Indian Hill Exempted Village School District

Five Year Forecast Financial Report

May, 2022

Prepared by Mick Davis, Treasurer

Indian Hill Exempted Village School District

Table of Contents	Page

Forecast Summary	3

Revenue Overview	4

Revenue Notes	5

Expenditures Overview	6

Expenditure Notes	7

Five Year Forecast	8

Forecast Purpose/Objectives

Ohio Department of Education's purposes/objectives for the five‐year forecast are:

1.     To engage the local board of education and the community in the long range planning and discussions of financial issues facing the school district.

2.     To serve as a basis for determining the school district's ability to sign the certificate required by O.R.C. §5705.412, commonly known as the "412 certificate."

3.     To provide a method for the Department of Education and Auditor of State to identify school districts with potential financial problems.

Forecast Methodology ‐ This forecast is prepared based upon historical trends and current factors. This information is then extrapolated into estimates for subsequent years. The forecast variables can change multiple times throughout the fiscal year and while cash flow monitoring helps to identify unexpected variances no process is guaranteed. The intent is to provide the district's financial trend over time and a roadmap for decisions aimed at encouraging financial sustainability and stability.

2

Forecast Summary

$50,000,000

$45,000,000

$40,000,000

$35,000,000

$30,000,000

$25,000,000

$20,000,000

$15,000,000

$10,000,000

$5,000,000

Indian Hill Exempted Village School District

20,998,208

$0
2021	2022 Actual                                      Projected

2023 Projected

2024 Projected

2025 Projected

2026 Projected

Total Revenue	Replace/Renew Levies	New Levies	Total Expenditures	15.01 Cash Balance

Note: Cash balance (Line 7.020) plus any existing levy modeled as renewed or new during the forecast.

Financial Forecast
	Fiscal Year	Fiscal Year	Fiscal Year
2022	2023	2024
	Fiscal Year	Fiscal Year
2025	2026

Beginning Balance (Line 7.010) Plus
	
15,796,325	17,102,126	17,877,939
	
19,064,975	20,325,293
	
+ Revenue
+ Proposed Renew/Replacement Levies + Proposed New Levies
‐ Expenditures
	39,907,354	41,806,439	42,312,496 ‐                                   ‐                                   ‐
‐	‐	‐
(38,601,553)	(41,030,627)	(41,125,460)
	42,736,884	42,996,121 ‐                                   ‐
‐	‐
(41,476,566)	(42,323,206)
	
= Revenue Surplus or Deficit
	1,305,801	775,812	1,187,036
	1,260,318	672,914
	
Line 7.020 Ending Balance with renewal/new levies
	17,102,126	17,877,939	19,064,975
	20,325,293	20,998,208

Analysis Without Renewal Levies Included:

Revenue Surplus or Deficit w/o Levies
Ending Balance w/o Levies
	1,305,801	775,812	1,187,036
17,102,126	17,877,939	19,064,975
	1,260,318	672,914
20,325,293	20,998,208

In FY 2022 a revenue surplus is expected. This means that expenditures are expected to be less than revenue by ‐$1,305,801 in FY 2022. By the last year of the forecast, FY 2026, the district is expected to have a revenue surplus where expenditures are projected to be less than revenue by ‐$672,914 The district would need to cut its FY 2026 projected expenses by ‐1.59% in order to balance its budget without additional revenue.

The district's cash balance is positive at year‐end in FY 2022 and is projected to improve by FY 2026. A worsening cash balance can erode the district's financial stability over time.

3

$33,170,693
$37,766,035
$32,975,315
$37,621,355
$36,900,503
$39,907,354
$41,806,439
$42,312,496
$42,736,884
$42,996,121
Indian Hill Exempted Village School District Revenue Overview

Sources of Revenue Over Time

100.0%

90.0%

80.0%
State
70.0%	        Funding        

60.0%

50.0%

40.0%                      Real 30.0%                    Estate

20.0%

10.0%

0.0%
2021

$0
$0
$0
$0
$0
State Funding

Real Estate

2026	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026

Real Estate Income Tax Prop Tax Alloc Other Sources

Public Utility State Funding All Othr Op Rev

Renewal Levy Revenue

Year‐Over‐Year Dollar & Percentage Change

$6,000,000

$4,000,000	13.85%

$2,000,000

$0

($2,000,000)

14.09%

8.15%

4.76%

1.21%	1.00% ‐1.92%

20.00%

15.00%

10.00%

5.00%

0.61%     0.00%

‐5.00%

($4,000,000)

($6,000,000)
2018

‐12.69%

2019	2020	2021	2022	2023	2024	2025

‐10.00%

‐15.00% 2026

Annual Dollar Change	Annual Percentage Change

Historical Actual Average Annual Dollar Change Compared to 5‐Year Projected

	Historical Average Annual $
Change
	Projected Average Annual $
Change
	Projected Compared to Historical Variance
	
Total revenue increased 2.06% or $736,511 annually during the past 5‐Year period and is projected to increase 2.91% or $1,219,124 annually through FY2026. Real Estate has the most projected average annual variance compared to the historical average at $567,091
	
Real Estate	($672,265)	$873,122	$1,545,387 Public Utility                                                            ($7,664)               $47,892                    $55,556 Income Tax                                                                       $0                           $0                               $0 State Funding                                                       ($50,926)               $51,516                  $102,442 Prop Tax Allocation                                               $34,862                 $32,968                    ($1,894) All Othr Op Rev                                                    $400,035	$213,248                ($186,787) Other Sources                                                          $7,447                      $377                    ($7,070)
		
Total Average Annual Change                            ($288,511)          $1,219,124               $1,507,634 2.06%                    2.91%                       0.84%

Note: Expenditure average annual change is projected
to be >	$1,287,832 On an annual average basis, expenditures are projected to grow faster than revenue.

4

Indian Hill Exempted Village School District

Revenue Notes

REAL ESTATE REVENUE

Real estate property tax revenue accounts for 68.64% of total revenue. Class I or residential/agricultural taxes make up approximately 89.77% of the real estate property tax revenue. The Class I tax rate is 23.98 mills in tax year 2021. The projections reflect an average gross collection rate of 99.0% annually through tax year 2025. The revenue changed at an average annual historical rate of 1.25% and is projected to change at an average annual rate of 3.01% through FY 2026.

PUBLIC UTILITY ‐ PERSONAL PROPERTY REVENUE

The public utility personal property tax revenue is generated from the personal property values, additions, and depreciation reported by the utility companies. This category currently makes up 1.54% of total district revenue. The property is taxed at the full voted tax rate which in tax year 2021 is 45.38 mills. The forecast is modeling an average gross collection rate of 100.00%. The revenue changed historically at an average annual dollar amount of $6,941 and is projected to change at an average annual dollar amount of $47,892 through FY 2026.

INCOME TAX REVENUE

The district does not have an income tax levy.

UNRESTRICTED STATE AID REVENUE

Beginning in FY 2022 Ohio adopted the Fair School Funding Plan (FSFP). Funding is driven by a base cost methodology that incorporates the four components identified as necessary to the education process. The Base Cost is currently calculated for two years using a statewide average from historical actual data.For Indian Hill Exempted Village School District the calculated Base Cost total is $14,868,297 in FY 2022. The state's share of the calculated Base Cost total is $722,663 or $360 per pupil.

t
The FSFP change to district educated enrollment could be lower than the district's historical formula funded enrollment but also potentially reduces tuition cost. In FY 2021, the district had approximately $319,763 in possible tuition cost reductions. These reductions will be reflected in the purchased services expenditure

RESTRICTED STATE AID REVENUE

Restricted aid is the portion of state per pupil funding that must be classifed as restricted use. Historically the district's restricted state aid changed annually on average by ‐$9,443 and is projected to change annually on average by $14,514. Restricted funds represent 0.39% of total revenue. Starting in FY 2022 the district's Success & Wellness funding is considered restricted, the state's share of this funding is recorded as restricted is $24,360. This funding has implications on general fund expenditures in that certain spending now occuring in a fund external to the general fund could shift to the general fund. The expenditures in this
forecast are adjusted to reflect this change. PROPERTY TAX ALLOCATION REVENUE

Property tax allocation primarily consists of reimbursements from the state of Ohio for local taxpayer credits or reductions. The state reduces the local taxpayer's tax bill with a 10% rollback credit, and 2.5% owner‐occupied rollback credit, plus a homestead credit for qualifying taxpayers. In FY 2022, approximately 10.5% local residential property taxes will be reimbursed by the state in the form of rollback credits and approximately 0.4% will be reimbursed in the form of qualifying homestead exemption credits.

OTHER REVENUE

Other revenue includes tuition received by the district for non‐resident students educated by the district. It also includes interest income, payments in lieu of taxes, and miscellaneous revenue. The historical average annual change was $384,822. The projected average annual change is $213,248 through FY 2026. The FSFP includes per pupil funding for any open enrollment in students the district is educating. This revenue, if any, was recorded in 'other revenue' prior to FY 2022. Fiscal year 2022 and beyond will not include any open enrollment in revenue.The district did not post any revenue code 1227 open enrollment in revenue in FY 2021.

OTHER FINANCING SOURCES

Other sources includes revenue that is generally classified as non‐operating. Return advances‐in are the most common revenue source. In FY 2021 the district receipted $19,549 as advances‐in and is projecting advances of $30,000 in FY 2022. The district also receives other financing sources such as refund of prior year expenditures in this category. The district is projecting that all other financing sources will be $15,000 in FY 2022 and average $15,000 annually through FY 2026.

ADDITIONAL REVENUE NOTES

5

$34,614,248
$35,499,554
$36,274,028
$41,413,227
$35,884,047
$38,601,553
$41,030,627
$41,125,460
$41,476,566
$42,323,206
Indian Hill Exempted Village School District

Expenditure Overview

Expenditure Categories Over Time

100.0%

90.0%

80.0%

70.0%	Benefits

60.0%

50.0%

40.0%

30.0%	Salaries

20.0%

10.0%

Benefits

Salaries

0.0%

2021

Salaries
Purchased Services Capital Outlay Other Objects

2026	2017	2018	2019	2020	2021	2022	2023	2024	2025	2026 Benefits
Supplies & Materials Intergov & Debt Other Uses

Year‐Over‐Year Dollar & Percentage Change

$6,000,000

$4,000,000

$2,000,000

$0

($2,000,000)

($4,000,000)

($6,000,000)

14.17%

2.56%	2.18%

7.57%	6.29%

0.23%	0.85%

20.00%

15.00%

10.00%

5.00% 2.04%     0.00%

‐5.00%

‐10.00%

($8,000,000)
2018

‐13.35%

2019	2020	2021	2022	2023	2024	2025

‐15.00% 2026

Annual Dollar Change	Annual Percentage Change

Historical Actual Average Annual Dollar Change Compared to 5‐Year Projected

	Historical Average Annual $
Change
	Projected Average Annual $
Change
	Projected Compared to Historical Variance
	
Total expenditures decreased ‐1.77% or ‐$649,100 annually during the past 5‐Year period and is projected to increase 3.59% or $1,287,832 annually through FY2026. Other Uses has the largest projected average annual variance compared to the historical average at $1,098,558.
	
Salaries	$652,195	$591,178	($61,017) Benefits                                                                  ($21,080)	$456,886                  $477,966 Purchased Services	$191,838	$108,026	($83,811) Supplies & Materials                                             $25,417                   $8,141	($17,276) Capital Outlay                                                     ($696,515)               $44,350                  $740,865 Intergov & Debt                                                       $9,725                 $62,133                    $52,408 Other Objects                                                       ($28,784)               $14,838                    $43,622 Other Uses                                                              ($4,632)                  $2,279                       $6,910
		
Total Average Annual Change                             $128,164           $1,287,832               $1,159,667 ‐1.77%                    3.59%                       5.36%

Note: Expenditure average annual change is projected
to be > $1,287,832	On an annual average basis, revenues are projected to grow slower than expenditures.

6

Indian Hill Exempted Village School District

Expenditure Notes

SALARY EXPENSE

Salaries represent 60.10% of total expenditures and increased at a historical average annual rate of 2.19% or $453,938. This category of expenditure is projected to grow at an annual average rate of 2.50% or $591,178 through FY 2026. The projected average annual rate of change is 0.31% more than the five year historical annual average.

BENEFIT EXPENSE

Benefits represent 19.00% of total expenditures and decreased at a historical average annual rate of ‐0.81% This category of expenditure is projected to grow at an annual average rate of 5.44% through FY 2026. The projected average annual rate of change is 6.25% more than the five year historical annual average.

PURCHASED SERVICES EXPENSE

Purchased Services represent 13.59% of total expenditures and increased at a historical average annual rate of 3.98%. This category of expenditure is projected to grow at an annual average rate of 2.03% through FY 2026 The FSFP funds only district educated enrollment thereby reducing tuition cost for open enrollment out, community schools, STEM, and scholarships starting in FY 2022. In FY 2021 these costs totaled $319,763. The graph to the left reflects the difference between past formula enrolled compared to actual district educated.

SUPPLIES & MATERIALS EXPENSE

Supplies & Materials represent 4.06% of total expenditures and increased at a historical average annual rate of 1.80%. This category of expenditure is projected to grow at an annual average rate of 0.55% through FY 2026. The projected average annual rate of change is ‐1.25% less than the five year historical annual average.

CAPITAL OUTLAY EXPENSE

Capital Outlay represent 1.89% of total expenditures and decreased at a historical average annual amount of ‐$159,696. This category of expenditure is projected t

INTERGOVERNMENTAL & DEBT EXPENSE

The Intergovernmental/Debt expenditure category details general fund debt issued by the District.

OTHER OBJECTS EXPENSE

Other Objects represent 1.22% of total expenditures and decreased at a historical average annual rate of ‐0.87%. This category of expenditure is projected to grow at an annual average rate of 2.96% through FY 2026. The projected average annual rate of change is 3.83% more than the five year historical annual

OTHER USES EXPENSES

Other Uses includes expenditures that are generally classified as non‐operating. It is typically in the form of advances‐out which are then repaid into the general fund from the other district funds. In FY 2021 the district had advances‐out and has advances‐out forecasted through FY 2026. The district can also move general funds permanently to other funds, the district has no transfers forecasted through FY 2026. The district can also have other uses of funds.

ADDITIONAL EXPENDITURE NOTES

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Indian Hill Exempted Village School District Five Year Forecast

May, 2022

Fiscal Year:
	Actual
	FORECASTED
	
	2019	2020	2021
	2022	2023	2024	2025	2026
	
Revenue:
1.010 ‐ General Property Tax (Real Estate)                        21,710,369              24,634,247              25,327,151 1.020 ‐ Public Utility Personal Property                                   538,700                   602,605                   567,545 1.030 ‐ Income Tax                                                                                 ‐                                ‐                                ‐ 1.035 ‐ Unrestricted Grants‐in‐Aid                                        1,451,035                1,399,482                1,381,519 1.040 ‐ Restricted Grants‐in‐Aid                                                127,274                   134,553                   144,557 1.050 ‐ Property Tax Allocation                                              3,069,316                3,062,553                3,147,629
1.060 ‐ All Other Operating Revenues	5,759,634	7,692,335	6,288,987
	
27,509,471              28,867,803              29,341,734              29,555,495              29,692,761 796,949                   732,445                   796,227                   803,601                   807,005
‐	‐	‐	‐	‐ 1,178,783                1,252,500                1,352,088                1,451,834                1,566,532
318,035                   312,610                   314,759                   315,228                   217,125 3,210,180                3,244,197                3,271,481                3,296,596                3,312,471
6,848,937	7,351,884	7,191,208	7,269,131	7,355,227
	
1.070 ‐ Total Revenue	32,656,329	37,525,775	36,857,389
	39,862,355	41,761,439	42,267,497	42,691,885	42,951,121
	
Other Financing Sources:
2.010 ‐ Proceeds from Sale of Notes	‐	‐	‐ 2.020 ‐ State Emergency Loans and Adv	‐	‐	‐ 2.040 ‐ Operating Transfers‐In	‐	‐	‐ 2.050 ‐ Advances‐In                                                                       32,500                      78,412                      19,549
2.060 ‐ All Other Financing Sources	286,485	17,169	23,566
	
‐	‐	‐	‐	‐ ‐	‐	‐	‐	‐ ‐	‐	‐	‐	‐
30,000	30,000	30,000	30,000	30,000
15,000	15,000	15,000	15,000	15,000
	
2.070 ‐ Total Other Financing Sources	318,985	95,581	43,114
	45,000	45,000	45,000	45,000	45,000
	
2.080 ‐ Total Rev & Other Sources	32,975,315	37,621,355	36,900,503
	39,907,354	41,806,439	42,312,496	42,736,884	42,996,121
	
Expenditures:
3.010 ‐ Personnel Services	20,847,735	21,667,178	21,565,695 3.020 ‐ Employee Benefits                                                      7,394,948                7,453,139                6,819,714 3.030 ‐ Purchased Services                                                     4,781,196                4,398,282                4,878,255 3.040 ‐ Supplies and Materials                                               1,323,215                1,286,874                1,457,837 3.050 ‐ Capital Outlay                                                              1,424,434                6,107,228                   678,248 Intergovernmental & Debt Service                                                      ‐                                ‐                        29,175
4.300 ‐ Other Objects	420,091	480,976	436,519
	
22,270,049              23,611,259              23,675,461              24,145,451              24,521,585 7,727,740                8,100,871                8,364,441                8,698,526                9,104,144 5,294,411                5,192,085                5,291,771                5,371,411                5,418,387 1,449,467                1,461,268                1,473,484                1,485,669                1,498,542 1,000,000                1,800,000                1,450,000                   900,000                   900,000 339,050                   339,400                   339,600                   339,800                   339,840
490,836	495,744	500,702	505,709	510,709
	
4.500 ‐ Total Expenditures	36,191,619	41,393,678	35,865,442
	38,571,553	41,000,627	41,095,460	41,446,566	42,293,206
	
Other Financing Uses
5.010 ‐ Operating Transfers‐Out                                                          ‐                                ‐                                ‐ 5.020 ‐ Advances‐Out                                                                    78,412                      19,549                      18,605
5.030 ‐ All Other Financing Uses	3,997	‐	‐
	
‐                                ‐                                ‐                                ‐                                ‐ 30,000                      30,000                      30,000                      30,000                      30,000
‐	‐	‐	‐	‐
	
5.040 ‐ Total Other Financing Uses	82,409	19,549	18,605
	30,000	30,000	30,000	30,000	30,000
	
5.050 ‐ Total Exp and Other Financing Uses	36,274,028	41,413,227	35,884,047
	38,601,553	41,030,627	41,125,460	41,476,566	42,323,206

6.010 ‐ Excess of Rev Over/(Under) Exp	(3,298,713)	(3,791,871)	1,016,456
	1,305,801	775,812	1,187,036	1,260,318	672,914

7.010 ‐ Cash Balance July 1 (No Levies)	21,870,454	18,571,741	14,779,869
	15,796,325	17,102,126	17,877,939	19,064,975	20,325,293
	
7.020 ‐ Cash Balance June 30 (No Levies)	18,571,741	14,779,869	15,796,325
	17,102,126	17,877,939	19,064,975	20,325,293	20,998,208

	Reservations
		
8.010 ‐ Estimated Encumbrances June 30	‐	‐	‐
9.080 ‐ Reservations Subtotal	‐	‐	‐
	500,000	500,000	500,000	500,000	500,000
‐	‐	‐	‐	‐
	
10.010 ‐ Fund Bal June 30 for Cert of App	18,571,741	14,779,869	15,796,325
	16,602,126	17,377,939	18,564,975	19,825,293	20,498,208
	
Rev from Replacement/Renewal Levies 11.010 & 11.020 ‐ Renewal Levies
11.030 ‐ Cumulative Balance of Levies	‐	‐	‐
	
‐	‐	‐	‐	‐
‐	‐	‐	‐	‐
	
12.010 ‐ Fund Bal June 30 for Cert of Obligations	18,571,741	14,779,869	15,796,325
	16,602,126	17,377,939	18,564,975	19,825,293	20,498,208
	
Revenue from New Levies 13.010 & 13.020 ‐ New Levies
13.030 ‐ Cumulative Balance of New Levies	‐	‐	‐
	
‐	‐	‐	‐	‐
‐	‐	‐	‐	‐
	
15.010 ‐ Unreserved Fund Balance June 30	18,571,741	14,779,869	15,796,325
	16,602,126	17,377,939	18,564,975	19,825,293	20,498,208

8