Transcript Cleveland Municipal School District

Cleveland Municipal School
District
1
FIVE YEAR FINANCIAL FORECAST
MAY 2012
The primary goal of the Cleveland Municipal School District is to become
a premier school district in the United States of America.
Five Year Forecast - Contents
2
 Major Assumptions
 General Fund Revenues
 General Fund Expenditures
 Five Year Forecast Summary
Cleveland Municipal School District
3
 Major Assumptions
Major Assumptions
4
Revenue:
 Forecast assumes that the property tax current collection rate will remain at
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78.87%.
In 2012 Cuyahoga County will complete the six year reappraisal of all property.
The impact on the district should be minimal.
Forecast uses the bridge formula to determine state funding in all years.
Forecast assumes the Average Daily Membership for K-12 to be:
FY12 – 40,758
FY13 – 38,854
FY 14 – 37,548
FY15 – 36,300
FY 16 – 35,448
Forecast assumes that Charter School ADM will increase 1,100 students each
year.
Forecast assumes no new levy revenue.
Major Assumptions continued
5
Expenditures:
 Forecast assumes a total of 2,591 classroom teachers in FY13 (2,316 are
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budgeted within the General Fund).
Forecast assumes April layoffs are permanent.
Forecast budgets 50 less employees each year in FY14-16.
Healthcare rates are forecasted to increase 7.7% in FY13 and 9.7% in FY14-16.
Forecast assumes all union agreements as currently defined.
Charter School Pass-Through increases $8.4 million each year.
Forecast assumes costs and savings from Employee Separation Plan.
One-time or temporary budget closure recommendations were limited to less
than 25%.
Cleveland Municipal School District
6
 General Fund Revenues
Cleveland Municipal School District
FY 2011-2012
7
Where the Money Comes From
Education Jobs
2.7%
State
64.7%
Property Tax
Allocation,
6.1%
Other
4.1%
Local Taxes
22.4%
Cleveland Municipal School District
Local Taxes – Property Tax Revenue
8
175.0
Revenue (In Millions)
150.0
11.2
4.3
1.0
0.3
148.9
147.1
148.1
144.5
144.9
145.2
145.2
145.2
2009
2010
2011
2012
2013
2014
2015
2016
125.0
100.0
75.0
50.0
25.0
0.0
Fiscal Year
Real Estate
Personal Tangible
Cleveland Municipal School District
Property Taxes – Current Collection Rate
98.6
Year
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
80.9
78.9
1988
99.0
98.0
97.0
96.0
95.0
94.0
93.0
92.0
91.0
90.0
89.0
88.0
87.0
86.0
85.0
84.0
83.0
82.0
81.0
80.0
79.0
78.0
77.0
76.0
75.0
1987
Current Collection Rate
9
Cleveland Municipal School District
Property Taxes – Total Collection Rate
107.00
105.00
103.00
101.00
99.00
97.00
95.00
93.00
91.00
89.00
87.00
85.00
83.00
81.00
79.00
77.00
75.00
1.3
98.6
6.5
78.9
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2010
Current Collection Rate
10
Current Collection Rate
Year
Lien sale scheduled for May 30, 2012
Delinquencies
Cleveland Municipal School District
State Foundation Revenue
11
Revenue (In Millions)
$440
$435
$430
27.3
$425
$420
34.1
437.2
$415
417.8
$410
411.3
$405
413.9
412.4
411.4
413.1
404.5
$400
2009
2010
2011
2012
2013
2014
2015
Fiscal Year
State Foundation
Fiscal Stabilization Fund
2016
Cleveland Municipal School District
State Foundation Revenue – Excluding Charter School Portion
12
$350
Revenue (In Millions)
$340
27.3
$330
34.1
$320
$310
$300
341.2
$290
313.0
$280
298.5
301.0
$270
288.7
278.8
$260
269.4
262.7
$250
2009
2010
2011
2012
2013
2014
2015
Fiscal Year
State Foundation
Fiscal Stabilization Fund
2016
Cleveland Municipal School District
Education Jobs
Revenue (In Millions)
13
$20
$15
17.7
$10
$5
$0
2009
2010
2011
2012
2013
Fiscal Year
Education Jobs
2014
2015
2016
Cleveland Municipal School District
Property Tax Allocation – State Hold Harmless Reimbursements
14
Revenue (In Millions)
$60
$50
$40
$30
$20
$10
38.6
39.8
28.9
26.9
4.5
4.5
4.4
12.3
12.4
12.4
12.3
13.9
13.9
13.9
13.9
12.3
12.3
12.3
12.3
$0
2009
2010
2011
2012
2013
2014
2015
2016
Fiscal Year
Property Tax Reimbursements
Utility Tax Reimbursements
HB 66 CAT Reimbursements
Cleveland Municipal School District
Other Revenue
15
Revenue (In Millions)
$25
$20
$15
3.5
1.8
2.0
5.5
3.5
4.0
2.5
1.7
1.7
1.9
2.3
14.1
7.6
6.2
0.0
4.0
0.0
4.0
0.0
4.0
1.8
1.7
1.6
1.5
16.8
17.1
17.4
17.6
0.4
0.4
0.4
0.4
22.4
3.1
$10
1.0
7.5
$5
4.8
2.4
2.1
$0
2009
2010
2011
0.5
2012
2013
2014
2015
Fiscal Year
Interest
Other
Catastrophic Aid
Medicaid
Advance In
2016
Cleveland Municipal School District
Total Revenue – Excluding Charter School Portion
16
Revenue (In Millions)
$600
5.5
19.9
45.6
2.5
14.7
55.5
$500
1.7
20.4
56.6
3.5
26.6
39.2
17.7
1
25.2
26.2
23.2
26.2
23.4
26.2
23.5
26.2
301.0
288.7
278.8
269.4
262.7
144.8
144.9
145.2
145.2
145.2
$400
341.2
340.3
332.6
$300
$200
$100
160.0
151.4
149.1
$0
2009
Property Tax
2010
2011
State Foundation
2012
2013
2014
2015
Fiscal Year
Ed Jobs State Reimbursement
Other
2016
Advance In
Cleveland Municipal School District
17
 General Fund Expenditures
Cleveland Municipal School District
Where the Money Goes
18
All Other,
$109,888,855,
16.8%
Charter School
Pass-Through,
$116,800,000,
17.8%
FY 2011-2012
Salaries &
Benefits,
$429,109,425,
65.4%
Cleveland Municipal School District
Salaries
19
Expenditures (In Millions)
$370
$350
$330
$310
360.2
359.3
$290
312.7
309.0
286.9
$270
286.2
287.0
287.9
$250
2009
2010
2011
2012
2013
Fiscal Year
Salaries
2014
2015
2016
Cleveland Municipal School District
Fringe Benefits
20
Expenditures (In Millions)
$140
$120
3.6
7.9
4.2
3.5
6.6
4.4
58.6
60.7
49.5
50.2
7.8
5.2
4.0
8.3
4.5
3.9
11.2
4.4
3.9
7.3
4.4
3.9
55.0
57.9
61.9
67.7
74.0
56.5
47.9
45.5
42.6
42.5
42.6
42.8
$100
$80
4.5
4.4
3.9
6.2
4.4
3.9
$60
$40
$20
$0
2009
2010
2011
2012
2013
2014
2015
2016
Fiscal Year
STRS/SERS
Employee Insurance Benefits
Medicare
Workers Compensation
Other
Cleveland Municipal School District
Purchased Services
21
Expenditures (In Millions)
$250
$200
$150
116.8
133.6
142.0
150.4
125.2
96.0
98.3
106.0
70.1
63.4
56.5
61.3
69.4
70.2
70.9
71.6
9.2
13.5
9.3
15.1
7.8
14.2
10.9
12.8
10.9
12.8
11.0
13.0
11.2
13.2
11.4
13.4
$100
$50
$0
2009
2010
2011
2012
2013
2014
2015
2016
Fiscal Year
Utilities
Student Transportation (Contract)
Other Purchased Services
Charter School Pass-Through
Cleveland Municipal School District
Supplies, Textbooks, Equipment, and Other Expenditures
Expenditures (In Millions)
22
30.0
25.0
6.3
20.0
6.0
15.0
1.9
7.7
11.5
6.6
8.3
1.3
0.8
10.0
5.0
11.7
12.6
9.0
5.7
7.0
7.0
7.0
7.0
8.1
8.2
8.4
8.5
8.7
1.0
0.8
0.8
0.8
0.8
10.1
10.5
10.5
10.5
10.5
0.0
2009
2010
2011
2012
2013
2014
2015
2016
Fiscal Year
Supplies and Textbooks
Equipment
Other Expense
Transfers/Advances
Cleveland Municipal School District
Total Expenditures– Excluding Charter School Portion
Expenditures (In Millions)
23
700.0
600.0
500.0
400.0
11.7
92.7
12.6
87.8
123.8
125.3
9.0
78.4
10.1
85.0
119.8
120.1
312.7
309.0
10.6
93.1
10.6
94.2
10.6
95.3
10.6
96.4
118.6
120.0
124.8
129.6
286.9
286.2
287.0
287.9
300.0
200.0
360.2
359.3
100.0
0.0
2009
2010
2011
2012
2013
2014
2015
Capital Outlay
Other
2016
Fiscal Year
Wages
Benefits
Purchased Services
Supplies and Materials
Transfers/Advances
Cleveland Municipal School District
24
 Five-Year Forecast Summary
Cleveland Municipal Public Schools
October 2011 Five-Year Forecast
(in millions of dollars)
25
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Beginning Cash
Balance
$82.0
$50.4
$13.0
$33.0
$7.1
($59.0)
($144.7)
($246.1)
Total Revenues
668.2
662.7
666.4
643.4
611.1
608.3
610.2
613.3
Total Expenses
699.8
700.1
646.4
669.3
677.2
694.0
711.6
729.8
Revenue over
Expenses
(31.6)
(37.4)
20.0
(25.9)
(66.1)
(85.7)
(101.4)
(116.5)
50.4
13.0
33.0
7.1
(59.0)
(144.7)
(246.1)
(362.6)
Encumbrances/
Reserves
7.0
6.5
8.2
7.0
7.0
7.0
7.0
7.0
Unencumbered
Balance
$43.4
$6.5
$24.8
$0.1
($66.0)
($151.7)
($253.1)
($369.6)
Ending Cash
Balance
Revenue Update FY12
26
General Property Tax
Revenue Adjustment
(3,599,362)
Personal Property Tax
Revenue Adjustment
48,852
State Foundation
Revenue Adjustment
1,387,568
Education Jobs
New Revenue
461,441
Homestead Tax
Revenue Adjustment
(155,000)
IRS Rebate
New Revenue
4,542,408
E-Rate
New Revenue
3,000,000
Revenue Adjustment
461,890
Other Revenue
TIF Receipts/Misc
Total Change
6,147,797
Expenditure Update FY12
27
Salaries
Wages
Labor Negotiations/
Budget Adjustment
(3,011,431)
STRS/SERS
Labor Negotiations/Budget Adj
(3,600,000)
Health Care
Labor Negotiations
(725,000)
Labor Negotiations/Budget Adj
(2,275,000)
Workers Compensation
Budget Adjustment
1,200,000
Separation Pay
Budget Adjustment
580,000
Budget Adjustment
2,400,000
Operational Efficiencies/
Budget Adjustment
(3,975,000)
Operational Efficiencies
(650,000)
Budget Adjustment
(2,000,000)
Operational Efficiencies
(1,500000)
Benefits
Unemployment Compensation
Purchased Services
Charter School Tuition
Other Purchased Services - (Utilities, Tuition
paid to other Districts, Professional Services)
Supplies and Materials
Subsidy to Food Service
Advances-Out
Total Change
(13,556,431)
Cleveland Municipal Public Schools
October 2011 Five-Year Forecast Adjusted
(in millions of dollars)
28
FY 2009
Beginning Cash
Balance
Total Revenues
changes on slide 25
Total Expenses
changes on slide 26
Revenue over
Expenses
Ending Cash
Balance
Encumbrances/R
eserves
Unencumbered
Balance
FY 2010
FY 2011
FY 2012
$82.0
$50.4
$13.0
$33.0
$26.8
($39.3)
($125.0)
($226.4)
668.2
662.7
666.4
611.1
608.3
610.2
613.3
699.8
700.1
646.4
643.4
6.1
669.3
(13.6)
677.2
694.0
711.6
729.8
(31.6)
(37.4)
20.0
(6.2)
(66.1)
($85.7)
($101.4)
($116.5)
50.4
13.0
33.0
26.8
(39.3)
($125.0)
($226.4)
($342.9)
7.0
6.5
8.2
7.0
7.0
7.0
7.0
7.0
$43.4
$6.5
$24.8
$19.8
($46.3)
($132.0)
($233.4)
($349.9)
FY 2013
FY 2014
FY 2015
FY 2016
Revenue Update FY13
29
General Property Tax
Revenue Adjustment
(3,149,000)
State Foundation
Revenue Adjustment
1,538,957
Homestead Tax
Revenue Adjustment
(200,000)
IRS Rebate
New Revenue
2,716,000
Casino Tax/Misc
New Revenue
699,564
Operational Efficiency
(1,500,000)
Other Revenue
Advance - In
Total Change
105,521
Expenditure Update FY13
30
December 2011 Budget Restoration
Labor Negotiations/
Budget Adjustments
2,721,826
Reduction in Force
(34,074,598)
ESP*
(1,772,600)
Operational Efficiencies
4,314,721
Labor Negotiations/
Budget Adjustments
521,698
Decrease in Non-Personnel Budget
Operational Efficiencies
(1,591,671)
Decrease in Purchased Services
Operational Efficiencies
(1,003,500)
Increase in Charter School Payment
Budget Adjustments
2,400,000
Decrease in Transfers and Advances
Budget Adjustments
(1,976,000)
Operational Efficiencies
3,600,000
Layoffs
Employee Separation Plan
Title Adjustment
Changes in Salary and Benefits
Strategic Investment
Total Change
(26,860,124)
* Final financial update to the 5-Year forecast will reflect updated projected savings
Cleveland Municipal Public Schools
October 2011 Five-Year Forecast Adjusted
(in millions of dollars)
31
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Beginning Cash
Balance
$82.0
$50.4
$13.0
$33.0
$26.8
($12.3)
($98.0)
($199.4)
Total Revenues
668.2
662.7
666.4
643.4
611.1
608.3
610.2
613.3
0.1
677.2
(26.9)
694.0
711.6
729.8
changes on slide 28
Total Expenses
changes on slide 29
Revenue over
Expenses
Ending Cash
Balance
Encumbrances/Re
serves
Unencumbered
Balance
699.8
700.1
646.4
6.1
669.3
(13.6)
(31.6)
(37.4)
20.0
(6.2)
(39.1)
($85.7)
($101.4)
($116.5)
50.4
13.0
33.0
26.8
(12.3)
($98.0)
($199.4)
($315.9)
7.0
6.5
8.2
7.0
7.0
7.0
7.0
7.0
$43.4
$6.5
$24.8
$19.8
($19.3)
($105.0)
($206.4)
($322.9)
Cleveland Municipal Public Schools
May 2012 Five-Year Forecast
(in millions of dollars)
32
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Beginning Cash
Balance
$82.0
$50.4
$13.0
$33.0
$26.8
($12.3)
($65.9)
($135.7)
Total Revenues
668.2
662.7
666.4
649.6
611.2
607.1
606.1
608.1
Total Expenses
699.8
700.1
646.4
655.8
650.3
660.7
675.9
691.3
Revenue over
Expenses
(31.6)
(37.4)
20.0
(6.2)
(39.1)
(53.6)
(69.8)
(83.2)
50.4
13.0
33.0
26.8
(12.3)
(65.9)
(135.7)
(218.9)
Encumbrances/
Reserves
7.0
6.5
8.2
7.0
7.0
7.0
7.0
7.0
Unencumbered
Balance
$43.4
$6.5
$24.8
$19.8
($19.3)
($72.9)
($142.7)
($225.9)
Ending Cash
Balance
Cleveland Municipal Public Schools
May 2012 Five-Year Forecast
(in millions of dollars)
33
FY 2009
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
FY 2015
FY 2016
Beginning Cash
Balance
$82.0
$50.4
$13.0
$33.0
$26.8
($12.3)
($65.9)
($135.7)
Total Revenues
668.2
662.7
666.4
649.6
611.2
607.1
606.1
608.1
Total Expenses
699.8
700.1
646.4
655.8
650.3
660.7
675.9
691.3
Revenue over
Expenses
(31.6)
(37.4)
20.0
(6.2)
(39.1)
(53.6)
(69.8)
(83.2)
50.4
13.0
33.0
26.8
(12.3)
(65.9)
(135.7)
(218.9)
Encumbrances/
Reserves
7.0
6.5
8.2
7.0
7.0
7.0
7.0
7.0
Unencumbered
Balance
$43.4
$6.5
$24.8
$19.8
($19.3)
($72.9)
($142.7)
($225.9)
Ending Cash
Balance
Permanent Change to Budget - $19.3 million
$0.0
($34.3)
($84.8)
($148.7)
Cleveland Municipal School District
May 2012 Five-Year Forecast Summary
34
Property Taxes
 Current economic conditions continue to have a significant impact on tax
collection rates
State Foundation Revenue
 Projections are based on the Bridge formula.
Education Jobs (Ed Jobs)
 A federal program to save or create education jobs for the FY 11 and/or FY 12
school years. This is one-time money that is being utilized in FY 12.
Cleveland Municipal School District
May 2012 Five-Year Forecast Summary -Continued
35
Salaries and Benefits
 Forecast assumes 2,591 total classroom teachers in FY13. (2,316 in the General
Fund)
 Forecast budgets 50 less employees each year in FY14-16.
 Forecast assumes all union agreements as currently defined.
 Healthcare rates are forecasted to increase 7.7% in FY13 and 9.7% in FY14-16.
Charter School Tuition
 Charter school tuition is projected to increase $8.4 million per year over the
forecast period.
Financial Summary
 A balanced budget is currently forecasted through June 30, 2012.
 A $19.3 million deficit is currently forecasted through June 30,
2013.
Fiscal Caution, Watch and Emergency
36
Fiscal Caution
Fiscal Watch
Lower bond ratings
State control
Higher Class Sizes
Fiscal Emergency
Fiscal Caution, Watch and Emergency
37
Fiscal Caution
Fiscal Watch
Fiscal Emergency
Fiscal Caution – may be declared when:
•No acceptable plan in place to avoid the potential current year deficit.
•Failure to submit a sufficient plan to address potential future year
deficit.
•Auditor of State certifies a deficit between 2% and 8% of prior year
general fund revenue and elects not to place District in Watch or
Emergency.
Fiscal Watch - May be declared, if all are met:
•Operating deficit for current FY certified by Auditor of State exceeds
2% but does not exceed 8%.
•Voters have not approved a levy that would raise sufficient funds in
next succeeding year.
•Auditor of State determines there is no reasonable cause for deficit or that
declaration is necessary to prevent further decline.
Fiscal Caution, Watch and Emergency
38
Fiscal Caution
Fiscal Watch
Fiscal Emergency
Fiscal Emergency– A fiscal emergency is the last resort and most severe
stage of a school district’s financial solvency problems. Following a
declaration by the Auditor of State, a commission is created that may
assume all or part of the powers of the board of education. The
commission develops a financial plan to alleviate the school district's
financial crisis.
Cleveland Municipal School District
Definitions
39
CAT Tax – Commercial Activity Tax: The commercial activity tax (CAT) is an annual
tax imposed on the privilege of doing business in Ohio, measured by gross receipts from
business activities in Ohio. Businesses with Ohio taxable gross receipts of $150,000 or
more per calendar year must register for the CAT, file all applicable returns, and make all
corresponding payments.
 Ed Jobs – The Education Jobs Fund: This fund was included as part of federal
legislation passed on Aug 10, 2010. The program provides $10 billion for states to save or
create education jobs. Ohio is estimated to receive $361 million from the program. The
district is estimated to receive $17.7 million. Funds can be used in FY 11 or FY 12.
 State Hold Harmless Reimbursements: The provision under which the State of
Ohio agreed to reimburse the Cleveland Municipal School District for any loss associated
with a change in law.

Cleveland Municipal School
District
Five-Year Financial Forecast – May 2012
40
QUESTIONS
THE PRIMARY GOAL OF THE CLEVELAND MUNICIPAL SCHOOL DISTRICT IS TO
BECOME A PREMIER SCHOOL DISTRICT IN THE UNITED STATES OF AMERICA.