GREEN LOCAL SCHOOL DISTRICT SUMMIT COUNTY OHIO IRN ADMINISTRATIVE by kimbrozic

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									        GREEN LOCAL SCHOOL DISTRICT
                    SUMMIT COUNTY, OHIO
                        IRN #050013

                   ADMINISTRATIVE OFFICE
                   1900 Greensburg Road
                        P.O. Box 218
                     Green, Ohio 44232


       FIVE YEAR FINANCIAL FORECAST
                       FISCAL 2009-2013


             Prepared by Treasurer/CFO Roy B. Swartz, CPA




October 30, 2008
                             INTRODUCTION
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
students, etc.

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.

Sincerely,



Roy B. Swartz
Treasurer/Chief Financial Officer
              FIVE YEAR FORECAST ASSUMPTIONS

REVENUES:
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
     November 2009.

     New levies may be proposed during the five-year period, but no
     proposed levies will be included in the forecast submitted to the
     State.

     The following is a history and projection of the district valuation:

                                         HISTORY
             2003           2004              2005             2006            2007
          $595,091,641   $635,409,113   $706,634,373        $716,826,592    $714,380,641



                                 FIVE-YEAR PROJECTION
             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
Funds Only):

                            PROJECTED MILLAGE
           TYPE          2008       2009             2010        2011           2012
         Inside            .60          .60           .60             .60         .60
         Mills
         1976 &          19.40     19.40         19.40            19.40        19.40
         Prior
         Expire          5.97       5.77        Expired         Expired       Expired
         12/31/2009

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
Subsidy)
     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.

All Other
     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.

EXPENDITURES:

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
     year.

     Other objects are projected to increase by 2% each year.

Debt Service:
     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.

Encumbrances
     Estimated encumbrances are based on an estimate using historical
     patterns.

RESERVATION OF FUND BALANCE:

Budget Reserve
     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.

REPLACEMENT/RENEWAL LEVIES:
$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.

FUTURE NEEDS:

Within the next year, the District will need to develop a plan to reduce
the projected operating deficits anticipated in fiscal year 2010 and
beyond.
MISCELANEOUS GRAPHS
      Revenue Sources - Percentage View

            4%                 Local Taxes

                               State Property Tax
                               Rollback
35%
                               State Foundation
                    53%
                               All Other


       8%

								
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