GREEN LOCAL SCHOOL DISTRICT
SUMMIT COUNTY, OHIO
1900 Greensburg Road
P.O. Box 218
Green, Ohio 44232
FIVE YEAR FINANCIAL FORECAST
Prepared by Treasurer/CFO Roy B. Swartz, CPA
October 30, 2008
I am pleased to present to the Board of Education and the Community an
updated forecast of the District’s finances over the next five years.
This forecast is based on many factors including district valuations,
increased personnel costs, financing from the State, total number of
As with any forecast, the accuracy is dependent upon the assumptions that
are made on these uncertain factors. As such, the forecast becomes less
accurate as the years pass. This forecast is continually updated for
changes and presented to the Board of Education at least twice each year.
It should be noted that financial forecasts are planning tools that are
used by the Board of Education to determine if there is a need to ask
voters to approve more operating dollars, to make reductions to the
current educational program, or a combination of these two items.
This forecast will be submitted to the State as required by law. The law
requires that public school districts formulate a plan in order to
balance their budgets. In order to make its current funds last as long
as possible without returning to the voters for additional funds, the
district has forecasted no salary increases after fiscal year 2009 and
anticipates using all of the rainy day funds that are permitted to be
used in accordance to the Ohio Revised Code.
If you have any questions or concerns about the information in this
document, please feel free to contact me.
Roy B. Swartz
Treasurer/Chief Financial Officer
FIVE YEAR FORECAST ASSUMPTIONS
Property Taxes and Property Tax Allocation
The General Property (Real Estate) Tax is one of the district’s most
important revenue sources. In past forecasts, including the October
2007 forecast, it was based on historical valuations including
scheduled updates and reappraisals as well as calculations based on
the 20-mill taxation floor. With today’s volatile housing market
the district’s values will be lower than they have been in the past.
In previous forecasts, the district had predicted that in 2008
(taxable in 2009), there would be a 13% reappraisal increase for
Residential/Agricultural properties and an 11% reappraisal increase
for Commercial properties. On the forecast presented in May 2008
the District had lowered its expectation of these reappraised values
to 6% for Residential/Agricultural properties and 5% for Commercial
properties. In order to derive the most educated estimate of what
those values should be, the district received input from many
different entities. These included discussions with officials at
the Summit County Fiscal Office, a survey of other Summit County
Public School Districts, conversations with Realtors and Home
Builders, a discussion with the City Planning Director, discussions
with other Green Schools Administrators, and extensive meetings with
both the District’s Board Finance Committee and the District’s
Finance Advisory Committee (which is comprised of citizens in the
community with financial expertise). Based on all of this input,
the May 2008 forecast represented our best educated estimate of what
values would be in 2008. However, we recently received accurate
data that indicates that actual reappraised values have decreased by
.03% for Residential/Agricultural properties and has also decreased
by .04% for Commercial properties. We have also decreased our
valuation forecast for calendar year 2012 from 8% to 2.5% due to the
anticipated continuation of lower property values.
The taxable value of the Tangible Personal Property Tax except on
public utilities is being phased out over a five year period. The
State has enacted a temporary replacement for the loss of most of
these tax dollars. These replacement dollars have been included
under the State Property Tax Allocation revenue. All new and
replacement personal property is now exempt from all taxes.
Beginning in fiscal year 2012, the State will begin a five year
phase out of these replacement dollars. All of these reductions, as
passed by the State Legislature, will significantly increase the
need in the future for additional taxes from homeowners.
An emergency tax levy that was renewed in November 2003 is set to
provide $4,100,000 and is allocated proportionally to the General
Property Tax, the Tangible Personal Property Tax, and the Property
Tax Allocation. The last opportunity for renewal of this tax is
New levies may be proposed during the five-year period, but no
proposed levies will be included in the forecast submitted to the
The following is a history and projection of the district valuation:
2003 2004 2005 2006 2007
$595,091,641 $635,409,113 $706,634,373 $716,826,592 $714,380,641
2008 2009 2010 2011 2012
$712,125,486 $713,342,820 $732,420,669 $768,644,126 $789,880,686
Following is the projected residential millage rates (General Operating
TYPE 2008 2009 2010 2011 2012
Inside .60 .60 .60 .60 .60
1976 & 19.40 19.40 19.40 19.40 19.40
Expire 5.97 5.77 Expired Expired Expired
Unrestricted Grants-In-Aid (State Foundation)
Revenue from State Foundation payments are projected based on House
Bill 119. In Fiscal year 2006, the State enacted two guarantees
into the formula which effectively gives the district the same
amount it actually received in fiscal year 2005. These two
guarantees are called the basic aid guarantee and the transitional
aid guarantee. Under this scenario, the funding from the State will
not grow even when the district experiences growth in the number of
students attending school. In effect, the funding per pupil
received from the State will decrease as the district grows. We are
very concerned that the State may reduce or eliminate the guarantee.
In fiscal year 2010 the total guarantee amount is expected to be
$1,852,635. If the State were to only guarantee 95% of what the
district received in 2005, then we would need to reduce the
Unrestricted Grant-in-Aid projection by $546,463. If the State were
to eliminate this guarantee, the projection would need to be reduced
by $1,852,635. As the State continues to reduce the State’s share
of the adequate funding level, the District will be forced to seek
additional taxes from homeowners or significantly reduce the quality
educational program that the district currently offers.
Restricted Grants-In-Aid (Career Technical Education Weighted Aid and Bus
Career Technical Education Weighted Aid is restricted for only
vocational courses. The district anticipates the elimination of
these programs in Fiscal Year 2009.
Also included in the Restricted Grants-In-Aid category is a small
amount of funding from the State for the purchase of buses used to
transport handicapped students.
In Fiscal year 2008, the district implemented an all day
kindergarten program that requires a fee for those that are not
categorized as at risk. In Fiscal Year 2009, the district
anticipates $114,725 additional revenues due to the expansion of
this program. Also, in Fiscal Year 2009, the district added a
summer school program which is anticipated to bring in an additional
$10,000 more revenue.
In 2009 a decrease of $135,157 is expected to occur due to lower
amounts available for investment and lower interest rates.
Personal Services and Benefits
The amounts for salaries are based on existing negotiated agreements
with a 3% pay increase for fiscal year 2009. The district has
eliminated all base salary increases from the projection over the
next four years. In 2009 the district obtained cost savings of
$204,310 from retirements, $176,664 from the attrition of three
positions, and $51,642 from changes in personnel. A reduction in
personal services of $316,740 was also obtained in fiscal year 2009
due to contracting substitute teacher services. This reduction will
increase the cost of the purchased services category. The District
also incurred additional costs from the addition of three new
positions and a long term sub at a cost of $181,985. In addition,
costs were incurred due to contractual changes for two bargaining
units that totaled $123,549. Also, additional programs,
supplemental contracts and pay adjustments were made that cost an
additional $86,643. The net increase of insurance benefits from
personnel changes totaled $45,613 in fiscal year 2009.
All other benefit costs are projected based on existing negotiated
agreements and historical patterns. Health insurance funding is
projected to increase annually by 10%.
Purchased Services, Supplies, Capital Outlay, and Other Objects
Anticipated expenditures for Purchased Services are based on 4%
annual cost increases. In 2009 expenditures are anticipated to
increase by $382,465 due to the subcontracting of substitute teacher
services. The district has also implemented a $35,000 budget
reduction for professional development.
Anticipated budgets for textbooks and supplies are projected to
increase by 4% in each fiscal year. In 2009, costs will increase an
additional $50,000 due to the additional purchase of textbooks. The
district will cut $65,000 from supply purchases during 2009. The
District will remain in compliance with the textbook and
instructional materials set-aside requirements as established by
House Bill 412.
In 2008, Capital Outlay budgets are increased by 2% every other
Other objects are projected to increase by 2% each year.
The District currently has no debt service that is funded from
General Fund resources.
OTHER FINANCING USES:
Transfers Out, Advances Out, and Other Financing Uses
A transfer out amount of $136,880 has been included to account for
EMIS support personnel. Transfers for EMIS support personnel are
projected to increase by 5% annually. The district also anticipates
that $1,510 will be refunded from prior years’ revenues.
Estimated encumbrances are based on an estimate using historical
RESERVATION OF FUND BALANCE:
In fiscal year 2009 the district will reduce the budget reserve to
the State minimum of $283,642. Set aside amounts as required by
House Bill 412 for textbooks and instructional materials are
expected to diminish over the forecasted years. A set aside is not
shown for capital improvements since the required amount of the set
aside will be spent within the Permanent Improvement fund.
$4.1 Million Emergency Levy (7.03 mills)
Two levies were renewed at $4.1 million in November 2003 as a
combined 7.03 mill levy. The collection of this levy began in
January 2005 and will expire by January 2010.
Within the next year, the District will need to develop a plan to reduce
the projected operating deficits anticipated in fiscal year 2010 and
Revenue Sources - Percentage View
4% Local Taxes
State Property Tax