Cleveland Municipal School DistrictCleveland Municipal School District

Fiscal Year 2009 Budget OverviewFiscal Year 2009 Budget Overview

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Cleveland Municipal School DistrictCleveland Municipal School DistrictAverage Daily MembershipAverage Daily Membership

20072007 20082008 20092009

CMSD CountCMSD Count 53,20253,202 49,85749,857 46,54846,548

Charter CountCharter Count 11,57311,573 12,69312,693 13,59313,593

The District is projected to lose over 3,000 students per year. Charter school enrollment is projected to increase 900 students per year.

3

Cleveland Municipal School DistrictWhere the Money Comes From

2008-2009

Local Taxes23.2%

State65.1%

Property Tax Allocation6.9%

Other3.3%

Federal 0.9%

Catastrophic Aid0.6%

The proposed general operating revenue forecast for the 2008-2009 school year totals $661,224,776, a decrease of $12.4 million or 1.8% lower then the current year. State sources represent 72.6% of the District’s revenue.

4

149,273,482

25,436,289

141,728,799

11,652,827

-

25,000,000

50,000,000

75,000,000

100,000,000

125,000,000

150,000,000

175,000,000

Re

ve

nu

e

2007 - 2008 2008 - 2009

Year

Cleveland Municipal School DistrictLocal Revenue - Tax Collection Estimates

Real Estate Personal Tangible

Tax revenues for 2009 are projected at $153,381,626 a decrease of $21.3 million or 12.2%. This decrease is primarily due to:

-Reduced real property tax collection rate to 86.81% from 88.04%.

-Shift of real property tax collections to Homestead/Rollback revenue due to HB119 – elderly and disabled home owner tax reduction.

-The continued elimination of personal tangible property tax.

5

$10,926,878

$4,478,226

$20,508,697

$12,000,000

$4,478,226

$28,864,342

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

Re

ve

nu

e

2007 - 2008 2008 - 2009

Year

Cleveland Municipal School DistrictProperty Tax Allocation - State Hold Harmless Reimbursements

Property Tax Rollbacks SB3 & 287 Reimbursements HB 66 CAT Reimbursements

Property Tax Allocation increase of $9.4 million or 26.3% is due to:

-The shift of Real Property Tax to Homestead/Rollback due to HB119

-Increase of HB66 CAT Tax Reimbursements based on the elimination of Personal Tangible Property Tax.

6

$293,249,518

$66,257,285

$71,065,610

$295,948,549

$66,642,760

$68,070,561

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

Re

ve

nu

e

2007 - 2008 2008 - 2009

Year

Cleveland Municipal School DistrictState Revenue

State Foundation Poverty Based Assistance Transitional Aid Guarantee

Due to declining enrollment, CMSD is a guarantee district. This results in the District receiving the same amount of state funding as it did in 2007 and 2008. Although our overall state funding remains level, the deductions for community schools continues to rise (from $93 million in 2008 to $101.4 million in 2009).

7

2004 2005 2006 2007 2008 2009

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

Rev

enue

Year

Cleveland Municipal School DistrictTax and Hold Harmless vs. State Foundation Revenue

Local Tax and Property Tax Allocation Net State Foundation Gross State Foundation

Tax revenue combined with HB66 hold harmless reimbursements is projected at $198.7 million, a decrease of $11.9 million or 5.65%. Tax revenue is lower due to the collection rate of 86.81% and phase out of tangible personal property tax.

The difference between the gross and net state funding represents flow thru charter school tuition costs. As charter school enrollment increases, the net dollars available to CMSD operations declines.

8

$13,474,849

$4,045,000

$7,750,000

$4,502,754

$13,028,712

$4,045,000

$6,200,000

$6,000,000

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

Re

ve

nu

e

2007 - 2008 2008 - 2009

Year

Cleveland Municipal School DistrictOther Revenue

Other Catastrophic Aid Interest Medicaid

Other Revenue is projected to decrease $498,891 or 1.7%.

9

Cleveland Municipal School DistrictWhere the Money Goes

2008-2009

Charter School Tuition14.3%

Salaries & Benefits69.4%

All Other16.3%

The proposed general operating budget for the 2008-2009 school year totals $711,892,569, an increase of $27.5 million over the current year budget.

10

Employee compensation (salaries and fringe benefits) are projected at $494.3 million, an increase of $14.6 million over the current year budget.

Salary estimates include a provision for a 3% base wage increase consistent with our employee union agreements.

Health insurance estimates reflect a rate increase of 2%.

Wage estimates have been adjusted to include salary schedule step increases.

District retirement costs are projected to increase consistent with the overall increase in salary levels.

Compensation projections reflect a net reduction of 70 positions due to declining enrollment.

$354,836,991

$124,809,159

$366,850,000

$127,440,289

$0

$100,000,000

$200,000,000

$300,000,000

$400,000,000

$500,000,000

Exp

end

iture

2007-08 2008-09

Year

Cleveland Municipal School DistrictSalaries & Benefits

Salaries Benefits

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The allocation for supplies, textbooks and equipment is recommended at $14.6 million, a $307,000 increase over the current year budget.

The appropriation for textbooks is recommended at $5.9 million, a 3% increase over current year allocation.

$14,327,392 $14,633,942

$0

$2,500,000

$5,000,000

$7,500,000

$10,000,000

Exp

en

dit

ure

2007-08 2008-09

Year

Cleveland Municipal School DistrictSupplies, Textbooks & Equipment

12

Purchased Services are projected at $186.2 million, an increase of $12.3 million over current year estimates.

Charter school tuition is projected at $101.4 million, up $8.4 million (9%) from current year projections.

Utility costs are projected to increase by approximately $2 million over current year projections.

Other purchased services are projected to increase $1.3 million. Tuition costs for students who reside in the District and receive services at other educational institutions are projected to increase.

$14,671,325

$7,948,363

$93,019,112

$58,263,040

$16,700,000

$8,560,000

$101,390,832

$59,574,589

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

Exp

en

dit

ure

2007-08 2008-09

Year

Cleveland Municipal School DistrictPurchased Services

Utilities Student Transportation Charter School Tuition Other Purchased Services

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Other Miscellaneous expenses (fixed charges) are projected at $6.0 million.

This category of expenditures includes County Auditor and Treasurer fees ($3.6 million), fees charged by the County for the collection of delinquent taxes ($1.3 million) and property and casualty insurance ($0.4 million).

$5,840,908 $6,047,559

$0

$2,500,000

$5,000,000

$7,500,000

Exp

end

itu

re

2007-08 2008-09

Year

Cleveland Municipal School DistrictOther Expenditures

14

Total Debt Service expenditures are projected at $1,251,000, a reduction of $18.4 million from current year budget estimates. In 1997, the District issued

Revenue Anticipation Notes (RAN) whereby CMSD restructured all of its outstanding General Fund debt. The RAN had a ten year maturity with the

final payment in the 2006-2007 school year.

Total Debt Service expenditures are projected at $1,251,000, a reduction of $18.4 million from current year budget estimates. In 1997, the District issued

Revenue Anticipation Notes (RAN) whereby CMSD restructured all of its outstanding General Fund debt. The RAN had a ten year maturity with the

final payment in the 2006-2007 school year.

$1,251,359 $1,251,358

$0

$250,000

$500,000

$750,000

$1,000,000

$1,250,000

$1,500,000

Exp

end

itu

re

2007-08 2008-09

Year

Cleveland Municipal School DistrictDebt Service

Debt Service expenditures are projected at $1,251,000. This category provides for the repayment on the District’s HB 264 Energy Conservation Bonds and loans from the Environmental Protection Agency for use in asbestos removal projects.

15

$9,444,000 $9,444,000

$0

$2,500,000

$5,000,000

$7,500,000

$10,000,000

Exp

en

dit

ure

2007-08 2008-09

Year

Cleveland Municipal School DistrictAdvances and Transfers

The 2008-2009 budget proposal includes $6,000,000 to cover a potential deficit in the Food Service program.

Transfers include a $944,000 sinking fund payment to repay the District’s Qualified Zone Academy Bonds (QZAB) debt.

$2.5 million has been projected to cover year end cash flow advances (June 2009 advances to Special Revenue Funds).

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Cleveland Municipal School DistrictCleveland Municipal School DistrictSummary of Revenues and ExpendituresSummary of Revenues and Expenditures

2007 - 2008 2008 - 2009

Beginning Unencumbered Cash Balance 80,418,495 69,607,113

Total Revenues 673,600,267 661,224,776

Total Expenses 684,411,649 711,892,569

Ending Unencumbered Cash Balance 69,607,113 18,939,320

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Cleveland Municipal School DistrictCleveland Municipal School District

Major Financial Uncertainties for the 2008-2009 School Year Major Financial Uncertainties for the 2008-2009 School Year

CMSD Student EnrollmentCMSD Student Enrollment

2008-2009 Charter School Enrollment2008-2009 Charter School Enrollment

Actual unreserved carry-over balance (June 30, 2008 unreserved balance)Actual unreserved carry-over balance (June 30, 2008 unreserved balance)

Energy CostsEnergy Costs

Approval of the new Medicaid reimbursement plan to reinstate Medicaid reimbursements from the Approval of the new Medicaid reimbursement plan to reinstate Medicaid reimbursements from the Federal GovernmentFederal Government

Tax collection rate and delinquenciesTax collection rate and delinquencies

We have prepared this year’s budget using the best available information, knowledge and judgment We have prepared this year’s budget using the best available information, knowledge and judgment in those areas which are variable. However, there are numerous financial uncertainties that could in those areas which are variable. However, there are numerous financial uncertainties that could have a major impact on the 2008-2009 school year budget.have a major impact on the 2008-2009 school year budget.