5 Year Financial Forecast

October, 2018

FY2019 - FY2023

Tonight’s Agenda

- Significant factors, assumptions, and variables
in the forecast

- Analysis of revenues and key variables

- Analysis of expenses and key variables

- Overall outlook and summary

Significant Factors,

Assumptions, and Variables

Revenues: - Lines 1.XX and 2.XX of Forecast


- Local Property Taxes – 53% of FY’19 Operating Revenues

-Significant variables include the impact of future reappraisals and

new construction

- State Foundation – 35%

-Variables include changes in future funding formulas

- Property Tax Allocation – 8%

-Changes in the amount of state reimbursement/funding (TPP)

FY’19 Revenues by Type

FY’19 Property Values by Type

Expenses - Lines 3.XX, 4.XX, and 5.XX


- Salaries – 60% of FY’19 Operating Expenses

-Significant variables include future negotiated agreements and anticipated
changes in staffing levels (+ or -)

- Fringe Benefits – 25%

-% change in future insurance renewals

- Purchased Services – 11%

-Utilities, special education services, community schools, open enrollment,
custodial, and maintenance services

FY’19 Operating Expenses by Type

Analysis of Revenues

& Key Variables

Revenue Assumptions: - Lines 1.XX and 2.XX


- General Property Taxes (53% of total):

-1.1% new construction growth annually in 2019 & beyond

-82% of district property value is from residential property

- State Foundation (35% of total):

-FY’19 and beyond – The district is now on the funding “formula guarantee”, and
no increases in state aid are projected in the coming years


-A new, state biennium budget will take effect 7/1/2019

Revenue Assumptions: - Lines 1.XX and 2.XX


- Property Tax Allocation (8% of total):

-Tangible Personal Property (TPP) reimbursement from the state legislature is
included in this line and is a significant variable

-$10.8 million - FY’11 (equivalent of approx. 6.2 mills)

-$1.5 million - FY’19

-$0 - FY’21

- Other Revenues (3% of total):

-Student fees, interest income, and Medicaid reimbursements are some of the
largest items in this line

Analysis of Expenses

& Key Variables

Expenses Assumptions:-Lines 3.XX, 4.XX, and 5.XX


- Salaries (60% of total):

-MCS employs over 1,100 regular staff members.

-Wage increases are projected per the current negotiated agreements.

-Staffing levels are anticipated to remain constant

- Fringe Benefits (25% of total):

-MCS is self funded for medical insurances.

-Future anticipated increases are based on historical data and results

Expenses Assumptions:-Lines 3.XX, 4.XX, and 5.XX


- Purchased Services (11% of total):

- Student services, including special education related services (OT/PT, Speech,
Psych), tuition, and community schools - $3.8M

- Electric, water, gas, phone – $2.1M

- Maintenance, repair, custodial - $2.8M

- Safety/Security services - $750K

- Future anticipated increases in each area are based on historical trends and currently known data

- Supplies/Materials (3% of total):

- Bus fuel, instructional supplies, transportation and maintenance supplies

- Future anticipated increases in each area are based on historical data/trends.

Expenses Assumptions:-Lines 3.XX, 4.XX, and 5.XX


- Capital Outlay

-Most of these items are purchased from the Permanent Improvement Fund 003

- Other Items:

-Property tax collection fees - $700K

-Audit/bank fees - $100K

Overall Outlook
& Summary

Historical Review:


- The most recent operating levy was passed 13 years ago, in 2005.
The one prior to that was passed in 2001. Both of those were
incremental levies.


- Multiple strategies were utilized to keep the districts P&L at or near
breakeven over the past several years
:

2000

MHS Bond:
3.29 Mils

2001

Levy:

6.95 Mils

2002

Levy:

1.5 Mils

2003

Levy:

1.5 Mils

2004

MECC Bond: 1.51 Mils

2005

Levy:
6.54 Mils

2006

Levy:
1.7 Mils

2007

HS Addition

Bond Issue:
1.35 Mils

Levy:

1.7Mils

2010

Levy

2011-12

Cost Reductions

2012-13

Cost Reductions

2013-14

Cost Reductions

2014-15

Cost Reductions

2009-10

Cost Reductions

A Decade of Decisions

2012-2017

Cost reductions
keep expenses flat

2010

Levy Fails

  • Eliminated over 160 positions
  • Stopped teaming at MMS
  • Semesters instead of Trimesters at MHS
  • Closed Mason Heights
  • Wage freezes for all staff in FY’13 & FY’14
  • Pay-to-Participate Fees
  • Consolidated bus stops

2018-2021

District makes strategic
investment priorities

  • School Safety
  • Mental Wellness
  • Student Opportunities
  • Innovation & STEAM

MCS remains committed to delivering value by providing outstanding opportunities for students.

Revenues:

- The current forecast shows operating revenues remaining largely constant through the forecast period. The largest variable into the future is the amount of state funding the district will receive. The future of this revenue source is revealed in two year increments, with the next one coming in June, 2019 when the state’s next biennium budget is signed into effect.

Expenses:

- Due to the fact that school districts are a service industry, personnel expenses are the largest portion of the budget. As such, wages, health insurance renewals, and staffing levels are significant variables for the future.

Key Current Variables/Unknowns:


- FY’20 & FY’21 state biennium budget that will shape the state funding amounts for MCS over the next two years

- Employee contract negotiations

- Deerfield Township debt free plan

Cash Reserves:


- The district is currently on stable financial ground and is maintaining
a healthy cash reserve balance at the beginning of FY’19.

- There will not be an operating levy on the ballot for MCS in 2019.
However, careful and continued monitoring and planning will be
necessary to determine the steps necessary to sustain future
success and financial health.

Questions/Comments?

Shaun Bevan, CPA

Treasurer/CFO

5 Year Forcast 10/23/18 - Google Slides