Transcript Cleveland Municipal School District

Cleveland Municipal School
District
1
FIVE YEAR FINANCIAL FORECAST
OCTOBER 2011
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:
 Budget Bill:

Eliminated the evidenced based model

State Stabilization Dollars will not be replaced by the State of Ohio.

Commercial Activity Tax Reimbursement phase out has been accelerated.
Utility Tax Reimbursement has been phased out.

 Forecast uses bridge formula to determine state funding in all years.
 Forecast assumes Average Daily Membership for K-12 to be:
FY12 – 40,461
FY13 – 39,014
FY 14 – 37,775
FY15 – 36,893
FY 16 – 36,164
 Forecast assumes Charter School ADM to increase 1,100 students each year.
 Property tax current collection rate is currently 80.90%. Forecast assumes no
change.
 Education Jobs (Ed Jobs) was 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 to pay for approx 192 teachers.
Major Assumptions continued
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Expenditures:
 246 teachers were shifted from stimulus dollars in Title 1 back to the General
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



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Fund in FY12.
Forecast assumes a total of 3,170 classroom teachers in FY12. (2,691 are
budgeted within the General Fund)
Forecast assumes an attrition rate of 50 employees per year.
Healthcare rates are forecasted to increase the 5% in FY12 and 9.7% in FY13-16.
Forecast assumes all union agreements as currently defined.
Charter School Pass-Through increases $8.4 million each year.
Forecast assumes budget reduction plan as presented to the Board on October
25, 2011 will be passed.
Cleveland Municipal School District
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 General Fund Revenues
Cleveland Municipal School District
FY 2011-2012
7
Where the Money Comes From
State, 65.1%
Education Jobs,
2.7%
Property Tax
Allocation,
6.1%
Other, 2.9%
Local Taxes,
23.2%
Cleveland Municipal School District
Local Taxes – Property Tax Revenue
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175.0
Revenue (In Millions)
150.0
11.2
4.3
1.0
0.2
148.9
147.1
148.1
148.1
148.1
148.1
148.1
148.1
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
99.00
98.00
97.00
96.00
95.00
94.00
93.00
92.00
91.00
90.00
89.00
88.00
87.00
86.00
85.00
84.00
83.00
82.00
81.00
80.00
98.6
84.04
80.9
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Current Collection Rate
9
Year
Cleveland Municipal School District
Property Taxes – Total Collection Rate
106.00
105.00
104.00
103.00
102.00
101.00
100.00
99.00
98.00
97.00
96.00
95.00
94.00
93.00
92.00
91.00
90.00
89.00
88.00
87.00
86.00
85.00
84.00
83.00
82.00
81.00
80.00
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
Current Collection Rate
10
Current Collection Rate
Year
Delinquencies
Cleveland Municipal School District
State Foundation Revenue
11
Revenue (In Millions)
$440
$435
$430
$425
$420
27.3
34.1
433.2
$415
416.4
$410
408.2
$405
412.4
411.4
413.0
415.7
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
$340
Revenue (In Millions)
$330
27.3
$320
34.1
$310
$300
337.2
$290
309.9
$280
298.5
302.0
$270
289.6
280.2
$260
273.4
267.7
$250
2009
2010
2011
2012
2013
2014
2015
Fiscal Year
State Foundation
Fiscal Stabilization Fund
2016
Cleveland Municipal School District
Education Jobs Fund
Revenue (In Millions)
13
$20
$15
$10
17.2
$5
$0
2009
2010
2011
2012
2013
Fiscal Year
Education Jobs Fund
2014
2015
2016
Cleveland Municipal School District
Property Tax Allocation – State Hold Harmless Reimbursements
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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
12.5
13.9
13.9
13.9
13.9
12.5
12.5
12.5
12.5
$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
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Revenue (In Millions)
$25
$20
3.5
$15
4.8
1.7
2.4
$10
4.0
3.1
$5
7.6
1.9
2.1
2.3
2.0
0.9
2.3
14.1
13.5
6.2
0.5
2.3
4.0
0.5
2.3
4.0
0.5
2.3
4.0
0.5
2.3
12.8
13.2
13.5
13.9
7.5
$0
2009
2010
2011
2012
2013
2014
Fiscal Year
Other
Catastrophic Aid
Interest
Medicaid
2015
2016
Cleveland Municipal School District
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 General Fund Expenditures
Cleveland Municipal School District
Where the Money Goes
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FY 2011-2012
All Other,
17.6%
Charter School
Pass-Through,
17.1%
Salaries &
Benefits, 65.3%
Cleveland Municipal School District
Salaries
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Expenditures (In Millions)
$370
$350
$330
$310
360.2
359.3
$290
312.7
312.0
312.2
313.6
315.1
316.7
$270
$250
2009
2010
2011
2012
2013
Fiscal Year
Salaries
2014
2015
2016
Cleveland Municipal School District
Fringe Benefits
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Expenditures (In Millions)
$160
$140
$120
3.6
7.9
4.2
3.5
6.6
4.4
58.6
60.7
49.5
50.2
3.9
5.1
4.0
7.8
5.2
4.0
10.0
3.3
3.9
3.9
5.2
3.9
55.0
64.5
70.6
77.1
84.2
58.8
47.9
49.0
46.0
46.0
46.3
46.4
$100
$80
3.9
5.1
4.2
3.9
5.1
4.0
$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
Supplies, Textbooks, Equipment, and Other Expenditures
Expenditures (In Millions)
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25.0
20.0
15.0
6.0
6.6
1.9
1.3
8.1
8.1
8.1
8.1
8.1
1.0
1.0
1.0
1.0
1.0
10.8
10.8
10.8
10.8
10.8
8.3
0.8
10.0
11.7
12.6
9.0
5.0
0.0
2009
2010
2011
2012
2013
2014
2015
Fiscal Year
Supplies and Textbooks
Equipment
Other Expense
2016
Cleveland Municipal School District
Purchased Services
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Expenditures (In Millions)
$250
$200
$150
131.2
139.6
148.0
114.4
122.8
96.0
98.3
106.0
70.1
63.4
56.5
65.8
66.4
67.0
67.3
67.8
9.2
13.5
9.3
15.1
7.8
14.2
9.0
14.1
9.2
14.3
9.4
14.4
9.6
14.7
9.8
14.9
$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
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 Five-Year Forecast Summary
October 2011 Five-Year Forecast
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$750
Millions of Dollars
$730
$730
$712
$710
$700
$690
$670
$650
$679
$681
$672
$668
$700
$663
$651
$694
$666
$669
$646
$643
$677
$630
$610
$611
$609
$610
$613
$590
$570
2007
2008
2009
2010
2011
2012
Fiscal Year
Revenues
Expenditures
2013
2014
2015
2016
Cleveland Municipal Public Schools
October 2011 Five-Year Forecast
(in millions of dollars)
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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
Cleveland Municipal School District
October 2011 Five-Year Forecast Summary
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Property Taxes
 Current economic conditions continue to have a significant impact on tax
collection rates
State Foundation Revenue
 The Evidenced-Based Model was eliminated with the new budget bill.
 A new funding model is currently being developed.
 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
October 2011 Five-Year Forecast Summary -Continued
26
Salaries and Benefits
 In FY 12, 246 teachers will be shifted from stimulus dollars in Title 1 back to the
General Fund.
 Forecast assumes 3,170 total classroom teachers in FY12. (2,691 in the General
Fund)
 Forecast assumes all union agreements as currently defined.
 Healthcare rates are forecasted to increase 5% in FY12 and 9.7% in FY13-16.
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 $66.0 million deficit is currently forecasted through June 30,
2013.
Fiscal Caution, Watch and Emergency
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Fiscal Caution
Fiscal Watch
Lower bond ratings
State control
Higher Class Sizes
Fiscal Emergency
Fiscal Caution, Watch and Emergency
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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.
Cleveland Municipal School District
Definitions
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ARRA – Education Stabilization Fund – SFSF: Ohio has been allocated $845
million from the ARRA in State Fiscal Stabilization Fund (SFSF) to help stabilize state
and local budgets in order to minimize and avoid reductions in education and other
essential services. Education SFSF will be distributed to school districts as part of the
foundation settlement payments each month – total foundation support will include both
state and federal SFSF funds. The District received $27.3 million in FY 10 and $34.1
million in FY 11.
 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 $17.2 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 - October 2011
30
QUESTIONS
THE PRIMARY GOAL OF THE CLEVELAND MUNICIPAL SCHOOL DISTRICT IS TO
BECOME A PREMIER SCHOOL DISTRICT IN THE UNITED STATES OF AMERICA.