OULP CPIM Seminar. April 26, 2012

Transcription

1 OULP CPIM Seminar April 26, 2012 Matt Bunting, Consultant Stacy Overly, Consultant Mike Sobul, Consultant Ernie Strawser, Consultant Debra Kelbaugh, COO Public Finance Resources, Inc. Serving the Public s Financial Leaders

2 Employee Bios Debra Kelbaugh, Chief Operations Officer of Public Finance Resources, provides direct services to clients, and oversees the day to day operations of PFR. She brings with her operational experience from both the public and private sectors, including a school district and multiple corporations in the financial services industry. Debra holds her Masters of Business Administration from Ohio University, and her Bachelors of Science in Business Administration from The Ohio State University. Stacy Overly, Consultant, provides direct financial services to clients. He has over 20 years of experience serving as school district treasurer, including 15 plus years of developing financial forecasting tools, and providing instruction and training opportunities attended and used by over two hundred of Ohio s public school treasurers. Stacy works with clients to analyze trends and review local economic data to help determine a long term operating strategy for the organization. He holds his Masters of Business Administration and his Bachelors of Business Administration in Finance from Ohio University. Ernie Strawser, Consultant, provides direct services to our public finance clients. He has over 30 years of public finance experience as a CFO, consultant, and developer and instructor of financial forecasting techniques and tools which have been used by over two hundred Ohio school district CFOs. Ernie works with clients to facilitate their understanding of local financial results, trends, and strategies. He holds both a Masters of Science in Administration from Central Michigan University and a Bachelor of Science in Finance from Ohio University. Matt Bunting, Consultant, has over 25 years of experience in the public finance sector. This includes 15 plus years as a school district treasurer, and 11 years with the Auditor of State where he lead financial, legal compliance, and Federal single audits of government entities. Matt has served as interim school treasurer several times, as well as worked with Ernie and Stacy to test their forecasting software and instruct at their yearly seminars. He holds an Associates Degree in Accounting from Hocking College, and is a Certified Government Financial Manager. Mike Sobul, Consultant, brings 30 years of experience in public finance and tax analysis. Currently a school district treasurer, Mike spent nearly 25 years with the Ohio Department of Taxation where he led revenue forecasting efforts and provided analysis, training, and fiscal services to schools and local governments. Mike holds a Masters Degree in Public Policy from the University of Michigan and a Bachelors Degree in Economics and Political Science from Wittenberg University. Public Finance Resources, Inc. Serving the Public s Financial Leaders 2

3 Agenda Cash Flow Peaks and Valleys Borrowing Vs. Investing? Constructing a Cash Balance Policy Building Better Cash Flow Estimates Economic Indicators Ohio Budget School Funding Property Valuations

4 Historical Cash Flow Peaks and Valleys What can we learn? Historical General Fund EOM Cash Balance 2009, 10, 11 Longer term trend? Interim Fluctuation? Tax/Revenue Variations?

5 Improve Financial Stability Fluctuations in cash demands occur throughout the year. Cash balance planning can minimize borrowing costs and avoid interruptions of payments to employees and vendors. 5

6 Start Vs. The End $2.5 Mill Minimum cash flow needed ideal conditions. 6

7 Understanding =Believing = Planning

8 Developing Investment Strategies

9 Components of Policy Annual Review Status Updates Constructed Amount = Ownership

10 Construction of Amount Three Payrolls Variance Fluctuation 30 Days 1/12th Benchmark? Aa3 (9.3%) State wide

11 Preserve Credit Standing Agency s that typically rate your organization s credit worthiness will evaluate cash balance. Often cash balance as a percent of revenue is an important stability indicator. 11

12 Levy Timing? Recommended Cash Balance Minimum Cash Balance How can this information help us? Size of levy/cuts? Timing of levy/cuts? Borrowing/Investing 12

13 Plan to Meet Financial Goals If an organization plans to zero then it will probably meet its goal. If an organization plans for financial stability then it will probably meet its goal. 13

14 Understanding = Believing = Planning Start with the end in mind. All organizations are perfectly aligned to get the results they are getting.

15 OBM Economic Summary

16 Economic Indicators -- OBM

17 ??Economist s Perspective?? Recession to Moderate (2.2% GDP)

18 Employment

19 Employment Update - March

20 The rest of the story?

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22 Year-Over-Year Ohio Tax Revenue

23 Year-Over-Year State Tax Collections

24 State Revenue Estimates

25 State Expenditures

26 State Budget Recap Year-Over-Year Actual Tax Revenue is UP Revenue Estimates are within +1.6% variance Expenditures trending 0.5% less than estimated after Medicaid/MIT uncertainty. FYTD Performance Stable Revenue Performance Still Less than Peak Continue to Monitor and Report

27 Your State Funding Guarantee Status Will ADM fluctuation impact your funding?

28 School Funding - Statewide

29 State Funding -- Yours Prior Year Funding (F) $21,205,589 Less Prior Year Stimulus (H) $1,677,844 F.Y Guarantee Amt $19,527,745 Preliminary 2012 Amount (L) $20,698,988 Formula Buffer $1,171,243 "At Risk" Guarantee $0

30 State Funding Increases -- Expectations? What is the effect on cash reserves? During the current and next TWO fiscal years, cash reserves are expected to WORSEN by 2012 (873,613) 2013 (2,433,197) 2014 (3,183,823) Revenue EXCEEDED by ($6,490,633) Budget Shortfall as % of Line 1.07 Revenue % % % Line Renew/ Replacement Levies Included Basic State Aid Increases Needed? % % % % % % % % Additional State revenue needed 40.9% to cover revenue shortfalls in the short-term. Note: ODE Forecast Line 1.035

31 Residential Housing Values

32 Ohio Sampling

33 Disconnect?

34 Residential Property Values

35 RESIDENTIAL SALES DATA FOR COUNTIES GOING THROUGH REAPPRAISAL OR UPDATE IN 2013 Inflation or Does Deflation 2011 Now Median Change Exceed Jurisdiction Number Median Sales Market to from % of County Type Year of Sales Price Price Ratio to 2011 Market? ADAMS County $56,460 91% ADAMS County $59,500 88% 3.14% CARROLL County $86,900 93% CARROLL County $79,500 95% -2.03% Yes CHAMPAIGN County $104,500 92% CHAMPAIGN County $99,600 98% -6.19% Yes CLARK County $100,000 93% CLARK County $99,500 97% -3.98% Yes COLUMBIANA County $86,000 97% COLUMBIANA County $86, % -3.72% Yes FAIRFIELD County $146,700 94% FAIRFIELD County $145,000 98% -3.70% Yes HANCOCK County $127,000 93% HANCOCK County $134,750 95% -1.61% Yes HOCKING County $113,500 89% HOCKING County $111,450 91% -2.62% Yes HOLMES County $117,500 95% HOLMES County $119,250 96% -0.64% Yes LAWRENCE County $103,750 89% LAWRENCE County $99,250 87% 1.88% LOGAN County $100,000 95% LOGAN County $100,000 99% -4.03% Yes

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37 Ohio Sales Ratio 2010 Reappraisal/Update Counties

38 Understand = Believe = Plan Cash Flow Estimating, Monitoring, Policy Plan with the end in mind State Funding Estimated/Actual, Guarantee/ADM, Order of Magnitude Housing Economic Monitoring

39 More Information: Debra Kelbaugh Chief Operating Officer Public Finance Resources, Inc PO Box 1822 Columbus, OH Phone: Cell: Ernie Strawser Consultant Public Finance Resources, Inc PO Box 1822 Columbus, OH Phone: Cell: Matt Bunting, Consultant Stacy Overly, Consultant Mike Sobul, Consultant Ernie Strawser, Consultant Debra Kelbaugh, COO Public Finance Resources, Inc. Serving the Public s Financial Leaders