Whitehall City School District Schedule Of Revenue, Expenditures and Changes In Fund Balances Actual and Forecasted Operating Fund ACTUAL FORECASTED Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year 2011 2012 2013 2014 2015 2016 2017 2018 Revenue: 1.010 - General Property Tax (Real Estate) 8,865,061 8,309,931 7,168,728 7,995,216 7,917,472 7,840,056 7,837,244 7,840,716 1.020 - Public Utility Personal Property 616,290 662,201 1,038,552 732,649 732,649 732,649 732,649 732,649 1.030 - Income Tax - - - - - - - - 1.035 - Unrestricted Grants-in-Aid 15,317,550 16,510,784 18,132,518 19,311,680 21,321,396 22,381,154 23,493,911 24,662,319 1.040 - Restricted Grants-in-Aid 178,764 183,203 183,204 232,447 239,391 241,785 244,203 246,645 1.045 - Restricted Federal Grants-in-Aid - SFSF 1,310,034 648,292 160,000 - - - - - 1.050 - Property Tax Allocation 2,697,398 2,125,396 1,577,526 1,573,838 1,562,129 1,553,575 1,555,100 1,556,923 1.060 - All Other Operating Revenues 1,660,202 1,743,135 1,603,181 1,568,181 1,568,181 1,568,181 1,568,181 1,568,181 1.070 - Total Revenue 30,645,299 30,182,942 29,863,709 31,414,011 33,341,219 34,317,400 35,431,288 36,607,432 Other Financing Sources: 2.010 - Proceeds from Sale of Notes - - - - - - - - 2.020 - State Emergency Loans and Advancements - - - - - - - - 2.040 - Operating Transfers-In - - - - - - - - 2.050 - Advances-In - - 7,000 5,798 - - - - 2.060 - All Other Financing Sources 14,639 34,814 6,752 287,187 30,000 30,000 30,000 30,000 2.070 - Total Other Financing Sources 14,639 34,814 13,752 292,985 30,000 30,000 30,000 30,000 2.080 - Total Revenues and Other Financing Sources 30,659,938 30,217,756 29,877,461 31,706,996 33,371,219 34,347,400 35,461,288 36,637,432 Expenditures: 3.010 - Personnel Services 18,148,800 17,885,720 17,461,948 17,506,635 18,095,217 18,685,001 19,286,547 19,945,897 3.020 - Employees' Retirement/Insurance Benefits 5,791,512 5,989,551 6,160,561 6,225,176 6,721,245 7,188,498 7,663,749 8,210,458 3.030 - Purchased Services 4,857,416 5,401,658 6,443,513 6,905,790 6,929,964 7,137,863 7,351,999 7,572,559 3.040 - Supplies and Materials 1,000,975 853,784 840,863 910,540 1,278,751 1,304,326 1,330,413 1,357,021 3.050 - Capital Outlay 562,769 465,996 394,900 1,068,798 555,174 551,277 562,303 573,549 3.060 - Intergovernmental - - - - - - - - Debt Service: 4.010 - Principal-All Years - - - - - - - - 4.020 - Principal - Notes - - - - - 4.030 - Principal - State Loans - - - - - 4.040 - Principal - State Advances - - - - - 4.050 - Principal - HB264 Loan - - - - - 4.055 - Principal - Other - - - - - 4.060 - Interest and Fiscal Charges - - - - - - - - 4.300 - Other Objects 285,590 282,536 362,282 327,660 334,213 340,897 347,715 354,669 4.500 - Total Expenditures 30,647,062 30,879,245 31,664,067 32,944,599 33,914,564 35,207,863 36,542,725 38,014,153 Other Financing Uses 5.010 - Operating Transfers-Out - - - - - - - - 5.020 - Advances-Out - 7,000 5,798 - - - - - 5.030 - All Other Financing Uses - - - - - - - - 5.040 - Total Other Financing Uses - 7,000 5,798 - - - - - 5.050 - Total Expenditures and Other Financing Uses 30,647,062 30,886,245 31,669,865 32,944,599 33,914,564 35,207,863 36,542,725 38,014,153 Excess of Rev & Other Financing Uses Over (Under) 6.010 - Expenditures and Other Financing Uses 12,876 (668,489) (1,792,404) (1,237,603) (543,345) (860,463) (1,081,437) (1,376,721) Cash Balance July 1 - Excluding Proposed Renewal/ 7.010 - Replacement and New Levies 15,927,260 15,940,136 15,271,647 13,479,243 12,241,640 11,698,295 10,837,831 9,756,394 7.020 - Cash Balance June 30 15,940,136 15,271,647 13,479,243 12,241,640 11,698,295 10,837,831 9,756,394 8,379,673 8.010 - Estimated Encumbrances June 30 22,304 44,689 609,965 30,000 30,000 30,000 30,000 30,000 Reservations of Fund Balance: 9.010 - Textbooks and Instructional Materials - - - - - - - - 9.020 - Capital Improvements - - - - - - - - 9.030 - Budget Reserve 497,896 497,896 497,896 497,896 497,896 497,896 497,896 497,896 9.040 - DPIA - - - - - - - - 9.050 - Debt Service - - - - - - - - 9.060 - Property Tax Advances 998,375 1,000,000 - - - - - - 9.070 - Bus Purchases - - - - - - - - 9.080 - Subtotal 1,496,271 1,497,896 497,896 497,896 497,896 497,896 497,896 497,896 Fund Balance June 30 for Certification 10.010 - of Appropriations 14,421,561 13,729,062 12,371,382 11,713,744 11,170,399 10,309,935 9,228,498 7,851,777 Rev from Replacement/Renewal Levies 11.010 - Income Tax - Renewal - - - - - 11.020 - Property Tax - Renewal or Replacement - - - - - 11.030 - Cumulative Balance of Replacement/Renewal Levies - - - - - - - - Fund Balance June 30 for Certification 12.010 - of Contracts, Salary and Other Obligations 14,421,561 13,729,062 12,371,382 11,713,744 11,170,399 10,309,935 9,228,498 7,851,777 Revenue from New Levies 13.010 - Income Tax - New - - - - - 13.020 - Property Tax - New - - - - - 13.030 - Cumulative Balance of New Levies - - - - - - - - 14.010 - Revenue from Future State Advancements - - - - - - - - 15.010 - Unreserved Fund Balance June 30 14,421,561 13,729,062 12,371,382 11,713,744 11,170,399 10,309,935 9,228,498 7,851,777 ADM Forecasts 20.010 - Kindergarten 300 266 277 265 265 20.015 - Grades 1-12 2,804 2,893 2,973 3,026 3,035
The mission of the Whitehall City School District is to continually increase the achievement of all. The quantity and quality of our educational programs are directly dependent on the funding provided and the effective, efficient management of those funds. It follows that the District s purposes can best be achieved through prudent fiscal management. The five year forecast is a management tool we use to identify trends and project the financial direction of the District. It reports 3 fiscal years of actual results and 5 fiscal years of projections for the General Fund only. The school districts fiscal year runs from July through June. For example, Fiscal Year 2014 is the period July 1, 2013 through June 30, 2014. It is appropriate to focus on the General Fund as it accounts for the ordinary operations of the District and drives local tax levy decisions. The forecast does not cover Food Services, Capital Projects, Student Activities, or Restricted Grants. These other funds are supplemental in nature and are expected to operate on a break even basis. They only impact the forecast if the General Fund has to subsidize their activities. Users are encouraged to focus on line 6.010 Excess of Revenue & Other Sources Over (Under) Expenditures and Other Uses. These amounts are the net operating results for each fiscal year and are summarized in the chart below: $12,876 Net Operating Result By Fiscal Year $(668,489) $(1,237,603) $(543,345) $(860,463) $(1,081,437) $(1,376,721) $(1,792,404) FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 The District has not asked voters for an operating tax increase since 1995. Prudent financial management allowed the District to keep expenditures within revenue through Fiscal Year 2011. However, as this chart shows, the District began deficit spending in FY 2012. It could not overcome revenue losses from the following: 1) a 14% reduction in real estate values from the 2011 Franklin County property reappraisal; 2) expiration of federal stimulus funding (American Recovery and Reinvestment Act and Education Jobs); and 3) reduction in state reimbursement for the loss of tangible personal property tax. School finance tends to be cyclical in nature. A school district passes an operating levy which provides a significant one-time boost to revenue. Revenue exceeds expenditures for a number of years and a cash balance accumulates. However, due to inherent revenue growth limitations (e.g., tax millage reduction factors, state budget woes, etc ), expenditures grow at a higher rate and eventually exceed revenue. The school district can operate this way for a while by balancing its budget with its cash balance or rainy day fund. But a rainy day fund can only be spent once and eventually the school district must bring spending back within revenue through a tax increase, budget cuts, or a combination of the two.
Given this cyclical nature of school finance, the user should also focus on line 7.020. This line reports the cash balance at the end of each fiscal year excluding any levies that have not yet been approved by voters, and is summarized for Whitehall City Schools in the chart below: Ending Cash Balance by Fiscal Year $15,940,136 $15,271,647 $13,479,243 $12,241,640 $11,698,295 $10,837,831 $9,756,394 $8,379,673 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 The District s ending cash balance will decline as it realizes the net operating losses shown in the first chart. School districts must remain solvent; they cannot end a fiscal year with a deficit balance. Further, a minimum cash balance should be maintained for cash flow purposes. General consensus places the recommended minimum cash balance between one to two months of operating money. This range would be roughly $2.5 $5.0 million for Whitehall City Schools. An adequate balance remains throughout the forecast period. Outside forces impact District revenue and expenditures. These forces can change in unforeseen ways. The five year forecast is a fluid document we continually update over time as financial indicators change. It is based on many assumptions, the most significant of which are outlined in the remainder of these notes. Revenue Assumptions Property Tax The District collects both Real Estate Tax and Public Utility Personal Property Tax. Property tax is a product of the effective millage rates and the valuation of property located within District Boundaries. The following chart summarizes Whitehall City School District s effective millage rates for the most recent year (2012). Residential property owners pay Class I rates. Commercial and Industrial property owners pay Class II rates. Personal Property taxpayers pay the full rates. Fund Inside Outside Millage Total Millage Description Millage Full Rate Class I Class II Full Rate Class I Class II General 6.15 57.70 31.28 41.33 63.85 37.43 47.48 Debt Service 0.00 8.90 8.90 8.90 8.90 8.90 8.90 1/2 Mill Maintenance 0.00 0.50 0.50 0.50 0.50 0.50 0.50 Grand Totals 6.15 67.10 40.68 50.73 73.25 46.83 56.88
The following table provides actual property valuations for tax years 2001-2012 and projected valuations for the next five years. Property values are adjusted for inflation or deflation every 3 years through either reappraisal or triennial update. Franklin County is next due for triennial update in 2014 and reappraisal in 2017. As mentioned above, there was an overall 14% reduction in (Class I and Class II) real estate values upon the 2011 reappraisal. The District monitors residential sales data to predict the impact of future reappraisals or triennial updates. Current sales data suggests homes remain overvalued (median ratio = 117%), hence the projected reduction for tax year 2014. When values increase or decrease as a result of reappraisal or triennial update, the County Auditor adjusts outside millage rates so those levies produce the same amount of revenue. The inside millage rate, however, remains the same and revenue from those 6.15 mills is impacted by the increase or decrease. Property values and taxes can also be impacted by new construction. New construction is not a significant factor as the District is fully developed. Residential new construction has averaged just 0.25% over the last 12 years.
Unrestricted Grants-in-Aid (State Funding) Unrestricted Grants-in-Aid is the District s most important revenue source, accounting for over 60% of total revenue. The General Assembly adopted a new state funding formula within their 2013-15 biennial budget (House Bill 59 of the 130 th General Assembly). It is a complex formula driven by formulas to calculate a Core Opportunity Grant amount and other components driven by each individual district s demographics. We only know how the State will fund schools through June 30, 2015. So we must make assumptions about how they will be funded in the future and our District s demographics that drive these formulas. Here is a summary of modeling for the forecast period: 2014 2015 2016 2017 2018 Core Aid Funding (See Note 2 for Detail) Core Funding Per Pupil $5,745 $5,800 $5,916 $6,034 $6,095 State Share of Core Funding (SFPR Line j) 78.5% 78.5% 83.7% 83.7% 87.2% State Core Funding Per Pupil $4,508 $4,552 $4,951 $5,050 $5,318 Total Formula ADM (SFPR Line a5) 3,439 3,443 3,534 3,575 3,584 Total Calculated Core Funding $15,505,476 $15,672,125 $17,497,374 $18,053,410 19,059,924 District Adjustments $0 $0 $0 $0 $0 otal Projected Core Funding for Fiscal Year from Note -2(SFPR Line A) $15,505,476 $15,672,125 $17,497,374 $18,053,410 19,059,924 Targeted Funding (See Note 2 for Detail Wealth Based Targeted Assistance Funding $4,131,634 $4,431,247 $5,003,565 $5,464,177 $5,816,094 Agricultural Target Assistance Supplemental Sobul Funding $0 $0 $0 $0 $0 Total Targeted Funding from Note -2(SFPR Line B) $4,131,634 $4,431,247 $5,003,565 $5,464,177 $5,816,094 Total Special Education Funding - Note 1 (SFPR Line H) $2,240,938 $2,262,291 $2,436,609 $2,460,975 $2,591,375 K-3 Literacy Aid - Note 1 (SFPR Line C) $209,883 $295,617 $303,415 $318,589 $311,808 Total ELL Funding - Note 1 (SFPR Line E) $266,623 $269,381 $290,138 $293,040 $308,567 Total Gifted Funding - Note 1 (SFPR Line F) $153,711 $155,450 $161,631 $165,353 $167,474 Total Economic Disadvantaged Aid - Note 1 (SFPR Line D) $2,091,024 $2,116,862 $2,195,886 $2,244,172 $2,272,450 Transportation Aid (SFPR Line G) $382,771 $402,053 $406,074 $410,134 $414,236 Low Density Transportation Aid Career Tech Weighted Funding (SFPR Line I) $232,447 $239,391 $241,785 $244,203 $246,645 Career Tech Associated Services Total Transportation and Career Tech Funding $615,218 $641,444 $647,858 $654,337 $660,880 Total Formula Aid (SFPR Line J) $25,214,508 $25,844,417 $28,536,477 $29,654,053 $31,188,572 Prior Year Funding Amount (SFPR Line K) $18,057,893 $19,186,511 $21,201,095 $22,261,150 23,374,207 Guarantee Percentage of 2013 Funding 100% 100% 100% 100% 100% Transitional Aid (SFPR Line L) $0 $0 $0 $0 $0 Growth Cap 1.0625 1.1050 1.0500 1.0500 1.0500 Maximum Capped Amount (SFPR Line N) 19,186,511 21,201,095 22,261,150 23,374,207 24,542,918 Final Funding Amount (SFPR Line O) 19,186,511 21,201,095 22,261,150 23,374,207 24,542,918 Unfunded Formula Above Cap $6,027,997 $4,643,322 $6,275,327 $6,279,846 $6,645,654 Preschool (SFPR Line P) 57861 58439.61 59024.0061 59614.24616 60210.38862 Special Education Transportation (SFPR Line Q) 149755 151252.55 152765.0755 154292.7263 155835.6535 Other State Funding (SFPR Line W) 150000 150000 150000 150000 150000 Prior Year Adjustment Career Tech to Restricted -$232,447 -$239,391 -$241,785 -$244,203 -$246,645 Final Adjustment to Calculated State Funding Adjustment for Current Cash Flow Trend: Total 18,132,518 19,311,680 21,321,396 22,381,154 23,493,911 24,662,319 The funding formula actually calculates a larger amount for the District than will actually be received. The State had to cap increases to school districts based on its own budget limitations. The cap for Fiscal Years 2014 and 2015 are 6.25% and 10.5%, respectively. Future caps are unknown. The District has made an assumption of 5% for Fiscal Years 2016-2018. The cap percentage is critical as modeling indicates the District will be due whatever maximum increase the State can afford.
Restricted Grants-in-Aid - Restricted Grants-in-Aid includes federal State Fiscal Stabilization Funds (SFSF) and Ed Jobs monies in Fiscal Years 2010 through 2012. Fiscal Year 2013 also includes a balance owed of $160,000 in Ed Jobs monies. These programs designed to retain or increase jobs in schools have expired. The only revenue remaining in this line item is Career-Tech funding, which is a part of the state funding formula but restricted as to its use. Tangible Personal Property Reimbursement - HB66 was adopted in June 2005 and mandated the complete phase-out of the tangible personal property tax over the next four years. Local collection of TPP tax was reduced by 25% per year starting in 2006, 50% in 2007, 75% in 2008, and completely gone in 2009. HB66 established a Hold Harmless Period (FY06-FY09) during which all taxing authorities were fully reimbursed by the State relative to prior law for revenue lost due to the taxable value reductions prescribed by HB66. (Tax year 2004 was used as the base year for this calculation.) These reimbursements from the State s commercial activity tax (CAT) fund are included in Line 1.050 Property Tax Allocation and were scheduled to be phased out during the Phase-Out Period (FY10-FY18). HB1, the 2010-11 biennial budget bill passed in June 2009, extended the Hold Harmless Period through FY11. HB153, the 2012-13 biennial budget bill passed in June 2011 attempted to eliminate the reimbursements all together starting in FY12. Reimbursement losses were capped at 2% of Districts total revenues for FY12 and FY13. Districts under the cap lost their entire reimbursement in FY12. The District lost $575,000 in FY12 and will lose another $575,000 in FY13. Current funding proposals in the biennial budget process have halted the phase out of these hold harmless payments. So the forecast assumes the District will retain the remaining $707,836 it collects each year. Whitehall s original general personal property tax collection amount of $2.3 million represented 18% of total property tax collections and 8.5% of total operating revenue in 2004 and therefore represents a major loss of revenue. Rollback and Homestead - Rollback and Homestead reimbursement from the State represent tax credits given owner occupied residences equaling 12.5% of the gross property taxes charged to residential taxpayers and up to 10% for commercial and industrial taxpayers. Increases or decreases of this reimbursement in future years should parallel increases or decreases anticipated in real estate tax revenue. All Other Revenues - In December 2005 the City of Whitehall passed tax increment financing ( TIF ) legislation which created five (5) incentive districts along the commercial corridors of the city. Additional revenue generated as a result of this action was not realized by the district until December 2009. Due to delays in processing the large volume of TIF parcels involved, the Franklin County auditor made one lump sum TIF payment of $1.6 million to the district for tax years 2005-2008 in December 2009. This payment greatly inflated the property tax receipts reported in FY10. TIF parcel tax collections fell back to $1.0 million in FY11 and remained at $1.0 million in FY12. This revenue is included in line 1.060 All Other Operating Revenue. All Other Revenues also include investment earnings, Medicaid School Program reimbursements (formerly CAFS), and local revenue from SF-14 tuition and special education SF-14H tuition billed to outside school districts.
Expenditure Assumptions Personal Services Personal Services consists of administrative, teaching and support staff salaries and wages. The following table summarizes current and projected employee counts by fiscal year: 2013 2014 2015 2016 2017 2018 Teachers 186.80 186.00 189.00 191.00 191.00 192.00 Professional 6.40 7.40 7.40 7.40 7.40 7.40 Administration 14.00 14.00 14.00 14.00 14.00 14.00 Classified - Maintenance/Custo 21.00 23.00 23.00 23.00 23.00 23.00 Classified - Clerical 12.25 12.25 12.25 12.25 12.25 12.25 Classified - Aides/Paraprofessio 16.75 16.75 16.75 16.75 16.75 16.75 Classified - Transportation 15.00 15.00 15.00 15.00 15.00 15.00 Confidential 9.00 9.00 9.00 9.00 9.00 9.00 Net FTE General Fund 281.20 283.40 286.40 288.40 288.40 289.40 Certified Not Classified Above 25.0 25.8 25.8 25.8 25.8 25.8 Classified Not Included Above 39.0 39.0 39.0 39.0 39.0 39.0 Net FTE All Funds 345.20 348.20 351.20 353.20 353.20 354.20 The projected increases in teachers are based on student enrollment projections and class size targets. In September 2011, both the teaching and support staff unions negotiated contracts for Fiscal Years 2013 and 2014. These contracts reflected a wage freeze. There were to be no cost-of-living or step increases those years. Terms have not been negotiated beyond FY 2014. It is assumed cost-of-living and step increases will resume beginning FY 2015. Retirement / Insurance Benefits These benefits include STRS/SERS retirement system contributions, Medicare tax, workers compensation, health, dental and life insurances. Retirement, Medicare and workers compensation are calculated as percentages of salaries & wages, so they will increase consistent with Personal Services. The cost of insurance benefits will be driven by premium rates. Health insurance accounts for nearly half of total benefits, so it is of particular concern. Fiscal Year 2013 was a good claims year for the District, so premium rates did not increase going into Fiscal Year 2014. However, the trend for medical insurance remains around 10% annual inflation, and that is the assumption for Fiscal Years 2015-2018. Dental premiums are expected to increase at a rate of 5% each year, and life insurance rates should stay about the same. Purchased Services, Supplies, Capital Outlay and Other - The District has witnessed a dramatic increase in open enrollment, charter school, and voucher tuition expense from $0 in Fiscal Year 2000 to over $3,000,000 in Fiscal Year 2013. These fees represent state and local funding following students to other schools through school choice options and are accounted for as Purchased Services. The cost of all other service, supply, and capital outlay expenditures should remain relatively stable. Modest inflationary increases of 2-3% are assumed in forecasted years. Debt Service - There are no existing or planned General Fund debt issuances included in the forecast. In November 2008, the community approved a 6.37 mill bond levy and authorized the District to issue $30.5 million of new debt for purposes of constructing all new schools. Debt service on these bonds is scheduled through 2034. The State of Ohio contributed $47.5 million or 61% toward the total $78 million project. Encumbrances - Encumbrances are obligations not paid and carried over to the subsequent fiscal year for payment.