School Finance 101BUILDING THE 10 YEAR PLANMADISON PLAINS - OCTOBER 2013

Tonight’s Agenda

•Review of Budget Tools

•Recap of FY13

•Review of FY14 Planned Budget

• The Five Year Forecast

• The 10 Year Plan

• Scenarios

Review of Budget Tools

•Appropriations• The appropriations are the Boards authorization for the

Superintendent acting as the purchasing agent to spend district funds.

• The appropriations also act as the control over spending. The Treasurer/CFO cannot approve a purchase request if it will exceed the approved appropriation.

• The Board may approve the Permanent Appropriation Resolution anytime prior to September 30 of each fiscal year.

Review of Budget Tools

• Spending plan• The Spending plan is not a required budget

tool per ORC

• The Spending plan is a monitoring tool provided to the Board of Ed. to allow for easy review of the monthly status of General fund activity versus the budget.

Review of Budget Tools• Spending plan

Review of Budget Tools• Five Year Forecast• The Five Year Forecast is required to be prepared

and submitted to the Ohio Department of Education by October 31st of each fiscal year. A revised forecast may be submitted anytime but is required to be submitted at least once by May 31st of each fiscal year.

• The forecast only reflects the forecasted activity of the district General fund, Poverty Based Assistance fund and any debt service funds.

• Our forecast includes the General fund, PBA and the Budget Reserve.

Review of Budget Tools

• Five Year Forecast• The Forecast has 2 parts: 1) the 5 years of

financial activity depicted in a spreadsheet, 2) the assumptions that drive the projections.

• The forecast is used by the ODE, MP Board of Ed., Administration, unions and public to analyze and decipher the revenues and planned expenditures of the district. It is arguably the most important financial document we prepare. (political and public relations)

Review of Budget Tools

• 10 Year Financial Plan• The 10 Year Financial Plan is not a required document.

• The 10 Year Financial Plan is unique to MP.

• The Plan allows for long range planning.

• The Plan extends the new five year forecast another 5 years.

• The Plan goals are as follows:• Transparent financial planning•Academics are the Focus of the district, not $’s• To provide a stable financial foundation.

Recap of FY13

Recap of FY13

Recap of FY13

Recap of FY13

Recap of FY13

Review of FY14

Review of FY14

The Five Year Forecast

The Five Year Forecast

• KEY ASSUMPTIONS

• Revenues• Tax advance in June 2014 will be $700,000 less than advance in June 2103• Renewal of Operating levy will occur in calendar 2014• Unrestricted Aid (State Foundation) will remain the same for 5 years• Enrollment will remain steady after 2014• State Funding Guarantee will remain throughout forecast

The Five Year Forecast

• KEY ASSUMPTIONS

• Expenditures – Personal Services (Salaries & Wages) Employee Base Pay

is expected to increase:2014 1.25%2015 1.25%2016 1.0%2017 1.0%2018 1.0%

The Five Year Forecast

•KEY ASSUMPTIONS• Expenditures – Personal Services (Salaries &

Wages)•Step increases are expected to be 1.85% per year•Degree attainment increases are expected to be .40% per year

The Five Year Forecast

•KEY ASSUMPTIONS• Expenditures – Benefits•Medical/Drug Premium will increase as follows:Fiscal year % Increase

2014 19% = $191,0002015 8%2016 8%2017 8%2018 8%

The Five Year Forecast

•KEY ASSUMPTIONS• Expenditures – Benefits•Retirement Contribution Increase due to increase in salary: 2014 = $45,000

•Expenditures – Supplies and Materials• Increase in Curriculum Supplies: 2014 = $57,000

The Five Year Forecast

•KEY ASSUMPTIONS• Expenditures – Principal / HB264 Loan•HB264 Loan paid off in 2017

The 10 Year Financial Plan

DETAILS

• Duration = 10 years

• Reduce Budget $8.4 million

• Pass PI Replacement Levy - 2013

• Pass Em. Op Levy in Place of Expiring Op Levy - 2014

• Consider Em. Op Levy in 2016

10 Year Financial Plan –Timeline Before the Plan2012

• Union Negotiations

2013

• PI Levy Expires December 31

2017

• General Fund goes in the RED

2021

• General Fund Balance = $-19,800,000

24

2014

• Operating levy Expires December 31

10 Year Financial Plan – Proposed Timeline May 2012

2012

• April - Implement 10 Year Financial Plan• August - Settle Negotiations• November – Replace PI Levy

2013

• November – Pass 8 Mill Emergency Operating levy• December - Remove Current Op Levy

2016

• January – Revisit Financial Plan as Needed• May – Pass 2.5 Mill Emergency Operating Levy

2017

• General Fund Balance in the BLACK

2021

• General Fund Balance = $2,694,80025

Current (May 2013) 10 Year Financial plan Timeline

2013

• Pass PI Levy• PI Levy Expires December 2013• Pass Em. Op. Levy• Remove Current Op. Levy

2014

• Operating levy Expires December 2014

2015

• Union Negotiations

2016

• Consider Need for additional Operating Revenues

2018

• General Fund Balance in Black with no New Revenues

2022

• General Fund Target Goal $2 million

The 10 Year Financial Plan-Comparison

28

Levy Timelines - 20121998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

PERMANENT IMPROVEMENT2.5 Mill Replacement 5 Years Passed

2.5 Mill Renewal 5 Years Passed

2.5 Mill Renewal 5 Years Passed

2.5 Mill Replacement Proposed

OPERATING LEVY8 Mill 3 years Passed

8 Mill Renewal 3 years Passed

8 Mill Renewal 3 Years Passed

EMERGENCY OP LEVY8 Mill 8 Year Proposed

2.5 Mill 5 Year Proposed Collection Period

Collection Period

Collection Period

Collection Period

Collection Period

Collection Period

Collection Period

Collection Period

Collection Period

29

Revised Levy timelines

Scenarios

• Is the Board satisfied with the Current 5 Year Forecast

• Is the Board satisfied with the Current 10 Year Projection?

• Is the Board satisfied with the Current 10 Year Plan?

• If the answer to any of the above is NO then we need to go into executive session.