NEW PHILADELPHIA CITY SCHOOLS FIVE-YEAR FORECAST

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1 Real Estate Tax Assumptions NEW PHILADELPHIA CITY SCHOOLS FIVE-YEAR FORECAST REVENUE ASSUMPTIONS Real estate taxes had increased at approximately 1.1% to 2.0% through 2013 and a 0.5% increase was normally built into the five year forecast Actual 2013 collections were about $$230,000 above the 2012 revenue, which was a dramatic change from 2012 when revenue had dropped from the previous year.. Unfortunately the 2014 revenue again decreased due to a $400,000 refund made to a commercial taxpayer for overpayments. The levy passed in May is shown in the new estimates as well as modest increases in 2015 through real estate and public utility valuation $424,996,830 Estimated Estimated Estimated Estimated Estimated Base $7,800,000 $7,875,000 $7,950,000 $8,025,000 $8,100,000 Emergency Levy 4,500,000 6,000,000 6,000,000 6,000,000 6,000,000 Refund 0 New Construction 75,000 75,000 75,000 75,000 75,000 Collection $12,375,000 $13,950,000 $14,025,000 $14,100,000 $14,175,000 Personal Property Tax Assumptions The personal property tax has been phased out and only a small estimate is made for delinquent taxes that may be collected by the county Auditor. There was hold harmless language in the phase out for the first 7 years. The hold harmless was based on tax collections and rates as of September The reimbursement of the tax would have come back in different ways including a direct reimbursement and through increases in foundation due to the decrease in property value The old foundation formula allowed for the calculation of the amount of personal property taxes that were offset by an increase in the state foundation due to the property value drop. We received $1,202,000 in direct payments in FY11 after the offset. The phase out included into the governor s budget as approved by the legislature has these payments phased out over a two year period. Approximately one third of the payment will be reduced in FY12 with another third reduced in FY13. The forecast shows a reduction to $781,426 in FY12 and an additional reduction to $336,560 in FY13 through FY19. The legislation only covered the two years and no new legislation was enacted to reduce the remaining amount in future state budgets.

2 State Foundation Unrestricted Grants in Aid We are currently being funded under a new foundation program which is in its second year. There are a number of components to the funding formula which includes Opportunity Grant, K-3 Literacy Funding, Economic Disadvantaged Funding, Special Education Funding and Transportation Funding as the major sources of revenue. Under the new funding formula the district should have received 11.9 million in funding, but due to caps on the funding formula we are only receiving 10.2 million. In addition we receive $357,000 in funding for preschool and special education transportation. Due to the fact that this is the second year of the State biennium budget and we do not know what will be contained in the next budget we have shown modest increases in the foundation revenue over the next four years. Foundation Unrestricted $10,253,000 $10,500,000 $10,750,000 $11,000,000 $11,250,000 Foundation Preschool/Transportation $357,000 $360,000 $360,000 $360,000 $360,000 $10,610,000 $10,860,000 $11,110,000 $11,360,000 $11,610,000 Property Tax Allocation Any growth in this area will be due to the increase in the homestead and rollback growth due to the increase in real estate taxes on all previously voted levies. There will be no reductions on future levies voted in the District. All Other Revenue This revenue classification fluctuates due to various local grants and revenues received by the District. The major sources of income in this area are Open Enrollment tuition, QDA Service agreement, regular tuition, fees and service agreements. Open Enrollment $1,150,000 $1,150,000 $1,150,000 $1,150,000 $1,150,000 QDA $425,000 $425,000 $425,000 $425,000 $425,000 Tuition $175,000 $175,000 $175,000 $175,000 $175,000 Other Revenue $520,000 $520,000 $520,000 $520,000 $520,000 $2,270,000 $2,270,000 $2,270,000 $2,270,000 $2,270,000

3 EXPENDITURE ASSUMPTIONS Personal Services Per the new negotiated agreements, there is no increase on the base in FY 2015 and a 2.75% increase in FY 2016 and FY For forecasting purposes a percentage increase of 1.00% on the base has been reflected in the salary estimates for FY 2018 through History shows that step increases amount to between 1.5% and 1.75% of the base each year without any overall increase in the base salary. We had reduced three positions and those numbers are reflected in the Due to the fact that we had to adjust the pay dates to be in compliance with the negotiated agreement, 27 paydays actually occurred during the 2013 FY which inflated the salary figure for that year. Base $14,471,732 $14,770,400 $15,300,898 $15,958,836 $16,365,787 Step 227, , , , ,670 Bonus 71, Increase(Decrease) 0 406, , , ,658 Teacher Reduction 0-100, $14,770,400 $15,300,898 $15,958,836 $16,365,787 $16,783,114 Employees Retirement and Benefits Retirement, and Medicare, will increase at the same percentages that the salary increases. Insurance increases have been estimated at 4% in FY15 and 5% for the remaining years of the forecast based upon prior year experiences. The insurance numbers for FY 2015 have been adjusted to reflect current costs and future projections are based on the FY 2015 base figure. This is our sixth year in the Portage County Consortium. It was our hope that by joining the group, any increase we might experience due to the Districts individual performance would be offset by the performance of the over all group. This has held true and after the first two years we saw a minor decrease in costs. The increase this past year was about 4%. The overall effect of being in the consortium has reduced our overall increases each year. We will continue to monitor the overall performance to make sure that it is meeting the projections and protection needed by the District. Workers compensation is increasing due to the changes being made by the Ohio Bureau of Workers Compensation. We are still enrolled in a group rating plan, but it is a retrospective plan so we do not know the actual savings to the District till after the plan year. It is our hope that the claims that put us into the program will migrate out of our claim history and we will once again be eligible for the regular group rating program.

4 The increases in the other categories are based on the estimated increases in salary costs. Tuition and clothing allowances are negotiated amounts and do not fluctuate. Retirement $2,350,000 $2,444,000 $2,541,760 $2,643,430 $2,749,168 Health Insurance 3,772,250 3,923,140 4,119,297 4,325,262 4,541,525 Employee Share -377, , , , ,152 Life Insurance 30,000 30,000 30,000 30,000 30,000 Medicare 200, , , , ,102 Clothing Allowance 9,000 9,000 9,000 9,000 9,000 Worker s Comp. & Unemp. 100, , , , ,000 Tuition 60,000 60,000 60,000 6,000 60,000 $6,144,025 $6,379,826 $6,660,307 $6,899,711 $7,260,642 Purchased Services, Supplies and Other Other increases are based on historical trends. Fiscal year 2015 figures for purchased services, supplies, and capital outlay have been adjusted by the carryover encumbrances of $64,847. A breakdown of the District s purchased services is shown in the following chart. The majority of general purchased services costs are utilities. Purchased Services 2,148,350 2,150,000 2,150,000 2,150,000 2,150,000 Open Enrollment Out 1,465,000 1,465,000 1,465,000 1,465,000 1,465,000 Community Schools 900, , , , ,000 Tuition 150, , , , ,000 $4,663,350 $4,665,000 $4,665,000 $4,665,000 $4,665,000 Operating Transfers Future year transfers are based on the Board s cost of supplementing the Summer School Program. The additional transfers are from the QDA contract to the Permanent Improvement and Permanent Improvement Stadium Funds Encumbrances are budgeted to be expended in the year they occur and are therefore shown at zero for the current and forecasted years.

5 GENERAL ASSUMPTIONS Estimates assume no major changes in the state foundation program funding. Estimates assume steady enrollment beginning fiscal year 2014 and moderate valuation growth beginning in FY The 5.90 mill operating levy has been placed on the ballot for renewal in November This will be the only opportunity to renew this levy. It should be noted that this forecast was prepared using the most current information available and will fluctuate as new data is available.