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Painesville Township Five Year Forecast for Fiscal Year 2009

District Type: Local
IRN: 047894
County: Lake
Date Submitted: 5/27/2009 Date Processed: 5/30/2009

Actual Forecasted
Line 2006 2007 2008 2009 2010 2011 2012 2013
1.010 General Property (Real Estate) 19,116,632 20,552,180 21,887,752 22,618,227 22,829,090 23,296,224 24,149,314 26,566,334
1.020 Tangible Personal Property Tax 4,511,755 2,868,792 2,444,789 1,493,671 750,000 750,000 750,000 750,000
1.035 Unrestricted Grants-in-Aid 6,895,893 6,839,368 6,323,172 6,800,000 6,800,000 6,800,000 6,800,000 6,800,000
1.040 Restricted Grants-in-Aid 401,280 345,918 388,368 334,100 355,000 355,000 355,000 355,000
1.050 Property Tax Allocation 2,474,927 3,574,439 4,641,464 5,156,229 6,031,303 5,780,188 5,399,704 5,026,852
1.060 All Other Operating Revenue 4,681,747 4,599,653 4,653,975 4,032,000 3,957,000 3,857,000 3,807,000 3,757,000
1.070 Total Revenue 38,082,234 38,780,350 40,339,520 40,434,227 40,722,393 40,838,412 41,261,018 43,255,186
2.050 Advances-In 77,289 115,875 50,000 50,000 50,000 50,000
2.060 All Other Financial Sources 258
2.070 Total Other Financing Sources 258 77,289 115,875 50,000 50,000 50,000 50,000
2.080 Total Revenues and Other Financing Sources 38,082,492 38,857,639 40,455,395 40,434,227 40,772,393 40,888,412 41,311,018 43,305,186
3.010 Personnel Services 20,863,064 21,353,831 22,367,805 23,443,156 24,243,610 25,183,585 26,160,145 27,174,720
3.020 Employees' Retirement/Insurance Benefits 6,779,917 7,474,738 8,287,714 8,801,275 9,120,354 9,701,621 10,321,343 10,982,122
3.030 Purchased Services 5,546,788 5,513,127 6,115,688 6,178,912 6,406,495 6,643,033 6,888,906 7,144,509
3.040 Supplies and Materials 1,741,036 1,784,027 2,119,598 2,194,492 2,252,812 2,312,753 2,374,363 2,437,689
3.050 Capital Outlay 222,783 57,931 172,627 125,510 79,357 80,216 81,109 82,038
4.300 Other Objects 503,092 529,877 549,185 578,388 595,560 613,246 631,464 650,228
4.500 Total Expenditures 35,656,680 36,713,531 39,612,617 41,321,733 42,698,188 44,534,454 46,457,330 48,471,306
5.010 Operational Transfers - Out 168,431 248,046 368,115 150,000 75,000 75,000 75,000 75,000
5.020 Advances - Out 2,000 750 1,800 50,000 50,000 50,000 50,000 50,000
5.030 All Other Financing Uses 50,000 50,000 50,000 50,000 50,000
5.040 Total Other Financing Uses 170,431 248,796 369,915 250,000 175,000 175,000 175,000 175,000
5.050 Total Expenditure and Other Financing Uses 35,827,111 36,962,327 39,982,532 41,571,733 42,873,188 44,709,454 46,632,330 48,646,306
6.010 Excess Rev & Oth Financing Sources over(under) Exp & Oth Financing 2,255,381 1,895,312 472,863 (1,137,506) (2,100,795) (3,821,042) (5,321,312) (5,341,120)
7.010 Beginning Cash Balance 3,141,985 5,397,366 7,292,678 7,765,541 6,628,035 4,527,240 706,198 (4,615,114)
7.020 Ending Cash Balance 5,397,366 7,292,678 7,765,541 6,628,035 4,527,240 706,198 (4,615,114) (9,956,234)
8.010 Outstanding Encumbrances 599,164 1,042,749 681,622 600,000 600,000 600,000 600,000 600,000
9.030 Budget Reserve 585,565 585,565 585,565 585,565 585,565 585,565 585,565 585,565
9.080 Total Reservations 585,565 585,565 585,565 585,565 585,565 585,565 585,565 585,565
10.010 Fund Balance June 30 for Certification of Appropriations 4,212,637 5,664,364 6,498,354 5,442,470 3,341,675 (479,367) (5,800,679) (11,141,799)
12.010 Fund Bal June 30 for Cert of Contracts,Salary Sched,Oth Obligations 4,212,637 5,664,364 6,498,354 5,442,470 3,341,675 (479,367) (5,800,679) (11,141,799)
15.010 Unreserved Fund Balance June 30 4,212,637 5,664,364 6,498,354 5,442,470 3,341,675 (479,367) (5,800,679) (11,141,799)

Notes to the Five Year Forecast

Riverside Local School District

Assumptions
Five-Year Forecast

GENERAL:
This financial forecast presents, to the best of management's knowledge, the
District's expected revenue, expenditures and changes

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in the general fund balance for the forecast period. Accordingly, the forecast
reflects its judgment as of May 14, 2009, the date
of this forecast, of the expected conditions and its expected course of action.
The assumptions disclosed herein are those that
management believes are significant to the forecast. There will usually be
differences between the forecast and actual results
because events and circumstances, many out of the District's control, frequently
do not occur as expected, and those differences
may be material.

This financial forecast includes three years of historical data and five years
of projected data in the District's General Fund.
The current fiscal year, 2009, is the first year of projected data.

REVENUES:
Property Taxes - Property tax revenue estimates are based on current legislation
and historical growth patterns, including updates
and reappraisals, and are substantiated by information provided for the upcoming
fiscal year from the county auditor. The property
tax figures are based on historical collection levels.

1.010 General Property Tax (Real Estate)

Property values are established each year by the County Auditor based on new
construction and complete or updated values. The
values reflect the full reappraisal that occurred in 2006. There will also
be a triennial update for the 2009 values collected in
2010. These changes have been factored into the projection for District propert
y values.

During update and reappraisal years, residential and agricultural real estate
property is expected to increase 18.47% and
commercial and industrial real estate property is expected to increase 9.99%.
During non-update and non-reappraisal years,
residential and agricultural real estate property is expected to increase 4.0%
and commercial and industrial real estate property
is expected to increase 2.61%. These percentages are based on the historical
increases from 1988 through 2007. The May 2009
Revision reflects the current real estate market conditions and assumes no incre
ase in values as part of the revaluation in 2010.

Tax levies are collected on a calendar basis (January through December), and
our fiscal year is July through June. Real estate
taxes are settled or paid twice a year; in March and August. Because we cannot
assume a renewal or replacement levy will pass by
December 2009, the last payment on this levy will be August 2009 (fiscal year
2010). To comply with the format of the forecast,
the real estate taxes (line 1.010) reflect the half-year loss in fiscal year
2010 and a full year loss in 2011 and 2012.

1.020 Tangible Personal Property Tax

Personal property tax, primarily taxes on business inventories, and equipment
are most affected by changes in inventory levels and
legislative actions that alter the assessment rate. These taxes are difficult
to predict as evidenced by their historical pattern;
annual percentage changes in valuation ranging from +13.5% to -22.85%.

House Bill 66 phases out the tax on the tangible personal property of general
businesses, telephone and telecommunications

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companies, and railroads. The tax on general business and railroad property
will be eliminated by 2009, and the tax on telephone
and telecommunications property will be eliminated by 2011. The tax is phased
out by reducing the assessment rate on the property
each year. At the same time, the bill replaces the revenue lost due to phasing
out the tax. In the first five years, school
districts and local governments are reimbursed fully for lost revenue; in the
following seven years, the reimbursements are phased
out.
2006 - 2010: The "Hold-Harmless Period"
The tax on tangible property is to be phased out over the period from 2006 to
2009. During this "Hold Harmless Period" all taxing
authorities will be fully reimbursed relative to prior law for revenue lost
due to the taxable value reductions prescribed by HB
66.
Reimbursement will be made for the base year amount, except that taxing authorit
ies are only reimbursed for inventory property
assessment percentage reductions beyond those already in place before the passag
e of HB 66. This means taxing authorities are only
reimbursed for the amount of revenue projected by using listing percentages
for inventory property of 23% in 2006, 21% in 2007, 19%
for 2008, and 17% for 2009.
All qualifying fixed-rate levies will be reimbursed to reflect the losses in
tax revenue during the phase-out of the tangible
property tax.
All qualifying school district emergency levies will be reimbursed at 100% of
the base year amount beginning in 2006, subject to
the half-mill threshold adjustment for all fixed-sum levies of the school distri
ct, even if the emergency levy expires, is reduced,
or is not levied by the school district for any of these years. No reimbursement
will be received for the fixed sum levies since
the half-mill threshold was not met. The millage on these levies will be increa
sed so that the original dollar amount of the levy
continues to be collected.
HB 66 treats each of the different types of tangible property somewhat different
ly for the purposes of phasing out the tax on
tangible property. First: all new manufacturing and machinery property put into
service in 2005 or thereafter is excluded from
taxation. Second: since inventory property is currently being phased out (withou
t reimbursement), HB 66 provides reimbursement only
for that portion of the lost revenue that is over and above the amount that
would be lost according to prior law. Third: telephone
company tangible property does not begin to be phased out until tax year 2007.
Due to these differences the reimbursement rates for
each of the types of property varies slightly.
In tax year 2006, for example, the assessment rate on furniture and fixtures
(part of the "other property" classification) is
reduced by one-fourth (from 25% to 18.75%). The state reimbursement payment
of 25% of the base year amount holds schools harmless,
so that they receive 100% of the base year amount by a combination of local
levies and state reimbursement payments.
In tax year 2006 the assessment rate on existing manufacturing machinery and
equipment is also reduced by one-fourth to 18.75
percent. However, new manufacturing machinery and equipment is not listed for
taxation at all. In an effort to hold schools
governments harmless, the reimbursement rate for manufacturing machinery and
equipment is set at 33.8 percent of the base year
amount instead of 25 percent. The higher reimbursement rate is designed to offse
t the loss in local tax revenue due to the new

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manufacturing machinery and equipment having a zero assessment rate, so that

in general schools and local governments receive 100%
of the base year amount through a combination of reimbursement payments and
local property tax revenues. In tax years 2007 and
2008, the reimbursement rates for machinery and equipment continue to be higher
than the percentage decline in the assessment rate
to attempt to account for new property coming on the rolls with a zero assessmen
t rate.
In general, the values used to determine the reimbursements to school districts
are (1) the tax year 2004 property values in the
district as of August 31, 2005, (2) the "qualifying levy" rates, (3) a percentag
e equal to the difference between the new (HB 66)
and old assessment rates, and (4) the reimbursement rate, which, for non-telepho
ne company property, is equal to 100 percent from
2006 to 2010 and a declining percentage thereafter.
These reimbursements are accounted for in line 1.035 - Unrestricted Grants-in-Ai
d.
Effective January 1, 2001, non-municipal owned electric utilities were deregulat
ed in the State of Ohio. Electric company personal
property was reduced from 100% assessed value to 25%. Effective May 1, 2001,
a kilowatt-hour tax will begin to be collected.
37.8% of these dollars will be deposited in a new Property Tax Replacement Fund
(PTRF). 70% of the PTRF will be paid to school
districts that lost revenue as determined by the Ohio Department of Taxation.
First distributions will be made to cover costs of
fixed sum levies such as debt and emergency levies. Next, fixed rate levies
will be replaced from 2002 through 2006, after this a
phase out formula will begin. Distributions from the PTRF will be semi-annual
and began in February 2002.

The amounts do not anticipate the automatic passage of a replacement or renewal

levy. That means that when a levy is scheduled to
expire, the estimated property tax revenue has a corresponding decline. Althoug
h new levies may be proposed during this time
period, no new levies are included in these amounts.

1.035 Unrestricted Grants-in-Aid

The per pupil average daily membership (ADM) funding amounts for 2009 is $5,732
The following factors could also impact the state
funding to the District: income factor adjustments, transportation guarantees,
vocational education factors, assessed value
adjustments due to inventory tax reductions, and special education factors.
Also, it is assumed that there will be adequate
funding in subsequent years to fund these components. The District will recogni
ze no increase in State Foundation revenue during
the forecast period.

On March 24, 1997, the Ohio Supreme Court rendered a decision declaring certain
portions of the Ohio school funding plan
unconstitutional. The Court stayed the effect of its ruling for one year to
allow the Ohio General Assembly to design a plan to
remedy the defects in the system. Declared unconstitutional was the State's
"School Foundation Program", which provides
significant amounts of money to school districts.

Since the Supreme Court ruling, the Ohio General Assembly has passed numerous
pieces of legislation in an attempt to address the
issues identified by the Court. The Court of Common Pleas in Perry County has
reviewed the new laws and on February 26, 1999

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determined they are not sufficiently responsive to the constitutional issues

raised under the "thorough and efficient" clause of
the Ohio Constitution. The State appealed the decision made by the Court of
Common Pleas to the Ohio Supreme Court. In May 2000
the Supreme Court ruled that the State of Ohio had not done enough to comply
with the original order found in the original case.
The court gave the State of Ohio until June 15, 2001 to correct funding of schoo
ls. The school funding system was declared
unconstitutional again in September 2001, and most recently in December 2002.
The Supreme Court has again directed the General
Assembly to enact a school funding scheme that is "thorough and efficient."

As of the date of this forecast, the District is unable to determine what effect
, if any, ongoing litigation will have on its
future State funding under the foundation program, and on its financial operatio
ns from fiscal years 2009 through 2013.

1.040 Restricted Grants-in-Aid

Restricted grants-in-aid is the School Bus Purchase Allowance program that provi
des subsidies for school bus purchases. Currently,
the District receives about $30,000 annually to offset the cost of a school
bus.

1.050 Property Tax Allocation

The rollback and homestead reimbursements are tax credits by the State of Ohio
granted to owners of real estate property. A 10%
reduction in the property taxes paid by the owner is paid by the state to the
District. If the property owner occupies the
property, then an additional 2.5% reduction in the property taxes is paid by
the state to the District instead of the property
owner. Increases in this line item are anticipated to reflect the anticipated
increases in real estate growth and to the personal
property tax reimbursement.

1.060 All Other Revenues

Other revenues include investment earnings, proceed from rental of the District
facilities, athletic pay-to-participate fees,
tuition from other districts for special education students and open enrollment
students. These revenue items can greatly
fluctuate from year-to-year based on changes in interest rates, usage of facilit
ies and students attending the District for either
special or regular education. This line item has been substantially decreased
due to the continued decrease in open enrollment
revenue.

EXPENDITURES
3.010 Personal Services
This line accounts for the salaries of the entire staff. The current negotiated
agreement for the classified staff expires July
31, 2010 and includes base salary increases of 2% each of the three years of
the negotiated agreement. The current negotiated
agreement for the teaching staff expires August 31, 2011 and includes annual
base salary increases of 3%, 2.3% and 3% over the
three years of the negotiated agreement. Total base salaries are projected
to increase at historical annual averages per year
after the expiration of the current negotiated agreements. Increases in staffin
g levels due to increases in enrollment have been
anticipated.

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3.020 Employees' Retirement/Insurance Benefits

This line accounts for the fringe benefits (Board paid contributions to employee
retirement systems, medical, dental, vision and
life insurance premiums, Medicare, and workers' compensation) of the entire
staff. These benefits were calculated using the actual
rates for employee retirement systems (14%), Medicare (1.45%) and workers' compe
nsation (1%) of the related salaries shown on the
personal services line. Health and life insurance is expected to increase and
average of 8%, annually after employee
contributions.

3.030 Purchased Services

For planning purposes, this area is projected to increase approximately 3% annua
lly. The main budget items in this area include
all utilities (gas, electric, water, sewer, phone, garbage), community school
tuition, post secondary education option tuition,
special education tuition, outgoing open enrollment tuition, property, liability
, and vehicle insurance, equipment repairs and
rentals, and postage. These budget items are generally considered the fixed
cost items of operating the District.

3.040 Supplies and Materials

For planning purposes, this area is projected to increase approximately 3% annua
lly. The main budget item in this area includes
instructional supplies, maintenance and custodial supplies, and transportation
fuel and parts. This is one area that is governed
by the House Bill 412 and Senate Bill 345 fiscal accountability standards that
require 3% of the prior year's base cost multiplied
by the District's student population to be used for textbooks and instructional
supplies purchases. These forecasted figures
comply with those mandates. The amount for textbooks and instructional supplies
is budgeted to increase every year of the forecast
period.

3.050 Capital Outlay

For planning purposes, this area is projected to increase approximately 3% annua
lly. Capital outlay includes all new and
replacement equipment for the District. Again, this is an area that is governed
by the House Bill 412 and Senate Bill 345
requirements mandating purchases toward capital improvements and maintenance.
The permanent improvement levy fund (separate from
the general operating fund) meets this requirement, thus reducing the burden
from the general fund.

Other Financing Uses

These line items cover fund-to-fund transfers and end of year short-term loans
from the General Fund to other funds until they have
received reimbursement and can repay the General Fund.

RESERVATION OF FUND BALANCE

9.010 Textbook and Instructional Materials
On an annual basis, the textbook and instructional materials set-aside requireme
nts are expected to be met through General Fund
expenditures already projected in the future; therefore there are no additional
reservations required.

9.020 Capital Improvements

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On an annual basis, the capital improvements and maintenance set-aside requireme

nts are expected to be met through Permanent
Improvement Fund expenditures; therefore there are no additional reservations
required.

9.030 Budget Reserve

The budget reserve includes the Bureau of Workers' Compensation rebates received
and the phase-in amounts previously required by
House Bill 412. The Board of Education passed a resolution retaining this reser
ve under R. C. 5705.13(A).

REVENUE FROM REPLACEMENT/RENEWAL LEVIES

11.020 Property Tax - Renewal or Replacement
A five-year, 1.74 mill operating levy was renewed in 2004. It must be renewed
or replaced in calendar year 2009. If it is not
renewed or replaced, the District will lose approximately $637,500 for fiscal
year 2010 and $1,275,000 annually thereafter.

A five-year, 3.3 mill operating levy was passed in 2004. It must be renewed
or replaced in calendar year 2009. If it is not
renewed or replaced, the District will lose approximately $1,412,500 for fiscal
year 2010 and $2,825,000 annually thereafter.

These levies were replaced by a substitute levy passed in May 2009.

ADM FORECASTS
20.010 Kindergarten - October Count
20.015 Grades 1-12 - October Count
Enrollment (ADM) is based on actual numbers, FY 2006, FY2007, FY2008 and FY2009.
Projections are based on historical increases.
While the District has had three enrollment studies conducted, all three have
underestimated the growth in enrollment. While it is
anticipated that this growth in enrollment will continue, many factors will
effect the actual change in enrollment. These factors
include birth rate, building activity, real estate transactions and other econom
ic conditions.

20.020 Kindergarten - February Count

20.025 Grades 1-12 - February Count
Projected enrollment for the February counts is the same as the October count
since, based on the first year two separate counts
have been made, there is very little difference in the counts.

REASONS FOR REVISION:

The major changes to this revised forecast are as follows:

1. General Property Tax (Real Estate) Revenue has been changed to reflect
the current real estate market conditions and assumes
no increase in values as part of the revaluation in 2010. These differences
effect the revenues for the FY2009 through FY2013. This
line also now includes the projected income from the substitute levy passed
in May 2009.

2. Tangible Personal Property Tax has been adjusted to reflect current revenue.

3. The Employees' Retirement/Insurance Benefits amounts have been reduced to

reflect a lower annual rate for health insurance.

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4. Revenue from Replacement/Renewal Levies has been changed to reflect the

passage of the Substitute Levy in May 2009.

5. ADM count for FY2009 has been changed to reflect actual ADM.

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