PUBLIC HEARING ON PROPOSED MOVEMENT OF INSIDE MILLAGE JANUARY 13, 2014 6:30 P.M.

LEDGEMONT LOCAL SCHOOL DISTRICT

ORIGINAL MILLAGE LEDGEMONT LOCAL SCHOOL DISTRICT

FUND Purpose Date Passed (voted) N/A Set by law N/A Set by law 1976 & prior Feb. 5, 1980 May 3, 1988 Nov. 3, 1992 Type Millage Originally Authorized 3.5 1.0 25.4 4.5 7.9 8.9 46.7 voted 4.5 set by law

General Fund General Fund General Fund General Fund General Fund General Fund TOTAL - 51.2

Operational Inside Millage Operational Inside Millage Operational Operational Operational Operational

Continuous Continuous Continuous Continuous Continuous Continuous

DEFINITION OF TERMS
INSIDE MILLAGE Minimum tax millage set by Statutor y legislation which will raise a specified amount of tax dollars. Inside millage is not affected by inflation or new construction in a district. Inside millage will always be assessed to every property in the district at the same rate into the future. At Ledgemont School District, our Inside Millage is set at 4.5% OUTSIDE MILLAGE Taxpayer voted millage. Outside millage is affected by inflation over time. Outside millage rate is set at the time of authorization (vote), but the dollars collected are limited to the original amount authorized. Thus, as property values increase over time, the dollars collected remain constant causing the effective rate of tax to decrease as the property values increase. AUTHORIZED MILLAGE The amount of millage approved by voters in any given election.

EFFECT OF INFLATION ON PROPERT Y VALUES AND VOTED MILLAGE RATES

Law stipulates that dollars collected remain constant, thus VOTED millage rates effectively decrease

Inflation over time causes property values to increase

COLLECTED TAX DOLLARS REMAIN THE SAME AND NEVER INCREASE (by law)

CURRENT EFFECTIVE MILLAGE LEDGEMONT LOCAL SCHOOL DISTRICT

FUND Purpose Date Passed (voted) N/A Set by law Type Millage Originally Authorized 3.5 2014 Effective Millage Rate 3.5

General Fund

Operational Inside Millage

Continuous

General Fund
General Fund General Fund General Fund General Fund

Operational Inside Millage

Operational Operational Operational Operational

N/A Set by law

1976 & prior Feb. 5, 1980 May 3, 1988 Nov. 3, 1992

Continuous
Continuous Continuous Continuous Continuous

1.0
25.4 4.5 7.9 8.9

1.0
6.297523 1.336527 3.508777 4.481523

TOTAL

46.7 voted 4.5 set by law

15.62435 voted 4.5 set by law

TAX EFFECT OF INFLATION OVER TIME

30 25 20 15

10
5 0 INSIDE MILLAGE 1976 & PRIOR 5-Feb-80 3-May-88 3-Nov-92

ORIGINAL MILLAGE

CURRENT EFFECTIVE RATE

TAX EFFECT OF INFLATION OVER TIME

60 50 40 30

20
10 0 INSIDE STATUTORY MILLAGE ORIGINAL MILLAGE OUTSIDE VOTED MILLAGE TOTAL COMBINED MILLAGE

CURRENT EFFECTIVE RATE

DEFINITION OF TERMS
CONTINUOUS LEVY A levy whose millage does not expire. This levy will always be assessed and does not need to be renewed in order to continue generating funds for a school district. EXPIRING LEVY A levy which has a set term of collection typically 3, 5, or 10 year s. These levies can be renewed as they expire by additional vote of the district residents prior to their expiration. OPERATING LEVY ( for g eneral operating expenses) A levy whose funds are used for general operating expenses. SPECIAL PURPOSE LEVY A levy whose funds are set aside for specific and intended purposes. Funds generated from these levies are not allowed to be comingled with general operational funds and must be accounted for separately in the books and records of the collecting entity (the district). Funds may ONLY be spent on the intended purpose. (Examples Permanent Improvement Levy, Bond Levy, Debt Ser vice Levy, Capital Improvement/Facility Construction Levy)

SPECIFICS TO LEDGEMONT SCHOOL DISTRICT

LEDGEMONT SCHOOL DISTRICT:

HAS

NO EXPIRING PROPERT Y TAX LEVIES HAS NO SPECIAL PURPOSE TAX LEVIES

ALL of Ledgemonts Voted Property Tax Levies are Continuous

THEY WILL FOREVER CONTINUE TO DECLINE IN MILLAGE as property values increase over time. THEY WILL NEVER COLLECT MORE DOLLARS than they did when they were originally passed.

SPECIFICS TO LEDGEMONT SCHOOL DISTRICT

LEDGEMONT SCHOOL DISTRICT:

HAS

NOT PASSED A NEW PROPERT Y TAX LEVY SINCE

NOVEMBER 3, 1992

DEFINITION OF TERMS
GENERAL FUND Schools operate under a segregated system of cash accounting with dif ferent funds (or cash) set aside for dif ferent legal purposes. The GENERAL FUND is the day -to-day operating fund for the school district. OPERATIONAL EXPENSES Day to day expenses of running the schools. Includes things like salaries, employee benefits, utilities, cost of transportation, classroom supplies, special ed services, general facility repairs & maintenance, insurance, legal & other professional fees, and all administrative costs. SPECIAL PURPOSE FUNDS Funds (cash) legally separated from the day to day operational funds of the school district that are used specifically for the intended purpose for which they are designated.

LEDGEMONT FUNDS
GENERAL FUND
Receives revenue from: State Foundation Payments - from The State of Ohio Real Estate Taxes from district property owners School District Income Taxes from district wage earners Medicaid Reimbursements from eligible families served in school Open Enrolled In students from other school districts Other minor miscellaneous revenues Expenses include: Salaries & benefits of all teaching & administrative employees, maintenance & custodial staff, educational aides, clinic staff, library staff and co-curricular advisors. Includes the cost of all utilities, student transportation, classroom supplies, special education services, general facility repairs & maintenance, insurance, legal & other professional fees, and all administrative costs. Also absorbs the States chargebacks for Open Enrolled Out students, payments to Community & Charter Schools, and P.S.E.O. tuition costs to local colleges Virtual Learning Academy costs

LEDGEMONT FUNDS
DISTRICT MANAGED STUDENT ACTIVIT Y FUNDS
Receives revenue from: Donations, Fundraisers for specific activities, Vending Expenses include: Payments for specified activity supplies & functions, donations directed by each group, field trip transportation for group activities Examples of District Managed Student Activities: Yearbook, Newspaper, Student Council, Marching/Pep Band, Teen Institute, Art Club , Principal Directed Discretionary Funds

STUDENT MANAGED ACTIVIT Y FUNDS

Receives revenue from: Donations & Fundraisers held by the various groups Expenses include: Payments for specified activity supplies & functions chosen by the students (Homecoming expenses, Prom expenses) Examples of District Managed Student Activities: Class of 2014, Class of 2015, Class of 2016,

LEDGEMONT FUNDS
ATHLETIC FUND
Receives revenue from: Pay-to-Participate Fees Gate & Ticket Sales Expenses include: Salaries & benefits of coaches & advisors Supply purchases for direct athletic needs, payments to officials, tickettakers & security, uniforms, league fees , and transportation to all athletic events.

FOOD SERVICE FUND

Receives revenue from: Cafeteria sales at elementary & high school Federal & state free & reduced breakfast & lunch program Expenses include: Salaries & benefits of food-service staff Food & supply purchases for direct cafeteria use Direct repairs & maintenance to kitchen facility & equipment

LEDGEMONT FUNDS
BUILDING IMPROVEMENT FUNDS
Ledgemont has NO special purpose levy for permanent improvements. Approximately $23,000 has been set aside for an anticipated sewer tie-in at the High School building

T RUST FUNDS
As the Beneficiary of certain Trusts (such as The Francis Spatz Leighton Testamentary Trust), trust funds are segregated in the books and records of the district. Trust funds are not available to pay General Fund expenses .

SCHOLARSHIP FUNDS
Ledgemont School District manages a variety of scholarships which are awarded at Graduation each year. Funds held in the scholarship accounts are carried over from year to year and are not available to be spent on General Fund expenses.

GRANT FUNDS
A variety of grant funds are received annually from the Federal Government. These funds are required to be segregated and spent strictly on items set forth in the grant applications. Some examples of allowable expenditures include Teacher Professional Development, Intervention & Tutoring salary payments, and technology improvements for rural districts.

LEDGEMONT SCHOOL DISTRICT BALANCE BET WEEN GENERAL FUND REVENUE & EXPENSE
REVENUES
State Foundation

EXPENSES

Salaries & Benefits General Operational Costs Open Enrollment, PSEO, State Mandated Programs

Real Property Taxes

Earned Income Tax

LEDGEMONT SCHOOL DISTRICT BALANCE BET WEEN GENERAL FUND REVENUE & EXPENSE

EXPENSES REVENUES

STATE SOLVENCY ASSISTANCE FUND LOAN HISTORY

Borrow (Repay)
2010-11 State of Ohio Borrow

BALANCE $2,170,000

$2,170,000

2011-12 State of Ohio Borrow

2011-12 Repayments 2012-13 State of Ohio Borrow 2012-13 Repayments 2013-14 Repayments 2013-14 State of Ohio Borrow (Projected)

$1,677,000
($1,085,000) $1,114,000 ($1,085,000) ($419,250) $300,000

$3,847,000
$2,762,000 $3,876,000 $2,791,000 $2,371,750

$2,671,750

MOVING INSIDE MILLAGE FOR THE PURPOSE OF DEBT SERVICE

STATE LAW ALLOWS FOR THE MOVE OF INSIDE MILLAGE from General Fund / Operational Funds for specific purposes as set forth by law. Per Ohio Revised Code (O.R.C.) Inside Millage tax revenues can be moved and reallocated to specifically address Debt Service needs of a school district. LEDGEMONT SCHOOL DISTRICT CAN REQUEST THAT UP TO 4.5 MILLS OF INSIDE MILLAGE BE COLLECTED AND DESIGNATED SPECIFICALLY TO REPAY DEBTS.

DEBT SERVICE IS ONE OF THOSE ALLOWABLE PURPOSES

WHAT HAPPENS TO THE FUNDS GENERATED WHEN INSIDE MILLAGE IS MOVED?

Funds are collected as usual Revenues are diverted from the General Fund Cash is segregated from General Funds available cash Funds are no longer allowed to be spent on operational expenses Funds MUST be spent on the specifically identified and intended purpose

HOW LONG ARE THE FUNDS DIVERTED?

FUNDS ARE DIVERTED AS LONG AS NEEDED TO SATISFY THE REQUIREMENTS OF THE INTENDED PURPOSE
Boards initial resolution would set a t ime limit on t he requested m ove.

STEPS NECESSARY TO SUCCESS

Advertise Public Hearing

Hold Public Hearing

Pass Board Resolution

Submit Resolution to County Auditor for presentation to the County Budget Commission

Millage is moved with the next calendar / tax year

FOR LEDGEMONT THIS WOULD BE 2015

HOW DOES LEDGEMONT END UP WITH ADDITIONAL FUNDS?

Minimum millage set at 20 Mills for school districts operating fund
Ohio Law states that district residents must contribute a minimum of 20 effective mills to their school districts general operating fund. This is called The 20 Mill Floor Ledgemont is just above the 20 Mill Floor at 21.12453 Mills being charged to residents annually If the district moves 4.5 of those fixed mills to debt service, we are left with 15.62453

This is under the minimum floor set by state law

The county would be required to re-set our tax rate to reflect an additional charge to bump the rate back up to 20 Mills for General Operations The bump would amount to 4.37565 mills

FINANCIAL IMPACT TO LEDGMONT SCHOOL DISTRICT

MILLAGE MOVED TO DEDICATED DEBT SERVICE FUND

4.5 Inside Mills

$451,573 annually

ADDITIONAL MILLAGE ASSESSED BY COUNTY (not voted by residents)

4.37565 Mills

$401,350 annually

FINANCIAL IMPACT TO LEDGMONT SCHOOL DISTRICT

$2,671,750 CURRENT DEBT REPAID TO STATE OF OHIO

6-7 years

$451,573 annually

TAXPAYERS ASSESSED ADDITIONAL FUNDS

6-7 years

$401,350 annually

NET EFFECT ON GENERAL FUND

Increase of 4.37565 Mills

increase of $401,350

WHY DO THIS?
It is a formulated plan to repay State of Ohio Solvency Assistance Loans. It is a plan with a finite beginning and a finite end. Millage movement for debt service is permissible by State law.

Provides the district with a viable opportunity to recover from financial stress that loan repayments have placed the district under.
Gives the district breathing room and time to explore further reductions, changes, and opportunities. Allows debt to be addressed, thereby making Ledgemont an attractive partner for many shared service opportunities.

IN SHORTIT GIVES LEDGEMONT OPTIONS.

POTENTIAL SETBACKS
Solvency Assistance Advances not specifically identified as Debt under current state law
Current Ohio law is vague as to the nature of Solvency Assistance Advances No legal precedence for millage move for this sort of repayment Ohio Department of Education may not be willing to agree to Extended payment terms as requested by Ledgemont Board of Education Property Tax payers may be unhappy with the unvoted millage bump-up

WHAT HAPPENS WHEN DEBT IS FULLY REPAID?

MILLAGE REVERTS BACK TO ITS ORIGINAL STATE

4.5 Mills REVERTS BACK TO INSIDE MILLAGE

RESIDENTS ARE NO LONGER ASSESSED THE ADDITIONAL BUMPED-UP TAX

LEDEMONT EXITS FROM THIS PERIOD DEBT FREE

SOME FINANCIAL STATISTICS

Ledgemont Local SD Average Household Income $49,646
Ledgemont Local SD A ggregate Property Value Huntsburg Township - $680,830 Montville Township - $52,240,320 Thompson Township - $49,453,680 TOTAL PROPERT Y VALUE: $102,374,830

TAX BUDGET HEARING

JANUARY 13, 2012 7:15 P.M.

LEDGEMONT LOCAL SCHOOL DISTRICT

CURRENT 2014 MILLAGE LEDGEMONT LOCAL SCHOOL DISTRICT

FUND Purpose Date Passed (voted) N/A Set by law Type Millage Originally Authorized 3.5 2014 Effective Millage Rate 3.5

General Fund

Operational Inside Millage

Continuous

General Fund
General Fund General Fund General Fund General Fund

Operational Inside Millage

Operational Operational Operational Operational

N/A Set by law

1976 & prior Feb. 5, 1980 May 3, 1988 Nov. 3, 1992

Continuous
Continuous Continuous Continuous Continuous

1.0
25.4 4.5 7.9 8.9

1.0
6.297523 1.336527 3.508777 4.481523

TOTAL

46.7 voted 4.5 set by law

15.62435 voted 4.5 set by law

LEDGEMONT LSD GENERAL FUND - 001

DESCRIPTION
Property Taxes Grants In Aid Property Tax Allocation Public Utility School Foundation Income Tax Other Revenue TOTAL REVENUE EXPENDITURES Over/(Under) Beginning Cash Ending Cash Yr. End Encumbrances

FY12 Actual
1,885,475
44,221 494,681 64,880 1,929,894 603,290 2,607,184 7,629,625 8,101,212 (471,587)

FY13 Actual
1,901,779
32,428 398,945 8,550 1,996,251 1,028,466 1,491,641 6,858,060 6,752,523 105,537

FY14 Estimate
1,899,000
30,000 401,000 0 2,025,000 1,099,961 599,000 6,053,961 6,384,184 (330,223)

FY15 BUDGET
1,867,231
25,000 401,000 0 2,025,000 1,100,000 275,000 5,693,231 5,691,465 1,766

775,514
303,927 79,000

303,927
409,464 7,117

409,464
79,241 79,000

79,241
81,007 79,000

LEDGEMONT LSD PERMANENT IMPROVEMENT FUND - 003

DESCRIPTION
Property Taxes Homestead & Rollback Property Tax Allocation Public Utility Other Revenue TOTAL REVENUE EXPENDITURES Over/(Under) Beginning Cash Ending Cash Yr. End Encumbrances

FY12 Actual
0 0

FY13 Actual
0 0

FY14 Estimate
0 0

FY15 BUDGET
0 0

0
0 20,434 20,434 25,289 (4,855) 27,763 22,908 0

0
0 0 0 695 (695) 22,908 22,213 0

0
0 0 0 700 (700) 22,213 21,513 0

0
0 0 0 700 (700) 21,513 20,813 0

LEDGEMONT LSD PROPOSED DEBT SERVICE FUND - 002

DESCRIPTION
Property Taxes Homestead & Rollback Public Utility Other Revenue TOTAL REVENUE EXPENDITURES Over/(Under) Beginning Cash

FY12 Actual
0 0

FY13 Actual
0 0

FY14 Estimate
0 0

FY15 BUDGET
225,736 0

0
0 0 44,760 (44,760) 63,670

0
0 0 18,910 (18,910) 18,910

0
0 0 0 0 0

0
0 225,736 225,736 0 0

Ending Cash
Yr. End Encumbrances

18,910
0

0
0

0
0

0
0

LEDGEMONT LSD SCHEDULE OF INDEBTEDNESS

PURPOSE OF NOTES Date of Issue
Feb 1, 2012

Actual & Proposed Date Dues

June 30, 2017 Actual

Principal Outstanding at July 1, 2014

$1,257,750

FY15 BUDGET

Repayment of State Solvency Assistance Indebtedness

$419,250

Feb 1, 2013

June 30, 2019 Proposed June 30, 2020

$1,114,000

$222,800

Feb 1, 2014

$300,000

$0

TOTAL

$2,671,750

$642,050

LEDGEMONT LSD STATEMENT OF FUND ACTIVIT Y

( F U N D S W I T H R E V EN U E O T HE R T H A N LO C A L TA X ES )
Fund by Type Beginning Balance Total Estimated Receipts Total Resources Available for Expenditure Total Estimated Expenditures & Encumbrances Ending Estimated Unencumbered Balance

SPECIAL REVENUE FUNDS Public School Support Student Activities EMIS Public Connectivity Race to the Top IDEA B Title I Title II-A Improving Teacher Quality REAP TOTAL SPECIAL REVENUE FUNDS 22,500 0 0 0 3,500 1,200 0 0 0 27,200 45,000 45,000 8,000 3,600 0 109,000 40,000 19,000 10,000 279,600 67,500 45,000 8,000 3,600 3,500 110,200 40,000 19,000 10,000 306,800 55,250 45,000 8,000 3,600 3,500 108,200 40,000 19,000 10,000 292,550 12,250 0 0 0 0 2,000 0 0 0 14,250

LEDGEMONT LSD STATEMENT OF FUND ACTIVIT Y

( F U N D S W I T H R E V EN U E O T HE R T H A N LO C A L TA X ES )
Fund by Type Beginning Balance Total Estimated Receipts Total Resources Available for Expenditure Total Estimated Expenditures & Encumbrances Ending Estimated Unencumbered Balance

ENTERPRISE FUNDS Food Service Latchkey TOTAL ENTERPRISE 0 7,500 7,500 128,000 20,000 148,000 128,000 27,500 155,500 128,000 20,000 148,000 0 7,500 7,500

INTERNAL SERVICE FUNDS District Agency (Teachers) TOTAL INTERNAL SERVICE 1,000 1,000 3,750 3,750 4,750 4,750 3,750 3,750 1,000 1,000

FIDUCIARY FUNDS Student Activity Trust Funds TOTAL FIDUCIARY FUNDS 45,000 58,000 103,000 75,000 0 75,000 120,000 58,000 178,000 95,000 18,000 113,000 25,000 40,000 65,000