Budgets, Levies, & Debt

Attached is the 2011 Tax Levy presentation given to the Geneva Board of Education by the Assistant Superintendent of Finance. The presentation lays out how a tax levy is created and recommends what the board should approve. 

The yearly tax levy must be presented and approved by mid-December of the current year to be effective with property taxes paid the following June.  One important fact is that debt repayment is not part of the levy. Debt repayment is considered a

Attachments:

2011 Tax Levy Presentation.pdf

Attached is a one-page summary of the 2010-2011 Geneva School District Comprehensive Annual Financial Report (CAFR). This was taken from the Annual Financial Report that the School District filed with the state.  This summary was done by GenevaTaxFACTS from information in the filed CAFR report.

The state measures four areas to determine the financial strength of the district. Geneva's financial rating was 4.0 (highest ranking) in the following three areas;

• spent 98.2% of it's revenue
• has more in reserves (61%)  than the state recommendation of $27 million. (Note, this is not a law, just a suggestion)
• has more working cash on hand than the average district ($14.5 million) 

The District's financial rating was 1.0 (lowest ranking) due to the fact we are at 82% of our debt limit.

The average of the ratings was 3.0 which means we spend our revenue, have too much in reserve, have excess working cash, and have a very high level of debt?

Attachments:

One-Page Summary - 2010-11 CAR Report.pdf

This attachment compares the 2011-12 School District Budget to the actual Revenue and Expenses from the School District Annual Financial Report 2010-11.  While the Budget is discussed for more than four months, the actual Revenue & Expenses for the year receives little or no analysis. 

Here's a quick recap of the actual expense numbers for the 2010-11 school year by Fund:

Fund                       Expense                 Reserve
Education               $50.6 million           $18.2 million
Operations              $  9.8                         $ 7.2
Debt Repayment    $13.3                         $ 3.4
Transportation       $  8.0                         $ 2.7
S.S. & Retiremt       $  2.2                         $ 1.9
Working Cash                                            $14.2

TOTAL                  $83.9                        $47.6

Attachments:

Geneva Budget and Historical Financial Info For Debt Repayment.pdf

View all Approved Budgets of the School District from 2001 to 2012.

This breakout of School District expenditures by Category as well as by Operating Funds from 1997 to 2009 was created in 2010 at Northern Illinois University with support from Illinois State Board of Education.  It was updated on March 4, 2011.

Take a look at how the Geneva School District expenses have grown since the 1997-98 school year.

Instruction                                138%
General Administration         375%
Support Services                      262%

Total                                           189%

Including Construction          690%

Enrollment                                41%*  

*Based on 2010 vs. 1998 enrollment from the Illinois Local Education Agency Retrieval System Website (ILEARN)

Attachments:

Expenditures 1997-2009.pdf

This bar chart from PMA Financial Network shows an analysis of our School District Revenues and Expenses from 2010 to 2015 and how the deficit continues to increase.

Attachments:

Long Range Results on Fund Balances.pdf

There has been a lot of discussion over the last three months about the total debt that is owed by the School District.  The attached spreadsheet recaps the debt principal, the interest charges, and the scheduled repayment on a yearly basis.  The Board of Education has until March 1st to decide if they are going to use some reserve funds to pay down the debt.  The current debt is scheduled to be paid in full in 2027.  These numbers may change based on if the Board refinances the current debt between now and 2027.

Yearly repayments will increase dramatically in 2016 and remain high until at least 2020.  Currently the repayment is about $14.4 million per year and will be $20.5 million in 2016. The following years will be: $22.1, $23.8, $24.5, $24.6 and 24.9 million per year.  The Board of Education does not have a formal plan on how these amounts will be funded.  The debt, unless refinanced, has to be repaid under Illinois State law.

This information was extrapolated by GenevaTaxFACTS from William Blair & Co. Presentation October 24, 2011 .

Attachments:

Summary of District Debt 2010 to 2027.pdf

Attached is the complete report of the 2007 Bond Issue.  The original request was for $85.8 million dollars.  Through what is called a "premium bond," the District received $112.1 million dollars.  By offering a higher than normal coupon rate (5% & 9%) the District was able to receive the incremental revenue.  The revenue breakout is explained on page 11.

What is the benefit of a premium bond?  The premium revenue received is not included in the maximum debt allowed. The District's maximum debt is 13.8% of the Operating Revenue.  Operating Revenue is defined as all revenue except for revenue for debt repayment.

Attachments:

2007 Bond Issue

The 2004 Bond issue was also issued at a premium.  This issue included two offerings, $8.3 million and $32.9 million.  The $8.3 million  offerings were issued as Capital Appreciation Bonds at a coupon rate of 9%.  The $32.9 million offerings were Current Interest Bonds at coupon rates between 3.5% and 5.0%.

The higher coupon rates enable the District to collect $46.2 million or $5.0 million more than originally requested.

Attachments:

2004 Bond Issue