MILTON-UNION SCHOOLS

Transcription

1 MILTON-UNION SCHOOLS Financial Forecast Assumptions & Notes FY2014, FY2015, FY2016, FY2017, FY2018 OHIO LEGISLATIVE CHANGES REVENUE New Funding Formula and Budget: The Governor and state legislature passed a new biennium budget for July 2013 through June The new formula is on a per pupil basis, with $5745 per pupil in FY2014 and $5800 per pupil in FY2015. The state share is now determined by property wealth per pupil and an income factor. Milton-Union will receive 50% of the formula funding. Other notable changes included an expansion of vouchers, and the elimination of 10% and 2.5% rollback on all new and replacement levies. Additionally, all new homestead applications will be means tested. Reductions in State Funding: Even with the new formula, state funding has not recovered from the previous cuts. During FY2010 and FY2011, the state used federal stimulus funding to supplant state funding. Now that the federal stimulus funding has ended, the decreased state funding has not been reinstated. The state also passed legislation reducing the taxation of Public Utility TPP and eliminating Business TPP tax collection and set up reimbursements by the state. Tangible Personal Property collections are now reduced and the state reimbursements have been eliminated. The total funding loss due to state actions is over $1,000,000 per year when compared to what Milton-Union received in FY2008 and FY2009. In response to the decreases in revenue, Milton-Union FTE employment had decreased from 187 in FY2009 to 150 in FY2013. Total Expenditures (excluding transfers and advances) decreased from $12,424,000 in FY2009 to $12,159,000 in FY2013. This reduction is in spite of negotiated raises in FY2010 and FY2011, and health insurance premiums increases over 34.5% since FY2010. GENERAL PROPERTY TAXES (1.010) Real Property: Real Property included private residences, agricultural property and business property. Real Property Tax collections have been relatively flat over the last 3 years. The district has calculated the tax collections based upon estimated valuations and appropriate tax rates by property classification real property tax estimates are based on Miami County Auditor estimate. Real Property tax collections vary little from year to year. New Millage and Renewals: The 17 mil levy expires at the end of calendar year 2017 and the 10.9 mil levy expires at the end of New Construction: Historically, each year, new AG/RES construction has been valued at $1,000,000. This was about a 0.75 percent increase. Building permits over the past few years have been minimal; therefore, estimated new construction has been reduced to 0.25%. IND/COM property new construction has averaged 0.30% annual increase over the last 6 years. Triennial Update/Reappraisal: Tax revenue estimates are based upon historical valuation growth patterns, including the effects of scheduled updates and reappraisals. The most recent Reappraisal (TY2013) resulted in a valuation decrease of $6,757,970 or 3.64 percent. All property classifications had decreases in total appraised valuation. However within the Real Property class, Agricultural Real Property valuation increased by 36%, while all real property decreased by 3.11%. Because Milton-Union is above the 20 mil floor, an increase or decrease in property appraised values result in a decrease or increase 1

2 effective tax rates. This means that as property values decreases, the effective millage increases in order to keep the total property tax collection unchanged. The recent reappraisal resulted in a decrease in total property value and an effective millage increase of.93 for residential/agricultural property and 2.84 mils for commercial/industrial property. Milton-Union total property tax collection is the same when property values increase or decrease because of the change in effective tax rates. These are averages and individual property owners may experience slight differences. The next Reappraisal is at the end of calendar year 2019, and the next update will occur in Normal property inflation is assumed to resume in TY2015. School Year FY 2005 FY 2012 FY 2013 FY 2014 FY2015 est. Real Property Tax Collected $4,285,570 $4,365,550 $4,377,825 $4,399,179 $4,374,419 TANGIBLE PERSONAL PROPERTY TAX (1.020) (Business Machinery, Equipment, Furniture, Fixtures, and Inventory): Public Utility Personal Property: PU Personal Property is now the only revenue included in this category. PU Collections are expected to continue at historical levels for the period of this forecast. Business Tangible Personal Property: Business TPP collections is now assessed at zero. School Year FY 2005 FY 2012 FY 2013 FY 2014 FY2015 est. Tangible Personal Property $780,456 $491,094 $510,628 $553,018 $580,142 INCOME TAX (1.030) Milton-Union Schools passed a 1.25% Earned Income Tax in November This tax is dual purpose, with 1.15% allocated to the Permanent Improvements and 0.10% allocated to general operating expenses. The Permanent Improvement portion is being used to fund the local portion of an Ohio School Facility Commission building project. The income tax is assumed to grow at 0.5% annually. School Year FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Income Tax $8,564 $100,059 $149,072 $160,111 $170,176 UNRESTRICTED GRANTS-IN-AID (1.035) FY2014 and FY2015 Budget Legislation- the Governor and state legislature passed a new biennium budget for July 2013 through June The new formula is on a per pupil basis, with $5745 per pupil in FY2014 and $5800 per pupil in FY2015. The state share is now determined by property wealth per pupil and an income factor. Milton-Union will receive 50% of the formula funding. FY2016, FY2017 and FY2018 are assumed to be funded with the same formula, and the same minimum funding guarantee. Funded Enrollment Projections: For FY2014 Formula ADM enrollment actually increased to or 0.76%. FY2015 enrollment is assumed to decline by 2.5% because kindergarten enrollment is below the level enrolled at this point for FY2014 and a relatively large senior class will be graduating (145). Note: students counted for funding include resident students (including Open Enrollment-Out students) and 20% of JVS students. It does not include Open Enrollment-In students or court placed students. Over the last 12 years, enrollment has averaged a decrease of 1.5% per year. FY2016, FY2017 and FY2018 enrollment is assumed to continue to decline. 2

3 School Year Count Date Oct Oct Oct Oct Oct Estimate Estimate Count % Change 0.0% -0.4% -4.2% -1.8% 0.8% -2.5% Casino Tax Revenue: Starting in FY2013 districts began receiving per pupil casino tax revenue. Professional organizations recommend assuming the following pupil revenue in the forecast: FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 $78,651 $70,000 $69,000 $67,629 $67,629 Total Foundation and Casino: School Year FY 2001 FY 2011 FY2012 FY2013 FY2014 State Foundation $5,811,654 $5,627,802 $5,645,117 $5,641,208 $5,880,044 RESTRICTED GRANTS-IN-AID (1.040) The new funding formula has two streams of restricted funding: Economically Disadvantaged Funding ($136,063) and Career Tech Education Funding ($611). School Year FY 2011 FY2012 FY2013 FY2014 (est.) Restricted Funds $543,497 $360,671 $27,432 $136,674 PROPERTY TAX ALLOCATION (1.050) The Property Tax Allocation includes the 10% and 2.5% Rollback, and Homestead for all real property. Because of changes in the biennium budget, any new or replacement levy passed in the future will not include the rollback payment from the State. Also, from now on, seniors applying for Homestead exemption will have to meet both the age and income means tests. Public Utility Tangible Property and the General Tangible Personal Property Reimbursements were eliminated in the last biennium state. This is a decrease in funding of $446,595. School Year FY2005 FY2011 FY2012 FY2013 FY2014 Property Tax Allocation $1,144,918 $1,227,109 $846,055 $789,812 $794,550 ALL OTHER REVENUE (1.06) 3

4 Other revenue included interest income, tuition payments for disabled and non-disabled students, open enrollment payments, and rentals. Due to decreased cash balance and lower interest rates earned as investments are called or mature, interest revenue is projected to decrease over the forecast. In Milton-Union is estimated to received approximately $206,000 in tuition payments, and $830,000 in open enrollment payments. The district continues to accept open enrollment students as space permits. This forecast assumes open enrollment to continue at present levels. OTHER FINANCING SOURCES This category includes: OPERATING TRANSFERS-IN (2.040) None anticipated. RETURN OF ADVANCES (2.050) Repayment of loans made to other funds. In both FY2013 and FY2014, we are assuming the repayment of $275,000 loaned to the PI fund for concession stand, locker room and tennis court construction. Also in FY2014, an advance of $23, will be made for the Reading Literacy Grant. ALL OTHER FINANCING SOURCES (2.060) In FY2014, the following items will be received: BWC Rebate, Sale of Lot on Main Street, and an SERS refund. EXPENDITURES PERSONAL SERVICES (3.010) Step Increases and Education Increases: Step increases are longevity raises due to experience. In addition, teachers may move from one educational level to another as a result of completion of additional college courses and degrees. Milton-Union Schools negotiated a three year (FY2012 through FY2014) agreement with teachers which provided for NO STEP INCREASES but does allow increases for additional education raises. The new contract, negotiations for FY15 through FY17, includes restarting steps and restoring 2 of the 3 frozen steps. Historically, steps have increased cost by 1.7%. Negotiated Increases: Milton-Union Schools has negotiated a three year (FY2014 through FY2017) agreements with teachers. This agreement provides for 1.5% base increase employees compensation annually. Staffing: Staffing remained at the FY2013 level for FY2014. Milton-Union rejoined the Miami County ESC consortium for Multi-Handicapped students in FY2012. This resulted in the reduction of 6 paraprofessionals and 2 teachers. The salary saving will be $178,166. (Consortium cost will be accounted for in Purchased Services.). This forecast assumes 3 new elementary teachers at BA, step 0. Non-Represented Employees: This group includes exempt support staff, supervisors and administrators. Administrators did not receive salary increases in FY2014 and are assumed to receive the same pay increases as the represented employees. Payroll Dates: Milton-Union s payroll occurs bi-weekly. Normal years have 26 pays. The number of pays in totaled 27. School FY2014 Year FY2005 FY2011 FY2012 FY2013 (est.) Salaries $ 7,602,031 $7,557,709 $7,362,867 $6,655,136 $6,607,561 4

5 EMPLOYEES RETIREMENT/INSURANCE BENEFITS (3.020) Retirement: Pension costs are 14% of salaries and this expense increase or decrease in direct proportion with salaries. The School Employee Retirement System (SERS) is moving from collecting retirement payment 6 months in arrears to collecting currently. Districts will pay one sixth of the arrears each year over the next six years, starting in July 2010 and ending June For Milton-Union that will mean an increase of approximately $24,000 a year. Medicare: Employees hired after April 1, 1986 must pay Medicare. District costs are now approaching 1.45% of salaries. Workers Compensation: Workers compensation is based on salary expenses and the cost of work related injuries. This expense is based on medical costs and lost time cost of injured workers. Milton-Union became penalty rated for 2009 (payment in 2010) and the estimated premium will increase from $38,920 to $86,887. The FY2012 cost was $59,501 for the General Fund and Jobs Fund. FY2013 BWC expense equaled $36,057. The FY2013 payment reflects decreased employment as well as improved experience. In FY2014, we will become penalty rated again and premiums were $43,230. Health Insurance: The new agreements (FY2015 thru FY2017) increase employee premium contribution from 15% to 20% for the PPO. The PPO premium will increase 1.5% October In January 2015, Milton-Union will offer a High Deductible Plan(HDP) with a Health Saving Account. The HDP premium is 18% lower than the PPO and the employee premium contribution will be 15%. For the remainder of the forecast, health insurance inflation is assumed to increase at 10% annually. Dental Insurance: FY2015 premium will increase by 2% and premiums are assumed to increase by 5% for the remainder of the forecast. Life Insurance: Life insurance benefits increased to $30,000 and costs increased by $1320. Unemployment Insurance: Unemployment expenses in FY2013 were $21,971. FY2011 unemployment expenses associated with the reduction in staff was $53,067. FY2012 unemployment expenses were to be $65,266. FY2014 is estimated to be approximately $12,000. Staffing: There were no cuts or additions for FY2014. Assume additional 3 teachers for FY2015 with family insurance. School Year FY2005 FY2011 FY2012 FY2013 Total Benefits $ 2,903,327 $ 2,987,706 $2,950,191 $2,922,718 PURCHASED SERVICES (3.030) Professional and Technical Services including Legal: Personal services include services such as legal, educational consultants, elementary social workers, Multi-handicap classrooms, data processing, printing, and postage. Property Services: Property services include garbage removal, repair and maintenance, property insurance, and rentals Tuition and Related Services: Management has very little control over tuition and related services such as occupational therapy, and physical therapy. They are driven by the needs of disabled children, their Individual Education Plans (IEP s), tuition for students who attend vocational school, and the tuition for students who attend other schools as a result of open enrollment and charter/community 5

6 schools. These costs are determined by the special education IEP or by the state. Anticipated expenditures in this area have been held at their historical levels and trends. Utilities: This category includes natural gas, electricity, and water/sewage. Milton-Union Schools is part of a natural gas purchasing cooperative through the Educational Purchasing Cooperative. This group is in the process of purchasing 50% of its natural gas at current prices for the next three years. Natural Gas costs have ranged from $55,800 in FY04 to $87,086 in FY2012 to $65, In FY2013. During FY2013 the district heated both the new K12 as well as the former HS for part of the year. Milton- Union recently joined the EPC the electricity purchasing program with DPL. We will receive an 18% discount on rates through 2012 and pay a flat rate of 6.5 cents per KWH through June FY2012 electricity costs were $140,469 and FY2013 electric costs were $210,121. Again FY2013 included electrical costs for part of the year for the former HS and EL/MS. School Year FY2005 FY2011 FY2012 FY2013 Purchased Services $ 1,362,753 $ 1,695,781 $1,941,578 $1,974,019 SUPPLIES, AND MATERIALS (3.040) Educational Supplies: Educational supplies include textbooks, office supplies and classroom supplies. Supply and Materials budgets have been held at recent levels. Replacement of textbooks is assumed during the remainder of the forecast. Bus Fuel: FY2009 FY2010 FY2011 FY2012 FY2013 $71,265 $84,524 $103,928 $110,835 $117,375 CAPITAL OUTLAY (3.050) Capital outlay includes equipment, building improvements, vehicles, school buses. Expenditures in this category can vary significantly from year to year depending on the timing and need. The forecast of capital outlay follows historical trends during this period.. DEBT SERVICE None OTHER FINANCIAL USES OPERATING TRANSFERS-OUT (5.010) This category includes transactions which withdraw money from one fund and permanently place it in another fund. During FY2013, funds will be transferred from the General Fund to Fund 035 for Termination Benefits and to Fund 300 (Athletics) for coaches salaries and benefit expenditures. ADVANCES-OUT (5.010) - Transactions which withdraw money from one fund to another fund, in anticipation of future revenue with which to repay the fund making the advance. Repayment must be made immediately upon receipt of the anticipated revenue. ALL OTHER FINANCING USES (5.030) - Refund of Prior Year Receipts are expenditures which are made for the purpose of refunding monies received in a prior fiscal year. 6

7 ENCUMBRANCES Estimated encumbrances are based on historical patterns. RESERVATION OF FUND BALANCE ASSUMPTIONS CAPITAL IMPROVEMENTS (9.020): Milton-Union has a Permanent Improvement Levy. This levy raises approximately $395,345, which offsets CI reserve requirements. No Capital Improvement reserves are shown in the forecast. CAREER TECH: (9.040): Unspent Career Tech funds must be either spent in the next FY or eventually repaid to ODE. REVENUE FROM REPLACEMENT/RENEWAL LEVIES PROPERTY TAX RENEWAL OR REPLACMENT (11.020) The renewal or replacement Property Tax levies that will expire during the term of the forecast must be accounted for on this line. 7

8 MILTON-UNION EXEMPTED VILLAGE SCHOOL DISTRICT - - MIAMI COUNTY SCHEDULE OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES ACTUAL AND FORECASTED OPERATING FUND Actual Forecasted Fiscal Year Fiscal Year Fiscal Year A Fiscal Year Fiscal Year Fiscal Year Fiscal Year Fiscal Year a Revenue: General Property Tax (Real Estate) 4,392,339 4,365,550 4,377,825 4,405,558 4,380,705 4,408,469 4,467,162 3,745, Tangible Personal Property Tax 487, , , , , , , , Income Tax 149, , , , , , , , Unrestricted Grants-in-Aid 5,627,802 5,675,189 5,641,208 6,022,728 5,777,850 5,690,677 5,604,426 5,520, Restricted Grants-in-Aid 543, ,677 27, , , , , , Property Tax Allocation 1,227, , , , , , , , All Other Revenues 1,116,448 1,093,404 1,191,167 1,193,923 1,183,923 1,168,923 1,153,923 1,153, Total Revenues 13,543,463 12,998,052 12,708,247 13,279,364 13,018,426 12,954,413 12,927,195 11,964,241 Other Financing Sources: Proceeds from Sale of Notes State Emergency Loans and Advancements Operating Transfers-In. 0 92, Advances-In 37,246 45, , , All Other Financing Sources 2,614 5, , ,088 4,000 4,000 4,000 4, Total Other Financing Sources 39, , , ,688 4,000 4,000 4,000 4, Total Revenues and Other Financing Sources 13,583,323 13,140,875 13,165,691 13,695,052 13,022,426 12,958,413 12,931,195 11,968,241 Expenditures: Personal Services 7,557,709 7,362,867 6,626,689 6,599,561 7,000,804 7,379,648 7,583,326 7,602, Employees' Retirement/Insurance Benefits 2,987,706 2,950,191 2,922,718 2,942,590 3,098,329 3,271,322 3,467,631 3,641, Purchased Services 1,695,781 1,941,578 1,974,019 1,918,650 1,999,807 2,085,023 2,174,499 2,268, Supplies and Materials 370, , , , , , , , Capital Outlay 66,170 89, ,644 96, , , , , Intergovernmental Debt Service: Principal-All (History Only) Principal-Notes Principal-State Loans Principal-State Advancements Principal-HB 264 Loans Principal-Other Interest and Fiscal Charges Other Objects 178, , , , , , , , Total Expenditures 12,856,773 12,800,678 12,158,712 12,125,743 12,801,742 13,464,068 13,974,348 14,277,529 Other Financing Uses Operating Transfers-Out 376, , , , , , , , Advances-Out 44, ,950 16,100 23, All Other Financing Uses Total Other Financing Uses 421,504 1,170, , , , , , , Total Expenditures and Other Financing Uses 13,278,277 13,971,274 12,636,198 12,509,343 13,167,342 13,834,068 14,346,348 14,649,529 Excess of Rev & Other Financing Sources over (under) Expenditures and Other Financing Uses 305, , ,493 1,185, , ,655-1,415,152-2,681,288 Cash Balance July 1 - Excl Proposed Renewal/ Replacement and New Levies 5,332,893 5,637,939 4,807,540 5,337,033 6,522,742 6,377,826 5,502,171 4,087, Cash Balance June 30 5,637,939 4,807,540 5,337,033 6,522,742 6,377,826 5,502,171 4,087,019 1,405, Estimated Encumbrances June , , , , , , , ,186 Reservation of Fund Balance Textbooks and Instructional Materials 37, Capital Improvements Budget Reserve Career Tech 0 8, Debt Service Property Tax Advances Bus Purchases Subtotal 37,802 8, Fund Balance June 30 for Certification of Appropriations 5,494,911 4,676,616 5,005,847 6,191,556 6,046,640 5,170,985 3,755,833 1,074,544 Rev from Replacement/Renewal Levies Income Tax - Renewal Property Tax - Renewal or Replacement , Cumulative Balance of Replacement/Renewal Levies ,179 Fund Balance June 30 for Certification of Contracts, Salary and Other Obligations 5,494,911 4,676,616 5,005,847 6,191,556 6,046,640 5,170,985 3,755,833 2,025,723 Revenue from New Levies Income Tax - New Property Tax - New Cumulative Balance of New Levies Revenue from Future State Advancements Unreserved Fund Balance June 30 5,494,911 4,676,616 5,005,847 6,191,556 6,046,640 5,170,985 3,755,833 2,025,723 6/4/2014, 9:27 AM