Docstoc

School Finance

Document Sample
School Finance Powered By Docstoc
					    Earlham Community
      Schools District
   Financial Trends Data



August 26, 2010


                       1
          Agenda of Topics
1.   Review of Mission, Beliefs and Goals
2.   IASB’s Five Key Financial Measures
3.   Other Funds
4.   Tax Rate
5.   Conclusions/Opinions




                                    2
     OUR MISSION

 Develop Responsible,
Independent, Productive
       Citizens


                     3
             We Believe:
 Student   learning is our primary
  purpose.
 Effective teaching is essential to
  student success.
 Successful education occurs in a safe,
  stimulating, challenging and positive
  environment.
 All individuals deserve to be treated
  with dignity and respect.

                                   4
           We Believe:
A  diversity of educational
  opportunities is essential to effective
  student learning.
 Learning is a shared responsibility by
  students, parents, staff and the
  community.
 Students need learning and basic life
  skills to become responsible,
  independent productive, citizens.
                                    5
            DISTRICT STUDENT
             LEARNING GOALS
   Communication: Students will be able to speak
    and write effectively, to read and listen for
    understanding and utilize technology for a
    resource.
   Productive Citizen/Social Responsibility:
    Students will interact constructively and work
    cooperatively with others. Students will recognize
    the rights and responsibilities of American
    citizenship in a global society.
   Problem Solving: Students will have the ability
    to research information using all available
    resources and to think critically using these
    resources.
                                                6
            DISTRICT STUDENT
             LEARNING GOALS
   Cognitive Skills: Students will demonstrate
    knowledge and mastery/competency of core
    subject areas.
   Diverse Society: Students will demonstrate
    awareness of the contribution of other cultures
    and beliefs and the interaction between them.
   Technology: Students will have the ability to
    understand and utilize technology as it develops.
   Assessment: Assessment is an essential part of
    student growth. All students will show continuous
    improvement on local, state, and national
    measures.
                                                7
         School Finance Basics
 General Fund – Operating Fund
 Physical Plant and Equipment Fund – PPEL

 Management Fund

 Debt Service Fund

 Secure and Advanced Vision for Education
    – Capital Projects
    – One cent sales tax dollars
    – Statewide Penny
 Activity Fund
 Food Service Fund
                                     8
IASB’s Five Key
   Measures



                  9
                Overview
 Equip board members to answer the
  question “How are we doing financially?”
 These measures apply to the General
  Fund – so only part of the equation
 Not exhaustive but knowing these five
  will give a fair and accurate
  representation of the financial health of
  the General Fund of the school district.
 Need trend not a single data point.
 Some are retrospective while others are
  prospective (and some need to be both).
                                       10
IASB’s Five Key Measures
   5. Solvency Ratio
   4. Enrollment Trend
   3. Staff Costs as Percent of
    Total General Fund
   2. Balanced Spending Authority
    Budget
   1. Unspent Balance


                              11
#5 – Solvency Ratio


  Five Key Measures as
    Identified by IASB
                         12
             #5 – Solvency Ratio
•What is Solvency Ratio?
•Measures the fund balance (cash) position at the conclusion of
the fiscal year.
•Unreserved/Undesignated General Fund balance divided by
Total General Fund Revenues
•What the Solvency Ratio is Not
•It is not a measure of the limit of spending
•Why is it important?
•Can impact bond rating
•Public “understands”
                                                         13
 Actual Cash Balance History
 for General Fund – June 30

School Year     Cash Balance
  04-05          $ 851,984
  05-06          $ 613,001
  06-07          $ 942,154
  07-08          $1,103,064
  08-09          $1,302,254
  09-10          $1,285,472
                               14
        #5 – Solvency Ratio
•What is a “Good” Solvency Ratio?
•Matter of Opinion
•Would like it to be between 0-10%
              •Earlham Solvency Ratio Trend
                     •2004-05 = 12.57%
                     •2005-06 = 12.20%
                     •2006-07 = 11.73%
                     •2007-08 = 10.62%
                     •2008-09 = 13.45%
                                              15
#4 – Enrollment Trend


   Five Key Measures as
     Identified by IASB
                          16
      OPERATING – GENERAL
         FUND REVENUE
   Based on Student Enrollment
    – Per Pupil of $5,883 – Set by the Legislature
    – Combination of Local Property Taxes and
      State Aid
   Property Taxes
    – Uniform Levy = $5.40/$1,000
   State Equalization Aid
    – 87.5% of Per Pupil Cost
   Additional Property Tax Levy for
    Combined District Cost
                                               17
     COMBINED DISTRICT COST
FY 10-11 District Cost Per Pupil = $5,883

100%
        $735       $735       $735
 78%
                             $2,148
                  $3,148
 55% $4,148
                                        Additional Levy
                                        State Foundation Aid
 33%                         $3,000     Uniform Levy
                  $2,000
 10% $1,000
         Low      Average     High
       Property   Property   Property
       Values     Values     Values


                                             18
        Earlham Community School
  FY 10-11 District Cost Per Pupil = $5,883


    $1
                $735                  $0
    $1
    $1
    $1
    $1                                                 Additional Levy
               $3,913                 $1
    $1                                                 State Aid
    $0                                                 Uniform Levy
    $0
    $0
    $0         $1,235                 $0
    $0
                 1                     2
Source: Aid and Levy Worksheet from Iowa Dept. of Management
                                                        19
               Enrollment History and Projections


                                                    674 684
                      638 657 641 635 649 647 650
Students
           700
           650609 618
           600
           550
               '   '   '   '   '   '   '   '   '   '   '
              04- 05- 06- 07- 08- 09- 10- 11- 12- 13- 14-
              05 06 07 08 09 10 11 12 13 14 15
                             School Year




                                                      20
  Source: Iowa Department of Education
   OPERATING – GENERAL
      FUND REVENUE
 Miscellaneous   Income
  – Cash Reserve Levy – Only for items
    for which the District has Spending
    Authority
  – Open Enrollment Tuition
  – Whole Grade Sharing Tuition
  – Interest on Investments
  – Rental Income
  – Textbook Fees

                                      21
#3 – Staff Costs


Five Key Measures as
  Identified by IASB
                       22
     OPERATING – GENERAL EXPENSES

 Instructional Programs
 Salaries and Benefits

 Textbooks

 Supplies

 Utilities

 Maintenance

 Transportation/Travel

 Professional Development

 School Board Expenses – ie. Newsletter
  Printing, Legal Consultations, Audit
                                     23
    Staff Costs as Percent of Total
           General Fund
 Staff costs are the single largest expense in
  the General Fund.
 School districts range from 75% to 85% of
  total General Fund expenditures are on
  staff.
 Important because ultimately impacts
  spending authority – recurring cost
 Take out special education staff (ultimately
  doesn’t impact spending authority).

                                         24
Earlham Staff Costs
  •What is a “Good” Staff Cost Percentage?
  •Matter of Opinion
  •Would like it to be between 75%-80%
            •Earlham Staff Cost Trend
                •2005-06 = 76.76%
                •2006-07 = 75.20%
                •2007-08 = 77.25%
                •2008-09 = 76.35%
                                        25
Source: Audit Report
#2 – Balanced Budget


   Five Key Measures as
     Identified by IASB
                          26
    2. Balanced Spending Authority Budget

 Spending authority measure used during
  budget preparation.
 Question: How much can I spend and not
  cause my Unspent Balance to decline?
 Annual measure

 Sets target for expenditure increase.

 If planning to use Unspent Balance to
  finance ongoing expenditures you need to
  figure out how you will sustain.

                                     27
     Revenue and Expenditure History
School Year      FY05        FY06        FY07        FY 08         FY 09


Total Revenue   4,101,298   4,693,790   4,887,421   5,251,564     5,480,180

Total
Expenditures    4,185,828   4,526,838   4,850,194   5,167,241     5,327,727


Difference        -84,530    166,952      37,227      84,323       152,453

Revenue %
Increase         8.49%      14.45%      4.13%       7.45%         4.35%

Expenditure %
Increase         2.75%      8.15%       7.14%       6.54%          3.11%
  Source: Dept. of Management                                28
29
#1 – Unspent Balance
   Five Key Measures as
     Identified by IASB


                          30
            1. Unspent Balance
 The single most important measure.
 Total amount of spending authority
  remaining at conclusion of fiscal year.
 Why important? SBRC will not close you
  down for a negative solvency ratio – but go
  negative two years and you can be subject
  to Phase 2 (Russell).
 Calculation:
    –   Beginning Unspent Balance
    – + Current Year Spending Authority
    – - General Fund expenditures
    – = Ending Unspent Balance
                                          31
   Unspent Balance History
 for General Fund – June 30

     School Year          Unspent Balance
         04-05                 $1,310,331
         05-06                 $1,583,693
         06-07                 $1,620,920
         07-08                 $1,705,243
         08-09                 $1,857,686
        *09-10                 $?????????
*Pending upcoming Audit   Source: Iowa Dept. of Management
                                                     32
All Other Funds

 Physical Plant and
     Equipment
   Management
    Debt Service
  Penny Sales Tax
      Activity
   Food Service       33
PHYSICAL PLANT AND EQUIPMENT
          - REVENUE

 Property Taxes
 Regular PPEL
  – Board Approved
  – $.33/$1,000
 Voted   PPEL
  – $.83/$1,000
 $168,470

                        34
      PHYSICAL PLANT AND
     EQUIPMENT - EXPENSES
   Capital Loan Note – $84,711
    – Remainder Paid from SAVE Fund this year
   Lease to Own agreements – Technology
    Equipment, Copiers, School Bus
   Buildings
    – Roof Repairs
    – Maintenance
   Grounds
    – Equipment
   School Bus Lease/Purchase
   Equipment Valued at over $500
    – Computers
    – Projectors
                                                35
  MANAGEMENT - REVENUE

 Property Taxes
 $.56/$1,000

 $80,777

 Maintaining Balance




                        36
  MANAGEMENT - EXPENSES
 Insurance   for Buildings and
  Grounds
 Insurance for Transportation
 Workers Compensation
 Unemployment Claims
 Equipment Breakdown
  Insurance


                                  37
    DEBT SERVICE - REVENUE
 Approved by the Voters by 60%
  Supermajority
 Property Taxes

 Pays Principal and Interest on Bonds

 $.70/$1,000

 $101,535

 Remainder of Principal and Interest paid
  from SAVE Fund

                                       38
Secured and Advanced Vision for Education – One
           Cent Sales Tax - Revenue

 Penny Sales Tax
 Generates County wide dollars

 Distributed per pupil to districts in the
  county
 Statewide By Legislative Action
    – Distributed per pupil statewide
    – Total Revenue is approximately $425,000
      depending on retail sales
    – Projected to Increase as County Votes Expire
      and More Become part of the Statewide Pool

                                              39
Secured and Advanced Vision for Education – One
         Cent Sales Tax - Expenditures

   Based on Revenue Purpose Statement at the
    time of Vote
    – Capital Loan – $24,989 previously paid from
      PPEL
    – Debt Service Payment – $167,894 previously
      paid via property taxes
    – Roofing project for Portable Building
    – Possible Tuckpointing project for 3-Story Building
    – Possible Window Replacement Project for 3-story
    – Possible Energy Efficiency Improvements

                                                40
              ACTIVITY
 Extracurricular   Programs
 Sports

 Speech   and Drama
 Entry Fees

 Officials/Referees

 Self Supporting




                               41
          FOOD SERVICE
 Breakfast

 Lunch

 Ala Carte Program
 Food Purchases

 Wages and Benefits for Food Service
  Workers
 Self-Supporting



                                 42
    June 30 Cash Balances
                   2008          2009         2010

General Fund     $1,103,064    $1,302,254   $1,285,472


Management        $ 88,207       $91,723      $95,483

PPEL – Regular    $ 78,746       $62,899     $148,289
  and Voted
SAVE – Capital    $199,167      $563,814     $791,045
   Project
 Food Service      $   9,235     $13,229      $32,234

   Activity       $ 34,056       $30,068      $49,980

                                              43
Tax Rate



           44
  Combined Property Tax Levies
          for 2010-11
Uniform Levy – General Fund       $ 5.40
Additional Levy – General Fund    $ 8.44

Regular PPEL                     $     .33
Voted PPEL                        $ 0.83
Management                        $ 0.55
Debt Service                      $ 0.70
Total                            $16.25
                                  45
   ECSD Tax Rate History
 2004-05   = $15.25
 2005-06   = $15.55
 2006-07   = $15.86
 2007-08   = $16.05
 2008-09   = $16.25
 2009-10   = $16.25
 2010-11   = $16.25
 2009-10   State Average = 14.80
                                46
              Conclusions/Opinions
   Positives
    – Increased Flexibility of SAVE Fund via voter approval
    – General Fund Unspent Balance Increase
    – Recuperating Spending Authority with Cash Reserve
    – PPEL, SAVE, Management, Activity and Food Service Funds
      all increased from previous year
    – Partial Self-Funding of Health Insurance
    – Enrollment Trends
          Actual enrollment was down in 09-10
          Appears as though Certified Enrollment may be down
    – Property Tax Rate stayed the same
    – Increases in Taxable Valuations

                                                            47
             Conclusions/Opinions
   Concerns
    – Loss of REAP Federal Funding for technology
      purposes - $40,000 – Still slightly too large of
      enrollment
    – Portable Building
    – Voter Approved PPEL renewal in 2012
          Must be done in 2011-12 School Year
    – Continued Financial Challenges of the State
        Revenue shortages
        Increased spending obligations

        Another ATB Reduction in October??

    – Allowable Growth for 11-12 not known at this
      time
    – Increases in Health Insurance premiums – 20%+
                                              48
   Earlham Community
     Schools District
  Financial Trends Data



August 26,2010


                      49

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:9
posted:8/7/2011
language:English
pages:49