1. Cleveland Municipal School District
Five Year Financial Forecast
OCTOBER 2013

2. Five Year Forecast - Contents
Major Assumptions
General Fund Revenues
General Fund Expenditures
Five Year Forecast Summary
Thank You - The Ohio revised code requires a board of education to submit a 5 year forecast along with assumptions to the Ohio Department of Education prior to October 31st of each fiscal year and to update this forecast between April 1 and May 31 of each fiscal year.

3. Cleveland Municipal School District
Major Assumptions

4. Major Assumptions Revenue:
Forecast assumes that the property tax collection rate will remain at same level as % change represents $2.4 million.
On 11/6/12 residents passed a 4 year 15 mill levy with collection beginning January Forecast includes new levy. Assumes levy will expire December 31, 2016.
State funding– New state funding formula. Cleveland is on the guarantee for FY14 and FY15. Assumes FY14 and FY15 will be same as FY13. FY14 includes $6.0 million from Straight-A fund.
FY12 ADM CMSD 40, Charter 16,621 total 57,420.70
1,700 less than FY12

5. Major Assumptions continued
Expenditures:
Staffing assumptions:
The district restored 50 minutes to the classroom in January 2013– 193 teachers were added – Estimated cost $16.7 million in FY14-18.
Forecast shifts $7.1 million of personnel cost to the General Fund in FY14 due to federal sequestration and a decline in federal funding.
Healthcare rates are forecasted to increase an average of 9% in FY14 - FY18.
Forecast assumes all union agreements as currently defined.
Forecast assumes a $3.2 textbook budget for all fiscal years.
FY14
FY15
FY16
FY17
FY18
G F
5,059
4,950
4,845
4,848
4,856
Charter
FY14 – 19,561
FY15 – 20,759
FY16 – 21,577
FY17 – 22,266
FY18 – 22,826

6. Major Assumptions continued
Expenditures:
Forecast assumes $3.6 million of strategic investments per year.
Improve IT Infrastructure
Improve IT support
Community Wrap Around
Forecast assumes additional dollars for investment schools. $3.5 million FY14, $7.0 million FY15, $10.5 million FY16-FY18.
$6.0 million for Straight “A” Fund - FY14.
9 Transformation schools were piloted for autonomy-FY14.
Forecast assumes $16 million of budgetary savings per year in FY14-18
Forecast assumes $7,335 per student for charter schools in FY14 – 18.
Charter
FY14 – 19,561
FY15 – 20,759
FY16 – 21,577
FY17 – 22,266
FY18 – 22,826

7. Cleveland Municipal School District
General Fund Revenues

8. Cleveland Municipal School District FY 2013-2014
Where the Money Comes From – page 8
We rely on the State of Ohio for most of our funding.
A slight shift has taken place since passage of the levy
1 year ago local taxes was 23.7% and State was 67.7% - so a little less reliant on the state
From May year forecast
Columbus
State 33%
Property Tax 55%
Cincinnati
State 32%
Property Tax 56%
Toledo
State 66%
Property Tax 23%
Akron
State – 52%
Property Tax – 36%

9. Cleveland Municipal School District Local Taxes – Property Tax Revenue
Local Property Taxes
Each chart shows 3 years of history and 5 years of projections.
This forecast includes the 15 mill levy recently passed by taxpayers – a portion of the levy is also shown on slide # 16 under property tax reimbursements
In FY13 the district received $174.6 million in real property taxes which included a half year of the new levy.
In Fy14 the district is forecasting $199.9 million in in real property taxes which includes a full year of the new levy. .
Real Property estimates were just increased by $10 million in fiscal years 14, 15 and 16 and $5 million in FY17 based on current collections
County’s 6 year reappraisal was completed in Property value decreased $800 million which had a very negative impact on the levy and the remaining property taxes.
Note
15 mill levy at the current collection rate of 76.10% would increase collections by $56.2 million per year of which $3.7 million will go to Charter schools.
15 mill levy at the total collection rate of would increase collections by $62.8 million per year of which $4.2 million will go to Charter Schools.
The district has paid Charter schools $2.0 for the 1st half of 2013 and $1.9 million for the 2nd half of 2013

10. Cleveland Municipal School District Property Taxes – Current Collection Rate
The 2012 current collect collection rate was 76.1 %. The lowest collection rate in 25 years.
Collection rate in 2013 has not been released yet
Year

11. Cleveland Municipal School District Property Taxes – Total Collection Rate
Current Collection Rate
The 2012 total collection rate was %. The lowest total collection rate in 25 years.
The 2013 total collection rate has not been released yet
Year

12. Cleveland Municipal School District State Foundation Revenue
Revenue (In Millions)
This make up almost 62% of total revenue.
Future estimates are based on the new bi-annual budget.
The district is a guaranteed district in FY14 and FY15
The district will receive the same amount as last year plus an additional $6.0 million from the straight A fund
FY16-18 is just an estimate at this point – need to spend some time with the the foundation calculator that was just released today
$414.2 million as last year plus $8.1 million of additional aid (preschool special ed and special ed transportation) plus $6 million for the straight a fund. =
Drop in fy15 is the $6 million – Straight A fund
FY16 – 18 based on bridge formula ??????????????
Enrollment
Pre K – 12 – 39,650 vs 40,697 or 1,047 decrease
K – 12 – 38,330 vs 39,460 or 1,130 decrease
Approx $35 million comes from lottery profits.
Fiscal Year

13. Cleveland Municipal School District State Foundation Revenue – Excluding Charter School Portion
Revenue (In Millions)
This chart looks at State Aid less the Charter School Tuition.
If the district can maintain or increase their enrollment this chart would look much different
Fiscal Year

14. Cleveland Municipal School District Education Jobs
Education Jobs proceeds were one time dollars used to pay for 190 classroom teachers in FY12.

15. Cleveland Municipal School District Property Tax Allocation – State Hold Harmless Reimbursements
2 keys items on this chart.
Utility reimbursement was eliminated in FY12 with the FY12 – 13 bi-annual budget
CAT tax reimbursement was reduced to $13 million in FY13 .
15 mill tax levy was passed in FY13 which increases the property tax reimbursements

16. Cleveland Municipal School District Other Revenue
Revenue (In Millions)
The highlights on this page include:
Medicaid - The district is anticipating a spike in revenues in FY14 - reimbursement of old claims.
Interest rates continues to be historically low
Other revenue Include Casino receipts of $815,000 in FY13 and $2.0 million in FY14
Advances are not budgeted
Bump in other revenue in fy14 is XXXXXXXXXXXXXXXXXXXXXX think workers comp
Note:
FY12 included one-time e-rate reimbursement and 2 payments from the City of Cleveland. Large refund 1 mill

17. General Fund Revenue
The slide shows the total revenue in the General Fund
FY13 to FY14 $46.9 increase
15 mill levy– 27.3
Foundation – straight a fund
Advance – 9.7
Additional Casino dollars - $1.2
Additional Medicaid - $4.2
FY14 to FY15
Advance - 9.7
Straight A Fund - 6.0
Medicare - 4.2
FY17 – includes a half year of the levy
FY18 – includes a full year of the levy dropping off
*Projected

18. Cleveland Municipal School District
General Fund Expenditures

19. Cleveland Municipal School District Where the Money Goes
Salaries and Benefits make up the largest piece of the Budget. They account for 62% of the budget with the Charter School Pass-through. If you back out the Charter school pass through, salaries and benefits make up close to 80% of the budget.

20. Cleveland Municipal School District Salaries
Salaries – page 20
In FY13 the district paid $283 million in salaries
In Fy14 the district has budgeted $307 million in salaries.
This is a $24.5 million increase.
As a result of the passage of the November levy we were able to add more educators to our schools.
Staffing has increased by 392 employees within in the General Fund.
These increase include:
193 teachers were added for the 50 minute restoration ($16.7M)
Increased allocation of 12 Nurses. ($.8M)
Increased allocation of 13 positions to support the English Second Language Program ($1M)
Increased allocation of 4 full time security officers and 14 part-time security officers ($.3M)
Created 4 positions for a Student and Family Recruiter ($.2 M)
Shifted 112 positions from grant funds to the general fund due to federal sequestration and due to less grant funding
(34 teaching positions and 42 paraprofessionals). ($3.4M)
($3.7M) (27 prek teachers off title carry over, 9 teachers & 3 para’s off title due to 4% increase in salaries.)
All union negotiated changes to compensation has been included in these estimates
including stipends in FY15 and FY16, a 1% increase in FY17 and shifting from the step and lane system into the new diferenciated compensation system.
Staffing is forecasted to decrease a total of 214 employees in next 2 years in then remains level for FY17 and FY18.

21. Cleveland Municipal School District Fringe Benefits
Fringe Benefits – page 21
In FY13 the district paid $56.3 million in health care benefits
In Fy18 the district has forecasted $86.9 million in health care benefits
That is an increase of $30.6 million or an average increase of 9% a year.
Other items were noting is other category. In FY14 $3 million of the straight A fund was budgeted here and the 2nd year payment of the FY12 ESP program is budgeted here. (6.9mill)

22. Cleveland Municipal School District Purchased Services
Expenditures (In Millions)
Purchased Services – page 22
The Charter school tuition is forecasted to increase to $ million in FY18. This included an increase in enrollment and a 4.2% increase to funding or $7,335 per student.
Other Purchased Services
- includes $3.6 million of strategic investments per year.
Includes additional dollars for investment schools. $3.5 million FY14, $7.0 million FY15, $10.5 million FY16-FY18.
Includes $3 million of the straight A Fund
Other items included in this category include:
Professional Services – 12.2
Legal fees – 2.1
Tuition paid to other districts – 42.6

23. Cleveland Municipal School District Supplies, Textbooks, Equipment, and Other Expenditures
Supplies, Textbook, Equipment and other Expenditures – page 23
Highlights include
- $3.2 million in textbooks in years FY14-18.
- $3.6 million to repair buses
- $2.3 Fuel
Equipment
Other Expenses
- $5.1 Cuy County to collect taxes
Transfers/Advances
$0 to food service –
$.5 million for claims – FY15-18
$.9 million for QZAB payment

24. General Fund Expenditures
The top part of this slide shows the total expenditures in the General Fund
The bottom half of the slide eliminates the Charter School tuition
This chart shows rising expenditures – primarily caused by additional employees, health care increases and charter school tuition.
Other increases include investment with the investment schools and $6 million for the Straight “A” fund.
*Projected

25. Cleveland Municipal School District
Five-Year Forecast Summary

26. Cleveland Municipal School District October 2013 Five-Year Forecast (in millions of dollars)
Projecting the district to finish the year with $78.7 million in cash or 10.6 more than last year.
A balanced budget in FY15 – a balanced budget in FY16 –
FY17 is currently showing a 74.3 million deficit – note this only includes a half year of the levy.
FY18 does not include any of the levy.

27. Cleveland Municipal School District October 2013 Five-Year Forecast – UPDATED AFTER (in millions of dollars)
Projecting the district to finish the year with $78.7 million in cash or 10.6 more than last year.
A balanced budget in FY15 – a balanced budget in FY16 –
FY17 is currently showing a 74.3 million deficit – note this only includes a half year of the levy.
FY18 does not include any of the levy.

28. Future – Key Items that will affect budget
CMSD enrollment
Charter enrollment
Property tax collections
State Funding - next bi-annual budget
Staffing levels
Differentiated compensation impact
Health Care

29. Cleveland Municipal School District Five-Year Financial Forecast – October 2013
QUESTIONS