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Elida Local Schools Financial Summit III

This report to stakeholders presents a detailed financial analysis of Elida Local Schools for the fiscal year 2007-2008. It covers school funding, future planning data, economic trends, and more.

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Elida Local Schools Financial Summit III

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  1. Elida Local SchoolsFinancial Summit III Report to Stakeholders Fiscal Year 2007-2008 Joel L. Parker,CPA

  2. Summit Team • Lynn Metzger, Metzger Financial Services • Bruce Opperman, WLIO • Phillip Morton, Elida Visionaries • Matt Huffman, State Representative • Dennis Swick, Mayor of Elida • Paul Basinger, Township Trustee • Pat Schymanski, Elida Visionaries • Peter Kesler, Ohio Foam Corporation • Cliff Barber, General Dynamics • David Anderson, The State Bank • Max Stover, First Federal Bank • Steve Boroff, Superior Federal Credit Union • Steve Romey, Attorney • Beth Jokinen, The Lima News • Mike Ford, Delphos Herald • Becky Foust, EEA • Sally Ulrich, Elida Board Member • Brenda Stocker, Elida Board Vice President • Don Diglia, Elida Superintendent • Joel Parker, Elida Treasurer • Faith Cummings, Elida NCLB Director • Jo Ellen Miller, Elida Information Director

  3. Goals • Review data on high school project • Review the financial condition of Elida Local Schools • Expand the knowledge base on school funding issues • Review data for future financial planning • Exchange ideas on “best practices” • Encourage dialogue on future economic trends • Have summit representative report to the Board of Education on current condition

  4. THERE IS NO BUSINESS LIKE PUBLIC SCHOOL BUSINESS • Ohio Revised Code • No Child Left Behind • Unfunded mandates-HB1 • DeRolph case • Collective Bargaining • Tax structure • State Budget • Levies/Bond Issues • Phantom Revenue • Voters • Raw product - 100% accepted • Emotional Issues

  5. TYPES OF LEVIES • BOND LEVY – Used to finance permanent improvements, new construction or renovation (Per ORC-MAY NOT BE USED FOR OPERATIONS) • PERMANENT IMPROVEMENT LEVY- Used for repairs/fixed assets with a useful life of 5 years (can be limited or continuing) and can be renewed or replaced

  6. TYPES OF LEVIES • OPERATING LEVY-Used for current operations (can be limited or continuing) can be renewed or replaced • EMERGENCY LEVY-Used for operations (limited to 5 years and generates a set amount) can be renewed but not replaced • RENEW=same effective rate • REPLACE=original millage

  7. ELIDABUILDING PROJECT • Bond Issue $38,250,000 • NY Presentation • Standard & Poor’s A+ • Moody’s A3 • 2009 Interest Rate 3% • All bonds have been sold • 6.46 Bond Issue and 1 mill PI Levy (38,250,000 Bonds + 1,500,000 Interest)

  8. Elida Building Project (continued)Official Statement • Amount $38,249,986 • Date September 4, 2008 • Insured rating Standard & Poor’s AAA and Moody’s Aaa • Issued in amounts of $5,000 • Debt schedule 2009 through 2036 • Great time to borrow!!

  9. Bond Proceeds Invested • Per Ohio Revised Code • Per Elida Investment Policy • Omar Ganoom, Investment Banker • Federal Home Loan Banks/Mortgage Corp • Federal National Mortgage Association • Government and Agency Mutual Funds • Interest Income from May 2008 to April 2009 - $926,874 • No Loss of Principal

  10. Bid Process • Follow Ohio Revised Code 3313.46 • Repair/Improvements over $25,000 • Advertise for 2 weeks • Bid Bond included • May reject all bids • Lowest Responsible Bid • Audited every year

  11. HS Building Contractor List • Architect-Garmann Miller, Minster OH • Construction Manager, Touchstone CPM, Lima, OH • Sitework/Road - $2,182,700 RD Jones Excavating, Harrod, OH • Geothermal Loop – Middleton Geothermal Services LLC - $667,766 Akron, OH • Builder’s Risk Insurance - $23,689 Webb Insurance, Lima, OH

  12. OSFC Ranking • Year Rank State Share • 2006 386 36% • 2007 393 35% • 2008 399 34% (Locked Rate) • 2009 414 32%

  13. Legislative Concerns/History • HB 920 Tax Reduction Factor • HB 152 Phantom Revenue • Budget Reduction Order • HB 95 Inventory Tax Phase Out • HB 282 Favored Charter Schools • HB 412 Mandated spending on repairs/educational supplies • SB 55 Increase in testing requirements • NCLB Increase in testing • 2008 State Budget Cuts • 2009 State Budget Cuts • HB 1

  14. HOW MANY CLIENTS? • Students • Tax payers • Boosters • Parents • Business partners • Local officials

  15. WHO ARE WE? • Maintenance – 2 • Custodial – 14 • Food Service – 25 • Bus Drivers – 31 • Asst Tech Co-1 • Total 271 • 4 Buildings • 81 square miles • Students – 2,420 • Teachers- 146 • Nurse –1 • Guidance – 4 • Professionals – 17 • Secretaries – 16 • Aides – 14

  16. Average Teacher Experience • EHS – 14.7 years • EMS – 15.5 years • EES – 15.6 years • EEK – 10.1 years

  17. PERFORMANCE INDICATORS • Carry-over Margin 1-5% • Strength of Carry-over - 60 day • 85% Rule on Salaries and Benefits • Debt to Total Assets • Residential Tax Rate • Per Pupil Spending (vs. other schools) • ADM Per Pupil Spending

  18. AUDIT LIST • Annual Financial Audit by Auditor of State • ADM Audit by ODE(every 5 years) • Staffing Audit by ODE(5 years ago) • Curriculum Review by ODE • Annual Facility Inspection (Jared’s Law)

  19. 76 Day Cash Balance! 60 DAY CASH BALANCE ALMOST A REALITY

  20. June 30 Carry-Over *Gaining Strength* • 1999 $ 936,422 21 days • 2000 $1,048,819 23 days • 2001 $ 758,675 17 days • 2002 $ 821,146 18 days • 2003 $ 360,933 8 days • 2004 $ 967,429 21 days • 2005 $1,865,900 39 days • 2006 $2,645,703 53 days • 2007 $3,496,376 68 days • 2008 $4,071,288 76 days

  21. WHAT CHANGED? • Staff cuts • Administrative cuts $239,155 • Administrative Wages-0% increase 2 yrs • Streamlined food service • Moved staff to PPO insurance plan • Moved to pay to participate • Passed a levy in 2005 to bring back specific programs • Reduce bus fuel consumption • Think long term • Savings on Retire/Rehire • Sharing on health premiums

  22. Health Insurance • 1/1/09 Medical Rate Increase 15% • 1/1/09 Dental Rate Increase 20% • 1/1/09 New Plan MDHP Developed • Meeting this year to introduce HDHP plan • Continue discussions on spousal coordination of benefits • What are you doing/seeing???

  23. Review Staffing Meal Policy American Express Bus Idle Share Ins Increases Bulk Paper Bid Property/Liability Diesel Grant Safe Route Grant Dir dep/email PO Turn down thermostats Change drug company No health ins R/R New health plans Auto lights switches Bid projects MAC Grants Early bus buy What’s Else Can We Do?

  24. General Fund

  25. General Fund Expenditures

  26. FOOD SERVICE

  27. Program Spending

  28. 5 Year Forecast

  29. AUDIT REPORT • Performed every year • Cost to taxpayers $16,000 • Cash basis (saves taxpayers $10,000-$13,000 each year) • Tests are performed on accounts payable, payroll, compliance with ORC, fund raising, athletics, food service, grants, etc. • Clean opinion • No adjustments

  30. Salary Data – Get the Facts!!

  31. The Lima News-April 1, 2007 • Top 25 • Lima Total $928,919(7 of top 25) • Shawnee Total $915,855(5 of top 25) • Bath Total $836,848 (5 of top 25) • Apollo Total $829,174 (1 of top 25) • Elida Total $760,064 (1 at 16th) • Delphos Total $753,602 (3 of top 25)

  32. The Lima News April 1, 2007-Superintendent Salary Data • Lima $115,269 • Crestview $108,159 • Allen East $102,019 • Delphos $101,457 • Auglaize ESC $96,600 • New Bremen $93,767 • Lincolnview $93,711 • Putnam ESC $93,565 • Waynesfield $92,426 • Elida $91,628 • Bluffton $88,642 • Allen ECS $81,946 • Miller City $80,458

  33. How does our 2007 residential tax rate stack up? • Residential Tax Rate 2007 • 32.61 Bath • 32.16 Lima • 31.20 Allen East • 30.59 Shawnee • 28.49 Perry • 27.93 Bluffton (Plus ½% income tax) • 27.37 Elida • 27.27 Spencerville(Plus 1% income tax) • 26.80 Delphos

  34. ADMINISTRATIVE EXPENSES Administration: Salaries for administrators, office staff, and office supplies

  35. STATE FUNDING FLAWS • Over-reliant on property taxes • No inflationary growth on property taxes • Phantom Revenue • Unfunded mandates • System too complicated • Many man hours on levies(2000,2003,2004,2005,2006,2007,2008) • Schools get viewed as “Big Government Waste” • One of the few ways voters can express frustration with taxes

  36. PHANTOM REVENUE • Who is it?? • State assumes we receive 23 mills from local tax payers • Elida actually receives 20 mills • This 3 mill gap is a huge problem • The State deducts 3 more mills than we actually receive • See SF3 handout (making sausage)

  37. State Aid-Short Version • $5,732 x 2,416.91=13,853,728.12 • Less 8,388,445(.023 x364,714,999) _______________ • $5,465,283 • No increase see line 19 decrease

  38. 23 Mill Charge- Off • FY 2005 $7,383,852 • FY 2006 $7,870,054 • FY 2007 $8,226,036 • FY 2008 $8,317,517 • FY 2009 $8,388,445

  39. State Aid FY 2006 $7,520,508 FY 2007 $7,504,941 FY 2008 $7,502,152 FY 2009 $7,502,152 FY 2010 $7,502,152 FY 2011 $7,352,109

  40. TAX BASE

  41. STATE BUDGET BREAKDOWN • Primary & Secondary Education 35% • Medicaid 20% • Colleges 13%

  42. State Budget Concerns-FY 2010 • CAT $ 1.3 billion new • Corporate Franchise Tax 1.1 billion loss • Tangible Property Tax 1.6 billion loss • Income Tax 2.1 billion loss • NET LOSS 3.5 billion in state revenue • 10 year job loss – 210,000 manufacturing • 10 year job loss- 4,000 Allen County

  43. DISTRICT WIDE REPAIRS

  44. Cost per building/per student

  45. Levy Timeline-Future Dates • March 2008 Bond Issue & PI • Fall 2009, 2010 Renew Emergency Levy • Fall 2012, 2013 Renew PI Levy • 2012-2013 OSFC Issue • 2014,2015 Renew Emergency Levy

  46. Funding the Future-Diversify Revenue Stream • Medina-1st in state to pass Sales Tax for schools • Income Tax-Earned income only • Continue to communicate-always in levy mode

  47. 5 Year Goals • Evaluate HB 1 and unfunded mandates • Continue to be lean • Continue to monitor health insurance (Health Savings Accounts, Spousal language, Mandate Generic Drugs)…impact of state pool • Enhance customer service • Maintain 0-2% profit margin • Continue to review staffing needs • Monitor new legislation • Diversify revenue streams(conversation) • Others ???? (group discussion)

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