GRANVILLE SCHOOLS CASH BALANCE GUIDELINES AND THE MAY 5-YEAR FORECAST

GRANVILLE SCHOOLS CASH BALANCE GUIDELINES AND THE MAY 5-YEAR FORECAST Mike Sobul, CFO/Treasurer Dan Gibson, Member, Superintendent s Finance Committee May 2013

CASH BALANCE GUIDELINES

Why Have Cash Balance Guidelines?

Projected Monthly Cash Flow Board Approved Cash Balance Policy $ - $7,000,000 $6,000,000 $5,000,000 $4,000,000 $1.9 Million $3,000,000 $2,000,000 1,428,590 $1,000,000 396,573 $0 -$1,000,000-451,404 7.020 - Ending Cash Balance Board Approved Cash Balance Policy 2013 2014

Why Have Cash Balance Guidelines? Difference in cash balance from the end of June to the end of January is maximum cash fluctuation through the year Without a regular cash balance to cover the fluctuation (upwards of $2 million), it will always be a challenge for cash management in January

Appropriate Cash Balance Guidelines? The Finance Committee members feel an appropriate cash balance target should be 10 percent of revenues (about $2.3 million) currently This would be a target for the end of a fiscal year Once projections show cash balances are expected to be below this level, the district should target corrective action (spending cuts or additional revenue)

Sample Cash Balance Guidelines The Board of Education recognizes the need for incorporating financial stability goals into its planning. The district s cash balance is one indicator and provider of financial stability. To provide the district with a goal of cash balance and credit rating stability the Board establishes a cash balance reserve target of 10% of general fund revenue. Annual revenue shall be defined as the next fiscal year s total revenue, Line 1.07 on the District s Five Year Forecast. $1.9 Million The treasurer shall prepare end-of-month cash balances (actual and projected) for the current and subsequent fiscal year and submit to the Board for quarterly approval. The treasurer shall identify any month falling below the board s cash balance reserve amount. The treasurer shall identify for the current and subsequent fiscal year any monthly deficits and resulting borrowing needs. The treasurer shall report on the degree to which June 30, ending cash balances are being impacted by revenue surpluses or shortfalls (Line 6.01) for the current and subsequent four fiscal years. The Board shall analyze these reported trends and incorporate the information into their resource appropriation decisions and, if necessary, borrowing authorization.

FINANCIAL OVERVIEW

Forecast Risks Positive Sale of the Granville Inn Worker s Comp rebate and rate lowering Levy passing Negative Higher than projected medical ins. costs in 2014/15 State aid in new budget lower than House version Levy failing

Revenue, Expenditures & Year End Fund Balance GRANVILLE EXEMPTED VILLAGE SCHOOL DISTRICT $30,000,000 Revenue, Expenditures and Year End Fund Balance $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 2010 2011 2012 2013 2014 2015 2016 2017 -$5,000,000 -$10,000,000 1.070 - Total Revenue 4.500 - Total Expenditures 7.020 - Cash Balance June 30 ACTUAL FORECASTED 2010 2011 2012 2013 2014 2015 2016 2017 1.070 - Total Revenue 22,117,178 22,819,132 22,579,152 22,514,742 22,841,805 23,422,436 23,663,755 23,877,529 4.500 - Total Expenditures 22,902,721 23,845,280 24,163,083 23,112,233 23,813,840 24,516,326 24,980,217 25,664,217 7.020 - Cash Balance June 30 4,894,902 3,914,501 1,983,624 1,428,577 456,542 (637,348) (1,953,809) (3,740,498)

Additional State Aid

Community school deductions, legal fees payments to ESC for special needs, electric rate increase

Forecast Compare - Compares Previous Forecast to Current Forecast GRAN For Fiscal Year: 2014 Forecasted as of: 11/2/2012 5/14/2013 Fiscal Year Fiscal Year Dollar Percentage Revenue: 2014 2014 Difference Variance 1.010 - General Property Tax (Real Estate) 14,236,797 14,092,608 (144,188) -1.01% 1.035 - Unrestricted Grants-in-Aid 4,968,234 5,606,387 638,153 12.84% 1.060 - All Other Operating Revenues 445,564 480,021 34,457 7.73% 2.080 - Total Revenues and Other Financing Sources 22,259,401 22,841,805 582,404 2.62% Expenditures: 3.010 - Personnel Services 12,943,883 13,183,713 239,830 1.85% 3.020 - Employees' Retirement/Insurance Benefits 5,531,344 5,671,757 140,413 2.54% 3.030 - Purchased Services 2,914,480 3,336,973 422,493 14.50% 5.050 - Total Expenditures and Other Financing Uses 22,962,794 23,813,840 851,046 3.71% 0 6.010 - Revenue Surplus/(Shortfall) - Line 2.080, Less 5.050 (703,393) (972,034) (268,642) 38.19% 7.010 - Cash Balance at Beginning of Year 1,377,859 1,428,577 50,718 3.68% 7.020 - Cash Balance at End of Year [Line 7.010 +/- Line 6.010] 674,466 456,542 (217,924) -32.31%

For FY 2013, Total per pupil expenditures are estimated to drop to about $9,750

For FY 2013, Total per pupil expenditures are estimated to drop to about $9,750

ENROLLMENT

New Kindergartners In 132 110 96 126 125 Loss of Seniors from Prior Year (181) (194) (220) (192) (214) Net Change in Pupils from Prior Year (5) (35) (87) (33) (61) Current Year Estimated Enrollment (Simulated October Count) 2,479 2,444 2,357 2,324 2,263 Students at the District Grade Head Count K 132 110 96 126 125 1 131 147 114 98 129 2 166 139 156 121 104 3 186 174 146 163 127 4 190 193 180 151 169 5 212 195 198 184 155 6 195 216 199 202 187 7 230 198 220 202 205 8 214 231 198 221 202 9 215 213 230 198 220 10 198 220 218 236 203 11 219 191 213 211 228 12 194 220 192 214 212 Total 2,482 2,447 2,360 2,327 2,266

REVENUES

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 General Property Tax (Real Estate) Actual and Projected $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0

Unrestricted Grants-in-Aid Actual and Projected $7,000,000 House version state aid increases $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

EXPENDITURES

Personnel Services Actual and Projected Spending cuts $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

2012 2013 2014 2015 2016 2017 2012 Certified - Teachers 162.33 152.43 153.93 151.93 150.93 148.93 Certified - Other Professionals 7.34 6.84 7.84 7.84 7.84 7.84 Certified - Administration 12.00 11.00 12.00 12.00 12.00 12.00 Classified - Maintenance/Custod 5.00 4.30 5.00 5.00 5.00 5.00 Classified - Clerical 14.00 12.00 12.00 12.00 12.00 12.00 Classified - Aides/Paraprofessio 17.79 14.99 14.99 14.99 14.99 14.99 Classified - Transportation 15.32 13.50 13.50 13.50 13.50 13.50 Classified - Other 5.00 5.50 5.50 5.50 5.50 5.50 Net FTE All Funds 238.78 220.56 224.76 222.76 221.76 219.76 The increase of 4.2 additional FTEs are due to: 1) New stricter requirements for graduation of special needs students necessitates the addition of a special education position in the high school. 2) New Ohio Teacher Evaluation System necessitates an additional assistant principal split between the elementary and intermediate schools. 3) The addition of an all-day kindergarten option adds the need for an additional half-time teacher, the cost of which is more than covered by tuition. 4) Additional demand for services leads to an increase of a half-time occupational therapist. 5) Additional itinerant services that will reduce other pre-school costs causes an increase of two speech therapists to fulltime from three-quarter time each. 6) Replacement of a bus mechanic who left last fall causes an net FTE increase of 0.7 over the 2012/2013 school year.

Sharp increases in health care costs

Purchased Service 2012 2013 2014 Community school deduction $145,708 $231,025 $240,700 Open Enrollment Deduction $51,335 $60,747 $63,998 ESC MH/SBD $218,159 $351,000 $387,200 ESC Pre-School $150,450 $133,000 $133,000 EMS $775,620 $760,000 $764,100 Natural Gas $194,239 $129,000 $135,450 Electric $313,318 $375,000 $397,500 Other contracted employees $173,595 $197,454 $223,557 Tuition to Other Disticts, including PSEO $18,522 $26,000 $30,000 Trash removal $19,081 $8,000 $8,240 Autism/Peterson Scholarships $137,200 $67,716 $110,000 Total These Items $2,197,228 $2,338,941 $2,493,746 Total All Purchased Services $2,976,972 $3,170,679 $3,336,973 These Items as a Percent of Total 73.8% 73.8% 74.7%

LEVY DISCUSSION

Levy Options We have the need for a new operating levy that will be on the ballot in November There is a 1.7 mill Permanent Improvement (PI) levy that expires at the end of this year (it is collected through the end of 2014) This levy must be renewed between now and next November

Levy Options The first option would be to put the operating levy on the ballot this November and the PI levy in May or November next year This is the most common way districts would handle the situation It would require running two levy campaigns in six months It would require the district to pay a share of the cost of two elections The second option would be to put both issues on this November as separate issues It would eliminate the two levy campaigns and paying for two elections It could cause voters to vote yes on the renewal and no on the operating levy and still feel comfortable that they supported the schools

Levy Options The third option would be to combine the two issues into a single ballot issue this November and then not renew the existing 1.7 mill PI levy The operating portion of the new levy would be put in place this year for collection in 2014 and the new PI levy portion would be first collected during 2015. There would be a need for increased communications with the community to convey that 1.7 mills of the new levy is not new millage (will not lead to additional taxes being paid)

8,000,000 Estimated Year End Cash Balances Compared to Cash Balance Target 6,000,000 4,000,000 2,000,000 $2.3 million 0-2,000,000 6.2 mills 5.5 mills 4.9 mills 4.25 mills -4,000,000-6,000,000 If additional state aid does not materialize, the millage rates shown here would need to be higher and/or the levies would not last as long -8,000,000-10,000,000 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23