“Serving the Public’s Financial Leaders”Public Finance Resources, Inc.

Loveland City Schools

Financial Forecast UpdateApril 16, 2013

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Agenda

• Comparison of current revenue and expenditure projections to October, 2012.

• Updated simplified forecast statements.

• Key revenue and expenditure assumptions.

• Conclusion• Per Pupil Expenditure Update

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October Vs. April Revenue Projections

Forecast Compare - Compares Previous Forecast to Current Forecast LOVELAND CITY SCHOOL DISTRICT - - HAMILTON COUNTYFor Fiscal Year: 2013

Forecasted as of: 10/31/2012 4/15/2013Fiscal Year Fiscal Year Percentage

Revenue: 2013 2013 Variance1.010 - General Property Tax (Real Estate) 23,952,473 24,187,229 0.98%1.020 - Tangible Personal Property Tax 973,855 772,586 -20.67%1.030 - Income Tax - - 01.035 - Unrestricted Grants-in-Aid 10,393,840 10,547,359 1.48%1.040 - Restricted Grants-in-Aid 59,376 19,376 -67.37%1.045 - Restricted Federal Grants-in-Aid - SFSF - - 01.050 - Property Tax Allocation 3,499,509 3,509,504 0.29%1.060 - All Other Operating Revenues 1,059,238 939,738 -11.28%

1.070 - Total Revenue 39,938,292 39,975,794 0.09%2.070 - Total Other Financing Sources 198,000 230,000 16.16%

2.080 - Total Revenues and Other Financing Sources 40,136,292 40,205,794 0.17%

Cash flow cross-check?

1.01 Real Estate revenue beat estimates for the 1st half. However, this is believed to be a timing issue (half paid) rather than ongoing revenue. The 2nd half settlement in July will confirm the longer term direction.

1.02 Public Utility Personal Property estimates of the Duke Energey refund were not met.

1.035 Unrestricted is increased for Casino Revenue (posting change).

1.06 Other revenue is decreased for Casino Revenue (posting change).

Current revenue estimates vary by only 0.17% from October’s forecast.

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October Vs. April Expenditure Projections

Forecast Compare - Compares Previous Forecast to Current Forecast LOVELAND CITY SCHOOL DISTRICT - - HAMILTON COUNTYFor Fiscal Year: 2013

Forecasted as of: 10/31/2012 4/15/2013Fiscal Year Fiscal Year Percentage

Expenditures 2013 2013 Variance3.010 - Personnel Services 26,054,580 26,230,580 0.68%3.020 - Employees' Retirement/Insurance Benefits 9,168,815 9,317,987 1.63%3.030 - Purchased Services 2,918,763 3,154,701 8.08%3.040 - Supplies and Materials 1,452,676 1,422,676 -2.07%3.050 - Capital Outlay - - 03.060 - Intergovernmental - - 04.010 - 4.060 - Principal, Interest & Fiscal Charges - - 04.300 - Other Objects 867,136 883,136 1.85%

4.500 - Total Expenditures 40,461,970 41,009,080 1.35%5.040 - Total Other Financing Uses 70,000 70,000 0.00%

5.050 - Total Expenditures and Other Financing Uses 40,531,970 41,079,080 1.35%0

6.010 - Rev Surplus/(Shortfall) - Line 2.080, Less 5.050 (395,679) (873,286) 120.71%7.010 - Cash Balance at Beginning of Year 4,196,366 4,196,366 0.00%7.020 - Cash Balance End of Year [Line 7.01 +/- Line 6.01] 3,800,687 3,323,080 -12.57%

3.01 Salary estimates were exceeded with less than projected savings for employee degree changes, replacement costs.

3.02 Health insurance costs exceeded estimates.

3.03 Purchased services reflect additional tuition and services.

Expenditures are trending 1.35% higher than October estimates.

M M

Expenditures vary 1.35% less than October’s estimates.

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Simplified Forecast Statement

Income and Expense Simplified Statement - Projected Fiscal Years LOVELAND CITY SCHOOL DISTRICT - - HAMILTON COUNTY

Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year2013 2014 2015 2016 2017

Beginning Balance 4,196,366 3,775,687 2,643,344 1,312,572 (674,652)

+ Revenue 40,136,292 39,987,755 40,312,572 40,736,365 41,156,736 + Proposed Renew/Replacement Levies - - - - - + Proposed New Levies - - - - - - Expenditures (40,531,970) (41,120,099) (41,643,344) (42,723,589) (43,851,567) = Revenue Surplus or Deficit (395,679) (1,132,344) (1,330,772) (1,987,224) (2,694,831)

Ending Balance 3,800,687 2,643,344 1,312,572 (674,652) (3,369,484)

Revenue Surplus or Deficit w/o Levies (395,679) (1,132,344) (1,330,772) (1,987,224) (2,694,831) Ending Balance w/o Levies 3,800,687 2,643,344 1,312,572 (674,652) (3,369,484)

District’s cash balance will hold through 2014 as promised in the 2011 levy campaign.

District’s cash balance continues to reflect cost of services that exceed revenue.

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2013 through 2017 Key Revenue Assumptions• Five year average real estate tax

collection rate of 99.07%.• State revenue increases are 6.61%

in 2014, 5.81% in 2015, and 1.22% each subsequent year.– State budget process will be monitored

and significant variances reported to Loveland BOE.

• Overall revenue increases average 2.33% per year.

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2013 through 2017 Key Expenditure Assumptions• Average salary increase is 0.97%

annually.• Fringe benefits increase annually

3.98% on average. • Overall expenditure average

increase of 1.97% annually.

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Forecast Conclusion

• Cash balance continues decline since 2011 levy.

• Cost of services provided exceeds revenue provided.

• 2011 Levy will last until 2014 as promised.

• Future Levy Considerations:– Academic and Program Goals– Financial Stability– Levy Cycle

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Per Pupil Expenditure Comparison(All Funds)

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2012 Per Pupil Expenditure Comparison to Most Similar Average

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Cost Change Relative to CPI-U

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Per Pupil Expenditure Summary• Loveland spend nearly $3,000 less

per pupil than its neighboring school districts.

• Loveland spends less in every expenditure category.

• Loveland’s increase in costs have trended lower than its neighboring school districts.

“Serving the Public’s Financial Leaders”Public Finance Resources, Inc.

Allocation of Daily Cost to Educate a Child - Loveland City , 2012

The annual per pupil cost serves as the basis for the daily cost calulations presented below. The calculations are based upon a 180 day school year. Instructional PPE and Pupil Support are combined for this analysis

Building Principals & Secretaries, Central

Office, Printing, Technology, Data Processing, $6.01

Building Operating Systems, Cleaning, Maintenance, Transportation, Food

Service, Etc., $9.83

Teachers, Counselors, Librarians, Media, Aides,

Textbooks, Computers, Etc., $37.96

Classroom support - Special Needs Aides and Teacher

Training & Licensure, $0.88

$54.68 Per Pupil Per Day

“Serving the Public’s Financial Leaders”Public Finance Resources, Inc.

Debra Hoelzle, Chief Operations Officer of Public Finance Resources, provides direct services to clients, and oversees the day-to-day operations of PFR. She brings with her operational experience from both the public and private sectors, including a school district and multiple corporations in the financial services industry. Debra holds her Masters of Business Administration from Ohio University, and her Bachelors of Science in Business Administration from The Ohio State University.

Stacy Overly, Consultant, provides direct financial services to clients. He has over 20 years of experience serving as school district treasurer, including 15 plus years of developing financial forecasting tools, and providing instruction and training opportunities attended and used by over two hundred of Ohio’s public school treasurers. Stacy works with clients to analyze trends and review local economic data to help determine a long-term operating strategy for the organization. He holds his Masters of Business Administration and his Bachelors of Business Administration in Finance from Ohio University.

Ernie Strawser, Consultant, provides direct services to our public finance clients. He has over 30 years of public finance experience as a CFO, consultant, and developer and instructor of financial forecasting techniques and tools which have been used by over two hundred Ohio school district CFOs. Ernie works with clients to facilitate their understanding of local financial results , trends, and strategies. He holds both a Masters of Science in Administration from Central Michigan University and a Bachelor of Science in Finance from Ohio University.

Matt Bunting, Consultant, has over 25 years of experience in the public finance sector. This includes 15 plus years as a school district treasurer, and 11 years with the Auditor of State where he led financial, legal compliance, and Federal single audits of government entities. Matt has served as interim school treasurer several times, as well as worked with Ernie and Stacy to test their forecasting software and instruct at their yearly seminars. He holds an Associates Degree in Accounting from Hocking College, and is a Certified Government Financial Manager.

Mike Sobul, Consultant, brings 30 years of experience in public finance and tax analysis. Currently a school district treasurer, Mike spent nearly 25 years with the Ohio Department of Taxation where he led revenue forecasting efforts and provided analysis , training, and fiscal services to schools and local governments. Mike holds a Masters Degree in Public Policy from the University of Michigan and a Bachelors Degree in Economics and Political Science from Wittenberg University.

Ryan Ghizzoni, Consultant, began his career with the Auditor of State’s Office and has served as a school district treasurer for the past 10 years. During his career, he has been the recipient of six Association of School Business Officials International Meritorious Budget Awards and was the recipient of the Ohio Association of School Business Officials 2011 Outstanding Treasurer of the Year Award. Ryan holds a Bachelors of Business Administration from the Youngstown State University, and is a Certified Administrator of School Finance and Operations.

Public Finance Resources Employee Bios

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“Serving the Public’s Financial Leaders”Public Finance Resources, Inc. 15

Ernie Strawser Matt Bunting Stacy Overly Ryan Ghizzoni Mike Sobul Debra Hoelzle

PFR Contact Information

Debra HoelzleChief Operating Officer

Public Finance Resources, Inc.PO Box 1822

Columbus, OH 43216debra@pfrcfo.com

Phone: 614-732-5948

Ernie StrawserConsultant

Public Finance Resources, Inc.PO Box 1822

Columbus, OH 43216ernie@pfrcfo.com

Phone: 614-732-5948

  www.PFRCFO.com