Tipp City Exempted Village Schools. Miami County

Transcription

1 Tipp City Exempted Village Schools Miami County Assumptions for Five-Year Financial Forecast Projected Fiscal years June 30, 2014 through June 30, 2018 Forecast provided by: Tipp City Exempted Village School District Regina M. Gagliano, CPA, Treasurer/CFO

2 Introduction: All Boards of Education are required by Ohio Revised Code to submit a Five-year Forecast to the State each year no later than October 31 of each fiscal year and to update the forecast if necessary between April 1 and May 31 of each fiscal year. Forecasts are living documents in that they are based on current assumptions and may and do change. Tipp City EVSD s current forecast was compiled based on current economic conditions, taxing conditions and state funding issues as well as input from the District s administration regarding the District s needs. Purpose: The three main purposes of the forecast are: Executive Summary: To provide the Board of Education a means for long range financial planning To serve as a basis for certification of 412 certificates To provide the Ohio Department of Education and Ohio Auditor of State a vehicle to identify school districts who may be in financial distress The District s voters passed a 4.93, 4 year, Emergency Levy in May 2013 with first collections beginning in fiscal year Both of the District s Emergency Levies expire in tax year 2016, January 1 through December 31, with the last collection being in fiscal year 2018 or August This revenue accounts for approximately 25% of total revenue, and expiration will result in deficit spending in fiscal year State budgeted revenues represent approximately 42% of total revenues. The current State biennium budget runs through fiscal year After this point, the estimates are ambiguous at best due to change in administration as well as the ever changing state of State funding and funding models. The federal budget sequester has impacted the District by a reduction in Federal grants-in-aid and the expiration of ARRA funds that will need to be absorbed by the general operating fund. The forecast includes a cost of living increase for staff in fiscal year 2014 the first one in three years. Dedicated staff has allowed the District to maintain its high report card rating. The Board is hopeful that the addition of a cost of living increase will reflect their support of the staff as well as its ability to attract and retain quality employees. Retirement and Insurance Benefits continue to rise. Health care costs alone increased by 6% in fiscal year Expectations are that costs may continue to rise as healthcare reform is implemented. The District is most able to control costs at the supply/material level. These costs account for 2.7% of the general fund budget. So, while controllable, they have a small effect on the District s budget. Despite this, the forecast includes a small increase in this line item for FY14 with decreases over the next four fiscal years.

3 25,000,000 General Fund Revenue, Expenditures and Cash Balance 20,000,000 15,000,000 10,000,000 5,000,000 Revenue Expenditures Cash Balance 5,000, Revenue Assumptions: General Fund Estimated Revenue $21,025,340 33% 1% 9% 4% 53% Property Taxes Unrestricted Grants Restricted Grants Property Tax Allocation Other Revenue Line General Property Tax (Real Estate) Property tax values are established by County Auditor based on new construction. A complete reappraisal or update is completed every three years. Tax Year 2013 is a reappraisal year for Miami County. During a normal growth period we would expect these values to increase, however, over the recent past values have declined. The Miami County Auditor expects a decrease in residential values by 8% with an increase in agricultural values of 6%. When values fall, reduction factors are lowered and HB 920 increases effective tax rates so the District tax revenues are held harmless. These factors do not affect the District s Emergency Levies, fixed sum levies, which account for 25% of tax revenue. These conditions are reflected in the tax revenue estimates. FY14 estimates are based on expected revenues provided by the Miami County Auditor. This estimate includes one half of the May 2013 Emergency Levy revenue to be collected and distributed in February FY 15, FY 16, and FY17 estimates include the full year collection of the both Emergency Levies. FY18 show significant reductions in revenue as the 2011 and 2013 Emergency Levies both expire in tax year Both levies are expected to be renewed/replaced by the Board based on need. The revenue from renewal of these levies is reflected in Line

4 Line Unrestricted State Grants-in-Aid FY14 and FY15 s projections were provided by the Ohio Department of Education based on current information regarding the current State budget and funding model. Subsequent year s estimates were increased by 1.5% which approximates the average historical growth in foundation. Line Property Tax Allocation Included in this estimated are reimbursements received from the State of Ohio for tax credits given for owner occupied residences equaling 12.5%. Also included in this estimate are State Reimbursements for Tangible Personal Property taxes. Expenditure Assumptions: 0.3% General Fund Estimated Expenditures $20,918,552 Personal Services 2.7% 14.3% 0.3% 0.1% 0.9% 60.8% Benefits Purchased Services Supplies and Materials Capital Outlay 20.6% Principal - Other Interest & Fiscal Charges Other Objects Line Personal Services After a three year base pay, longevity and training freeze, the forecast includes an addition to base pay for all staff. Additionally this number has been increased to include severance payments for staff that may be retiring as a result of pension reform. FY 2015 s estimated includes costs associated with certified retirements. Retirements are expected to increase at the end of FY14 due to STRS pension reform changes that will go into effective August 1, The estimate also includes wages for staff that had previously been funded by federal grants. Federal grant funding has been reduced significantly resulting in movement of some of these expenditures to the general fund to maintain current programming. Line Personal Services/Benefits This line item includes insurance, retirement, Medicare and worker s compensation insurance. An increase in retirement is required due to an increase in salaries as the District must deposit 14% of includable compensation to either the State Teachers Retirement System or the School Employees Retirement System. Health care costs have also caused this line item to increase. Current year health premiums have increase by 6% and each year this cost is expected to rise.

5 Line Purchased Services Purchased services include expenditures for utilities, the County ESC contract and foundation deductions for community school and open enrollment students. This line also includes estimates for special education services that may need to be provided outside the ESC contracts. Estimates for this line item were based on historical trends and estimated service needs. Line Principal-HB 264 Loans The District issued 15 year Energy Conservation Notes, HB264, in fiscal year Amounts on this line include principal repayment on this loan. Conclusion Beginning in FY16 the District moves into negative spending and begins tapping its cash reserves to support its mission. This condition is a true representation of the levy cycle in which during the initial years of a levy, cash balances climb and then decrease as the levy ages. While levy revenue is stagnant, costs are not. In addition to holding costs down, the District will also need to consider its options as far as revenue generation is concerned prior to FY17.

6 Tipp City Exempted Village Miami Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2011, 2012 and 2013 Actual; Forecasted Fiscal Years Ending June 30, 2014 Through 2018 Actual Forecasted Fiscal Year Fiscal Year Fiscal Year Average Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Change Revenues General Property Tax (Real Estate) $10,268,373 $10,334,351 $10,378, % $11,191,054 $12,146,233 $12,146,233 $12,146,233 $9,323, Tangible Personal Property Tax 8,362 2,636 2, % Income Tax Unrestricted State Grants-in-Aid 6,695,418 6,764,439 6,967, % $6,875,000 $7,097,231 $7,203,689 $7,311,745 $7,421, Restricted State Grants-in-Aid 38,632 39,131 37, % $127,700 $125,146 $122,643 $120,190 $117, Restricted Federal Grants-in-Aid - SFSF 712, , , % $14, Property Tax Allocation 3,368,007 2,639,007 2,251, % $1,940,718 $1,850,200 $1,724,551 $1,548,330 $1,118, All Other Revenues 570, , , % $876,074 $876,074 $876,074 $876,074 $876, Total Revenues 21,661,648 20,906,747 20,627, % 21,025,340 22,094,884 22,073,191 22,002,572 18,857,784 Other Financing Sources Proceeds from Sale of Notes State Emergency Loans and Advancements (Approved) Operating Transfers-In Advances-In 5,770 46,000 11, % 20,700 20,000 20,000 20,000 20, All Other Financing Sources 25,298 12,032 27, % 10,000 15,000 15,000 15,000 15, Total Other Financing Sources 31,068 58,032 39, % 30,700 35,000 35,000 35,000 35, Total Revenues and Other Financing Sources 21,692,716 20,964,779 20,667, % 21,056,040 22,129,884 22,108,191 22,037,572 18,892,784 Expenditures Personal Services 14,082,191 13,497,202 12,375, % 12,709,182 13,462,164 13,613,808 13,870,482 14,032, Employees' Retirement/Insurance Benefits 4,319,610 4,368,586 4,083, % 4,309,837 4,482,230 4,661,520 4,847,980 5,041, Purchased Services 2,762,426 2,818,778 2,721, % 3,000,000 3,021,000 3,042,147 3,063,442 3,084, Supplies and Materials 490, , , % 571, , , , , Capital Outlay 50,687 29,784 33, % 52,405 33,150 33,150 33,150 33, Intergovernmental Debt Service: Principal-All (Historical Only) Principal-Notes Principal-State Loans Principal-State Advancements Principal-HB 264 Loans 56,830 58,319 58,319 59,846 61,414 63, Principal-Other Interest and Fiscal Charges 20,949 25,444 23,916 22,350 20,740 19, Other Objects 272, , , % 191, , , , , Total Expenditures 21,977,258 21,570,263 20,099, % 20,918,552 21,862,722 22,235,256 22,722,244 23,124,294 Other Financing Uses Operating Transfers-Out 49,000 12,000 2, % 2,500 2,500 2,500 2,500 2, Advances-Out 46,000 11,896 20, % 20,700 20,000 20,000 20,000 20, All Other Financing Uses 38, Total Other Financing Uses 133,806 23,896 23, % 23,200 22,500 22,500 22,500 22, Total Expenditures and Other Financing Uses 22,111,064 21,594,159 20,122, % 20,941,752 21,885,222 22,257,756 22,744,744 23,146, Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 418, , , % 114, , , ,172-4,254, Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 1,715,265 1,296, , % 1,212,197 1,326,485 1,571,147 1,421, , Cash Balance June 30 1,296, ,537 1,212, % 1,326,485 1,571,147 1,421, ,409 3,539, Estimated Encumbrances June ,765 36, , % 100, , , , ,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 1,196, , , % 1,226,485 1,471,147 1,321, ,409 3,639,601- Revenue from Replacement/Renewal Levies Income Tax - Renewal Property Tax - Renewal or Replacement 2,822, Cumulative Balance of Replacement/Renewal Levies 2,822, Fund Balance June 30 for Certification of Contracts, Salary Schedules and Other Obligations 1,196, , , % 1,226,485 1,471,147 1,321, , ,031- 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 1,196, , , % 1,226,485 1,471,147 1,321, , ,031- ADM Forecasts Kindergarten - October Count Grades October Count State Fiscal Stabilization Funds Personal Services SFSF 556, Employees Retirement/Insurance Benefits SFSF Purchased Services SFSF 13, Supplies and Materials SFSF Capital Outlay SFSF Total Expenditures - SFSF 570,514 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