EDU CATING FOR TOMOR R OW. Popular Annual Financial Report For the year ending June 30, 2018 Pickerington Schools, Pickerington, Ohio

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1 EDU CATING FOR TOMOR R OW Popular Annual Financial Report For the year ending June 30, 2018 Pickerington Schools, Pickerington, Ohio

2 P ickerington Schools are fortunate to have a supportive community that is a partner in the education of our children. As steward of the community s investments in its schools, the district is committed to ensuring residents have easy access to and understanding of Pickerington Schools finances. This Popular Annual Financial Report (PAFR) is part of our commitment to transparency. It offers an easy-tounderstand overview of the district s general operating activities, as well as key financial trends and data. The PAFR contains highlights of district finances, with key data taken from audited financial statements in the district s Comprehensive Annual Financial Report (CAFR) for the fiscal year ending June 30, The intention of this report is to summarize the financial activities and operating results reported in the district s audited Comprehensive Annual Financial Report (CAFR). The PAFR is unaudited and presented on a non-gaap (Generally Accepted Accounting Principle) basis. The PAFR does not include full disclosures or segregated funds. Some readers may be interested in exploring the more comprehensive CAFR. That document can be found at and at the Ohio Auditor of State s website, Questions, comments, and feedback about this report are encouraged. Contact the Treasurer s Office at (614) or ryan_jenkins@plsd.us. Respectfully submitted, Timothy Ryan Jenkins Treasurer District Leadership Top row: Board of Education President Keith Kristoff, Vice President Michelle Waterhouse, and Members Clay Lopez, Vanessa Niekamp, and Lori Sanders 2 Bottom row: Dr. Chris Briggs, Superintendent; Bob Blackburn and Zack Howard, Assistant Superintendents

3 Assets Over Liabilities and Deferred Inflows (Balance Sheet) The financial position statement, known in accounting terms as the balance sheet, reports the assets the district has available to provide services along with the liabilities (amounts for which the district is obligated to pay in the future) and deferred inflows (primarily, assets that do not finance the current fiscal year). The district s net position (net worth) is found by subtracting the district s liabilities and deferred inflows from its assets. The amounts below are for the district s General Fund. Assets* Cash and Investments Receivables Other Assets Total Assets ** $36,341 $45,657 $493 $82,489 $35,202 $44,185 $92 $79,479 $33,487 $43,365 $81 $76,933 $27,795 $42,238 $27 $70,060 Liabilities and Deferred Inflows* Amount Owed to Employees and Vendors Deferred Inflows Liabilities and Deferred Inflows ** Assets Over Liabilities and Deferred Inflows ** $12,922 $28,031 $40,953 $41,536 $12,301 $33,660 $45,961 $33,518 $12,239 $34,077 $46,316 $30,617 $12,654 $33,738 Toa tl $46,392 $23,668 * Shown in thousands Community Statistics Median Home Value 2017 $220, $204, $189, Employment in Community (16+) ** Totals may differ due to rounding Median Household Income (Inflation Adjusted by Year) Civilian Labor Force 27,953 Not in Labor Force 12, $93, % 2016 $90, $80,425 Unemployed In Armed Forces Source: U.S. Census Bureau, American Community Survey 5-Year Estimates 3

4 Understanding Services and Expenditures Definitions INSTRUCTION: Activities directly dealing with teaching students or interaction between teachers and students. This includes all aides and classroom assistants who assist in the instructional process. Technology used by students is also included here. PUPIL SUPPORT: Activities that assess and improve students well-being and that supplement the teaching process. This includes guidance services, health services, psychological services, and support services for students with disabilities. INSTRUCTIONAL STAFF SUPPORT: Activities associated with helping the instructional staff with the content and process of providing learning experiences for students. BOARD/ADMINISTRATION/FISCAL: Activities associated with establishing and administrating policy that operates the school district. This includes budgeting, receiving/disbursing, financial accounting, payroll, inventory control, auditing, and fiscal services rendered by persons in the Treasurer s Office. 4 PLANT OPERATION: Activities that keep our facilities open, comfortable, and safe for use and that keep the grounds, buildings, and equipment in an effective working condition and state of repair. This includes activities that maintain safety in buildings, on the grounds, and near the schools. FACILITIES ACQUISITION AND CONSTRUCTION: Activities concerned with acquiring land and buildings, along with remodeling, constructing, or making additions to buildings. This includes initially installing or extending service systems and other built-up equipment, as well as improving sites. TRANSPORTATION: Activities concerned with getting students to and from school, as provided by state law. It also includes transportation to school activities. NON-INSTRUCTIONAL SERVICES: Activities concerned with providing non-instructional services to students, staff, and the community. This includes providing certain services to other school districts. CENTRAL SUPPORT: Activities, other than general administration, that assist in providing the other instructional and supporting services programs. This includes planning, research, development, evaluation, information, and statistical/ data processing services. EXTRACURRICULAR: District-sponsored activities that give students opportunities to participate in athletics, musical groups, clubs, and other experiences on an individual basis at school events or public events under the guidance or supervision of qualified adults. CAPITAL OUTLAY: Expenditures to acquire or add to capital assets. This includes expenditures for land or existing buildings; improvement of grounds; construction, addition, or remodeling of buildings; and initial and additional equipment furnishings and vehicles. DEBT SERVICE: Transactions primarily to discharge the district s commitment for interest and principal on debt.

5 Revenues & Resources Over Expenditures & Services The income statement provides a summary of district revenues and resources compared to the expenditures and services provided by the district. The amounts below reflect the General Fund. Revenues & Resources (shown in thousands) Property and Income Taxes State and Federal Revenue Investment Income Tuition Extracurricular Miscellaneous Total Revenues & Resources Other Financing Sources $62,176 $53,562 $52,673 $51,024 $61,014 $59,125 $57,154 $55,722 $720 $407 $365 $183 $1,010 $438 $522 $552 $820 $797 $774 $754 $1,388 $1,036 $1,010 $1,283 $127,128 $115,365 $112,498 $109,518 $315 $2,771 N/A N/A Expenditures & Services (shown in thousands) Instruction * Pupil Support Instructional Staff Support ** Board/Administration/Fiscal Business Support Plant Operation Transportation Central Support Operation of Non-instructional Extracurricular Facilities Acquisition and Construction Capital Outlay Debt Service Total Expenditures & Services *** Other Financing Uses $72,428 $67,965 $62,818 $63,117 $7,657 $6,884 $6,345 $6,194 $5,304 $4,800 $5,094 $5,155 $11,111 $10,549 $10,552 $10,241 $502 $383 $548 $410 $10,831 $10,229 $9,458 $9,574 $6,070 $6,478 $5,870 $5,702 $1,151 $1,056 $690 $636 $100 $112 $81 $92 $2,010 $1,951 $1,835 $1,766 $120 $78 $18 $106 $259 $2,771 $174 $1,520 $881 $1,228 $1,490 $1,430 $118,425 $114,485 $104,974 $105,946 $1,000 $750 $576 Revenues and Resources Over (Under) Expenditures, Services, and Financing Uses $8,017 $2,902 $6,948 $3,571 * Includes expenditures for teachers, teaching supplies, teaching equipment, and regular, special, and vocational instruction. ** Includes expenditures that help teachers. *** General Fund expenditures increased from to, due mainly to negotiated staff raises of 2.25% (FY14), 2.75% (), 2.25% (), and 2.50% (). 5

6 Our Revenues & Resources Where the General Fund money comes from Total Revenues 47.99% State and Federal Revenue 48.91% Property and Income Taxes 1.09% Miscellaneous 0.79% Tuition 0.65% Extracurriculars 0.57% Investment Income (Shown in thousands) $127,128 Our Expenditures & Services Where the General Fund money goes % Instruction 9.38% Board / Administration / Fiscal 9.15% Plant Operation 6.74% Pupil Support 5.13% Transportation 4.48% Instructional Staff Support 2.54% Miscellaneous * 1.70% Extracurricular Total Expenditures and Services (Shown in thousands) $118,425 * Miscellaneous includes Debt Service, Capital Outlay, Business Support, Facilities Acquisition/Construction, and Central Support/Operation of Non-Instructional

7 Property Taxes State Funding Property taxes provide most of the local revenue to operate and maintain our schools. The district receives property taxes from residents and businesses in Fairfield and Franklin counties. This graph shows revenues received by the General Fund from real and personal property taxes. State money is critical to running a fiscally solvent school district. The primary components of state revenues are unrestricted state aid, consisting of State Foundation (a formula calculation based upon student enrollment), and property tax allocations, which include homestead and rollback payments. Those payments represent the portion of the local tax bill paid by the state on behalf of district residents. For, property taxes increased $7.04 million (19.23%). Actual tax cash receipts increased $1.28 million (3.56%) from. The remaining increase in tax revenue is due to an increase in tax advances available at June 30, 2018, vs. June 30, 2017, which are recorded as revenue. The amount of tax advance available can vary depending upon when the county auditor sends tax bills. $34,987 $35,606 $35,352 $36,283 $36,614 $46,653 $46,947 $50,440 $55,578 $56,678 $58,752 $60,708 This graph shows revenues for the district s General Fund from the State of Ohio. During the last two biennia (from fiscal year 2014 to 2017) and into the first year of the -FY19 biennium, Pickerington Schools have received substantial funding increases due to legislation changes in the state funding formula and due to enrollment increases from to. FY13 FY14 FY13 FY14 Amounts shown in thousands Amounts shown in thousands What percent of students are publicly educated? Nursery School / Preschool 1, % Kindergarten to Grade 12 10, % College (Undergraduate) 2, % Graduate / Professional School % Males in College or Graduate School Females in College or Graduate School 1,574 2, % 79.4% Source: U.S. Census Bureau, American Community Survey 5-Year Estimates 7

8 School District Income Tax $14,597 $15,188 $15,672 $16,390 $16,948 $18,523 The district has a 1 percent income tax. Revenues from the income tax are reported in the district s General Fund and are used to support school operations. Income tax revenues for the past six fiscal years are reported below. FY13 FY14 Amounts shown in thousands 98.1% Households with Computers % Households with Broadband Source: U.S. Census Bureau, American Community Survey 5-Year Estimates

9 Five-Year Forecast Fiscal Year 2019 Fiscal Year 2020 $33,609,294 $31,825,944 $121,081,790 $124,368,233 ($122,865,140) ($128,167,055) Beginning Balance + Revenue - Expenditures Community Statistics Fiscal Year 2021 Fiscal Year 2022 Fiscal Year 2023 $28,027,122 $23,022,747 $15,950,718 $127,632,935 $130,979,180 $14,553,910 ($132,637,310) ($138,051,209) ($143,305,968) + Revenue Surplus or (Deficit) ($1,783,350) ($3,798,822) ($5,004,375) ($7,072,029) ($8,752,058) Ending Balance $31,825,944 $28,027,122 $23,022,747 $15,950,718 $7,198,660 Native Languages (by household) The district remains in a relatively healthy financial position. Our current five-year forecast, presented on a cash basis, projects Pickerington Schools will maintain at least a $7 million end-of-year cash balance through at least June 30, The district has not placed an operating levy on the ballot since English 87.6% Spanish 3.2% Other 9.2% Race by Total Population White 72.1% Black/African American 18.4% American Indian/Alaska Native 0% Asian Enrollment 5.0% Native of Hawaii/Pacific Island Actual Projections 0% Other race 2.3% Two or more races 2.3% Educational Attainment (Age 25+) Less than 9th grade 1.2% 9th-12th, no diploma 4.4% High school diploma/ged 21.6% 10,976 10,811 10,728 10,572 10,448 10,304 10,191 10,150 10,190 10,185 10,203 10,281 Some college, no degree 25.2% FY12 FY13 FY14 FY19 FY20 FY21 FY22 FY23 Associate s Degree 8.0% Bachelor s Degree 26.9% Graduate/Prof. Degree 12.7% Source: U.S. Census Bureau, American Community Survey 5-Year Estimates 9

10 Outstanding Debt at Year End The chart below captures the district s long-term bond obligations. These bonds were issued for construction and/or renovation of school buildings and construction of a public library. Outstanding Debt (shown in thousands) General Obligation Bonds Series 2001 Capital Appreciation Bonds $1,801 $3,817 Series 2001 Capital Appreciation Bonds Accreted Interest $1,944 $3,733 Public Library Refunding Bonds Series 2002 Capital Appreciation Bonds $18 $40 Series 2002 Capital Appreciation Bonds Accreted Interest $89 $167 General Obligation Bonds Series 2004 Capital Appreciation Bonds $145 $145 Series 2004 Capital Appreciation Bonds Accreted Interest $643 $540 Series 2006 Current Interest Refunding Bonds $51,785 $53,630 Series 2006 Capital Appreciation Bonds $3,245 $5,110 $5,110 $5,110 Series 2006 Capital Appreciation Bonds Accreted Interest $6,954 $9,521 $8,217 $7,029 Series 2007 Current Interest Bonds $1,670 $13,710 $24,460 Series 2014 Current Interest Refunding Bonds $25,755 $26,620 $26,670 $27,520 Series 2015 Current Interest Refunding Bonds $8,805 $8,805 $8,805 n/a Series 2016B Current Interest Refunding Bonds $10,010 $10,010 n/a n/a Series 2016 Current Interest Refunding Bonds $46,130 $46,980 n/a n/a Total Outstanding Debt $100,899 $108,715 $118,937 $126,191 Amounts shown in thousands Performance Data From the State Report Card ACT Participation 88.6% Graduation Rate (4-year) 96.7% AP Course Participation 50.8% Student Attendance Rate 94.7% Teachers with Master s Degrees 80.9% Class of 2015 Entering College Within 2 Years 77.7% Average Experience of Teachers 14 years % Meeting Third Grade Reading Guarantee 99.1% 10 Source: State Report Card. More details can be found at and in the Pickerington Schools CAFR at

11 Unbundling the Tax Rate District tax rates (except inside millage) are reduced as valuations increase. In accordance with House Bill 920, as property values increase during the triennial update and reappraisal periods, the voted millage is reduced. As a result the district receives the same amount of tax revenue as it did when voters initially approved each levy. The district only receives additional tax revenue from new construction or when voters approve new tax issues. The chart below shows the difference in the district s gross (voted) residential/agricultural tax rates, compared to the effective rates, which are what is collected. These rates are for the 2018 tax year, collected in Tax Burden on Homeowners Type Gross Rate Effective Rate Length Approved Inside - Operating Permanent Voted - Operating Permanent Classroom Facilities years Bond Retirement Various Total Rates Assessed Values of Real Property Collection Year Agricultural/Residential & Other Real Estate Commercial/ Industrial Public Utility Personal Property Total 2018 $1,056,812,230 $188,993,210 $26,389,680 $1,272,195, $1,034,462,730 $188,373,101 $23,973,550 $1,246,809, $1,015,327,750 $178,813,220 $21,581,640 $1,215,722, $929,969,940 $190,934,860 $21,084,440 $1,141,989, $903,818,230 $181,216,180 $18,770,810 $1,103,805,220 During the past five collection years, overall taxable valuation of growth has averaged about 3.0% per year. During that same time, growth in residential/agricultural values due to new construction has averaged about 1.5% per year. 11

12 PAFR, CAFR Receive GFOA Awards Following a review by a panel of independent reviewers, the district s Popular Annual Financial Report (PAFR) for the year ending June 30, 2017, received the Award for Outstanding Achievement in Popular Annual Financial Reporting from the Government Finance Officers Association (GFOA) of the United States and Canada. The evaluation included evaluation of information presented, reader appeal, understandability, distribution, and other elements. Thank you to Sycamore Creek Elementary students Ean Spetter, Tenley Lazroff, Grant Bender, Carter Billingsley, Maya Cook, Aidan Langdon, Lily Foster, Christian Wellendorf, Tyson Czapla, Victoria Charles, and Jack Adkins, as well as art teacher Ellie Mescher-Miller for providing the cover art for this year s PAFR and reminding us that our future is in great hands! Pickerington Schools also received the Certificate of Achievement for Excellence in Financial Reporting from the GFOA for its Comprehensive Annual Financial Report (CAFR.) The Certificate of Achievement is the highest form of recognition in the area of government accounting and financial reporting. Its attainment represents a significant accomplishment by a governmental agency and its administrators.