Elida Local SchoolsFinancial Summit III

Report to StakeholdersFiscal Year 2007-2008

Joel L. Parker,CPA

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

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

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 BudgetLevies/Bond IssuesPhantom RevenueVotersRaw product - 100% acceptedEmotional Issues

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

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

ELIDA BUILDING 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)

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!!

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

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

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

OSFC Ranking

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

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

HOW MANY CLIENTS?

Students Tax payers Boosters Parents Business partners Local officials

WHO ARE WE?

Students – 2,420 Teachers- 146 Nurse –1 Guidance – 4 Professionals –

17 Secretaries – 16 Aides – 14

Maintenance – 2Custodial – 14Food Service – 25Bus Drivers – 31Asst Tech Co-1 Total 2714 Buildings 81 square miles

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

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

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)

60 DAY CASH BALANCE ALMOST A REALITY

76 Day Cash Balance!

Cash Graph

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1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

Month

Gen

era

l F

un

d C

ash

19992000200120022003200420052006200720082009

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

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

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???

What’s Else Can We Do?

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

General FundRevenue Chart FYD as of June 30, 2008

42%

4%

38%

0%

8%

8%

Real Estate

PersonalPropertyFoundation

Restricted Aid

Homestead/Roll

Other

General Fund Expenditures

Expense Chart FYD as of June 30, 2008

55%

18%

20%

4%

2%

0%

0%

1%

Salaries

Retire/Ins

PurchasedServiceSupplies

Capital Outlay

Debt-Prin.

Debt-Int.

Other

Elida Transportation Data

0

100000

200000

300000

400000

500000

Fiscal Year

Am

oun

t

Expended

Gallons

Miles

Fiscal Year 2001 2002 2003 2004 2005 2006 2007 2008

Expended 86,985 61,233 70,591 66,988 92,372 144,618 127,159 193,731

Gallons 83,123 67,209 63,354 60,504 57,217 62,220 64,631 62,355

Miles 428,886 440,673 415,682 376,971 372,549 402,349 398,107 393,866

1 2 3 4 5 6 7 8

FOOD SERVICE

JuneFiscal Year 2000 2001 2002 2003 2004 2005 2006 2007 2008

Revenue Federal 243,346 234,529 223,494 278,530 243,644 239,122 320,161 279,240 386,010 State 10,072 10,092 10,756 10,706 12,630 13,207 11,028 10,954 11,001 Local 594,211 576,010 561,344 575,917 586,843 513,334 575,959 571,476 548,922

Total 847,629 820,631 795,594 865,153 843,117 765,663 907,148 861,670 945,933

ExpensesSalaries 325,736 332,741 345,760 353,996 350,154 276,396 283,380 313,751 317,182 Fringes 134,816 156,892 198,125 211,198 245,929 181,288 153,651 179,800 171,619 Purchased Service 9,128 8,421 5,285 5,011 4,507 7,022 11,485 13,657 16,928 Supplies 339,680 338,004 327,304 314,984 292,572 279,624 307,740 342,635 351,055 Equipment 9,333 12,348 20,709 - - 16,241 - - 2,105

Total 818,693 848,406 897,183 885,189 893,162 760,571 756,256 849,843 858,889

Net Gain/(Loss) 28,936 (27,775) (101,589) (20,036) (50,045) 5,092 150,892 11,827 87,044

Plus Advances - - - 48,636 40,000 54,000 - - (10,000) Plus Beginning Bal. 111,602 140,538 112,763 11,174 39,774 29,726 88,818 239,711 251,538

Ending Balance 140,538 112,763 11,174 39,774 29,729 88,818 239,710 251,538 328,582

Program SpendingGeneral Fund Revenue General Fund Expenditures

Local Revenue Instructions Real Estate Taxes 8,439,846$ 42% Regular 11,157,647$ 57% Personal Property Taxes 826,455 4% Special Education 1,421,907 7% Vocational 1,548 0% Total Local 9,266,301 46% Total Instructions 12,581,102 64%

State Revenue Supporting Services Foundation 7,574,892 38% Pupil Support** 659,045 3% Homestead Rollback 1,533,802 8% Instr. Staff Support## 526,551 3% - Administration 1,307,607 7%

Transportation 1,359,025 7% Total State 9,108,694 46% Business/Maintenance 2,442,644 13%

Total Support Svcs. 6,294,872 32% - Other 1,640,547 8% Extracurriculars 490,641 3%Total Revenue 20,015,542$ 100%

Debt Requirements Principal/Interest 69,616 0%

Total Expenditures 19,436,231$ 100%

REPORT TO STAKEHOLDERS

5 Year Forecast Fiscal Year Fiscal Year Fiscal Year 2006 2007 2008

Revenues1.010 General Property Tax (Real Estate) $7,354,275 $8,177,224 $8,439,8461.020 Tangible Personal Property Tax 1,531,472 1,230,346 826,4561.030 Income Tax1.035 Unrestricted Grants-in-Aid 7,434,281 7,567,028 7,511,2931.040 Restricted Grants-in-Aid 126,781 80,380 63,5991.050 Property Tax Allocation 913,801 1,186,853 1,533,8021.060 All Other Revenues 1,191,073 1,327,283 1,640,547

1.070 Total Revenues 18,551,683 19,569,114 20,015,543

Other Financing Sources2.010 Proceeds from Sale of Notes2.020 State Emergency Loans and Advancements (Approved)2.040 Operating Transfers-In2.050 Advances-In 67,214 55,511 12,0002.060 All Other Financing Sources 527 9,7002.070 Total Other Financing Sources 67,741 65,211 12,000

2.080 Total Revenues and Other Financing Sources 18,619,424 19,634,325 20,027,543

Expenditures3.010 Personal Services 9,731,655 10,221,067 10,429,8963.020 Employees' Retirement/Insurance Benefits 3,189,571 3,421,171 3,548,0843.030 Purchased Services 3,445,327 3,707,597 3,916,0113.040 Supplies and Materials 631,558 738,752 796,8353.050 Capital Outlay 463,637 311,707 388,5443.060 Intergovernmental

Debt Service:4.010 Principal-All (Historical Only)4.020 Principal-Notes 10,511 50,883 52,9244.030 Principal-State Loans4.040 Principal-State Advancements4.050 Principal-HB 264 Loans4.055 Principal-Other4.060 Interest and Fiscal Charges 2,248 18,734 16,6924.300 Other Objects 309,612 311,736 287,247

4.500 Total Expenditures 17,784,119 18,781,647 19,436,233

Other Financing Uses5.010 Operating Transfers-Out5.020 Advances-Out 55,511 2,000 16,3985.030 All Other Financing Uses5.040 Total Other Financing Uses 55,511 2,000 16,398

5.050 Total Expenditures and Other Financing Uses 17,839,630 18,783,647 19,452,631

6.010 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 779,794 850,678 574,912

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 1,865,899 2,645,693 3,496,371

7.020 Cash Balance June 30 2,645,693 3,496,371 4,071,283

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

Salary Data – Get the Facts!!

Classified &Fiscal Year Teaching Admin. Health Ins.2002-03 5% 6%2003-04 4% 0%2004-05 1.5% 0%2005-06 3% 3%2006-07 3.5% 3.5%2007-08 3.5% 3.5% 50/502008-09 3.5% 3.5% 50/502009-2010 3.5% 3.5% 50/50Average 3.44% 2.88%

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)

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

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

Administration: Salaries for administrators, office staff, and office supplies

ADMINISTRATIVE EXPENSES

-

200

400

600

800

1,000

1,200

1,400

London

Port Clinton

Sheffield LakeR

avennaH

eath

BataviaN

ew Philadelphia

Napoleon

Orrville

Sidney

Defiance

Lake

Oregon

Tiffin

Urbana C

ityBellefontaineFrem

ontW

ilmington

Wauseon

Norw

alkElida

Comparison Group-Administrative Expense Per Pupil

 

-

2,000

4,000

6,000

8,000

10,000

12,000

Comparison Group-Expense Per Pupil

-

5

10

15

20

25

30

Comparison Group-Report Card Data

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

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)

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

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

State Aid

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

TAX BASE

Tax Valuations2001 2002 2003 2004 2005 2006 2007 2008

Values Values Values Values Values Values Values Values

Collected Year 2002 2003 2004 2005 2006 2007 2008 2009

Ag/Residential 179,161,050 182,378,550 213,179,340 216,149,940 219,179,010 240,726,340 243,660,870 246,525,140 Commercial/Industrial 72,432,590 73,126,890 87,268,820 90,926,040 91,884,270 97,276,200 100,017,980 101,438,990 Sub Total 251,593,640 255,505,440 300,448,160 307,075,980 311,063,280 338,002,540 343,678,850 347,964,130

Utility Real 43,010 45,410 47,120 47,890 31,820 21,120 21,590 19,340 Total Real 251,636,650 255,550,850 300,495,280 307,123,870 311,095,100 338,023,660 343,700,440 347,983,470

Utility Personal 9,296,660 9,603,630 9,517,850 9,280,790 8,795,910 8,919,930 6,906,750 7,215,890 Tangible Personal 40,797,097 39,268,817 32,993,852 36,274,840 27,665,882 18,362,998 5,116,935 - Total Personal 50,093,757 48,872,447 42,511,702 45,555,630 36,461,792 27,282,928 12,023,685 7,215,890

Total All 301,730,407 304,423,297 343,006,982 352,679,500 347,556,892 365,306,588 355,724,125 355,199,360

Exempt Values 20,946,010 20,946,010 20,946,010 24,203,770 24,291,910 69,828,126 69,828,126 69,828,126

Full

Inside Millage 5.40 5.40 5.40 5.40 5.40 5.40 5.40 5.40 5.40Outside - Continuing 20.10 14.60 14.60 14.60 14.64 14.64 14.60 14.62 14.60Emergency Levy 7.35 5.80 5.70 5.00 5.00 7.64 7.14 7.35 7.34Permanent Improvement 0 0 0 0 0 0 0 0.999Bond Levy 0.90 0.90 0.82 0.00 0.00 0.00 0.00 6.39

Total Rate 32.85 26.70 26.60 25.82 25.04 27.68 27.14 27.37 34.73

STATE BUDGET BREAKDOWN

Primary & Secondary Education 35%

Medicaid 20% Colleges 13%

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

FY 2000-01 34,144 15,890 2,141 26,167 FY 2001-02 58,311 13,894 5,937 8,361 FY 2002-03 59,248 23,447 7,003 16,811 FY 2003-04 91,489 26,079 6,084 31,830 FY 2004-05 80,184 36,326 56,356 17,054 FY 2005-06 67,983 18,012 31,475 33,381 FY 2006-07 69,260 114,049 32,411 13,178 Total 661,651 379,250 214,687 271,949

PI Repairs-10 years 414,235

Total FY 96-07 HS 1,075,886

12 year Average 89,657.17

DISTRICT WIDE REPAIRS

Cost per building/per studentBuilding Data

FY 06-07

Gomer Elida High Heat

Repairs 13,178 Repairs 69,260 EMS 25,305

EE 24,941

Heat 33,361 Heat 122,339 GK 33,361

Total 83,607

Electric 9,524 Electric 102,557 EHS 122,339

Water 2,215 Water 8,951 Difference 38,732

Total 58,278 Total 303,107

ADM 171 ADM 820

Per Student 341 Per Student 370 ElectricEMS 65,598 EE 31,015 GK 9,524 Total 106,137

EHS 102,557

Elida Ele. Elida MiddleRepairs 32,411 Repairs 114,049 Difference (3,580)

Heat 24,941 Heat 25,305

Square ft.

Electric 31,015 Electric 65,598 EMS 86,283

EE 67,642

Water 11,405 Water 7,692 GK 47,320

Total 201,245

Total 99,772 Total 212,644 EHS 135,117

ADM 888 ADM 581 Difference (66,128)

Per Student 112 Per Student 366

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

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

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)

Items of Concern State Budget Cuts-HB 1 Health Care/BWC Increases Utility Increases Loss of tax valuation Special Education Increases Price of diesel Price of wheat and food supplies Loss on transportation Loss to ESC’s Fund All-day K Fund Pre-school program

Building Timeline (Estimate) March 4, 2008 Pass Bond Issue March 13, 2008 1ST Meeting with

Architect Early Spring 2009 – Complete

Drawings Late Spring 2009 – Bid out project May 2009 – Break ground Summer 2011 – Move in!

Meet the Team

Architect – Garmann Miller, Minster Ohio

Construction Management – Touchstone CPM, Lima Ohio

Investment Banker – Omar Ganoom, Columbus, Ohio

Construction Attorney – Bricker & Eckler, Columbus, Ohio