five year financial forecast may 2012 cleveland municipal school district the primary goal of the...

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FIVE YEAR FINANCIAL FORECASTMAY 2012

Cleveland Municipal School District

The primary goal of the Cleveland Municipal School District is to become a premier school district in the United States of

America.

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Five Year Forecast - Contents

Major AssumptionsGeneral Fund RevenuesGeneral Fund ExpendituresFive Year Forecast Summary

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Major Assumptions

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Major Assumptions

Revenue: Forecast assumes that the property tax current collection rate will

remain at 78.87%. In 2012 Cuyahoga County will complete the six year reappraisal of

all property. The impact on the district should be minimal. Forecast uses the bridge formula to determine state funding in all

years. Forecast assumes the Average Daily Membership for K-12 to be:

FY12 – 40,758FY13 – 38,854FY 14 – 37,548FY15 – 36,300FY 16 – 35,448

Forecast assumes that Charter School ADM will increase 1,100 students each year.

Forecast assumes no new levy revenue.

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Major Assumptions continued

Expenditures: Forecast assumes a total of 2,591 classroom teachers in FY13 (2,316

are budgeted within the General Fund). Forecast assumes April layoffs are permanent. Forecast budgets 50 less employees each year in FY14-16. Healthcare rates are forecasted to increase 7.7% in FY13 and 9.7%

in FY14-16. Forecast assumes all union agreements as currently defined. Charter School Pass-Through increases $8.4 million each year. Forecast assumes costs and savings from Employee Separation Plan. One-time or temporary budget closure recommendations were

limited to less than 25%.

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General Fund Revenues

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Cleveland Municipal School DistrictFY 2011-2012

Local Taxes; 22.4%

State; 64.7%

Education Jobs; 2.7%

Property Tax Allo-

cation, 6.1%

Other; 4.1%

Where the Money Comes From

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Cleveland Municipal School DistrictLocal Taxes – Property Tax Revenue

2009 2010 2011 2012 2013 2014 2015 20160.0

25.0

50.0

75.0

100.0

125.0

150.0

175.0

148.9 147.1 148.1 144.5 144.9 145.2 145.2 145.2

11.2 4.3 1.0 0.3

Real Estate Personal TangibleFiscal Year

R e v e n u e ( I n M i l l i o n s )

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Cleveland Municipal School DistrictProperty Taxes – Current Collection Rate

75.0

77.0

79.0

81.0

83.0

85.0

87.0

89.0

91.0

93.0

95.0

97.0

99.098.6

80.978.9

Cu

rren

t C

oll

ecti

on

Rate

Year

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Cleveland Municipal School DistrictProperty Taxes – Total Collection Rate

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2010

75.0077.0079.0081.0083.0085.0087.0089.0091.0093.0095.0097.0099.00

101.00103.00105.00107.00

98.6

78.9

1.3

6.5

Current Collection Rate Delinquencies

Cu

rren

t C

oll

ecti

on

Rate

YearLien sale scheduled for May 30, 2012

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Cleveland Municipal School DistrictState Foundation Revenue

2009 2010 2011 2012 2013 2014 2015 2016$400

$405

$410

$415

$420

$425

$430

$435

$440

437.2

411.3404.5

417.8413.9 412.4 411.4 413.1

27.334.1

State Foundation Fiscal Stabilization Fund

Reve

nu

e (

In M

illi

on

s)

Fiscal Year

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Cleveland Municipal School DistrictState Foundation Revenue – Excluding Charter School Portion

2009 2010 2011 2012 2013 2014 2015 2016$250

$260

$270

$280

$290

$300

$310

$320

$330

$340

$350

341.2

313.0298.5 301.0

288.7278.8

269.4 262.7

27.3

34.1

State Foundation Fiscal Stabilization Fund

Reve

nu

e (

In M

illi

on

s)

Fiscal Year

13

Cleveland Municipal School DistrictEducation Jobs

2009 2010 2011 2012 2013 2014 2015 2016$0

$5

$10

$15

$20

17.7

Education Jobs


Fiscal Year

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Cleveland Municipal School DistrictProperty Tax Allocation – State Hold Harmless Reimbursements

2009 2010 2011 2012 2013 2014 2015 2016$0

$10

$20

$30

$40

$50

$60

12.3 12.4 12.4 12.3 12.3 12.3 12.3 12.3

4.5 4.5 4.4

28.938.6 39.8

26.9

13.9 13.9 13.9 13.9

Property Tax Reimbursements Utility Tax Reimbursements HB 66 CAT Reimbursements


Fiscal Year

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Cleveland Municipal School DistrictOther Revenue

2009 2010 2011 2012 2013 2014 2015 2016$0

$5

$10

$15

$20

$25

4.82.4 2.1 0.5 0.4 0.4 0.4 0.4

7.6

7.5

14.1

22.4

16.8 17.1 17.4 17.6

4.0

3.1

2.3

2.0

1.8 1.7 1.6 1.53.5

1.7

1.9

1.8

6.2 4.0 4.0 4.05.5

2.5

1.70.0 0.0 0.0

Interest Other Catastrophic Aid Medicaid Advance In

Fiscal Year

Reve

nu

e (

In M

illi

on

s)

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Cleveland Municipal School DistrictTotal Revenue – Excluding Charter School Portion

2009 2010 2011 2012 2013 2014 2015 2016$0

$100

$200

$300

$400

$500

$600

160.0 151.4 149.1 144.8 144.9 145.2 145.2 145.2

341.2 340.3 332.6 301.0 288.7 278.8 269.4 262.7

45.6 55.5 56.639.2

26.2 26.2 26.2 26.2

19.9 14.7 20.426.6

25.2 23.2 23.4 23.5

5.5 2.5 1.73.5

1

17.7

Property Tax State Foundation Ed JobsState Reimbursement Other Advance In

Reve

nu

e (

In M

illi

on

s)

Fiscal Year

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General Fund Expenditures

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Cleveland Municipal School DistrictWhere the Money Goes

Salaries & Bene-fits; 429109425;

65.4%

Charter School Pass-Through; 116800000;

17.8%

All Other; 109888855;

16.8%

FY 2011-2012

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Cleveland Municipal School DistrictSalaries

2009 2010 2011 2012 2013 2014 2015 2016$250

$270

$290

$310

$330

$350

$370

360.2 359.3

312.7 309.0

286.9 286.2 287.0 287.9

Salaries

Fiscal Year

E x p e n d i t u r e s ( I n M i l l i o n s )

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Cleveland Municipal School DistrictFringe Benefits

2009 2010 2011 2012 2013 2014 2015 2016$0

$20

$40

$60

$80

$100

$120

$140

49.5 50.2 47.9 45.5 42.6 42.5 42.6 42.8

58.6 60.755.0 57.9 56.5 61.9 67.7 74.0

4.2 4.44.0 3.9

3.93.9

3.93.97.9 6.6

5.2 4.54.4

4.44.4

4.43.6 3.57.8 8.3 11.2 7.3

6.24.5

STRS/SERS Employee Insurance Benefits MedicareWorkers Compensation Other

Fiscal Year


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Cleveland Municipal School DistrictPurchased Services

2009 2010 2011 2012 2013 2014 2015 2016$0

$50

$100

$150

$200

$250

13.5 15.1 14.2 12.8 12.8 13.0 13.2 13.49.2 9.3 7.8 10.9 10.9 11.0 11.2 11.4

70.1 63.4 56.5 61.3 69.4 70.2 70.9 71.6

96.0 98.3 106.0116.8

125.2 133.6 142.0 150.4

Utilities Student Transportation (Contract)Other Purchased Services Charter School Pass-Through

Fiscal Year

Exp

en

dit

ure

s (I

n

Mil

lion

s)

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Cleveland Municipal School DistrictSupplies, Textbooks, Equipment, and Other Expenditures

2009 2010 2011 2012 2013 2014 2015 20160.0

5.0

10.0

15.0

20.0

25.0

30.0

11.7 12.69.0 10.1 10.5 10.5 10.5 10.5

1.9 1.3

0.81.0 0.8 0.8 0.8 0.8

6.0 6.6

8.38.1 8.2 8.4 8.5 8.7

6.37.7 11.5

5.7 7.0 7.0 7.0 7.0

Supplies and Textbooks Equipment Other Expense Transfers/Advances


Fiscal Year

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Cleveland Municipal School DistrictTotal Expenditures– Excluding Charter School Portion

2009 2010 2011 2012 2013 2014 2015 20160.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

360.2 359.3 312.7 309.0 286.9 286.2 287.0 287.9

123.8 125.3119.8 120.1 118.6 120.0 124.8 129.6

92.7 87.878.4 85.0 93.1 94.2 95.3 96.4

11.7 12.6

9.0 10.1 10.6 10.6 10.6 10.6

Wages Benefits Purchased Services Supplies and MaterialsCapital Outlay Other Transfers/Advances


Fiscal Year

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Five-Year Forecast Summary

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Cleveland Municipal Public SchoolsOctober 2011 Five-Year Forecast

(in millions of dollars)

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)

Ending Cash Balance 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)

FY 2016FY 2014 FY 2015 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013

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Revenue Update FY12

General Property Tax Revenue Adjustment (3,599,362)

Personal Property Tax Revenue Adjustment 48,852

State Foundation Revenue Adjustment 1,387,568

Education Jobs New Revenue 461,441

Homestead Tax Revenue Adjustment (155,000)

Other Revenue

IRS Rebate New Revenue 4,542,408

E-Rate New Revenue 3,000,000

TIF Receipts/Misc Revenue Adjustment 461,890

Total Change 6,147,797

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Expenditure Update FY12

Salaries

Wages Labor Negotiations/ Budget Adjustment

(3,011,431)

Benefits

STRS/SERS Labor Negotiations/Budget Adj

(3,600,000)

Health Care Labor Negotiations (725,000)

Unemployment Compensation Labor Negotiations/Budget Adj

(2,275,000)

Workers Compensation Budget Adjustment 1,200,000

Separation Pay Budget Adjustment 580,000

Purchased Services

Charter School Tuition Budget Adjustment 2,400,000

Other Purchased Services - (Utilities, Tuition paid to other Districts, Professional Services)

Operational Efficiencies/ Budget Adjustment

(3,975,000)

Supplies and Materials Operational Efficiencies (650,000)

Subsidy to Food Service Budget Adjustment (2,000,000)

Advances-Out Operational Efficiencies (1,500000)

Total Change (13,556,431)

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Cleveland Municipal Public SchoolsOctober 2011 Five-Year Forecast Adjusted



Total Revenues 668.2 662.7 666.4 643.4 611.1 608.3 610.2 613.3 changes on slide 25 6.1 Total Expenses 699.8 700.1 646.4 669.3 677.2 694.0 711.6 729.8

changes on slide 26 (13.6)Revenue over Expenses (31.6) (37.4) 20.0 (6.2) (66.1) ($85.7) ($101.4) ($116.5)

Ending Cash Balance 50.4 13.0 33.0 26.8 (39.3) ($125.0) ($226.4) ($342.9)




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Revenue Update FY13

General Property Tax Revenue Adjustment (3,149,000)

State Foundation Revenue Adjustment 1,538,957

Homestead Tax Revenue Adjustment (200,000)

Other Revenue

IRS Rebate New Revenue 2,716,000

Casino Tax/Misc New Revenue 699,564

Advance - In Operational Efficiency

(1,500,000)

Total Change 105,521

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Expenditure Update FY13

December 2011 Budget Restoration

Labor Negotiations/ Budget Adjustments

2,721,826

Layoffs Reduction in Force (34,074,598)

Employee Separation Plan ESP* (1,772,600)

Title Adjustment Operational Efficiencies

4,314,721

Changes in Salary and Benefits Labor Negotiations/ Budget Adjustments

521,698

Decrease in Non-Personnel Budget

Operational Efficiencies

(1,591,671)

Decrease in Purchased Services Operational Efficiencies

(1,003,500)

Increase in Charter School Payment

Budget Adjustments 2,400,000

Decrease in Transfers and Advances

Budget Adjustments (1,976,000)

Strategic Investment Operational Efficiencies

3,600,000

Total Change (26,860,124)

* Final financial update to the 5-Year forecast will reflect updated projected savings

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Cleveland Municipal Public SchoolsOctober 2011 Five-Year Forecast Adjusted



Total Revenues 668.2 662.7 666.4 643.4 611.1 608.3 610.2 613.3

changes on slide 28 6.1 0.1 Total Expenses 699.8 700.1 646.4 669.3 677.2 694.0 711.6 729.8

changes on slide 29 (13.6) (26.9)

Revenue over Expenses (31.6) (37.4) 20.0 (6.2) (39.1) ($85.7) ($101.4) ($116.5)

Ending Cash Balance 50.4 13.0 33.0 26.8 (12.3) ($98.0) ($199.4) ($315.9)




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Cleveland Municipal Public SchoolsMay 2012 Five-Year Forecast



Total Revenues 668.2 662.7 666.4 649.6 611.2 607.1 606.1 608.1

Total Expenses 699.8 700.1 646.4 655.8 650.3 660.7 675.9 691.3






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Cleveland Municipal Public SchoolsMay 2012 Five-Year Forecast



Total Revenues 668.2 662.7 666.4 649.6 611.2 607.1 606.1 608.1

Total Expenses 699.8 700.1 646.4 655.8 650.3 660.7 675.9 691.3





Permanent Change to Budget - $19.3 million $0.0 ($34.3) ($84.8) ($148.7)


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Cleveland Municipal School DistrictMay 2012 Five-Year Forecast Summary

Property Taxes Current economic conditions continue to have a significant impact

on tax collection rates

State Foundation Revenue 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.

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Cleveland Municipal School DistrictMay 2012 Five-Year Forecast Summary -Continued

Salaries and Benefits Forecast assumes 2,591 total classroom teachers in FY13. (2,316 in

the General Fund) Forecast budgets 50 less employees each year in FY14-16. Forecast assumes all union agreements as currently defined. Healthcare rates are forecasted to increase 7.7% in FY13 and 9.7%

in FY14-16.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 $19.3 million deficit is currently forecasted through June

30, 2013.

Fiscal Caution, Watch and Emergency

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Fiscal Caution Fiscal Watch Fiscal Emergency

Lower bond ratingsState controlHigher Class Sizes


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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.


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Fiscal Emergency– A fiscal emergency is the last resort and most severe stage of a school district’s financial solvency problems. Following a declaration by the Auditor of State, a commission is created that may assume all or part of the powers of the board of education. The commission develops a financial plan to alleviate the school district's financial crisis.

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Cleveland Municipal School DistrictDefinitions

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 $17.7 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.

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QUESTIONS

T H E P R I M A R Y G O A L O F T H E C L E V E L A N D M U N I C I PA L S C H O O L D I S T R I C T I S T O B E C O M E A P R E M I E R S C H O O L D I S T R I C T I N T H E U N I T E D S T A T E S O F

A M E R I C A .


Five-Year Financial Forecast – May 2012

five year financial forecast may 2012 cleveland municipal school district the primary goal of the...

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