Page 34 - Hudson City Schools CAFR 2017

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2017
(UNAUDITED)

Governmental Activities

Net position of the District’s governmental activities decreased $3,832,586 due to an increase in expenses combined with
a decrease in revenues.

Total revenues for governmental activities decreased $4,118,353 or 5.82%. The primary sources of revenue for
governmental activities are derived from property taxes and unrestricted grants and entitlements. These two revenue
sources represent 84.80% of total governmental revenue. Grants and entitlements reported as general revenues consist
primarily of the unrestricted portion of the District’s State Foundation revenue. The decrease in property taxes revenue is
mostly due to fluctuations in the amount of tax collected and available for advance at fiscal year-end by the Summit
County Fiscal Officer. Tax advances available to the District are recorded as revenue under GAAP. The amount of tax
advances available at June 30, 2017 and 2016 was approximately $5.0 million and $9.2 million, respectively. This
amount can vary depending upon when the County Fiscal Officer distributes tax bills.

The overall increase in governmental activities expenses was $4,936,614 or 7.53%. This increase is primarily a result of
increased pension expense for the District due to the overall increase in net pension liability reported by the School
Employees Retirement System and the State Teachers Retirement System. Employee wages and benefits expenses also
increased slightly in accordance with the District’s latest negotiated agreements with the unions. The largest expense of
the District is for instructional programs. Instruction expenses totaled $41,947,338 or 59.53% of total governmental
expenses for fiscal year 2017.

The following graph presents the District’s governmental activities revenues and expenses for fiscal years 2017 and
2016.

Governmental Activities - Revenues and Expenses

$72,000,000
$70,000,000
$70,461,481 $70,747,248
$68,000,000
Expenses
$66,000,000
$66,628,895 Revenues
$64,000,000 $65,524,867
$62,000,000
2017 2016

The statement of activities shows the cost of program services and the charges for services and grants offsetting those
services. The following table shows, for governmental activities, the total cost of services and the net cost of services for
2017 and 2016. That is, it identifies the cost of these services supported by taxes revenue and unrestricted grants and
entitlements.

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