Niles Township High School District 219 Skokie, Illinois
Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2010
The governing body consists of a seven-member Board of Education elected from within the Niles Township boundaries and serve four-year terms. Based on the legislative authority codified in The School Code of Illinois, the Board of Education has the following powers: a. has the corporate power to sue and be sued in all courts, b. has the power to levy and collect taxes and to issue bonds, c. can contract for appointed administrators, teachers, and other personnel, as well as for goods and services. The Board of Education appoints a superintendent who, in turn, recommends to the Board of Education the appointment of the remaining administrative team. An organizational chart is provided at the front of this report. District 219 serves students of the Villages of Skokie, Lincolnwood, Morton Grove, and Niles and offers its diverse student population a broad cross-section of courses and opportunities tailored to the needs of every student. Over 165 courses are available for students to choose including Advanced Placement (AP), STEM inquiry and research, Project Lead the Way (engineering program), comprehensive English Language Learner (ELL) services, and a top-notch special education program. We also encourage student involvement in extracurricular activities, athletics, clubs, and fine arts. There are more than 20 competitive sports and 80 clubs for our students to join. The District is required to adopt an annual budget for all its funds by September 30 of each year. The annual budget serves as a foundation for financial planning and control. The budget is prepared by fund, function (e.g., instruction, support services), location, program, and object (e.g., salaries, employee benefits). The Board of Education approves the hiring of employees, awarding of bids, and payments to vendors at its regular meetings throughout the year.
Local Economy Niles Township is in Cook County, Illinois. The majority of Niles Township is composed of the Villages of Skokie, Lincolnwood, Morton Grove, and Niles. The major industries include retail stores, medical centers, manufacturers, and distributors. Over the past five years, the combined assessed valuation of industrial and commercial property averaged over 48 percent of the total property valuation within Niles Township, which lessens the property tax burden on residential homeowners. The 2010 county unemployment rate was approximately 10.9%. The state and national unemployment rates for the same year were 10.4% and 9.5%, respectively. Over 85% of Cook County residents are employed in non-manufacturing jobs as opposed to manufacturing and agriculture jobs. In February 1995, the Illinois General Assembly passed a tax cap legislation (P.L. 89-1) for Cook County making it retroactive to the 1994 tax year. This legislation, known as the Property Tax Extension Limitation Law Act, controls the District’s ability to generate property tax revenues. In addition to P.L. 89-1, the Illinois General Assembly amended Article 20, which limits the amount of debt service taxes a district can generate through the sale of non-referendum bonds to the district’s 1994 aggregate nonreferendum debt service amount. For District 219, this limit is $2,864,970. In order for a district to increase its property tax rates, a referendum question would need to be put to the voters. In March 2004, the voters of District 219 approved a referendum increasing the Educational property tax rate by 23 cents from 1.2991 to 1.5291.
For information regarding the District’s financial position and respective changes in financial position, please read the Management’s Discussion and Analysis on pages 3 – 13.
Long-Term Financial Planning Although the District has benefited from the successful referendum, it still needs to be fiscally prudent. Key areas of concern are delayed state funding, costs of complying with 29 Illinois laws and 100 specific instructional mandates, growing English Language Learner population resulting in increased costs for remedial reading and math programming, and growing special education student needs. The District is actively reducing expenditures, where possible. Reductions of $1 million occurred in fiscal year 2009 and fiscal year 2010. District finances are monitored through such means as monthly financial reports to the Board of Education, the annual budget process, and long-term financial projections. The Superintendent established a Superintendent’s Financial Advisory Committee (SFAC) consisting of parents, local governmental officials, business owners, community members, administration, and teachers. The SFAC meets at the Superintendent’s discretion, but, minimally, once per year.
Relevant Financial Policies Budget planning begins no later than March by adopting a proposed budget calendar. The proposed budget shall be available for public inspection and comment at least 30 days before the budget hearing. Within 30 days of adoption, the budget needs to be filed with the Cook County Clerk’s office and filed electronically with the Illinois State Board of Education (ISBE). Also, the adopted budget shall be posted on the District’s website. The Board of Education may amend the budget by following the same procedure as provided for in the original adoption. The Board of Education shall act on all expenditures, interfund loans and transfers, and transfers within funds in excess of 10 percent of the total fund. The Township Treasurer serves as the Chief Investment Officer. The Township Treasurer invests money that is not required for current operations, in accordance with Board policy and state law. See the Notes to the Basic Financial Statements for additional information on cash and investments. The certificate of property tax levy is to be filed with the Cook County Clerk’s office by the last Tuesday in December. The District annually publishes a statement of affairs regarding its financial position by December 1 each year.
Major Initiatives At its June 15, 2009 meeting, the Board of Education approved the five interventions in the plan document, “A Vision for the Future of District 219”. Detailed plans, including targets, timelines, resources, and evaluation plans, are on the District’s website. The following are summaries of this vision:
Advancing and Integrating Science, Technology, Engineering, and Mathematics (STEM) and 21st Century Literacies We want to provide opportunities for our students to design and carry out sophisticated research, communicate with colleagues throughout the world and have a competitive advantage as they seek college enrollment and entry into institutions of higher learning and the workforce. To accomplish this goal, the District constructed a STEM research center at Niles North and Niles West High Schools. Curriculum enhancements have included incorporating courses associated with Project Lead the Way (an engineering program which culminates in a capstone engineering research course) and a science research course that provides students an opportunity to participate in authentic research with an instructor during the school day. Ensuring a Guaranteed and Rigorous Curriculum and Common Final Exam Each course will have a District-wide core curriculum guide and complementing common final exam, which will be administered each semester. The purpose of this goal is to assess student performance in District 219 as follows:
Guarantee similar learning opportunities for students taking the same course at North, West, and Central Evaluate student academic performance on course learning targets (coded to State Standards or other department-wide selected standards) that the District believes to be crucial to student learning Use assessment data to improve student learning Modify and adjust curriculum
By fall of 2014, every course will have a Curriki, common curriculum guide, learning targets, and a common final assessment. Engaging Students in Anywhere-Anytime Learning (AAL) by Providing Laptop Computers to Expand Their Learning Opportunities Our students are citizens of the 21st century. They read, communicate, collaborate, socialize, work, explore, and learn with personal technologies. Schools can begin to capitalize on the talents and interests of this collaborative, resourceful, and innovative generation of thinkers by bringing them the tools that they are already familiar with and use them for their academic achievement. There are three main elements of the Anywhere-Anytime 21st Century Learning (AAL) plan:
Pedagogical support – Teachers and staff will be provided the professional development and technical support to fully integrate technology into instruction Hardware deployment and support – Mobile devices will be deployed to students, kept secure, and maintained in working order Infrastructure and networking consideration – The infrastructure will support a widescale deployment of mobile computing solutions for students
There is a large body of evidence which shows that technology motivates learning. Anywhere-Anytime Learning (AAL), facilitated by a 1:1 deployment, bridges the digital divide where all students have equal access to information, learning resources, and the digital tools that will make the difference in their success in the 21st century working and learning environment.
Committing to a Five-Year Comprehensive Capital Improvement Plan All three locations, Niles North, Niles West, and Niles Central/District Office, have established a fiveyear capital plan to improve the facilities to meet the goals set by the Board of Education. Highlights of the comprehensive plan include Niles North grandstands and press box, renovating Niles North athletic fitness/dance cardio area, relocating Niles West’s gymnastics gym, adding to Niles West a training room and cardio lab, and renovating the existing pool and building a new pool at Niles North. Establishing and Enhancing Partnerships with Parents, Community Organizations, and Outside Agencies to Strengthen our Community of Learners Research shows that there is a convincing link between student achievement and parent and community involvement, including improved academic achievement. Research also indicates that when communities and agencies partner with schools, students receive benefits such as higher quality learning programs and new resources and programs to improve teaching and the curriculum. District 219 already has established some partnerships like Artists in Residency, Abbott Labs, and the English Language Learners Parent Center. Every department will establish relationships with outside agencies, initiate programs that incorporate parents and/or the community into the pedagogy and content of their discipline, and teachers will evidence the ways they include parents in their students’ education and participation in class.
Awards and Acknowledgements Government Finance Officers Association (GFOA) GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to Niles Township High School District 219 for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2009. This is the ninth consecutive year that the District has received this prestigious award. In order to be awarded a Certificate of Achievement, the District had to publish an easily readable and efficiently organized CAFR that satisfied both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Achievement Program’s requirements, and we are submitting it to the GFOA to determine its eligibility for another certificate. Association of School Business Officials International (ASBO) ASBO awarded a Certificate of Excellence in Financial Reporting to Niles Township High School District 219 for its comprehensive annual financial report (CAFR) for the fiscal year ended June 30, 2009. This is the ninth consecutive year that the District has received this prestigious award. In order to be awarded a Certificate of Excellence, the District had to prepare and issue a high-quality CAFR that met or exceeded the standards of the program. A Certificate of Excellence is valid for a period of one year only. We believe that our current CAFR continues to meet the Certificate of Excellence Program’s requirements, and we are submitting it to the ASBO to determine its eligibility for another certificate.
The preparation of this report would not have been possible without the efficient and dedicated service of the entire Business Office staff. We wish to express our appreciation to all members of the Business Office department who assisted and contributed to the preparation of this report. Also, credit must be given to the Board of Education President and members for their desire and commitment to maintain the highest standards of professionalism in the management of Niles Township High School District 219 finances. Respectfully submitted,
INDEPENDENT AUDITORS' REPORT
The Members of the Board of Education Niles Township High School District 219 Skokie, Illinois We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Niles Township High School District 219, as of and for the year ended June 30, 2010, which collectivelycomprise Niles Township High School District 219's basic financial statements, as listed in the table of contents. These financial statements are the responsibility of Niles Township High School District 219's management. Our responsibility is to express opinions on these financial statements based on our audit. The prior year summarized comparative information has been derived from the District’s June 30, 2009 financial statements and, in our report dated January 4, 2010, we expressed unqualified opinions on the respective financial statements of the governmental activities, each major fund, and the aggregate remaining fund information. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of Niles Township High School District 219 as of June 30, 2010, and the respective changes in financial position thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have issued our report, dated March 11, 2011, on our consideration of Niles Township High School District 219's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. (Continued) -1-
The Members of the Board of Education Niles Township High School District 219 Skokie, Illinois
The management's discussion and analysis on pages 3 through 13, the Illinois Municipal Retirement Fund and Other Postemployment Benefits historical data on page 52 and 53, and the budgetary comparison schedules and notes to the required supplementary information on pages 54 through 80 are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise Niles Township High School District 219's basic financial statements. The other schedules, listed in the table of contents as other supplementary financial information, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. The accompanying introductory and statistical sections, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. This information has not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion on it. MILLER, COOPER & CO., LTD.
Certified Public Accountants Deerfield, Illinois March 11, 2011
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 As management of the Niles Township High School District 219 (“District”) finances, we offer readers of the Niles Township High School District 219 financial statements this narrative overview and analysis of the financial activities of the Niles Township High School District 219 for the fiscal year ended June 30, 2010. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our transmittal letter at the front of this report.
District 219 improved its overall financial position for fiscal year 2010 from fiscal year 2009. Total revenue of $150,936,497 exceeded expenses of $124,094,377 by $26,842,120. The assets of the District exceeded its liabilities at June 30, 2010 by $142,728,069 (net assets). Of this amount, $68,444,392 represents unrestricted net assets. Total governmental fund revenue of $150,975,037 exceeded total governmental fund expenditures of $130,893,046 by $20,081,991. As of June 30, 2010, the total fund balance for all governmental funds equaled $127,493,728, which is a $20,082,051 increase from the prior year. Approximately 99.6% of the total fund balance is available for spending at the District’s discretion (unreserved, undesignated fund balance).
Overview of the Financial Statements This management’s discussion and analysis (MD&A) is intended to serve as an introduction to the Niles Township High School District 219 basic financial statements. The District’s basic financial statements consist of three parts: government-wide financial statements, fund financial statements, and notes to the basic financial statements. Government-Wide Financial Statements These statements are designed to provide readers with a broad overview of the District’s finances, in a manner similar to private-sector businesses. The Statement of Net Assets presents information on all of the District’s assets and liabilities, with the difference between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. The Statement of Activities presents information showing how the District’s net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in future fiscal years (e.g., uncollected taxes). The government-wide financial statements can be found on pages 14 - 15 of this report.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Fund Financial Statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The District, like other state and local governments, use fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the District’s funds fall into two categories: governmental funds and fiduciary funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on nearterm inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements. Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the District’s near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The District maintains eight individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, special revenue funds, debt service fund, and capital projects funds. For reporting purposes, the District is classifying each of its governmental funds as a major fund. The District adopts an annual appropriated budget for all governmental funds. Budgetary comparison statements have been provided for each governmental fund to demonstrate compliance with this budget. The basic governmental fund financial statements can be found on pages 16 - 21 of this report. Fiduciary funds are used to account for resources held for the benefit of parties outside the District. Fiduciary funds are not reflected in the government-wide financial statements because the resources of those funds are not available to support the District’s own programs. The basic fiduciary fund financial statement can be found on page 22 of this report. Notes to the Financial Statements The notes are an integral part of the financial statements and provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 23 - 51 of this report.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Other Information In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information (RSI) concerning the District’s operations. RSI schedules, individual fund schedules, and other supplementary financial information can be found on pages 52 - 88 of this report. The statistical section which includes various financial, operational, and historical schedules is on pages 89 - 129 of this report.
Government-Wide Financial Analysis Net Assets As noted earlier, net assets may serve over time as a useful indicator of the District’s financial position. The following is a condensed statement of net assets as of June 30, 2010:
Table 1 Condensed Statement of Net Assets Percentage Governmental Activities 2010 2009 Change $ 206,405,589 $ 192,478,351 7.2% 4.9% 134,347,538 128,084,428 340,753,127 320,562,779 6.3%
Current and other assets Net capital assets Total assets
Long-term liabilities Other liabilities Total liabilities
140,617,082 64,059,748 204,676,830
-1.2% -7.6% -3.2%
43,461,211 43,317,206 30,822,466 32,302,463 68,444,392 40,266,280 $ 142,728,069 $ 115,885,949
0.3% -4.6% 70.0% 23.2%
138,864,896 59,160,162 198,025,058
Net assets Invested in capital assets, net of related debt Restricted Unrestricted Total net assets
The overall net asset position of the District as of June 30, 2010 is $142,728,069, with $30,822,466 representing resources that are subject to external restrictions on how they may be used and $68,444,392 being unrestricted. A portion of the net assets, $43,461,211, is invested in capital assets (e.g., land, buildings, and equipment), net of related debt and is not available for future spending. Although the District’s investment in capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Most of the current and other assets are comprised of $127,556,377 in cash and investments and $54,303,102 for property taxes receivable. Long-term liabilities outstanding consist primarily of bonds of $134,102,964, and other liabilities are mostly unearned revenue of $53,549,770.
Changes in Net Assets The following table provides a condensed government-wide summary of the changes in net assets for the 2010 fiscal year:
Table 2 Changes in Net Assets Governmental Activities 2010 2009 Revenues: Program revenues: Charges for services Operating grants and contributions General revenues: Property taxes Replacement taxes Other Total revenue Expenses: Instruction-related services Support services Community services Nonprogrammed charges Other Total expenses Change in net assets Beginning net assets Ending net assets
119,836,010 3,743,872 6,121,812 150,936,497
106,559,460 4,627,823 5,161,195 133,578,912
12.5% -19.1% 18.6% 13.0%
67,564,458 50,347,702 233,318 41,487 5,907,412 124,094,377
63,463,132 48,232,890 31,983 48,283 6,104,404 117,880,692
6.5% 4.4% 629.5% -14.1% -3.2% 5.3%
26,842,120 115,885,949 $ 142,728,069
15,698,220 100,187,729 $ 115,885,949
71.0% 15.7% 23.2%
Revenues Property Taxes – As depicted in the following pie chart, 79.4% of District revenues is derived from property taxes. This revenue source is limited by the state’s “tax cap” methodology. In essence, the annual growth in property tax revenues is limited to a consumer price index (CPI) factor plus new property growth in the District’s community. The CPI factor related to the 2009 levy year decreased to 0.1% from the 2008 levy year rate of 4.1%. The equalized assessed valuation (EAV) decreased by $217,612,188 to $5,157,582,183 from the 2008 tax levy year. The new property for the 2009 levy year was $29,795,197, which is a decrease of $28,170,793 from the prior levy year.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010
Charges for services
Sources of Revenue FY 2010
Operating grants Property taxes Replacement taxes Other
Operating Grants and Contributions – The 28.3% increase is primarily attributable to the $3,183,055 increase in the TRS on-behalf contribution. This increase does not affect cash or net assets as the same revenue amount is recorded as an expense. The American Recovery and Reinvestment Act of 2009 (ARRA) increased this category total from the prior year as this was a one-time funding. A total of $1,018,652 was received for funding for general state aid, Title I, and special education. Replacement Taxes – There was a decrease of $883,951 in replacement taxes from fiscal year 2009 as a result of the state’s poor economy. Other General Revenues – Investment earnings increased by $679,285 from $3,627,017 to $4,306,302 for FY 2010. Expenses Salaries and employee benefits increased based on the collective bargaining agreements and individual employee contracts. Medical and dental costs decreased from the prior year by $156,861, or 1.8%. The TRS on-behalf payment increased from $7,566,237 to $10,749,292 based on creditable earnings and the statutory contribution rate of 23.38% for fiscal year 2010. Depreciation expense increased from $8,378,787 to $8,965,360. Other changes in expense are detailed in the next section.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Change in Net Assets The change in net assets for fiscal year 2010 was higher than last year by $11,143,900. In fiscal year 2009, the change in net assets equaled $15,698,220, while the change in net assets for the current year was $26,842,120.
Financial Analysis of the Government’s Funds As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental Funds The focus of the District’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District’s financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year. On June 30, 2010, the total fund balance for its governmental funds equaled $127,493,728, an increase of $20,082,051 in comparison to the prior year. A portion of the fund balance ($449,387) has been reserved and is not available for new spending because it has already been committed for prepaid items. The undesignated fund balance increased from fiscal year 2009 from $107,199,749 to $127,044,341 and is available for spending at the District’s discretion. The June 30, 2010 undesignated fund balance for the General Fund (Educational Fund) was $74,270,735, which equaled 81.82% of the General Fund expenditures. The total undesignated fund balance of $127,044,341 for all governmental funds equaled 97.06% of total governmental expenditures. The following pie chart shows the percentage of each individual fund balance in relation to the total governmental fund balance:
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010
Debt Service 2%
Fire Preven. 3%
Working Cash 18%
IMRF 3% O&M 7% Transpor. 3%
General Fund Educational Fund The Educational Fund is the chief operating fund of the District and accounts for the instructional and support costs for educating its students. As of June 30, 2010, the reserved fund balance equaled $223,196 and the undesignated fund balance equaled $74,270,735 for a total fund balance of $74,493,931. Property taxes increased by $10,312,154 and interest on investments increased by $888,496. State sources mostly increased by the increase in the TRS on-behalf contribution of $3,183,055. Overall, federal revenue increased by $464,859. The special education Individuals with Disabilities Education Act (IDEA) flow through grant and the IDEA room and board grant decreased by $36,366 and $178,218, respectively. The Medicaid Fee for Service grant increased by $41,257. The various ARRA grants (General State Aid, Title I, and IDEA flow through) increased the revenue by $717,624. Total expenditures increased from $82,973,733 to $90,772,560, or by 9.40%. When factoring out the TRS on-behalf payment, the total expenditure increase equaled 6.12%. Staffing remained fairly consistent from fiscal year 2009 to 2010. Certified personnel, excluding administrators, increased from 394.5 to 400.6 full-time equivalents (FTE). Total support staff decreased by eight FTE. Salary increases are reflected under the appropriate functions.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Special Revenue Funds Operations and Maintenance Fund The fund balance from fiscal year 2009 to 2010 increased by $1,962,395 to $8,832,928. The general levy increased by $1,582,607 and leasing levy decreased by $1,675,513. Various increases and decreases in expenditures affected the fund balance increase as well. Purchased services and capital project expenditures may fluctuate greatly from year to year depending on the approved capital projects. The purchased services increased by $456,397 and capital outlay expenditures increased by $203,258. Overall, expenditures increased from the prior year by 2.6% or $337,929 to $13,201,804. Tort Immunity and Judgment Fund The fund balance decreased by $1,223,486 to $7,291,782 for the current year. The property tax levy decreased by $1,520,772 to $2,076,821 and other local revenue decreased by $81,916 due to insurance refunds which were a one-time receipt in 2009. Total expenditures increased by a modest $38,619 or 1.1%. Transportation Fund The fund balance increased by $523,334 from fiscal year 2009 to fiscal year 2010. Property taxes increased from $1,598,630 to $2,004,126 for the current year. State funding for special education transportation increased by $512,860. Total fund expenditures were higher by $431,742 to $5,005,720. The primary cause for the expenditure increase was related to the $437,250 settlement with the transportation carrier, Alltown. IMRF and Social Security Fund The fiscal year 2009 and 2010 fund balances were $3,003,642 and $3,374,416, respectively. Property tax revenue for fiscal year 2010 was $3,257,764 which was an increase of $1,080,552 from the prior year. Benefits increased by $198,989 to $3,068,998. This expenditure increase is attributable to a general increase in salaries. Working Cash Fund As in past years, interest earned in this fund was transferred to another fund in need. For fiscal year 2010, $775,507 of interest was transferred to the Transportation Fund. The fund balance increased from fiscal year 2009 to 2010 by $1,355,993, which is lower than the prior year’s net change in fund balance of $2,085,130.
Debt Service Fund There were six outstanding bond series as of June 30, 2010. Bond principal and interest payments were $1,095,000 and $4,670,163, respectively. The fund balance for fiscal year 2010 increased to $2,594,282 from the fiscal year 2009 balance of $2,369,507.
Capital Projects Funds Capital Projects Fund Debt certificates were issued in fiscal year 2008 to improve the District’s facilities in the amount of $10,500,000, and the proceeds were reported in this fund. Capital improvements were finalized in FY 2010 in the amount of $8,090,392. The fiscal year 2009 fund balance plus the current year’s interest earnings were spent this year resulting in a zero ending fund balance for June 30, 2010. -10-
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Fire Prevention and Safety Fund The fiscal year 2010 fund balance increased by $663,699 from the prior year fund balance of $2,875,068. Property taxes increased by $1,512,251. Purchased services decreased by $40,886 and capital projects increased by $264,960. These expenditure categories can vary from year to year depending on the life safety projects that are completed.
Budgetary Highlights There were no amendments to the fiscal year 2010 budget. Therefore, the original budget is also the final budget.
General Fund Educational Fund The general levy was $24,230,376 higher than the budgeted amount of $65,801,208. The special education levy was lower than the budget by $2,312,826. Corporate personal property replacement taxes came in under budget by $3,031,128, due to $3,000,000 being allocated to the Operations and Maintenance Fund. Interest on investments was higher than expected and resulted in a $1,017,095 positive variance. General state aid was $561,218 less than budget, due to $704,356 being allocated to the Operations and Maintenance Fund. The special education private facility tuition grant and the bilingual education grant had favorable variances of $182,746 and $118,441, respectively. However, the School Safety and Educational Improvement Block grant had a negative variance of $159,660. The on-behalf contribution to TRS shows a favorable variance of $849,292. The special education flow through grant had a negative variance of $112,356. The ARRA flow through grant had an unfavorable variance of $483,423. Overall, total federal sources had a negative variance of $918,045, or 22.2%. Overall, expenditures had a positive variance of $3,179,724, or 3.4%. Total salaries and benefits were under budget by $1,859,331 and $2,025,330. Purchased services had a favorable variance of $379,311. Capital outlay had a negative variance of $490,362, mostly due to the timing difference of netbook purchases of $472,499 for the following school year’s implementation of the Anytime Anywhere Learning Plan.
Capital Asset and Debt Administration Capital Assets The historic cost, net of accumulated depreciation, of the District’s capital assets as of June 30, 2010 is shown below:
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 Table 3 Capital Assets (net of accumulated depreciation) Land Land improvements Buildings Equipment Transportation equipment Food service equipment Total
2010 $ 2,548,773 8,775,211 114,107,700 8,704,868 46,927 164,059 $ 134,347,538
2009 $ 2,548,773 8,063,903 110,008,215 7,208,350 67,967 187,220 $ 128,084,428
Percentage Change 0.0% 8.8% 3.7% 20.8% -31.0% -12.4% 4.9%
As of June 30, 2010, the District had approximately $134,347,538 of capital assets. As a result of the debt certificate proceeds from fiscal year 2008, additional capital improvements occurred during fiscal year 2010. Land improvements consisted primarily of the synthetic turf projects and other athletic field improvements. Equipment increases were mostly due to netbooks for students, STEM (science, technology, engineering, mathematics) equipment, computer hardware, and furniture. Depreciation expense charged to operations in fiscal year 2010 was $8,965,360. Additional detail is provided in Note E of the Notes to the Financial Statements and in schedules to the financial statements.
Long-Term Debt The following is a condensed summary of the District’s long-term debt outstanding as of June 30, 2010:
Table 4 Outstanding Long-Term Debt 2009 2010 Bonds $ 134,102,964 $ 135,015,112 2,253,465 2,417,099 Unamortized premium Compensated absences and employee obligations 2,508,467 3,184,871 $ 138,864,896 $ 140,617,082 Total long-term debt
Percentage Change -0.7% -6.8% -21.2% -1.2%
General obligation bonds in the amount of $134,102,964 will be paid with specifically approved property tax levies accounted for in the Debt Service Fund. Other long-term debt obligations as of June 30, 2010 consist of employee early retirement obligations and compensated absences of $2,242,274 and $266,193, respectively. During fiscal year 2010, the District paid $5,765,163 for all scheduled principal and interest obligations related to its debt instruments.
Niles Township High School District 219 Management’s Discussion and Analysis For the Year Ended June 30, 2010 State statutes limit the amount of general obligation debt for the high school district to 6.9% of the equalized assessed valuation (EAV) of taxable properties within Niles Township. As of June 30, 2010, the available bonding debt capacity equaled $221,770,207. Our existing debt equaled 37.68% of the bond debt limit. Additional detail is provided in the Note F of the Notes to the Financial Statements and schedules to the financial statements.
Economic Factors and Next Year’s Budget The District is aware of the following items that could significantly affect its future financial position or results of operations:
On December 17, 2007, the Board of Education and two unions (Niles Township Federation of Teachers and Niles Township Support Staff) approved a three-year extension of the current contract. The existing contract expired in fiscal year 2009. The contract extension provides for labor peace through fiscal year 2012. Raises averaging 2.75% were added to the existing salary schedule increases. Employee contributions for health and prescription drug coverage will increase, but new wellness benefits will be provided. An on-site daycare center will be available at competitive marketplace rates. An additional day of instruction will be added to the school calendars beginning in fiscal year 2010. The NTFT contract extension will include retirement language that preserves existing benefits but complies with state legislation regarding salary increase caps so that it is cost-neutral to the District.
On October 5, 2010, debt certificates of $16,000,000 were issued for capital improvements to be made in the District. These capital improvements will not occur in fiscal year 2011; therefore, the fiscal year 2011 capital outlay budget excludes these projects.
On December 28, 2010, a debt restructuring occurred from the issuance of $62,205,000 in refunding bonds. The December 1, 2010 principal and interest payments were still the original bond series, as detailed in this report.
Requests for Information This financial report is designed to provide a general overview of the Niles Township High School District’s finances for all those with an interest in the government’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Paul O’Malley, Assistant Superintendent for Business Services, or Susan Husselbee, Director of Fiscal Services, Niles Township High School District 219, 7700 Gross Point Road, Skokie, Illinois 60077.