Bloomfield Hills, M I

Comprehensive Annual

Financial ReportFor the Year Ended June 30, 2018

Comprehensive Annual Financial Report

Bloomfield Hills Schools Bloomfield Hills, Michigan

For the fiscal year ended

June 30, 2018

Board Of Education

Cynthia von Oeyen President

Paul Kolin Mark Bank Jacqueline El-Sayed Vice President Treasurer Secretary Ed Ford Howard Baron Jason Paulateer Trustee Trustee Trustee

Dr. Robert J. Glass Superintendent of Schools

As prepared by the Finance Team

Bloomfield Hills Schools

Contents

Introductory Section

Members of the Board of Education and Administration i

Guiding Principles for Teaching and Learning ii

Mission Statement and Core Values iii

Organizational Chart iv

Letter of Transmittal v-xvii

Charts and Graphs xviii-xxi

Points of Pride xxii-xxviii

Certificate of Excellence xxix

Financial Section

Independent Auditor's Report 1-2

Management's Discussion and Analysis 3-9

Basic Financial Statements

Government-wide Financial Statements:Statement of Net Position 10Statement of Activities 11

Fund Financial Statements:Governmental Funds:

Balance Sheet 12-13Reconciliation of the Balance Sheet to the Statement of Net Position 14Statement of Revenue, Expenditures, and Changes in Fund Balances 15-16Reconciliation of the Statement of Revenue, Expenditures, and Changes in Fund

Balances to the Statement of Activities 17

Proprietary Funds:Statement of Net Position 18Statement of Revenue, Expenses, and Changes in Net Position 19Statement of Cash Flows 20

Fiduciary Funds:Statement of Fiduciary Net Position 21Statement of Changes in Fiduciary Net Position 22

Notes to Financial Statements 23-42

Required Supplemental Information 43

Budgetary Comparison Schedule - General Fund 44Budgetary Comparison Schedule - Major Special Revenue Funds 45-46Schedule of Proportionate Share of the Net Pension Liability 47Schedule of Pension Contributions 48Schedule of Proportionate Share of the Net OPEB Liability 49Schedule of OPEB Contributions 50Notes to Required Supplemental Information 51

Bloomfield Hills Schools

Contents (Continued)

Other Supplemental Information 52

Nonmajor Governmental Funds:Combining Balance Sheet 53-54Combining Statement of Revenue, Expenditures, and Changes in Fund Balances 55-56Budgetary Comparison Schedule - Nonmajor Governmental Funds 57-59

Schedule of Bonded Indebtedness 60Agency Fund - Student Activities - Schedule of Changes in Assets and Liabilities 61

Statistical Section 62

Introduction to Statistical Section 63

Financial Trend InformationNet Position by Component 64Changes in Governmental Net Position 65Fund Balances - Governmental Funds 66Changes in Fund Balances - Governmental Funds 67

Revenue Capacity InformationAssessed Value and Actual Value of Taxable Property 68Direct and Overlapping Property Tax Rates 69Principal Property Taxpayers 70Property Tax Levies and Collections 71

Debt Capacity InformationRatios of Outstanding Debt 72Direct and Overlapping Governmental Activities Debt 73Legal Debt Margin 74

Demographic and Economic InformationDemographic and Economic Statistics 75Principal Employers 76

Operating InformationFull-time Equivalent School District Employees 77Operating Indicators 78Capital Asset Information 79Student Enrollment Data 80Capital Asset Building Detail 81

GraphsComparative General Fund Revenue 82Comparative General Fund Expenditures and Other Uses 83Retirement Funding - MPSERS Expense 84Comparison of Michigan Schools General Fund Balances as a Percentage of Current

Expenditures 85

Federal Awards Supplemental Information Issued UnderSeparate

Cover

Bloomfield Hills Schools District Officials

Administration Board of Education

Dr. Robert J. Glass Superintendent of Schools

Cynthia von Oeyen President

Kelly Bohl Assistant Superintendent - Human Resources & Labor Relations

Paul Kolin Vice President

Todd Bidlack Assistant Superintendent - Learning Services

Mark Bank Treasurer

Christina M. Kostiuk Assistant Superintendent – Finance and Operations

Jacqueline El-Sayed Secretary

Christine DiPilato Director - Learning Services

Ed Ford Trustee

Brian Goby Director - Physical Plant Services

Howard Baron Trustee

Shira Good Director - Communications and Service Standards

Jason Paulateer Trustee

David Shulkin Director - Learning and Performance Technology

Pam Schoemer Director - Special Education

Karen Hildebrandt Director – Finance

Karen Healy Director – Human Resources and Payroll

Michael Cowdrey Director of Athletics and Community Recreation

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ii

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Bo

ard

of

Edu

cati

on

Superintendent

Assistant Superintendent HR & Labor Relations

Director Communications & Service Standards

Communication Specialist (.3)

MarCom Coordinator

Director

HR & Payroll

Payroll Coordinator

Benefits Coordinator

Director Athletics & Rec

Assistant Director

Athletic Coordinator

Preschool Manager

Assistant Superintendent Learning Services

Director Learning Services

Principals

Director Special Education

Wing Lake

Supervisor

Deaf & Hard of Hearing Supervisor

Director Learning & Performance Technology

System Architect

Systems Administrator

Systems Engineer

Field Technology Manager Field Technician (4)

Radio Station Manager

Digital media Services Manager

Assistant Superintendent Finance & Operations

Director Physical Plant Services

Assistant Director

Transportation

Manager

Physical Plant Services Coordinator

Director of Finance

Accts Payable Accounting Specialist

Accts Receivable Accounting Specialist

General Ledger Accounting Specialist

Nature Center

Manager

Farm Educational Leader Program Coordinator

Food Service (Aramark)

Organizational Chart 2017-18

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October 16, 2018

To Citizens and Board Members:

The Comprehensive Annual Financial Report of Bloomfield Hills Schools (the “School District”) for the fiscal year ended June 30, 2018 is submitted herewith. This report was prepared by the School District and contains all activities and programs of the Board of Education. Responsibility for both the accuracy of the presented data and the completeness and fairness of the presentation, including all disclosures, rests with the School District. We believe that the data as presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial position and results of operations of the School District as measured by the financial activity of its various funds. All disclosures necessary to enable the reader to gain the maximum understanding of the School District’s financial affairs are included.

Reporting Entity and Services

Bloomfield Hills Schools is an independent reporting entity fully meeting the criteria established by the Governmental Accounting Standards Board. All funds and reporting levels of the School District are included in this report. The School District does not have component units.

The financial section reports separately the district-wide reporting level, governmental fund types, proprietary fund type, and fiduciary fund types administered by the School District.

How this Report is Organized

The Comprehensive Annual Financial Report was prepared to meet the needs of a broad spectrum of financial statement readers and is divided into the following major sections: introductory, financial, and statistical.

Introductory Section

This section introduces the reader to Bloomfield Hills Schools and to this report. Included are this transmittal letter, charts and graphs about the School District, Points of Pride of the School District, the School District’s members of the Board of Education and Administration, the School District’s Mission Statement and Core Values, the School District’s Organizational Chart, and the School District’s Certificate of Excellence in Financial Reporting.

Financial Section

The independent auditors’ report, management’s discussion and analysis, financial statements, notes to the financial statements, required supplemental information, and other supplemental information are included in this section. These are the School District’s basic financial statements that will provide an overview for readers who require less detailed information than is contained in the balance of this report. The management’s discussion and analysis provides condensed financial information extracted from the district-wide and fund level financial statements. We direct the reader to the management’s discussion and analysis, which starts on page 3.

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The management of the School District is responsible for the financial information and representations contained in the financial statements and other sections of the annual report. In preparing the financial statements, it is necessary that management make informed estimates and judgments based on currently available information of the effects of certain events and transactions.

The basic financial statements, supplementary statements, and schedules presented in the financial section of this report present fairly and with full disclosure the financial position and results of the financial operation of the funds and reporting levels in conformity with accounting principles generally accepted in the United States of America and demonstrate compliance with finance-related legal and contractual provisions.

The basis of accounting for each reporting level/fund is consistent with the activities and objectives of the fund as a fiscal and accounting entity.

Other supplementary information and schedules contain a more detailed analysis of revenues and expenditures that are compared to the 2017-2018 budgets for the General and Special Revenue Funds. In addition, there are combining schedules shown by fund type with totals that agree with those reflected in the basic financial statements as other nonmajor governmental funds. Also included in this section is a schedule of indebtedness describing each debt issue along with interest rates and annual maturities, and schedule of cash and investments.

Statistical Section

Although this section contains substantial financial information, these tables differ from financial statements in that they present some non-accounting data, compare 10 years of data, and are intended to reflect economic data and financial trends of the School District.

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About Bloomfield Hills Schools

The Community

Bloomfield Hills Schools covers 25 square miles of lakes and rolling wooded land in Oakland County. It is located approximately 20 miles north of Detroit, with easy access to the abundant cultural and educational activities of the metropolitan area. The School District consists of most of the City of Bloomfield Hills, approximately one-half of Bloomfield Township, and parts of West Bloomfield Township, the City of Troy, and the City of Orchard Lake Village. The population within the School District boundaries is approximately 42,000. The total population of all five municipalities without regard to the School District boundaries is 200,163 per July 2017 Southeastern Michigan Council of Governments (SEMCOG) . This is an established suburban residential community that encourages and supports excellence in education.

Living and learning go hand-in-hand in the Bloomfield Hills community. The schools are the centerpiece of community activities - with art shows, nature walks, sporting events, musical and dramatic performances, parenting classes, enrichment programs, and many other community education offerings.

In community surveys, Bloomfield Hills Schools has consistently scored an “A” or “B” in all areas of academia, college preparedness, and educational opportunities.

The School District’s Mission Statement, Strategic Goals, Core Values, and Guiding Principles

Bloomfield Hills Schools exemplifies a multifaceted environment with many features and perspectives considered. Consistent with other school districts and many businesses, the School District crafted a mission statement many years ago. The way in which the mission statement has been aligned with the School District’s strategic goals and core values, however, is what makes Bloomfield Hills unique and distinctive.

Scholarship, citizenship, service, and integrity form the four pillars of the mission statement. These four components are essential to an all-encompassing education. When they are interwoven with core values, they provide the compass and direction for setting strategic goals that impact students, adults, and resources.

Visionary goals were established through 2018 with four main objectives that include detailed action plans within each objective. To further support achievement of the visionary goals outlined in the strategic plan, a comprehensive review in 2011 resulted updated language to acknowledge the focus on personalized, world-class educational experiences for our students.

As a proud leader in educational innovation, we recognize that as the world rapidly changes, we must continually change and innovate with it, evolving our specific practices upon a solid platform of our mission, core values, and strategic goals. This evolving review led to the development of the School District’s Guiding Principles for Teaching and Learning. The guiding principles assist as a framework for the learning experience.

A copy of the School District’s mission statement and core values as well as the guiding principles is provided at the end of the introductory section.

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Instructional Program

Bloomfield Hills Schools is steadfast in the belief that its primary responsibility is to provide optimal educational opportunities for students from pre-kindergarten through grade 12. School District administrators study societal and economic trends with a watchful eye toward students’ future opportunities. Students need a solid academic foundation combined with adaptability, resourcefulness, and enterprise in preparation for their success in a world of rapid change. Continual and thoughtful review of curriculum and program options that align with our Mission, Vision, and 10 Guiding Principles, strengthens learning experiences for students.

Toward this end, the School District is continually striving for professional growth in order to sustain high quality instruction. The School District offers a variety of ongoing and new opportunities for staff training. In addition, enthusiastic staff optimizes student learning by creating innovative programs. Parents, community members, and representatives from the business sector have ever-increasing opportunities to work with instructional staff to consider program options and create new partnerships within its schools.

The School District has long understood the value of technology as a means of expanding and enhancing both teaching and learning. In support of several of our guiding principles, providing students and teachers with a uniform technology platform will expand the School District’s ability to provide the most effective and comprehensive learning possible. With that focus, the School District implemented a project called “One to World”, which puts iPads and Chromebooks in the hands of teachers and students. “One to World” stands for the ratio of one student or teacher to a world of information they will be able to access with this project. The project puts a powerful learning tool in the hands of students, assist teachers in demonstrating complex concepts, and allow for a more personalized and collaborative learning environment.

At the core of our district philosophy, we believe student engagement, rich and caring relationships, developing a sense of belonging, and student ownership of learning are paramount. Research, school visits, and reflection on our students’ needs indicated that a redesign of learning spaces can facilitate a meaningful connection to the curriculum, peers, and teachers. This focus has resulted in a design of gateway spaces and learning communities at the middle school and high school levels. We believe that students will thrive in the environment with access to spaces and furniture that promote collaboration, creativity, critical thinking, and personal learning.

The School District continually investigates funding options, which will permit it to continue offering myriad opportunities for a global education to its students in the third millennium. Ongoing programs and supports enable students to develop skills for effective participation as adults in a democratic society.

Elementary Schools

The School District’s four exemplary elementary schools provide comprehensive instruction in language arts, math, social studies, Spanish, science, technology, art, music, and physical education. Each building has grades kindergarten through three or grades kindergarten through four.

The outstanding core curriculum includes hands-on computer skills training and science exploration, beginning with the instruction at the kindergarten level. Each elementary building has adopted an instructional initiative to guide instructional practices in the building. Conant and Lone Pine Elementary Schools have adopted the International Baccalaureate Primary Years Programme (PYP) and both are fully authorized IB schools. PYP requires a cross-disciplinary, inquiry-based approach to teaching and learning. Students see the natural connections between subjects taught, and learn to develop meaningful questions about content and their own learning,

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while concurrently acquiring skills that enable them to assess the validity and impact of information they discover. The PYP is internationally accredited and requires an international focus for instruction, which helps students understand and appreciate the importance of examining issues from multiple perspectives and cultures.

Eastover Elementary School and Way Elementary School nurture a culture of thinking and compassion by embracing the Visible Thinking framework, a body of work that came out of Harvard’s Project Zero. The salient tenets of Visible Thinking call for focusing students on the learning versus the work, teaching for understanding versus mere knowledge, encouraging deep versus surface learning strategies, promoting independence versus dependence and developing a growth versus fixed mindset. In the fall of 2015, Eastover Elementary School was recognized as a U.S. Department of Education National Blue Ribbon School.

Middle Schools

The School District’s nationally recognized middle school program offers a team approach focusing on the core areas of math, science, reading, writing, and social studies. Numerous elective classes provide students with opportunities to discover and explore their passions in world language, practical and fine arts, music, health, physical education, and computer literacy. Consultant teams work with teachers to provide enrichment and remedial programs to ensure the success of all students.

Beyond the “basics,” the School District middle school philosophy focuses on the development of social, emotional, and academic confidence of its students. The School District’s three award-winning middle schools serve students in grades four through eight or grades five through eight.

The School District’s middle schools have adopted the International Baccalaureate Middle Years Programme (MYP) and are fully authorized MYP schools. Additionally, West Hills Middle School received Primary Years Programme (PYP) authorization, a program for their fourth and fifth graders. The MYP has similar goals as the PYP discussed in the last paragraph under Elementary Schools. MYP focuses on the critical transitional stage from childhood into adulthood and is designed for students between the ages of 11 and 16.

High Schools

Recognized as “Outstanding” by the U.S. Department of Education, the School District’s high school, Bloomfield Hills High School, annually produces an average of 19 National Merit Scholarship winners, 98 percent college applicants, and a generous number of presidential scholars in academics and the arts. Built around the four Cornerstones of Relationships, Authentic Learning, Innovation and Responsibility/Ownership, the school building itself features open, flexible, collaborative learning spaces that mirror the modern work environments found in business and higher education. Rather than being organized by department, grades nine and 10 are organized into learning communities that support connections between subject areas.

Bloomfield Hills High School has adopted the International Baccalaureate Middle Years Programme (MYP) for students in ninth and tenth grades. In addition, the International Baccalaureate Diploma Programme is an option for students in eleventh and twelfth grades. The MYP has similar goals as the MYP discussed in the last paragraph under middle schools. The Diploma Programme is substantially more rigorous, requiring end-of-term exams in several content areas among other requirements. Increasingly, universities are inquiring in their application process whether students have participated in International Baccalaureate-sanctioned curriculum programs.

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As an option available to students during their high school career, the School District has developed the Model Center. Students may choose to take one or more classes at the Model Center each semester. Largely self-directed and entrepreneurial in its approach, it allows students with a passionate interest in a particular topic to pursue divergent learning styles and take a creative approach to systems thinking and problem solving.

An alternative high school operates at the School District’s Charles L. Bowers School Farm (Bowers Academy). Students participate in this unique culture that provides an optimal learning environment. Student to adult ratio target is 8:1. This gives students greater opportunities for individual attention, supervision, and mentoring experiences.

The PREP (Prepared, Responsible, Employable, Productive) program opened in 2006, serving post-secondary students ages 18 through 26. The young adults learn vocational and life skills in the program. In addition, the Disability Network teaches them empowerment skills like self-advocacy and personal responsibility. Michigan Rehabilitative Services provides job coaching and helps students find work.

In addition, the School District operates, in consortium with 11 school districts in Oakland County, the International Academy. Upon graduation, students earn a world-recognized International Baccalaureate diploma. With a 205-day school year and eight hours of instruction per day, the Academy provides a unique blend of rigorous academic standards and practical, career-related learning.

Specialized Learning Facilities

The E.L. Johnson Nature Center is an outdoor learning area set aside to develop and encourage outdoor, ecological education, and activities for students. A modern interpretive building enhances the site. Programming is scheduled for each grade level consistent with their learning skills and aptitude. The Nature Center is also a community resource, which operates throughout the year.

The Charles L. Bowers School Farm is a learning laboratory for the School District’s K-12 students. The School District recently entered into a strategic partnership with Michigan State University Extension to collaboratively develop opportunities for the community to engage in authentic, place-based educational and recreational activities. Students participate in AgriScience courses, appropriate for their learning level, that relate to the environmental sciences and food production. As one of the few remaining working farms in Oakland County, the Bowers School Farm is shared with all community members through special programs offered throughout the year.

Special Needs Facilities

The School District operates two Oakland County Special Education regional programs. Wing Lake Developmental Center serves students with severe cognitive and severe multiple impairments. The second center program is for students who are deaf and hard of hearing (DHH). Students that attend the DHH center program attend three general education buildings with same age peers. Students attend both center programs from schools throughout Oakland County.

SCAMP is a five-week summer day camp program for children with disabilities. The program is operated by Bloomfield Hills Schools and is funded through tuition and donations.

Bloomfield Hills supports students under the Michigan Administrative Rules for Special Education (MARSE) Rules to meet students' individual needs. Programs and services are offered in every building and include Resource Room, ancillary services i.e., school social work,

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occupational therapy, physical therapy, speech and language therapy and paraprofessional support as determined by a students Individual Education Plan (IEP). All students are general education students first and foremost and receive specially designed instruction in their deficit area. Students may be eligible for services from birth to 26 years of age.

Preschool and Child Care Services

The School District places a deliberate focus on preschool and childcare services. Such services round out the kindergarten through twelfth grade program and provide truly comprehensive services to families. The preschool program prepares children for kindergarten beginning at the age of two-and-a-half years old. Preschool instruction is developmentally appropriate and aligns seamlessly with early elementary instruction.

Preschool services are primarily fee-based and operate at three sites under the brand Bloomin’ Kids. These sites were specifically designed and built for preschool-aged children. Two of these facilities are built as additions to existing elementary schools, with enhanced interactions with these elementary schools (Conant and Lone Pine schools). The third is a spacious facility at Fox Hills, which is fully remodeled for preschool-aged children. The School District has been able to participate in a state-funded preschool program, The Great Start Readiness Program. This program has supported a classroom at the Fox Hills site to serve families whose circumstances indicate a need for free early childhood education.

Childcare services are also fee-based and provided at each elementary school for students who need a safe, supervised environment before and after school. In addition, the Fox Hills facility provides childcare, beginning with infants. Another program for infants and toddlers is available at Lone Pine Elementary School.

Children with special needs are supported at Fox Hills in the SEED Program. These children receive specialized instruction to meet their individualized needs. Additionally, children birth - 3 years of age are supported by our Early Interventionists in their natural environments (homes).

Recreation and Community Services

The School District’s Recreation and Community Services Department operates a host of other community outreach programs. Programs are developed to appeal to all ages in the community from preschoolers to adults. The School District’s indoor and outdoor facilities are used to operate both recreational and community outreach programs. Facilities owned by the School District provide the only source of community recreation related activities in the Bloomfield Hills area.

Student and Staff Recognition

The School District is proud of the many achievements of students and staff in 2017-2018. A list of some of these achievements is included at the conclusion of the introductory section.

Financial Status of the School District

One of our strategic goals is to maximize the community’s investment, uphold our tradition of fiscal stewardship & optimize the use & value of all district facilities and properties. Objectives and action plans are updated annually with progress monitored throughout the year.

Specific to the financial status of the district, we continue to be challenged by school funding not keeping pace with inflation. With adequate funding, ongoing budget balancing efforts are necessary to reduce and eliminate annual operating deficits and to comply with board policy on the operating budget and fund balance level. Despite the budget challenges, the district remains

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in a sound financial position and in compliance with board policy. The district continues to offer exceptional programs and resources to our students, our class-size ratios are excellent and we continue to provide our learners with a uniquely personal, highly engaging experience.

Budgetary and Internal Controls

The School District’s Board of Education maintains a system of budgetary and internal controls designed to assist management in meeting its responsibility for reporting reliable information. The system is designed to provide reasonable assurance that assets are safeguarded and transactions are recorded and executed with management’s authorization. Internal control systems are subject to inherent limitations with regard to the necessity to balance cost against the benefits produced. Management believes that the existing system of budgetary and accounting control provides reasonable assurance that errors or irregularities that could be material to the financial statements are prevented or would be detected within a timely period. The School District utilizes a functional budget that is prepared according to the guidelines and requirements set forth in state law and the State Financial Reporting Manual.

During the fiscal year, monthly disbursement and financial reports are provided to the Board of Education for the budgetary funds, which includes the function budget lines, current year-to-date activity, encumbrances, and percent of budget for revenue and expenditures. In addition, similar budget reports are readily accessible to all budget owners, including the ability to drill into the activity and supporting detail electronically, at any time.

The report of the School District’s independent certified public accountants, Plante & Moran, PLLC, appears on pages 1-3 of this report. Their audit of the basic financial statements was performed in accordance with generally accepted auditing standards and Government Auditing Standards and, accordingly, included a review of the Board of Education system of budgetary and accounting controls.

Capital Projects

During the spring of 2012, voters approved a $58.65 million bond to be used to redevelop the former Andover High School, improve performing arts facilities, athletic facilities and fields, and do other remodeling. The project began with an official groundbreaking in June of 2013 and Bloomfield Hills High School opened fall of 2015.

Currently, funding for capital projects is provided primarily by a sinking fund millage approved by voters. In June 2004, voters approved 1.4834 mills for 10 years ending in fiscal year 2013-2014. In the fall of 2010, voters approved a five-year renewal of the sinking fund millage at .7400 mills for five years which began in fiscal year 2014-2015. The sinking fund millage is subject to the Headlee rollback factor under the Headlee Amendment that requires a rollback in the rate if the amount of tax revenue exceeds the prior year by the lessor of inflation or five percent. After the rollback, the sinking fund millage rate for the 2017-2018 year is .7165. This millage generated $2.5 million for fiscal year 2017-2018 after the Headlee rollback that decreased revenue by approximately $26,000 from the prior year. Use of the current sinking fund millage revenue has been limited to the construction and repair of school buildings until new legislation was enacted in March 2017 expanding the allowable uses to include school security improvements, and the acquisition or upgrading of technology. Since prior voter-approved sinking funds were not made eligible for this expanded use, the School District requested a replacement of the existing authority be authorized for .7165 mills, for a period of six years, 2018 to 2023, which was approved in May 2018. A comprehensive plan exists for the funds, and the Board of Education approves a list of capital projects each fall for the succeeding year with most of the work taking place in the summer months.

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The Capital Equipment Fund was established in 2014 to segregate funding and spending related to capital needs not related to building improvements. Prior to the establishment of the Capital Equipment Fund, capital replacements and other capital needs were direct expenditures of the General Fund and fluctuated from year to year. With the Capital Equipment Fund, a consistent amount is budgeted and approved as a transfer from the General Fund to the Capital Equipment Fund. The transfer is considered a type of expenditure and, therefore, part of the Board approved General Fund budget. As part of the annual budget development and approval process, long-term capital needs are reviewed and compared to the funds available in the Capital Equipment Fund. The available funds in the Capital Equipment Fund will be assessed against replacement schedules for our various capital items, including vehicles, buses, technology, furniture and equipment.

Economic Conditions and Outlook

This section provides a brief discussion of the economic and legislative factors that impact the financial health of Bloomfield Hills Schools and the School District’s response to manage its revenue and control its operating cost. The discussion will include the major initiatives undertaken by the School District to better serve the community and achieve sound financial management.

The School District enjoys a solid economic base. Total taxable value for all real and personal property was $3.500 billion for fiscal year 2017-2018 compared with $3.395 billion for fiscal year 2016-2017. Taxable value has increased $105 million, or 3.1 percent. Taxable value for fiscal year 2017-2018 amounts to $616,498 per full time equivalent student. Principal residence taxable value accounts for $2.853 billion, while non-principal residence taxable value accounts for $602 million. The tax base is predominantly residential, with just over 17 percent of real property classified as non-principal residence because these properties are not the principal residences of the owners. The nonresidential segment of the tax base is light commercial in nature, consisting of a broad mix of professional services and retail business.

Funding

On March 15, 1994, Michigan voters enacted the current school financing plan, commonly referred to as Proposal A. The new school financing plan involved dramatic cuts in local school property taxes and a 50 percent increase in the sales tax. This completely changed the method by which schools received their funding. Proposal A took effect for the school fiscal year 1994-1995. Funding for public schools is now based on a system whereby each school district receives a specific amount of revenue for each enrolled pupil. This amount is called the “per pupil foundation allowance.” Statewide, the revenue per pupil for fiscal year 2017-2018 ranged from $7,631 to $8,289. The Michigan legislature determines the revenue amount for each pupil. In addition, some school districts are allowed to seek local voter approval to levy local taxes (“hold harmless millage”) in order to maintain their pre-Proposal A revenue level. The core revenue budget for a school district is based on the number of students enrolled multiplied by the per pupil foundation allowance.

Under Proposal A, state sales taxes, rather than local property taxes, account for the largest portion of school financing. Therefore, the fortunes of school districts are tied to the general health of the Michigan economy. Each year the legislature establishes the amount of funding per pupil. The funding is usually a fixed dollar amount. As a result, school districts with lower revenue per pupil receive a higher percentage change, while those with higher revenue per pupil receive a lower percentage change each year.

In summer 2000, the Michigan legislature enacted a three-year School Aid Bill, which provided increases in revenue per pupil of $300 in fiscal year 2000-2001, $300 in fiscal year 2001-2002, and $200 in fiscal year 2002-2003. The downturn in the economy resulted in reduced revenue

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collections for the State School Aid Fund. In light of the economic downturn, the legislature did not appropriate an increase in the foundation allowance in fiscal year 2003-2004 and fiscal year 2004-2005. The legislature did appropriate an increase of $175 in fiscal year 2005-2006, an increase of $210 in fiscal year 2006-2007, an increase of $48 in fiscal year 2007-2008, and an increase ranging from $56 to $112 in fiscal year 2008-2009. In 2009-2010, the legislature eliminated categorical funding referred to as “20j” that amounted to $119.25 per pupil for the district. The legislature did not appropriate an increase in the foundation allowance due to the recession and deducted a proration amount of $154 per pupil in 2009-2010 and $170 per pupil in 2010-2011. Prorations do not permanently reduce the foundation allowance. During fiscal year 2011-2012, the legislature enacted a reduction in the foundation allowance of $470 per pupil. This reduction coupled with the elimination of “20j”, brought the total loss in funding to close to $600 per pupil as of 2011-2012. The legislature appropriated an increase in the minimum foundation allowance during 2012-2013 of $120 per pupil, $60 per pupil during 2013-2014, $50 during 2014-2015, $70 during 2015-2016 $60 during 2016-2017 and 2017-2018.

Financial Forecast

From fiscal years 1995 through 2018, the School District had an average annual growth in per pupil revenue of .69 percent compared with the Consumer Price Index of 2.87 percent during the same 23-year period under Proposal A. While Proposal A is intended to narrow the funding gap between districts with the lowest per pupil revenue and the highest per pupil revenue, funding growth that does not keep pace with inflation diminishes the purchasing power of districts with a higher per pupil revenue that results in budget reductions to balance the budget. Since Proposal A, the lowest funded districts averaged increases of $139 per pupil annually compared to Bloomfield’s $67 annually. This restrictive revenue growth trend is expected to continue in the future. The high tax base of the School District does not translate into solid growth in operating revenues due to the fact that the school funding formula provides a fixed dollar amount to each enrolled pupil.

Bloomfield Hills Schools ranks among the top in per pupil revenue for school districts in Michigan. As such, the School District receives the lowest percentage increase in the state. This is due to the fact that the legislature appropriates a flat dollar increase to all school districts, rather than a percentage increase. Also, the School District has faced some declining pupil enrollment base due to the low mobility rate of the community and the scarcity of undeveloped land. The combination of slow growth in our revenue per pupil and the overall declining pupil enrollment created budget balancing challenges. The School District responds by continuously finding ways to enhance revenue and systematically reduce the cost of operations, including an annual budget balancing action process that begins before midyear for possible implementation in the following school year.

Bloomfield Hills Schools seeks to enhance revenue by the following means: encouraging residents to choose the School District, attracting nonresidents to the School District, and maintaining and developing innovative programs to meet the diverse needs of students and families. The School District is one of several choices for its residents. Other choices include nonpublic schools, home schooling, and other school districts. School District staff provides service to each enrolled family or potential enrollee with the full knowledge that each resident is important to the School District.

Nonresidents are attracted to the School District through our Nonresident Tuition Program, the first of its kind in Michigan. This program had approximately 78 nonresident pupils enrolled for the 2017-2018 school year, its twenty-first full year of operation. This program has been the source of much needed revenue growth for the School District, while at the same time, permitting much more efficient use of facilities and staff. In addition, children of nonresident employees are allowed to attend school as residents of the School District under a new law that took effect for

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the 2004-2005 school year. A total of 114 children of employees were enrolled, bringing the total nonresident enrollment to 192 and further stabilizing the School District’s overall enrollment.

Improved programs are developed to meet the diverse needs of the School District’s population and stabilize enrollment. At the high school level, three nontraditional options are the Bowers Academy, Model High School, and International Academy Consortium as discussed earlier in this report. These options have fulfilled the needs of students who otherwise might have left the School District to exercise other choices.

The School District’s budget controls are designed to ensure that the School District will spend within the limits of available revenue. Recent years reported an annual operating deficit, which has steadily improved with the implementation of many budget balancing actions. The approach to cost management has been a proactive one, in anticipation of slow revenue growth. Systematic cost reductions have been planned and implemented in both the instructional programs and supporting services. The School District expects sound and efficient cost management from individual department heads on an ongoing basis.

Major Initiatives and Future Programs

In January 2009, the Bloomfield Hills Schools Board of Education adopted a 10-year strategic plan - “Strategic Planning: 2018.” Mid-way through, “Strategic Plan: Phase II, Visionary Goal 2011-2018” was changed to add more clarity and focus. The School District’s educational goal moved to #1 and the term “lighthouse” was changed to “personalized, world-class education experience.”

The mission of Bloomfield Hills Schools was affirmed and its core values were preserved during the strategic planning process. The strategic plan sets strategic goals for Bloomfield Hills Schools:

1. Ignite the passion, fuel the dreams, and provide a personalized, world-class experience forevery student.

2. Nurture constructive partnerships that strengthen our entire community.3. Maximize the community’s investment, uphold our tradition of financial stewardship, and

optimize the use and value of all district facilities and properties.

According to the plan, Bloomfield Hills Schools will foster student success by defining 21st Century innovation and creativity skills and making staff “architects of their own futures.” The plan also commits the district to educating each child to his or her full potential, to eliminating achievement gaps between majority and minority students, and to guiding students to become leaders.

With the expiration of our Strategic Plan in 2018, it’s time to reflect on where we’ve been, what we value most, and the next steps we will take together to propel our district forward. Throughout 2018, the district reviewed the Guiding Principles for Teaching and Learning, transforming them into the Profile of a Learner. During the fall of 2018, the Board and Administration will collaboratively establish a vision and mission with input from the district’s instructional leaders. A facilitated community process for strategic goal setting will commence in October of 2018, convening a committee comprised of diverse external and internal stakeholders that represent our community.

The strategic plan is viewable on the Bloomfield Hills Schools web site at www.bloomfield.org.

Master Property Plan - Since 2014, Bloomfield Hills Schools has engaged the community in a Master Property Planning (MPP) process. The process initially included identifying the best use for several physical plant resources no longer housing specific school programs as of September

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2015 which included: former Hickory Grove Elementary; former Pine Lake Elementary; and Vacant parcel on Long Lake Road adjacent to the Wabeek development. The first years of MPP resulted in the demolition and, in most cases, sale of those properties. The initial phase of MPP also led to the restructuring of grade distribution on the East side of the district, with the 4th grade students and staff relocating to East Hills Middle School in the fall of 2017. The process is being conducted in the overall context of the district's anticipated programming needs, enrollment trends, building capacities, and physical plant needs and MPP remains ongoing work for Bloomfield Hills Schools to determine the best use for the former Lahser High School site and two auxiliary buildings located adjacent to the new high school.

The Board approved the demolition of both the former Pine Lake Elementary building and the former Hickory Grove Elementary building. Proposals were requested and received during the 2015-16 school year for the sale of the Wabeek vacant parcel and the former Hickory Grove Elementary site. In June 2016, the Board approved the sale of the Wabeek vacant parcel to a residential developer. In September 2016, the Board approved the sale of the former Hickory Grove Elementary site to a residential developer that includes a land contract component for the second phase of development. The Wabeek sale was finalized during 2017-2018. The Hickory Grove sale closed during 2017-2018 with proceeds received for the first phase and a land contract executed for the second phase where proceeds will be received in a future year.

The School District is also facing issues related to the age of our remaining instructional facilities. The average age of our school buildings is about 50 years. The overall focus of the MPP process is on creating opportunities for the future while also optimizing building utilization and reducing the infrastructure burden on the district. The process included an Advisory Committee of internal and external stakeholders, welcomed creative ideas and the discovery of mutually beneficial partnerships that benefit the district and community as a whole. Analysis and decisions on the former Lahser High School site are in process.

Fiscal challenges imposed by the economic downturn have caused the School District to take measures to sustain its fiscal viability. For the fiscal year ended June 30, 2018, the School District received state funding for about 5,609 and private funding for approximately 68 full time equivalent students for total students served of approximately 5,677. Our current enrollment projections are anticipating an increase for the fiscal year ending June 30, 2019. Collective bargaining agreements have been thoughtfully and cooperatively negotiated with employees, many of which expire at the end of 2018-2019.

Finally, the current economic downturn has impacted Michigan harder than most states. Because Michigan school districts rely on the State for funding, economic concerns at the state level become local funding issues for school districts also. We continue to remain current with state school funding issues, and maintain strong relationships with our legislators.

Independent Audit

Plante & Moran, PLLC, Certified Public Accountants, audited the School District’s financial statements as of June 30, 2018. Their audit was made in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards. The financial statements present fairly the financial position of Bloomfield Hills Schools at June 30, 2018. Their audit also included the single audit on federal financial assistance programs, which is published under separate cover. A copy of the single audit report is available on the district’s website under transparency reporting.

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Excellence in Financial Reporting

The School District is committed to providing its citizens and other users with comprehensive financial reporting. For school districts meeting the requirements of a Comprehensive Annual Financial Report, the Association of School Business Officials International (ASBO) awards a Certificate of Excellence in Financial Reporting. The School District received its eighteenth consecutive Certificate of Excellence in Financial Reporting from the ASBO for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2017.

In order to be awarded a Certificate of Excellence, a governmental unit must publish an easily readable and efficiently organized Comprehensive Annual Financial Report whose contents conform to program standards. Such reports must satisfy both accounting principles generally accepted in the United States of America and applicable legal requirements.

A Certificate of Excellence is valid for a period of one year only. We believe our current report conforms to program standards and we are submitting our report to ASBO to determine its eligibility for this certificate.

Acknowledgements

The preparation of this report on a timely basis could not have been accomplished without the effort and dedicated services of the entire Finance Team. We would like to express our appreciation to all members of this team for their participation in preparing this report. We also express our appreciation to other departments and individuals who assisted in the preparation of this report. Additionally, we thank the audit staff of Plante & Moran, PLLC for their assistance.

Sincerely,

Karen Hildebrandt, CFO Director of Finance

Christina M. Kostiuk, CPA, CFO Assistant Superintendent for Finance & Operations

Robert J. Glass Superintendent

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Bloomfield Hills SchoolsAnalysis of General Fund RevenueYear Ended June 30, 2018

43.2%

49.3%

2.1%

5.3%

0.1%

Local

State

Federal

Interdistrict

Transfer In

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Bloomfield Hills SchoolsAnalysis of General Fund ExpendituresYear Ended June 30, 2018

Our largest cost is our staff totaling about $77 million, which comprises around 84% of our total General Fund

50%

34%

7%

5%

1%3%

Salaries

Benefits

Purchased services

Supplies & other

Transfers out(Cap. Eqmt. & Food Svcs)

Tuition ‐ outgoing

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Bloomfield Hills SchoolsFoundation Allowance HistoryCumulative Change compared to CPI

*Fiscal Years 2009/10 & 2010/11 are based on the effective foundation allowance, which is less than the published nominal foundation per pupil due to State budget actions.

Fiscal Yrs: 

Foundation allowance history 1994/95  2008/09  2009/10*  2010/11*  2011/12  2012/13  2013/14  2014/15  2015/16  2016/17  2017/18 Minimum foundation*  $       4,200  $     7,316  $       7,162  $       7,146  $     6,846  $     6,966  $     7,026  $     7,126  $     7,391  $     7,511  $     7,631 

Increase (decrease) 112  (154) (16) (300) 120  60  100  265  120  120 Percent change 1.55% ‐2.10% ‐0.22% ‐4.20% 1.75% 0.86% 1.42% 3.72% 1.62% 1.60%Minimum Cumulative % Change 74% 71% 70% 63% 66% 67% 70% 76% 79% 82%

Maximum foundation  $       6,500  $     8,489  $       8,335  $       8,319  $     8,019  $     8,019  $     8,049  $     8,099  $     8,169  $     8,229  $     8,289 Increase (decrease) 56  (154) (16) (300) ‐ 30  50  70  60  60 Percent change 0.66% ‐1.81% ‐0.19% ‐3.61% 0.00% 0.37% 0.62% 0.86% 0.73% 0.73%Maximum Cumulative % Change 31% 28% 28% 23% 23% 24% 25% 26% 27% 28%

Bloomfield Hills Schools  $     10,454  $  12,443  $     12,170  $     12,154  $  11,854  $  11,854  $  11,884  $  11,934  $  12,004  $  12,064  $  12,124 Increase (decrease) 56  (273) (16) (300) ‐ 30  50  70  60  60 Percent change 0.45% ‐2.19% ‐0.13% ‐2.47% 0.00% 0.25% 0.42% 0.59% 0.50% 0.50%Bloomfield Cumulative % Change 19% 16% 16% 13% 13% 14% 14% 15% 15% 16%

Consumer Price Index (CPI) 144.5  207.3  215.3  214.4  218.1  224.9  229.6  233.0  236.7  237.0  240.0 Percent change 2.83% 3.86% ‐0.42% 1.73% 3.12% 2.09% 1.48% 1.59% 0.13% 1.27%CPI Cumulative % Change 43% 49% 48% 51% 56% 59% 61% 64% 64% 66%

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Cumulative Change in Foundation Allowance since 1994/95, the first year under Proposal A:

Minimum ‐ 82%Maximum ‐ 28%Bloomfield Hills ‐ 16%C.P.I. ‐ 66%

Bloomfield Hills SchoolsPercent Change in Foundation Allowance by Year

While Proposal A is intended to narrow the funding gap between districts with the lowest per pupil revenue and the highest per pupil revenue, funding growth for Bloomfield Hills Schools does not keep pace with inflation and diminishes purchasing power.

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Highlights of 2017-18 School Year District Points of Pride:

● The Association of School Business Officials (ASBO) International has awarded Bloomfield Hills Schools the Certificate of Excellence in Financial Reporting award for having met or exceeded the program's high standards for financial reporting and accountability.

● The Bloomfield Hills Schools Language Program is designed to assist students in acquiring and refining the linguistic skills necessary to succeed in the 21st century. Spanish is available for students in Kindergarten through 12th grade. Chinese, French and German are also taught at the middle school level and high school students have additional language opportunities.

● Bloomfield Hills Schools Transportation Team received a “perfect” inspection rating for the entire district bus fleet for the 26th year in a row.

● Bloomfield Hills Schools was rated the #1 school district in Michigan by Niche. ● PTOC Make a Difference Day (MADD) sponsored Cass Community Social Services, in

Detroit, in October, 2017. Students of all ages and from all Bloomfield Hills Schools participated in this event, to take part in our country’s national Make A Difference Day. Our Bloomfield Hills School community raised over $5,000, which was enough to purchase a roof for one of the tiny homes that Cass Community Social Services constructs to support the people of Detroit.

● Bloomfield Hills Schools Athletics Program was ranked #12 in Michigan.

● Bloomfield Hills Schools received a 2018 Best Communities for Music Education award from the NAMM Foundation. The award

recognizes the commitment and dedication of BHS to music and the arts as innovative learning opportunities for a well-rounded education.

● Bloomfield Hills Schools was the only district in Michigan to offer a tuition-free K -12 International Baccalaureate Organization curriculum.

● MAP (Maximizing Academic Potential) Services are available throughout Bloomfield Hills Schools.

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● Outdoor Classrooms at individual school sites foster hands on, inquiry based learning, and increase engagement.

● Flexible Classroom Seating, available in all Bloomfield Hills Schools, provides comfortable seating that allows children to move while remaining alert and focused.

High School Points of Pride: ● The BHHS Bionic Black Hawks

brought home the World Championship Title after the world-wide competition in China. The Bionic Black Hawks had incredible success at the FIRST Michigan State Championship, with their third straight FIRST Michigan Chairman’s Award.

● Bloomfield Hills High School Model UN Team was named #1 in Michigan and top in North America.

● The Bloomfield Hills High School Forensics team competed in the Michigan Interscholastic Forensic Association State Championship in April 2018 at Oakland Community College. Bringing a full squad of competitive entries, the team placed first in the Class A MIFA Championship.

● BHHS has an average of 19 annual National Merit Scholar winners. ● BHHS has a 98% graduation rate. ● Bloomfield Hills High School was awarded the Safe Sports School Team award by the

National Athletic Trainers' Association for high school athletics and athletic training. The award champions safety and recognizes secondary schools that provide safe environments for student athletes. The award reinforces the importance of providing the best level of care, injury prevention and treatment. BHHS is the first public high school in Oakland County to attain this award, and 1 out of 23 schools out of 815 in the state of Michigan!

● The Bloomfield Hills High School Jills Choir celebrated 60 years of musical excellence. In this select girls’ choir group, students sing, read music, and play the handbells.

● The BHHS Broken Leg Theater Company featured A Chorus Line as their fall musical, and The Musical Comedy Murders of 1940 as their spring play production.

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● The Black Hawks varsity boys tennis team earned the title of 2017 Division 1 State

Champions. Individuals championships included Constantin Hemmrich at #3 singles (third straight individual state championship), Cade Burman and Sebastian Burman at #1 doubles, and Chaz Blamo and Vik Chakrabortty at #2 doubles. State runner-up players included Andrew Zhang at #1 singles, and Adrian Wilen and Chris Sauer at #3 doubles. The team was also undefeated in the 2017 season.

● BHHS students served the community by making blankets for Fleece & Thank You to help pediatric patients.

● The Bloomfield Hills High School Model UN Team hosted more than 1,000 students for the 22nd Annual SouthEast Michigan Model United Nations Association (SEMMUNA) Fall Conference. As the largest high school Model UN event in the state of Michigan, the event attracted 40 student teams in Michigan.

● Five seniors from Bloomfield Hills High School were nominated as

candidates for the United States Presidential Scholars Program. Emily Wang, Srirama Varanasi, Ananyaa Kumar, Megan O'Gorman, and Simona Zhu were among the 140 students from Michigan named as candidates for this honor.

● Bloomfield Hills High School National Scholastic Medalists included Amanda Bearden (silver medal for photography), Anna Hemsworth (silver medal for portfolio), Lauren Rhoads (silver medal for sculpture), and Jenny She silver medal for photography). These students were recognized at the national ceremony at Carnegie Hall in New York in June.

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● Mikaela Schulz, a junior at BHHS, was named Female Golfer of the Year by the Detroit Free Press Sports Awards! Mikaela averaged an astonishing 72.1 for 18 holes, and won every event played in addition to finishing 4th in the State Finals. Mikaela has been named First Team All-State every season, and finished as the Runner-Up for Michigan Player of the Year sophomore and junior years. Mikaela maintains a 4.0 GPA and has verbally committed to play golf in college at the University of Michigan.

● Ally Heath, a senior at BHHS, received the Youth Volunteer of the Year award as part of the 2018 Michigan Governor's Service Awards. Ally also advanced to The International Science and Engineering Fair (ISEF) in May in Pittsburgh. Ally first competed at The 2018 Science and Engineering Fair of Metro Detroit (SEFMD) at Cobo Hall in March. Ally's project, In Vitro Characterization of HER2 Positive Breast Cancer Brain Metastases in the category of Cellular & Molecular Biology, was selected as one of the 2018 Grand Award Winners and one of the top 6 exhibits from over 2,000 to advance to international competition.

● 2018 Robert C.J. Traub Memorial Scholarship Recipients included seniors Anna Hemsworth (art) and Laurel Baker (music). Alternate winners were Akira Tuazon (art) and Tariq Masir-Zada (music).

● Elena Hirsch, sophomore, was selected as 1 of 100 students from across the nation to participate in the Disney Dreamers Academy with Steve Harvey and Essence, a four-day, immersive and transformational mentoring program at Walt Disney World Resort in Florida. "My biggest dream is to become a successful singer/songwriter and to spread a positive message through my music," expressed Elena. Elena attended speaking and networking events with acclaimed celebrities such as Neyo, Sonia Jackson Myles, and Princeton Parker. Elena is currently working with Ms. Myles to bring The Sister Accord program to BHHS.

● BHHS athlete Allison Fealk earned the title of the 2018 "My Way" Girls Wrestling State Champion. Allison competed in the state tournament in Kalamazoo the weekend of March 24-25, 2018.

● Sophomore Regan Lee took first place in the 10th grade category for the NAIAS (Auto Show) Poster Contest. Regan won $500, plus Regan's poster was included in the official program, on the NAIAS website, and was on display at Cobo Center in January 2018.

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Middle School Points of Pride: ● Neal Pullukat, 7th grade student and winner of the

East Hills Middle School Geography Bee, went on to the National Geographic Geography Bee in Michigan in early April, as one of 100 students throughout the state.

● Bloomfield Hills Middle School sent three Robotics teams (The Space Unicorns, The Mechanical Monkeys, and The Purple Protons) to Cedar Rapids, Iowa for the FIRSTTech Challenge North Super Regional. Bloomfield Hills Schools is the only district in the State of Michigan (and

possibly the country) to send three teams to this national competition in Iowa, which took place in March, 2018. The BHMS teams joined 72 FIRST Tech Challenge teams, representing 11 states, in the multi-day, highly competitive event.

● West Hills Middle School 8th grade student Pooja Kannappan was recognized for the creation of an app called EZDR, which uses artificial intelligence and a neural network to diagnose diabetic retinopathy, and the severity of it - from mild, to moderate, to severe - by looking at retina images of people's eyes.

Elementary School Points of Pride:

● West Hills School 4th grade classrooms received Fountas and Pinnell levelled library books to enhance their classroom libraries, and develop clearly leveled libraries to assist

students in choosing appropriate books for their reading levels.

● Conant Elementary School students picked an animal to research and present at their Animal Sharing Day, featuring student presentations. Students researched their animals based on books from the school library, to help them prepare their presentations.

● Eastover Elementary 3rd grade students held an Exhibition on Pioneers in Michigan. Students researched pioneer life, debated issues like whether to

mine copper, and gained an appreciation of what Michigan pioneers experienced, as well as an appreciation of the comforts of our modern lives.

● Eastover Elementary features a Student Ambassador program, where older students help younger students adjust to school, make friends, and feel safe.

● Lone Pine Elementary has a Student Action Team, devoted to community service projects. Within the 2017-2018 school year, the team completed the following activities: collecting school supplies for Detroit schools; collecting 300 pounds of canned and dried foods for Gleaners Food Bank; collecting unwanted Halloween candy and donating it to Gleaners Food Bank; making Get Well cards for local children in the hospital; making cards for local senior citizens; bringing in items for Boxes of Joy, an idea presented by

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3rd grader Simone Jasgur; Whiteout Wednesday: collecting over 1000 white items for homeless veterans in support of the Caleb White Project, a project presented by 3rd grader Seleste Baker; raising $1100 for Pennies for Power to support THAW; and collecting pet supplies to support Dog Aid.

● Multiple elementary schools began a new art program called Teaching for Artistic Behavior (TAB), which encourages students to have choice in their artistic creations.

● Multiple elementary schools celebrated new life with incubator systems in Kindergarten classrooms. Students received an education in the incubation process, and were able to see chicks and ducks hatch.

● Multiple elementary schools have gardening programs that offer hands-on, experiential learning opportunities in natural and social sciences, and nutrition.

Bowers School Farm and E.L. Johnson Nature Center Points of Pride:

● E.L. Johnson Nature Center, a Bloomfield Hills School property, is 40 acres making it the

largest outdoor classroom in Oakland County. ● Charles L. Bowers School Farm, a Bloomfield Hills School property, is a 96-acre working

farm for hands-on agriscience curriculum, supporting K through 12th grade learning across all Bloomfield Hills Schools.

● 70 volunteers planted 42 trees at the Nature

Center in April, 2018. This project helped in the restoration of the Rouge River ecosystem in partnership with ReLeaf Michigan, a non-profit tree organization, Bloomfield Township, and the Michigan Department of Natural Resources – Urban and Community Forestry Program.

● Farm on the Spot, a new program in the 2017-2018 school year, brings animals from Bowers

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School Farm into Bloomfield Hills School classrooms. Students receive an up-close and highly engaging approach to learning about animals from experts.

● Bloomfield Hills 4th grade students visited the Nature Center for their annual bird banding field trip in the spring. Expert, licensed bird bander Allen Chartier teaches students how to capture, weigh, measure, and track birds of all species that fly into the area. The Nature Center has been home to a 29 year long bird banding study!

● The E.L. Johnson Nature Center is a key partner in teaching the Next Generation Science Standard (NGSS) to Bloomfield Hills Schools students. All K-7th grade students take two field trips each year to the 35-acre preserve. "Our main function is to augment the classroom instruction," Dan Badgley, Nature Center Manager says. "We run programs that are topical by grade. For instance, fifth graders learn to explore ecosystems and second graders learn about plants and habitats. We start by explaining science concepts and we follow up with engaging questions to bring more depth to the topic. We incorporate literacy and reading, too. Then, we break the students into small groups for hands-on experiences."

Staff Points of Pride:

● Stephanie Bevier (Media Specialist at BHHS) and Nicole Harris (DAEER at BHS) represented Bloomfield Hills Schools as new members of the Diversity Champion Honor Roll. Stephanie and Nicole were awarded this honor during a special breakfast in May, 2018, at the Birmingham Community House.

● Vicky Croskey, BHHS Teacher, received the Oakland County Teacher Recognition Award. Teaching in Bloomfield Hills Schools for over 30 years, Mrs. Croskey has positively impacted the lives of hundreds of students throughout the decades.

● Mark Honeyman, a middle school Language Arts teacher, received the Excellence in Education Award. Sydney Harker, an 8th grader, submitted Honeyman's nomination for the award.

● Nature Center educator, Jody Harrington, was honored with the Michigan Association of Environmental and Outdoor Educators (MAEOE) 2017 Recognition Award. Jody's work at the Nature Center continues to leave a positive impact on many of the K-12 students and families in Bloomfield Hills Schools.

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The Certificate of Excellence in Financial Reporting

is presented to

Bloomfield Hills Schools

for its Comprehensive Annual Financial Report (CAFR) for the Fiscal Year Ended June 30, 2017.

The CAFR has been reviewed and met or exceeded

ASBO International’s Certificate of Excellence standards.

Charles E. Peterson, Jr., SFO, RSBA, MBA John D. Musso, CAE President Executive Director

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Independent Auditor's Report

To the Board of EducationBloomfield Hills Schools

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the major funds, and theaggregate remaining fund information of Bloomfield Hills Schools (the "School District") as of and for the yearended June 30, 2018 and the related notes to the financial statements, which collectively comprise BloomfieldHills Schools' basic financial statements, as listed in the table of contents.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordancewith accounting principles generally accepted in the United States of America; this includes the design,implementation, and maintenance of internal control relevant to the preparation and fair presentation of financialstatements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express opinions on these financial statements based on our audit. We conducted ouraudit in accordance with auditing standards generally accepted in the United States of America and the standardsapplicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General ofthe United States. Those standards require that we plan and perform the audit to obtain reasonable assuranceabout whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thefinancial statements. The procedures selected depend on the auditor’s judgment, including the assessment of therisks of material misstatement of the financial statements, whether due to fraud or error. In making those riskassessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of thefinancial statements in order to design audit procedures that are appropriate in the circumstances, but not for thepurpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express nosuch opinion. An audit also includes evaluating the appropriateness of accounting policies used and thereasonableness of significant accounting estimates made by management, as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinions.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the governmental activities, the major funds, and the aggregate remaining fund information ofBloomfield Hills Schools as of June 30, 2018 and the respective changes in its financial position and, whereapplicable, cash flows for the year then ended in accordance with accounting principles generally accepted in theUnited States of America.

Emphasis of Matter

As discussed in Note 2 to the basic financial statements, as of July 1, 2017, the School District adopted theprovisions of Governmental Accounting Standards Board Statement No. 75, Accounting and Financial Reportingfor Postemployment Benefits Other than Pensions. The School District's unrestricted net position has beenrestated as of July 1, 2017 as a result of this change in accounting principle. Our opinion is not modified withrespect to this matter.

1

To the Board of EducationBloomfield Hills Schools

Required Supplemental Information

Accounting principles generally accepted in the United States of America require that the management'sdiscussion and analysis, pension and OPEB schedules of proportionate share and schedules of contributions,and the major fund budgetary comparison schedules be presented to supplement the basic financial statements.Such information, although not a part of the basic financial statements, is required by the GovernmentalAccounting Standards Board, which considers it to be an essential part of financial reporting for placing the basicfinancial statements in an appropriate operational, economic, or historical context. We have applied certain limitedprocedures to the required supplemental information in accordance with auditing standards generally accepted inthe United States of America, which consisted of inquiries of management about the methods of preparing theinformation and comparing the information for consistency with management's responses to our inquiries, thebasic financial statements, and other knowledge we obtained during our audit of the basic financial statements.We do not express an opinion or provide any assurance on the information because the limited procedures do notprovide us with sufficient evidence to express an opinion or provide any assurance.

Other Information

Our audit was conducted for the purpose of forming an opinion on the financial statements that collectivelycomprise Bloomfield Hills Schools' basic financial statements. The other supplemental information, as identified inthe table of contents, and introductory section and statistical section schedules are presented for the purpose ofadditional analysis and are not a required part of the basic financial statements.

The other supplemental information, as identified in the table of contents, is the responsibility of management andwas derived from and relates directly to the underlying accounting and other records used to prepare the basicfinancial statements. Such information has been subjected to the auditing procedures applied in the audit of thebasic financial statements and certain additional procedures, including comparing and reconciling suchinformation directly to the underlying accounting and other records used to prepare the basic financial statementsor to the basic financial statements themselves, and other additional procedures in accordance with auditingstandards generally accepted in the United States of America. In our opinion, the other supplemental information,as identified in the table of contents, is fairly stated in all material respects in relation to the basic financialstatements as a whole.

The introductory section and statistical section schedules have not been subjected to the auditing proceduresapplied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provideany assurance on them.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated October 16, 2018 onour consideration of Bloomfield Hills Schools' internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. Thepurpose of that report is to describe the scope of our testing of internal control over financial reporting andcompliance and the results of that testing, and not to provide an opinion on the internal control over financialreporting or on compliance. That report is an integral part of an audit performed in accordance with GovernmentAuditing Standards in considering Bloomfield Hills Schools' internal control over financial reporting andcompliance.

October 16, 2018

2

Bloomfield Hills Schools

Management's Discussion and Analysis

This section of Bloomfield Hills Schools' (the "School District") annual financial report presents our discussion andanalysis of the School District's financial performance during the year ended June 30, 2018. Please read it inconjunction with the School District's financial statements, which immediately follow this section.

Using this Annual Report

This annual report consists of a series of financial statements and notes to those financial statements. Thesestatements are organized so the reader can understand Bloomfield Hills Schools financially as a whole. Thegovernment-wide financial statements provide information about the activities of the whole School District,presenting both an aggregate view of the School District’s finances and a longer-term view of those finances. Thefund financial statements provide the next level of detail. For governmental activities, these statements tell howservices were financed in the short term, as well as what remains for future spending. The fund financialstatements look at the School District’s operations in more detail than the government-wide financial statementsby providing information about the School District’s most significant funds - the General Fund, InternationalAcademy Fund, Center Program Fund, Combined Sinking Fund, and Capital Improvements Fund, with all otherfunds presented in one column as nonmajor funds. The School District has also established a proprietary InternalService Fund, primarily for compensated absences and self-insurance activity. The remaining statements, thestatement of fiduciary net position and statement of changes in fiduciary net position, present financial informationabout activities for which the School District acts solely as an agent for the benefit of students and parents. Thisreport is composed of the following elements:

Management's Discussion and Analysis (MD&A)(Required Supplemental Information)

Basic Financial Statements

Government-wide Financial Statements

Fund Financial Statements

Notes to Financial Statements

Required Supplemental Information

Budgetary Information for Major Funds

Schedules of the School District's Proportionate Share of the Net Pension and OPEB Liabilities

Schedules of the School District's Pension and OPEB Contributions

Other Supplemental Information

In addition, the School District has added the introductory section and statistical section to complete itsComprehensive Annual Financial Report.

Reporting the School District as a Whole - Government-wide Financial Statements

One of the most important questions asked about the School District is, “As a whole, what is the School District’sfinancial condition as a result of the year’s activities?” The statement of net position and the statement ofactivities, which appear first in the School District’s financial statements, report information on the School Districtas a whole and its activities in a way that helps you answer this question. We prepare these statements to includeall assets, deferred outflows of resources, liabilities, and deferred inflows of resources, using the accrual basis ofaccounting, which is similar to the accounting used by most private sector companies. All of the current year’srevenue and expenses are taken into account, regardless of when cash is received or paid.

3

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

These two statements report the School District’s net position - the difference between assets plus deferredoutflows of resources and liabilities plus deferred inflows of resources, as reported in the statement of net position- as one way to measure the School District’s financial health or financial position. Over time, increases ordecreases in the School District’s net position - as reported in the statement of activities - are indicators ofwhether its financial health is improving or deteriorating. The relationship between revenue and expenses is theSchool District’s operating results. However, the School District’s goal is to provide services to our students, notto generate profits as commercial entities do. One must consider many other nonfinancial factors, such as thequality of the education provided and the safety of the schools, to assess the overall health of the School District.

The statement of net position and the statement of activities report the governmental activities for the SchoolDistrict, which encompass all of the School District’s services, including instruction, support services, communityservices, athletics, and food services. Property taxes, unrestricted state aid (foundation allowance revenue), andstate and federal grants finance most of these activities.

Reporting the School District's Most Significant Funds - Fund Financial Statements

The School District’s fund financial statements provide detailed information about the most significant funds - notthe School District as a whole. Some funds are required to be established by state law and by bond covenants.However, the School District establishes many other funds to help it control and manage money for particularpurposes (the Food Service and Community Services Funds are examples) or to show that it is meeting legalresponsibilities for using certain taxes, grants, and other money (such as bond-funded construction funds used forvoter-approved capital projects). The governmental funds of the School District use the following accountingapproach.

Governmental Funds

All of the School District's services are reported in governmental funds. Governmental fund reporting focuses onshowing how money flows into and out of funds and the balances left at year end that are available for spending.They are reported using an accounting method called modified accrual accounting, which measures cash and allother financial assets that can readily be converted to cash. The governmental fund statements provide a detailedshort-term view of the operations of the School District and the services it provides. Governmental fundinformation helps determine whether there are more or fewer financial resources that can be spent in the nearfuture to finance the School District’s programs. We describe the relationship (or differences) betweengovernmental activities (reported in the statement of net position and the statement of activities) andgovernmental funds in reconciliations.

Proprietary Funds

Proprietary fund reporting focuses on the economic resources measurement and an accounting method called fullaccrual accounting. The proprietary fund statements present a long-term view of operations and the services itprovides to other funds. The School District established a proprietary fund, specifically the Internal Service Fund,to finance specific services provided to other funds of the School District on a cost-reimbursement basis. Thespecific services include health care, workers' compensation, accrued vacation pay, and termination pay.

The School District as Trustee - Reporting the School District's Fiduciary Responsibilities

The School District is the trustee, or fiduciary, for its student activity funds. All of the School District’s fiduciaryactivities are reported in a separate statement of fiduciary net position. We exclude these activities from theSchool District’s other financial statements because the School District cannot use these assets to finance itsoperations. The School District is responsible for ensuring that the assets reported in these funds are used fortheir intended purposes.

4

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

The School District as a Whole

Recall that the statement of net position provides the perspective of the School District as a whole. The followingtable provides a summary of the School District’s net position as of June 30, 2018 and 2017:

Governmental Activities

2018 2017

(in millions)

AssetsCurrent and other assets $ 46.1 $ 44.5Capital assets 142.5 144.1

Total assets 188.6 188.6

Deferred Outflows of Resources 34.7 19.0

LiabilitiesCurrent liabilities 11.3 10.8Noncurrent liabilities 59.8 61.2Net pension liability 156.5 151.8Net OPEB liability 53.5 -

Total liabilities 281.1 223.8

Deferred Inflows of Resources 19.4 8.0

Net PositionNet investment in capital assets 87.1 88.3Restricted 1.9 0.8Unrestricted (166.2) (113.3)

Total net position $ (77.2) $ (24.2)

The above analysis focuses on net position. The change in net position of the School District’s governmentalactivities is discussed below. The School District’s net position was $(77.2) million at June 30, 2018. Netinvestment in capital assets, net of related debt, totaling $87.1 million, compares the original cost, lessdepreciation of the School District’s capital assets, to long-term debt used to finance the acquisition of thoseassets. Most of the debt will be repaid from voter-approved property taxes collected as the debt service comesdue. Restricted net position is reported separately to show legal constraints from debt covenants and enablinglegislation that limit the School District’s ability to use that net position for day-to-day operations. The remainingamount of net position ($(166.2) million) was unrestricted.

The $(166.2) million in unrestricted net position of governmental activities represents the accumulated results ofall past years’ operations. The unrestricted net position balance enables the School District to meet workingcapital and cash flow requirements, as well as to provide for future uncertainties. The operating results of theGeneral Fund will have a significant impact on the change in unrestricted net position from year to year.

5

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

The results of this year’s operations for the School District as a whole are reported in the condensed statement ofactivities below, which shows the changes in net position for the years ended June 30, 2018 and 2017:

Governmental Activities

2018 2017

(in millions)

RevenueProgram revenue:

Charges for services $ 12.9 $ 12.7Operating grants and contributions 28.1 26.6

General revenue:Taxes 39.2 38.4State aid not restricted to specific purposes 33.2 32.7Other 5.8 1.0

Total revenue 119.2 111.4

ExpensesInstruction 62.6 59.9Support services 40.3 38.2Co-curricular activities 2.3 2.1Food services 1.7 1.8Community services 3.2 3.3Debt service 1.9 2.2Depreciation expense (unallocated - excludes direct depreciation

expenses of various programs) 6.0 14.7

Total expenses 118.0 122.2

Change in Net Position 1.2 (10.8)

Net Position - Beginning of year, as previously reported (24.3) (13.5)

Cumulative Effect of Change in Accounting Principle (54.1) -

Net Position - Beginning of year (78.4) (13.5)

Net Position - End of year $ (77.2) $ (24.3)

As reported in the statement of activities, the cost of all of our governmental activities this year was $118.0million. Certain activities were partially funded from those who benefited from the programs ($12.9 million) or byother governments and organizations that subsidized certain programs with grants and contributions ($28.1million). We paid for the remaining “public benefit” portion of our governmental activities with $39.2 million intaxes, $33.2 million in state foundation allowance, and with our other revenue (i.e., interest and generalentitlements).

The School District experienced an increase in net position of $1.2 million. Key reasons for the change in netposition were proceeds from the sale of Hickory Grove Elementary School in the amount of approximately $3.7million and planned use of reserves from the General Fund and the International Academy Fund.

6

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

As discussed above, the net cost shows the financial burden that was placed on the state and the SchoolDistrict’s taxpayers by each of these functions. Since property taxes for operations and unrestricted state aidconstitute the vast majority of district operating revenue sources, the Board of Education and administration mustannually evaluate the needs of the School District and balance those needs with state-prescribed availableunrestricted resources.

As required by the Governmental Accounting Standards Board (GASB), the School District adopted GASBStatement No. 75. This standard required the inclusion of the School District’s proportionate share of theMichigan Public School Employees’ Retiree Health Care Plan within the School District’s financial statements,effective July 1, 2017. The effect of the adoption was to decrease July 1, 2017 beginning net position by $54.1million and to include the net OPEB obligation and related deferred inflows and outflows of resources in the June30, 2018 financial statements. All governments participating in the plan were required to adopt this new standard.

The School District's Funds

As we noted earlier, the School District uses funds to help it control and manage money for particular purposes.Looking at funds helps the reader consider whether the School District is being accountable for the resourcestaxpayers and others provide to it and may provide more insight into the School District’s overall financial health.

As the School District completed this year, the governmental funds reported a combined fund balance of $32.7million, which is an increase of $1.4 million from last year. The primary reasons for the increase are as follows:

In the General Fund, our principal operating fund, the fund balance decreased approximately $381,000 to $20.4million. The change is due to planned use of reserves. Fund balance of the General Fund is available to fundcosts related to allowable school operating purposes, and a portion of the total fund balance is reserved fordesignated for specific uses.

The International Academy Fund had a decrease in fund balance of approximately $527,000 as a result ofplanned use of reserves.

The Center Program Fund had a decrease in fund balance of approximately $236,000 due to the transfer of fundsfor purchasing replacement equipment in the Capital Equipment Fund.

The Sinking Fund ended the year with a decrease in fund balance of approximately $898,000 as a result ofplanned capital projects that were finalized during the early summer months, primarily funded by previousreserves.

The Capital Improvements Fund had an increase in fund balance of approximately $2,864,000 due to the initialproceeds from the land contract sale of the land located on the previous Hickory Grove Elementary site.

The other nonmajor funds showed an increase in fund balance of approximately $575,000. Several specialrevenue funds and debt service funds are included in this category, as described below:

The Food Service Fund had an increase in fund balance of approximately $140,000 due to a plannedimprovement in operational performance.

The Community Services Fund had an increase in fund balance of approximately $6,000 as a result of a plannedincrease in reserves.

The Co-curricular Endowment Fund increased its fund balance by approximately $3,000 as a result of interestearnings.

The Debt Service Fund showed a fund balance increase of approximately $315,000 due to a planned addition toreserves for upcoming debt payments.

The Capital Equipment Fund had an increase in fund balance of approximately $111,000 as a result of timing ofpurchases expanding over fiscal years.

7

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

General Fund Budgetary Highlights

Over the course of the year, the School District revises its budget as it attempts to deal with unexpected changesin revenue and expenditures. State law requires that the budget be amended to ensure that expenditures do notexceed appropriations. The final amendment to the budget was adopted in June 2018. A schedule showing theSchool District’s original and final budget amounts compared with amounts actually paid and received is providedin required supplemental information in these financial statements.

There were significant revisions made to the 2017-2018 General Fund original budget. Budgeted revenue wasincreased by $2.3 million due to an unexpected change in certain categorical revenue from the State of $1.4million, along with an unanticipated increase in revenue from the intermediate school district of $0.7 million.

Budgeted expenditures were also increased by $3.5 million to account for the recording of retirement expensesassociated with the increased categorical revenue passed through the State in the amount of $1.4 million,increased staffing related to student placements throughout the School District, and increased legal fees.

Actual activities in the General Fund resulted in final revenue being approximately $103,000 more than amountsbudgeted. This was primarily caused by additional pass-through funding from the intermediate school district.Actual final expenditures for the year were approximately $672,000 under budgeted amounts. This was primarilydue to conservative budget estimates for staffing costs.

Capital Assets and Debt Administration

Capital Assets

As of June 30, 2018, the School District had $217.7 million invested in a broad range of capital assets, includingland, buildings, vehicles, furniture, and equipment. This amount represents a net decrease (including additions,disposals, and depreciation) of approximately $1.6 million, or 1.1 percent, from last year.

Governmental Activities

2018 2017

Land $ 1,983,626 $ 1,983,626Construction in progress 974,065 577,185Buildings and improvements 186,874,206 184,984,449Furniture and equipment 11,646,324 11,024,789Buses and other vehicles 5,893,789 5,809,246Site improvements 10,294,364 10,240,590

Total capital assets 217,666,374 214,619,885

Less accumulated depreciation 75,172,879 70,554,385

Total capital assets - Net of accumulated depreciation $ 142,493,495 $ 144,065,500

This year's additions of $4.4 million were offset with disposals of $1.4 million, including vehicles, technology,building renovations, and buses. No major capital projects are planned for the 2018-2019 fiscal year. Weanticipate capital additions will be comparable to this year. We present more detailed information about ourcapital assets in the notes to the financial statements.

8

Bloomfield Hills Schools

Management's Discussion and Analysis (Continued)

Debt

At the end of this year, the School District had $52.6 million in bonds outstanding versus $53.6 million in theprevious year - a change of 1.8 percent. Those bonds consisted of the following:

2018 2017

General obligation bonds $ 52,610,000 $ 53,570,000

The School District’s general obligation bond rating is Aa1, as affirmed by Moody’s in July 2018. The State limitsthe amount of general obligation debt that schools can issue to 15 percent of the assessed value of all taxableproperty within the School District’s boundaries. If the School District issues “qualified debt” (i.e., debt backed bythe State of Michigan), such obligations are not subject to this debt limit. The School District’s outstandingunqualified general obligation debt of $52.6 million is significantly below this $472.3 million statutorily imposedlimit.

Other obligations include accrued vacation pay and sick leave. We present more detailed information about ourlong-term liabilities in the notes to the financial statements.

Economic Factors and Next Year's Budgets and Rates

Our elected officials and administration consider many factors when setting the School District’s 2018-2019 fiscalyear budget. One of the most important factors affecting the budget is our student count. The state foundationallowance revenue is determined by multiplying the blended student count by the foundation allowance per pupil.The 2018-2019 budget was adopted in June 2018 based on an estimate of students who will enroll in September2018. Approximately 75.0 percent of total General Fund revenue is from the foundation allowance. Under statelaw, the School District cannot access additional property tax revenue for general operations. As a result, districtfunding is heavily dependent on the State's ability to fund local school operations. Based on early enrollment dataat the start of the 2018 school year, we anticipate that the fall student count will be short of the estimates used increating the 2018-2019 budget. Once the final student count and related per pupil funding is validated, state lawrequires the School District to amend the budget if actual district resources are not sufficient to fund originalappropriations.

Since the School District's revenue is heavily dependent on state funding and the health of the State's School AidFund, the actual revenue received depends on the State's ability to collect revenue to fund its appropriation to theSchool District. The State periodically holds revenue-estimating conferences to estimate revenue. Based on theresults of the most recent conference, the State estimates funds are sufficient to fund the appropriation, includinga foundation allowance increase of $120 per pupil.

Contacting the School District's Management

This financial report is intended to provide our taxpayers, parents, and investors with a general overview of theSchool District's finances and to show the School District's accountability for the money it receives. If you haveany questions about this report or need additional information, we welcome you to contact the finance office at7273 Wing Lake Road, Bloomfield Hills, Michigan 48301.

9

Bloomfield Hills Schools

Statement of Net Position

June 30, 2018

GovernmentalActivities

AssetsCash and investments (Note 4) $ 34,251,969Receivables:

Accounts receivable 247,477Due from other governmental units 9,210,020

Inventories 51,288Prepaid costs and other assets 500,877Restricted cash and investments (Notes 4 and 9) 1,823,846Capital assets: (Note 6)

Assets not subject to depreciation 2,957,691Assets subject to depreciation - Net 139,535,804

Total assets 188,578,972

Deferred Outflows of ResourcesDeferred pension costs (Note 11) 31,710,305Deferred OPEB costs (Note 11) 2,975,789

Total deferred outflows of resources 34,686,094

LiabilitiesAccounts payable 1,806,430Accrued payroll-related liabilities 8,675,405Unearned revenue (Note 5) 848,277Noncurrent liabilities:

Due within one year (Note 8) 2,277,487Due in more than one year (Note 8) 57,471,167Net pension liability (Note 11) 156,541,080Net OPEB liability (Note 11) 53,490,825

Total liabilities 281,110,671

Deferred Inflows of ResourcesRevenue in support of pension contributions made subsequent to the report date 6,224,828Deferred pension cost reductions (Note 11) 11,325,877Deferred OPEB cost reductions (Note 11) 1,808,380

Total deferred inflows of resources 19,359,085

Net PositionNet investment in capital assets 87,084,611Restricted:

Debt service 629,314Co-curricular Endowment Fund 412,112International Academy Fund 702,702Food Service Fund 162,083

Unrestricted (166,195,512)

Total net position $ (77,204,690)

See notes to financial statements. 10

Bloomfield Hills Schools

Statement of Activities

Year Ended June 30, 2018

Program RevenueGovernmental

Activities

ExpensesCharges for

Services

OperatingGrants and

Contributions

Net (Expense)Revenue andChanges inNet Position

Functions/ProgramsPrimary government - Governmental

activities:Instruction $ 62,626,157 $ 6,619,690 $ 16,912,071 $ (39,094,396)Support services 40,302,053 386,320 10,740,105 (29,175,628)Co-curricular activities 2,252,578 161,727 - (2,090,851)Food services 1,735,863 1,404,437 438,670 107,244Community services 3,224,934 4,327,862 - 1,102,928Interest 1,880,199 - - (1,880,199)Depreciation expense (unallocated -

excludes direct depreciation expensesof various programs) 6,007,926 - - (6,007,926)

Total primary government $ 118,029,710 $ 12,900,036 $ 28,090,846 (77,038,828)

General revenue:Taxes:

Property taxes, levied for generalpurposes 33,323,421

Property taxes, levied for debt service 3,324,582Property taxes, levied for capital projects 2,507,192

State aid not restricted to specific purposes 33,245,543Interest and investment earnings 354,844Gain on sale of assets 3,776,749Other 1,701,738

Total general revenue 78,234,069

Change in Net Position 1,195,241

Net Position - Beginning of year, as previouslyreported (24,264,436)

Cumulative Effect of Change in AccountingPrinciple (Note 2) (54,135,495)

Net Position - Beginning of year, as restated (78,399,931)

Net Position - End of year $ (77,204,690)

See notes to financial statements. 11

Bloomfield Hills Schools

General FundInternational

Academy FundCenter

Program FundCombined

Sinking Fund

AssetsCash and investments (Note 4) $ 20,434,152 $ 1,044,939 $ 4,607,070 $ -Receivables:

Accounts receivable 42,379 - - -Due from other governmental units 9,132,560 62,940 - -

Inventories - - - -Prepaid costs and other assets 111,659 - - -Restricted cash and

investments (Notes 4 and 9) - - - 449,837

Total assets $ 29,720,750 $ 1,107,879 $ 4,607,070 $ 449,837

LiabilitiesAccounts payable $ 995,575 $ 32,808 $ 5,885 $ 523,628Accrued payroll-related liabilities 7,775,937 282,104 142,360 -Unearned revenue (Note 5) 527,117 90,265 - -

Total liabilities 9,298,629 405,177 148,245 523,628

Fund BalancesNonspendable:

Inventories - - - -Prepaid costs 111,659 - - -

Restricted:Debt service - - - -International Academy - 702,702 - -Co-curricular Endowment Fund - - - -

Assigned:Subsequent year's budget 881,325 - - -Community service - - - -Center program - - 4,458,825 -Capital projects - - - -

Unassigned (deficit) 19,429,137 - - (73,791)

Total fund balances 20,422,121 702,702 4,458,825 (73,791)

Total liabilities and fundbalances $ 29,720,750 $ 1,107,879 $ 4,607,070 $ 449,837

See notes to financial statements. 12

Governmental Funds Balance Sheet

June 30, 2018

CapitalImprovements

FundNonmajor

Funds

TotalGovernmental

Funds

$ 4,863,831 $ 988,714 $ 31,938,706

202,801 2,297 247,477- 14,520 9,210,020- 51,288 51,288- 64,081 175,740

- 1,374,009 1,823,846

$ 5,066,632 $ 2,494,909 $ 43,447,077

$ 14,296 $ 69,887 $ 1,642,079- 9,513 8,209,914- 230,895 848,277

14,296 310,295 10,700,270

- 51,288 51,288- 64,081 175,740

- 961,897 961,897- - 702,702- 412,112 412,112

- - 881,325- 259,644 259,644- - 4,458,825

5,052,336 388,878 5,441,214- 46,714 19,402,060

5,052,336 2,184,614 32,746,807

$ 5,066,632 $ 2,494,909 $ 43,447,077

13

Bloomfield Hills Schools

Governmental Funds Reconciliation of the Balance Sheet to the Statement of Net Position

June 30, 2018

Fund Balances Reported in Governmental Funds $ 32,746,807

Amounts reported for governmental activities in the statement of net position are differentbecause:

Capital assets used in governmental activities are not financial resources and are notreported in the funds:

Cost of capital assets 217,666,374Accumulated depreciation (75,172,879)

Net capital assets used in governmental activities 142,493,495

Bonds payable including premium and deferred charges are not due and payable in thecurrent period and are not reported in the funds (55,408,884)

Accrued interest is not due and payable in the current period and is not reported in thefunds (332,583)

Some employee fringe benefits are payable over a long period of years and do notrepresent a claim on current financial resources; therefore, they are not reported asfund liabilities:

Severance-related liabilities (2,195,122)Net pension liability and related deferred inflows and outflows (136,156,652)Net OPEB liability and related deferred inflows and outflows (52,323,416)

Revenue in support of pension contributions made subsequent to the measurement dateis reported as a deferred inflow of resources in the statement of net position and is notreported in the funds (6,224,828)

Internal service funds are included as part of governmental activities 196,493

Net Position of Governmental Activities $ (77,204,690)

See notes to financial statements. 14

Bloomfield Hills Schools

General FundInternational

Academy FundCenter

Program FundCombined

Sinking Fund

RevenueLocal sources $ 39,432,976 $ 479,798 $ - $ 2,513,067State sources 44,890,023 - 2,342,518 -Federal sources 1,915,857 - - -Interdistrict sources 4,802,970 5,201,832 6,812,115 -

Total revenue 91,041,826 5,681,630 9,154,633 2,513,067

ExpendituresCurrent:

Instruction 52,804,927 4,090,796 5,821,512 -Support services 33,518,733 1,751,920 3,238,134 9,305Co-curricular activities 2,254,857 - - -Food services - - - -Community services 1,846,798 349,444 - -

Debt service:Principal - - - -Interest - - - -

Capital outlay 71,903 16,099 - 3,402,039

Total expenditures 90,497,218 6,208,259 9,059,646 3,411,344

Excess of Revenue Over (Under)Expenditures 544,608 (526,629) 94,987 (898,277)

Other Financing Sources (Uses)Proceeds from sale of capital assets - - - -Transfers in (Note 7) 98,429 - - -Transfers out (Note 7) (1,023,583) - (331,040) -

Total other financing (uses)sources (925,154) - (331,040) -

Net Change in Fund Balances (380,546) (526,629) (236,053) (898,277)

Fund Balances - Beginning of year 20,802,667 1,229,331 4,694,878 824,486

Fund Balances - End of year $ 20,422,121 $ 702,702 $ 4,458,825 $ (73,791)

See notes to financial statements. 15

Governmental Funds Statement of Revenue, Expenditures, and Changes in Fund Balances

Year Ended June 30, 2018

CapitalImprovements

FundNonmajor

Funds

TotalGovernmental

Funds

$ 541,270 $ 5,975,804 $ 48,942,915- 74,565 47,307,106- 364,105 2,279,962- - 16,816,917

541,270 6,414,474 115,346,900

- - 62,717,235467,020 80,964 39,066,076

- - 2,254,857- 1,735,871 1,735,871- 1,031,986 3,228,228

- 960,000 960,000- 2,043,725 2,043,725

664,122 1,565,681 5,719,844

1,131,142 7,418,227 117,725,836

(589,872) (1,003,753) (2,378,936)

3,745,824 30,925 3,776,749- 1,586,623 1,685,052

(292,000) (38,429) (1,685,052)

3,453,824 1,579,119 3,776,749

2,863,952 575,366 1,397,813

2,188,384 1,609,248 31,348,994

$ 5,052,336 $ 2,184,614 $ 32,746,807

16

Bloomfield Hills Schools

Governmental Funds Reconciliation of the Statement of Revenue, Expenditures, and Changes in

Fund Balances to the Statement of Activities

Year Ended June 30, 2018

Net Change in Fund Balance Reported in Governmental Funds $ 1,397,813

Amounts reported for governmental activities in the statement of activities are differentbecause:

Governmental funds report capital outlays as expenditures; however, in the statement ofactivities, these costs are allocated over their estimated useful lives as depreciation:

Capitalized capital outlay 4,435,921Depreciation expense (6,007,926)

Revenue in the statement of activities that does not provide current financial resourcesis not reported as revenue in the funds until it is available (32,934)

Revenue in support of pension contributions made subsequent to the measurement date (901,820)

Repayment of bond principal is an expenditure in the governmental funds, but not in thestatement of activities (where it reduces long-term debt); amortization ofpremium/discounts and inflows/outflows related to bond refundings are not expensesin the governmental funds 1,115,493

Interest expense is recognized in the government-wide statements as it accrues 8,033

Some employee costs (pension, OPEB, and compensated absences) do not require theuse of current financial resources and, therefore, are not reported as expenditures inthe governmental funds 1,412,540

Internal service funds are included as part of governmental activities (231,879)

Change in Net Position of Governmental Activities $ 1,195,241

See notes to financial statements. 17

Bloomfield Hills Schools

Proprietary Funds Statement of Net Position

June 30, 2018

Internal ServiceFund

AssetsCurrent assets:

Cash and investments (Note 4) $ 2,313,263Prepaid costs and other assets 325,137

Total assets 2,638,400

LiabilitiesCurrent liabilities:

Accounts payable 164,351Other accrued liabilities 132,908Employee compensated absences - Current portion (Note 8) 400,000Provision for uninsured losses - Current portion (Note 8) 551,994

Total current liabilities 1,249,253

Noncurrent liabilities:Employee compensated absences (Note 8) 1,023,788Provision for uninsured losses (Note 8) 168,866

Total noncurrent liabilities 1,192,654

Total liabilities 2,441,907

Net Position - Unrestricted $ 196,493

See notes to financial statements. 18

Bloomfield Hills Schools

Proprietary Funds Statement of Revenue, Expenses, and Changes in Net Position

Year Ended June 30, 2018

Internal ServiceFund

Operating Revenue - Charges to other funds $ 9,807,154

Operating ExpensesMedical, dental, and vision 8,329,709Health risk assessments, management fees, severance-related expenses, and workers'

compensation 1,713,509

Total operating expenses 10,043,218

Operating Loss (236,064)

Nonoperating Revenue - Interest and investment earnings 4,185

Change in Net Position (231,879)

Net Position - Beginning of year 428,372

Net Position - End of year $ 196,493

See notes to financial statements. 19

Bloomfield Hills Schools

Proprietary Funds Statement of Cash Flows

Year Ended June 30, 2018

Internal ServiceFund

Cash Flows from Operating ActivitiesReceipts from other funds $ 9,834,201Payments for services (10,027,058)

Net cash used in operating activities (192,857)

Cash Flows Provided by Investing Activities - Interest received on investments 4,185

Net Decrease in Cash (188,672)

Cash - Beginning of year 2,501,935

Cash - End of year $ 2,313,263

Reconciliation of Operating Loss to Net Cash from Operating ActivitiesOperating loss $ (236,064)Adjustments to reconcile operating loss to net cash from operating activities -

Changes in assets and liabilities:Prepaid costs 27,047Accounts payable 34,750Other liabilities 10,836Employee compensated absences (18,235)Uninsured losses and liabilities (11,191)

Net cash used in operating activities $ (192,857)

See notes to financial statements. 20

Bloomfield Hills Schools

Fiduciary Funds Statement of Fiduciary Net Position

June 30, 2018

Private PurposeTrust

StudentActivities

Agency Fund

Assets - Cash and investments (Note 4) $ 99,918 $ 2,025,327

LiabilitiesAccounts payable 1,000 $ 20,805Due to student groups - 2,004,522

Total liabilities 1,000 $ 2,025,327

Net Position - Assets held in trust for scholarships $ 98,918

See notes to financial statements. 21

Bloomfield Hills Schools

Fiduciary Funds Statement of Changes in Fiduciary Net Position

Year Ended June 30, 2018

Private PurposeTrust

AdditionsInterest $ 772Private donations 4,494

Total additions 5,266

Deductions - Scholarships awarded 6,755

Net Decrease in Net Position (1,489)

Net Position - Beginning of year 100,407

Net Position - End of year $ 98,918

See notes to financial statements. 22

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 1 - Nature of Business

Bloomfield Hills Schools (the "School District") is a school district in the state of Michigan that provideseducational services to students.

Note 2 - Significant Accounting Policies

Accounting and Reporting Principles

The School District follows accounting principles generally accepted in the United States of America(GAAP) as applicable to governmental units. Accounting and financial reporting pronouncements arepromulgated by the Governmental Accounting Standards Board (GASB). The following is a summary ofthe significant accounting policies used by the School District:

Reporting Entity

The School District is governed by an elected seven-member Board of Education. In accordance withgovernment accounting principles, there are no separate legal entities appropriate to be reported withinthese financial statements.

Report Presentation

Governmental accounting principles require that financial reports include two different perspectives - thegovernment-wide perspective and the fund-based perspective. The government-wide financial statements(i.e., the statement of net position and the statement of activities) report information on all of thenonfiduciary activities of the primary government and its component units, as applicable. Thegovernment-wide financial statements are presented on the economic resources measurement focus andthe full accrual basis of accounting. Property taxes are recognized as revenue in the year for which theyare levied. Grants and similar items are recognized as revenue as soon as all eligibility requirementsimposed by the provider have been met. The statements also present a schedule reconciling theseamounts to the modified accrual-based presentation found in the fund-based statements.

The statement of activities demonstrates the degree to which the direct expenses of a given function orsegment are offset by program revenue. Direct expenses are those that are clearly identifiable with aspecific function or segment. Program revenue includes: (1) charges to customers or applicants forgoods, services, or privileges provided; (2) operating grants and contributions; and (3) capital grants andcontributions, including special assessments. Taxes, unrestricted intergovernmental receipts, and otheritems not properly included among program revenue are reported instead as general revenue.

As a general rule, the effect of interfund activity has been removed from the government-wide financialstatements. Exceptions to this general rule occur when there are charges between business-typeactivities and various other functions. Eliminations of these charges would distort the direct costs andprogram revenue reported for the various functions concerned.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciaryfunds, even though the latter are excluded from the government-wide financial statements. Majorindividual funds are reported as separate columns in the fund financial statements.

23

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Fund Accounting

The School District accounts for its various activities in several different funds in order to demonstrateaccountability for how it spends certain resources; separate funds allow the School District to show theparticular expenditures for which specific revenue is used. The various funds are aggregated into threebroad fund types:

Governmental Funds

Governmental funds include all activities that provide general governmental services that are notbusiness-type activities. Governmental funds can include the General Fund, special revenue funds, debtservice funds, capital project funds, and permanent funds. The School District reports the following fundsas "major" governmental funds:

The General Fund is the primary operating fund because it accounts for all financial resources used to

provide government services, other than those specifically assigned to another fund.

The International Academy Fund is used to record the operations of the International Academy. The

fund is financed by tuition payments and fees.

The Center Program Fund is used to record the operations of the Center Programs. The fund is

financed by state source revenue and tuition payments.

The Combined Sinking Fund is used to record the sinking fund property tax levy and other revenue

and the disbursement of invoices specifically designated for acquiring new school sites, construction,

or repair of school buildings.

The Capital Improvements Fund is used to record revenue and the disbursement of invoices

specifically designated by the Board of Education for acquiring new school sites and buildings and for

major remodeling and repairs.

Additionally, the School District reports the following nonmajor governmental fund types:

Special revenue funds are used to account for the proceeds of specific revenue sources that are

restricted or committed to expenditure for specified purposes. The School District’s special revenue

funds include the Food Service, Community Services, and Co-curricular Endowment Funds. The Food

Service Fund is financed by sales of school lunches to students and from the Federal School Lunch

Program. The Community Services Fund is primarily supported by fees generated by the program.

The Co-curricular Endowment Fund is financed by the School District's contributions and fundraising

activities, and monies of the fund are restricted to the extent that only earnings, and not principal, may

be used for sustaining and enhancing the School District's co-curricular programs. The School District

maintains full control of these funds. Any operating deficit generated by these activities is the

responsibility of the General Fund.

Capital projects funds are used to record bond proceeds or other revenue and the disbursement of

invoices specifically designated for acquiring new school sites, buildings, equipment, technology

upgrades, and for remodeling and repairs. The funds operate until the purpose for which they were

created is accomplished. The nonmajor capital projects fund maintained by the School District is the

Capital Equipment Fund, which represents the remaining proceeds from Board-designated projects

that are available for future needs.

Debt service funds are used to record tax, interest, and other revenue for payment of interest,

principal, and other expenditures on long-term debt.

24

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Proprietary Funds

Proprietary funds include enterprise funds (which provide goods or services to users in exchange forcharges or fees) and internal service funds (which provide goods or services to other funds of the SchoolDistrict). The School District does not have any enterprise funds.

The School District’s internal service fund is used to finance services provided to other funds of theSchool District on a cost-reimbursement basis. The Internal Service Fund maintained by the SchoolDistrict accounts for medical coverage, workers' compensation, and accrued vacation pay. It is fundedthrough charges primarily to the General Fund in amounts equal to normal estimated risk managementand compensated absence claims.

Fiduciary Funds

Fiduciary funds include amounts held in a fiduciary capacity for others. These amounts are not used tooperate the School District’s programs. Activities that are reported as fiduciary include the following:

The Private Purpose Trust Fund is used to account for resources legally held in trust, including

contributions received by the School District to be awarded in the form of scholarships.

The Student Activities Agency Fund is custodial in nature (assets equal liabilities) and does not

involve the measurement of results of operations. This fund is used to record the transactions of

student groups for school and school-related purposes. The funds are segregated and held in trust for

the students.

Interfund Activity

During the course of operations, the School District has activity between funds for various purposes. Anyresidual balances outstanding at year end are reported as amounts due from/to other funds andadvances to/from other funds. While these balances are reported in fund financial statements, certaineliminations are made in the preparation of the government-wide financial statements. Balances betweenthe funds included in governmental activities (i.e., the governmental and internal service funds) areeliminated so that only the net amount is included as internal balances in the governmental activitiescolumn.

Furthermore, certain activity occurs during the year involving transfers of resources between funds. Infund financial statements, these amounts are reported at gross amounts as transfers in/out. Whilereported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminatedso that only the net amounts are reported as transfers in the governmental activities column.

Basis of Accounting

The governmental funds use the current financial resources measurement focus and the modified accrualbasis of accounting. This basis of accounting is intended to better demonstrate accountability for how theSchool District has spent its resources.

Expenditures are reported when the goods are received or the services are rendered. Capital outlays arereported as expenditures (rather than as capital assets) because they reduce the ability to spendresources in the future; conversely, employee benefit costs that will be funded in the future (such aspension and retiree healthcare-related costs or sick and vacation pay) are not counted until they comedue for payment. In addition, debt service expenditures, claims, and judgments are recorded only whenpayment is due.

25

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Revenue is not recognized until it is collected, or collected soon enough after the end of the year that it isavailable to pay for obligations outstanding at the end of the year. For this purpose, the School Districtconsiders amounts collected within 60 days of year end to be available for recognition. Revenue notmeeting this definition is classified as a deferred inflow of resources.

Proprietary funds and fiduciary funds use the economic resources measurement focus and the fullaccrual basis of accounting. Revenue is recorded when earned and expenses are recorded when aliability is incurred, regardless of the timing of related cash flows.

Specific Balances and Transactions

Cash and Investments

Cash and cash equivalents include cash on hand, demand deposits, and short-term investments withmaturities of three months or less when acquired. Investments are stated at fair value, except forinvestments in external investment pools, which are valued at amortized cost.

Inventories and Prepaid Costs

Inventories are valued at cost, on a first-in, first-out basis. Inventories of governmental funds are recordedas expenditures when consumed rather than when purchased. United States Department of Agriculturecommodities inventory received by the Food Service Fund is recorded as inventory and deferred revenueuntil used. Certain payments to vendors reflect costs applicable to future fiscal years and are recorded asprepaid costs in both government-wide and fund financial statements. The School District uses thepurchases method to report prepaid costs in the governmental funds.

Restricted Assets

The following amounts are reported as restricted assets:

Unspent bond proceeds and related interest of the bonded capital projects funds required to be set

aside for construction or other allowable bond purchases

Unspent property taxes levied held in the debt service funds required to be set aside for future bond

principal and interest payments

Unspent property taxes levied and held in the Sinking Fund required to be set aside for repairs of the

School District

Capital Assets

Capital assets are reported in the applicable governmental activities column in the government-widefinancial statements. Capital assets are defined by the School District as assets with an initial individualcost of more than $10,000 and an estimated useful life in excess of one year. Such assets are recordedat historical cost or estimated historical cost if purchased or constructed. Donated capital assets arerecorded at estimated acquisition value at the date of donation. Costs of normal repair and maintenancethat do not add to the value or materially extend asset life are not capitalized. The School District doesnot have infrastructure-type assets.

Capital assets are depreciated using the straight-line method over the following useful lives:

Depreciable Life -Years

Buildings and improvements 20 - 50Furniture and equipment 5 - 10Buses and other vehicles 5 - 10

26

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Long-term Obligations

In the government-wide financial statements and the proprietary fund types in the fund financialstatements, long-term debt and other long-term obligations are reported as liabilities in the applicablestatement of net position. Bond premiums and discounts are deferred and amortized over the life of thebonds using the effective interest method. Bonds payable are reported net of the applicable bondpremium or discount. Bond issuance costs are expensed at the time they are incurred. In the fundfinancial statements, governmental fund types recognize bond issuances and premiums as otherfinancing sources and bond discounts as other financing uses. The General Fund and debt service fundsare generally used to liquidate governmental long-term debt.

Deferred Outflows/Inflows of Resources

In addition to assets, the statement of net position will sometimes report a separate section for deferredoutflows of resources. This separate financial statement element represents a consumption of netposition that applies to future periods and will not be recognized as an outflow of resources(expense/expenditure) until then.

The School District reports deferred outflows related to deferred pension and OPEB plan costs.

In addition to liabilities, the statement of net position will sometimes report a separate section for deferredinflows of resources. This separate financial statement element represents an acquisition of net positionthat applies to future periods and will not be recognized as an inflow of resources (revenue) until thattime.

The School District reports deferred inflows related to unavailable revenue, which arises only under themodified accrual basis of accounting and is therefore reported only in the governmental funds balancesheet. The governmental funds report unavailable revenue from delinquent property taxes. Theseamounts are deferred and recognized as an inflow of resources in the period that the amounts becomeavailable. The other deferred inflows reported relate to revenue in support of pension contributions madesubsequent to the measurement date and deferred pension and OPEB plan cost reductions.

Net Position

Net position of the School District is classified in three components. Net investment in capital assetsconsists of capital assets net of accumulated depreciation and is reduced by the current balances of anyoutstanding borrowings used to finance the purchase or construction of those assets. The restrictedcomponent of net position consists of restricted assets reduced by liabilities and deferred inflows ofresources related to those assets. Unrestricted net position is the remaining net position that does notmeet the definition of invested in capital or restricted.

Net Position Flow Assumption

The School District will sometimes fund outlays for a particular purpose from both restricted andunrestricted resources. In order to calculate the amounts to report as restricted net position andunrestricted net position in the government-wide and proprietary fund financial statements, a flowassumption must be made about the order in which the resources are considered to be applied. It is theSchool District’s policy to consider restricted net position to have been depleted before unrestricted netposition is applied.

27

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Fund Balance Flow Assumptions

The School District will sometimes fund outlays for a particular purpose from both restricted andunrestricted resources. In order to calculate the amounts to report as restricted, committed, assigned, andunassigned fund balances in the governmental fund financial statements, a flow assumption must bemade about the order in which the resources are considered to be applied. It is the School District’s policyto consider restricted fund balance to have been depleted before using any of the components ofunrestricted fund balance. Furthermore, when the components of unrestricted fund balance can be usedfor the same purpose, committed fund balance is depleted first followed by assigned fund balance.Unassigned fund balance is applied last.

Fund Balance Policies

Fund balances of governmental funds are reported in various categories based on the nature of anylimitations requiring the use of resources for specific purposes. The nonspendable fund balancecomponent represents amounts that are not in spendable form or are legally or contractually required tobe maintained intact. Restricted fund balance represents amounts that are legally restricted by outsideparties, constitutional provisions, or enabling legislation for use for a specific purpose. The School Districtitself can establish limitations on the use of resources through either a commitment (committed fundbalance) or an assignment (assigned fund balance).

The committed fund balance classification includes amounts that can be used only for the specificpurposes determined by a formal action of the School District’s highest level of decision-making authority.The Board of Education is the highest level of decision-making authority for the School District that can,by passing a resolution prior to the end of the fiscal year, commit fund balance. Once passed, thelimitation imposed by the resolution remains in place until a similar action is taken (the passing of anotherresolution) to remove or revise the limitation.

Amounts in the assigned fund balance classification are intended to be used by the government forspecific purposes, but do not meet the criteria to be classified as committed. The School District has, byresolution, authorized the Board of Education to assign fund balance. The Board of Education may assignfund balance as it does when appropriating fund balance to cover a gap between estimated revenue andappropriations in the subsequent year’s appropriated budget. Unlike commitments, assignmentsgenerally only exist temporarily. In other words, an additional action does not normally have to be takenfor the removal of an assignment. Conversely, as discussed above, an additional action is essential toeither remove or revise a commitment.

The School District's fund balance policy prescribes the minimum fund balance as 15 percent ofexpenditures in the General Fund. This is deemed to be the prudent amount to maintain the SchoolDistrict's ability to meet obligations as they come due throughout the year.

Property Tax Revenue

Properties are assessed as of June 30, and the related property taxes become a lien on July 1 forapproximately 50 percent of the taxes that are due on September 14, and December 1 for the remainderof the property taxes that are due on February 14. Tax collections are forwarded to the School District ascollected by the assessing municipalities through February 28, at which time they are considereddelinquent and added to county tax rolls. The School District considers all receivables to be fullycollectible; accordingly, no allowance for uncollectible amounts is recorded.

28

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Grants and Contributions

The School District receives federal, state, and local grants, as well as contributions from individuals andprivate organizations. Revenue from grants and contributions is recognized when all eligibilityrequirements, including time requirements, are met. Grants and contributions may be restricted for eitherspecific operating purposes or for capital purposes. Amounts that are unrestricted, or that are restricted toa specific operating purpose, are reported as nonoperating revenue. Amounts restricted to capitalacquisitions are reported after nonoperating revenue and expenses.

Pension and Other Postemployment Benefit (OPEB) Plans

For the purpose of measuring the net pension and net OPEB liabilities, deferred outflows of resourcesand deferred inflows of resources related to each plan, and pension and OPEB expense, informationabout the fiduciary net position of the Michigan Public School Employees' Retirement System (MPSERS)and additions to/deductions from MPSERS fiduciary net position have been determined on the samebasis as they are reported by MPSERS. MPSERS uses the economic resources measurement focus andthe full accrual basis of accounting. Contribution revenue is recorded as contributions are due, pursuantto legal requirements. Benefit payments (including refunds of employee contributions) are recognized asexpenses when due and payable in accordance with the plan benefit terms. Related plan investments arereported at fair value.

Compensated Absences (Vacation and Sick Leave)

It is the School District's policy to permit employees to accumulate earned but unused sick and vacationpay benefits. Sick pay is accrued for the estimated amount that the School District will pay uponemployment termination; vacation pay is accrued when incurred. Both of these are reported in thegovernment-wide and proprietary fund financial statements. A liability for these amounts is reported ingovernmental funds only for known employee terminations as of year end. Generally, the funds thatreport each employee’s compensation are used to liquidate the obligations.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in theUnited States of America requires management to make estimates and assumptions that affect thereported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date ofthe financial statements and the reported amounts of revenue and expenses during the period. Actualresults could differ from those estimates.

Adoption of New Accounting Pronouncement

As of July 1, 2017, the School District adopted GASB Statement No. 75, Accounting and FinancialReporting for Postemployment Benefits Other than Pensions, which addresses reporting by governmentsthat provide postemployment benefits other than pensions (OPEB) to their employees and forgovernments that finance OPEB for employees of other governments. This OPEB standard will requirethe School District to recognize on the face of the financial statements its proportionate share of the netOPEB liability related to its participation in the Michigan Public School Employees' Retirement System(MPSERS). The statement also enhances accountability and transparency through revised notedisclosures and required supplemental information.

In accordance with the statement, the School District has reported a net OPEB liability of $56,420,970,deferred outflows of financial resources for OPEB contributions of $4,010,053 made subsequent to themeasurement date, and deferred inflows of financial resources for revenue received from state aid insupport of OPEB contributions of $1,724,578 that was received subsequent to the measurement date, asthe effects of this change in accounting principles on the School District's net position as of July 1, 2017.

29

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 2 - Significant Accounting Policies (Continued)

Upcoming Accounting Pronouncements

In January 2017, the GASB issued Statement No. 84, Fiduciary Activities. This statement establishescriteria for identifying fiduciary activities of all state and local governments. An activity meeting the criteriashould be reported in a fiduciary fund in the basic financial statements. The School District is currentlyevaluating the impact this standard will have on the financial statements when adopted. The provisions ofthis statement are effective for the School District's financial statements for the year ending June 30,2020.

In June 2017, the GASB issued Statement No. 87, Leases, which improves accounting and financialreporting for leases by governments. This statement requires recognition of certain lease assets andliabilities for leases that previously were classified as operating leases and recognized as inflows ofresources or outflows of resources based on the payment provisions of the contract. It establishes asingle model for lease accounting based on the foundational principle that leases are financings of theright to use an underlying asset. Under this statement, a lessee is required to recognize a lease liabilityand an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and adeferred inflow of resources. The School District is currently evaluating the impact this standard will haveon the financial statements when adopted. The provisions of this statement are effective for the SchoolDistrict's financial statements for the year ending June 30, 2021.

Note 3 - Stewardship, Compliance, and Accountability

Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles andstate law, when applicable, for the General Fund, all special revenue funds in aggregate, and debtservice funds in aggregate. All annual appropriations lapse at fiscal year end.

The budget document presents information by fund and function. The legal level of budgetary controladopted by the governing body (i.e., the level at which expenditures may not legally exceedappropriations) is the function level. State law requires the School District to have its budget in place byJuly 1. Expenditures in excess of amounts budgeted are a violation of Michigan law. State law permitsdistricts to amend their budgets during the year. During the year, the budget was amended in a legallypermissible manner. Revenue amendments were made during the year to reflect revisions to local, state,and federal funds based on the anticipated and actual collection of funds. Adjustments in property taxcollections, student enrollment, and federal grants are all examples of reasons to amend the revenuebudgets. Budgeted expenditures were amended to reflect changes that occurred after the adoption of theoriginal budget, which is created using conservative assumptions. Modifications in salaries and benefitsare made to reflect actual staffing levels, while purchased services, supplies and materials, capital outlay,and other expenditures are modified throughout the year to reflect actual and anticipated expenditures.Capital outlay expenditures are included in the functional categories to which they relate in accordancewith the adopted budget of the School District. Capital outlay is presented separately on the statement ofrevenue, expenditures, and changes in fund balances.

Encumbrance accounting is employed in governmental funds. Encumbrances (e.g., purchase orders,contracts) outstanding at year end are reported as restrictions, commitments, or assignments of fundbalances and do not constitute expenditures or liabilities because the goods or services have not beenreceived as of year end; the commitments will be reappropriated and honored during the subsequentyear. The amount of encumbrances outstanding at year end for all funds was $1,163,612.

30

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 3 - Stewardship, Compliance, and Accountability (Continued)

Fund Deficits

Under Michigan Law, school districts are required to maintain positive fund balance in each fund. TheSchool District has an accumulated fund deficit in the Combined Sinking Fund of $73,791 at June 30,2018. The School District expects this situation to correct itself in the subsequent year as the SinkingFund deficit is due to the timing of significant one-time expenditures, which will be offset in the future withtax collections.

Sinking Fund Compliance

The Sinking Fund records school construction activities funded with Sinking Fund millage. For this fund,authorized prior to March 16, 2017, the School District has complied with the applicable provisions of§1212(1) of the Revised School Code and the State of Michigan Department of Treasury Letter No. 2004-4. In June 2004, voters authorized a sinking fund millage of 1.5 mills for a period of 10 years, whichended in June 2014. In the fall of 2010, the voters approved a five-year renewal of 0.74 mills for theSinking Fund, beginning July 1, 2014. In the spring of 2018, the voters approved a six-year replacementmillage of 0.7165 mills for the Sinking Fund, beginning July 1, 2018.

Note 4 - Deposits and Investments

State statutes and the School District's investment policy authorize the School District to make deposits inthe accounts of federally insured banks, credit unions, and savings and loan associations that haveoffices in Michigan. The School District is allowed to invest in U.S. Treasury or agency obligations, U.S.government repurchase agreements, bankers' acceptances, certificates of deposit, commercial paperrated prime at the time of purchase that matures not more than 270 days after the date of purchase,mutual funds, and investment pools that are composed of authorized investment vehicles. The SchoolDistrict's deposits and investments are in accordance with statutory authority.

The School District has designated four banks for the deposit of its funds.

The School District's investments in the Michigan Liquid Asset Fund Plus - MAX Class fund may not beredeemed for at least 14 calendar days, with the exception of direct investments of funds distributed bythe State. Redemptions made prior to the applicable 14-day period are subject to a penalty equal to 15days' interest on the amount so redeemed. There are no limitations or restrictions on participantwithdrawals for the investment pools that are recorded at amortized cost.

The School District's cash and investments are subject to several types of risk, which are examined inmore detail below:

Custodial Credit Risk of Bank Deposits

Custodial credit risk is the risk that, in the event of a bank failure, the School District's deposits may notbe returned to it. The School District's investment policy and corresponding rules and regulations requirethat financial institutions be evaluated and only those with an acceptable risk level be used for the SchoolDistrict’s deposits for custodial credit risk. The School District believes that, due to the dollar amounts ofcash deposits and the limits of FDIC insurance, it is impractical to insure all deposits. As a result, theSchool District evaluates each financial institution with which it deposits funds and assesses the level ofrisk of each institution; only those institutions with an acceptable estimated risk level are used asdepositories. At year end, the School District had $31,679,220 of bank deposits (checking and savingsaccounts) that were uninsured and uncollateralized.

31

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 4 - Deposits and Investments (Continued)

Custodial Credit Risk of Investments

Custodial credit risk is the risk that, in the event of the failure of the counterparty, the School District willnot be able to recover the value of its investments or collateral securities that are in the possession of anoutside party. The School District's investment policy and corresponding rules and regulations states thatthat custodial credit risk will be minimized by limiting investments to the types of securities allowed bystate law and by prequalifying the financial institutions, broker/dealers, intermediaries, and advisors withwhich the School District will do business using the criteria established in the investment policy andcorresponding rules and regulations. At June 30, 2018, the School District did not hold any investmentsecurities that were unregistered.

Interest Rate Risk

Interest rate risk is the risk that the value of investments will decrease as a result of a rise in interestrates. The School District's investment policy minimizes interest rate risk by requiring the structuring ofthe investment portfolio so that securities mature to meet cash requirements for ongoing operations,thereby avoiding the need to sell securities in the open market, and investing operating funds primarily inshorter-term securities, liquid asset funds, money market mutual funds, or similar investment pools andlimiting the average maturity in accordance with the School District's cash requirements. The SchoolDistrict's investment policy does not restrict investment maturities other than commercial paper, whichcan only be purchased with no more than a 270-day maturity.

Credit Risk

State law limits investments in commercial paper to the top two ratings issued by nationally recognizedstatistical rating organizations. The School District's investment policy does not further limit its investmentchoices. As of June 30, 2018, the credit quality ratings of debt securities (other than the U.S. government)are as follows:

Investment Fair Value Rating Rating Organization

Michigan CLASS $ 5,624,010 AAAm Standard & Poor'sMichigan Liquid Asset Fund 332,550 AAAm Standard & Poor's

Total $ 5,956,560

Concentration of Credit Risk

The School District places no limit on the amount the School District may invest in any one issuer. TheSchool District's investment policy minimizes concentration of credit risk by requiring diversification of theinvestment portfolio so that the impact of potential losses from any one type of security or issuer will beminimized.

Fair Value Measurements

The School District categorizes its fair value measurements within the fair value hierarchy established bygenerally accepted accounting principles. The hierarchy is based on the valuation inputs used tomeasure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets;Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.Investments that are measured at fair value using the net asset value per share (or its equivalent) as apractical expedient are not classified in the fair value hierarchy below.

At June 30, 2018, the School District has $5,624,010 invested in the Michigan CLASS Pool. Thisinvestment is measured at fair value using the net asset value per share (or its equivalent) as a practicalexpedient and is not classified in the fair value hierarchy. The School District has no other assets orliabilities measured at fair value at June 30, 2018.

32

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 5 - Unavailable/Unearned Revenue

Governmental funds report unavailable revenue in connection with receivables for revenue that are notconsidered to be available to liquidate liabilities of the current period. Governmental funds also reportunearned revenue recognition in connection with resources that have been received but not yet earned.

At June 30, 2018, the School District had no unavailable revenue and $848,277 of unearned revenue,primarily related to advance payments for services.

Note 6 - Capital Assets

Capital asset activity of the School District's governmental activities was as follows:

Governmental Activities

BalanceJuly 1, 2017 Reclassifications Additions

Disposals andAdjustments

BalanceJune 30, 2018

Capital assets not beingdepreciated:

Land $ 1,983,626 $ - $ - $ - $ 1,983,626Construction in progress 577,185 (577,185) 974,065 - 974,065

Subtotal 2,560,811 (577,185) 974,065 - 2,957,691

Capital assets being depreciated:Buildings and improvements 184,984,449 577,185 1,520,466 (207,894) 186,874,206Furniture and equipment 11,024,789 - 1,088,215 (466,680) 11,646,324Buses and other vehicles 5,809,246 - 799,401 (714,858) 5,893,789Site improvements 10,240,590 - 53,774 - 10,294,364

Subtotal 212,059,074 577,185 3,461,856 (1,389,432) 214,708,683

Accumulated depreciation:Buildings and improvements 52,033,430 - 4,623,037 (207,894) 56,448,573Furniture and equipment 7,951,976 - 347,452 (466,680) 7,832,748Buses and other vehicles 3,136,308 - 612,118 (714,858) 3,033,568Site improvements 7,432,671 - 425,319 - 7,857,990

Subtotal 70,554,385 - 6,007,926 (1,389,432) 75,172,879

Net capital assets beingdepreciated 141,504,689 577,185 (2,546,070) - 139,535,804

Net governmental activitiescapital assets $ 144,065,500 $ - $ (1,572,005) $ - $ 142,493,495

Depreciation expense was not charged to activities, as the School District considers its assets to benefitmultiple activities and allocation is not practical.

In May 2018, the School District simultaneously with the execution of a land contract received a downpayment representing about 63 percent of the sales price. The remaining proceeds and transfer ofownership is expected during the 2019-2020 fiscal year, at which time the asset value will be adjusted.

Construction Commitments

As of year end, the School District had contracts with contractors for various construction projects thatwere still in progress. At year end, there were approximately $1,028,000 of commitments outstanding.The School District's cumulative expenditures through the Sinking Fund as of June 30, 2018 are$18,869,905.

33

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 7 - Interfund Transfers

The composition of interfund transfers is as follows:

Fund Advanced From

Fund Advanced To General FundCenter Program

Fund

CapitalImprovements

Fund

NonmajorGovernmental

Funds Total

General Fund $ - $ 60,000 $ - $ 38,429 $ 98,429Nonmajor governmental funds 1,023,583 271,040 292,000 - 1,586,623

Total $ 1,023,583 $ 331,040 $ 292,000 $ 38,429 $ 1,685,052

During the year, the General Fund transferred funds to the Capital Equipment Fund to designate funds forequipment purchases. The Food Service Fund transferred funds to the General Fund related to theapplication of indirect costs. The General Fund transferred funds to the Food Service Fund to coveroverhead expenses of the fund. The Center Program Fund transferred funds to the General Fund toreimburse for special education program-related expenditures. The Center Program Fund alsotransferred funds to the Capital Equipment Fund related to the purchase of capital assets used in thespecial education program. The Capital Improvements Fund transferred funds to the Capital EquipmentFund to cover projects completed by the fund.

Note 8 - Long-term Debt

Long-term debt activity for the year ended June 30, 2018 can be summarized as follows:

BeginningBalance Additions Reductions Ending Balance

Due WithinOne Year

Bonds payable:General obligations $ 53,570,000 $ - $ (960,000) $ 52,610,000 $ 1,070,000Unamortized bond premiums 2,954,377 - (155,493) 2,798,884 155,493

Total bonds payable 56,524,377 - (1,115,493) 55,408,884 1,225,493

Compensated absences 1,442,023 296,343 (314,578) 1,423,788 400,000Risk liabilities (Note 10) 732,051 552,634 (563,825) 720,860 551,994Severance liabilities 2,435,320 139,853 (380,051) 2,195,122 100,000

Total governmentalactivities long-term debt $ 61,133,771 $ 988,830 $ (2,373,947) $ 59,748,654 $ 2,277,487

General Obligation Bonds

The School District issues general obligation bonds to provide for the acquisition and construction ofmajor capital facilities and the acquisition of certain equipment. General obligation bonds are directobligations and pledge the full faith and credit of the School District. General obligations outstanding atJune 30, 2018 are as follows:

Purpose

RemainingAnnual

Installments Interest Rates Maturing Outstanding

$55,195,000 general obligationschool building and site bonds(2013 Issue)

$1,070,000 -$4,355,000

3.00 to 5.00percent May 1, 2039 $ 52,610,000

34

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 8 - Long-term Debt (Continued)

Other Long-term Liabilities

Compensated Absences

Accrued compensated absences at year end consist of vacation hours earned and vested and accruedvacation severance pay. The current portion is estimated based on historical trends and expectedamounts to be paid within one year. Compensated absences are payable from the Internal Service Fund.

Severance Liabilities

The School District offers a severance incentive plan to employees based on years of service, to be paidto individuals retiring from the School District who are eligible for such benefits. The current portion isestimated based on historical trends and expected amounts to be paid within one year. Severanceliabilities are payable from the General Fund.

Debt Service Requirements to Maturity

Annual debt service requirements to maturity for the above bond obligations are as follows:

Governmental Activities

Years EndingJune 30 Principal Interest Total

2019 $ 1,070,000 $ 1,995,476 $ 3,065,4762020 1,180,000 1,941,976 3,121,9762021 1,300,000 1,882,976 3,182,9762022 1,425,000 1,817,976 3,242,9762023 1,560,000 1,746,726 3,306,726

2024-2028 9,830,000 7,784,754 17,614,7542029-2033 13,525,000 5,929,478 19,454,4782034-2038 18,365,000 3,148,826 21,513,826

2039 4,355,000 174,200 4,529,200

Total $ 52,610,000 $ 26,422,388 $ 79,032,388

Note 9 - Restricted Assets

At June 30, 2018, restricted assets are composed of the following:

DescriptionGovernmental

Activities

Co-curricular endowment funds held by the School District $ 412,112Property tax collections for repayment of bonded indebtedness 961,897Property tax collections for sinking fund purposes 449,837

Total $ 1,823,846

Note 10 - Risk Management

The School District is exposed to various risks of loss related to property loss, torts, errors and omissions,and employee injuries (workers' compensation), as well as medical benefits provided to employees. TheSchool District has purchased commercial insurance for errors and omission claims. The School Districtparticipates in the Michigan Association for Improved School Legislation risk pool for claims relating toproperty loss and torts. The School District is self-insured for workers' compensation and employeemedical, dental, and vision claims. Settled claims relating to the commercial insurance have notexceeded the amount of insurance coverage in any of the past three fiscal years.

35

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 10 - Risk Management (Continued)

The shared-risk pool program in which the School District participates operates as a common risk-sharingmanagement program for school districts in Michigan; member premiums are used to purchasecommercial excess insurance coverage and to pay member claims in excess of deductible amounts.There has not been any significant reduction in insurance coverage from the prior year.

The School District estimates the liability for workers' compensation and employee medical, dental, andvision claims that have been incurred through the end of the fiscal year, including both those claims thathave been reported, as well as those that have not yet been reported. These estimates are recorded inthe government-wide statements. Changes in the estimated liability for the past two fiscal years were asfollows:

2018 2017

Estimated liability - Beginning of year $ 732,051 $ 716,055Estimated claims incurred, including changes in estimates 8,419,593 8,673,241Claim payments (8,430,784) (8,657,245)

Estimated liability - End of year $ 720,860 $ 732,051

Note 11 - Michigan Public School Employees' Retirement System

Plan Description

The School District participates in the Michigan Public School Employees' Retirement System (MPSERSor the "System"), a statewide, cost-sharing, multiple-employer defined benefit public employee retirementsystem governed by the State of Michigan that covers substantially all employees of the School District.Certain school district employees also receive defined contribution retirement and healthcare benefitsthrough the System. The System provides retirement, survivor, and disability benefits to plan membersand their beneficiaries. The System also provides postemployment healthcare benefits to retirees andbeneficiaries who elect to receive those benefits.

The System is administered by the Office of Retirement Services (ORS). The Michigan Public SchoolEmployees' Retirement System issues a publicly available financial report that includes financialstatements and required supplemental information for the pension and postemployment healthcare plans.That report is available on the web at http://www.michigan.gov/orsschools or by writing to the Office ofRetirement System at 7150 Harris Drive, P.O. Box 30171, Lansing, MI 48909.

Benefits Provided

Benefit provisions of the defined benefit pension plan and the postemployment healthcare plan areestablished by state statute, which may be amended. Public Act 300 of 1980, as amended, establisheseligibility and benefit provisions for the defined benefit pension plan and the postemployment healthcareplan.

Depending on the plan option selected, member retirement benefits are calculated as final averagecompensation times years of services times a pension factor ranging from 1.25 percent to 1.50 percent.The requirements to retire range from attaining the age of 46 to 60 with years of service ranging from 5 to30 years, depending on when the employee became a member. Early retirement is computed in thesame manner as a regular pension, but is permanently reduced 0.50 percent for each full and partialmonth between the pension effective date and the date the member will attain age 60. There is nomandatory retirement age.

36

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

Depending on the member’s date of hire, MPSERS offers the option of participating in the definedcontribution plan that provides a 50 percent employer match (up to 3 percent of salary) on employeecontributions.

Members are eligible for nonduty disability benefits after 10 years of service and for duty-related disabilitybenefits upon hire. Disability retirement benefits are determined in the same manner as retirementbenefits, but are payable immediately without an actuarial reduction. The disability benefits plusauthorized outside earnings are limited to 100 percent of the participant's final average compensation,with an increase of 2 percent each year thereafter.

Benefits may transfer to a beneficiary upon death and are determined in the same manner as retirementbenefits, but with an actuarial reduction.

Benefit terms provide for annual cost of living adjustments to each employee's retirement allowancesubsequent to the employee's retirement date. The annual adjustment, if applicable, is 3 percent. Somemembers who do not receive an annual increase are eligible to receive a supplemental payment in thoseyears in which investment earnings exceed actuarial assumptions.

MPSERS provides medical, prescription drug, dental, and vision coverage for retirees and beneficiaries.A subsidized portion of the premium is paid by MPSERS, with the balance deducted from the monthlypension of each retiree healthcare recipient. Depending on the member’s date of hire, this subsidizedportion ranges from 80 percent to the maximum allowed by the statute.

Contributions

Public Act 300 of 1980, as amended, required the School District to contribute amounts necessary tofinance the coverage of pension benefits of active and retired members. Contribution provisions arespecified by state statute and may be amended only by action of the State Legislature. Under theseprovisions, each school district's contribution is expected to finance the costs of benefits earned byemployees during the year, with an additional amount to finance a portion of the unfunded accruedliability.

Under the OPEB plan, retirees electing this coverage contribute an amount equivalent to the monthly costfor Part B Medicare and 10 percent, or 20 percent for those not Medicare eligible, of the monthly premiumamount for the health, dental, and vision coverage at the time of receiving the benefits. The MPSERSboard of trustees annually sets the employer contribution rate to fund the benefits. Participatingemployers are required to contribute at that rate.

Under Public Act 300 of 2012, members were given the choice between continuing the 3 percentcontribution to retiree healthcare and keeping the premium subsidy benefit described above, or choosingnot to pay the 3 percent contribution and instead opting out of the subsidy benefit and becoming aparticipant in the Personal Healthcare Fund (PHF), a portable, tax-deferred fund that can be used to payhealthcare expenses in retirement. Participants in the PHF are automatically enrolled in a 2 percentemployee contribution into their 457 account as of their transition date, earning them a 2 percentemployer match into a 401(k) account. Members who selected this option stop paying the 3 percentcontribution to retiree healthcare as of the day before their transition date, and their prior contributionswere deposited into their 401(k) account.

The School District's contributions are determined based on employee elections. There are multipledifferent pension and healthcare benefit options included in the plan available to employees based ondate of hire and the elections available at that time. Contribution rates are adjusted annually by the ORS.

37

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

The range of rates is as follows:

Pension OPEB

October 1, 2017 - January 31, 2018 13.54% - 17.89% 7.42% - 7.67%February 1, 2018 - September 30, 2018 13.54% - 19.74% 7.42% - 7.67%

Depending on the plan selected, member pension contributions range from 0 percent up to 7.0 percent ofgross wages. For certain plan members, a 4 percent employer contribution to the defined contributionpension plan is required. In addition, for certain plan members, a 3 percent employer match is provided tothe defined contribution pension plan.

The School District's required and actual pension contributions to the plan for the year ended June 30,2018 were $16,863,407, which include the School District's contributions required for those members witha defined contribution benefit. The School District's required and actual pension contributions include anallocation of $6,224,828 in revenue received from the State of Michigan, and remitted to the System, tofund the MPSERS unfunded actuarial accrued liability (UAAL) stabilization rate for the year ended June30, 2018. For the year ended June 30, 2018, the contributions also include a one-time payment to theSchool District received under Section 147c(2) of the State Aid Act, which the School District thenremitted as a contribution to the plan.

The School District's required and actual OPEB contributions to the plan for the year ended June 30,2018 were $3,877,368, which includes the School District's contributions required for those members witha defined contribution benefit.

Net Pension Liability

At June 30, 2018, the School District reported a liability of $156,541,080 for its proportionate share of thenet pension liability. The net pension liability was measured as of September 30, 2017, and the totalpension liability used to calculate the net pension liability was determined by an actuarial valuation as ofSeptember 30, 2016, which used updated procedures to roll forward the estimated liability to September30, 2017. The School District's proportion of the net pension liability was based on a projection of its long-term share of contributions to the pension plan relative to the projected contributions of all participatingreporting units, actuarially determined. At September 30, 2017 and 2016, the School District's proportionwas 0.60% and 0.61%, respectively.

Net OPEB Liability

At June 30, 2018, the School District reported a liability of $53,490,825 for its proportionate share of thenet OPEB liability. The net OPEB liability for fiscal year 2018 was measured as of September 30, 2017,and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarialvaluation as of September 30, 2016, which used updated procedures to roll forward the estimated liabilityto September 30, 2017. The School District’s proportion of the net OPEB liability was based on aprojection of its long-term share of contributions to the OPEB plan relative to the projected contributionsof all participating reporting units, actuarially determined. At September 30, 2017 and 2016, the SchoolDistrict’s proportion was 0.60% of MPSERS in total.

38

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

Pension Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Relatedto Pensions

For the year ended June 30, 2018, the School District recognized pension expense of $15,141,167,inclusive of payments to fund the MPSERS UAAL stabilization rate. At June 30, 2018, the School Districtreported deferred outflows of resources and deferred inflows of resources related to pensions from thefollowing sources:

DeferredOutflows ofResources

DeferredInflows of

Resources

Difference between expected and actual experience $ 1,360,449 $ (768,114)Changes in assumptions 17,150,319 -Net difference between projected and actual earnings on pension plan

investments - (7,483,694)Changes in proportion and differences between the School District's

contributions and proportionate share of contributions 142,507 (3,074,069)The School District's contributions to the plan subsequent to the

measurement date 13,057,030 -

Total $ 31,710,305 $ (11,325,877)

The $6,224,829 reported as deferred inflows of resources resulting from the pension portion of state aidpayments received pursuant to the UAAL payment will be recognized as state appropriations revenue forthe year ending June 30, 2019. Amounts reported as deferred outflows of resources and deferred inflowsof resources related to pensions will be recognized in pension expense as follows:

Years Ending Amount

2019 $ 1,767,2852020 4,392,8522021 1,623,2722022 (456,011)

Total $ 7,327,398

In addition, the contributions subsequent to the measurement date will be included as a reduction of thenet pension liability in the next year.

39

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Relatedto OPEB

For the years ended June 30, 2018, the School District recognized OPEB expense of $3,578,535.

At June 30, 2018, the School District reported deferred outflows of resources and deferred inflows ofresources related to OPEB from the following sources:

DeferredOutflows ofResources

DeferredInflows of

Resources

Difference between expected and actual experience $ - $ (569,520)Net difference between projected and actual earnings on OPEB plan

investments - (1,238,860)Changes in proportionate share or difference between amount

contributed and proportionate share of contributions 2,969 -Employer contributions to the plan subsequent to the measurement date 2,972,820 -

Total $ 2,975,789 $ (1,808,380)

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEBwill be recognized in OPEB expense as follows (note that employer contributions subsequent to themeasurement date will reduce the net OPEB liability and, therefore, will not be included in future pensionexpense):

Years Ending Amount

2019 $ (436,336)2020 (436,336)2021 (436,336)2022 (436,336)2023 (60,067)

Total $ (1,805,411)

Actuarial Assumptions

The total pension liability and total OPEB liability as of September 30, 2017 are based on the results of anactuarial valuation as of September 30, 2016 and rolled forward. The total pension and OPEB liabilitieswere determined using the following actuarial assumptions:

Actuarial cost method Entry age normal cost actuarial cost methodInvestment rate of return - Pension 7.00% - 7.50% Net of investment expenses based on the groupsInvestment rate of return - OPEB 7.50% Net of investment expenses based on the groupsSalary increases 3.50% - 12.30% Including wage inflation of 3.50 percentHealthcare cost trend rate 7.50% Year 1 graded to 3.5 percent year 12Mortality basis RP2000 Combined Healthy Mortality Table, adjusted

for mortality improvements to 2025 using projectionscale BB

Cost of living pension adjustments 3.00% Annual noncompounded for MIP members

Assumption changes as a result of an experience study for the periods from 2007 to 2012 have beenadopted by the System for use in the annual pension valuations beginning with the September 30, 2014valuation.

40

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

Discount Rate

The discount rate used to measure the total pension liability was 7.00 - 7.50 percent and 7.00 - 8.00percent as of September 30, 2017 depending on the plan option. The discount rate used to measure thetotal OPEB liability was 7.50 percent as of September 30, 2017. The projection of cash flows used todetermine the discount rate assumed that employee contributions will be made at the current contributionrate and that district contributions will be made at statutorily required rates.

Based on those assumptions, the pension plan's fiduciary net position and the OPEB plan’s fiduciary netposition were projected to be available to make all projected future benefit payments of current active andinactive employees. Therefore, the long-term expected rate of return on pension plan and OPEB planinvestments was applied to all periods of projected benefit payments to determine the total pensionliability and total OPEB liability.

The long-term expected rate of return on pension plan and OPEB plan investments was determined usinga building-block method in which best-estimate ranges of expected future real rates of return (expectedreturns, net of plan investment expense, and inflation) are developed for each major asset class. Theseranges are combined to produce the long-term expected rate of return by weighting the expected futurereal rates of return by the target asset allocation percentage and by adding expected inflation. The targetallocation and best estimates of arithmetic real rates of return for each major asset class are summarizedin the following table:

Asset Class Target Allocation

Long-termExpected RealRate of Return

Domestic equity pools %28.00 %5.60Private equity pools 18.00 8.70International equity pools 16.00 7.20Fixed-income pools 10.50 (0.10)Real estate and infrastructure pools 10.00 4.20Real return, opportunistic, and absolute pools 15.50 5.00Short-term investment pools 2.00 (0.90)

Total %100.00

MPSERS approved a decrease in the discount rate for the September 30, 2017 annual actuarial valuationfor the pension plan and the OPEB plan to 7.05 percent and 7.15 percent, respectively. As a result, theactuarial computed employer contributions, the net pension liability, and net OPEB liability will increasefor the measurement period ended September 30, 2018.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate

The following presents the net pension liability of the School District, calculated using the discount ratedepending on the plan option. The following also reflects what the School District's net pension liabilitywould be if it were calculated using a discount rate that is 1 percentage point lower or 1 percentage pointhigher than the current rate:

1 PercentDecrease

(6.00 - 6.50%)

CurrentDiscount Rate(7.00 - 7.50%)

1 PercentIncrease

(8.00 - 8.50%)

Net pension liability of the School District $ 203,920,960 $ 156,541,080 $ 116,650,238

41

Bloomfield Hills Schools

Notes to Financial Statements

June 30, 2018

Note 11 - Michigan Public School Employees' Retirement System (Continued)

Sensitivity of the Net OPEB Liability to Changes in the Discount Rate

The following presents the net OPEB liability of the School District, calculated using the current discountrate. It also reflects what the School District's net OPEB liability would be if it were calculated using adiscount rate that is 1 percentage point lower or 1 percentage point higher than the current rate:

1 PercentDecrease(6.50%)

CurrentDiscount Rate

(7.50%)

1 PercentIncrease(8.50%)

Net OPEB liability of the School District $ 62,653,216 $ 53,490,825 $ 45,714,823

Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate

The following presents the net OPEB liability of the School District, calculated using the currenthealthcare cost trend rate. It also reflects what the School District's net OPEB liability would be if it werecalculated using a healthcare cost trend rate that is 1 percentage point lower or 1 percentage point higherthan the current rate:

1 PercentDecrease(6.50%)

CurrentDiscount Rate

(7.50%)

1 PercentIncrease(8.50%)

Net OPEB liability of the School District $ 45,299,538 $ 53,490,825 $ 62,791,460

Pension Plan and OPEB Plan Fiduciary Net Position

Detailed information about the plan’s fiduciary net position is available in the separately issued MPSERSfinancial report.

Payable to the Pension Plan and OPEB Plan

At June 30, 2018, the School District reported amounts payable of $1,644,958 and $223,069 for theoutstanding amount of contributions to the pension plan and OPEB plan, respectively, required for theyear ended June 30, 2018.

42

Required Supplemental Information

43

Bloomfield Hills Schools

Required Supplemental InformationBudgetary Comparison Schedule - General Fund

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

Over (Under)Final Budget

RevenueLocal sources $ 38,386,415 $ 39,361,092 $ 39,432,976 $ 71,884State sources 44,172,931 44,910,378 44,890,023 (20,355)Federal sources 2,042,393 1,961,201 1,915,857 (45,344)Interdistrict sources 4,000,890 4,706,574 4,802,970 96,396

Total revenue 88,602,629 90,939,245 91,041,826 102,581

ExpendituresCurrent:

Instruction:Basic programs 43,596,916 44,967,508 44,287,688 (679,820)Added needs 7,829,303 8,688,553 8,554,832 (133,721)

Total instruction 51,426,219 53,656,061 52,842,520 (813,541)

Support services:Pupil services 6,839,151 6,677,878 6,852,033 174,155Instructional services 4,231,233 5,089,004 5,032,180 (56,824)General administration 603,853 783,401 710,686 (72,715)School administration 4,435,660 4,595,270 4,603,178 7,908Business services 1,113,908 1,057,036 1,068,586 11,550Physical plant services 7,525,797 7,754,997 7,658,265 (96,732)Transportation 3,627,734 3,756,641 3,773,648 17,007Central services 3,821,138 3,895,747 3,854,467 (41,280)

Total support services 32,198,474 33,609,974 33,553,043 (56,931)

Co-curricular activities 2,185,884 2,075,390 2,254,857 179,467Community services 1,887,325 1,828,262 1,846,798 18,536

Total expenditures 87,697,902 91,169,687 90,497,218 (672,469)

Excess of Revenue Over (Under)Expenditures 904,727 (230,442) 544,608 775,050

Other Financing Sources (Uses)Transfers in 60,000 60,000 98,429 38,429Transfers out (1,000,000) (1,025,000) (1,023,583) 1,417

Total other financing uses (940,000) (965,000) (925,154) 39,846

Net Change in Fund Balance (35,273) (1,195,442) (380,546) 814,896

Fund Balance - Beginning of year 20,802,667 20,802,667 20,802,667 -

Fund Balance - End of year $ 20,767,394 $ 19,607,225 $ 20,422,121 $ 814,896

See notes to required supplemental information. 44

Bloomfield Hills Schools

Required Supplemental InformationBudgetary Comparison Schedule - Major Special Revenue Funds

Center Program Fund

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

(Under) OverFinal Budget

RevenueState sources $ 2,575,316 $ 2,663,538 $ 2,342,518 $ (321,020)Interdistrict sources 6,901,158 6,836,899 6,812,115 (24,784)

Total revenue 9,476,474 9,500,437 9,154,633 (345,804)

ExpendituresCurrent:

Instruction - Added needs 5,979,814 5,992,428 5,821,512 (170,916)Support services:

Pupil services 1,687,690 1,774,956 1,682,027 (92,929)Instructional services 569,161 533,488 554,713 21,225Physical plant services 992,107 982,371 1,001,394 19,023Transportation 1,000 1,000 - (1,000)Central services - 500 - (500)

Total support services 3,249,958 3,292,315 3,238,134 (54,181)

Total expenditures 9,229,772 9,284,743 9,059,646 (225,097)

Excess of Revenue Over Expenditures 246,702 215,694 94,987 (120,707)

Other Financing Uses - Transfers out (60,000) (331,040) (331,040) -

Net Change in Fund Balance 186,702 (115,346) (236,053) (120,707)

Fund Balance - Beginning of year 4,694,878 4,694,878 4,694,878 -

Fund Balance - End of year $ 4,881,580 $ 4,579,532 $ 4,458,825 $ (120,707)

See notes to required supplemental information. 45

Bloomfield Hills Schools

Required Supplemental InformationBudgetary Comparison Schedule - Major Special Revenue Funds

International Academy Fund

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

Over (Under)Final Budget

RevenueLocal sources $ 310,000 $ 437,818 $ 479,798 $ 41,980Interdistrict sources 5,066,539 5,201,831 5,201,832 1

Total revenue 5,376,539 5,639,649 5,681,630 41,981

ExpendituresCurrent:

Instruction - Basic programs 3,633,198 4,036,521 4,106,895 70,374Support services:

Pupil services 358,790 260,319 244,376 (15,943)Instructional services 214,326 221,094 211,490 (9,604)School administration 672,230 691,554 681,372 (10,182)Physical plant services 620,510 606,299 600,052 (6,247)Transportation 11,013 13,449 14,630 1,181

Total support services 1,876,869 1,792,715 1,751,920 (40,795)

Community services 300,000 322,136 349,444 27,308

Total expenditures 5,810,067 6,151,372 6,208,259 56,887

Net Change in Fund Balance (433,528) (511,723) (526,629) (14,906)

Fund Balance - Beginning of year 1,229,331 1,229,331 1,229,331 -

Fund Balance - End of year $ 795,803 $ 717,608 $ 702,702 $ (14,906)

See notes to required supplemental information. 46

Bloomfield Hills Schools

Required Supplemental InformationSchedule of Proportionate Share of the Net Pension Liability

Michigan Public School Employees' Retirement System

Last Four Plan Years

Plan Years Ended September 30

2017 2016 2015 2014

School District's proportion of the net pensionliability %0.60407 %0.60861 %0.62372 %0.62471

School District's proportionate share of the netpension liability $ 156,541,080 $ 151,843,637 $ 152,344,004 $ 137,601,220

School District's covered employee payroll $ 50,612,794 $ 50,842,733 $ 51,958,464 $ 50,864,127

School District's proportionate share of the netpension liability as a percentage of its coveredemployee payroll %309.29 %298.65 %293.20 %270.53

Plan fiduciary net position as a percentage oftotal pension liability %63.96 %63.01 %62.92 %66.20

See notes to required supplemental information. 47

Bloomfield Hills Schools

Required Supplemental InformationSchedule of Pension Contributions

Michigan Public School Employees' Retirement System

Last Four Fiscal Years

Years Ended June 30

2018 2017 2016 2015

Statutorily required contribution $ 15,490,867 $ 14,485,547 $ 14,349,323 $ 11,539,879Contributions in relation to the statutorily

required contribution 15,490,867 14,485,547 14,349,323 11,539,879

Contribution Deficiency $ - $ - $ - $ -

School District's Covered Employee Payroll $ 52,189,064 $ 52,144,086 $ 51,383,829 $ 53,119,684

Contributions as a Percentage of CoveredEmployee Payroll %29.68 %27.78 %27.93 %21.72

See notes to required supplemental information. 48

Bloomfield Hills Schools

Required Supplemental InformationSchedule of Proportionate Share of the Net OPEB Liability

Michigan Public School Employees' Retirement System

Last Plan Year

Plan Year Ended September 30

2017

School District's proportion of the net OPEB liability %0.60404

School District's proportionate share of the net OPEB liability $ 53,490,825

School District's covered employee payroll $ 50,612,794

School District's proportionate share of the net OPEB liability as a percentageof its covered employee payroll %105.69

Plan fiduciary net position as a percentage of total OPEB liability %36.53

See notes to required supplemental information. 49

Bloomfield Hills Schools

Required Supplemental InformationSchedule of OPEB Contributions

Michigan Public School Employees' Retirement System

Last Fiscal Year

Year Ended June 30

2018

Statutorily required contribution $ 3,735,302Contributions in relation to the statutorily required contribution 3,735,302

Contribution Deficiency $ -

School District's Covered Employee Payroll $ 52,189,064

Contributions as a Percentage of Covered Employee Payroll %7.16

See notes to required supplemental information. 50

Bloomfield Hills Schools

Notes to Required Supplemental Information

June 30, 2018

Budgetary Information

Annual budgets are adopted on a basis consistent with generally accepted accounting principles and state law,when required, for the General Fund, all special revenue funds in aggregate, and debt service funds in aggregate.All annual appropriations lapse at fiscal year end.

The budget document presents information by fund and function, which is the legal level at which expendituresmay not legally exceed appropriations. The statement of revenue, expenditures, and changes in fund balancespresents capital outlay and other financing sources separately, as required by generally accepted accountingprinciples. State law requires the School District to have its budget in place by July 1. Expenditures in excess ofamounts budgeted are a violation of Michigan law. State law permits districts to amend their budgets during theyear. There were significant variances from the budget during the year in the General Fund due to actual staffinglevels, along with purchased services and supplies needs.

Pension Information

Ultimately, 10 years of data will be presented in both of the pension-related schedules. The number of yearscurrently presented represents the number of years since the accounting standard requiring these schedules firstbecame applicable.

Benefit Changes

There were no changes of benefit terms in 2017.

Changes in Assumptions

On February 23, 2017, MPSERS approved a decrease in the discount rate for the September 30, 2016 annualactuarial valuation of 0.5 percent to 7.00 - 7.50 percent based on the group.

Covered Payroll

The employers’ covered payroll to be reported in the required supplemental information is defined by GASBStatement No. 82, Pension Issues - An Amendment to GASB Statements No. 67, No. 68, and No. 73, as payrollon which contributions to a pension plan are based and by GASB Statement No. 85, Omnibus 2017, as payroll onwhich contributions to the OPEB plan are based. For the School District, covered payroll represents payroll onwhich contributions to both plans are based.

OPEB Information

Ultimately, 10 years of data will be presented in both of the OPEB-related schedules. The number of yearscurrently presented represents the number of years since the accounting standard requiring these schedules firstbecame applicable.

Benefit Changes

There were no changes of benefit terms in 2017.

Changes in Assumptions

There were no changes of benefit assumptions in 2017.

Covered Payroll

The employers' covered payroll to be reported in the required supplemental information is defined by GASBStatement No. 82, Pension Issues - An Amendment to GASB Statements No. 67, No. 68, and No. 73, as payrollon which contributions to a pension plan are based and by GASB Statement No. 85, Omnibus 2017, as payroll onwhich contributions to the OPEB plan are based. For the School District, covered payroll represents payroll onwhich contributions to both plans are based.

51

Other Supplemental Information

52

Bloomfield Hills Schools

Special Revenue Funds

Food ServiceCommunity

Services

Co-curricularEndowment

Fund

AssetsCash and investments $ 110,287 $ 481,627 $ -Receivables 16,817 - -Inventories 51,288 - -Prepaid costs and other assets 64,081 - -Restricted cash and investments - - 412,112

Total assets $ 242,473 $ 481,627 $ 412,112

LiabilitiesAccounts payable $ 102 $ 61,863 $ -Accrued payroll-related liabilities - 9,513 -Unearned revenue 80,288 150,607 -

Total liabilities 80,390 221,983 -

Fund BalancesNonspendable:

Inventories 51,288 - -Prepaid costs 64,081 - -

Restricted:Debt service - - -Co-curricular Endowment Fund - - 412,112

Assigned:Community service - 259,644 -Capital projects - - -

Unassigned 46,714 - -

Total fund balances 162,083 259,644 412,112

Total liabilities and fund balances $ 242,473 $ 481,627 $ 412,112

53

Other Supplemental InformationCombining Balance Sheet

Nonmajor Governmental Funds

June 30, 2018

Capital ProjectFunds

Debt ServiceFunds

CapitalEquipment

Fund Total

$ - $ 396,800 $ 988,714- - 16,817- - 51,288- - 64,081

961,897 - 1,374,009

$ 961,897 $ 396,800 $ 2,494,909

$ - $ 7,922 $ 69,887- - 9,513- - 230,895

- 7,922 310,295

- - 51,288- - 64,081

961,897 - 961,897- - 412,112

- - 259,644- 388,878 388,878- - 46,714

961,897 388,878 2,184,614

$ 961,897 $ 396,800 $ 2,494,909

54

Bloomfield Hills Schools

Special Revenue Funds

Food ServiceCommunity

Services

Co-curricularEndowment

Fund

RevenueLocal sources $ 1,455,706 $ 1,095,323 $ 3,154State sources 74,565 - -Federal sources 364,105 - -

Total revenue 1,894,376 1,095,323 3,154

ExpendituresCurrent:

Support services:Business services - - -Physical plant services - 57,108 -Transportation 3,615 - -

Food services 1,735,871 - -Community services - 1,031,986 -

Debt service:Principal - - -Interest - - -

Capital outlay - - -

Total expenditures 1,739,486 1,089,094 -

Excess of Revenue Over (Under) Expenditures 154,890 6,229 3,154

Other Financing Sources (Uses)Proceeds from sale of capital assets - - -Transfers in 23,583 - -Transfers out (38,429) - -

Total other financing (uses) sources (14,846) - -

Net Change in Fund Balances 140,044 6,229 3,154

Fund Balances - Beginning of year 22,039 253,415 408,958

Fund Balances - End of year $ 162,083 $ 259,644 $ 412,112

55

Other Supplemental InformationCombining Statement of Revenue, Expenditures,

and Changes in Fund BalancesNonmajor Governmental Funds

Year Ended June 30, 2018

Capital ProjectFunds

Debt ServiceFunds

CapitalEquipment

Fund Total

$ 3,338,896 $ 82,725 $ 5,975,804- - 74,565- - 364,105

3,338,896 82,725 6,414,474

20,241 - 20,241- - 57,108- - 3,615- - 1,735,871- - 1,031,986

960,000 - 960,0002,043,725 - 2,043,725

- 1,565,681 1,565,681

3,023,966 1,565,681 7,418,227

314,930 (1,482,956) (1,003,753)

- 30,925 30,925- 1,563,040 1,586,623- - (38,429)

- 1,593,965 1,579,119

314,930 111,009 575,366

646,967 277,869 1,609,248

$ 961,897 $ 388,878 $ 2,184,614

56

Bloomfield Hills Schools

Other Supplemental InformationBudgetary Comparison Schedule - Nonmajor Governmental Funds

Food Service

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

Over (Under)Final Budget

RevenueLocal sources $ 1,443,549 $ 1,443,549 $ 1,455,706 $ 12,157State sources 90,000 90,000 74,565 (15,435)Federal sources 365,062 365,062 364,105 (957)

Total revenue 1,898,611 1,898,611 1,894,376 (4,235)

ExpendituresCurrent:

Support services - Pupil transportationservices - - 3,615 3,615

Food services 1,825,849 1,825,849 1,735,871 (89,978)

Total expenditures 1,825,849 1,825,849 1,739,486 (86,363)

Excess of Revenue Over Expenditures 72,762 72,762 154,890 82,128

Other Financing Sources (Uses)Transfers in - 25,000 23,583 (1,417)Transfers out - (25,000) (38,429) (13,429)

Total other financing uses - - (14,846) (14,846)

Net Change in Fund Balance 72,762 72,762 140,044 67,282

Fund Balance - Beginning of year 22,039 22,039 22,039 -

Fund Balance - End of year $ 94,801 $ 94,801 $ 162,083 $ 67,282

57

Bloomfield Hills Schools

Other Supplemental InformationBudgetary Comparison Schedule - Nonmajor Governmental Funds

(Continued)Community Services

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

(Under) OverFinal Budget

Revenue - Local sources $ 1,105,000 $ 1,097,270 $ 1,095,323 $ (1,947)

ExpendituresCurrent:

Support services - Physical plant services 56,100 52,942 57,108 4,166Community services 903,108 960,069 1,031,986 71,917

Total expenditures 959,208 1,013,011 1,089,094 76,083

Net Change in Fund Balance 145,792 84,259 6,229 (78,030)

Fund Balance - Beginning of year 253,415 253,415 253,415 -

Fund Balance - End of year $ 399,207 $ 337,674 $ 259,644 $ (78,030)

58

Bloomfield Hills Schools

Other Supplemental InformationBudgetary Comparison Schedule - Nonmajor Governmental Funds

(Continued)Co-curricular Endowment Fund

Year Ended June 30, 2018

OriginalBudget Final Budget Actual

Over (Under)Final Budget

Revenue - Local sources $ 2,000 $ 3,100 $ 3,154 $ 54

Expenditures - - - -

Net Change in Fund Balance 2,000 3,100 3,154 54

Fund Balance - Beginning of year 408,958 408,958 408,958 -

Fund Balance - End of year $ 410,958 $ 412,058 $ 412,112 $ 54

59

Bloomfield Hills Schools

Other Supplemental InformationSchedule of Bonded Indebtedness

June 30, 2018

2013 Bond Issue

Years Ending June 30 Principal

2019 $ 1,070,0002020 1,180,0002021 1,300,0002022 1,425,0002023 1,560,0002024 1,715,0002025 1,835,0002026 1,965,0002027 2,085,0002028 2,230,0002029 2,370,0002030 2,535,0002031 2,700,0002032 2,870,0002033 3,050,0002034 3,235,0002035 3,440,0002036 3,660,0002037 3,895,0002038 4,135,0002039 4,355,000

Total remaining payments $ 52,610,000

Principal payments due May 1

Interest payments due May 1 andNovember 1

Interest rate 3.00% to 5.00%

Original issue $ 55,195,000

60

Bloomfield Hills Schools

Other Supplemental InformationSchedule of Changes in Assets and Liabilities

Agency Fund - Student Activities

Year Ended June 30, 2018

July 1, 2017 Additions Deductions June 30, 2018

AssetsCash and cash equivalents $ 2,016,792 $ 3,920,865 $ (3,912,330) $ 2,025,327Receivables 645 - (645) -

Total assets $ 2,017,437 $ 3,920,865 $ (3,912,975) $ 2,025,327

LiabilitiesAccounts payable $ 33,612 $ 1,916,341 $ (1,929,148) $ 20,805Due to student groups 1,983,825 2,004,524 (1,983,827) 2,004,522

Total liabilities $ 2,017,437 $ 3,920,865 $ (3,912,975) $ 2,025,327

61

Statistical Section and Other Information (Unaudited)

62

Bloomfield Hills Schools

Introduction to Statistical Section

This part of the School District’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplemental information says about the School District’s overall financial health. Contents Page Financial Trends 64-67 These schedules contain trend information to help the reader understand how the School District’s financial performance and well-being have changed over time. Revenue Capacity 68-71 These schedules contain information to help the reader assess the School District’s most significant local revenue source, the property tax. Debt Capacity 72-74 These schedules present information to help the reader assess the affordability of the School District’s current levels of outstanding debt and the School District’s ability to issue additional debt in the future. Demographic and Economic Information 75-76 These schedules offer demographic and economic indicators to help the reader understand the environment within which the School District’s financial activities take place. Operating Information 77-81 These schedules contain service and infrastructure data to help the reader understand how the information in the School District’s financial report relates to the services the School District provides and the activities it performs.

63

Bloomfield Hills Schools

Net Position by Component - Governmental Activities (Unaudited) Last Ten Fiscal Years

 

2009 2010 2011 2012 2013 2014 2015 * 2016 2017 2018**

Governmental ActivitiesNet investment in capital assets 61,054,404$ 62,527,525$ 62,944,188$ 66,030,978$ 76,959,704$ 81,534,741$ 98,303,015$ 103,600,839$ 88,297,093$ 87,084,611$ Restricted 19,642,967 22,152,065 22,600,025 9,493,034 8,991,848 7,498,164 2,025,012 677,084 783,825 1,906,211 Unrestricted 37,100,012 39,788,330 43,124,145 58,407,979 51,498,428 43,239,417 (110,559,081) (117,797,713) (113,345,354) (166,195,512)

Total primary government

net position 117,797,383$ 124,467,920$ 128,668,358$ 133,931,991$ 137,449,980$ 132,272,322$ (10,231,054)$ (13,519,790)$ (24,264,436)$ (77,204,690)$

Source: Bloomfield Hills Schools audited financial statements

* Note: the School District adopted GASB 68/71 effective July 1, 2014.

** Note: the School District adopted GASB 75 effective July 1, 2017.

June 30

64

Bloomfield Hills Schools

Changes in Governmental Net Position (Unaudited) Last Ten Fiscal Years

 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

ExpensesGovernmental activities:

Instruction 57,151,339$ 55,996,736$ 54,719,778$ 59,495,740$ 57,752,064$ 58,359,608$ 60,517,511$ 58,882,759$ 59,879,242$ 62,626,157$ Support services 38,467,463 37,202,484 36,632,327 37,246,599 36,622,822 36,795,639 37,786,359 35,101,364 38,243,115 40,302,053 Food services 2,182,303 2,060,013 2,155,395 2,260,964 2,328,847 2,159,971 2,061,736 1,946,241 1,816,014 1,735,863 Co-curricular activities 2,054,936 2,079,843 2,071,091 2,174,050 2,251,516 2,137,380 1,945,577 1,894,848 2,055,383 2,252,578 Community services 3,258,322 3,070,866 3,175,162 3,168,142 2,836,678 2,980,962 2,993,157 3,179,720 3,275,419 3,224,934 Interest on long-term debt 1,042,769 937,724 868,002 696,404 480,298 2,191,057 2,166,183 1,854,030 2,220,441 1,880,199

Loss on disposal of capital assets (unallocated) 1,846 - 3,354,140 377,751 - 6,790,762 40,109 - 693,372 - Depreciation (unallocated) 3,511,141 3,874,897 3,363,536 3,600,605 3,455,368 3,270,180 3,379,138 5,227,368 14,651,431 6,007,926

Total governmental activities 107,670,119 105,222,563 106,339,431 109,020,255 105,727,593 114,685,559 110,889,770 108,086,330 122,834,417 118,029,710

Program RevenueCharges for services:

Instruction 3,780,283 3,703,966 3,502,522 3,389,655 3,278,191 6,359,222 6,316,321 6,555,033 6,542,715 6,619,690 Support services 4,276,507 5,349,653 5,085,341 4,960,801 4,652,147 540,266 483,843 442,782 409,129 386,320 Food services 1,884,739 1,860,122 1,782,524 1,803,158 1,701,060 1,551,378 1,592,426 1,463,597 1,412,947 1,404,437 Co-curricular activities 370,038 326,304 323,010 328,547 330,674 259,740 346,797 226,475 244,486 161,727 Community services 3,758,787 3,790,013 3,810,254 4,077,759 3,845,376 3,836,675 3,800,516 3,848,303 4,112,244 4,327,862

Operating grants and contributions 31,475,546 21,581,926 20,781,221 25,295,136 22,218,405 21,840,318 24,947,884 21,758,317 26,566,325 28,090,846

Total program revenue 45,545,900 36,611,984 35,284,872 39,855,056 36,025,853 34,387,599 37,487,787 34,294,507 39,287,846 40,990,882

Net Expenses (62,124,219) (68,610,579) (71,054,559) (69,165,199) (69,701,740) (80,297,960) (73,401,983) (73,791,823) (83,546,571) (77,038,828)

General RevenueProperty taxes 42,258,187 42,152,823 40,074,492 39,832,055 38,153,620 38,668,139 36,481,432 37,355,025 38,410,677 39,155,195

State aid not restricted to specific purposes 34,121,927 32,160,725 34,445,896 33,983,795 34,567,629 34,920,000 31,939,422 31,604,082 32,654,611 33,245,543 Investment earnings 1,242,586 592,431 604,607 575,742 357,767 399,643 283,512 256,000 223,966 354,844 Other 213,232 142,132 130,002 103,652 126,282 1,132,520 1,125,247 1,287,980 1,512,671 5,478,487

Total general revenue 77,835,932 75,048,111 75,254,997 74,495,244 73,205,298 75,120,302 69,829,613 70,503,087 72,801,925 78,234,069

Change in Net Position 15,711,713$ 6,437,532$ 4,200,438$ 5,330,045$ 3,503,558$ (5,177,658)$ (3,572,370)$ (3,288,736)$ (10,744,646)$ 1,195,241$

Source: Bloomfield Hills Schools audited financial statements

June 30

65

Bloomfield Hills Schools

Fund Balances - Governmental Funds (Unaudited) Last Ten Fiscal Years

 

2009 2010 2011* 2012 2013 2014 2015 2016 2017 2018

General FundReserved 679,452$ 311,349$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved 20,881,415 21,865,835 - - - - - - - - Nonspendable - - 148,007 162,420 163,788 150,792 179,132 93,940 81,741 111,659 Committed - - 6,680,000 - - - - - - - Assigned - - 776,541 3,680,018 2,024,689 2,323,806 1,202,938 441,490 35,273 881,325 Unassigned - - 16,372,929 20,912,339 22,001,495 19,571,794 17,989,619 17,990,630 20,685,653 19,429,137

Total General Fund 21,560,867$ 22,177,184$ 23,977,477$ 24,754,777$ 24,189,972$ 22,046,392$ 19,371,689$ 18,526,060$ 20,802,667$ 20,422,121$

All Other Governmental FundsReserved 19,877,478$ 22,399,610$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved, reported in:

Special revenue funds 5,124,383 5,990,031 - - - - - - - - Capital project funds 12,996,887 13,393,889 - - - - - - - -

Nonspendable - - 192,468 213,820 213,249 96,380 212,025 60,729 150,817 115,369 Restricted - - 10,006,339 11,946,088 8,935,746 47,673,342 14,129,489 2,373,266 3,109,742 2,076,711 Committed - - 14,260,271 - - - - - - - Assigned - - 19,084,824 31,982,600 28,995,134 22,166,500 11,378,919 5,014,693 7,394,965 10,159,683 Unassigned - - - - (70,403) (68,761) (546,279) (44,368) (109,197) (27,077)

Total all other governmental funds 37,998,748$ 41,783,530$ 43,543,902$ 44,142,508$ 38,073,726$ 69,867,461$ 25,174,154$ 7,404,320$ 10,546,327$ 12,324,686$

Total governmental funds 59,559,615$ 63,960,714$ 67,521,379$ 68,897,285$ 62,263,698$ 91,913,853$ 44,545,843$ 25,930,380$ 31,348,994$ 32,746,807$

Source: Bloomfield Hills Schools audited financial statements

* GASB 54 was implemented during the fiscal year ended June 30, 2011, which changed the fund balance classifications to enhance usefulness. The balances prior to June 30, 2011 have not been restated.

June 30

66

Bloomfield Hills Schools

Changes in Fund Balances – Governmental Funds (Unaudited) Last Ten Fiscal Years

 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Revenue

Local revenue 52,947,295$ 52,482,160$ 50,460,536$ 49,641,287$ 48,603,029$ 47,898,836$ 45,206,513$ 45,986,360$ 47,465,022$ 48,942,915$

State revenue 37,553,992 35,354,282 37,586,913 40,078,177 40,939,964 41,699,149 42,734,848 44,310,503 46,708,088 47,307,106

Federal revenue 4,350,480 4,804,533 4,408,124 2,605,302 2,614,770 2,942,543 2,610,080 2,253,703 2,322,028 2,279,962

Interdistrict revenue 29,252,316 19,072,297 18,436,812 21,591,651 17,946,467 17,002,217 16,729,316 16,351,808 15,890,546 16,816,917

Total revenue 124,104,083 111,713,272 110,892,385 113,916,417 110,104,230 109,542,745 107,280,757 108,902,374 112,385,684 115,346,900

Expenditures

Current:

Instruction 56,321,459 55,271,221 54,932,334 56,966,252 57,026,302 58,828,546 60,517,060 60,358,497 60,147,401 62,717,235

Support services 38,658,868 37,324,524 36,681,497 37,850,447 37,089,970 36,698,644 35,144,817 34,992,252 36,451,388 39,066,076

Food services 2,182,303 2,060,013 2,155,395 2,260,964 2,328,847 2,154,225 1,997,282 1,951,206 1,816,779 1,735,871

Co-curricular activities 2,054,936 2,079,843 2,124,816 2,174,050 2,251,516 2,125,600 1,954,263 1,917,072 2,064,537 2,254,857

Community services 3,258,322 3,070,866 3,175,162 3,168,142 2,836,678 2,980,962 3,001,115 3,218,942 3,290,775 3,228,228

Debt service:

Principal 2,343,953 2,432,967 2,605,403 3,825,427 3,046,478 2,635,000 2,030,000 745,000 880,000 960,000

Interest 1,031,009 926,814 850,610 1,087,831 496,733 1,958,226 2,178,025 2,076,225 2,061,325 2,043,725

Other 25,458 25,616 33,146 450 455 - - - - -

Capital outlay 16,043,627 4,120,309 4,773,357 5,206,948 11,660,838 31,325,138 47,846,469 22,258,643 3,901,873 5,719,844

Total expenditures 121,919,935 107,312,173 107,331,720 112,540,511 116,737,817 138,706,341 154,669,031 127,517,837 110,614,078 117,725,836

Excess of revenue over

(under) expenditures 2,184,148 4,401,099 3,560,665 1,375,906 (6,633,587) (29,163,596) (47,388,274) (18,615,463) 1,771,606 (2,378,936)

Other Financing Sources (Uses)

Debt issuance - - - - - 55,195,000 - - - -

Debt premium or discount - - - - - 3,576,349 - - - -

Proceeds from the sale of capital assets - - - - - 42,402 20,264 - 3,647,008 3,776,749

Transfers in 2,169,263 1,955,376 9,231 13,869,873 9,640 14,776,288 6,452,071 3,556,567 1,451,716 1,685,052

Transfers out (2,169,263) (1,955,376) (9,231) (13,869,873) (9,640) (14,776,288) (6,452,071) (3,556,567) (1,451,716) (1,685,052)

Total other financing

sources - - - - - 58,813,751 20,264 - 3,647,008 3,776,749

Net Change in Fund Balance 2,184,148 4,401,099 3,560,665 1,375,906 (6,633,587) 29,650,155 (47,368,010) (18,615,463) 5,418,614 1,397,813

Fund Balance - Beginning of year 57,375,467 59,559,615 63,960,714 67,521,379 68,897,285 62,263,698 91,913,853 44,545,843 25,930,380 31,348,994

Fund Balance - End of year 59,559,615$ 63,960,714$ 67,521,379$ 68,897,285$ 62,263,698$ 91,913,853$ 44,545,843$ 25,930,380$ 31,348,994$ 32,746,807$

Debt service - Percentage of noncapital expenditures

3.21% 3.28% 3.40% 4.58% 3.37% 4.26% 3.86% 2.66% 2.71% 2.55%

Source: Bloomfield Hills Schools audited financial statements

June 30

67

Bloomfield Hills Schools

Assessed Value and Actual Value of Taxable Property (Unaudited) Last Ten Fiscal Years

 

Tax rate TaxableTax rate (Mills) Value as a

Agricultural Personal Total (Mills) Non- Estimated Percent ofTax Year Residential Commercial Industrial and Other Property Value Homestead Homestead Actual Value Actual

2008 3,596,299,950$ 267,737,950$ 519,900$ 401,030$ 61,995,960$ 3,926,954,790$ 8.8761 20.1534 7,853,909,580$ 0.50 2009 3,454,985,360 286,695,900 542,740 419,980 60,496,020 3,803,140,000 9.1167 20.1534 7,606,280,000 0.50 2010 3,114,921,070 274,084,860 531,800 399,770 61,201,070 3,451,138,570 10.0693 20.2734 6,902,277,140 0.50 2011 2,810,303,010 246,867,770 539,390 - 59,461,020 3,117,171,190 11.0932 20.4420 6,234,342,380 0.50 2012 2,750,505,770 231,862,560 551,660 - 62,788,271 3,045,708,261 10.9224 20.4420 6,091,416,522 0.50 2013 2,807,069,840 222,201,890 545,670 - 67,708,150 3,097,525,550 10.8301 20.4420 6,195,051,100 0.50 2014 2,885,593,240 222,508,100 550,160 - 62,268,280 3,170,919,780 9.8539 19.6974 6,341,839,560 0.50 2015 3,001,817,120 225,829,310 557,600 - 64,440,390 3,292,644,420 9.4086 19.6826 6,585,288,840 0.50 2016 3,088,940,920 233,638,870 559,240 - 71,950,130 3,395,089,160 9.5223 19.6739 6,790,178,320 0.50 2017 3,190,240,670 236,553,450 564,240 - 72,287,440 3,499,645,800 9.3781 19.6665 6,999,291,600 0.50

Note: Under Michigan law, the revenue base is taxable value.Taxes levied in a particular tax year become revenue of the subsequent fiscal year.

Source: Michigan Department of Treasury Form L-4029

Real Property

Taxable Value by Property Type

68

Bloomfield Hills Schools

Direct and Overlapping Property Tax Rates (Unaudited) Last Ten Fiscal Years

 

Fiscal Year Oakland Oakland City of City of Township ofEnded Non- Sinking Non- Oakland Community Intermediate State Bloomfield City of Orchard Township of West

June 30 Homestead Homestead Debt* Fund* Homestead Homestead County College School District Education Hills Troy Lake Village Bloomfield Bloomfield SMART**

2009 6.7227 18.0000 0.6700 1.4834 8.8761 20.1534 4.1900 1.5844 3.3690 6.0000 8.3000 9.2800 8.4950 11.1212 8.9994 0.5900 2010 6.9633 18.0000 0.6700 1.4834 9.1167 20.1534 4.1900 1.5844 3.3690 6.0000 8.3000 9.2800 8.4450 11.1212 8.9774 0.5900 2011 7.7959 18.0000 0.7900 1.4834 10.0693 20.2734 4.1900 1.5844 3.3690 6.0000 9.0500 9.4000 9.4830 12.5877 9.0074 0.5900 2012 8.6512 18.0000 0.9586 1.4834 11.0932 20.4420 4.1900 1.5844 3.3690 6.0000 9.8500 10.1900 10.2300 12.7677 11.9347 0.5900 2013 8.4804 18.0000 0.9586 1.4834 10.9224 20.4420 4.1900 1.5844 3.3690 6.0000 10.2400 10.4800 8.8200 12.8977 12.2537 0.5900 2014 8.3881 18.0000 0.9586 1.4834 10.8301 20.4420 4.1900 1.5844 3.3690 6.0000 10.2400 10.5200 7.3600 12.8777 12.2550 0.5900 2015 8.1565 18.0000 0.9586 0.7388 9.8539 19.6974 4.1900 1.5844 3.3690 6.0000 10.9900 10.5000 7.8600 13.3406 12.2380 1.0000 2016 7.7260 18.0000 0.9500 0.7326 9.4086 19.6826 4.0900 1.5819 3.3633 6.0000 10.9866 10.4974 7.8600 13.2512 12.2112 0.9998 2017 7.8484 18.0000 0.9500 0.7239 9.5223 19.6739 4.0400 1.5707 3.3398 6.0000 10.9843 10.3989 7.8332 13.0044 12.1665 0.9941 2018 7.7116 18.0000 0.9500 0.7165 9.3781 19.6665 4.0400 1.5555 3.3079 6.0000 10.9806 10.3582 7.8270 12.7871 12.0487 0.9863

*Debt and Sinking Fund millages apply to Homestead and Nonhomestead property.**Suburban Mobility Authority Regional Transportation

Source: Municipal Advisory Council of Michigan

Operating Total Direct Taxes

Millage Rates - Direct School District Taxes Overlapping Taxes

69

Bloomfield Hills Schools

Principal Property Taxpayers (Unaudited) Current Fiscal Year and Nine Years Prior

 

2017 Taxable Percentage 2008 Taxable PercentageTaxpayer Value of Total Value of Total

1 Detroit Edison 19,320,730$ 0.55% 11,454,220$ 0.29% 2 Bloom-Wood Centre LLC 10,801,530 0.31% 23,804,960 0.61% 3 Bloomfield Centre LLC 9,471,330 0.27% -

4 Bloomfield Parkway Association 9,417,970 0.27% 8,098,290 0.21%

5 Bloomfield Woodward Ave Assoc. 7,998,580 0.23% 6 Bloomfield Plaza Shopping Center 7,197,520 0.21% 7 Taubman Office Center 7,190,750 0.21% 8 Health Care Reit, Inc 5,924,590 0.17% 9 CSL Woodward CCRC LLC 5,790,070 0.17%

10 2100 Woodward Assoc. LLC 5,746,220 0.16% 10,487,760 0.27% Ridge Road Properties 9,669,200 0.25% John Hancock RE Finance 8,367,130 0.21% Schostak Brothers & Co 6,859,570 0.17% Woodward Hills Nursing Center 5,466,500 0.14% Detroit SMSA LTD Partnership 6,295,960 0.16% Davidson, William 6,927,220 0.18% Various 3,410,786,510 97.46% 3,829,523,980 97.52%

Total 3,499,645,800$ 3,926,954,790$

Source: Respective municipalities and County Equalization Department

70

Bloomfield Hills Schools

Property Tax Levies and Collections (Unaudited) Last Ten Fiscal Years

 

Fiscal Year PercentEnded Current Percent Delinquent Total Tax of Levy

June 30 Total Levy Collections Collected Collections Collections Collected

2009 42,433,110$ 40,055,192$ 94.40% 2,281,446$ 42,336,638$ 99.77%2010 42,070,664 39,983,308 95.04% 1,993,872 41,977,180 99.78%2011 40,089,617 38,515,774 96.07% 1,542,126 40,057,900 99.92%2012 39,693,237 38,410,644 96.77% 1,262,606 39,673,250 99.95%2013 38,077,956 37,072,030 97.36% 973,156 38,045,186 99.91%2014 38,605,045 37,509,317 97.16% 1,065,008 38,574,325 99.92%2015 36,646,765 35,597,588 97.14% 1,036,614 36,634,202 99.97%2016 36,982,055 35,949,847 97.21% 1,013,547 36,963,394 99.95%2017 38,449,054 37,404,300 97.28% 1,018,187 38,422,487 99.93%2018 39,227,604 38,112,537 97.16% 842,692 38,955,229 99.31%

71

Bloomfield Hills Schools

Ratios of Outstanding Debt (Unaudited) Last Ten Fiscal Years

 

LessPledged Other Net General Total Debt as a

General Debt General Total General Bonded Debt as Total Debt as a Net General Total Per Capita Percentage ofFiscal Obligation Service Net General Obligation Obligation a Percentage of Percentage of Bonded Debt Debt Per Personal Per CapitaYear Bonds Funds Bonded Debt Debt Debt Taxable Value Taxable Value Taxable Value Population Per Capita Capita Income Personal Income

2009 15,468,572$ -$ 15,468,572$ -$ 15,468,572$ 3,926,954,790$ 0% 0% 41,023 377$ 377$ 77,271$ 0%2010 13,230,588 - 13,230,588 - 13,230,588 3,803,140,000 0% 0% 41,023 323 323 75,511 0%2011 10,833,888 - 10,833,888 - 10,833,888 3,451,138,570 0% 0% 41,023 264 264 74,756 0%2012 7,350,375 - 7,350,375 - 7,350,375 3,117,643,360 0% 0% 41,023 179 179 74,005 0%2013 4,665,000 - 4,665,000 - 4,665,000 3,045,708,261 0% 0% 41,023 114 114 75,388 0%2014 57,225,000 - 57,225,000 - 57,225,000 3,097,525,550 2% 2% 41,023 1,395 1,395 76,519 2%2015 55,195,000 - 55,195,000 - 55,195,000 3,170,919,780 2% 2% 41,023 1,345 1,345 77,667 2%2016 54,450,000 - 54,450,000 - 54,450,000 3,292,644,420 2% 2% 42,112 1,293 1,293 78,832 2%2017 53,570,000 - 53,570,000 - 53,570,000 3,395,089,160 2% 2% 42,112 1,272 1,272 80,014 2%2018 52,610,000 - 52,610,000 - 52,610,000 3,499,645,800 2% 2% 42,112 1,249 1,249 81,214 2%

Population information obtained from Southeast Michigan Council of Governments.

Per Capita information obtained from Bureau of Labor Statistics, Southeast Michigan Council of Governments and Pearson Education.

72

Bloomfield Hills Schools

Direct and Overlapping Governmental Activities Debt (Unaudited) Year Ended June 30, 2018

 

Governmental Unit Debt Outstanding

Estimated %

Applicable *

Estimated Share

of Overlapping

Debt

Oakland Intermediate School District 44,695,000$ 6.42% 2,869,419$ Oakland County 340,795,795 6.39% 21,776,851 City of Bloomfield Hills 19,930,000 84.89% 16,918,577 City of the Village of Orchard Lake 1,133,120 2.73% 30,934 City of Troy 16,904,329 1.75% 295,826 Township of Bloomfield 118,540,375 61.78% 73,231,873 Township of West Bloomfield 50,688,532 14.60% 7,400,526

Total overlapping debt 122,524,006

Direct district debt 52,610,000

Total direct and overlapping debt 175,134,006$

* Overlapping debt for the School District is calculated as the School District's taxable valuation as a percentage of the total taxable valuation within the municipalities and then applied to the total debt of the municipality.

Source: Municipal Advisory Council of Michigan

73

Bloomfield Hills Schools

Legal Debt Margin (Unaudited) Last Ten Fiscal Years

 

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Calculation of Debt LimitState equalized valuation (SEV) 3,926,954,790$ 3,803,140,000$ 3,451,138,570$ 3,117,171,190$ 3,045,708,261$ 3,097,525,550$ 3,170,919,780$ 3,292,644,420$ 3,395,089,160$ 3,499,645,800$

15% of SEV 589,043,219 570,471,000 517,670,786 467,575,679 456,856,239 464,628,833 475,637,967 493,896,663 509,263,374 524,946,870

Calculation of Debt Subject to LimitTotal debt 15,468,572 13,230,588 10,833,888 7,350,375 4,665,000 57,225,000 55,195,000 54,450,000 53,570,000 52,610,000 Less debt not subject to limit - State qualified debt issuance (1,678,572) (1,495,588) (1,303,888) (210,375) - - - - - -

Net debt subject to limit 13,790,000 11,735,000 9,530,000 7,140,000 4,665,000 57,225,000 55,195,000 54,450,000 53,570,000 52,610,000

Legal Debt Margin 575,253,219$ 558,736,000$ 508,140,786$ 460,435,679$ 452,191,239$ 407,403,833$ 420,442,967$ 439,446,663$ 455,693,374$ 472,336,870$

Net debt subject to limit as % of debt limit 2.34% 2.06% 1.84% 1.53% 1.02% 12.32% 11.60% 11.02% 10.52% 10.02%

Note: Only energy conservation bonds (years 1997-2000, inclusive) are subject to the legal debt margin. All other bonds qualified under Article IX, Section 16 of the Michigan Constitution of 1963 are exempt from computation of the legal debt margin.

Source: Municipal Advisory Council of Michigan

74

Bloomfield Hills Schools

Demographic and Economic Statistics (Unaudited) Last Ten Fiscal Years

 

Fiscal Year Population

Total Personal

Income (in

Thousands)

Per Capita

Personal Income

Unemployment

Rate

2009 41,023 3,169,882$ 77,271$ 14.10%2010 41,023 3,097,674 75,511 13.20%2011 41,023 3,066,697 74,756 10.90%2012 41,023 3,035,907 74,005 9.00%2013 41,023 3,092,642 75,388 8.70%2014 41,023 3,139,032 76,519 7.20%2015 41,023 3,186,117 77,667 5.40%2016 42,112 3,319,756 78,832 4.50%2017 42,112 3,369,553 80,014 3.20%2018 42,112 3,420,096 81,214 3.40%

Source: Bureau of Labor Statistics, Southeast Michigan Council ofGovernments and Pearson Education

75

Bloomfield Hills Schools

Principal Employers (Unaudited) For the Current Year and Nine Years Prior

 

Taxpayer

2017

Employees*

Percentage of

Total

Employment

2009

Employees

Percentage of

Total

Employment

1 Cranbrook Educational Community 1,167 4% 828 4%2 Taubman Centers 624 2% 627 3%3 Oakland Community College 375 1% 400 2%4 Plunkett & Cooney PC 350 1% 350 2%5 Pultegroup, Inc. 250 1% 95 1%6 Woodward Hills Nursing Center 200 1% 200 1%7 Target Corporation 177 1% - 0%8 Advantic Occupational Health, LLC 140 1% - 0%9 Kingsley Inn 140 1% 175 1%

10 Dickinson Wright PLLC 140 1% 140 1%US Postal Service - 0% 198 1%Bloomfield Hills Country Club - 0% 60 0%

Total Principal Employers 3,563 3,073

Total Employment 26,691 18,823

* 2018 Data not readily availableSource: Manta, Southeast Michigan Council of Governments, and Taxpayer Websites and Annual Reports

76

Bloomfield Hills Schools

Full-Time-Equivalent School District Employees (Unaudited) Last Ten Fiscal Years

 

Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

General government Administrators 62.10 57.90 64.56 69.50 65.60 66.04 65.44 62.97 58.80 61.47 Teachers 492.14 483.68 505.93 475.45 487.23 476.91 465.96 430.16 432.68 443.25 Paraprofessionals/Aides 163.24 141.28 165.86 155.82 167.86 163.46 174.42 167.10 179.61 185.91 Non-Instructional 337.37 302.56 326.43 305.95 303.84 300.30 275.58 255.54 376.67 367.58

Total 1,054.85 985.42 1,062.78 1,006.72 1,024.53 1,006.71 981.40 915.77 1,047.76 1,058.21

Source: Bloomfield Hills School District Registry of Educational Personnel (REP) as reported through MI School Data

77

Bloomfield Hills Schools

Operating Indicators (Unaudited) Last Ten Fiscal Years

 

PercentageTotal of Students

General Fund General Fund Teaching Qualifying for AverageDistrict-wide District-wide Current Operating Cost Per Operating Revenue and Certified Free/Reduced Teacher

Year Enrollment* Expenses Revenue Expenditures Pupil Revenue Per Pupil Staff Meals Salary

2009 5,438.92 121,919,935$ 124,104,083$ 83,353,904$ 15,325$ 82,528,718$ 15,174$ 448.61 4.68% 74,575$ 2010 5,433.19 107,312,173 111,713,272 78,220,300 14,397 80,780,978 14,868 424.08 4.56% 74,781 2011 5,388.52 107,277,732 110,890,378 78,785,313 14,621 80,619,078 14,961 405.83 8.95% 72,656 2012 5,392.10 112,540,511 113,879,762 81,207,213 15,060 81,898,543 15,189 410.48 9.77% 72,977 2013 5,396.76 116,737,817 110,104,230 81,237,621 15,053 80,672,816 14,948 424.60 12.18% 72,757 2014 5,354.17 138,706,341 109,542,745 83,721,703 15,637 81,535,721 15,228 399.38 10.52% 73,830 2015 5,195.35 111,045,118 107,317,400 84,886,487 16,339 82,211,784 15,824 397.23 8.98% 76,264 2016 5,246.70 108,086,330 104,797,594 85,232,859 16,245 84,387,230 16,084 372.99 8.58% 74,240 2017 5,398.67 122,141,045 111,396,399 86,207,294 15,968 88,483,901 16,390 372.77 9.41% 71,818 2018 5,474.67 118,029,710 119,224,951 90,497,218 16,530 91,041,826 16,630 382.85 9.41% 70,490

Source: Bloomfield Hills Schools audited financial statements* Students enrolled in the Center Program are deducted from the enrollment numbers.

78

Bloomfield Hills Schools

Capital Asset Information (Unaudited) Last Ten Fiscal Years

 

Function/Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Instructional BuildingsElementary:

Number of buildings 6 4 4 4 4 4 4 4 4 4 Square footage 312,715 216,565 216,565 216,565 216,565 216,565 216,565 216,565 216,565 216,565 Capacity 2,775 1,905 1,905 1,905 1,905 1,905 1,905 1,905 1,905 1,905 Enrollment* 2,099 1,614 1,561 1,594 1,681 1,668 1,657 1,657 1,740 1,639

Middle:Number of buildings 3 3 3 3 3 3 3 3 3 3 Square footage 336,522 336,522 336,522 336,522 336,522 336,522 336,522 336,522 336,522 336,522 Capacity 1,675 2,025 2,025 2,025 2,025 2,025 2,025 2,025 2,025 2,025 Enrollment* 1,384 1,777 1,771 1,780 1,820 1,878 1,807 1,807 1,855 1,950

High:Number of buildings 4 4 4 4 4 4 4 3 3 3 Square footage 488,897 488,897 488,897 488,897 488,897 340,859 340,859 442,889 442,889 442,889 Capacity 3,485 3,485 3,485 3,485 3,485 2,375 2,375 2,375 2,375 2,375 Enrollment* 2,496 2,500 2,525 2,462 2,384 2,279 2,241 2,308 2,316 2,382

Other:Number of buildings 4 6 6 6 6 6 6 7 5 5 Square footage 108,677 204,827 204,827 204,827 204,827 152,127 152,127 378,753 226,171 226,171 Capacity 280 280 280 280 280 280 280 280 280 280 Enrollment* 197 195 188 191 181 172 162 163 153 178

Administrative:Number of buildings 5 5 5 5 5 5 5 5 5 5 Square footage 67,100 67,100 67,100 67,100 67,100 70,860 70,860 70,860 70,860 70,860

Transportation:Number of garages 1 1 1 1 1 1 1 1 1 1 Buses 58 58 58 58 58 58 58 51 57 59

Athletics:Football fields 5 5 5 5 5 4 4 5 5 5 Soccer fields 19 19 19 19 19 17 17 17 17 17 Running tracks 2 2 2 2 2 1 1 2 2 2 Baseball/Softball fields 18 18 18 18 18 15 15 19 19 19 Swimming pools 2 2 2 2 2 1 1 2 2 2 Playgrounds 8 8 8 8 8 8 8 9 9 9

*Enrollment reflects all students enrolled including consortium students and tuition students. Student count is head count, not full-time equivalent membership count.

Source: Bloomfield Hills Schools audited financial reports

79

Bloomfield Hills Schools

Student Enrollment Data (Unaudited) Last Ten Fiscal Years

 

Year Kdg. 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th Spec Ed. Total

2008-2009 321.40 290.98 325.06 388.81 344.95 361.60 405.12 448.79 482.36 444.52 486.50 483.97 499.72 358.75 5,642.53 2009-2010 324.61 322.92 288.34 342.15 398.15 354.62 384.47 419.84 449.45 498.95 463.65 477.55 493.08 349.71 5,567.49 2010-2011 272.49 341.29 340.77 303.09 354.67 412.12 381.86 407.24 416.85 464.52 537.67 451.93 484.19 350.83 5,519.52 2011-2012 303.72 277.64 380.03 353.77 325.53 385.90 447.82 394.20 412.26 422.88 483.82 522.28 461.04 347.21 5,518.10 2012-2013 331.28 334.71 308.34 381.40 383.77 361.65 415.20 473.60 416.16 402.28 432.34 486.38 528.34 332.36 5,587.81 2013-2014 311.21 352.53 356.94 314.30 409.31 406.55 380.71 428.16 474.64 409.14 411.40 413.57 483.37 325.34 5,477.17 2014-2015 313.01 328.63 363.45 377.69 335.71 428.72 417.37 375.07 438.31 456.96 420.19 405.20 422.80 294.78 5,377.89 2015-2016 291.54 340.50 334.68 384.93 409.30 351.95 453.78 439.66 387.20 442.35 478.21 435.71 421.56 284.94 5,456.31 2016-2017 356.87 335.97 361.94 352.56 405.66 419.18 379.36 475.12 459.69 389.65 473.75 488.20 435.48 275.64 5,609.07 2017-2018 347.63 361.48 351.44 375.83 380.23 425.31 435.64 394.65 483.50 456.47 413.69 477.99 498.15 274.64 5,676.65

Source: School District fall student count (full-time equivalent) including non-resident private paid students State of Michigan report CA-15 audited.

80

Bloomfield Hills Schools

Capital Asset Building Detail (Unaudited) Year Ended June 30, 2018

 

Square Year StudentAcreage Footage Built Count*

Elementary SchoolsConant 16.642 50,970 1960 417Eastover 18.000 60,295 1955 440Lone Pine 20.000 56,900 1967 355Way 19.788 48,400 1966 427

Middle SchoolsBloomfield Hills 25.000 112,860 1958 751East Hills 30.420 113,102 1962 582West Hills 54.844 110,560 1966 617

High SchoolsBloomfield Hills High School 43.241 371,000 2015 1,720Bowers Academy [2] N/A 10,139 2010 34International Academy 21.100 61,750 1965 628

Other District FacilitiesWing Lake Developmental Center 4.500 40,027 2008 110Fox Hills Center 27.300 42,950 1967 68Lahser 61.000 117,494 1967 N/ACharles L. Bowers Farm 87.147 19,700 1975 N/AE. L. Johnson Nature Center 40.730 6,000 1985 N/ABooth Center 18.090 39,400 1962 N/ATemporary Physical Plant Operations 4.100 7,100 1966 N/AMaintenance 0.918 15,760 1969 N/ATransportation [1] N/A 5,600 1966 N/APine Lake (Playground and Parking Lot) 22.990 - N/A

Vacant Property - Hickory Grove (Land Contract) 27.719 - N/A

Total 543.529 1,290,007 6,149

[1] Located on East Hills Middle School property [2] Located on Charles L. Bowers Farm property * Student count reflects all students enrolled in each building [including consortium students at the International Academy and Bloomfield Hills Schools tuition students]. Student count is head count, not full-time equivalent membership count.

Source: Bloomfield Hills Schools audited financial reports

81

$0

$15

$30

$45

$60

$75

$90M

illio

ns o

f D

olla

rs

Local $35.1 $36.6 $36.4 $37.1 $38.3 $39.4

State $30.0 $38.5 $39.7 $41.5 $44.3 $44.9

Interdistrict & Federal $6.3 $5.4 $6.1 $5.8 $5.9 $6.7

1995 2014 2015 2016 2017 2018

45%

47%

8%

44%

48%

8%

44%

49%

7%

43%

50%

7%

43%

49%

8%

49%

42%

9%

Bloomfield Hills SchoolsComparative General Fund Revenue

Years Ended June 30

82

$0

$15

$30

$45

$60

$75

$90

$105

1995 2014 2015 2016 2017 2018Other $2.7 $5.3 $5.1 $4.9 $5.1 $5.2Support Services $24.8 $30.0 $29.3 $29.9 $30.7 $33.5Instruction $37.0 $48.4 $50.4 $50.5 $50.5 $52.8

Mill

ions

of

Dol

lars

58%

36%

6%

59%

35%

6%

59%

35%

58%

36%

6%

58%

37%

58%

38%

4%

6%

Bloomfield Hills SchoolsComparative General Fund Expenditures and Other Uses

Years Ended June 30

83

Bloomfield Hills SchoolsRetirement Funding – MPSERS Expense

Years Ended June 30

84

Bloomfield Hills SchoolsComparison of Michigan Schools General Fund Balances

As a Percentage of Current Expenditures2012/2013 through 2016/2017

0

20

40

60

80

100

120

140

160

180

200

Less than 0% 0 ‐ 5% 5 ‐ 10% 10 ‐ 15% 15 ‐ 20% 20 ‐ 25% > 25%

Num

ber o

f Schoo

l Districts Rep

ortin

g

General Fund Balance as Percent of Current Operating Expenditures

2012 / 2013 2013 / 2014 2014 / 2015 2015 / 2016 2016 / 2017

85