XENIA COMMUNITY CITY SCHOOL DISTRICT-GREENE COUNTY SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE

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1 XENIA COMMUNITY CITY SCHOOL DISTRICT-GREENE 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 Xenia Community City School District Treasurer's Office Eric J. Soltis, MBA, Treasurer/CFO May 22, 2017

2 Xenia Community City School District Greene County Schedule of Revenues, 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 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) 17,690,161 17,659,571 17,916, % 17,998,874 18,088,868 18,179,312 18,270,209 18,361, Tangible Personal Property 887, , , % 1,028,539 1,079,775 1,102,206 1,124,208 1,142, Income Tax 3,382,238 3,478,897 3,605, % 3,792,982 3,906,771 4,023,974 4,144,693 4,269, Unrestricted State Grants-in-Aid 18,813,995 19,905,772 20,229, % 20,593,411 20,106,381 20,163,480 20,289,677 20,417, Restricted State Grants-in-Aid 1,065,712 1,611,904 1,632, % 1,674,237 1,688,079 1,702,059 1,716,179 1,730, Restricted Fed. SFSF Fd. 532 FY10&11/Ed Jobs Fd % Property Tax Allocation 3,009,498 3,040,881 3,003, % 2,985,769 2,970,188 2,951,010 2,913,777 2,883, All Other Revenues 1,148,565 1,245,160 1,651, % 1,567,570 1,575,408 1,583,285 1,591,201 1,599, Total Revenues 45,997,991 47,869,961 49,012, % 49,641,382 49,415,470 49,705,326 50,049,944 50,403,351 Other Financing Sources Proceeds from Sale of Notes % State Emergency Loans and Advancements (Approved % Operating Transfers-In 0 0 1,000, % 103, Advances-In % 520, All Other Financing Sources 21, , % 4,375 4,500 4,500 4,500 4, Total Other Financing Sources 21, ,376, % 628,640 4,500 4,500 4,500 4, Total Revenues and Other Financing Sources 46,019,126 47,870,027 50,389, % 50,270,022 49,419,970 49,709,826 50,054,444 50,407,851 Expenditures Personal Services 19,962,693 20,413,620 21,631, % 23,476,573 24,517,748 24,762,925 25,010,554 25,260, Employees' Retirement/Insurance Benefits 6,871,441 6,904,634 7,422, % 7,173,282 7,729,027 8,038,188 8,359,716 8,694, Purchased Services 10,965,352 11,659,053 11,769, % 14,223,931 14,525,392 14,670,646 14,817,352 14,965, Supplies and Materials 844, , , % 1,665,871 1,682,530 1,699,355 1,716,349 1,733, Capital Outlay 53, ,632 1,090, % 1,241,235 2,268,260 2,273,625 2,279,098 2,279, Intergovernmental % Debt Service: 0.0% Principal-All (Historical Only) % Principal-Notes % Principal-State Loans % Principal-State Advancements % Principal-HB 264 Loans 280, , , % 120, , , , , Principal-Other 130, , , % Interest and Fiscal Charges 78,775 68,684 55, % 47,413 44,263 40,738 36,831 36, Other Objects 1,872,802 2,365,021 2,568, % 684, , , , , Total Expenditures 41,059,695 42,623,036 45,564, % 48,632,470 51,578,228 52,308,395 53,049,797 53,806,678 Other Financing Uses Operating Transfers-Out 30, ,000, % 518, , , , , Advances-Out 0 330, , % All Other Financing Uses % Total Other Financing Uses 30, ,100 1,300, % 518, , , , , Total Expenditures and Other Financing Uses 41,089,695 42,953,136 46,865, % 49,150,963 51,878,228 52,608,395 53,349,797 54,106, Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 4,929,431 4,916,891 3,523, % 1,119,059 (2,458,258) (2,898,569) (3,295,353) (3,698,827) Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 6,784,625 11,714,056 16,630, % 20,154,829 21,273,888 18,815,630 15,917,061 12,621, Cash Balance June 30 11,714,056 16,630,947 20,154, % 21,273,888 18,815,630 15,917,061 12,621,708 8,922, Estimated Encumbrances June 30 1,067,233 1,381,038 1,219, % 675, , , , ,000 ` Reservation of Fund Balance Textbooks and Instructional Materials % Capital Improvements % Budget Reserve % 7,490,136 7,994,379 8,478,613 8,598,640 8,720, DPIA % Fiscal Stabilization % Debt Service % Property Tax Advances % Bus Purchases % Subtotal % 7,490,136 7,994,379 8,478,613 8,598,640 8,720, Fund Balance June 30 for Certification of Appropriations 10,646,823 15,249,909 18,934, % 13,108,751 10,146,251 6,763,448 3,348,067 (472,634) 5/19/2017 ~ Xenia CSD~

3 Xenia Community City School District Greene County Schedule of Revenues, 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 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 0.0% Property Tax - Renewal or Replacement 0.0% Cumulative Balance of Renewal Levies 0.0% Fund Balance June 30 for Certification of Contracts, Salary Schedules and Other Obligations 10,646,823 15,249,909 18,934, % 13,108,751 10,146,251 6,763,448 3,348,067 (472,634) Revenue from New Levies Income Tax - New 0.0% Property Tax - New 0.0% Cumulative Balance of New Levies % Revenue from Future State Advancements 0.0% Unreserved Fund Balance June 30 10,646,823 15,249,909 18,934, % 13,108,751 10,146,251 6,763,448 3,348,067 (472,634) 5/19/2017 ~ Xenia CSD~

4 Xenia Community City School District Greene County Assumptions to the Five Year Forecast General Fund Only May 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. This forecast is being updated to meet the May 31 filing deadline for the Ohio Department of Education. Overall, we believe the economy of the state is stable and growing. This should provide a stable basis for which to make projections of state revenues to the district as noted in HB64 through FY17 and continuing through FY21 in future state budgets. The improving labor market is also providing for steady property tax collections in this forecast by: 1) increasing or stabilizing property values; 2) increasing current property tax collections; and, 3) increasing prior delinquent tax collections. Forecast Risks and Uncertainty: A five year financial forecast has risks and uncertainty not only due to economic uncertainties, but also due to state legislative changes that will occur in the spring of 2017 and During this time, the deliberation of the next two (2) state biennium budgets for FY18-19 & FY20-21 will occur, both of which affect this five year forecast. Revenues and expenditures have been estimated based on the best data available to the district at the time of this forecast. The items below give a short description of the current issues and how they may affect the forecast long term: I. The State Budget represents 52% 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 funding formula in future state budgets reduces funding to the district. 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 future district funding. II. III. Greene County went through a reappraisal in the 2014 tax year to be collected in FY15. The reappraisal update maintained the overall assessed values at approximately $649 million. An update to assessed value will occur next year for collection in There is, however, some risk that the district could sustain another reduction in values in the next appraisal update, but is not anticipated at this time. The district was eligible for a new U.S. Department of Agriculture program in FY16 called Community Eligibility Provision (CEP). This program allows districts with 40% eligible students to certify free and reduced price lunches via Direct Certification. The Ohio Department of Education (ODE) uses this information to certify Economically Disadvantaged students. In FY16 and FY17, if a school building was CEP eligible, 100% of their students were reflected at Economically Disadvantaged even if they were not. This greatly increased funding to the district in FY16 and FY17. It has been heard that the ODE is looking into different EMIS codes to report students as Economically Disadvantaged and will not then result in 100% of the students in an eligible building being counted in the program. The new coding could be effective in FY18, and as a result, provisions to reduce our state economically disadvantaged funding have been included in this forecast in anticipation of this change. The district will watch this very carefully as budget deliberations occur this spring and EMIS changes are made. 3

5 IV. There are many provisions in the current state budget bill HB64 that will increase the district expenditures, such as the expanded school choice programs like College Credit Plus and increases in amounts deducted from 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. The district continues to monitor any new threats to state aid and increased costs very closely. V. Labor relations in the district have been amicable with all parties working for the best interest of students and realizing the resource challenges. As the district moves forward, the positive working relationship will continue and will only grow stronger. 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 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 the district. If you would like further information, please feel free to contact Eric J. Soltis, MBA, Treasurer/CFO of Xenia Community City Schools, at General Fund Revenue, Expenditures and Ending Cash Balance: $60,000,000 General Fund Revenue, Expenditures & Cash Balance $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $- Act 14 Act 15 Act 16 Est 17 Est 18 Est 19 Est 20 Est 21 Revenue Expenditures Ending Bal. 4

6 Revenue Assumptions Estimated Revenues for Fiscal Year ending June 30, 2017: Estimated General Fund Revenue FY2017 $ 49,641,382 State Foundation 44.9% Other State 6.0% State Sources 50.9% Local Sources 49.1% Real Estate Taxes 36.3% Other Local 3.2% Income Tax 7.6% Tang. Tax 2.1% Real Estate Value Assumptions Line # Property Values are established each year by the County Auditor based on new construction and complete reappraisal or updated values. There was a full reappraisal completed in 2014 to be collected in Values decreased by $2.8 million, or.4%. A reappraisal update will take place for 2017 values to collect in We have estimated minimal growth in 2018 for residential/agricultural and commercial/industrial values at this time. These have been factored into the projection for the district s property values, along with their corresponding tax reduction factors affecting outside voted millage. Tangible personal property (TPP) values decreased to $-0- in 2011 as a result of HB66, passed in 2005, to be effective July 1, This began a phase-out of this tax base statewide to be replaced by a Commercial Activities Tax (CAT). Unfortunately, the district has not been held harmless from the loss of the local taxes by the state TPP reimbursements. Estimated Assessed Property Valuations by Collection Years Actual Estimated Estimated Estimated Estimated TAX YEAR 2016 TAX YEAR 2017 TAX YEAR 2018 TAX YEAR 2019 TAX YEAR 2020 Classification COLLECT2017 COLLECT2018 COLLECT 2019 COLLECT2020 COLLECT2021 Res./Ag. $537,759,340 $552,303,324 $553,403,324 $554,503,324 $569,465,907 Comm./Ind. 90,186,020 90,361,020 90,536,020 90,711,020 90,886,020 Public Utility Personal Property (PUPP) 25,497,310 25,997,310 26,497,310 26,997,310 27,497,310 Tangible Personal Property (TPP) Total Assessed Value $653,442,670 $668,661,654 $670,436,654 $672,211,654 $687,849,237 5

7 Estimated Real Estate Tax Collections Property tax levies are estimated to be collected at 95.25% of the annual amount. Delinquencies for the February 2016 collection were up $152,000 over February This caused a slight rise in taxes in FY16, which is estimated to go back down in FY17-20 and hold steady from year to year. Technically, 100% of taxes will be settled on property due to Ohio s property tax laws; however, the timing of the tax payments has a tendency to fluctuate. More recently, they appear to have normalized. Property taxes are estimated to be collected at 53.2% of the Res/Ag. and Comm./Ind. in the February tax settlements, and 46.8% collected in the August tax settlements. Public Utility tax settlements (PUPP taxes) are estimated to be received 50% in the February settlement and 50% in the August settlement from the Greene County Auditor. Tangible Personal Property 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 eliminated local collections after FY11. Any amounts received in this forecast period will be delinquent TPP collections from previous periods and are not predictable in the forecast. School District Income Tax Collections Line #1.030 The current SDIT will expire on December 31, 2023, and has produced $3,792,982 in FY17. The district forecasts a conservative 3% growth rate in income tax collections FY18 through FY21. SDIT Collection $3,605,181 $3,792,982 $3,906,771 $4,023,974 $4,144,693 Adjustments 187, , , , ,341 Total to Line #1.030 $3,792,982 $3,906,771 $4,023,974 $4,144,693 $4,269,034 School District Income Tax Renewal Line # The district is required to remove current levies that expire in the five year forecast. The current SDIT expires December 31, State Foundation Revenue Estimates Line #1.035, #1.040, and #1.045 A) Unrestricted State Foundation & Casino Revenue Line #1.035 The amounts estimated for FY17 for state funding is based on funding component computations from the most recent September 2016 State Foundation Payment Report (SFPR). The current FY16-17 state budget (HB64) includes an increase in funding for the district. However, state funding for FY18-21 will depend on the FY18-19 and FY20-21 state budgets. These are the two unknown state budgets that are included in this forecast period covering three fiscal years. In FY14-15, HB59 created the fourth (4th) new funding formula for public education since The state FY16-17 state budget, or HB64, made alterations to the funding formula and added several new components. The new funding formula is very complex and could change again with the new FY18-19 or FY20-21 state budgets. The funding formula in HB64 has a modified 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. 6

8 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 and FY17. 8) Career-Technical Education Funds Based on career technical average daily membership and five (5) categories students enrolled in. 9) Transportation Aid 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 FY 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 students in FY17. Provides additional funding based on rider density and the number of miles driven by the school buses. 3) 3rd 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. This calculation were anticipated in late February of 2017, and estimates are based on the best information available and the most current calculation used by ODE. Changes to forecasted data could occur if there are large adjustments made by ODE based on the final FY16 reconciliation. The current SFPR estimates for FY17 are using August 2016 adjusted average daily membership (ADM) and flat students each year for growth through FY21. Beginning in FY16, the state changed the way it measures student ADM. Student counts are now supposed to be updated October 31, March 31, and June 30 of the fiscal year. In most cases, the district will not know its actual student-funded ADM until the end of June 2017, and even then, there will be adjustments into the succeeding fiscal year. This could result in undulating state aid payments throughout the year based on each student count if the district was on the formula. Changing enrollment figures could have a significant impact on the district s funding in the future. The estimate of state aid is based on the most current data available at this time. State aid is forecasted to increase by approximately 1.0% in FY18-FY21. 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 were 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 7

9 will be paid into a student fund at the state level. These funds are 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. This amount rose to $51.50 per pupil for a full-year payment in FY14, and $50.50 per pupil 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 FY17-21, the district forecasts a decline of 0.3% in the number of pupils to 1,789,000 and an increase in the GCR to $93 million, or $51.91 per pupil. The district will increase estimates for future years when actual casino revenues show signs of stronger increases. Basic Aid-Unrestricted $19,619,276 $19,128,813 $19,182,433 $19,305,104 $19,429,026 Additional Aid Items 756, , , , ,727 Basic Aid-Unrestricted Subtotal $20,376,003 $19,885,540 $19,939,160 $20,061,831 $20,185,753 Ohio Casino Commission ODT 217, , , , ,421 Total Unrestricted State Aid Line # $20,593,411 $20,106,381 $20,163,480 $20,289,677 $20,417,174 B) Restricted State Revenues Line # HB64 continues funding two restricted sources of revenues to school districts, which are Economic Disadvantaged Funding and Career Technical Education funding. This forecast incorporates this amount into the restricted aid amount in Line #1.04 for FY Economically Disadvantaged Aid $1,384,202 $1,398,044 $1,412,024 $1,426,144 $1,440,405 Career Tech - Restricted $156,621 $122,488 $140,035 $140,035 $140,035 Catastophic Aide $150,000 $150,000 $150,000 $150,000 $150,000 Total Restricted State Revenues Line #1.040 $1,674,237 $1,688,079 $1,702,059 $1,716,179 $1,730,440 C) Restricted Federal Grants in Aid line #1.045 There are no restricted federal funds projected in this forecast for FY Summary of State Foundation Revenues Line#1.035; 1.040; and, SUMMARY FY17 FY18 FY19 FY20 FY21 Unrestricted Line # $20,593,411 $20,106,381 $20,163,480 $20,289,677 $20,417,174 Restricted Line # $1,674,237 $1,688,079 $1,702,059 $1,716,179 $1,730,440 Rest. Federal Funds #1.045 $0 $0 $0 $0 $0 Total State Foundation Revenue $22,267,648 $21,794,460 $21,865,539 $22,005,856 $22,147,614 State Taxes Reimbursement/Property Tax Allocation Line #1.050 a) Rollback and Homestead Reimbursements Rollback funds are reimbursements paid to the district from the State of Ohio for tax credits given for owneroccupied 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, 2013, which is the effective date of HB59. HB66, the FY06-07 budget bill, previously eliminated 10% rollback on Class II (commercial and industrial) property. 8

10 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 the age of 65 or who are disabled, regardless of income. Effective September 29, 2013, HB59 changed 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 reduce 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 The District does not receive TPP Fixed Rate reimbursement payments. c) Tangible Personal Property Reimbursements Fixed Sum HB 64 has continued reimbursement of fixed sum TPP reimbursements at current levels through FY17, and in FY18, will begin a phase-out of 20% each year 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 emergency levy and collected in local property taxes. This is directly shifting the burden to local taxpayers by the state cut in fixed sum TPP reimbursement. Summary of State Tax Reimbursements Line #1.050 a) Rollback and Homestead $2,751,348 $2,782,651 $2,810,357 $2,820,009 $2,836,125 b) TPP Reimbursement - Fixed Rate $0 $0 $0 $0 $0 c) TPP Reimbursement - Fixed Sum 234, , ,653 93,768 46,884 Total Tax Reimbursements #1.050 $2,985,769 $2,970,188 $2,951,010 $2,913,777 $2,883,009 Other Local Revenues Line #1.060 Open enrollment into the district is one the largest revenue sources in this line item and is expected to fluctuate. Medicaid reimbursements are also a significant revenue source within this line item. Overall, this line item is projected to grow by 0.5% annually. Interest rates have moved upward over the fiscal year, and the district has realized greater revenues in this area than in past fiscal years. As always, security of the public funds collected by the district is the top priority of the treasurer s office when investing district funds. All Other Financial Sources Line #2.010 through Line #2.060 & Line # There is no short-term borrowing planned for in this forecast at this time. Other financing sources consist of advances that the school district anticipates will be repaid during the forecasted period. Advances are made from the general fund to other funds, primarily to cover grant monies that are not received as of fiscal year end. Advances are forecasted based on the historical timeliness of grant monies not received at fiscal year-end. 9

11 Expenditures Assumptions Expenditure Estimates for Fiscal year ending June 30, 2017: Estimated General Fund Expenditures FY2017 $ 48,632,470 Wages 48% Other 1% 0% Capital 3% Benefits 15% Materials 4% Services 29% Wages Line #3.010 The district approved new contracts in FY15, which covers FY16-18 for certified employees. The district negotiated a 1.75% wage increase and step for each of the fiscal years. Step increases are included through FY21 for planning purposes. In addition, sixteen positions were added during FY17, increasing personnel costs. For FY18, an additional FTE (Full-Time Equivalent) of staff are projected. While these positions are expected to positively impact and improve the realm of educational services provided, they inherently drive up the costs of salaries throughout the forecast. From FY18-21, a 1% increase on all salaries is assumed. Fringe Benefits Estimates Line #3.020 This area of the forecast captures all costs associated with benefits and retirement costs which, all except health insurance, are directly related to wages paid. A) STRS/SERS will Increase With Wages 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. B) Insurance In FY17, the district had a 5% increase in premium costs. The district pays the first percent increase, and then the cost alternates between the employee and employer thereafter. Thus, this forecast includes a 3% increase. In FY18, the district projects a 5% increase, equaling another 3% increase for the district. In FY19-FY21, this forecast conservatively includes a 10% increase in premiums. 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,

12 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 Many of the significant provisions of the PPACA were implemented by employers on January 1, It is uncertain to what extent the implementation of PPACA will cost the district in future years. There are numerous new regulations that potentially will require added staff time, at least initially due to increased demands. It is likely that additional employees will be added to coverage that do not have coverage now. The Transition Reinsurance fee, a fee that was due January 15, 2015, is a fee due to 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 equated 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 and the district is watching closely to evaluate the overall effects. C) Workers Compensation & Unemployment Compensation Workers Compensation is expected to remain at about.12% of wages in FY17 and beyond. Premiums are paid in the following calendar year for claims and estimates made in the current year. The district may choose to pay the entire premium in May, or 45% in May and 55% in September. The district anticipates paying the entire premium in May, as in prior years. Unemployment compensation has been a negligible cost for the district. D) Medicare Medicare will continue to increase at the rate of the increase of wages. Contributions are 1.45% for all new employees to the district on or after April 1, These amounts are rising at the general growth rate of wages. Purchased Services Line #3.030 Professional and technical services are generally projected to increase by 1% in the forecasted period. The district has reflected a 2.5% increase on the custodial service contracts, which is in place through FY17, and for transportation, which is in place through FY20. The district has also approved an updated agreement with modest increases for maintenance services for the forecasted period. The district is in the Ohio Edison service territory and participates in Power4Schools, a lower-priced electricity purchasing program from First Energy Utility. Services decreased in FY15 because of the cost containment we are experiencing from our new HB264 energy conservation program. FY16 remained lower, on the other hand, because of a mild winter. Again, a 1% increase for all purchased services is forecasted for FY17 and beyond. Tuition and community school payments are forecasted to increase each fiscal year due to the increase in the per pupil cost related to state foundation, with the assumption that the number of students leaving the school district will remain relatively constant. Travel and meeting expenses, communication costs, and trade services are forecasted to remain fairly consistent over the forecasted period. In FY17, the district estimates an increase each remaining year of the forecast by 1% for open enrollment and community school deductions. Supplies and Materials Line #3.040 The district believes that this supply line item will remain consistent during the forecast period, with a projected 1% increases from FY18 and beyond. In an effort to improve course offerings and expand the effectiveness of the curriculum, the district continues to budget for new textbooks and curriculum supplies. 11

13 Equipment Line # Capital outlay expenditures tend to fluctuate based on the district s educational needs. In the past few fiscal years, the district has made a conscious effort to move toward a one-to-one ratio. Meaning, having one technological device per student. In FY17, nearly $700,000 was allocated for the purchase of a new track and field. This is anticipated to be complete by the end of the fiscal year. Should the voters reject the local share of the proposed bond issue for a new middle school/high school complex on the August 8, 2017 ballot, the Board of Education is setting aside $2 million each fiscal year, beginning in FY18, for repairs to the current middle school and/or high school buildings. Years FY18 through FY21 represent an additional $2 million above and beyond ordinary expenditures for this respective line item, and are subject to change as new capital outlay purchases are considered. Capital Outlay $1,241,235 $268,260 $273,625 $279,098 $279,098 Building Repairs Warner MS and Xenia HS 0 2,000,000 2,000,000 2,000,000 2,000,000 Technology Total Line $1,241,235 $2,268,260 $2,273,625 $2,279,098 $2,279,098 Other Expenses Line #4.300 The category of Other Expenses consists primarily of the county ESC deductions for specialized services provided to the district, as well as County Auditor/Treasurer fees and insurance. Forecasted for FY18-21 is an assumption of 1% increase in costs. Total Other Financing Uses - # In FY16, a transfer to the JDC was made in the amount of $1,000,000. In each year FY17 FY21, annual planned transfers are forecasted, and are adjusted as needed. Operating Transfers Out Line #5.010 $518,493 $300,000 $300,000 $300,000 $300,000 Advances Out Line # Total $518,493 $300,000 $300,000 $300,000 $300,000 Debt Service Line #4.020; #4.050; #4.060 The district approved and completed a HB264 project, which is the only debt financed with the General Fund. HB 264 Principal Line # $120,000 $120,000 $125,000 $125,000 $125,000 Interest on TANS & HB 264 Total Line $47,413 $44,263 $40,738 $36,831 $36,831 Encumbrances Line #8.010 Encumbrances represent purchase authorizations and contracts for goods or services that are pending vendor performance and those purchase commitments which have been performed, invoiced, and are awaiting payment. Encumbrances on a budget basis of accounting are treated as the equivalent of expenditure at the time authorization is made in order to maintain compliance with spending restrictions established by Ohio law. For presentation in the forecast, outstanding encumbrances are presented as a reduction of the general fund cash balance. Encumbrances are forecasted based on the treasurer of the district s estimates for FY

14 FY17 FY18 FY19 FY20 FY21 Estimated Encumbrances $675,000 $675,000 $675,000 $675,000 $675,000 Reservations of Fund Balance Line #9.010 to #9.080 The district established a budget reserve in FY16 to help stabilize the budget and district operations. The district s policy is to have a minimum of 60 days worth of operating expenses on hand in order to prevent the General Fund from being overdrawn. Textbooks & Materials- Line $0 $0 $0 $0 $0 Budget Reserve - Line $7,490,136 $7,994,379 $8,478,613 $8,598,640 $8,720,515 Total Reservations of Balance- Line#9.080 $7,490,136 $7,994,379 $8,478,613 $8,598,640 $8,720,515 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, as permitted by HB153 effective September 30, 2011, could be issued. FY17 FY18 FY19 FY20 FY21 Ending Cash Balance $ 13,108,751 $ 10,146,251 $ 6,763,448 $ 3,348,067 $ (472,634) True Cash Days Ending Balance Another way to look at the district s ending cash balance is to state it in terms of True Cash Days. In other words, this figure demonstrates how many days the district could operate at year end if no additional revenues were received. This is the current year s Ending Cash Balance divided by (current year s expenditures divided by 365 days), which equals the number of days the district could operate without additional resources or a severe resource interruption. The Government Finance Officers Association recommends no less than two (2) months, or 60 days, cash be on hand at year end. However, it could be more depending on each district s complexity and risk factors for revenue collection. This is calculated including transfers, as this is predictable funding source for other funds, such as capital and Fund 034. Ending Cash Balance in True Cash Days (50) Act 14 Act 15 Act 16 Est 17 Est 18 Est 19 Est 20 Est (3) 21 True Cash Days 13