Cardinal Local School District establishe d in 1956

Cardinal Local School District establishe d in 1956 Who Are We? Cardinal Huskies

Who Are We? We are a rural District comprise of: Middlefield Village, Huntsburg, Middlefield and Parkman Townships. We educate 1, 063 students from Kindergarten through Twelfth grade. Along with 16 preschool students and 6 special students over the age of 18. We have 140 employees consisting of 6 Administrators, 7 Confidential, 76 Teachers and 51 Classified positions.

Who Are We? We are a District with a strong sense of Community and Huskie Pride: The Community passed a 5. 5 mill continuing operating levy in May 2017 knowing the need to keep the District stable and financially strong in the changing school climate ahead. The Community renewed the 9. 7 mill levy in November 2017 and has renewed it every five years. We continue to review the course offerings at all levels to provide a career or college path to our students to enable them to be productive once they leave here in whatever path they may follow.

Who Are We? The Five Year Forecast - The District is required to present a financial picture so the community and the state will know where we are currently operating and where we will forecast to be operating in the future.

Who Are We? The Five Year Forecast This Report is mandated by state law and is focused on the General Fund. It is completed by the Treasurer and approved by the Board twice a fiscal year, October/November and May. Ø This report is initially based on the Permanent Appropriations and Certified Revenues as approved by the County Auditor in October and the expected tax revenues approved at the Tax Budget hearing in February. Ø Basically, this is a tool to help districts plan for future goals, projects and potential deficits. Ø It must be filed with the Ohio Department of Education after being Board approved.

Who Are We? The Five Year Forecast – The Forecast is a look at the various budget components of the General Fund. ØThe General Fund is the main operating fund of the District. ØA majority of the tax revenues received by the District are part of the General Fund. ØAll other funds of the District have specific purposes. Ø The Forecast summarizes the various revenue sources and expenditure categories within the General Fund.

Who Are We? The Five Year Forecast – Ø Creating the Five Year Forecast is not an exact science as the information is continually changing. Consequently, the best known information is used at the time the Forecast is completed, knowing as you put it together things can change the next day, the next week, the next month. Ø “The Jello Affect” – The budget and therefore the Forecast is a living document. At any time during the fiscal year, money can be received and money can be taken away from the main sources of revenue. Also at any time an expenditure can increase or decrease. Or a new unplanned expenditure can pop up without much notice. Ø This makes it challenging to maintain an accurate budget and to know with any real certainty what monies will be available in the future.

Who Are We? The Five Year Forecast – Forecast worksheets are prepared bringing all of the required information together to analyze and project out the budgets for the next four fiscal years based on the current fiscal year budget. Ø Any known facts, changes and cuts will drive the Forecast process. Ø Including the tax budget information, negotiated contracts, future goals and purchases, tax levies expiring, new tax levies needed, insurance premium increases, increases in specific expenditures such as special education services, phasing out of state revenues, and other such items. Ø The various factors and the percentage of change from the last three years are used to help calculate the estimated amounts entered into the forecast worksheet and flow on through to the final Forecast report.

Who Are We? The Five Year Forecast – Ø Assumptions are your best guesses at the time you are putting the Forecast together as to what the next four fiscal years will hold for the District. Ø Imagine having to determine what your household finances will look like in June 2020, June 2021 or June 2022. Ø Impossible! year! BUT school districts have to do that twice a

Who Are We? The Five Year Forecast – Ø The Office of School Finance will review the Forecast as submitted in October/November and May each year. Ø Based on the information included on the Forecast and conclusions they have drawn, they will contact those districts they feel may run into financial stress in the near future. Their intention is to let them know they are there to help. Ø With the passage of the 5. 5 mill levy in 2017 we have been able to maintain a steady cash forecast and avoid financial stress at this time. Ø Continued monitoring will keep us with a stable budget picture.

Who Are We? The Five Year Forecast – Ø The Budget is reviewed regularly and discussions are held throughout the year with the Superintendent and Treasurer regarding the annual budget for the current school year and any pending changes or needs. Ø Budget reviews and discussions are also held with the administrators for the few funds they are responsible for. 009, 018, 200 funds.

Who Are We? Mr. Revenues Mr. Bills

Who Are We? Revenues received by the General Fund: Ø Property tax revenues Ø School foundation settlements Ø Tangible personal property loss value make up Ø Homestead and rollback Ø Medicaid reimbursements Ø Pay-to-participate fees, tuition, interest, rentals, and other miscellaneous revenues

Who Are We? Revenues 6. 33%0. 70% 11. 27% 4. 43% 17. 88% 59. 39% General Property Taxes Unrestricted State Grants in Aid Restricted State Grants in Aid Property Tax Allocation All Other Revenues Operating. Transfers

Who Are We? Tax revenues – 59. 39% Ø Largest source of revenues for the General Fund. It is based on levies passed by the residents of our District and 3. 5 of the 4. 5 mills of inside millage. Ø Four voted continuing operating levies dating back to before 1976 and the new 5. 5 mill levy passed in May 2017 are collected each year by the District. Ø One voted operating levy from 1992 that must be renewed every five years – the 9. 7 mill levy. Ø Only the inside millage will see an increase in collections if there is an increase in property valuation. The rest can only collect a specified amount of dollars as voted in on the original ballot. Ø A new or replacement levy or an emergency levy is the only other way to get increased revenues. Money voted on in one calendar year is not collected until the following calendar year.

Who Are We? Unrestricted State Grants-in-aid – 17. 88% School foundation settlement payments Ø State support monies - two payments a month through the school foundation settlement based on last fiscal year’s amount for FY 2020. Ø Commercial Activity Tax (CAT) revenues and Ohio lottery monies are used to make these settlement payments. Restricted State Grants-in-aid – 4. 43% Ø Certain special education payments from the school foundation settlement. Ø Catastrophic cost reimbursements are applied for each year. Ø Metzenbaum State Pass-thru monies. Ø The Medicaid Reimbursement Program payments and audit settlements are received through the Ohio Department Of Job & Family Services.

Who Are We? Property tax allocation – 11. 27% Tangible personal property tax loss value make- up payments Ø To make Ohio more business-friendly the tangible personal property tax paid by businesses on their inventory and machinery was eliminated and replaced with the commercial activity tax (CAT) based on gross sales. Ø The State has been providing the District with TPP make-up payments at a much lower amount than previously received in TPP tax revenues. Ø The Governor’s budget for FY 2016 reinstated the phase out period for these revenues, a significant loss of revenues for our District. FY 2020 - $862, 500. FY 2021 - $672, 010. Beyond that $0 with no known replacement. Homestead and rollback payments Ø Property owners get a relief on their tax bills in the form of homestead and rollback deductions/credits. Ø The state makes up that loss of property tax revenues to the school district through state monies.

Who Are We? Other revenues – 6. 33% Ø The largest portion of this revenue is for tuition paid by other districts for open enrollment – approx. $430, 600. We have 72 students from other districts attending Cardinal this year. Ø Other revenues includes pay-to-participate fees, rentals, donations, and revenues that do not fit in any other category. Transfers – 0. 70% Ø Each year the General Fund will need to transfer money from the main fund to the energy conservation debt payment special cost center and to the bus lease special cost center for payment of principal and interest. This year the bus lease will be paid from PI funds. The corresponding transfer out is included in the expenditures.

Who Are We? Expenditure Categories For The General Fund: Also known as appropriations (the budget) in the forecast. Ø Personal services Ø Benefits Ø Purchased services Ø Materials and supplies Ø Capital outlay Ø Other Ø Principal and interest Ø Transfers

Who Are We? Expenditures 0. 56% 2. 25% 0. 08% 1. 92% 7. 81% 43. 21% 23. 37% 20. 79% Personal Services Benefits Purchased Services Materials and Supplies Capital Outlay Other Principal and Interest Transfers/contingency

Who Are We? Personal services – 43. 21% Ø Includes salaries and wages for teachers, nurses, psychologists, speech, secretaries, classroom aides, custodians, mechanics, maintenance, bus and van drivers, bus aides, cashiers, technology, principals, superintendent’s secretary, treasurer, assistant treasurer/payroll, accounts payable and board members. Ø Salaries for the certified and classified staff are based on the negotiated agreements. Ø Salaries for the administration and confidential staff are based on board approved salary schedules. Ø Also included are substitutes, supplementals, and severance/termination payments. Ø The District had to make some placement changes due to a reduction of title funding received and moved folks out of title funds and into the General Fund.

Who Are We? Benefits – 20. 79% Ø STRS and SERS are 14% of salaries and wages. Ø Medical (hospitalization and prescription) and dental insurances are through Ø Ø Ø Medical Mutual. The District joined the Stark County Council of Governments consortium to save on medical premiums for FY 2018 and forward. For FY 2020 the District qualified for two months of premium holidays, where we will be getting 12 months of insurance for the cost of 10 months. We have been cautioned that next fiscal year will be a 10% increase and no expected premium holidays due to the volatile insurance market. We have set aside money to help cover this expected premium increase in FY 2021. Medicare costs will increase as older employees retire and new employees are hired. The District qualified for group rating again and will see a discount on worker’s comp premiums in FY 2020. In addition there will be a refund of employer’s premium received from FY 2017.

Who Are We? Purchased services – 23. 37% Ø Professional services are those services provided to the District by outside sources. Ø The largest of these services is for special education needs outside of the regular classroom, nearly $1, 600, 000 a year. Ø Next is tuition paid to other districts/schools for open enrollment of 101 of our students to other districts - $650, 000, community/online schools - $370, 000 and post -secondary education/CRO - $97, 925. All three have increased in FY 2020 over FY 2019. Ø Utility costs should continue to see some relief due to the energy conservation project that was completed in fiscal year 2012. New windows and the energy changes made with help of the COP bond money will provide savings in the years to come. Ø Other services include property and vehicle insurance, legal, technical, training & repairs.

Who Are We? Materials and supplies – 1. 92% Ø Includes, office supplies, classroom materials, software and computer supplies, library books, newspapers, periodicals, maintenance and repair supplies, bus supplies, diesel and regular fuel and tires. Capital outlay -. 08% Ø Includes purchases of new and replacement equipment, vans and buses for the district. Ø The District entered into two lease agreements- one for 3 new buses and the other for 2 new buses. The first lease was paid off in FY 2019 and the second lease will be paid off in FY 2021. The savings from the repair costs of the aging fleet will help make the lease payments. This year these payments will be made from the PI fund. Other expenditures – 2. 25% Ø Includes the various fees charged to the District from banks, the county ESC, the board of elections, the county auditor, the county treasurer and the state auditors for their services.

Who Are We? Debt payments – 0. 56% Ø The energy conservation project is being paid for by 0% interest QSCP bonds. Ø The principal and interest payments are paid from the savings on the utility bills due to the upgrades and replacements of heating equipment, the HVAC units and lighting. Ø The principal and interest payments for the COP Bond’s will be paid from the PI fund. Transfers Out/Contingencies – 7. 81% Ø Each year the general fund has to transfer money to the food service fund to help with the operation of the three cafeterias and to avoid a deficit cash balance at year-end. Ø The corresponding transfer out within special cost centers of the general fund for the energy conservation debt payments is recorded here. The net effect is $0. Ø The money for the COP bond payments will be transferred out of the General Fund to the PI fund with a small portion of the payment being made from the PI tax monies. Ø The Board has agreed to hold at least $150, 000 in a Cash Balance Reserve in efforts to carry that money over into the next fiscal year. This forecast includes $200, 000 in reserve for each year accounted for. PLUS $200, 000 is reserved for the potential premium increase in FY 2020.

Who Are We? The Forecast has to tell the story of the District’s current operations and what the future holds for the District. Ø We operate three school buildings, a bus garage and a board office. We opened the Cardinal Community Learning Center in the old CIS building and are working to rent out space to cover the cost of running the building without students. Ø We have 16 buses in our fleet dating from 2004 -2016 with mileage on some over 200, 000 miles. Ø We have 10 special education vans in our fleet dating from 2008 -2019 with mileage on some over 100, 000 miles. Ø We also have a maintenance pickup truck, a sprinter van, an enclosed trailer, a flat bed trailer and a Swiss cheese booth. Ø We have brought one-on-one technology to the classrooms, we offer online college credit courses as well as courses on college campuses, we have implemented a One School, One Book program to encourage reading for K-4 and we have a positive behavior program in our buildings as well.

Who Are We? Sound Fiscal Management – Ø When we look at line 10. 010 of the Forecast it shows our cash balance as of June 30 th for this fiscal year at $52, 970 after the budget reserve to carry forward is subtracted. Ø Sound Fiscal Management is to have a Unencumbered Cash Balance at the end of the fiscal year equal to one month’s expenditures. Based on this Forecast information we should be ending our fiscal year with $1, 194, 124 for an ending cash balance. (Total Expenditures divided by 12) Ø If these figures hold true at June 30 th, the District would actually be $1, 141, 154 short of what is recommended for Financial Stability.

Who Are We? We are the Cardinal Huskies: Ø We are providing a quality education to our students and we are seeing amazing support from our Community for the District and our students. Ø We opened the PHABLab in the middle school bringing technology to the classroom based on real life jobs and opportunities for our students. Ø We have upgraded our grandstand this fall and will have a new track set up for the spring season, thus bringing home track meets back to Cardinal for the first time in many years. Ø We are doing more with less and are seeing good things in our students regardless of what the State Report Card says. Ø We are continuing to work to keep Cardinal in a financially stable position that will last more than one year at a time.

Who Are We? In Conclusion Some major issues for future years – THE SAME FOR THE LAST FIVE YEARS! Ø State funding is a huge unknown factor for all school districts. With a new governor funding can change again for public schools. Ø There can be a change in the funding formula for the next state two-year budget cycle and this can hurt the school funding currently being received. Any new unfunded mandates will be detrimental to the District. Ø The phase out of the TPP make-up payments has begun and at this time will continue until the money is no longer received. NO REPLACEMENT REVENUES ARE OUT THERE at this time. Ø We cannot spend all of the money in the bank, we must have money set aside for the unknown increases or decreases.

Who Are We? Cardinal Huskies ! Ø The draft of the Forecast was discussed with the Board on October 23 rd and the final will be approved tonight at the November 6, 2019 meeting. Ø Please look for the Five Year Forecast and corresponding Assumptions on the District website in the next week. Ø Please contact the Treasurer if you have questions at 440 -632 -0261 or merrylou. knuckles@cardinalschools. org