Elida Local Schools Financial Summit

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Elida Local SchoolsFinancial Summit

• Report to Stakeholders
• Fiscal Year 2005-2006
• Joel L. Parker,CPA

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Summit Team

• Lynn Metzger, Metzger Financial Services
• Bruce Opperman, WLIO
• Brenda Stocker, State Superintendents 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

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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

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THERE IS NO BUSINESS LIKE PUBLIC SCHOOL BUSINESS

• State Budget
• Levies/Bond Issues
• Phantom Revenue
• Voters
• Raw product - 100 accepted
• Emotional Issues

• Ohio Revised Code
• No Child Left Behind
• Unfunded mandates
• DeRolph case
• Collective Bargaining
• Tax structure

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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

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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
• RENEWsame effective rate
• REPLACEoriginal millage

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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

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HOW MANY CLIENTS?

• Students
• Tax payers
• Boosters
• Parents
• Business partners
• Local officials

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WHO ARE WE?

• Students 2,478
• Teachers- 144
• Nurse 1
• Guidance 4
• Professionals 15
• Secretaries 16
• Aides 14

• Maintenance 2
• Custodial 12
• Food Service 26
• Bus Drivers 30
• 4 Buildings
• 81 square miles

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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

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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 (Jareds Law)

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60 DAY CASH BALANCE ALMOST A REALITY
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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

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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

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General Fund
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General Fund Expenditures
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(No Transcript)
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FOOD SERVICE
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5 Year Forecast
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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

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Salary Data Get the Facts!!
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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)

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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

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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

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ADMINISTRATIVE EXPENSES
Administration Salaries for administrators,
office staff, and office supplies
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BUILDING EXPENSES
  Building OperationsUtilities, maintenance,
repairs, busses and lunchroom expenses
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Staff Support Expenses
Staff Support Teacher training and other
professional development activities
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Pupil Support Expenses
Pupil Support Salaries for librarians,
counselors, and nurses  
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Instructional Support
Instruction Teacher and education professional
salaries and classroom materials
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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

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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)

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State Aid-Short Version

• 5,403 x 1.00687x2,442.1513,285,586
• Less 8,226,036(.023 x357,653,735)
• _______________
• 5,059,550

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23 Mill Charge- Off

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

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State Aid

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

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TAX BASE
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STATE BUDGET BREAKDOWN

• Primary Secondary Education 35
• Medicaid 20
• Colleges 13

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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

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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
  Ohios 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
  states personal income percentage

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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

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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!

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DISTRICT WIDE REPAIRS
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Cost per building/per student
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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)

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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)

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Cliff S. BarberLima City PresidentCitizens
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.

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I havent talked to anyone that wont agree
Elida NEEDS a new high school. I dont 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, well be forced
to put more band-aids on craters. We need to
take action now. Waiting would cost everyone
much, much moreand were not just talking about
money!

• David A. Anderson
• President - Lima Region
• The State Bank and Trust Company

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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. Anderson
• President - Lima Region
• The State Bank and Trust Company

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

• David A. Anderson
• President - Lima Region
• The State Bank and Trust Company