Groveport-Madison Local School District – Franklin County SCHEDULE OF REVENUE, EXPENDITURES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEARS ENDED JUNE 30, 2016, 2017 and 2018 ACTUAL FORECASTED FISCAL YEARS ENDING
JUNE 30, 2019 THROUGH 2023

Forecast Provided By Groveport-Madison School District
Treasurer's Office John Walsh, Treasurer

May 8, 2019

GROVEPORT MADISON LOCAL SCHOOL DISTRICT Franklin County
Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2016, 2017, 2018 Forecasted Fiscal Year Ending June 30, 2019 through 2023

	Actual
		Forecasted
	
	Fiscal Year	Fiscal Year	Fiscal Year
2016	2017	2018
	Average
Change
	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
2019	2020	2021	2022	2023

Revenues
1.010     General Property Tax (Real Estate) 1.020     Tangible Personal Property
1.030     Income Tax
1.035     Unrestricted State Grants-in-Aid 1.040     Restricted State Grants-in-Aid
1.045     Restricted Fed. SFSF Fd. 532 FY10&11/Ed Jobs Fd.504 FY1 1.050     Property Tax Allocation
1.060     All Other Revenues 1.070 Total Revenues

Other Financing Sources 2.010     Proceeds from Sale of Notes
2.020     State Emergency Loans and Advancements (Approved) 2.040     Operating Transfers-In
2.050     Advances-In
2.060     All Other Financing Sources 2.070     Total Other Financing Sources
2.080 Total Revenues and Other Financing Sources

Expenditures 3.010     Personnel Services
3.020     Employees' Retirement/Insurance Benefits 3.030     Purchased Services
3.040     Supplies and Materials 3.050     Capital Outlay
3.060     Intergovernmental Debt Service:
4.010	Principal-All (Historical Only) 4.020	Principal-Notes
4.030	Principal-State Loans
4.040	Principal-State Advancements 4.050	Principal-HB 264 Loans
4.055	Principal-Other
4.060	Interest and Fiscal Charges 4.300     Other Objects
4.500 Total Expenditures

Other Financing Uses 5.010     Operating Transfers-Out 5.020     Advances-Out
5.030     All Other Financing Uses 5.040     Total Other Financing Uses
5.050 Total Expenditures and Other Financing Uses
6.010 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies

7.020 Cash Balance June 30

8.010 Estimated Encumbrances June 30

Reservation of Fund Balance
9.010	Textbooks and Instructional Materials 9.020	Capital Improvements
9.030	Budget Reserve 9.040	DPIA
9.045	Fiscal Stabilization 9.050	Debt Service
9.060	Property Tax Advances 9.070	Bus Purchases
9.080	Subtotal
Fund Balance June 30 for Certification of 10.010 Appropriations

32,155,208	33,795,007	34,158,402 0                         0                          0 -                         -                          -
35,321,355            37,712,926             39,185,321 2,009,661             2,265,448              2,359,606
-	-	-2,909,981             2,841,785              2,767,245
4,739,478	7,271,459	5,005,876

3.1% 0.0% 0.0% 5.3% 8.4% 0.0% -2.5%
11.1%

$35,362,195	$32,688,720	$30,703,525	$31,367,167	$31,930,133 $0                       $0                       $0                       $0                       $0 $0                       $0                       $0                       $0                       $0
$40,481,664          $41,672,902          $42,925,974          $42,995,556          $43,163,666 $2,265,232            $2,287,884            $2,310,763            $2,333,870            $2,357,209 $0                       $0                       $0                       $0                       $0 2,655,057             2,676,333             2,570,576             2,525,009             2,527,184
4,569,607	4,369,034	4,215,419	4,235,284	4,255,365
	
	77,135,683	83,886,625	83,476,450
	4.1%
	85,333,755	83,694,873	82,726,257	83,456,886	84,233,557

-                350,014                        60 -                         -                          -
1,490,437             1,492,023                          --                         -                          -
432,899	8,447	9,773

0.0% 0.0%
-49.9% 0.0%
-41.2%

$0	$0	$0	$0	$0 -                         -                         -                         -                         --                         -                         -                         -                         --                         -                         -                         -                         -
$25,775	$10,000	$10,000	$10,000	$10,000
	
	1,923,336	1,850,484	9,833
	-51.6%
	25,775	10,000	10,000	10,000	10,000
	
	79,059,019	85,737,109	83,486,283
	2.9%
	85,359,530	83,704,873	82,736,257	83,466,886	84,243,557

$29,789,432          $31,672,935           $33,669,012 12,675,174            14,049,911             15,870,153 24,995,611            26,659,143             24,252,433 1,851,554             1,835,078              2,546,622 345,201             1,822,345                 810,428
-	-	-

-	-	--	-	--	-	--	-	--	-	--	-	--	-	-
1,055,302	1,117,533	1,102,995

6.3% 11.9% -1.2% 18.9% 186.2% 0.0%

0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
2.3%

$35,360,254          $37,249,521          $38,907,717          $40,604,652          $42,089,445 $16,693,554          $17,940,153          $19,052,040          $20,285,165          $21,629,171 $23,874,140          $24,207,383          $24,549,649          $24,780,168          $25,137,722 2,704,802             2,630,946             2,709,874             2,791,171             2,874,906 640,000             1,190,587             1,495,125             1,210,739             1,213,150
-	-	-	-	-

-	-	-	-	--	-	-	-	--	-	-	-	-
$0	$0	$0	$0	$0 $0	$0	$0	$0	$0 $0	$0	$0	$0	$0 $0	$0	$0	$0	$0
$976,288	$1,147,565	$1,171,467	$1,195,980	$771,122
	
	$70,712,274	77,156,945	78,251,643
	5.3%
	80,249,038	84,366,155	87,885,872	90,867,874	93,715,515

1,781,029             2,291,973              1,814,325 -                         -                          -
-	-	-

3.9% 0.0%
0.0%

$1,803,537            $1,399,358            $1,114,017              $926,265              $927,075 -                         -                         -                         -                         -
-	-	-	-	-
	
	1,781,029	2,291,973	1,814,325
	3.9%
	1,803,537	1,399,358	1,114,017	926,265	927,075
	
	72,493,303	79,448,918	80,065,968
	5.2%
	82,052,575	85,765,513	88,999,889	91,794,139	94,642,590

6,565,716	6,288,191	3,420,315
	
-24.9%
	
3,306,955	(2,060,640)	(6,263,632)	(8,327,253)	(10,399,033)

485,751	7,051,466	13,339,657

720.4%

16,759,972	20,066,927	18,006,287	11,742,655	3,415,401

	7,051,466	13,339,657	16,759,972
	57.4%
	20,066,927	18,006,287	11,742,655	3,415,401	(6,983,632)

	2,070,190	995,888	1,135,794
	-18.9%
	491,000	394,000	394,000	394,000	394,000

-	-	--	-	--	-	--	-	--	-	--	-	--	-	--	-	-
-	-	-

0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0.0%

-	-	-	-	--	-	-	-	--	-	-	-	--	-	-	-	-
3,090,611	3,130,607	3,169,527	-	--                         -                         -	-	--                         -                         -	-	--                         -                         -	-	-
3,090,611	3,130,607	3,169,527	-	-

4,981,276	12,343,769	15,624,178
	
87.2%
	
16,485,316	14,481,680	8,179,128	3,021,401	(7,377,632)

5/1/2019 Groveport Madison - 046979	1

GROVEPORT MADISON LOCAL SCHOOL DISTRICT Franklin County
Schedule of Revenues, Expenditures and Changes in Fund Balances For the Fiscal Years Ended June 30, 2016, 2017, 2018 Forecasted Fiscal Year Ending June 30, 2019 through 2023

	Actual
		Forecasted
	
	Fiscal Year	Fiscal Year	Fiscal Year
2016	2017	2018
	Average
Change
	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year	Fiscal Year
2019	2020	2021	2022	2023

Revenue from Replacement/Renewal Levies 11.010      Income Tax - Renewal
11.020      Property Tax - Renewal or Replacement

11.300 Cumulative Balance of Replacement/Renewal Levies 12.010 Fund Balance June 30 for Certification of Contracts,
Salary Schedules and Other Obligations

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

-                         --                         -

0.0% 0.0%

-                         -                         -                         -                         --             2,866,601             5,589,152             5,589,152             5,589,152
	
	-	-
	0.0%
	-	2,866,601	8,455,753	14,044,905	19,634,057

4,981,276	12,343,769	15,624,178
	
87.2%
	
16,485,316	17,348,281	16,634,881	17,066,306	12,256,425

0.0% 0.0%

$0                       $0                       $0                       $0                       $0 -                         -                         -                         -                         -
	
	-	-	-
	0.0%
	-	-	-	-	-

-
	
0.0%
	
-	-	-	-	-
	
	4,981,276	12,343,769	15,624,178
	87.2%
	16,485,316	17,348,281	16,634,881	17,066,306	12,256,425

5/1/2019 Groveport Madison - 046979	2

Groveport-Madison School District – Franklin County Notes to the Five Year Forecast General Fund Only

May 8, 2019

Introduction to the Five Year Forecast
For fiscal year 2019 (July 1, 2018 – June 30, 2019) school districts in Ohio are required to file a five (5) year financial forecast by October 31 2018, and May 31, 2019. HB87, effective November 1, 2018, will change the filing date from October 31 to November 30 beginning with the 2019 November filing. The May 31 filing date will remain unchanged. The five-year forecast includes three years of actual and five years of projected general fund revenues and expenditures. Fiscal year 2019 (July 1, 2018-June 30, 2019) is the first year of the five year forecast and is considered the baseline year. Our forecast is being updated to reflect the most current economic data available to us for the May 2019 filing.

Updates for May
Taxes Lines 1.01 & 1.02: The taxes received in the February settlement was greater than expected by $203,498. Along with the additional amount received in the tax settlement the valuations increased more than expected that led to a total increase of $1.6 million for the entire forecast.

Restricted & Unrestricted grants in Aid Lines 1.035 & 1.04: The enrollment for FY19 increased more than what was projected which will cause an increase for the remainder of the forecast of $974,312 when the district becomes a formula district in the last three years of the forecast based on the current funding model.

Other Revenues Lines 1.06 & 2.07: These lines will experience a decrease of $1.4 million for the forecast based on the amounts that the district has received for FY19 for tuition from other districts, E-Rate reimbursements and other miscellaneous revenue.

Personnel Services Line 3.01: The unexpected decrease in the staff and wages during FY19 that occurred since the October forecast by $502,977 will then decrease the amount of salaries for the forecast by $2.7 million as a savings for the district.

Fringe Benefits Line 3.02: The change in salaries will also decrease the amount of benefits by $1.4 million for the forecast.

Other Expenditures Lines 3.03 to 4.30: There was a decrease in students going to other districts through Open Enrollment, Community Schools and the various Scholarship Programs in FY19 that greatly reduced the amount that the district had to pay for these programs, which will have an overall savings of $2.2 million for the forecast.

Forecast Risks and Uncertainty:
A five year financial forecast is laden with risks and uncertainty not only due to economic uncertainties but also due to state legislative changes that will be happening in the spring of 2019 and 2021 due to deliberation of the next two (2) state biennium budget for FY20-21 & FY22-23, both of which affect this five year forecast. We have estimated revenues and expenses based on the best data available to us at the time of this forecast. The items below give a short description of the current issues and how they may affect our forecast long term:

I.	Property tax collections are the second largest single revenue source for the school district. In 2017 our district received an increase of 13.94% in values for Class I. The increase percentage is less than has been reported by the Franklin County Auditor as the percentage will be blended between the increase in

3

residential and the loss of Current Agricultural Use Values (CAUV) from the authorized changes in HB49. The changes authorized by HB49 to CAUV values will lower those values by an estimated 30% beginning with counties experiencing a reappraisal or update in Tax Year 2017. It is anticipated this reduction will be mostly offset by HB920 as rates will adjust up if net values for Class I are lower. It is also expected that cuts in CAUV will shift a larger tax burden to residential taxpayers which may be an unintended consequence of the legislature responding to agricultural interests. There is however always a minor risk that the district could sustain a reduction in values in the next appraisal update but we do not anticipate that at this time.

II.	The State Budget represents 53.2% of district revenues, which means it is a significant area of risk to revenue. The risk comes in FY20 and beyond if the state economy worsens or if the funding formula in future state budgets reduce funding to our district. There are two future State Biennium Budgets covering the period from FY20 through FY23 in this forecast. For the May forecast there are two proposed scenarios for state funding for Groveport-Madison Local Schools which are; the state budget and the Cupp-Patterson Study. Even though the proposed budget has been introduced for FY20-FY21 it is much too early in the budget process to make changes in the forecast, as the final budget will not be completed until after the forecast filing deadline. Future uncertainty in both the state foundation funding formula and the state’s economy makes this area an elevated risk to district funding long range through FY22.

III.	There are many provisions in the current state budget bill HB64 that will increase the district expenditures in the form of expanded school choice programs and increases in amounts deducted from our state aid in the 2018-19 school years. The cost of each Peterson Special Needs voucher and Autism Scholarship Program increased sharply in FY16 from $20,000 each to $27,000, a 35% increase. The college Credit Plus costs continue to increase as this program becomes more understood. 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. We are monitoring new threats to our state aid and increased costs very closely.

IV.	The district’s 6.68 mill Current Expense levy will expire on December 31, 2019. The renewal of this levy is necessary to keep the district financially healthy long term.

V.	Labor relations in the district have been very amicable with all parties working for the best interest of students and realizing the resource challenges the district faces. We believe as the district moves forward a strong working relationship will continue.

4

General Fund Revenue, Expenditure and Ending Cash Balance

	

	Tax levytobe renewed

	

Act. 2016	Act. 2017	Act. 2018	Est. 2019	Est. 2020	Est. 2021	Est. 2022	Est. 2023

General Fund Revenue, Expenditures & Cash Balance

Millions
$100

$80

$60

$40

$20

$-

$(20)

Revenue	Expenditures	Ending Bal.

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 and refer 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 our district. If you would like further information please feel free to contact John Walsh, Treasurer/CFO of Groveport-Madison School District at 614-492-2520.

5

Revenue Assumptions

General Fund Revenues Estimated 2019	$ 85,333,755

Other State
	
Local Sources     46.8%
	
3%

State Foundation	Real Estate Taxes 50%

Tang. Tax State Sources 53.2%	0%
Other Local 5%

Estimated General Fund Revenue for FY19

42%
Real Estate Value Assumptions – Line # 1.010
Property Values are established each year by the County Auditor based on new construction, demolitions, Board of Revision (BOR)/Board of Tax Appeals (BTA) activity and complete reappraisal or updated values.

The Franklin County Auditor provided the district the values of all abatements that will be added to the Comm/Ind valuation beginning in 2015 collected in 2016. The first year that the values are added from being abated the values are treated as new construction which will give the district an increase in tax revenue. We have included these values in the forecast during the correct collection year.

A complete reappraisal occurred in 2017 for collection in FY18 and we received an increase of 13.94% in residential/agricultural values and an increase of 4.38% commercial/industrial property. Real estate tax revenue makes up 41% of the district’s General Fund revenue.

CAUV values represent 1.8% of Class I residential agricultural values. HB49 authorized a reduction in CAUV computations that will result in these values falling on average by 30%. These reductions will occur as districts experience their next reappraisal or update cycle. We experienced this in the Tax Year 2017 reappraisal. A reduction of value has been weighted in to our average Class I value change in 2017. This will cause a shift in taxes from agricultural taxpayers to residential taxpayers but should not result in lower taxes to our district.

In 2011 Tangible Personal Property (TPP) values were reduced to $-0- as a result of HB 66 that took effect July 1, 2005. Public Utility Personal Property (PUPP) values have seen a growth over the past five years and we expect a slight increase each year of the forecast.

6

ESTIMATED ASSESSED VALUE (AV) BY COLLECTION YEARS

Classification Res./Ag.
Comm./Ind.

Actual TAX YEAR 2018 COLLECT2019
$520,715,620 $347,396,180

Actual TAX YEAR 2019 COLLECT2020
$521,665,620 $355,661,325

Estimated TAX YEAR 2020 COLLECT2021
$532,548,932 $379,426,028

Estimated TAX YEAR 2021 COLLECT2022
$532,998,932 $394,159,838

Estimated TAX YEAR 2022 COLLECT2023
$533,448,932 $408,893,648

Public Utility(PUPP)
Tangible Personal Property(TPP) Total Assessed Value

$66,765,250 $0 $934,877,050

$67,265,250 $0 $944,592,195

$67,765,250 $0 $979,740,210

$68,265,250 $0 $995,424,020

$68,765,250 $0 $1,011,107,830

ESTIMATED REAL ESTATE TAX (Line #1.010)
Property tax levies are estimated to be collected at 97% of the annual amount. Technically 100% of taxes will be settled on property due to Ohio’s property tax laws however, the timing of the tax payments is always in flux but they appear to have normalized. Property taxes are estimated to be collected at 53.94% of the Res/Ag and Comm/Ind in the February tax settlements and 46.06% collected in the August tax settlements. The December 2017 Federal Tax law changes to the deductibility of State and Local Tax (SALT) caused the first half 2018 tax collections to be and estimated $200,000 higher and will result in the second half 2018 (affects FY19) being lower by this amount. This will result in FY18 tax collections being higher and FY19 will be lower. This was an event that caused onetime cash flow acceleration only and is not additional new taxes. Tax collections will return to normal collections for FY20.

The district is forecasting tax settlement payments from Board of Revision complaints in FY19 of $348,633 and in FY20 through FY23 of $325,000. These are settlement payments from previous years taxes that were not paid as the amount of valuations were being challenged.

Public Utility Personal Property tax settlements (PUPP taxes) are estimated to be received 50% in the February and 50% in the August settlement from Franklin County Auditor. The district posts PUPP and Real Estate Taxes in Line 1.010.

Category
Est. General Property Taxes Line #1.010

FY19 $35,362,195

FY20 $32,688,720

FY21 $30,703,525

FY22 $31,367,167

FY23 $31,930,133

Estimated Tangible Personal Tax – 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 have estimated the tangible personal property tax would be eliminated after FY11. Any TPP revenues received in FY13 and beyond are delinquent TPP taxes.

Renewal and Replacement Levies – Line #11.020
The May 2014 levy will expire at the end of 2019. The district will need to renew that levy in order for the collection to be maintained in 2019 for 2020.

Category Renew 6.68 mill levy
Total Line # 11.020

FY19	FY20
$0                $2,866,601 $0                $2,866,601

FY21 $5,589,152 $5,589,152

FY22 $5,589,152 $5,589,152

FY23 $5,589,152 $5,589,152

New Tax Levies – Line #13.030
No new levies are modeled in this forecast.

State Foundation Revenue - Lines #1.035, 1.040 & 1.045 A) Unrestricted State Foundation & Casino – Line #1.035

7

The amounts estimated for state funding are based on component computations from the most recent State Foundation Payment Report for FY19. We are projected to be a CAP district regarding state funding in FY19.

The current formula continues to use the State Share Index (SSI) as a key district wealth measure. The SSI is the formula’s measure of a districts capacity to raise local revenue. The higher a district’s ability to raise taxes based on wealth the lower the SSI will be, and vice versa. The index is derived from a district’s wealth index, which is based on a valuation index, and for certain districts, an income index. Property wealth per pupil is still the major factor in the SSI. Generally, the higher the property valuation per pupil, the lower a district’s SSI and therefor the percentage of state aid. The SSI for FY18 and FY19 will be calculated using Tax Year 2014, 2015, and 2016 average assessed values for the district. It will be calculated once for both fiscal year 18 and 19. 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 .17% from $6,000 in FY17 to $6,010 in FY18 and .17% to $6,020 in FY19. Well below inflation rates.
2) Targeted Assistance – Tier I based on wealth and Tier II based on percentage of district agricultural assessed value. Higher the percentage of agricultural value, higher the targeted assistance.
3) Special Education Additional Aid – Based on six (6) weighted funding categories of disability.
4) Limited English Proficiency – Based on three (3) funded categories based on time student enrolled in schools.
5) Economically Disadvantaged Aid- Based on number and concentration of economically disadvantaged students compared to state average.
6) K-3 Literacy Funds - Based on district K-3 average daily membership and two funded Tiers. 7) Gifted Funds –Based on average daily membership at $5.05 in FY18 & FY19.
8) Career-Technical Education Funds – Based on career technical average daily membership and five (5) weighted funding categories students enrolled in. Funding guaranteed at FY17 levels individually and is in addition to the Cap in FY18 and FY19.
9) Transportation Aid – Funding based on total ridership rather than qualifying ridership in determining statewide cost per rider. Reduces state minimum share from 50% to 37.5% in FY18 and 25% in FY19.

The current funding formula continues 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; however, some items are now included in CAP district payments:

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. Included in FY18 and FY19 Guarantee payments and moved to be inside the Cap amount for districts. Not in addition to the Cap payments.
2) Transportation Supplement – Provides additional funding for districts with rider density (riders per square mile) less than 35 students in FY18 and 50 in FY19. Provides additional funding based on rider density and the number of miles driven by the school buses. Included in FY18 and FY19 Guarantee payments and moved to be inside the Cap amount for districts. Not in addition to the Cap payments.
3) 3rd Grade Reading Proficiency Bonus - Provides a bonus to districts based on third grade reading results, is included in FY18 & 19 guarantee at FY17 levels and is in addition to the Cap payments.
4) High School Graduation Rate Bonus - Provides a bonus to districts based on high school graduation rates up to approximately $450 per student and is included in FY18 & 19 guarantee at FY17 levels and is in addition to the Cap payments.

Transitional Guarantee Phase-Out- For the first time HB49 includes a phase-out of funding for districts on the guarantee. If a guarantee district’s average daily membership (ADM) over three (3) years from FY14-FY16, on average fell by 10% or more, they will loose 5% of their funding from FY17 levels. If the average ADM loss is

8

less than 5% then they will be guaranteed at 100% of FY17 levels. If average ADM loss is between 5% and 10% loss then funding is cut on a sliding scale of loss up to 5%.

We are anticipated to be a CAP district and not a Guarantee for the forecast period.

Gain Cap Funded Districts- For the first time HB49 has created tiers of funding for districts that are on the funding cap (or limit) based on the amount of student ADM growth. Generally, if a district is a “Cap” district the state formula calculates that a district is owed more than they are being paid. The Cap grew 7.5% in FY16 and FY17 from the FY15 levels. There are now funding tiers established for Cap district’s based on three (3) year average ADM growth for the period FY14-FY16. The Cap will generally be 3% additional funding in FY18 and FY19 from the FY17 levels, with the following exceptions:

1) If average ADM from FY14 to FY16 is 5.5% or greater in FY18 or 6% greater in FY19, the gain cap is set at 5.5% or 6% respectively, of the district’s previous year’s state aid. Cap limits will include Capacity Aid and Transportation Supplement payments which limit the state’s increased payment.
2) If average ADM from FY14 to FY16 is between 3% and 5.5% in FY18, or between 3% and 6% in FY19, the gain cap is set at a scaled amount between 3% and 5.5% and 3% and 6% respectively, of the districts previous year’s state aid. Cap limit will include Capacity Aid and Transportation Supplement payments which limit the state’s increased payment.

Our district is not anticipated to be a Gain Cap district during the forecast period.

Our current SFPR estimates for FY19 are using March #2 SFPR average daily membership (ADM) and holding student numbers steady each year through FY23. 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 2018, and then there will be adjustments into the succeeding fiscal year. The district has received two adjustments for FY18 in the amount of $24,898.

Future State Budgets: Our funding status for the FY20-23 will depend on two (2) new state budgets which are unknown. We have been very conservative in our estimates of future state funding lowering per pupil growth to .5% per year FY20-FY23, due to the potential for the economy to be slower. Even though the proposed budget has been introduced for FY20-FY21 we are not making any changes to the forecast at this time since it is too early in the budgeting process and the final budget will not be completed until after the district is required to submit the May Forecast.

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 are 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 will be paid into a student fund at the state level. These funds will be distributed to school districts on the 31st of January and August each year which began for the first time on January 31, 2013.

The state indicated recently that revenues from casinos are not growing robustly as originally predicted but are still growing slowly as the economy has improved. Actual numbers generated for FY18 statewide were 1,791,647 students at $51.37 per pupil. That is a decline of 4 tenths of 1% percent from the prior year. For FY19-23 we estimated another 4 tenths of 1% decline in pupils to 1,784,480 and GCR increasing to $92.9 million or $52 per pupil. We will increase estimates for out years when actual casino revenues show signs of stronger increases.

9

Category Basic Aid-Unrestricted Additional Aid Items

Basic Aid-Unrestricted Subtotal Ohio Casino Commission ODT
Total Unrestricted State Aid Line # 1.035

FY19 $39,396,286
$768,210

$40,164,496 $317,168
$40,481,664

FY20 $40,587,537
$768,210

$41,355,747 $317,155
$41,672,902

FY21 $41,840,609
$768,210

$42,608,819 $317,155
$42,925,974

FY22 $41,910,191
$768,210

$42,678,401 $317,155
$42,995,556

FY23 $42,078,301
$768,210

$42,846,511 $317,155
$43,163,666

B)	Restricted State Revenues – Line # 1.040
HB64 continues funding two restricted sources of revenues to school district which are Economic Disadvantaged Funding and Career Technical Education funding. We have incorporated a 1% increase each year of the forecast for FY18-22.

Category Economically Disadvantaged Aid Career Tech - Restricted

Total Restricted State Revenues Line #1.040

FY19 $2,014,632
$250,600

$2,265,232

FY20 $2,034,778
$253,106

$2,287,884

FY21 $2,055,126
$255,637

$2,310,763

FY22 $2,075,677
$258,193

$2,333,870

FY23 $2,096,434
$260,775

$2,357,209

C) Restricted Federal Grants in Aid – line #1.045
The district does not expect to receive any federal unrestricted funds in the general fund.

SUMMARY OF STATE REVENUES

SUMMARY Unrestricted Line # 1.035 Restricted Line # 1.040
Fed. Grants - SFSF & Ed Jobs Line #1.045

Total State Foundation Revenue

FY19 $40,481,664
$2,265,232 $0

$42,746,896

FY20 $41,672,902
$2,287,884 $0

$43,960,786

FY21 $42,925,974
$2,310,763 $0

$45,236,737

FY22 $42,995,556
$2,333,870 $0

$45,329,426

FY23 $43,163,666
$2,357,209 $0

$45,520,875

State Taxes Reimbursement/Property Tax Allocation - Line #1.050 A) Rollback and Homestead Reimbursement
Rollback funds are reimbursements paid to the district from Ohio for tax credits given owner occupied residences equaling 12.5% of the gross property taxes charged residential taxpayers on tax levies passed prior to September 29, 2013. HB59 eliminated the 10% and 2.5% rollback on new levies approved after September 29, 2013. HB66 previously eliminated 10% rollback on Class II (commercial and industrial) property.

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 age 65 years of age or who are disabled regardless of income. Effective September 29, 2013 HB59 changes 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 slow the growth of 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 no longer receives Fixed Rate reimbursements.

10

c) Tangible Personal Property Reimbursements – Fixed Sum
HB 64 has continued reimbursement of Fixed Sum TPP reimbursements at current levels through FY17 and will begin a phase out 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 fixed sum millage and collected in local property taxes. This is directly shifting the burden to local tax payers by the state cut in fixed sum TPP reimbursement.

Summary of State Tax Reimbursement – Line #1.050

Category a) Rollback and Homestead b) TPP Fixed Rate
c) TPP Fixed Sum

Total Tax Reimb./Prop. Tax Allocations #1.050

FY19 $2,500,435
$0 $154,622

$2,655,057

FY20 $2,573,252
$0 $103,081

$2,676,333

FY21 $2,519,035
$0 $51,541

$2,570,576

FY22 $2,525,009
$0 $0

$2,525,009

FY23 $2,527,184
$0 $0

$2,527,184

Other Local Revenues – Line #1.060
Revenues from all other sources are based on historical growth patterns. This revenue largely consists of rental income, tuition payments, Medicaid reimbursements and payments from TIF (Tax Increment Financing) and PILOT (Payments in Lieu of Taxes) programs.

The district expects to receive $300,000 in Medicaid payments each year of the forecast. This is considerably less than the past few years as the catch-up period has ended. The district expects to receive an additional $175,000 for a technology/telecommunication project that is eligible for e-rate funding in FY20.

Category TuitionSF-14 &SF-14H Extra Curricular &ClassFees Interest
Medicaid CAFS Cruiser Academy
TIF &PILOT Payments Erate &Other Miscellaneous

Total Line # 1.060

FY19 $1,672,000
$2,583 $500,000 $395,000 $0 $1,750,000 $250,024

$4,569,607

FY20 $1,688,720
$2,790 $200,000 $300,000 $0 $1,750,000 $427,524

$4,369,034

FY21 $1,705,607
$3,013 $200,000 $300,000 $0 $1,750,000 $256,799

$4,215,419

FY22 $1,722,663
$3,254 $200,000 $300,000 $0 $1,750,000 $259,367

$4,235,284

FY23 $1,739,890
$3,514 $200,000 $300,000 $0 $1,750,000 $261,961

$4,255,365

11

Comparison of Local Revenue and State Revenue

Millions
General Fund Local Revenue Vs. State $60

$50

$40

$30

$20

$10

$-

Act.2016	Act.2017	Act.2018	Est.2019	Est.2020	Est.2021	Est.2022	Est.2023

Local Revenue	State Revenue

The chart above shows that the district has been receiving additional funding from the state from FY16 through FY23. The state funding will hold steady in the last three years of the forecast due to the loss of TPP replacement funds that offsets any increase is SFPR payments. The local revenue increased in FY16 with the passing of the levy and will be maintained at that level until the levy is renewed in FY21. The district cannot include levy proceeds as actual income until a levy is approved by the voters.

Short-Term Borrowing – Lines #2.010 & Line #2.020 There are no short term borrowings planned at this time.

Transfers In / Return of Advances – Line #2.040 & Line #2.050
Returns of advances to other funds from the previous year are included in this area. The reserve can only be used for emergencies and must be approved by the Board of Education.

All Other Financial Sources – Line #2.060 & Line #14.010
The district received additional payments in FY19 of $15,775 and does not expect to receive that additional amount if future years.

Category Refunds & Sale of Assets

FY19 $25,775

FY20 $10,000

FY21 $10,000

FY22 $10,000

FY23 $10,000

12

Expenditures Assumptions

Estimated General Fund Expenditures for FY19

General Fund Operating Expenditures FY19 $80,249,038

Materials 3%

Capital Other 1%         1%

Wages 44%

Services 30%

Benefits 21%

Wages – Line #3.010
The district had successful negotiations with both the Certified and Classified staff. The classified staff agreement is for three years with base wages of 2.75% in FY19-FY21. The certified agreement will expire in FY19 with a 2.5% base wage increase. The district is including a base wage increase for forecasting purposes only for the certified staff at the same amount as for the classified staff in FY20 and FY21. The district is estimating base increases of 2.75% in FY22 and 2% in FY23. Due to staffing changes in FY19 there has been a decrease of $502,977 for the year.

The district’s Student Achievement Improvement Plan includes additional staffing in in FY19 for 2 new teachers for the High School Pathway program. The district is estimating an average of 6 retirements per year with replacement of those staff members.

The district will be paying severance from the 034 fund and will no longer include the amounts within the forecast.

Category Base Wages

FY19 $32,871,981

FY20 $34,557,297

FY21 $36,430,505

FY22 $38,072,321

FY23 $39,752,548

Increases/ Merit Based Pay Steps&Training/Performance Based Pay Growth
Unfunded Recapture Subs&Supplemental Costs Severance
StaffReductions

Total Wages Line 3.010

$834,127 $821,800 $1,000,942 -$502,977 $802,957 $0
-$468,576

$35,360,254

$950,326 $739,526 $698,728 $0 $819,016 $0
-$515,372

$37,249,521

$1,001,839 $779,613 $337,679 $0 $835,396 $0
-$477,315

$38,907,717

$1,046,989 $814,748 $294,130 $0 $852,104 $0
-$475,640

$40,604,652

$795,051 $850,705 $300,013 $0 $869,146 $0
-$478,018

$42,089,445

13

Fringe Benefits Estimates Line 3.02
This area of the forecast captures all costs associated with benefits and retirement costs, with all except health insurance being directly related to the wages paid. 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.

A)	STRS/SERS
As required by law the BOE pays 14% of all employee wages to State Teachers Retirement System (STRS) or School Employees Retirement System (SERS).

B)	Insurance
Medical insurance trend is being projected annually at 4% in FY19 and 7% in FY20 with an increase of 0.5% each year for the remainder of the forecast. The trend is based on current plan design, enrollment in the plan and claim history. The insurance committee is working together to review possible options in order to reduce costs for employees and the district. The district will incur additional insurance costs in FY19 of $130,000 per the OAPSE negotiate agreement but a decrease of $110,863 from staff that are not participating in the district insurance program.

Patient Protection and Affordable Care Act (PPACA) Costs- 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, 2010. 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 1965.

It is uncertain to what extent the implementation of PPACA will cost our district additional funds. There are numerous new regulations that potentially will require added staff time, at least initially due to increased demands, and it is likely that additional employees will be added to coverage that do not have coverage now. We are not certain what these added costs may be but there are “taxes” mandated by the act which we are aware of. The Transition Reinsurance fee due January 15, 2015, is a fee due 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 could equate 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 we are watching closely to evaluate the effect on our district.

C)	Workers Compensation & Unemployment Compensation
Workers Compensation is expected to remain at about .5% of wages FY18 – FY22. The district is a self-insured workers compensation district, which means we only pay claims as they occur. In order for the district to maintain a reserve for claims the amount of premiums will be paid to a self-insurance fund based on a percentage of annual salary. This fund will be evaluated each on the amount of the payments in December. Unemployment is expected to remain at a very low level. The district is a direct reimbursement employer which means unemployment costs are only incurred and due if we have employees who are eligible and draw unemployment.

D)	Medicare
Medicare will continue to increase at the rate of increases in wages. Contributions are 1.45% for all new employees to the district on or after April 1, 1986. These amounts are growing at the general growth rate of wages.

14

Summary of Fringe Benefits – Line #3.020

Category STRS/SERS
Insurance's

FY19 $5,319,756
$10,690,570

FY20 $5,745,579
$11,479,248

FY21 $6,006,069
$12,309,472

FY22 $6,268,517
$13,254,298

FY23 $6,501,848
$14,341,752

Workers Comp/Unemployment Medicare
Other/Tuition

Total Line 3.020

$66,191 $512,723 $104,314

$16,693,554

$68,235 $542,777 $104,314

$17,940,153

$70,048 $562,137 $104,314

$19,052,040

$71,901 $586,135 $104,314

$20,285,165

$73,541 $607,716 $104,314

$21,629,171

Purchased Services – Line #3.030
This category includes payments for contracted services, utilities, gas, electric, property insurance and transportation. Significant payments are made to Community Schools, Open Enrollment and the Educational Choice Voucher program. The Cruiser Academy will no longer be a community school therefore the students that attend that program will not be charged as a deduction to the district beginning in FY18. We are using the March #2 for tuition deductions from the state; which is less than what was projected in October. The chart below shows the depth of the loss of dollars for the district to other districts.

Our Students Leave with Substantial School Choice Dollars

$14,000,000

$12,000,000

$10,000,000

$8,000,000

Community Schools

Tuition & EdChoice

Open Enrollment

$6,000,000

$4,000,000

$2,000,000

$-

Act. 2016	Act. 2017	Act. 2018	Est. 2019	Est. 2020	Est. 2021	Est. 2022	Est. 2023

The district is projecting growth that was outlined within the Student Achievement Improvement Plan in the following areas: Early Learning Instruction services and student data management system, finishing of the floors for the athletic middle school programs, professional development for response to intervention, Connect Ohio Grant, gifted consultant, early teaching instruction consultant, additional middle school athletic transportation costs. The district will be leasing modular classrooms beginning in FY18 through FY21 for $121,057 per year.

15

6%
In order to better understand where the amounts are spent for services the chart below shows what percentage is for each area within the Purchase Service line.

Utilities 4%

FY19 Purchase Services Transportation	BaseServices

22%

Legal , Network, Curriculum,Substitutes etc. 13%

STEM & Scholarship Transfers 5%

Other Tuition 8%

Open Enrollment Deduction 5%

Community School Deductions 37%

The amounts within the chart below correspond to the FY19 percentage as shown in the graph above.

Category Base Services

FY19 $1,544,530

FY20 $1,590,866

FY21 $1,638,592

FY22 $1,566,693

FY23 $1,613,694

Legal , Network, Curriculum, Substitutes etc. OpenEnrollment Deduction CommunitySchool Deductions
Other Tuition

STEM &Scholarship Transfers Utilities
Transportation

Total Line 3.030

$3,144,615 $1,180,993 $8,740,862 $1,816,008 $1,150,242 $957,546 $5,339,344

$23,874,140

$3,176,061 $1,192,803 $8,740,862 $1,870,488 $1,184,749 $1,005,423 $5,446,131

$24,207,383

$3,207,822 $1,204,731 $8,740,862 $1,926,603 $1,220,291 $1,055,694 $5,555,054

$24,549,649

$3,239,900 $1,216,778 $8,740,862 $1,984,401 $1,256,900 $1,108,479 $5,666,155

$24,780,168

$3,272,299 $1,228,946 $8,740,862 $2,043,933 $1,294,607 $1,163,903 $5,779,478

$25,137,722

Supplies and Materials – Line #3.040
Supplies and materials are expected to grow by 3% through FY23. The additional supplies for new instructional programs and offerings have been put in place for student growth. The district is including an additional $150,000 for the new career technical courses that are beginning in FY19 for each year. There is an additional increase in FY19 for additional Chromebooks of $135,000 and $20,000 for the new E-Rate project.

Category Supplies

FY19 $2,547,001

FY20 $2,468,411

FY21 $2,542,463

FY22 $2,618,737

FY23 $2,697,299

Textbook/Curriculum Updates

Total Line 3.040

$157,801

$2,704,802

$162,535

$2,630,946

$167,411

$2,709,874

$172,434

$2,791,171

$177,607

$2,874,906

16

Equipment – Line # 3.050
Most Capital Outlay is paid through the Permanent Improvement fund. The district has completed a Capital Outlay plan that includes: FY19-FY23 technology equipment and other items as they are needed. The district has included the replacement of a pick-up truck in FY21. The amounts for the updates at the softball field have been moved to FY20 from FY19 of $300,000. Also in FY20 there will be the E-rate project that was not expected in October for $160,000. Roof repair expenses have been added in FY21 through FY23 in the amount of $500,000 each year.

Category Capital Outlay
Other

Total Line 3.050

FY19 $640,000
$0

$640,000

FY20 $1,190,587
$0

$1,190,587

FY21 $1,495,125
$0

$1,495,125

FY22 $1,210,739
$0

$1,210,739

FY23 $1,213,150
$0

$1,213,150

Debt Service – Line# 4.050; 4.060;
The district does not have any general fund debt.

Other Expenses – Line #4.300
The category of Other Expenses consists primarily of the County ESC deductions for specialized services provided to the District and Auditor & Treasurer fees. Auditor and Treasurer Fees will fluctuate with real estate revenue collections. The County ESC costs are projected to increase by 3% each year. The Win-Win agreement will expire in FY23 for a deduction of $450,000 in that year.

Category County Auditor & Treasurer Fees County ESC
Audit Fees/Liability Ins/Other Total Line 4.300

FY19 $373,097 -$18,137 $621,328 $976,288

FY20 $526,278 -$18,681 $639,968
$1,147,565

FY21 $531,541 -$19,241 $659,167
$1,171,467

FY22 $536,856 -$19,818 $678,942
$1,195,980

FY23 $92,225
-$20,413 $699,310 $771,122

	Capital

Material

Services

Benefits

Wages

		

		

Total Expenditure Categories Actual FY16 through FY18 and Estimated FY19 through FY23

General Fund Operating Expenditures Actual FY2016 Through Estimated 2023

Millions
$100

$90

$80

$70

$60

$50

$40

$30

$20

$10

$0

Act. 2016 Act. 2017 Act. 2018     Est. 2019     Est. 2020     Est. 2021     Est. 2022     Est. 2023

17

Transfers Out/Advances Out – Line# 5.010
This account group covers fund to fund transfers and end of year short term loans from the General Fund to other funds until they have received reimbursements and can repay the General Fund. The district is required to transfer annually $114,100 to the 034 Building Maintenance Fund for the High School OFCC project for maintenance of the building for 38 years. In addition to the OFCC required transfer in FY19 the district will transfer for payments to the appropriate payment funds for Certificate of Participation Notes (COPS) $683,630, turf debt service $200,837, athletic field maintenance $55,000, Severance Fund $350,000 and $400,000 for the Columbus Public Schools Revenue Sharing Agreement. The district will be transferring for these items each year of the forecast; however the amounts may change based on payment schedules.

Category Operating Transfers Out Line #5.010 Advances Out Line #5.020

Total

FY19 $1,803,537
$0

$1,803,537

FY20 $1,399,358
$0

$1,399,358

FY21 $1,114,017
$0

$1,114,017

FY22 $926,265
$0

$926,265

FY23 $927,075
$0

$927,075

Encumbrances –Line#8.010
These are outstanding purchase orders that have not been approved for payment as the goods were not received in the fiscal year in which they were ordered. Estimates are based on trends of expenditures and payments.

Category Estimated Encumbrances

FY19 $491,000

FY20 $394,000

FY21 $394,000

FY22 $394,000

FY23 $394,000

Reservations of Fund Balance – Line #9.080
The district is establishing a Fiscal Stabilization policy as a goal of the passage of the levy. The amount within this line will not be permitted to be appropriated unless there is an emergency within the district and will need to be approved by action of the Board of Education.

Category Textbooks& Materials-Line 9.010 Capital Improvements-Line 9.020 Budget Reserve -Line 9.030
DPIA-Line 9.040

FY19	FY20	FY21	FY22	FY23
$0	$0	$0	$0	$0 $0	$0	$0	$0	$0 $0	$0	$0	$0	$0 $0	$0	$0	$0	$0

Fiscal Stabilization-Line 9.045 Debt Service -Line 9.05
TaxAdvancesfor Future Year-Line 9.060 State BusPurchases-Line 9.070

Total ReservationsofBalance-Line#9.080

$3,090,611 $0 $0 $0

$3,090,611

$3,130,607 $0 $0 $0

$3,130,607

$3,169,527	$0	$0 $0	$0	$0 $0	$0	$0 $0	$0	$0

$3,169,527	$0	$0

Ending Unencumbered Cash Balance “The Bottom-line” – Line#15.010
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 5705.412, ORC punishable by personal liability of $10,000, unless an alternative “412” certificate can be issued pursuant to HB153 effective September 30, 2011.

Category Ending Cash Balance

FY19 $16,485,316

FY20 $17,348,281

FY21 $16,634,881

FY22 $17,066,306

FY23 $12,256,425

The chart below shows that the district is not deficit spending until the third year of the forecast which includes the renewal of the levy in 2019. By not deficit spending is allowing the district to increase our ending cash balance and to maintain 45 days of cash each year until FY23.

18

General Fund Ending Cash Balance FY16 through Estimated FY23 Revenues vs ExpenditureIncluding Renewal of Levy FY

$100,000,000

$90,000,000

$80,000,000

$70,000,000

$60,000,000

$50,000,000

$40,000,000

$30,000,000

$20,000,000

$10,000,000

$0	Act.2016	Act.2017	Act.2018	Est.2019	Est.2020	Est.2021	Est.2022	Est.2023

Revenue W/Renewals	Expenditures	45 Day Cash Ratio	Ending Cash Balances

True Cash Days
The Government Financial Officers Association (GFOA) recommends, at a minimum, regardless of size, maintain unrestricted budgetary fund balance in their general fund of no less than two months of regular general fund operating revenues or regular general fund operating expenditures. Based on the current fund balances, without the renewal of the levy and with deducting the Fiscal Stabilization Fund the district will not have the sixty (60) day balance at the end of FY21.This chart below shows the unencumbered cash balance and does not include the levy renewal.

Ending Cash Balance in True Cash Days

80

60

40	25

20

0

Act. 2016

(20)

(40)

57

Act. 2017

71

Act. 2018

73

Est. 2019

62

Est. 2020

34

Est. 2021

12

Est. 2022

Est. 2023

(28)

19

Conclusion

The district is very fortunate to have received more funding for FY18 and FY19 than had been expected from the state budget. Being that 53.2% of the funding for the district is from state dollars this increase is very beneficial to the overall operations for the education of our students. However, the district must be very mindful of future state budgets and the effect on our district.

The Current Expense Levy will need to be renewed in 2019 for collection to continue in 2020 in order to maintain fiscal stability for the district in the future.

The district administration will be able to plan for the future needs of our students with the financial stability obtained with the current state budget and the passage of the levy. But they will also need to be mindful that there are many risks and uncertainties that will need to be considered in future planning as there are two new state budgets in the time period from FY20-FY23.

As you read through the notes and review the forecast, remember that the forecast is based on the information that is known at the time that it is prepared.

20