Cleveland Metropolitan Schools Cleveland Metropolitan Schools - - PowerPoint PPT Presentation

Cleveland Metropolitan Schools Cleveland Metropolitan Schools

Strong Schools ~ Strong Community ~ A Worthy Investment

Board of Education Meeting

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Board of Education Meeting November 9, 2011

Our Challenge

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THEIR FUTURE THEIR FUTURE

Critical Thinking Collaboration Creativity Innovation

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O t b 2011 P j t d F t October 2011 Projected Forecast

(in millions of dollars)

FY 2016 FY 2014 FY 2015 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 Beginning Cash Balance $82.0 $50.4 $13.0 $33.0 ($6.2) ($88.6) ($190.9) ($309.1) Total Revenues 668.2 662.7 666.4 643.4 611.1 608.2 610.2 613.3 Total Expenses 699.8 700.1 646.4 682.6 693.5 710.5 728.4 746.9 Revenue over Expenses (31.6) (37.4) 20.0 (39.2) (82.4) (102.3) (118.2) (133.6) Ending Cash Balance 50.4 13.0 33.0 (6.2) (88.6) (190.9) (309.1) (442.7) Encumbrances/ Reserves 7 0 6 5 7 0 7 0 7 0 7 0 7 0 7 0 Reserves 7.0 6.5 7.0 7.0 7.0 7.0 7.0 7.0 Unencumbered Balance $43.4 $6.5 $26.0 ($13.2) ($95.6) ($197.9) ($316.1) ($449.7)

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O i R d ti Ongoing Reductions

Phase I (Immediate)

• Reduce textbooks

$2,450,937 R d t l t ff $1 691 383 Phase II (Second Quarter)

• Reduce meal choices

$ 262,000 R d l b / ti iti $ 418 768

• Reduce central staff

$1,691,383

• Reduce budgets

$ 675,000

• Reduce maintenance $ 500,000
• Reduce clubs/activities $ 418,768
• Reduce cleaners

$ 313,439

• Reduce security

$ 888,125

• Single supply vendor $ 72,333

Phase III (Second Semester)

• Reduce principals/APs $ 727,000

Reduce principals/APs $ 727,000

• Eliminate HS busing

$ 1,550,013

• Eliminate spring sports $ 568,260

Eli i t h l $ 741 000

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Total Reductions: $13,305,258

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• Eliminate pre‐school

$ 741,000

• Eliminate summer school $2,447,000

Cleveland Municipal Public Schools Cleveland Municipal Public Schools

October 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 FY 2016 FY 2014 FY 2015 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 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) 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/ 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)

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Then and Now

1996 2009/ 2010 1996

• Cost of a gallon of Gas $1.22
• Average Income per year $36,300.00

2009/ 2010

• Cost of a gallon of Gas $2.73
• Average Income per year $39,423.00
• Average Monthly Rent $554.00
• Average Cost of new house $118,200.00
• Loaf of Bread $1 15
• Average Monthly Rent $675.00
• Average Cost of new house $232,880.00
• Loaf of Bread $1.77
• Loaf of Bread $1.15
• Minimum Hourly Wage Raised To $5.15
• US GDP (1998 dollars): $7,661.60 billion
• Loaf of Bread $1.77
• Minimum Hourly Wage Raised To $ 7.25
• US GDP (1998 dollars): $14,601 billion
• Federal spending: $1,572 billion
• Federal debt: $5,207 billion
• Unemployment: 5 4%
• Federal spending: $3,552 billion
• Federal debt: $13,050 billion
• Unemployment: 9.0%

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• Unemployment: 5.4%
• Cost of a first‐class stamp: 32 cents
• Unemployment: 9.0%
• Cost of a first‐class stamp: 44 cents

Where does the money come from?

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Cl l d M i i l S h l Di t i t Cleveland Municipal School District

Where the Money Comes From FY 2011-2012

Property Tax, 22.9% State of Ohio

Reimbursements

6.1% Other, 2.9% Ed Jobs, 2.7% State, 65.1%

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State Foundation Revenue – Excluding S e

• u d
• eve ue

c ud g Charter School Portion

ions) ue (In Milli Revenu Fiscal Year

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Property tax collection by Cuyahoga p y y y g County

Current collection rate has been trending downward Current collection rate has been trending downward Key facts Key facts

Current collection rate is at 78.87% 78.87% For every 1% decrease in the collection rate, CMSD d b hl revenues go down by roughly $1.8M

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Where does the money go?

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Cleveland Municipal School District p Where the Money Goes

FY 2011-2012

All Other, 17.6% Salaries & Charter School Pass-Through, 17.1% S & Benefits, 65.3%

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October 2011 Five-Year Forecast

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Fact

We cannot expense our way out We cannot expense our way out

• f this significant budget

challenge!

An integrated approach is needed

Cost containment Structural change

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New revenue

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Levy Information

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CMSD levy history

Election History (Current Expense Levies -- Last 30 Years) Election Millage Duration Result Vote (For - Against) 11/08/83 9.0 Continuing Passed 69,917 - 64,563 g , , 08/04/87 8.0 Continuing Failed 20,150 - 27,620 05/03/94 12.9 Continuing Failed 30,203 - 45,788 11/08/94 9.0 Continuing Failed 48,580 - 60,552 11/05/96 13.5 Continuing Passed 76,954 - 63,748 11/02/04 11.4 Continuing Failed 80,089 - 96,653 08/02/05 8.0 Continuing Failed 15,366 - 27,877 Operating Millage (CY 2010) Levy Type Nominal Mills Effective Mills (Class I) Unvoted ("Inside Millage") 4.0 4.000000 Voted (Pre-1976) 31.7 7.992933 Voted (1983) 9 0 3 751515

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Voted (1983) 9.0 3.751515 Voted (1996) 13.5 9.175410 TOTAL 58.2 24.919858

Bond Levy 2001 y Issue 14

CMSD passed a 335 million bond issue in May

2001

Locally funded source for CMSD Master Facilities

Pl Plan Th B d A bili C i i (BAC)

The Bond Accountability Commission (BAC),

created to monitor the Cleveland Municipal School District's spending for school construction and

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District s spending for school construction and renovation

Primary priorities for new revenue

S d i d h h

Student services and supports that ensure that

• ur students are college and career ready

Improving quality Sustaining core services Completing the master facilities plan

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Completing the master facilities plan

Types of Levies

• Operating Levy – is a levy used for day-to-day operating expenses (salaries,
• Operating Levy

is a levy used for day to day operating expenses (salaries, benefits, utilities, textbooks and supplies), academic achievement initiatives and transformation.

• Incremental Levy – is a kind of operating levy. Most operating levies require
• Incremental Levy

is a kind of operating levy. Most operating levies require taxpayers to pay at a constant rate for several years. This allows the school system to build up a cash reserve and to use those reserves to fund increased costs in later

• years. The Incremental Tax Levy starts small and gradually rises to match the real

needs of the school. It collects money from taxpayers in a “stepped” fashion, a “ ” i T t t h ld t th i til it i “pay-as-you-go” version. Taxpayers get to hold onto their money until it is needed.

• Permanent Improvement Levy – is used to maintain buildings, purchase busses,

h l d h d i l i I b d f d d technology and other educational equipment. It cannot be used for day-to-day

• perations of the schools.
• Bond Issue – is used to pay for major renovations and new school buildings.

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• Income Tax – State law permits Ohio school districts to levy a tax on income as

well as property. A school district income tax uses as its base the same taxable income as reported for state income tax purposes.

Types of Operating Levies

• Additional Current Expense Levy
• Additional Current Expense Levy
• The standard current expense levy approach, used by CMSD in the past
• The duration of the levy can be any number of years not exceeding five or a continuing

period of time

• Replacement Current Expense Levy
• Takes levied millage from effective millage to nominal (originally voted) millage

“E ” L

• “Emergency” Levy
• Typically used by school districts at the “20-mill floor” (CMSD is not at the 20-mill

floor) to raise a specified dollar amount each year

• School District Income Tax Levy
• Tax does not reach commuters
• Duration can be any specified number of years, or a continuing period of time

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L Th P Levy : The Process

F l t b l d th b ll t th B d ill d

• For a levy to be placed on the ballot, the Board will need

to adopt two resolutions, with intervening certifications from the Cuyahoga County Fiscal Officer

• All Board action will need to be concluded and all

documents need to be filed with the Cuyahoga County documents need to be filed with the Cuyahoga County Board of Elections 2 months before the election date A l d ( dl f b ll t ti i ) ld t k

• Any levy passed (regardless of ballot timing) would take

effect the following January

• Would provide half-year impact in the first fiscal year (e.g., passage

i 2012 ld t k ff t i J 2013 th l t 6 th f FY2013)

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in 2012 would take effect in Jan 2013—the last 6 months of FY2013)

Ti li C id ti Timeline Considerations

Upcoming Levy opportunities Upcoming Levy opportunities March 6, 2012

• Ohio General Assembly, U.S. Senate primary
• Levy filing deadline: December 7, 2011

June 12, 2012

U S H f R t ti d P id ti l i

• U.S. House of Representatives and Presidential primary
• Levy filing deadline: March 14, 2012

November 6, 2012

• General Election
• Levy filing deadline: August 8, 2012

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What might a levy yield?

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Millage and tax information for g CMSD

Implications Implications Millage levels and annual impact Millage levels and annual impact

Each mill provides $4.5M in additional annual revenue ($5.7M x 78.87%

Collection Additional Tax Amount Rate $50,000 $64,012 Mills to District 78.87% Half Year House House

1.00 $ 5,699,501 $ 4,495,197 $ 2,247,598 15.31 19.60

( collection rate) Average homeowner in Cleveland would pay ~$157-$294 more per year in taxes if a levy passed for between 8

2.00 11,399,002 8,990,393 4,495,197 30.63 39.21 3.00 17,098,503 13,485,590 6,742,795 45.94 58.81 4.00 22,798,005 17,980,786 8,990,393 61.25 78.41 5.00 28,497,506 22,475,983 11,237,991 76.56 98.02

taxes if a levy passed for between 8- 15 mills Footnote:

6.00 34,197,007 26,971,179 13,485,590 91.88 117.62 7.00 39,896,508 31,466,376 15,733,188 107.19 137.23 8.00 45,596,009 35,961,572 17,980,786 122.50 156.83 9.00 51,295,510 40,456,769 20,228,384 137.81 176.43

1. Persons who rent homes do not directly pay taxes. Home owners pay the tax portion. 2 Businesses do pay taxes to the

9.90 56,425,061 44,502,446 22,251,223 151.59 194.08 10.00 56,995,011 44,951,965 22,475,983 153.13 196.04 11.00 62,694,513 49,447,162 24,723,581 168.44 215.64 12.00 68,394,014 53,942,359 26,971,179 183.75 235.24

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• 2. Businesses do pay taxes to the
• schools. 50% of monies comes from

commercial tax collections.

13.00 74,093,515 58,437,555 29,218,778 199.06 254.85 14.00 79,793,016 62,932,752 31,466,376 214.38 274.45 15.00 85,492,517 67,427,948 33,713,974 229.69 294.06

Potential levy scenarios for CMSD

Year passed Number

• f mills

Annual amount Cost reduction required in FY 2013 % of annual

• perating budget

Mar/ Mar/ Jun 5 $22.5 M $54.7 8.2% 2012 9.9 $44.5M $43.7 6.5% 15 $67.4M $32.3 4.8% 5 $22.5M $66.0 9.9% 5 $22.5M $66.0 9.9%

2013

9.9 $44.5M $66.0 9.9%

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15 $67.4M $66.0 9.9%

Potential levy scenarios for CMSD

Year passed Number

• f mills

Annual amount Cost reduction required in FY 2013 % of annual

• perating budget

Nov 5 $22.5 M $66.0 9.9%

• r

2013 9.9 $44.5M $66.0 9.9% Nov 2012 15 $67.4M $66.0 9.9% 5 $22.5M $66.0 9.9% 5 $22.5M $66.0 9.9%

2013

9.9 $44.5M $66.0 9.9%

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15 $67.4M $66.0 9.9%

Decisions Required to Preserve the Decisions Required to Preserve the Option of a March Levy

November 7, 2011

• CMSD CFO would need to file paperwork with the State Superintendent of Public

Instruction and the State Tax Commissioner if bond issue is being considered (i.e. 120 days in advance of a levy) 120 days in advance of a levy)

November 9, 2011

• Present Board with various levy options

November 22, 2011 November 22, 2011

• Board would need to pass Resolution(s) of Necessity

November 22 and November 28, 2011

• Cuyahoga County Fiscal Officer would certify value of Resolution(s) of Necessity

By November 29, 2011

• Board would need to pass Resolution to Proceed

By December 7, 2012

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• File Resolution to Proceed with the County Board of Elections

Additi ll t Additionally we must…

Continue to work to decrease district expenses

• Continue negotiations with district labor unions
• Continue recruitment efforts to retain students and draw students

back from charter schools

• Evaluate school buildings and facilities for maximum space

utilization utilization

• Continue to reduce workforce as necessary in alignment with

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enrollment declines

THEIR FUTURE DEPENDS ON THEIR FUTURE DEPENDS ON OUR WORK TODAY!

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

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America.