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 2012 and a 1.5% increase was normally built into the five year forecast Actual 2012 collections were about $50,000 under the 2011 revenue. This is the first time that tax revenue has dropped in the District. The August 2012 collection was $150,000 above the 2011 collection. The 2013 estimate has been adjusted accordingly and modest increases have been shown in 2014 through real estate and public utility valuation $413,097, Actual Estimated Estimated Estimated Estimated Base $7,900,000 $7,900,000 $7,950,000 $8,000,000 $8,050,000 Emergency Levy 3,000,000 3,000,000 3,000,000 3,000,000 3,000,000 New Construction 0 50,000 50,000 50,000 50,000 Collection $10,900,000 $10,950,000 $11,000,000 $11,050,000 $11,100,000 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 FY16. At the present time, the legislation only covers the two years of the present biennium budget, but legislation could be enacted to reduce the remaining amount in future state budgets.

2 State Foundation Unrestricted Grants in Aid Last year was the final year of funding under the new Evidence Based Model. This model is being changed back to a per pupil amount for the future. At the present time, there is a Bridge Formula in place to fund districts for the next two years while the per pupil funding model is developed. The State fiscal Stabilization funds received in FY10 and FY11 have been eliminated. The most recent state budget does project an increase in regular funding in FY14 and FY15. Those increases are incorporated into the estimates as well as moderate increases in FY15, forward. None of these increases will be finalized until the final budget bill is passed.. Foundation Unrestricted $7,750,000 $8,272,000 $8,825,000 $9,001,500 $9,181,530 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 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 investment revenue which will decline over the years as the available cash for investments declines, as well as the decline in the overall interest rates, tuition, fees and service agreements.

3 EXPENDITURE ASSUMPTIONS Personal Services For forecasting purposes, a percentage increase of 1.00% is used in FY13 and FY14 and no increase in the remaining years has been reflected in the salary estimates. History shows that step increases amount to between 1.75% and 2% of the base each year without any overall increase in the base salary. At the present time we are forecasting the reduction of at least three positions and those numbers are reflected in the 2013 and 2014 estimates. Due to the fact that we had to adjust the pay dates to be in compliance with the negotiated agreement, 27 paydays actually occur during the 2013 FY which inflates the salary figure for that year. Base $14,650,000 $14,650,000 $14,948,575 $15,180,278 $15,415,572 Step 0 227, , , ,941 27th pay 485, Increase(Decrease) 0 146, Teacher reduction 0-75, $15,135,000 $14,948,575 $15,180,278 $15,415,572 $15,654,514 Employees Retirement and Benefits Retirement, and Medicare, will increase at the same percentages that the salary increases. Insurance increases have been estimated at 1.3% in FY13 and 5% for the remaining years of the forecast based upon prior year experiences. We have also included a phase in of additional contributions by staff to 10% in FY12 forward, which is an increase of 5% per year. The insurance numbers for FY13 have been adjusted to reflect current costs and future projections are based on the FY13 base figure. This is our fourth 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 held true after the first two years and we saw a minor decrease in costs. The increase in insurance costs for the FY 12 year was 16%. However, had we not been a member of the consortium, the increase would have been in the 30% to 35% range. The increase this past year was 1.3%. 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 the group rating percentages have been lowered by the bureau which has lead to increases in our workers compensation costs.

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 $2,200,000 $2,288,000 $2,379,520 $2,474,701 $2,573,689 Health Insurance 3,550,000 3,727,500 3,913,875 4,109,569 4,315,047 Payment from reserves -260, , Employee Share -355, , , , ,505 Life Insurance 25,500 26,000 26,500 27,000 27,500 Medicare 192, , , , ,098 Clothing Allowance 9,000 9,000 9,000 9,000 9,000 Worker s Comp. & Unemp. 105, , , , ,000 Tuition 60,000 60,000 60,000 6,000 60,000 $5,526,500 $5,780,510 $6,306,200 $6,530,116 $6,874,829 Purchased Services, Supplies and Other Other increases are based on historical trends. Fiscal year 2013 figures for purchased services, supplies, and capital outlay have been adjusted by the carryover encumbrances of $35,309. Operating Transfers Future year transfers are based on the Board s cost of supplementing the Summer School Program. 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 steady enrollment beginning fiscal year 2013 and moderate valuation growth beginning in FY The foundation estimates are the best estimate at this point in time based upon the current budget bill. Due to the uncertaianty of the State of Ohio budget, accurately estimating the 2014, 2015, 2016 and 2017 state revenues to the district is almost impossible. As more information is released by the Department of Education, updated projections will be put into the forecast. The decrease in revenue of over $1,000,000 per year beginning in FY 2012 is due to the decrease in funding from the state. It will be necessary for the district to look at increasing revenues by passing additional tax levies, or reducing costs. The overall projected loss in revenue to the district due to state cuts over the entire forecast is in excess of $8,000,000. We have added to the forecast in FY13 revenues from a new tax levy. (Line ) However due to the unpredictability of a levy being passed at a particular time, these numbers are only projections. The 5.90 mill operating levy will need to be placed on the ballot for renewal in November 2013 It should be noted that this forecast was prepared using the most current information available and will fluctuate as new data is available.