Page 37 - 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)

The overall decrease in revenues is mostly due to the decreased property taxes revenue. The primary reason for this is
fluctuations in the amount of tax advances available at year-end, as discussed on page F 12. For the general fund, the
amount of tax advances available at June 30, 2017 and 2016 were approximately $4.85 million and $8.89 million,
respectively. Payments in lieu of taxes increased as the District began receiving additional reimbursements related to
various tax abatement agreements. Interest earnings also increased which is due to higher interest rates on the District’s
CDs and investments.

The following table assists in illustrating the expenditures of the general fund.

2017 2016 Percentage
Amount Amount Change
Expenditures
Instruction $ 35,079,933 $ 33,710,259 4.06 %
Support services 21,301,929 20,800,256 2.41 %
Other non-instructional services 14,814 6,210 138.55 %
Extracurricular activities 1,204,049 1,098,373 9.62 %
Debt service 633,221 699,282 (9.45) %

Total $ 58,233,946 $ 56,314,380 3.41 %

General fund expenditures in fiscal year 2017 were $1,919,566 or 3.41% higher than in fiscal year 2016. This increase is
primarily due to slightly higher wages and salaries, as well as higher employee benefits costs, including medical
insurance premiums.

Enterprise Fund

The District maintains an enterprise fund to account for the community education program. Since the enterprise fund is
accounted for on the same basis of accounting as business-type activities (the accrual basis of accounting), the statement
of net position and the results of operations on the fund financial statements mirror those reported as business-type
activities on the District-wide financial statements. See page F 14 for a discussion of the District’s business-type
activities.

General Fund Budgeting Highlights

The District’s budget is prepared according to Ohio law and is based on accounting for certain transactions on a basis of
cash receipts, disbursements and encumbrances. The District uses site-based budgeting and the budgeting systems are
designed to tightly control total site budgets but provide flexibility for site management. The most significant budgeted
fund is the general fund.

For the general fund, the original budgeted revenues and other financing sources totaled $64,291,364. This was
increased slightly to $64,405,891 in the final budget. Actual revenues and other financing sources were $61,320,081, or
$3,085,810 (4.79%) less than the final budget, primarily due to lower than expected property tax collections.

General fund original and final budget appropriations (expenditures and other financing uses) were $61,716,488. The
actual budget basis expenditures and other financing uses for fiscal year 2017 totaled $58,862,608, which is $2,853,880
(4.62%) less than the final budget appropriations. The District routinely appropriates more resources than actually
projected in order to reflect what expenditures would be in a worst-case scenario in order to ensure a sufficient general
fund carryover balance.

F 15