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HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

(UNAUDITED)

Consequently, in order to compare 2015 total program expenses to 2014, the following adjustments are needed:

Total 2015 program expenses under GASB 68 Governmental Business-Type
Pension expense under GASB 68 Activities Activities
2015 contractually required contributions
Adjusted 2015 program expenses $ 63,943,542 $ 1,315,393
(3,389,235) (49,133)
Total 2014 program expenses under GASB 27 5,096,378 10,612
Increase (decrease) in program 65,650,685
expenses not related to pensions 1,276,872
63,884,215
1,345,070

$ 1,766,470 $ (68,198)

Governmental Activities

Net position of the District’s governmental activities increased $8,546,647. Program revenues supported
13.55% of the total governmental expenses.

Total revenues for governmental activities decreased $3,481,225 or 4.58%. The primary sources of revenue for
governmental activities are derived from property taxes and unrestricted grants and entitlements. These two revenue
sources represent 86.14% 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
partly 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 are recorded as revenue under GAAP. The amount of tax advances
available at June 30, 2015, 2014 and 2013 was approximately $8.8 million, $6.4 million and $2.0 million, respectively.
This amount can vary depending upon when the County Fiscal Officer distributes tax bills. Approximately $500,000 in
outstanding delinquent taxes was written off in fiscal year 2015, which also contributed to the decrease in property taxes
revenue. Delinquent taxes are recorded as revenue under the full accrual basis of accounting.

The only significant decrease in revenues was in capital grants and contributions. These revenues consist primarily of
donations for the construction of the Malson Athletic Center.

The overall increase in expenses not related to pensions was $1,766,470 or 2.77%. The increase is primarily a result of
slight increases in employees’ retirement and insurance benefits and purchased services expenses. The largest expense of
the District is for instructional programs. Instruction expenses totaled $38,011,081 or 59.44% of total governmental
expenses for fiscal year 2015.

The following graph presents the District’s governmental activities revenues and expenses for fiscal years 2015 and
2014.

F 13