Page 37 - Hudson CAFR Report 2018

HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

MANAGEMENT’S DISCUSSION AND ANALYSIS
FOR THE FISCAL YEAR ENDED JUNE 30, 2018

(UNAUDITED)

The overall increase in revenues is mostly due to the increased property taxes revenue. This is a result of; a) higher
collections due to an increase in assessed property values, and b) fluctuations in the amount of tax advances available at
year-end. Payments in lieu of taxes increased as the District received additional reimbursements related to various tax
abatement agreements. Tuition also increased due to revenues from the District’s elementary schools. The increase in
interest earnings is a result of additional investments in interest-bearing securities, as well as higher interest rates on
those investments.

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

Expenditures 2018 2017 Percentage
Instruction Amount Amount Change
Support services
Other non-instructional services $ 38,010,717 $ 35,079,933 8.35 %
Extracurricular activities 22,478,605 21,301,929 5.52 %
Debt service 9,053 14,814 (38.89) %
1,388,245 1,204,049 15.30 %
Total 645,219 633,221 1.89 %

$ 62,531,839 $ 58,233,946 7.38 %

General fund expenditures in fiscal year 2018 were $4,297,893 or 7.38% higher than in fiscal year 2017. This increase is
partly due to higher wages and employee benefits costs, particularly for the District’s certified teaching staff. In addition,
the District entered into a capital lease transaction of approximately $1.2 million during fiscal year 2018 to acquire
copiers. This is reported as an instruction expenditure.

Building Fund

The building fund is reported as a major fund and is used to account for receipts and expenditures involved in the
construction and replacement of instructional facilities. This fund had revenues of $1,322,348 and expenditures of
$600,665 in fiscal year 2018. In addition, the building fund reported other financing sources (sale of bonds and transfers
in) of $82,050,000 and other financing uses (transfers out) of $1,238,000, resulting in a net change in fund balance of
$81,533,683. The bonds issued in 2018 are being used to finance various capital improvements throughout the District,
including the construction of a new middle school.

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 13 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.

F 16