School Finance 101
BUILDING THE 10 YEAR PLAN
MADISON PLAINS - OCTOBER 2013
Tonight’s Agenda
• Review of Budget Tools
• Recap of FY13
• Review of FY14 Planned Budget
• The Five Year Forecast
• The 10 Year Plan
• Scenarios
Review of Budget Tools
• Appropriations
• The appropriations are the Boards authorization for the
Superintendent acting as the purchasing agent to spend
district funds.
• The appropriations also act as the control over spending. The
Treasurer/CFO cannot approve a purchase request if it will
exceed the approved appropriation.
• The Board may approve the Permanent Appropriation
Resolution anytime prior to September 30 of each fiscal year.
Review of Budget Tools
• Spending plan
• The Spending plan is not a required budget tool per
ORC
• The Spending plan is a monitoring tool provided to the
Board of Ed. to allow for easy review of the monthly
status of General fund activity versus the budget.
Review of Budget Tools
• Spending plan
Review of Budget Tools
• Five Year Forecast
• The Five Year Forecast is required to be prepared and
submitted to the Ohio Department of Education by October
31st of each fiscal year. A revised forecast may be submitted
anytime but is required to be submitted at least once by May
31st of each fiscal year.
• The forecast only reflects the forecasted activity of the district
General fund, Poverty Based Assistance fund and any debt
service funds.
• Our forecast includes the General fund, PBA and the Budget
Reserve.
Review of Budget Tools
• Five Year Forecast
• The Forecast has 2 parts: 1) the 5 years of financial activity
depicted in a spreadsheet, 2) the assumptions that drive
the projections.
• The forecast is used by the ODE, MP Board of Ed.,
Administration, unions and public to analyze and decipher
the revenues and planned expenditures of the district. It is
arguably the most important financial document we
prepare. (political and public relations)
Review of Budget Tools
• 10 Year Financial Plan
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The 10 Year Financial Plan is not a required document.
The 10 Year Financial Plan is unique to MP.
The Plan allows for long range planning.
The Plan extends the new five year forecast another 5 years.
The Plan goals are as follows:
• Transparent financial planning
• Academics are the Focus of the district, not $’s
• To provide a stable financial foundation.
Recap of FY13
Recap of FY13
Recap of FY13
Recap of FY13
Recap of FY13
Review of FY14
Review of FY14
The Five Year Forecast
The Five Year Forecast
• KEY ASSUMPTIONS
• Revenues
• Tax advance in June 2014 will be $700,000 less than
advance in June 2103
• Renewal of Operating levy will occur in calendar 2014
• Unrestricted Aid (State Foundation) will remain the same
for 5 years
• Enrollment will remain steady after 2014
• State Funding Guarantee will remain throughout forecast
The Five Year Forecast
• KEY ASSUMPTIONS
• Expenditures – Personal Services (Salaries & Wages)
Employee Base Pay
is expected to increase:
2014
1.25%
2015
1.25%
2016
1.0%
2017
1.0%
2018
1.0%
The Five Year Forecast
• KEY ASSUMPTIONS
• Expenditures – Personal Services (Salaries & Wages)
• Step increases are expected to be 1.85% per year
• Degree attainment increases are expected to be .40%
per year
The Five Year Forecast
• KEY ASSUMPTIONS
• Expenditures – Benefits
• Medical/Drug Premium will increase as follows:
Fiscal year
2014
2015
2016
2017
2018
% Increase
19% = $191,000
8%
8%
8%
8%
The Five Year Forecast
• KEY ASSUMPTIONS
• Expenditures – Benefits
• Retirement Contribution Increase due to increase in
salary: 2014 = $45,000
• Expenditures – Supplies and Materials
• Increase in Curriculum Supplies: 2014 = $57,000
The Five Year Forecast
• KEY ASSUMPTIONS
• Expenditures – Principal / HB264 Loan
• HB264 Loan paid off in 2017
The 10 Year Financial Plan
DETAILS
• Duration = 10 years
• Reduce Budget $8.4 million
• Pass PI Replacement Levy - 2013
• Pass Em. Op Levy in Place of Expiring Op Levy - 2014
• Consider Em. Op Levy in 2016
10 Year Financial Plan –Timeline Before the Plan
2012
2013
2014
2017
2021
• Union Negotiations
• PI Levy Expires December 31
• Operating levy Expires December 31
• General Fund goes in the RED
• General Fund Balance = $-19,800,000
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10 Year Financial Plan –
Proposed Timeline May 2012
2012
• April
- Implement 10 Year Financial Plan
• August - Settle Negotiations
• November – Replace PI Levy
2013
• November – Pass 8 Mill Emergency Operating levy
• December - Remove Current Op Levy
• January
2016 • May
2017
2021
– Revisit Financial Plan as Needed
– Pass 2.5 Mill Emergency Operating Levy
• General Fund Balance in the BLACK
• General Fund Balance = $2,694,800
25
Current (May 2013)
10 Year Financial plan Timeline
2013
2014
2015
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Pass PI Levy
PI Levy Expires December 2013
Pass Em. Op. Levy
Remove Current Op. Levy
• Operating levy Expires December 2014
• Union Negotiations
• Consider Need for additional Operating Revenues
2016
• General Fund Balance in Black with no New Revenues
2018
2022
• General Fund Target Goal $2 million
The 10 Year Financial Plan-Comparison
Levy Timelines - 2012
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
PERMANENT IMPROVEMENT
2.5 Mill Replacement 5 Years Passed
2.5 Mill Renewal 5 Years
2.5 Mill Renewal 5 Years
8 Mill Renewal 3 years
8 Mill Renewal 3 Years
EMERGENCY OP LEVY
8 Mill 8 Year
2.5 Mill 5 Year
2013
2014 2015
2016
2017 2018 2019 2020 2021
Collection Period
Passed
Collection Period
Passed
Collection Period
2.5 Mill Replacement
OPERATING LEVY
8 Mill 3 years
2012
Proposed
Collection Period
Passed Collection Period
Passed
Collection Period
Passed
Collection Period
Proposed
Collection Period
Proposed Collection Period
28
Revised Levy timelines
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Scenarios
• Is the Board satisfied with the Current 5 Year Forecast
• Is the Board satisfied with the Current 10 Year Projection?
• Is the Board satisfied with the Current 10 Year Plan?
• If the answer to any of the above is NO then we need to go into
executive session.