Forecast Provided By Groveport-Madison School District Treasurer's Office John Walsh, Treasurer

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1 Groveport-Madison City School District Franklin County SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE 30, 2014, 2015 and 2016 ACTUAL FORECASTED FISCAL YEARS ENDING JUNE 30, 2017 THROUGH 2021 Forecast Provided By Groveport-Madison School District Treasurer's Office John Walsh, Treasurer May 10, 2017

2 GROVEPORT MADISON LOCAL SCHOOL DISTRICT Franklin County Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2014, 2015, 2016 Forecasted Fiscal Year Ending June 30, 2017 through 2021 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) 24,941,144 23,397,991 32,155, % $33,791,867 $33,035,710 $33,540,717 $31,024,466 $28,989, Tangible Personal Property 152, % $0 $0 $0 $0 $ Income Tax % $0 $0 $0 $0 $ Unrestricted State Grants-in-Aid 30,144,792 32,777,397 35,321, % $37,612,787 $39,630,570 $41,380,147 $41,663,745 $41,956, Restricted State Grants-in-Aid 1,560,208 2,138,934 2,009, % $2,351,649 $2,375,165 $2,398,917 $2,422,906 $2,447, Restricted Fed. SFSF Fd. 532 FY10&11/Ed Jobs Fd.504 FY % $0 $0 $0 $0 $ Property Tax Allocation 3,516,282 3,627,519 2,909, % 2,829,049 2,766,214 2,722,936 2,616,103 2,553, All Other Revenues 2,328,332 3,251,160 4,739, % 4,774,775 3,857,288 3,674,091 3,691,160 3,521, Total Revenues 62,642,837 65,193,792 77,135, % 81,360,127 81,664,947 83,716,808 81,418,380 79,467,022 Other Financing Sources Proceeds from Sale of Notes 5,000, % $350,014 $0 $0 $0 $ State Emergency Loans and Advancements (Approved) % Operating Transfers-In - - 1,490, % 1,492, Advances-In % All Other Financing Sources 178, , , % $20,899 $20,899 $20,899 $20,899 $20, Total Other Financing Sources 5,178, ,449 1,923, % 1,862,936 20,899 20,899 20,899 20, Total Revenues and Other Financing Sources 67,821,595 65,877,241 79,059, % 83,223,063 81,685,846 83,737,707 81,439,279 79,487,921 Expenditures Personnel Services $26,867,629 $27,087,580 $29,789, % $31,455,149 $32,731,315 $33,956,215 $35,062,903 $36,221, Employees' Retirement/Insurance Benefits 11,424,848 11,443,592 12,675, % $13,923,207 $15,592,447 $16,621,096 $17,597,269 $18,643, Purchased Services 21,169,778 24,070,211 24,995, % $26,742,231 $26,337,031 $26,710,891 $27,094,651 $27,367, Supplies and Materials 1,055,496 1,201,042 1,851, % 1,862,745 1,709,227 1,757,004 1,806,214 1,856, Capital Outlay 5,379 38, , % 1,928,831 1,064, , , , Intergovernmental % Debt Service: Principal-All (Historical Only) % Principal-Notes 5,000, % Principal-State Loans % Principal-State Advancements % $0 $0 $0 $0 $ Principal-HB 264 Loans % $0 $0 $0 $0 $ Principal-Other % $0 $0 $0 $0 $ Interest and Fiscal Charges 34, % $0 $0 $0 $0 $ Other Objects 1,206,739 1,408,658 1,055, % $1,117,963 $1,140,435 $1,163,471 $1,187,086 $1,211, Total Expenditures $66,764,418 65,249,688 70,712, % 77,030,126 78,575,393 80,693,677 83,253,123 85,841,296 Other Financing Uses Operating Transfers-Out - 178,723 1,781, % $2,477,473 $982,900 $985,200 $987,300 $983, Advances-Out % All Other Financing Uses 1,093,995 6, % Total Other Financing Uses 1,093, ,279 1,781, % 2,477, , , , , Total Expenditures and Other Financing Uses 67,858,413 65,434,967 72,493, % 79,507,599 79,558,293 81,678,877 84,240,423 86,824, Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses (36,818) 442,274 6,565, % 3,715,464 2,127,553 2,058,830 (2,801,143) (7,336,613) Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 80,293 43, , % 7,051,465 10,766,929 12,894,482 14,953,312 12,152, Cash Balance June 30 43, ,749 7,051, % 10,766,929 12,894,482 14,953,312 12,152,169 4,815, Estimated Encumbrances June 30 8, ,714 2,070, % 704, , , , ,000 Reservation of Fund Balance Textbooks and Instructional Materials % Capital Improvements % Budget Reserve % DPIA % Fiscal Stabilization - - 1,570, % 3,017,252 3,049,822 3,090,611 3,130,607 3,169, Debt Service % Property Tax Advances % Bus Purchases % Subtotal - - 1,570, % 3,017,252 3,049,822 3,090,611 3,130,607 3,169, Fund Balance June 30 for Certification of Appropriations 34,649 72,035 3,410, % 7,045,677 9,410,660 11,371,701 8,627,562 1,252,029 5/2/2017 Groveport Madison

3 GROVEPORT MADISON LOCAL SCHOOL DISTRICT Franklin County Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2014, 2015, 2016 Forecasted Fiscal Year Ending June 30, 2017 through 2021 Actual Forecasted Fiscal Year Fiscal Year Fiscal Year Average Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Change Revenue from Replacement/Renewal Levies Income Tax - Renewal % Property Tax - Renewal or Replacement % ,858,026 5,285, Cumulative Balance of Replacement/Renewal Levies % ,858,026 8,143, Fund Balance June 30 for Certification of Contracts, Salary Schedules and Other Obligations 34,649 72,035 3,410, % 7,045,677 9,410,660 11,371,701 11,485,588 9,395,249 Revenue from New Levies Income Tax - New 0.0% $0 $0 $0 $0 $ Property Tax - New 0.0% Cumulative Balance of New Levies % Revenue from Future State Advancements - 0.0% Unreserved Fund Balance June 30 34,649 72,035 3,410, % 7,045,677 9,410,660 11,371,701 11,485,588 9,395,249 5/2/2017 Groveport Madison

4 Groveport-Madison School District Franklin County Notes to the Five Year Forecast General Fund Only May 10, 2017 Introduction to the Five Year Forecast All school districts in Ohio are required to file a five (5) year financial forecast by October 31, and May 31, in each fiscal year (FY). The five-year forecast includes three years of actual and five years of projected general fund revenues and expenditures. Fiscal year 2017 (July 1, 2016 through June 30, 2017) is the first year of the five year forecast and is considered the baseline year. Our forecast is being updated to reflect the most current economic data for the May 2017 filing. Forecast Risks and Uncertainty: A five year financial forecast is laden with risks and uncertainty not only due to economic uncertainties but also due to state legislative changes that will be happening in the spring of 2017 and 2019 due to deliberation of the next two (2) state biennium budget for FY18-19 & FY20-21, both of which affect this five year forecast. We have estimated revenues and expenses based on the best data available to us at the time of this forecast. The items below give a short description of the current issues and how they may affect our forecast long term: I. Franklin County will go through an update in the 2017 tax year to be collected in FY18. A reappraisal update occurred in tax year 2014 for collection in FY15, which lowered assessed values by $23.5 million or a decrease of 5.1%. The decrease was not nearly as large as many districts in Ohio which indicated our property values were not overstated. In 2017 our district saw a slight increase in terms of valuation changes as property values are starting to recover in our state. There is always some risk that the district could see larger value reductions but we do not anticipate that at this time. II. III. IV. The State Budget represents nearly 54% of district revenues, which means it is a significant area of risk to revenue. The risk comes in FY18 and beyond if the state economy worsens or if the currently adopted HB64 funding formula is changed to reduce funding to our district in a future biennium budget. There are two future State Biennium Budgets covering the period from FY18 through FY21 in this forecast. Future uncertainty in both the state foundation funding formula and the state s economy makes this area an elevated risk to district funding long range through FY21. HB64 the new state budget reinstitutes the phase out of district Tangible Personal Property (TPP) reimbursements which had been promised under previous budget bills. There are many provisions in the current state budget bill HB64 that will increase the district expenditures in the form of expanded school choice programs and increases in amounts deducted from our state aid in the school years. The cost of each Peterson Special Needs voucher and Autism Scholarship Program increased sharply in HB64 from $20,000 each to $27,000, a 35% increase. These are examples of new choice programs that cost the district money. Expansion or creation of programs such as these exposes the district to new expenditures that are not currently in the forecast. We are monitoring HB49 for any new threats to our state aid and increased costs very closely. V. Patient Protection and Affordable Care Act (PPACA) This program was approved March 23, 2010 along with the Health Care and Education Reconciliation Act. Many of the provisions of this federal statute were to be implemented January 1, Implementation of those provisions has increased costs by as much as 2%. There is the additional risk that costs will go up as additional staffs are added to our health care rolls. We have made allowance for increases in our costs for health care in the forecast 3

5 based on what we know at this time. Future uncertainty over rules and implementation of PPACA exists as it is under review and potential appeal or mediation at the federal level. VI. VII. VIII. The district s 6.8 mill Substitute Emergency levy will expire on December 31, The renewal of this levy is necessary to keep the district financially healthy long term. HB59 eliminated the Rollback exemption on any future new or replacement levy. This means that should the District place a new levy on the ballot taxpayers will no longer receive the 12.5% reduction as they do on current levies. This could make passing any new levy more difficult. This will not effect the total collection for the school district but will further shift the tax burden from the State of Ohio onto local taxpayers. Labor relations in the district have been very amicable with all parties working for the best interest of students and realizing the resource challenges the district faces. We believe as the district moves forward a strong working relationship will continue. May 2017 Updates: Tax Revenue Line 1.01 There is an increase of $2,538,419 for the remainder of the forecast. After reviewing the updated tax base for 2016 collect in 2017 we have made changes to new construction values, increases for the update and reappraisal percentages in the future and board of revision amounts. Restricted & Unrestricted State Revenue Lines 1.035, & There is an increase of $3,849,573 for the remainder of the forecast. Increases are from the changes in ADM over the course of the forecast, changes in the per pupil amounts and amounts of the CAP based on most recent data for HB49. Other Revenue Lines There is a decrease of $951,701 for the remainder of the forecast. The change is for the amount of TIF and Pilot payments and the loss of the rental revenue for Cruiser Academy. Wages Line There is a decrease of $5,738,375 for the remainder of the forecast. The change is for a smaller number of staff that will retire throughout the forecast and not increasing staff for future years of the forecast. Benefits Line There is a decrease of $1,217,918 for the remainder of the forecast. The decrease corresponds to the changes in salaries. Other Expenditures Lines to There is an increase of $425,455 for the remainder of the forecast. The changes are for additional cost in transportation, capital outlay and technology for the remainder of the forecast. Transfer Out Line There is an increase of $937,500 for the remainder of the forecast. The district will transfer the amount of the donation for the football stadium to a capital projects account when received each year. 4

6 Millions General Fund Revenue, Expenditure and Ending Cash Balance General Fund Revenue, Expenditures & Cash Balance $100 $90 $80 $70 $60 $50 $40 Tax levy to be renewed $30 $20 $10 $- Act Act Act Est Est Est Est Est Revenue Expenditures Ending Bal. The major lines of reference for the forecast are noted below in the headings to make it easier to relate the assumptions made for the forecast item and refer back to the forecast. It should be of assistance to the reader to review the assumptions noted below in understanding the overall financial forecast for our district. If you would like further information please feel free to contact John Walsh, Treasurer/CFO of Groveport-Madison School District at

7 Estimated General Fund Revenue for FY17 Revenue Assumptions General Fund Revenues Estimated 2017 $ 81,360,127 Other State 3% Local Sources 47.4% State Foundation 49% Real Estate Taxes 42% State Sources 52.6% Tang. Tax 0% Other Local 6% Real Estate Value Assumptions Line # Property Values are established each year by the County Auditor based on new construction, demolitions, Board of Revision (BOR)/Board of Tax Appeals (BTA) activity and complete reappraisal or updated values. The Franklin County Auditor provided the district the values of all abatements that will be added to the Comm/Ind valuation beginning in 2015 collected in The first year that the values are added from being abated the values are treated as new construction which will give the district an increase in tax revenue. We have included these values in the forecast during the correct collection year. A complete reappraisal update occurred in tax year 2014 for collection in FY15. Real estate values fell 5.1 % for residential and commercial property fell 0.7% and total value declined in all classes by 2.1%. An appraisal update will occur in 2017 for collection in FY18 and we are projecting an increase of 1% in residential and for commercial property to stay steady at that time. Real estate tax revenue makes up 42% of the district s General Fund revenue. The district has seen growth in new construction from the values that were provided in January 2016 to January 2017 in both Residential/Agriculture Class I Property and Commercial/Industrial Class II property. The Class I increased a total of $3,346,900 in valuation. The Class II property increased to a total of $20,968,880 in valuation. We anticipate the increase in values to continue throughout the forecast. In 2011 Tangible Personal Property (TPP) values were reduced to $-0- as a result of HB 66 that took effect July 1, Public Utility Personal Property (PUPP) values have seen a growth over the past five years and we expect a slight increase each year of the forecast. 6

8 ESTIMATED ASSESSED VALUE (AV) BY COLLECTION YEARS Actual Actual Estimated Estimated Estimated TAX YEAR 2016 TAX YEAR 2017 TAX YEAR 2018 TAX YEAR 2019 TAX YEAR 2020 Classification COLLECT 2017 COLLECT 2018 COLLECT 2019 COLLECT 2020 COLLECT 2021 Res./Ag. $450,238,220 $455,190,602 $456,140,602 $457,090,602 $462,111,508 Comm./Ind. $327,141,680 $342,734,495 $347,319,425 $355,584,570 $379,348,506 Public Utility (PUPP) $45,821,170 $46,321,170 $46,821,170 $47,321,170 $47,821,170 Tangible Personal Property (TPP) $0 $0 $0 $0 $0 Total Assessed Value $823,201,070 $844,246,267 $850,281,197 $859,996,342 $889,281,184 ESTIMATED REAL ESTATE TAX (Line #1.010) Property tax levies are estimated to be collected at 95% of the annual amount. Technically 100% of taxes will be settled on property due to Ohio s property tax laws however, the timing of the tax payments is always in flux but they appear to have normalized. Property taxes are estimated to be collected at 51.75% of the Res/Ag and Comm/Ind in the February tax settlements and 48.25% collected in the August tax settlements. Public Utility Personal Property tax settlements (PUPP taxes) are estimated to be received 50% in the February and 50% in the August settlement from Franklin County Auditor. The district posts PUPP and Real Estate Taxes in Line Est. General Property Taxes Line #1.010 $33,791,867 $33,035,710 $33,540,717 $31,024,466 $28,989,076 Estimated Tangible Personal Tax Line#1.020 The phase out of TPP taxes as noted earlier began in FY06. HB66 was adopted in June 2005 and the provisions of the legislation have estimated the tangible personal property tax would be eliminated after FY11. Any TPP revenues received in FY13 and beyond are delinquent TPP taxes. Renewal and Replacement Levies Line # The May 2014 levy will expire at the end of Therefore the district will need to renew that levy in order for the collection to be maintained in 2019 for 2020 collection. Renew 6.68 mill levy $0 $0 $0 $2,858,026 $5,285,194 Total Line # $0 $0 $0 $2,858,026 $5,285,194 New Tax Levies Line # No new levies are modeled in this forecast. State Foundation Revenue - Lines #1.035, & A) Unrestricted State Foundation & Casino Line #1.035 The amounts estimated for FY17 for state funding are based on funding component computations from the most recent April #2 State Foundation Payment Report (SFPR). The current FY16-17 state budget HB64 includes an increase in funding for our district. We are projected to be a CAP district regarding state funding in FY16 and FY17. Our state funding status for FY18-21 will depend on two unknown state budgets in this forecast period. HB49 the current proposed new state budget for FY18 & FY19 will not be known until late June Our revision to the October 2017 forecast will capture the changes made in HB49. 7

9 The funding formula in HB64 has used the backbone of the previous state foundation funding formulas but has modified the State Share Index (SSI) method to measure a district s wealth and capacity to raise local revenue. The SSI is applied to the per pupil opportunity grant calculation and many of the other categorical funding items in the state foundation formula as noted below: 1) Opportunity Grant Per pupil amount increased 1.7% from $5,800 in FY15 to $5,900 in FY16 and 1.7% to $6,000 in FY17. 2) Targeted Assistance Tier I based on wealth and Tier II based on percentage of district agricultural assessed value 3) Special Education Additional Aid Based on six (6) categories of disability 4) Limited English Proficiency Based on three (3) categories based on time student enrolled in schools 5) Economically Disadvantaged Aid- Based on number and concentration of economically disadvantaged students 6) K-3 Literacy Funds- Based on districts K-3 average daily membership and two Tiers 7) Gifted Funds Based on average daily membership at $5.05 in FY16 & FY17 8) Career-Technical Education Funds Based on career technical average daily membership and five (5) categories students enrolled in 9) Transportation Aid Funding based on total ridership rather than qualifying ridership in determining statewide cost per rider. Reduces state minimum share from 60% to 50%. There are several new funding components provided in HB64 for FY16 &17. These are additional funds that can be earned by a district or is intended to help a district who has an undue burden or inability to raise local revenue. 1) Capacity Aid Provides additional funding for districts where income generated for one mill of property tax is below the state median for what is generated. 2) Transportation Supplement Provides additional funding for districts with rider density (riders per square mile) less than 35 students in FY16 and 50 in FY17. Provides additional funding based on rider density and the number of miles driven by the school buses. 3) 3 rd Grade Reading Proficiency Bonus- Provides a bonus to districts based on third grade reading results. 4) High School Graduation Rate Bonus-Provides a bonus to districts based on high school graduation rates up to approximately $450 per student. There are potentially 342 independent variables in the SFPR formula. If any of the variables are changed, either independently or in conjunction with other variables, there could be a change to forecasted state aid for FY Currently, there are still changes being made to the above variables as well as changes that could result once ODE finalizes the calculations from FY16. Our estimates are based on the best information available to us and the most current calculation used by ODE. Changes to our forecasted data could occur if there are large adjustments made by ODE based on the final FY16 reconciliation. The April #1 SFPR payment included the Final #5 adjustment for FY15 and the Final #3 adjustment for FY16, we are not completely confident that there will not be any other changes to FY16 after this payment. Our current SFPR estimates for FY17 are using April #2 adjusted average daily membership (ADM) and had added 10 new students each year through FY21. Student counts are now updated with each SFPR payment to the district. So far in FY17 we have received payment adjustments for both FY15 andfy16 which we have included in the amount of our state funding. We are hopeful that there will not be any more changes from previous years. These corrections could result in undulating state aid payments throughout the year based on each student count if a district is on the formula. 8

10 Our estimate of state aid is based on the most current data we have available to us at the time. We have estimated relatively stable enrollment and a 0.5% per pupil increase in FY18 & FY19 and then a 1% per pupil increase in FY20 & FY21 for Opportunity Grant funding. Current calculations indicate our district is a CAP funded district for FY16 and we anticipate that we will remain on the CAP in FY17 as well. The CAP growth rate for FY16 & 17 is 7.5% each year. We believe the district will receive additional funds for the period FY17 through FY21. We have estimated an increase in the CAP amount of 5% each year for FY18-21, but this amount could be higher or lower. The House of Representatives have made changes to HB49 for FY18-FY19 budget, we have not included those changes in the assumptions for the May forecast since the amounts are based on January enrollment data and do not specify the actual changes from the Governor s proposal. On November 3, 2009 Ohio voters passed the Ohio casino ballot issue. This issue allowed for the opening of four (4) casinos, one each in Cleveland, Toledo, Columbus and Cincinnati. As of March 4, 2013, all four (4) casinos are open for business and generating Gross Casino Tax Revenues (GCR). Thirty-three percent (33%) of the gross casino revenue will be collected as a tax. School districts will receive 34% of the 33% GCR that will be paid into a student fund at the state level. These funds will be distributed to school districts on the 31st of January and August each year which began for the first time on January 31, The initial student payment to schools in January 2013 (FY13) was a half year payment of $21.00 per pupil that rose to $51.50 per pupil for a full year in FY14 and $50.50 in FY15. The state indicated recently that the original 2009 estimates of $1.9 billion of GCR may be closer to $900 million as revenues from casinos are not growing robustly as originally predicted. Actual numbers generated for FY16 statewide were 1,792,947 students at $51.34 per pupil. For FY17-20 we estimated another 3/10 th of 1% decline in pupils to 1,789,000 and GCR increasing to $89.3 million or $49.68 per pupil. We will increase estimates for out years when actual casino revenues show signs of stronger increases. Basic Aid-Unrestricted $36,508,724 $38,526,507 $40,276,084 $40,559,682 $40,852,353 Additional Aid Items $816,048 $816,048 $816,048 $816,048 $816,048 Basic Aid-Unrestricted Subtotal $37,324,772 $39,342,555 $41,092,132 $41,375,730 $41,668,401 Ohio Casino Commission ODT $288,015 $288,015 $288,015 $288,015 $288,015 Total Unrestricted State Aid Line # $37,612,787 $39,630,570 $41,380,147 $41,663,745 $41,956,416 B) Restricted State Revenues Line # HB64 continues funding two restricted sources of revenues to school district which are Economic Disadvantaged Funding and Career Technical Education funding. We have incorporated the April #2 payment for FY17 within this line and a 1% increase each year of the forecast for FY Economically Disadvantaged Aid $2,260,859 $2,283,467 $2,306,302 $2,329,365 $2,352,659 Career Tech - Restricted $90,790 $91,698 $92,615 $93,541 $94,476 Total Restricted State Revenues Line #1.040 $2,351,649 $2,375,165 $2,398,917 $2,422,906 $2,447,135 C) Restricted Federal Grants in Aid line #1.045 The district does not expect to receive any federal unrestricted funds in the general fund FY

11 SUMMARY OF STATE REVENUES SUMMARY FY17 FY18 FY19 FY20 FY21 Unrestricted Line # $37,612,787 $39,630,570 $41,380,147 $41,663,745 $41,956,416 Restricted Line # $2,351,649 $2,375,165 $2,398,917 $2,422,906 $2,447,135 Fed. Grants - SFSF & Ed Jobs Line #1.045 $0 $0 $0 $0 $0 Total State Foundation Revenue $39,964,436 $42,005,735 $43,779,064 $44,086,651 $44,403,551 State Taxes Reimbursement/Property Tax Allocation - Line #1.050 A) Rollback and Homestead Reimbursement Rollback funds are reimbursements paid to the district from Ohio for tax credits given owner occupied residences equaling 12.5% of the gross property taxes charged residential taxpayers on tax levies passed prior to September 29, HB59 eliminated the 10% and 2.5% rollback on new levies approved after September 29, HB66 previously eliminated 10% rollback on Class II (commercial and industrial) property. Homestead Exemptions are also credits paid to the district from the state of Ohio for qualified elderly and disabled. In 2007 HB119 expanded the Homestead Exemption for all seniors over age 65 years of age or who are disabled regardless of income. Effective September 29, 2013 HB59 changes the requirement for Homestead Exemptions. Individual taxpayers who do not currently have their Homestead Exemption approved or those who do not get a new application approved for tax year 2013, and who become eligible thereafter will only receive a Homestead Exemption if they meet the income qualifications. Taxpayers who currently have their Homestead Exemption as of September 29, 2013 will not lose it going forward and will not have to meet the new income qualification. This will slow the growth of homestead reimbursements to the district, and as with the rollback reimbursements above, increase the taxes collected locally on taxpayers. b) Tangible Personal Property Reimbursements Fixed Rate School districts were to be reimbursed for the TPP tax losses by the state of Ohio at varying levels through 2026 but those reimbursements were severely curtailed or eliminated by HB153 effective July 1, The district received $2,036,389 in FY12 and $827,794 in FY13 through FY15. HB64 is eliminating the Fixed Rate reimbursement based on a five different quintile ranking system that decreases the amounts from 1% to 2% annually and will eliminate the TPP reimbursements to our district completely in FY16. Since the district will receive additional funding in the Basic State Aid Formula we will not receive any type of TPP hold harmless payment beginning in FY16 that are included in Sub. HB64. c) Tangible Personal Property Reimbursements Fixed Sum HB 64 has continued reimbursement of Fixed Sum TPP reimbursements at current levels through FY17 and will begin a phase out over five years through FY21. There will be no fixed sum TPP reimbursement in FY22. Districts will not lose money due to the phase out. The amount of money the state is cutting its reimbursement by will be added on the local fixed sum millage and collected in local property taxes. This is directly shifting the burden to local tax payers by the state cut in fixed sum TPP reimbursement. Summary of State Tax Reimbursement Line #1.050 a) Rollback and Homestead $2,571,345 $2,560,052 $2,568,314 $2,513,022 $2,450,308 b) TPP Fixed Rate $0 $0 $0 $0 $0 c) TPP Fixed Sum $257,704 $206,162 $154,622 $103,081 $103,081 Total Tax Reimb./Prop. Tax Allocations #1.050 $2,829,049 $2,766,214 $2,722,936 $2,616,103 $2,553,389 Other Local Revenues Line #1.060 Revenues from all other sources are based on historical growth patterns. This revenue largely consists of rental income, tuition payments, Medicaid reimbursements and payments from TIF (Tax Increment Financing) and 10

12 Millions PILOT (Payments in Lieu of Taxes) programs. The district expects to receive $300,000 in Medicaid payments each year of the forecast. This is considerably less than the past few years as the catch-up period has ended. The district is expecting larger TIF and PILOT payments in FY17. The district will be receiving additional payment for the Obetz CRA in FY18 but the amount is not known at this time and is not included in the forecast. Tuition SF-14 & SF-14H $1,006,619 $1,016,685 $1,026,852 $1,037,121 $1,047,492 Extra Curricular & Class Fees $16,269 $17,571 $18,977 $20,495 $22,135 Interest $90,019 $90,919 $91,828 $92,746 $93,673 Medicaid CAFS $300,000 $300,000 $300,000 $300,000 $300,000 Crusier Academy $750,000 $0 $0 $0 $0 TIF & PILOT Payments $2,184,033 $2,000,000 $1,800,000 $1,800,000 $1,800,000 Erate & Other Miscellanous $427,835 $432,113 $436,434 $440,798 $257,706 Total Line # $4,774,775 $3,857,288 $3,674,091 $3,691,160 $3,521,006 Comparison of Local Revenue and State Revenue General Fund Local Revenue Vs. State $50 $45 $40 $35 $30 $25 $20 $15 $10 $5 $- Act.2014 Act.2015 Act.2016 Est.2017 Est.2018 Est.2019 Est.2020 Est.2021 Local Revenue State Revenue The chart above shows that the district began receiving additional dollars from the state in FY15 and will continue to receive additional dollars based on the information that the district has at this time. The local revenue increased in FY16 with the passing of the levy and will be maintained at that level until the levy is renewed in FY20. The district cannot include levy proceeds as actual income until a levy is approved by the voters. Short-Term Borrowing Lines #2.010 & Line #2.020 There are no short term borrowings planned at this time. Transfers In / Return of Advances Line #2.040 & Line #2.050 Returns of advances to other funds from the previous year are included in this area. The district transferred from General Fund to a Special Cost Center for Budget reserve $1,492,022 to adjust the Budget reserve to $3,000,000. The reserve can only be used for emergencies and must be approved by the Board of Education. 11

13 All Other Financial Sources Line #2.060 & Line # The district has decreased the amount of refunds and sales of assets to a more moderate level from previous years since the district will no longer receive large refunds from SERS for over reporting of salaries. Refunds & Sale of Assets $20,899 $20,899 $20,899 $20,899 $20,899 Estimated General Fund Expenditures for FY17 Expenditures Assumptions General Fund Operating Expenditures FY17 $77,030,126 Materials 2% Capital 3% Other 1% Wages 41% Services 35% Benefits 18% Wages Line #3.010 The district is initiating aggressive action to help students improve academic performance and prepare them for success in the future beginning in FY16. The district had successful negotiations with both the Certified and Classified staff and included the increased percentage of raises for FY16 through FY19 is a range of 2% to 3% and 2% for FY20. The district is projecting growth in FY17 through FY19 based on the following items within the Student Achievement Improvement Plan: FY18 increase for a new preschool unit of 1 teacher and one aide; FY19 2 new staff for High School Pathway teachers. The district is estimating an average of 6 retirements per year with replace of those staff members. The district is adding two gifted teachers in FY17 and one gifted administrator for FY17. 12

14 Base Wages $28,713,990 $30,683,209 $31,944,936 $33,155,108 $34,246,774 Increases/ Merit Based Pay $702,783 $717,850 $767,080 $638,899 $663,102 Steps & Training/Performance Based Pay $614,479 $656,621 $683,622 $709,519 $732,881 Growth $1,134,919 $458,774 $358,314 $371,140 $378,563 Unfunded Recapture $650,311 $0 $0 $0 $0 Subs & Supplemental Costs $721,940 $736,379 $751,107 $766,129 $781,452 Severance $50,000 $50,000 $50,000 $50,000 $50,000 Staff Reductions -$1,133,273 -$571,518 -$598,844 -$627,892 -$631,031 Total Wages Line $31,455,149 $32,731,315 $33,956,215 $35,062,903 $36,221,741 Fringe Benefits Estimates Line 3.02 This area of the forecast captures all costs associated with benefits and retirement costs, with all except health insurance being directly related to the wages paid. The district pays 14% of each dollar paid in wages to either the State Teachers Retirement System or the School Employees Retirement System as required by Ohio law. A) STRS/SERS As required by law the BOE pays 14% of all employee wages to State Teachers Retirement System (STRS) or School Employees Retirement System (SERS). B) Insurance The district has a very good medical insurance trend history. In previous years the district has seen from a 1.5% decrease to a 5.3% increase in premiums. For FY17 we are forecasting an increase of 14%, the insurance committee is currently reviewing the rates. Medical trend is being projected annually at 10% in FY18, 9% in FY19 and 8% in FY20-FY21.The insurance committee is working together to review possible options in order to reduce costs for employees and the district. Patient Protection and Affordable Care Act (PPACA) Costs- the Patient Protection and Affordable Care Act (PPACA) commonly called Obamacare or the Affordable Care Act (ACA), is a United States federal statute signed into law by President Barack Obama on March 23, Together with the Health Care and Education Reconciliation Act, it represents the most significant regulatory overhaul of the country's healthcare system since the passage of Medicare and Medicaid in It is uncertain to what extent the implementation of PPACA will cost our district additional funds. There are numerous new regulations that potentially will require added staff time, at least initially due to increased demands, and it is likely that additional employees will be added to coverage that do not have coverage now. We are not certain what these added costs may be but there are taxes mandated by the act which we are aware of. The Transition Reinsurance fee due January 15, 2015, is a fee due the IRS for $5.25 per covered member per month for the prior year (2014).This will be $63 for each employee who had a full year of coverage in the prior year. This tax could equate to roughly a 2% annual increase in FY15. Longer-term a significant concern is the 40% Cadillac Tax that will be imposed in 2018 for plans whose value of benefits exceed $10,200 for individual plans and $27,500 for family plans. The rules and implementation of the PPACA is an ongoing issue we are watching closely to evaluate the effect on our district. C) Workers Compensation & Unemployment Compensation Workers Compensation is expected to remain at about.72% of wages FY17 FY21. In January 2015 the district became a self-insured workers compensation district, which means we only pay claims as they occur. In order for the district to maintain a reserve for claims the amount of premiums will be paid to a self-insurance fund based on a percentage of annual salary. This fund will be evaluated each on the amount of the payments in December. Unemployment is expected to remain at a very low level. The district is a direct reimbursement 13

15 employer which means unemployment costs are only incurred and due if we have employees who are eligible and draw unemployment. D) Medicare Medicare will continue to increase at the rate of increases in wages. Contributions are 1.45% for all new employees to the district on or after April 1, These amounts are growing at the general growth rate of wages. Summary of Fringe Benefits Line #3.020 STRS/SERS $4,246,186 $5,046,677 $5,237,311 $5,410,626 $5,589,467 Insurance's $8,836,773 $9,695,646 $10,515,337 $11,300,079 $12,148,542 Workers Comp/Unemployment $268,398 $270,859 $273,274 $275,578 $277,939 Medicare $465,554 $472,969 $488,878 $504,690 $521,554 Other/Tuition $106,296 $106,296 $106,296 $106,296 $106,296 Total Line $13,923,207 $15,592,447 $16,621,096 $17,597,269 $18,643,798 Purchased Services Line #3.030 This category includes payments for contracted services, utilities, gas, electric, property insurance and transportation. Significant payments are made to Community Schools, Open Enrollment and the Educational Choice Voucher program. In FY16 $14,123,202 was paid out for tuition for Open Enrollment, Community Schools and Scholarship programs. The Cruiser Academy will no longer be a community school therefore the students that attend that program will not be charged as a deduction to the district beginning in FY18. The chart below shows the depth of the loss of dollars for the district to other districts. Our Students Leave with Substantial School Choice Dollars $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 Community Schools Tuition & EdChoice Open Enrollment $6,000,000 $4,000,000 $2,000,000 $- Act Act Act Est Est Est Est Est The district is projecting growth that was outlined within the Student Achievement Improvement Plan in the following areas: Early Learning Instruction services and student data management system, finishing of the floors for the athletic middle school programs, professional development for response to intervention, Connect Ohio Grant, gifted consultant, early teaching instruction consultant, additional middle school athletic 14

16 transportation costs. Two transportation routes were eliminated in FY17 for a cost savings of $150,000 however there has been a significant increase in other transportation costs. The district will be leasing modular classrooms beginning in FY18 through FY20 for $121,057 per year. Within the Student Achievement Improvement Plan in FY16 is the increase of the state mandated College Credit Plus (CCP) tuition for middle school and high school students that will be attending college courses. The district is paying $23,708 for FY16 students that attended the CCP programs. In order to better understand where the amounts are spent for services the chart below shows what percentage is for each area within the Purchase Service line. Utilities 3% Transportation 20% FY17 Purchase Services Base Services 7% Legal, Network, Curriculum, Substitutes etc. 16% STEM & Scholarship Transfers 4% Open Enrollment Deduction 6% Other Tuition 8% Community School Deductions 36% The amounts within the chart below correspond to the FY17 percentage as shown in the graph above. Base Services $1,804,995 $1,980,202 $2,039,608 $2,100,796 $2,042,763 Legal, Network, Curriculum, Substitutes etc. $4,146,119 $4,087,580 $4,128,456 $4,169,741 $4,211,438 Open Enrollment Deduction $1,501,222 $1,516,234 $1,531,396 $1,546,710 $1,562,177 Community School Deductions $9,690,478 $8,902,497 $8,902,497 $8,902,497 $8,902,497 Other Tuition $2,208,675 $2,274,935 $2,343,183 $2,413,478 $2,485,882 STEM & Scholarship Transfers $1,101,825 $1,134,880 $1,168,926 $1,203,994 $1,240,114 Utilities $866,919 $910,265 $955,778 $1,003,567 $1,053,745 Transportation $5,421,998 $5,530,438 $5,641,047 $5,753,868 $5,868,945 Total Line $26,742,231 $26,337,031 $26,710,891 $27,094,651 $27,367,561 Supplies and Materials Line #3.040 Supplies and materials are expected to grow by 3% through FY21. Additional supplies and materials for the Student Achievement Improvement Plan include: early learning instructional supplies, textbooks and supplies for high school Pathway programs, recruiting materials for the Pathway programs, middle school athletic program supplies and uniforms, preschool digital program, and response to intervention digital programs and supplies. 15

17 Millions Supplies $1,862,745 $1,709,227 $1,757,004 $1,806,214 $1,856,900 Textbook/Curriculum Updates $0 $0 $0 $0 $0 Total Line $1,862,745 $1,709,227 $1,757,004 $1,806,214 $1,856,900 Equipment Line # Most Capital Outlay is paid through the Permanent Improvement fund. The district has completed a Capital Outlay plan that includes: FY17 Asbury roof replacement, technology equipment and modular buildings at Sedalia Elementary, FY18 technology equipment, tuck pointing at Groveport Elementary, and FY19-FY21 technology equipment and other items as they are needed. Capital Outlay $1,928,831 $1,064,938 $485,000 $505,000 $540,000 Other $0 $0 $0 $0 $0 Total Line $1,928,831 $1,064,938 $485,000 $505,000 $540,000 Debt Service Line# 4.050; 4.060; The district does not have any general fund debt. Other Expenses Line #4.300 The category of Other Expenses consists primarily of the County ESC deductions for specialized services provided to the District and Auditor & Treasurer fees. Auditor and Treasurer Fees will fluctuate with real estate revenue collections. The County ESC costs are projected to increase by three percent each year. County Auditor & Treasurer Fees $553,339 $558,872 $564,461 $570,106 $575,807 County ESC $36,524 $37,620 $38,749 $39,911 $41,108 Audit Fees/Liability Ins/Other $528,100 $543,943 $560,261 $577,069 $594,381 Total Line $1,117,963 $1,140,435 $1,163,471 $1,187,086 $1,211,296 Total Expenditure Categories Actual FY14 through FY16 and Estimated FY17 through FY21 General Fund Operating Expenditures Actual FY2014 Through Estimated 2021 $90 $80 $70 $60 $50 $40 Capital Material Services Benefits Wages $30 $20 $10 $0 Act Act Act Est Est Est Est Est

18 Transfers Out/Advances Out Line# This account group covers fund to fund transfers and end of year short term loans from the General Fund to other funds until they have received reimbursements and can repay the General Fund. We are also required to transfer annually $114,100 to the 034 Building Maintenance Fund for the High School OFCC project for maintenance of the building for the next 50 years. The district also will be transferring funds for COPS payments to the bond retirement fund and to special cost center in the general fund for the establishment of the Fiscal Stabilization fund in FY17. The district will also be transferring the amount of the donation for the football field to a capital outlay fund each time it is received. At this time we are not anticipating any advances during the forecast years. Operating Transfers Out Line #5.010 $2,477,473 $982,900 $985,200 $987,300 $983,238 Advances Out Line #5.020 $0 $0 $0 $0 $0 Total $2,477,473 $982,900 $985,200 $987,300 $983,238 Encumbrances Line#8.010 These are outstanding purchase orders that have not been approved for payment as the goods were not received in the fiscal year in which they were ordered. Estimates are based on trends of expenditures and payments. Estimated Encumbrances $704,000 $434,000 $491,000 $394,000 $394,000 Reservations of Fund Balance Line #9.080 The district is establishing a Fiscal Stabilization policy as a goal of the passage of the levy. The amount within this line will not be permitted to be appropriated unless there is an emergency within the district and will need to be approved by action of the Board of Education. Textbooks & Materials- Line $0 $0 $0 $0 $0 Capital Improvements- Line $0 $0 $0 $0 $0 Budget Reserve - Line $0 $0 $0 $0 $0 DPIA - Line $0 $0 $0 $0 $0 Fiscal Stabilization - Line $3,017,252 $3,049,822 $3,090,611 $3,130,607 $3,169,527 Debt Service - Line 9.05 $0 $0 $0 $0 $0 Tax Advances for Future Year- Line $0 $0 $0 $0 $0 State Bus Purchases- Line $0 $0 $0 $0 $0 Total Reservations of Balance- Line#9.080 $3,017,252 $3,049,822 $3,090,611 $3,130,607 $3,169,527 Ending Unencumbered Cash Balance The Bottom-line Line# This amount must not go below $-0- or the district General Fund will violate all Ohio Budgetary Laws. Any multi-year contract which is knowingly signed which results in a negative unencumbered cash balance is a violation of , ORC punishable by personal liability of $10,000, unless an alternative 412 certificate can be issued pursuant to HB153 effective September 30, Ending Cash Balance $7,045,677 $9,410,660 $11,371,701 $11,485,588 $9,395,249 17

19 The chart below shows that the district is not deficit spending until the fourth year of the forecast which includes the renewal of the levy in By not deficit spending is allowing the district to increase our ending cash balance and to maintain 30 days of cash each year of the forecast. General Fund Ending Cash Balance FY14 through Estimated FY21 Revenues vs Expenditure Including Renewal of Levy FY $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 Act.2014 Act.2015 Act.2016 Est.2017 Est.2018 Est.2019 Est.2020 Est.2021 Revenue W/Renewals Expenditures 30 Day Cash Ratio Ending Cash Balances True Cash Days The Government Financial Officers Association (GFOA) recommends, at a minimum, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. Based on the current fund balances, without the renewal of the levy and with deducting the Fiscal Stabilization Fund the district will not have the sixty (60) day balance at the end of FY21. Ending Cash Balance in True Cash Days Act Act Act Est Est Est Est Est

20 Conclusion The district is very fortunate to have received more funding for FY16 and FY17 than had been expected from the state budget. Being that 52.6% of the funding for the district is from state dollars this increase is very beneficial to the overall operations for the education of our students. The Substitute Emergency Levy will need to be renewed in 2019 for collection to continue in 2020 in order to maintain fiscal stability for the district in the future. The district administration will be able to plan for the future needs of our students with the financial stability obtained with the current state budget and the passage of the levy. But they will also need to be mindful that there are many risks and uncertainties that will need to be considered in future planning as there are two new state budgets in the time period from FY18-FY21. As you read through the notes and review the forecast, remember that the forecast is based on the information that is known at the time that it is prepared. 19