Auditor of State Performance Audit Report Summary

1. Auditor of State Performance Audit Report Summary Pam Harrington, TreasurerThomas L. Hosler, SuperintendentPerrysburg Board of EducationOctober 3, 2019

2. Welcome • Introduction to Perrysburg Schools • Overview of the Auditor of State Performance Audit Report • Review of the audit • Perrysburg Schools November 5, 2019 operational levy • Board discussion • Submit question cards to BOE • 5-minute break • Public comments (2 minutes per person) • Board member comments

3. Our State Report Card Performance Index Score places us in the top 5% of school districts statewide.

4. Perrysburg High School was named one of the Best High Schools by U.S. News.

5. Hull Prairie Intermediate School is an Ohio Department of Education STEM-Designated School.

6. Our most recent graduating class was offered over $14 million in scholarship awards.

7. A Annual Public Survey: Grading of the School District B A—69% B—23% C—3% D—0% F—0 C Respondents were asked: “Suppose Perrysburg Schools were graded like students in our district. Based on your impressions and experiences, what would you say the district's overall grade should be?” 92% 5% skipped question

8. Our overall expenditure per pupil as well as our administrative expenditure per pupil are below the state average.

9. We are proud of the work that our employees do every day to ensure all students achieve their greatest potential.

10. We are proud of our amazing and talented student body.

11. We appreciate the longstanding support of our community, without which these accomplishments would not have been possible.

13. Growth Today and Tomorrow

14. Student Growth • Since 2008, our student population has grown by 21%, or 976 students. • We have added the equivalent of the entire Ottawa Hills School District since 2008. • Because of this explosive growth, Perrysburg Schools is in need of additional revenue to maintain our current level of services to this rapidly growing student population. • The Board of Education voted unanimously to place an operational levy on the November 5, 2019 ballot for this reason.

15. Perrysburg School Levy November 5, 2019Growth • K-6 Regular Education Teachers – 2/year x 5 years = 10 by 2023-2024 • Special Education Teachers – 2 per year x 5 years = 10 total • Speech Language Pathologist in 19-20 based on enrollment, less one Special Education • PHS Social Studies Teacher • PHS Science Teacher • PHS 1/2 time to full Time Chinese Teacher • PHS English Teacher • PHS Math Teacher • PHS Robotics Teacher • PHS French Teacher • Additional Elective @ PJHS (Possibly split American Sign Language with PHS?) • Addition of Two Moderate to Intense Intervention Specialists at the elementary level in order to maintain students at all ability levels in their home schools • Additional Social Studies and Science Content Team for PJHS • Elementary Elective: Additional 2 STEM + 2 MakerSpace Teachers (anticipated 5-6 sections/grade level = 5 specials teachers per school) • English as a Second Language Teacher from 1/2 to Full Time • PJHS Athletic Teams - Creating athletic “B teams” and applicable co-curriculars for Boys and Girls to increase access

16. Perrysburg School Levy November 5, 2019Safety & Security • School Resource Officer for PJHS • PHS Guidance Counselor • Full time Social Worker • Elementary Heath Aide x 2 to have FT in each elementary school • District 504 Plan Coordinator • Upgrade Radio System • District-Wide Training

17. Perrysburg School Levy November 5, 2019 Maintain Academic Excellence • ACT/SAT Test Preparation Specialist • eLearning Teacher • Student Life & Work Force Coordinator • Targeted Assistance All Day Kindergarten

18. State Performance Audit - Background • The same reason the Board placed this levy on the ballot also triggered the Auditor of State, in consultation with the Ohio Department of Education, to conduct a performance audit of Perrysburg Schools. • The report paints a stark picture of how our school district would look without additional operating revenue, in other words, if the November 5 levy does not pass.

19. Performance Audit Purpose and Overview • Performance audits provide objective analysis to assist management and those charged with governance and oversight to improve program performance and operations, reduce costs, facilitate decision making by parties with responsibility to oversee or initiate corrective action, and contribute to public accountability.

20. Peer Groups Primary Local Anthony Wayne LSD (Lucas County) Maumee City School District (Lucas County) Rossford Exempted Village School District (Wood County) Springfield Local School District (Lucas County) Sylvania City School District (Lucas County) Washington Local School District (Lucas County) • Anthony Wayne (Lucas County) • Avon Local (Lorain County) • Avon Lake (Lorain County) • Green Local (Summit County) • Jackson Local (Stark County) • Kings Local (Warren County) • Loveland (Hamilton County) • North Canton City (Stark County) • Springboro (Warren County) • Twinsburg (Summit County)

21. Primary Peers

22. State Performance Audit - Overview • Steps the auditors have outlined would result in an immediate $7,015,500 reduction annually to the budget, including the elimination of 98.5 jobs. • To put this in perspective, this is more employees than we currently have at Ft. Meigs and Frank Elementary Schools combined. • TOTALS • Elimination of 98.5 jobs • Reduction of Current AND Planned Additional Positions Combined: 122.5 • Average Annual Reduction: $7,015,500

23. State Performance Audit - Summary • Eliminate 49 teachers • Eliminate 10 custodians • Eliminate 9 student support staff members • Eliminate 9 support staff members • Eliminate 8 technology and administrative support employees • Eliminate 7.5 operational employees • Eliminate 6 administrators • Eliminate 24 new general and special education teacher positions budgeted due to projected growth over the next four years • Eliminate the General Fund subsidy of extracurricular activities, including athletics and performing arts • Implement a salary base and step freeze for FY 2020-21 through FY 2022-23 • Renegotiate collective bargaining agreement provisions beginning in FY 2021-22 • Decrease employer cost of medical insurance

24. Financial Forecast with Performance Audit Recommendations

25. Funding is Capped – State Funding “It is important to note that the amount of funding a district can receive from the State is based on a variety of formulas and laws. The formula which determines the amount granted takes into account student enrollment and the property wealth of the district. However, while the formula determines a potential amount to grant districts, these awards are subject to cap restrictions. In FY 2018-19, $15,111,466 of PEVSD’s calculated state funding was subject to cap restrictions and PEVSD was funded at $11,566,986.” - Auditor of State PEVSD Performance Audit, Page 4

26. Items reviewed - no recommendations • Food Service (no recommendation - operating in the black) • Special Education (no recommendation) • Central Office Administration (no recommendation - staffing at peer level) • Transportation Efficiency (no recommendation)

27. Table B-3: Building Administrator Staff Comparison (page 36)

28. Noteworthy Accomplishments Noteworthy accomplishments acknowledge significant accomplishments or exemplary practices. The following summarizes noteworthy accomplishments identified during the course of this audit.

29. Noteworthy Accomplishment: Strategic Planning The District has begun the process of aligning its budgetary resources with the formal goals and objectives contained in the strategic plan. As a part of its capital planning efforts, the District has formalized its spending goals for its Permanent Improvement Fund, including bus replacement intervals. Additionally, the District is developing a comprehensive facilities master plan that will guide future capital developments.

30. Noteworthy Accomplishment: Financial Communication The District actively disseminates financial information through its website, including current and prior year five-year forecasts, audited financial statements, levy and bond information, a facilities master plan, collective bargaining agreements, and Ohio school finance information, including cost per pupil comparisons. In addition to the information provided on the website, the Treasurer also has offered a school finance class to help educate the public on how school funding works in Ohio and holds open finance meetings.

31. Reductions Lead to “drop below primary peers” • Page i – “Due to growing enrollment within the District, reductions in staff to the peer levels may lead to staffing levels below peer levels in future years.” • Page 12 - Central Office Support Staff Reductions – “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2020-21.” • Page 13 - Building Administrator Staff Reductions – “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2021-22.” • Page 14 – Building Office Support Staff Reductions - “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2020-21.” • Page 15 – Eliminate a combined total of 19.0 FTEs from the direct education and student support position categories - “However, because of projected growth in enrollment, such reductions in staffing could lead to PEVSD to be below primary peer averages in some areas by the end of the forecast period.”

32. Reductions Lead to “drop below primary peers” • Page 15 – General Education Staff – “Due to increasing enrollment, the student to teacher ratio will change over time.” • Page 16 - Gifted and Talented Teacher Positions – “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2021-22.” • Page 17 – K-8 Art Education Teachers – “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2022-23.” • Page 18 – K-8 Music Education Teacher Staff - “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2020-21.” • Page 18 - Remedial Specialist Positions – “However, due to projected increases in student population, PEVSD would drop below the primary peer average beginning in FY 2021-22.”

33. “Although these options would eliminate the deficit in each year of the forecast, it could drastically change service levels within the District.” - Auditor of State PEVSD Performance Audit, Page 29

34. Audit Report Response - Steps Taken • Reduction of $900,000 from budget prior to the start of 2019-2020 school year • R.4 Contract provisions - P-CAPP suspended for the 2019-2020 school year • R.5 Initiated review of third party TPA (Third Party Administrator) • R.5 Preparing to explore RFP for health care plans

35. Board Responds – Formal Committee • In the event the levy passes on November 5, the Board will appoint a Performance Audit Team (PAT) comprised of business leaders, community members, employees, parents and students to review each of the recommendations found in the audit report. • The team will be charged with reporting their findings to the Board by May 2020. • The application process would be outlined in December. • In the event the levy fails, a team would not be convened.

37. Limited Options • Even with the significant reductions outlined in the report, at the end of four years—if there is no additional revenue—the school district would still only have $1,987 in its cash reserve. • The school district would be placed on Fiscal Watch or Caution by the Ohio Department of Education based on the lack of cash reserves even having implemented these drastic reductions. • Ohio school districts have little choice in the matter of funding as we are quite limited in how we are able to fund our operations.

39. What is an incremental levy? • It is a property tax levy under RC 5705.213, which permits a specific amount of funding each year that can be increased by a set amount over the prior year's amount.

40. Incremental Levy Passed in 2004 Paid 4.35 mills less than what voters approved over the life of the levy.

41. Projected Levy Monthly Increase on a Home Valued at $200,000 (Taxable Value is 35% or $70,000) *Projected Millage Rate will be Lower as Values Increase

42. Effective Tax Rates The school district collects a fixed sum and as more people build homes and businesses come to Perrysburg, the less everyone pays.

43. Misconceptions • Can’t the district stop growth? NO. • With all the new homes and students new to the school district, isn’t the district getting a lot more money? NO. • Aren’t Perrysburg Schools’ property taxes among the highest in the region? FALSE. • Perrysburg Schools – why do we want a “Cadillac” system when a “Chevy” is good enough? REALLY?

44. Reality • Things like “impact fees” or “tax the new residents only” are illegal in Ohio and not an option. • The school district cannot cut its way to keep up with growth without changing the fabric of our schools and community. • We wish it was a smaller levy, but it isn’t. • There are no 10-word soundbite solutions.

45. What’s Next • Perrysburg Schools leaders are reviewing the audit report and incorporating some of the recommendations into our own reduction plan that would be implemented if the levy were to fail in November. • While there may be slightly different components between the plans, the end result of cutting an average of $7,015,500 annually is the final destination that must be reached if no additional operational funds become available this year. • Regardless of the outcome of the levy, the information in this report will be examined as we continue to grow and evaluate our services.

46. The Jacket Way • We appreciate the work of the Auditor of State’s Team and value their professionalism and the insight that their work has provided. • The team that worked directly with Perrysburg Schools strove to understand while maintaining their independence. • As a school district, we continue to look for ways to improve our performance. • We welcome taking a hard look at our operations. • This is The Jacket Way.

47. Thank You You may access the complete Auditor of State performance audit report on our web site: www.perrysburgschools.net.