Presented By: Todd Puster, Treasurer/CFO March 28, 2016

BUSINESS INTELLIGENCE PROJECT Installment 1: “The Leading Component of School Expenditures”

Business Intelligence Defined

Ø  Business Intelligence is: Ø A set of techniques and tools to transform

raw data into meaningful and useful information.

Ø A support mechanism for operational and strategic business decisions.

Ø A way to provide a more complete picture

that cannot be derived by any singular data set.

Business Intelligence Project Purpose

Ø  Pertinent Financial Information Ø  Supports sound

decision making. Ø Guides courses of

action. Ø  Sustains desired

outcomes.

Business Intelligence Limitations

Ø  Even Similar School Communities Are Unique Ø Orange serves 5 diverse communities.

Ø Orange enjoys the benefits of a large campus school environment.

Ø Orange Community Education & Recreation

provides services atypical for Ohio schools.

Business Intelligence Comparisons

Ø  Nearby Most Similar Districts Ø  Chagrin Ø  Orange Ø  Beachwood

Ø  8 Statewide Similar Districts Ø  Chagrin Ø  Orange Ø  Beachwood Ø  Solon Ø  Copley-Fairlawn Ø  Hudson Ø  Indian Hill Ø  New Albany-Plain

Ø  Comparative groups are defined based on relevant subject matter and may vary based on the topic under study. The groups considered today are defined below.

Similar District Commonalities

Ø  Components of Similarity Ø Demographic profiles. Ø  Robust property tax

bases. Ø High median incomes. Ø Nominal State funding. Ø  Top tier college

matriculation rates.

Similar District Analytics

Chagrin Falls-Orange-Beachwood Selected Analytics

Analytic Orange Beachwood Chagrin Falls Enrollment1 2,146 1,496 2,021

Tax Revenue Per Student2 $17,799 $17,832 $10,666 Property Tax Base3 $1,054,272,420 $720,078,250 $328,892,550 Tax Rate (mills)4 41.41 34.05 48.46

Adjusted Gross Income5 $84,900 $67,570 $73,768 AGI School District Rank5 1st 15th 8th

1Total District Enrollment (ADM) for Fiscal Year 2014. Source: Ohio Department of Education via Forecast 5. 2General Fund, Property Tax Revenue Per Student Data for Fiscal Year 2014. Source: Ohio Department of Education via Forecast 5. 3General Fund, Total Property Tax Base, Tax Year 2015. Source: Cuyahoga County Auditor. 4General Fund, Residential Effective Rate, Tax Year 2015. Source: Cuyahoga County Auditor 5Federal Tax Year 2013 Returns. Source: Internal Revenue Service via Ohio Department of Taxation. High-Low Ranking.

Ø Comparisons and Contrasts

Drilling Down Through Data

Ø  The Funnel Approach Ø  Start at top-line costs

per pupil Ø Drill to Layer 1:

Instructional Costs. Ø Drill to Layer 2:

General Instructional Costs.

Ø Drill to Layer 3: General Instructional Teacher Salary Costs.

Total Costs Per Pupil Drill Down

Ø  Major Cost Categories Ø  Instruction Ø  Support Services Ø  Extracurricular

Activities Ø  Facilities & Other Costs

Total Costs Per Pupil

$11,359.85

$7,401.49

$11,371.75

$8,856.53

$4,902.16

$8,847.20

$614.22

$263.26

$594.37

$499.78

$411.88

$2,474.37

$0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00

Beachwood

Chagrin Falls

Orange

Ohio Department of Educatoin Fiscal Year 2014 Data

Cost Per Pupil Comparison: Beachwood-Chagrin Falls-Orange

Instruction (1000) Supporting Services (2/3000) Extracurricular Activities (4000) Facilities Services & Other (5/7000)

$23,287

$12,979

$21,330

Total Costs Per Pupil

$0.00 $5,000.00 $10,000.00 $15,000.00 $20,000.00 $25,000.00

Beachwood

Chagrin Falls

Copley-Fairlawn

Hudson

Indian Hill

New Albany-Plain

Orange

Solon

Cost Per Pupil: Statewide 8 Similar Districts

Instruction (1000) Supporting Services (2/3000) Extracurricular Activities (4000) Facilities Services (5/7000) Ohio Department of Education Fiscal Year 2014 Data

$13,586

$23,287

$11,165

$15,591

$10,110

$9,779

$12,979

$21,330

Total Cost Comparison

Ø  An Overview Ø  $10 Million Spend

Down is a driving factor for Orange.

Ø Orange and Beachwood have similar costs.

Ø  Larger districts trend toward lower costs.

Instructional Cost Factors

Ø  General Instruction Ø  Kindergarten Ø  All

elementary grade levels

Ø  Core college prep courses

Ø  Fine arts courses

Ø  Vocational Instruction Ø  Visual Art &

Design Ø  EXCEL TECC

programs

Ø  Instructional costs refer to those expenditures directly applied to classroom education. They include following:

Ø  Special Programs Instruction Ø  Special needs Ø  Gifted

Ø  Preschool Ø  English as a

second language

Orange Instructional Costs

Ø  Costs stayed within a narrow range in recent years. Ø  Total Instructional Costs were $24,625,507

in 2011 Ø  Those costs were $24,848,529, an increase

of $223,022 (0.9%) over 5 years.

Orange City Schools Instructional Expenditures1 Fiscal Year General Instruction Special Education Vocational Education Other Education Total Instruction Total Annual Change

2015 $18,332,272 $6,268,938 $246,319 $0 $24,848,529 +1.9%

2014 $17,634,788 $6,492,430 $248,350 $10,235 $24,385,804 +1.9%

2013 $17,493,695 $6,071,600 $353,004 $15,784 $23,934,084 -3.1%

2012 $18,256,039 $5,955,819 $418,238 $41,055 $24,711,151 +0.4%

2011 $18,203,774 $5,916,207 $343,283 $162,243 $24,625,507 1General Fund Expenditures Only. Source: District Accounting Records.

Orange General Instructional Costs

Ø  Costs also stayed within a narrow range in recent years. Ø  Total General Instructional Costs were

$18,203,773 in 2011 Ø  Those costs were $18,333,272 in 2015, an

increase of $129,499 (0.7%) over 5 years.

Orange City Schools General Instructional Expenditures1

Fiscal Year

Salaries

Benefits Purchased Services

Supplies & Materials

Equipment

Other

Annual Total

2015 $13,026,179 $4,055,283 $810,508 $302,388 $138,914 $0 $18,333,272 2014 $12,826,229 $3,964,506 $302,096 $350,707 $191,249 $0 $17,634,788 2013 $12,798,153 $3,979,565 $311,652 $173,377 $230,948 $0 $17,493,695 2012 $13,369,030 $4,172,229 $260,268 $216,979 $237,533 $0 $18,256,039 2011 $13,337,143 $4,042,071 $237,423 $281,003 $306,135 $0 $18,203,773

1General Fund Expenditures Only. Source: District Accounting Records.

General Instructional Is Labor Intensive

Ø  Teacher compensation is the primary way funds are spent in the classroom. Ø All other spending amounts to 5% of

general instructional costs.

Similar Districts—Similar Proportions

Ø  Higher purchased services costs for some districts usually will reflect the following: Ø  Substitute fulfillment services Ø Outside paraprofessional services

8 Similar Statewide Districts General Instructional Costs Per Pupil1

District Salaries Benefits Purchased Services Supplies Equipment Other Orange $5,977 $1,847 $141 $172 $89 $0

Chagrin Falls $4,257 $1,521 $103 $167 $115 $4 Beachwood $5,392 $1,593 $143 $126 $176 $0

Solon $4,768 $1,312 $356 $140 $77 $1 Copley-Fairlawn $3,256 $1,004 $430 $187 $55 $6

Hudson $3,902 $1,204 $61 $162 $28 $0 Indian Hill $4,899 $1,656 $127 $144 $20 $0

New Albany-Plain $3,610 $1,142 $231 $62 $7 $4 1General Fund Expenditures for Fiscal Year 2014. Source: Ohio Department of Education via Forecast 5

The Leading Driver of Costs Per Pupil

Ø  General Teacher Salaries Ø  Regular Salaries,

including sick and personal leave.

Ø  Some Supplemental Compensation payments.

Ø  Severance Pay under certain circumstances.

Similar District Total Teacher Salaries

$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

$20,000,000

Orange Beachwood Chagrin Falls Solon Copley-Fairlawn Husdon Indian Hill New Albany-Plain

Instructional Salaries Cost Total: 8 Statewide Similar Districts

Ohio Department of Education Fiscal Year 2014 Data

Teacher Salaries Drive School Spending

Ø  Similar Districts Yet Dissimilar Spending Ø  Smaller Similar Districts trend toward

spending more per pupil. Ø  The difference ties closely to curriculum

offerings and class size.

8 Similar Statewide Districts General Teacher Salary Costs1 District General Teacher Salaries Total Salaries Per Pupil Per Pupil Difference to Orange

Orange $12,343,290 $5,752 $0

Chagrin Falls $8,320,391 $4,117 $1,635

Beachwood $7,853,469 $5,250 $502

Solon $19,258,192 $3,960 $1,792

Copley-Fairlawn $9,739,434 $3,064 $2,688

Hudson $15,370,797 $3,355 $2,397

Indian Hill $8,761,697 $4,549 $1,203

New Albany-Plain $16,918,571 $3,548 $2,204 1General Fund Expenditures for Fiscal Year 2014. Source: Ohio Department of Education via Forecast 5

The Bounds of Business Intelligence

Ø  A lens for viewing data Ø  Business Intelligence is

about deploying Quantitative information for analysis.

Ø  Proper decision making also requires deploying Qualitative information.

Ø  Synthesizing both is essential for achieving desired results.

Presented By: Todd Puster, Treasurer/CFO March 28, 2016

BUSINESS INTELLIGENCE PROJECT Installment 1: “The Leading Component of School Expenditures”