Fiscal Stress Monitoring System Comprehensive Reference Guide

Fiscal Stress Monitoring System Comprehensive Reference Guide The Office of the State Comptroller has developed a public fiscal stress monitoring system that provides feedback to counties, cities, towns, villages, school districts, and citizens regarding the level of fiscal stress in which these entities are currently operating. This Fiscal Stress Monitoring System will identify for local officials and for citizens the need to take action to change their financial trends for the better. Table of Contents I. Fiscal Stress Defined... 2 II. Scoring Overview... 2 III. Local Government Information... A. Financial Indicators... 1. Financial Indicators Defined... 4 2. Combined Funds Defined... 7. Weighted Average Scoring... 7 B. Environmental Indicators... 8 1. Environmental Indicators defined... 9 2. Weighted Average Scoring... 1 IV. School District Information... 14 A. Financial Indicators... 14 1. Financial Indicators Defined... 14 2. Weighted Average Scoring... 16 B. Environmental Indicators... 17 1. Environmental Indicators Defined... 17 2. Weighted Average Scoring... 20

I. Fiscal Stress Defined Fiscal stress is a judgment about the financial condition of an individual entity that must take into consideration its unique circumstances, but can be generally defined as a local government s or school district s inability to generate enough revenues within its current fiscal period to meet its expenditures. Any attempt to identify or predict fiscal stress must recognize that changes in behavior, the specific financial decisions made in a locality, or unforeseen external events, can quickly change ongoing financial trends. These local actions can impact the financial health of a locality or school district suddenly, either for better or worse. II. Scoring Overview Each local government and school district will be evaluated based on two broad factors: the current level of fiscal stress and the degree to which the entity is experiencing stress in its local environment. The Fiscal Stress Score is based on a review of the financial indicators. The indicators were chosen because they measure the extent to which a municipality or school district is able to generate sufficient revenue to meet operating needs while responding to short-term fiscal challenges (budgetary solvency). Each indicator is scored based on set criteria and entities are assigned points which indicate the presence of fiscal stress. These points are then totaled by category and a weighted average score is computed to classify entities in one of four categories: significant fiscal stress, moderate fiscal stress, susceptible to fiscal stress, or no designation. The first two classifications were developed so that a differentiation could be made between units that were experiencing fiscal stress with differing levels of severity. The classification susceptible to fiscal stress was developed to identify units that are exhibiting conditions that may lead them into fiscal stress in the short term. The classification no designation indicates that an entity does not meet the criteria to be assigned a stress rating. it may, however, be approaching the susceptible range, so it is therefore important to consider both the category as well as the overall score. The Environmental Stress scoring is based on the analysis of environmental indicators. These indicators are important because they represent the factors that, while generally out of the local government s control, can often lead to fiscal pressures. Similar to the financial scoring, points are assigned for each environmental indicator. They are then totaled by category and weighted to produce a final score that is used to classify entities into groups. These groups are notated with pound signs from worst to best: ###, ##, #. Units that are deemed to not have negative environmental conditions will not receive a no designation notation.

III. Local Government Information A. Financial Indicators Category Financial Indicator Max. Points Max Category Score Scoring Weighted Average Year-End Fund Assigned and Unassigned Fund Balance 4 8 50% Balance Total Fund Balance 4 Operating Deficits Operating Deficit 10% Cash Ratio Cash Position 6 20% Cash % of Monthly Expenditures Use of Short-Term Short-Term Debt Issuance 6 10% Debt Short-Term Debt Issuance Trend Personal Services and Employee Fixed Costs Benefits as a % of Revenues 6 10% Debt Service as a % of Revenues Total Available Points 29 Once each of the fiscal indicators is scored, each local government will be assigned a fiscal stress classification based on the weighted average score across all categories. The four fiscal stress classifications are based on the % of total points assigned to the entity as follows: Significant Fiscal Stress 65% - 100% Moderate Fiscal Stress 55% - 64.9% Susceptible to Fiscal Stress 45% - 54.9% No Designation 0% - 44.9%

1. Financial Indicators Defined Category 1: Year End Fund Balance. Two indicators are used to analyze the year-end fund balance. Both indicators measure the amount that is available to provide a cushion for revenue shortfalls or expenditure overruns. Additionally, the Total Fund Balance indicator includes amounts reserved for specific purposes. Both indicators are first calculated for the general fund (for towns this includes the highway fund) and then for combined funds. Indicator 1. Assigned and Unassigned Fund Balance = Assigned and Unassigned Fund Balance includes account codes 915, 917, and 924. Gross Expenditures = Total expenditures including transfers out. Up to four points may be issued based upon the following: If general fund (GF) indicator is > 10% If GF indicator is 10% but > 6.67% If GF indicator is 6.67% but >.% If GF indicator is.% If combined funds is < GF ratio, add Indicator 2. Total Fund Balance = Total Fund Balance = Account codes 806-924 Gross Expenditures (EOU) = Total expenditures including transfers out Up to four points may be issued based upon the following: If general fund (GF) indicator ratio is > 20% If GF indicator is 20% but > 15% If GF indicator is 15% but > 10% If GF indicator is 10% If combined funds ratio is < GF ratio add Category 2: Operating Deficits. One indicator is used to evaluate the trend of Operating deficits. Multiple years of operating deficits indicate budgets are not structurally balanced.

Indicator. Operating Deficits = Gross Revenues Gross Expenditures Gross Revenues (ROS) = Total Revenues, including transfers in Gross Expenditures (EOU) = Total expenditures, Including transfers out This indicator is calculated using the combined funds for the most recent three years. One point is assigned for each year there is a deficit. Three points are automatically assigned if the deficit is less than or equal to -10% of expenditures. Category : Cash Position. Two indicators are used to analyze the cash position. These indicators evaluate the local government s ability to fund the ensuing fiscal year s operations from available cash and current assets. These indicators are calculated using the combined funds. Indicator 4. Cash Ratio = Cash and Current Investments = Account codes 200-22, 450, 451 Current Liabilities = Account codes 600-626, 61-668 less accounts 280, 290, 295 Up to three points may be assigned based upon the following: If indicator is 100% or greater If indicator is < 100% but 75% If indicator is < 75% but 50% If indicator is < 50% Indicator 5. Cash as a % of Monthly Expenditures = Unreserved Cash and Current Investments = Account codes 200, 201, 450 and 451 Average Monthly Gross Expenditures = Total expenditures including transfers /12 Up to three points may be assigned based upon the following: Villages and Towns If indicator is 100% or greater If indicator is < 100% but 66.7% If indicator is < 66.7% but.% If indicator is <.% Cities and Counties If indicator is 150% or greater If indicator is < 150% but 100% If indicator is < 100% but 50% If indicator is < 50%

Category 4: Use of Short Term Debt. Two indicators are used to analyze the use of short term debt. These indicators are calculated using short term debt from all funds except the capital project fund, and revenues from the general fund only. Indicator 6. Short-Term Debt Issuance = Total short-term debt = Account codes 620, 621, 622 Total revenue = Account codes 1001-5791 excluding transfer activity (code 501). Up to three points may be assigned based upon the following: If indicator is 0% If indicator is > 0% but 5% If indicator is > 5% but 15% If indicator is > 15% Indicator 7. Short-Term Debt Issuance Trend Short-term debt accounts are reviewed for the most recent three years. A point is assigned for each year short-term debt was issued, up to three points. Three points are automatically assigned if a budget note (code 622) was issued in the current year. Category 5: Fixed Costs. Two indicators are used to analyze fixed costs. These indicators determine the extent to which revenues are restricted to be used for personal services, employee benefits, and debt service. These indicators are calculated using all funds except the capital project fund. Indicator 8. Personal Services and Employee Benefits as a % of Revenues = Three years average of: Total Personal Services and Employee Benefits Expenditures = All expenditures with object codes.1 (Personal Services) and.8 (Employee Benefits) Total Revenue = Account codes 1001-5791 excluding transfer activity (code 501). If avg. of last three fiscal years (FY) is < 65% If avg. of last three FY is 65% but < 70% If avg. of last three FY is 70% but < 75% If avg. of last three FY is 75%

Indicator 9. Debt Service as a % of Revenues = Last three years average of: Total Debt Payments = Account codes with object codes of.6 (Debt Principle) and.7 (Debt Interest) Total Revenue = Account codes 1001-5791 excluding transfer activity (code 501) and excluding proceeds of advanced refunding bonds (5791). If avg. of last three FY is < 10% If avg. of last three FY is 10% but < 15% If avg. of last three FY is 15% but < 20% If avg. of last three FY is 20% 2. Combined Funds Defined Class Combined Funds Cities General, All Water, and All Sewer Counties General, County Road, Road Machinery, Water, Sewer, and All Enterprise Funds Villages General, All Water, and All Sewer Funds Towns General Town-Wide, General Part-Town, Highway Town-Wide, Highway Part- Town, All Water and All Sewer Funds. Weighted Average Scoring Once a score has been determined for each financial indicator, the weighted average is calculated to determine the entity s fiscal stress level. The following example of the weighted average scoring is for demonstration purposes: Row Year End Fund Balance Operating Deficits Cash Position Use of Short-Term Debt 1 Maximum Category Score 8 6 6 6 Fixed Costs 2 Example Category Score 6 1 4 5 0 Score as a % of Total (Row 2 divided by Row 1) 75%.% 66.67% 8.% 0% 4 Category Weight 50% 10% 20% 10% 10%

5 Weighted Score (Row multiplied by Row 4) 7.5%.% 1.% 8.% 0% Overall Score (Sum of Row 5) 62.5% The Fiscal Stress Classifications identify the Example entity s score of 62.5% to place this entity in the category Moderate Fiscal Stress B. Environmental Indicators Category Environmental Indicator Max Category Score Max. Pts. County City & Village Town Scoring Weighte d Avg. Max. Pts. Scoring Weighte d Avg. Max. Pts. Scoring Weighte d Avg. Population Change in Population 1990-2010 15% 15% 20% Age Change in Median Population 2000-2010 4 10% 10% Median Age of 1 1 1 Population 2010 10% Child Poverty Rate 2010 Poverty Change in Child 4 10% 15% 20% Poverty Rate 2000-2010 1 1 1 Property Value Change in Property Value 6 25% 0% Property Value Per Capita 0% Change in Unemployment Rate 1 1 1 Employment Base Unemployment Rate 1 10% 1 10% 1 10% Change in total Jobs in County 1 1 1 Reliance on State Aid Intergovernmental Reliance on Federal 4 10% 10% Revenues 1 1 1 Aid 10% Constitutional Tax Constitutional Tax Limit Limit Exhausted 0 NA 10% 0 NA Sales Tax Receipt Change in local Sales 20% NA NA 0 0 Tax Receipt Total Points Available by type of Local Government 27 27 24

Each local government will be assigned an environmental stress classification based on the information below: ### Worst environmental condition 50% or more of total points ## Negative environmental condition 40% - 49.9% # Last level of negative environmental condition 0% -9.9% No Designation is displayed for entities with less than 0% of total available points. 1. Environmental Indicators defined Category 1: Population. One indicator is used to identify local governments where total population has declined over the last two decades or significantly declined over the last decade. Indicator 1. Percent Change in Population = Up to three points may be assigned based upon the following: Change between 2000 and 2010 is 0% Change between 2000 and 2010 is < 0% but > -5% Change between 2000 and 2010 is -5% Change between 1990 and 2000 and 2000 and 2010 are both < 0% OR change between 2000 and 2010 is < -10% Category 2: Age. The two indicators in this category are the current median age of the population and the trend in the age (whether the population is trending older or younger). Indicator 2. Change in Median Age of Population = Change is < 15% Change is < 20% but 15% Change is < 25% but 20% Change is 25% Indicator. Median Age of Population. Median age based on the LG 2010 Census If the median age is < 50 If the median age is 50 Category : Poverty. The two indicators in this category are the current child poverty rate and the trend in the level of child poverty. We specifically selected the child poverty rate because this rate is less affected by other factors. For example college student populations tend to inflate poverty rates.

Indicator 4. Child Poverty Rate. The child poverty rate of the local government is based on the 2010 Census. The statewide average poverty rate was 19.90 percent based on the 2010 Census. The rate is < 19.90% The rate is 19.90% but < 29.85% The rate is 29.85% but < 9.80% The rate is 9.80% (2X the statewide rate) Indicator 5. Change in Child Poverty Rate (CPR). If the change is 0% If the change is > 0% Category 4: Property Value. The two indicators in this category evaluate the current property wealth and the trend in a local government s property value. Indicator 6. Change in Property Value = CY = Current Year PY = Prior Year FPV = Full Property Value The same calculation must be performed for the previous three fiscal years. Resulting in the annual % change in property value for the most recent four fiscal years. These percentages should then be averaged (add the result for each year together and divide by four). If the four fiscal yr. avg. is > -1% If the four fiscal yr. avg. is -1% but > -2% If the four fiscal yr. avg. is -2% but > -4% If the four fiscal yr. avg. is -4% OR the change between the last two fiscal years is < -10% Indicator 7. Property Value Per Capita = FPV = Full Property Value If the value is > $0,000 If the value is $0,000 but > $20,000 If the value is $20,000 but > $10,000 If the value is $10,000

Category 5: Employment Base. The three indicators in this category evaluate the current unemployment rate, the trend in the unemployment rate and the trend in the total jobs in the county in which the local government is located. (NOTE: Unemployment rates are only available for local governments with a population of 25,000 or more. Therefore, for local governments that have a population of less than 25,000, we use the unemployment rate for the county in which the local government most resides.) Indicator 8. Change in Unemployment Rate = LG Unemployment Rate CFY LG Unemployment Rate PFY CFY = Current Fiscal Year PFY = Prior Fiscal Year If the change is 0% If the change is > 0% Indicator 9. Unemployment Rate. The annual unemployment rate of the local government, obtained from the department of labor, for the most current year. If the rate is the annual statewide average If the rate is > the annual statewide average Indicator 10. Change in Total Jobs in County. The total jobs in the county for the most current year minus the total jobs in the county for the prior year. For each local government, we used the data for the county in which the local government most resides. If the change is 0 If the change is < 0 Category 6: Intergovernmental Revenues The extent to which a local government s operations are supported by intergovernmental revenues from State and federal sources can pose challenges to a local government s finances. The two indicators in this category evaluate the local government s current level of dependence on intergovernmental revenues and the trend in intergovernmental revenues. Indicator 11. Reliance on State and Federal Aid = State and Federal Revenues = Current year (account codes 000 thru 4000) (account codes 960 + 4960) for all funds except capital projects Total Revenue = Account codes 1001-5791 excluding transfer activity (code 501) for all funds except capital projects The same calculation must be performed for the previous three fiscal years. Resulting in the annual % of revenues derived from State and federal sources for the local governments, excluding the capital projects fund, for the most recent four fiscal years. These percentages should then be averaged (add the result for each year together and divide by four). If the four fiscal year average is < 0% If the four fiscal year average is < 40% but 0%

If the four fiscal year average is < 50% but 40% If the value is 50% Indicator 12. Change in State and Federal Aid Indicator = CY = Current Year PY = Prior Year State and Federal Aid Revenues = Current year (account codes 000 thru 4000) (account codes 960 + 4960) for all funds except capital projects If the change is 0% If the change is < 0% Category 7: Constitutional Tax Limit. This category is applied to cities and villages only. A city or village that has exhausted its constitutional tax limit loses flexibility in its revenue structure and may not be able to sustain the current level of services. Indicator 1. Constitutional Tax Limit Exhausted = Tax levy = city or village tax levy subject to the tax levy limit The tax limit is computed by multiplying taxable real property by a certain percentage enumerated in the State Constitution. For more information on Constitutional Tax Limits: http://www.osc.state.ny.us/localgov/finreporting/ctl.htm If the current tax levy is < 50% of the limit If the current tax levy is < 65% of the limit but >, = 50% If the current tax levy is < 80% but >, = 65% If the current tax levy is >, = 80% Category 8: Sales Tax Receipts. This category is applied to counties only, as this revenue source is not allocated in a uniform manner to cities, towns, and villages. Indicator 14. Change in Sales Tax Receipts = CY = Current year PY = Prior year Local sales tax receipts = the amount that is distributed to counties on a monthly basis from OSC. The corresponding annual change in the consumer price index (CPI) obtained from bureau of labor statistics.

If the percentage is change in CPI ( CPI) If the percentage is < CPI but half CPI If the percentage is < half CPI but 0% If the value is < 0% 2. Weighted Average Scoring Once points have been assigned for each environmental indicator the weighted average must be calculated to determine the entity s environmental stress level. The following example shows the calculation of the weighted average score. Row Population Age Poverty Property Value Employment Base Intergovernmenta l Revenues Constitutional Tax Limit Sales Tax Receipts 1 Maximum Category Score 4 4 6 4 0 2 Example Category Score 2 2 4 0 4 0 Score as a % of Total (Row 2 divided by Row 1) 66% 75% 50% 66% 0% 100% 100% N/A 4 Assigned Weight 15% 10% 15% 0% 10% 10% 10% 0% 5 Weighted Score (Row multiplied by Row 4) 10% 7.5% 7.5% 20% 0% 10% 10% N/A Overall Score (Sum of Row 5) 65% The Environmental Stress Classifications identify the Example entity s score of 65% which places this local government in the worst environmental category represented by ###.

IV. School District Information A. Financial Indicators Category Year-End Fund Balance Operating Deficits Cash Position Use of Short- Term Debt Financial Indicators Max. Points Unassigned Fund Balance Total Fund Balance Max. Category Score Scoring Weighted Avg. 6 50% Operating Deficit 20% Cash Ratio Cash% of Monthly Expenditures 6 20% Short-Term Debt Issuance Short-Term Debt Issuance Trend 6 10% Total Available Points 21 21 100% Each school district will be assigned a fiscal stress classification based on the weighted average calculation of the financial indicators assigned points. The four fiscal stress classifications are based on the percent of total points assigned to the school district as follows: Significant Fiscal Stress 65% - 100% Moderate Fiscal Stress 45% - 64.9% Susceptible to Fiscal Stress 25% - 44.9% No Designation 0% - 24.9% 1. Financial Indicators Defined Financial Indicators are calculated for school district s using only the district s general fund. Category 1: Year-End Fund Balance. Two financial indicators were chosen in the category to evaluate a school district s unassigned fund balance level and total fund balance. Indicator 1. Unassigned Fund Balance = Unassigned Fund Balance = Account 917 Gross Expenditures = Total Expenditures including transfers out If the resulting % is > % If the resulting % is > 2% but % If the resulting % is > 1% but 2% If the resulting % is 1% point Indicator 2. Total Fund Balance = Total Fund Balance = Account codes 806-917

Gross Expenditures = Total Expenditures including transfers out If the % is > 10% If the % is > 5% but 10% If the % is > 0% but 5% If the % is 0% Category 2: Operating Deficits. One financial indicator was selected in this category to evaluate the trend of operating deficits and determine whether the school district incurred a significant operating deficit in its most recently completed fiscal year. Indicator. Operating Deficit = Gross Revenues = Total Revenues including transfers in Gross Expenditures = Total Expenditures including transfers out If there are no deficits -1% for the last fiscal years If the % in one of the last fiscal years is -1% If the % in two of the last fiscal years is -1% If the % in all of the last fiscal years is -1% OR a deficit in the last fiscal year is -% Category : Cash Position. The two financial indicators in this category evaluate the ability to liquidate current liabilities and the ability to fund the ensuing fiscal year s operation from available cash. Indicator 4. Cash Ratio = Cash and Investments = accounts ( 200-22,450,451) Current Liabilities = accounts (600-626 and 61-668) minus the sum of accounts (280,290, and 295) If the indicator is > 100% If the indicator is > 75% but 100% If the indicator is > 50% but 75% If the indicator is 50% Indicator 5. Cash as a % of Monthly Expenditures = Cash and Investments = accounts (200,201,450, and 451) Average Monthly Gross Expenditures - Sum of accounts (1010-9950) divided by 12 If the indicator is > 100%

If the indicator is > 66.7% but 100% If the indicator is >.% but 66.7% If the indicator is.% Category 4: Use of Short-Term Debt. The two financial indicators in this category evaluate the amount of short-term debt that was issued in the last fiscal year as well as the trend in the issuance of short-term debt. Indicator 6. Short-Term Debt Issuance = Total of Short-Term debt = Sum of accounts (620, 621, and 622) RANs, TANs, and budget notes Total Revenues = Sum of account (1001-5789) less account 501 If the indicator is 0% If the indicator is > 0% but 5% If the indicator is > 5% but 15% If the indicator is > 15% Indicator 7. Short-Term Debt Issuance Trend = The number of years that short-term debt (RAN s, TAN s and budget notes) was issued over the last three fiscal years. Up to three points may be issued one point for each year short-term debt was issued. No points if no short-term debt was issued in the last three years. 2. Weighted Average Scoring Once points have been assigned for each financial indicator, the points are totaled by category. These category total points are used to perform the weighted average scoring as shown below: Row Year End Fund Balance Operating Deficits Cash Position Use of Short- Term Debt 1 Maximum Category Score 6 6 6 2 Example Category Score 4 1 4 5 Score as a % of Total 66.67%.% 66.67% 8.% (Row 2 divided by Row 1) 4 Assigned Weight 50% 20% 20% 10% 5 Weighted Score (Row multiplied by Row 4).% 6.67% 1.% 8.% Overall Score (Sum of Row 5) 61.6% The Fiscal Stress Classifications identify the entity s score of 65.8% to place this entity in the category Moderate Fiscal Stress.

B. Environmental Indicators Category Environmental Indicator Max. Points Max. Category Score Scoring Weighted Average Property Value Change in Property Value 0% Enrollment Change in Enrollment 20% Budget Votes Trend in First Budget Vote Being Defeated Change In Approval % First Budget Vote 6 15% Graduation Rate Graduation Rate % 15% Free or Reduced Priced Lunch Free or Reduced Priced Lunch % 20% Total Available Points 18 100% We recognize that there are instances in which some of the environmental indicators are not applicable to each school district. When these instances occur, the environmental indicators that are not applicable to the school district will not be evaluated. Instead, the school district s overall environmental indicator score will be calculated by proportionately redistributing the weighted average for the environmental indicator categories that are applicable. This will result in all school districts overall environmental indicator scores being equitable and comparable to each other. The points and weight are used to calculate the level of environmental stress of the local government as shown below: ### Worst environmental condition 60% or more ## Negative environmental condition 45% - 59.9% # Last level of negative environmental condition 0% -44.9% No Designation is displayed for entities with less than 0% of total available points. 1. Environmental Indicators Defined Category 1: Property Value: This indicator evaluates the trend in a school s property value. Indicator 1. Change in Property Value = FPV Full Property Value This calculation is performed for the most recent four fiscal years; an average of the percent change for the fiscal years is used to determine how points will be issued. (Information will be required for five years in total.) Four fiscal years average is > -1% Four fiscal years average is -1% but > -2% Four fiscal years average is -2% but > -4% Four fiscal years average is -4% OR the change between

the last two fiscal years is < -10% Category 2: Enrollment: Changes in school district enrollment can provide insight into the health of the local economy and can pose challenges to a school district s finances. Indicator 2. Change in Enrollment = This calculation is performed for the most recent four fiscal years; an average of the percent change for the fiscal years is used to determine how points will be issued. (Information will be required for five years in total.) Four fiscal years average is > -1.5% Four fiscal years average is -1.5% but > -2.5% Four fiscal years average is -2.5% but > -.5% Four fiscal years average is -.5% Category : Budget Votes: The two indicators in this category identify school districts that had a declining approval percentage for the first budget vote. Indicator. Trend in First Budget Vote Being Defeated - Budget vote information will be required for the most recent four fiscal years budgets. School district budgets are subject to public vote and must pass by a majority of votes (more than 50%). Alternatively, starting with the 2012-1 fiscal year budget vote, a supermajority of total votes (more than 60%) was required if the budget included an override of the tax cap. Budget Vote defeated the 1 st time in 1or none of the last 4 fiscal years. Budget Vote defeated the 1 st time in 2 of the last 4 fiscal years Budget Vote defeated the 1 st time in of the last 4 fiscal years Budget Vote defeated the 1 st time in 4 of the last 4 fiscal years Indicator 4. Change in Approval Percentage for the First Budget Vote = Budget Approval % Year 2 Budget Approval % Year 1 Budget Approval % = the total number of yes votes for the first budget vote divided by the total number of votes cast for the first budget vote. This calculation needs to be performed for the most recent four fiscal years; an average of the percent change for the fiscal years is used to determine how points will be issued. (Information will be required for five years in total.) Four fiscal years average is > -% points Four fiscal years average is > -6% points but -% points and last year s approval % is < 60% Four fiscal years average is > -9% points but -6% points and last year s approval % is < 60% Four fiscal years average is -9% points and

last year s approval % is less than 60% Category 4: Graduation Rate - Graduation rates may affect the school district s expenditures. A low graduation rate may indicate a school district has students with higher needs that require additional academic services, resulting in additional expenditures for the school district. Indicator 5. Graduation Rate Percentage = The number of students who graduated in the most current fiscal year = students who graduated within four years with a local diploma, Regents diploma, or Regents with an advanced designation diploma. Graduation rate information will be required for the last four fiscal years to determine the graduation rate average for the last four fiscal years. Graduation % below 1.5 standard deviations of that fiscal year s average graduation rate % in None of the last 4 fiscal years. Graduation % below 1.5 standard deviations of that fiscal year s average graduation rate % in One of the last four fiscal years. 1point Graduation % below 1.5 standard deviations of that fiscal year s average graduation rate % in Two of the last four fiscal years. Graduation % below 1.5 standard deviations of that fiscal year s average graduation rate % in Three or more of the last four fiscal years. Category 5: Free or Reduced Priced Lunch. The percentage of students eligible for free or reduced price lunch is directly correlated with the poverty rate. Indicator 6. Free or Reduced Price Lunch Percentage = This calculation will be required for the last three fiscal years, to obtain an average for the last three fiscal years. Three fiscal years average is < 55% Three fiscal years average is < 65% but >, = 55% Three fiscal years average is < 75% but >, = 65% Three fiscal years average is >, = 75%

2. Weighted Average Scoring Once points have been assigned for each environmental indicator the points are totaled by category. These category total points are used to perform the weighted average scoring as shown below: Row Property Value Enrollment Budget Votes Graduation Rate Free or Reduced Price Lunch 1 Maximum Category Score 6 2 Example Category Score 2 2 2 1 Score as a % of Total (Row 2 divided by Row 1) 66% 100 % % 66% % 4 Assigned Weight 0% 20% 15% 15% 20% 5 Weighted Score (Row multiplied by Row 4) Overall Score (Sum of Row 5) 19.8% 20% 4.95% 9.9% 6.6% 61.25% The Environmental Stress Classifications identify the above entity as having a score of 61.25% which is the worst environmental stress level and is represented by ###.