluated by the Treasurer, Superintendent and reviewed by the Bard f Educatin. This frecast is based n management s judgment f the mst likely set f cnditins and mst likely curse f actin. The five-year frecast is derived thrugh a cmbinatin f variables, including but nt limited t: histry, future prjected grwth, curriculum & prgram ptins, fiscal and physical cnstraints. The frecast is als based n the assumptin f future events, which are based n present circumstances and infrmatin currently available. Other factrs that impact the five-year frecast (favrably r unfavrably) are changes in law, state funding, and general ecnmic cnditins. Thus, the frecast is a fluid dcument we cntinually update ver time as financial cnditins change. It is meant t be ur best prjectin at the time, nt an abslute prjectin. It is based n many assumptins, the mst significant f which are utlined in these ntes. 2. Histry PER PUPIL EXPENDITURES: Ohi Department f Educatin per pupil expenditures fr the District during fiscal year 2012 ($8,407) and 2013 ($8,183) ranked 81 st and 71st lwest, respectively, f 607 schls. Fiscal year 2012 and 2013 state averages per pupil expenditure were $10,597 and $10,446, respectively. The District utperfrmed state averages by $2,180 and $2,262 per pupil during fiscal year 2012 and 2013, respectively. It amunts t savings fr fiscal year 2012 and 2013 f apprximately $7.4 millin and $8.2 millin, respectively. Fiscal year 2014 data is nt available (Ohi Department f Educatin, CUPP Reprt). The chart belw cmpares per pupil expenditures f Licking Heights t state average. $11,000 $10,500 $10,000 $9,500 $9,000 $8,500 $8,000 $7,500 Per Pupil Expenditure $10,565 $10,697 $10,597 $10,446 $10,254 $9,991 $9,623 $9,343 $8,515 $8,711 $8,476 $8,620 $8,202 $8,128 $8,407 $8, STATE AVERAGE LICKING HEIGHTS BUILDING INFORMATION High Schl Original Cnstructin (2003) 141,000 sq. ft. 1

4 Student Enrllment LICKING HEIGHTS LOCAL SCHOOL DISTRICT Central Original Cnstructin (1961) 25,818 sq. ft. Gym Additin (1968) 35,800 sq.ft. Classrm Additin (1977) 25,414 sq. ft. Classrm Additin (2000) 11,768 sq. ft. Cafeteria Additin (2005) 9,898 sq. ft. Nrth Original Cnstructin (1953) 23,780 sq. ft. Classrm Additin (1977) 3,920 sq. ft. Office Additin (1987) 1,224 sq. ft. Cnference Rm Additin (1990) 318 sq. ft. Classrm Additin (2002) 14,794 sq. ft. Cafeteria Additin (2005) 9,050 sq. ft. West Original Cnstructin (2004) 74,906 sq. ft. Classrm Additin (2012) 21,990 sq. ft. Suth Original Cnstructin (2004) 95,355 sq. ft. Student enrllment has increased 75% since fiscal year 2005 as illustrated in the chart belw: 5,000 4,000 3,000 2,000 1, Students 2,258 2,532 2,708 2,933 3,076 3,222 3,437 3,423 3,638 3,782 3,960 BUILDING PROJECT: The Bard f Educatin is currently seeking architectural services t generally assist the District with technical expertise fr preparing t ptentially attempt a bnd issue as sn as May 2015 t build new and/r renvate facilities fr the all r sme grade levels t address significant vercrwding issues. The Bard plans t crdinate with the cmmunity t facilitate a plan. Fr purpses f the frecast it is assumed that a building will be cnstructed t educate grades 9 thrugh 12 while grades pre-kindergarten thrugh 8 will be recnfigured and educated thrughut the space left pen in the existing buildings t address the district-wide capacity prblem due t vercrwding. Future frecasts will be updated t reflect the directin taken by the cmmunity, but csts will be incurred regardless f the path chsen. In the interim the district is incurring upfrnt csts fr the additin f mdular classrms until a permanent slutin can be implemented. The csts assciated with the temprary mdular space is expected t increase dramatically ver the next few years and culd significantly drain permanent imprvement funds available fr maintenance and educatin t keep pace with the need fr space due t the number f students. The frecast includes the additinal perating csts assciated with the cnstructin f a new building. Thse csts are first reflected in fiscal year 2019 as fllws: Persnnel Services: The District assumes the additins f the fllwing psitins fr a cst f $768,320: Principal, Assistant Principal, Guidance Cunselr, Maintenance, Custdians (3), ne principal and teachers (5); Benefits: The additinal staff added will als incur csts fr health and dental insurances, retirement, Medicare and ther benefits f $268,912; 2

5 LICKING HEIGHTS LOCAL SCHOOL DISTRICT Purchased Services: The additin f the new building will incur additinal csts fr utilities, (i.e., electric, natural gas, water/sewage, phne), maintenance, security, technlgy, travel, prfessinal develpment and ther prfessinal services f $500,000; Supplies: The District des nt fresee a significant increase but will incur additinal csts f $45,000 in the fllwing supply categries: instructinal due t student grwth, custdial t maintain new building and administrative. Overall, the frecast assumes an additinal $1.5 millin in perating csts beginning in fiscal year 2019 resulting frm the pening f a new building. 3. Financial Overview The vters apprved a 10 year $4.4 millin emergency levy in May 2013 that rescued the District frm ptential fiscal emergency. The state s biennium budget prvided an additinal $1.2 billin fr schls during 2014 and The District s enrllment grwth and wealth factrs allwed the District t reap the benefits f the additinal funding in the biennium budget. As a result, cash balances have grwn frm $124,229 in fiscal year 2012 t $5.1 millin beginning fiscal year The cash balance is strng thrugh fiscal year 2018 assuming revenue grwth frm new cnstructin, tax incentives and state funding; hwever, the cash balance is prjected t be negative $1.7 millin at fiscal yearend The District intends t renew bth emergency levies expiring in 2020 and 2022 t maintain current perating needs. An incme tax levy may be necessary during the frecast perid t ffset increasing csts due t additinal staffing and facility needs directly impacted by student grwth. 4. Significant Issues t Mnitr STATE FUNDING (FY 16-19): There will be a new state budget in fiscal year 2016 and the current funding frmula culd be changed. REYNOLDSBURG SHARED GROWTH: In fiscal year 2014, the District secured a $1.1 millin payment fr a territrial revenue sharing agreement fr tax years frm Reynldsburg City Schl District, as rdered by an Arbitratr and upheld by the Curt system. The Districts are discussing the applicatin f Arbitratr s frmula fr tax years Applicatin f the Arbitratr s frmula indicates that the District is due $580,000 frm Reynldsburg City Schl District fr tax years INCOME TAX: The District may want t cnsider instituting an incme tax as an alternative t prperty tax funding. STUDENT ENROLLMENT: The district has cntinued t grw and is expected t grw which is cunter t the trend in Central Ohi. The district s high academic perfrmance and attractive cmmunity means that increasing enrllment trend is likely t cntinue causing mre strain n the existing system. HEALTH INSURANCE: Rates are up acrss the cuntry but the district is likely t incur the Cadillac tax fr its plan designs in 2018 absent a significant change. The tax culd result in the district paying $415,000 r greater in additinal health csts in an unsustainable mdel. The frecast fr increases in premiums is als higher than previusly anticipated making this a majr issue t mnitr and lk fr pprtunities t address. NEW ALBANY TIF (TAX INCREMENT FINANCING): The District held assumptins cnstant with May 2014 frecasting in the New Albany business area despite knwledge f tw large AEP facilities entering the area. The District did nt want t ver rely n the New Albany revenue surce until actual calculatins are cnfirmed. BUS GARAGE: The District cntinues t evaluate and research bus garage alternatives t increase efficiencies and decrease fuel csts. The facility culd be cnsidered as part f any capital bnd initiative and alleviate cncerns in the general fund. MODULAR CLASSROOMS: The District anticipates the need fr additinal mdular classrm s t cmpensate fr vercrwding due t student grwth if permanent slutin is nt added. The District will incur additinal perating csts regardless f the directin that the cmmunity decides as the District will need t add a significant number f mdular classrms. A prlnged reliance n temprary mdular classrms as a grwth slutin culd 3

6 negatively impact the general fund as pressure will be put n funds allcated fr peratins may be needed t keep pace with the temprary classrm needs. ALL DAY KINDERGARTEN: The district is cmmitted t all-day kindergarten and will implement nce a grwth plan is apprved by the cmmunity t prvide space district-wide fr the verall grwth at every level. 5. Revenue Assumptins A. General Prperty Tax (1.010) Real Estate Tax is a prduct f the valuatin f prperty lcated within District bundaries and effective millage rates levied n such prperty. Here are the current real estate valuatins by class: Type f Prperty Licking/Franklin Cunty Ttal Agricultural 14,773,120 Residential 378,456,610 Class I Ttal 393,229,730 Cmmercial 50,045,490 Industrial 49,201,470 Public Utility 255,880 Class II Ttal 99,502,840 Public Utility Persnal 9,540,125 TOTAL VALUATION 502,272,695 Assessed prperty values (i.e., 35% f market value) are taxed based n millage rates levied against prperty. A millage rate is 1/1000 f a dllar (.001). Prperty taxes are cmputed by multiplying the assessed prperty value by an effective millage rate (i.e., illustrated in chart belw). Fr example, a hme wner in Licking Heights with an assessed prperty value f $35,000 (i.e., $100,000 market value) wuld pay apprximately $1,829 in yearly prperty taxes befre rllback and hmestead tax reliefs [$35,000 * (1/1000 * )]. Type f Levy Term Expiring Term Vted Millage Rate Effective Millage Rate General Fund Inside Millage Cntinuing Cntinuing Current Expense (1976) Cntinuing Cntinuing Current Expense (1980) Cntinuing Cntinuing Emergency Levy (2011) 10 years Emergency Levy (2013) 10 years Permanent Imprvement (2009) Cntinuing Cntinuing Bnd Fund Bnd (2000) 28 years Bnd (2003) 28 years Ttal Millage Rate:

7 The District has experienced 1% yearly grwth rates in residential/agricultural values during the last 10 years. The District has experienced 8% yearly grwth rates in cmmercial/industrial values ver the time same time perid. Full cllectin n the $4.4 millin emergency levy passed in May 2013 will be realized in fiscal year 2015 which results in a significant increase frm the prir year. The frecast assumes minimal grwth f 1% yearly in ttal prperty tax values during the frecasted perid. B. Tangible Persnal Prperty Tax (1.020) Tangible persnal prperty tax currently includes cllectins n public utility tangible tax. The last three years have seen an average revenue grwth f 5% per year. The grwth rate is expected t slw and is prjected at 3% thrughut the frecasted perid. C. Unrestricted Aid (1.035) STATE FUNDING: The State apprved a biennial budget fr fiscal year s 2014 & 2015 as part f Huse Bill 59 that enacted a new schl funding frmula. The frmula placed an emphasis n enrllment and relative wealth. The funding frmula capped district grwth at 6.5% and 10.5% fr fiscal year 2014 and 2015, respectively. The District was capped at 6.5% during fiscal year 2014 and is expected t be capped at 10.5% during fiscal year State funding is expected t increase 9% t $9.8 millin during fiscal year 2015; hwever, the cap is restricting actual funding levels within the frmula. The current funding frmula is dependent n the Ohi Gvernr electin in Nvember 2014 but early indicatins are that the funding frmula will remain regardless. Als, the cap is expected t be increased 3% t 5% which is favrable fr the District. The frecast assumes a 3% grwth rate ver the frecast perid. CASINO REVENUE: In 2009, Ohi vters passed a cnstitutinal amendment that prvided fr fur casin facilities t be lcated in Cleveland, Tled, Clumbus and Cincinnati. The grss casin revenue tax is impsed n licensed casin peratrs at the rate f 33%. The tax revenue cllected frm the grss casin tax is split amng seven funds with 34% distributed t all schl districts based upn student ppulatins. The District received casin revenue tax f $187,412 in fiscal year Openings f new vide lttery terminal facilities and hrse racing tracks are expected t cmpete with full-service casins which diminish substantial grwth thus the frecast assumes a 1% grwth rate ver the frecast perid. D. Restricted Aid (1.040) Restricted aid cnsists f funding fr career technical and ecnmically disadvantaged assistance. Bth surces f funding pass thrugh the state funding frmula and distributed with bi-mnthly state funding settlements. In fiscal year 2014, the District received $34,787 and $164,364 in career technical and ecnmically disadvantage assistance, respectively. Similarly t state funding, revenue is dependent upn the Ohi gvernr electin in Nvember The frecast assumes a 3% grwth rate ver the frecast perid. E. Prperty Tax Allcatin (1.050) Prperty tax allcatins include state reimbursements fr real prperty tax relief. Within real prperty tax relief there are tw separate prgrams: prperty tax rllbacks and hmestead exemptin. The prperty tax rllbacks prgrams reimburse the District fr the cst f the fllwing tax credits: a 10% reductin in each residential taxpayer s real prperty tax bill and an additinal 2.5% n a hmestead that is ccupied by the hmewner. The hmestead exemptin prvides real prperty tax relief t all elderly r disabled hmewners and their surviving spuses. Prvisins f Huse Bill 59 eliminated the 10% and 2.5% rllbacks n all new levies passed beginning with the Nvember 2013 electin cycle. Revenue grwth is tied t changes in current year prperty tax revenues which are expected t grw slwly. The frecast assumes a 1% grwth rate each year. 5

8 F. Other Revenue (1.060) LICKING HEIGHTS LOCAL SCHOOL DISTRICT PAYMENT IN LIEU OF TAXES FOR TAX INCENTIVE FINANCING (TIF): A TIF is an ecnmic develpment mechanism available t lcal gvernments in Ohi t finance public infrastructure imprvements. A TIF wrks by lcking in the taxable wrth f real prperty at the value it hlds at the time the authrizing legislatin was apprved. A taxpayer whse peratins are lcated within a TIF cntinues t make payments in an amunt equal t the real prperty tax liability and these payments in lieu f taxes are cllected by the cunty treasurer and disbursed accrdingly. Currently the District has taxpayers lcated within TIF lcatins n East Brad Street and Waggner Rad. The District received $1.6 millin in lieu f taxes during fiscal year 2014 as result f the TIF. The frecast assumes a 1% grwth rate each year. REYNOLDSBURG REVENUE SHARING: The District has an agreement with the City f Reynldsburg resulting frm an enterprise zne agreement t exempt increases in assessed real prperty value cnstituting the prject site at the intersectin f Brad Street and Taylr Rad. The agreement is fr the purpse f sharing incme tax revenues frm the prject. The District receives 50% f new incme tax resulting frm the prject. The District received $470,567 during fiscal year Expansin and new emplyment in this area has subsided; the frecast des nt assume any substantial grwth. NEW ALBANY INCOME TAX REVENUE SHARING: The District has an agreement with the City f New Albany t share revenue fr cmpanies having tax abatements within District bundaries n Beech Rad. The area is expected t expand creating new emplyment pprtunities and additinal revenue. The pace f grwth and ptential revenue is uncertain; the frecast prjects new revenue f $250,000 (FY16), $450,000 (FY17), $650,000 (FY18) and $800,000 (FY19). Estimates are based upn infrmatin prvided by the New Albany Tax Incentive Review Cuncil and dependent upn many fluctuating factrs. YMCA PRESCHOOL: In fiscal year 2013, the District established an agreement with the YMCA t prvide inhuse preschl services t supprt a cmmunity need. The agreement als prvides additinal revenues t the District t allw the YMCA t utilize facilities. The District received $41,016 during fiscal year 2014 and yearly incme is prjected t be near $50,000 during the frecasted perid. TUITION & OPEN ENROLLMENT: District pen enrllment is clsed. Circumstances d ccur, such as fster placed r curt rdered, where a District must educate a nn-resident child. The District is eligible t receive tuitin, excess csts r catastrphic csts in certain situatins based upn instructinal needs f a child. The District received apprximately $415,000 in fiscal year 2014; the frecast assumes n increase but we expect the revenue surce t remain cnsistent. OTHER: The District receives nminal revenue frm interest earnings, dnatins, student fees, athletic pay t participate fees and prperty rent. The frecast assumes n increase in these revenue surces. 6. Expenditures Assumptins A. Persnnel Services (3.010) CERTIFIED: The District negtiated a three-year cllective bargaining agreement with the educatin assciatin (LHEA) cncluding June 30, The agreement prvided an increase n base salary and 1% yearly increase. The District receives federal grants that help subsidize 18 teaching salaries frm the general fund. The District will mst likely cntinue t receive federal grant supprt in future years but the amunt f supprt is unknwn. Student enrllment cntinues t substantially grw and is prjected t increase 300 t 500 students during the frecast. The frecast assumes an additinal 24 teaching and 1 guidance FTE s during the frecast t ffset ptential cuts in federal aid and t cmpensate fr student grwth. The frecast assumes yearly increases due t cst f living and step increase. CLASSIFIED: The District negtiated a three-year cllective bargaining agreement with the educatinal supprt prfessinals assciatin (LHESPA) cncluding June 30, The agreement prvided a $2 per hur base increase fr bus drivers and $.60 per hur fr all ther members in fiscal year All members will receive a 6

9 1% yearly increase during the final tw years f the agreement. The District is currently perating transprtatin with 39 bus drivers which is apprximately 8-12 drivers understaffed. The District plans t meet student grwth needs with either a new High Schl r expansin f ther facilities that wuld require additinal staffing. The frecast assumes 50 bus drivers during the five-year perid. In additin, the frecast prjects staffing increases in fiscal year 2019 t accmmdate expansin needs due t student grwth by adding custdial (3), maintenance (1) and secretarial (2) psitins. The frecast assumes yearly increases due t cst f living and step increase. EXEMPT: The District has 6 emplyees exempted frm bth assciatins, including: superintendent s administrative assistant, EMIS crdinatr, technlgy assistant, treasurer assistant (2), and district registrar. The District did nt replace an accunts receivable psitin due t retirement but des plan t add a treasurer s administratin assistant during fiscal year 2015 replacing a vacant assistant treasurer psitin. The frecast assumes yearly increases due t cst f living increases. ADMINISTRATION: The District administratin team currently includes a superintendent, treasurer, human resurce directr, technlgy directr, special educatin directr, transprtatin/buildings & grunds directr, athletic directr, principals (4) and assistant principals (5). The District did nt replace an assistant treasurer psitin due t resignatin during fiscal year In additin, the District pted t save funds by utilizing ne principal t versee tw buildings. The District des plan t add a Business Manager during fiscal year 2016 t help fulfill a need t facilitate business related prjects. The frecast prjects administrative increases in fiscal year 2019 t accmmdate expansin needs due t student grwth by adding a principal and assistant principal. The frecast assumes yearly increases due t cst f living increases. B. Retirement/Insurance Benefits (3.020) MEDICAL INSURANCE: The District s usage/claims histry cntinues t be unfavrable where premiums increase at unsustainable rates. Rates increased 17% during 2013 and Rates are expected t increase 18.5% January 1, The District paid $3.3 millin in fiscal year 2014 fr medical insurance premiums and it is prjected t exceed $4 millin in fiscal year The District cntinues t strategize t help sustain premium increases. Each assciatin agreed t eliminate a premium plan during negtiatins that shuld psitively impact usage/claims histry. The premium plan was eliminated t help limit the risk f paying a Cadillac Tax in 2018; hwever, due t significant premium increases the District is still susceptible t the Cadillac Tax in Emplyees agreed t phase-in increased cntributins up t 25% during negtiatins. The District plans t evaluate and determine whether self funding and jining an insurance cnsrtium culd save mney by decreasing administrative csts and eliminating ther fees assciated with the fully-funded plans. The District will cntinue t evaluate plan design, educate members and wrk tward reducing medical insurance csts. Medical insurance made up 52% f all benefit csts in fiscal year The frecast assumes a premium increase f 18.5% in 2015 and a yearly 10% increase fr 2016 and beynd. RETIREMENT: As mandated by law, the District pays 14% f all wages fr retirement t either the State Teachers Retirement System (STRS) r Schl Emplyees Retirement System (SERS). The District paid $2.4 millin in retirement csts during fiscal year 2014 making up 38% f all benefit csts. Increased retirement csts are directly related t ttal wages. The frecast assumes retirement csts f $2.6 millin (2015), $2.8 millin (2016), $2.9 millin (2017), $3.1 millin (2018) and $3.3 millin (2019). OTHER BENEFITS: Cnsidering medical insurance and retirement csts are 90% f benefits; ther benefit csts include Medicare, dental insurance, life insurance, wrker s cmpensatin/unemplyment and tuitin reimbursement. The District spent $609,000 fr ther benefits in fiscal year The frecast prjects yearly 3% increases fr life insurance and wrker s cmpensatin/unemplyment. Dental insurance is prjected at 5% yearly increases. Medicare is 1.45% f all wages (i.e., exceptins include wages f emplyees hired prir t 1986) and is prjected t increase 8% yearly. 7

10 C. Purchased Services (3.030) LICKING HEIGHTS LOCAL SCHOOL DISTRICT PROFESSIONAL & TECHNICAL SERVICES: The District cntracts with the Educatinal Service Center (ESCCO) f Central Ohi fr substitute teaching and supprt staff. In fiscal year 2014, the District pted t cntract these services t the ESCCO t reach a larger substitute pl and reduce administrative time n staffing. The District utilizes additinal services with the ESCCO including emplyment f aide s, teacher evaluatins, etc. The District als cntracts with special educatin cmpanies/specialists t help educate disadvantaged students with particular needs that the District cannt accmplish. The District expended $2.4 millin fr prfessinal & technical services in fiscal year The frecast assumes 2% yearly increase fr and a 4% increase in 2019 t accmmdate expansin needs due t student grwth. UTILITY SERVICES: The District incurs csts assciated with maintaining a cmfrtable learning envirnment fr students and staff by heating and cling facilities. District utility services include electric, natural gas and water/sewage. The District expended $805,000 in 2014 and utility csts are expected t increase. The frecast makes the fllwing assumptins: 1. A 15% increase in electric usage fr 2015 at high schl due t mdular classrms; 2. A 2% increase fr all ther utilities fr ; and 3. The frecast assumes a new High Schl but expansin culd result in additinal mdular classrms r adding space t existing facilities. We are prjecting additinal electric and natural gas expenses in 2019 f $190,000 and $95,000, respectively, fr a new high schl. TUITION: The District has uncntrllable discretinary expenses fr resident students attending ther districts, cmmunity schls, clleges r institutins. The District expended nearly $2.2 millin in fiscal year 2014 with $1.4 millin resulting frm resident students attending cmmunity schls. The District expended an additinal $330,000 fr resident students pen enrlling at ther schl districts. The District expended $362,000 fr resident students attending specialized special needs facilities. The frecast assumes a yearly 2% increase. D. Materials & Supplies (3.040) INSTRUCTIONAL: The District allcates funds fr instructinal materials such as textbks, wrkbks, subscriptins, lab supplies, etc. The District expended $412,000 in fiscal year The Bard f Educatin adpted new math standards t cmply with Ohi Department f Educatin requirements resulting in a need t purchase new district-wide math textbks in fiscal year The District will experience an increase in fiscal year due t the ne-time textbk purchase. Budgets are based n a per pupil basis and expected t increase due t student enrllment grwth. The frecast assumes yearly 1% increases fr and 5% increases in 2019 t cmpensate fr expansin needs due t student grwth. CUSTODIAL/MAINTENANCE: The District incurs supply csts fr maintaining buildings and grunds. The District expended $328,000 in fiscal year 2014 n custdial and maintenance supplies. The frecast assumes yearly 1% increases fr and 5% increases in 2019 t cmpensate fr expansin needs due t student grwth. TRANSPORTATION: The District maintains a bus fleet f abut 60 buses t transprt students in the District. The District expended $290,000 in fiscal year 2014 n fuel. The District cntinues t review fueling alternatives t cntrl csts. The District expended an additinal $149,000 during fiscal year 2014 fr maintenance supplies t prlng estimated bus life and ensure buses perate efficiently. The frecast assumes yearly 1% increases fr and 5% increases in 2019 t cmpensate fr expansin needs due t student grwth. E. Capital Outlay (3.050) The District s gal is t utilize ther capital funds (i.e., permanent imprvement) t purchase capital utlay. District expenditures include new technlgy equipment and custdial equipment. The frecast assumes yearly 1% increases fr

11 F. Principal & Interest (4.020, & 4.060) Payment f principal and interest fr a 4-year $4.2 millin tax anticipatin nte issued upn passage f the May 2013 emergency levy and bus purchase bnd. The nte and bnd bear an interest rate f 1.25% reflected in the frecast. The nte and bnd will be paid in full during fiscal year 2017 and 2016, respectively. G. Other (4.300) Expenditures cnsist f auditr & treasurer fees fr the billing and cllectin f real estate taxes, state auditr fees fr audit services and emplyee flexible spending accunt disbursements. The District expended $410,000 in fiscal year 2014 fr these services. The frecast assumes yearly 1% increases fr H. Advances & Transfers (5.010/5.020) Advances are made t ther funds fr cash flw purpses and typically repaid by the end f each fiscal year. Transfers t ther funds are permanent. The District des nt assume any significant transfers r advances fr fiscal years 2015 and beynd. 9