Elida Local SchoolsFinancial Summit

Report to StakeholdersFiscal Year 2005-2006

Joel L. Parker,CPA

Summit Team Lynn Metzger, Metzger Financial Services Bruce Opperman, WLIO Brenda Stocker, State Superintendent’s Parent Advisory

Council Phillip Morton, WORTH Center Matt Huffman, State Representative Pat Schymanski, General Dynamics Peter Kesler, Ohio Foam Corporation Cliff Barber, Citizens National Bank David Anderson, The State Bank Max Stover, First Federal Bank Steve Boroff, Superior Federal Credit Union Tim Niebel, Fifth Third Securities Beth Jokinen, The Lima News Mike Ford, Delphos Herald Mike Klaus, EEA Sally Ulrich, Elida Board President Don Diglia, Elida Local Schools Superintendent Joel Parker, Elida Local Schools Treasurer Faith Lee, Elida Local Schools NCLB Director Elida Accounting Students

Goals

Review the financial condition of Elida Local Schools

Expand the knowledge base on school funding issues

Review data for future levies 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 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

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

HOW MANY CLIENTS?

Students Tax payers Boosters Parents Business partners Local officials

WHO ARE WE?

Students – 2,478 Teachers- 144 Nurse –1 Guidance – 4 Professionals –

15 Secretaries – 16 Aides – 14

Maintenance – 2Custodial – 12Food Service – 26Bus Drivers – 304 Buildings81 square miles

PERFORMANCE INDICATORS Profit Margin 1-5% Strength of Carry-over - 60 day 80% Rule on Salaries and Benefits Debt to Total Assets Residential Tax Rate

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)

Cash Graph

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Month

Gen

era

l F

un

d C

ash

19992000200120022003200420052006

60 DAY CASH BALANCE ALMOST A REALITY

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

WHAT CHANGED?

Staff cuts Administrative cuts $239,155 Streamlined food service Moved staff to PPO insurance plan Moved to pay to participate Passed a levy in 2005 to bring back

specific programs

Revenue Chart FYD as of June 30, 2006

40%

8%

40%

1%

5%

6%

Real Estate

PersonalPropertyFoundation

Restricted Aid

Homestead/Roll

Other

General Fund

Expense Chart FYD as of June 30, 2006

54%

18%

19%

4%

3%

0%

0%

2%

Salaries

Retire/Ins

PurchasedServiceSupplies

Capital Outlay

Debt-Prin.

Debt-Int.

OtherGeneral Fund Expenditures

Elida Transportation Data

-

100,000

200,000

300,000

400,000

500,000

Fiscal Year

Am

ount Miles

GallonsExpense

Miles 428,886 440,673 415,682 376,971 372,549 402,349

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

Expense 86,985 61,233 70,591 66,988 92,372 144,618

2001 2002 2003 2004 2005 2006

Fiscal Year 2000 2001 2002 2003 2004 2005 2006

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

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

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

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

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

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

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

FOOD SERVICE

5 Year Forecast Actual Forecasted Fiscal Year Fiscal Year Fiscal Year 2004 2005 2006

Revenues1.010 General Property Tax (Real Estate) $6,584,688 $6,852,071 $7,354,2751.020 Tangible Personal Property Tax 1,463,699 1,497,346 1,531,4721.030 Income Tax1.035 Unrestricted Grants-in-Aid 7,561,375 7,502,306 7,434,2811.040 Restricted Grants-in-Aid 79,501 64,011 126,7811.050 Property Tax Allocation 829,212 895,012 913,8011.060 All Other Revenues 882,998 1,129,184 1,191,073

1.070 Total Revenues 17,401,473 17,939,930 18,551,683

Other Financing Sources2.010 Proceeds from Sale of Notes2.020 State Emergency Loans and Advancements (Approved)2.040 Operating Transfers-In2.050 Advances-In 51,028 16,000 67,2142.060 All Other Financing Sources 5272.070 Total Other Financing Sources 51,028 16,000 67,741

2.080 Total Revenues and Other Financing Sources 17,452,501 17,955,930 18,619,424

Expenditures3.010 Personal Services 9,864,196 9,322,548 9,731,6553.020 Employees' Retirement/Insurance Benefits 3,219,649 3,144,906 3,189,5713.030 Purchased Services 2,843,428 3,226,038 3,445,3273.040 Supplies and Materials 369,007 475,893 631,5583.050 Capital Outlay 4,116 334,935 463,6373.060 Intergovernmental

Debt Service:4.010 Principal-All (Historical Only) 71,638 46,9424.020 Principal-Notes 63,736 65,821 10,5114.030 Principal-State Loans4.040 Principal-State Advancements4.050 Principal-HB 264 Loans4.055 Principal-Other4.060 Interest and Fiscal Charges 35,597 27,279 2,2484.300 Other Objects 287,520 287,495 309,612

4.500 Total Expenditures 16,758,887 16,931,857 17,784,119

Other Financing Uses5.010 Operating Transfers-Out 28,6265.020 Advances-Out 56,000 121,214 55,5115.030 All Other Financing Uses5.040 Total Other Financing Uses 84,626 121,214 55,511

5.050 Total Expenditures and Other Financing Uses 16,843,513 17,053,071 17,839,630

6.010 Excess of Revenues and Other Financing Sources over (under) Expenditures and Other Financing Uses 608,988 902,859 779,794

7.010 Cash Balance July 1 - Excluding Proposed Renewal/Replacement and New Levies 360,933 969,921 1,872,780

7.020 Cash Balance June 30 969,921 1,872,780 2,652,574

AUDIT REPORT Performed every year Cost to taxpayers $15,000 Cash basis (saves taxpayers

$10,000-$13,000 each year) Tests are performed on accounts

payable, payroll, compliance with ORC, fund raising, athletics, etc

Clean opinion No adjustments

Salary Data – Get the Facts!!

Elida Local SchoolsSalary Data

Classified &Fiscal Year Teaching Administration2002-03 5% 6%2003-04 4% 0%2004-05 1.5% 0%2005-06 3% 3%2006-07 3.5% 3.5%TOTAL 17% 12.5%

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

How does our 2006 residential tax rate stack up? Residential Tax Rate 2006 31.44 Lima City 31.26 Allen East 31.15 Bath 29.76 Shawnee 29.23 Bluffton 27.86 Perry 27.09 Spencerville (Plus 1% income tax) 27.14 ELIDA 26.80 Delphos

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

Administrative Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

Lima City School $1,228 13.1%

State Expenditures $1,143 12.2%

Spencerville $1,025 13.3%

Delphos City $1,005 12.7%

Allen East $961 12.9%

Perry $933 13.4%

Bath $882 11.7%

Bluffton $856 11.1%

Shawnee $831 11.5%

Elida Elida $811$811 11.3%11.3%

ADMINISTRATIVE EXPENSES

 Building Operations:Utilities, maintenance, repairs, busses and lunchroom expenses

BUILDING EXPENSES

Building Operations Expenditures

Expenditures Per Pupil Percentage of Total Expenditures

Bluffton $1,804 23.3%

State Expenditures $1,779 19.0%

Shawnee $1,749 24.2%

Bath $1,716 22.7%

Lima City $1,673 17.9%

Perry $1,664 23.9%

Allen East $1,567 21.0%

Spencerville $1,529 19.8%

ElidaElida $1,412$1,412 19.7%19.7%

Delphos $1,326 16.8%

Staff Support Expenses

Staff Support Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

Lima City $389 4.2%

State Expenditures $293 3.1%

Bluffton $155 2.0%

ElidaElida $90$90 1.3%1.3%

Spencerville $51 0.7%

Bath $35 0.5%

Allen East $34 0.4%

Perry Local $25 0.4%

Shawnee $24 0.3%

Delphos $12 0.1%

Staff Support: Teacher training and other professional development activities

Pupil Support ExpensesPupil Support Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

State Expenditures $935 10.0%

Lima City $931 9.9%

Delphos $907 11.5%

Bath $851 11.3%

Spencerville $806 10.5%

Shawnee $727 10.1%

Allen East $688 9.2%

Bluffton $672 8.7%

ElidaElida $669$669 9.4%9.4%

Perry $623 9.0%

Pupil Support: Salaries for librarians, counselors, and nurses 

Instructional SupportInstructional Expenditures

Expenditures Per Pupil

Percentage of Total Expenditures

State Expenditures $5,205 55.6%

Lima City $5,148 54.9%

Delphos $4,664 58.9%

Spencerville $4,299 55.8%

Bluffton $4,244 54.9%

Allen East $4,220 56.5%

ElidaElida $4,169$4,169 58.3%58.3%

Bath $4,070 53.9%

Shawnee $3,891 53.9%

Perry $3,704 53.3%

Instruction: Teacher and education professional salaries and classroom materials

STATE FUNDING FLAWS

Over-reliant on property taxes No inflationary growth on property taxes Phantom Revenue Unfunded mandates System too complicated Waste many man hours on

levies(2000,2003,2004,2005,2006,2007) 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

$5,403 x 1.00687x2,442.15=13,285,586

Less 8,226,036(.023 x357,653,735)_______________

$5,059,550

23 Mill Charge- Off

FY 2005 $7,383,852 FY 2006 $7,870,054 FY 2007 $8,226,035

State Aid

FY 2006 $7,520,508FY 2007 $7,520,508FY 2008 $7,458,619FY 2009 $7,458,619

TAX BASETax Valuations

1999 2000 2001 2002 2003 2004 2005Values Values Values Values Values Values Values

Collected Year 2000 2001 2002 2003 2004 2005 2006

Ag/Residential 164,693,830 175,352,850 179,161,050 182,378,550 213,179,340 216,149,940 219,179,010 Commercial/Industrial 70,131,360 70,709,240 72,432,590 73,126,890 87,268,820 90,926,040 91,884,270 Sub Total 234,825,190 246,062,090 251,593,640 255,505,440 300,448,160 307,075,980 311,063,280

Utility Real 40,220 45,900 43,010 45,410 47,120 47,890 31,820 Total Real 234,865,410 246,107,990 251,636,650 255,550,850 300,495,280 307,123,870 311,095,100

Utility Personal 12,149,290 11,460,990 9,296,660 9,603,630 9,517,850 9,280,790 8,795,910 Tangible Personal 36,829,336 37,055,024 40,797,097 39,268,817 32,993,852 36,274,840 27,665,882 Total Personal 48,978,626 48,516,014 50,093,757 48,872,447 42,511,702 45,555,630 36,461,792

Total All 283,844,036 294,624,004 301,730,407 304,423,297 343,006,982 352,679,500 347,556,892

Exempt Values 20,080,550 20,324,880 20,946,010 20,946,010 20,946,010 24,203,770 24,291,910

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

CONSTITUTIONAL AMENDMENT

High-quality education is a fundamental right for every Ohio child

Determine levels of funding based on student need Eliminate “Phantom Revenue” Exempt Ohio seniors and disabled from property taxes on the

first $40,000 of the market value of their homes Create an independent commission appointed by Ohio’s top

elected leaders(to monitor efficiency) Direct the commission to report annually to the governor Create and maintain a permanent local government fund to

support local government services Establish a system to fund colleges at no less than 2007

amounts and increases annually based on state’s personal income percentage

ELIDA BUILDING PROJECT Elida High School $35,600,000 Elida Middle School Addition

$4,500,000 Demolition $2,300,000 Total $42,400,000 6.8 mills and ½ mill PI Levy

WHY NOW?

Close two 90+ year old buildings Take advantage of current construction costs

(over 26 month period,cost went up $5 million) Improve air quality and handicap accessibility Expand community partnerships Protect local and community real estate values Better investment of tax-payer money Excellent strategic planning The need goes back to 1969---The time is now!

High Middle Elida School School Ele. Gomer

FY 1995-96 23,799 9,627 3,349 7,901 FY 1996-97 35,209 15,804 10,481 17,348 FY 1997-98 27,918 15,502 25,997 31,014 FY 1998-99 81,276 22,623 14,225 53,493 FY 1999-00 32,830 67,997 19,228 15,411 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 Total 592,391 247,189 150,801 225,390

PI Repairs-10 years 414,235

Total FY 96-06 HS 1,006,626

HS-11 Year Ave. 91,511

DISTRICT WIDE REPAIRS

Building DataFY 05-06

Gomer Elida High Repairs 33,381 Repairs 67,983

Heat 28,212 Heat 122,339

Electric 40,068 Electric 36,699

Water 10,164 Water 9,516

Total 111,825 Total 236,537

ADM 199 ADM 811

Per Student 562 Per Student 292

Elida Ele. Elida MiddleRepairs 31,475 Repairs 18,012

Heat 32,187 Heat 35,260

Electric 30,846 Electric 61,450

Water 9,516 Water 9,516

Total 104,024 Total 124,238

ADM 855 ADM 574

Per Student 122 Per Student 216

Cost per building/per student

28 year savings when Gomer is closed

Repairs/Utilities $2,000,000 Staff reductions $2,800,000 Heating System $1,017,000 Electrical $ 468,468 Handicap access $ 432,232 Total $6,717,700 (Other potential repairs do exist)

5 Year Goals

Pass a building bond issue Continue to monitor health insurance

(Health Savings Accounts, Spousal language, Mandate Generic Drugs)…impact of state pool

Enhance customer service Maintain 0-5% profit margin Continue to review staffing needs Monitor new legislation Others ???? (group discussion)

Cliff S. BarberLima City President

Citizens National Bank

“From a cost savings standpoint the bond issue is a "no-brainer". The annual maintenance cost for the old high school alone is over $100,000per year and that does not include the $122,000 per year in heating costs. Also, the addition to the

middle school will save $4.4 million in operating and personnel expenses over the life of the bond by allowing the district to

operate three buildings instead of four thus allowing the middle school addition to pay for itself. “

“I haven’t talked to anyone that won’t agree Elida NEEDS a new high school. I don’t think anyone could reasonably

argue otherwise. Both the high school and Gomer buildings are tired and costly. For example, over the past

10 years alone our school district has spent $4.80/sf, $4.39/sf and $2.87/sf on repairs at the Gomer building,

high school and middle school, respectively. By comparison that translates into $300,000 of excess costs being absorbed to keep the older buildings operational. If

a major problem presents itself at the high school or Gomer, which is highly probable, we’ll be forced to put more “band-aids on craters.” We need to take action

now. Waiting would cost everyone much, much more…and

we’re not just talking about money!”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company

“It is clearly documented that new school facilities improve attitudes and enhance

the education process. If we do not update our facilities we not only leave

money on the table (35% from the State of Ohio), we all but assure ourselves that future graduating classes will continually fall behind their peers that have access to

better technology and equipment that come with new buildings.”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company

“From an economic development perspective, we need to be aware that new business prospects care

about the quality of schools when determining where to locate. They understand that modern, well-

maintained facilities provide students with access to advanced technology and equipment that will be important to the future quality of their workforce.

Likewise, prospective new residents also make choices based on the quality of schools. Anyone who has ever

moved from one community to another knows that part of the process involves evaluating which school

district to move within. I know my family did when we chose Elida in 1994. With all the new school facilities now surrounding the Elida School District, what’s the

chance of new residents making that same choice today? Exactly! We need to take action now.”

David A. AndersonPresident - Lima Region

The State Bank and Trust Company