FINANCIAL STATEMENTS MARCH 2018

Transcription

1 EXHIBIT T-1 SHAKER HEIGHTS CITY SCHOOL DISTRICT OFFICE OF THE TREASURER Parkland Drive Shaker Heights, Ohio (216) Bryan C. Christman Treasurer FINANCIAL STATEMENTS MARCH 2018

2 INDEX SECTION # SECTION NAME 1. FINANCIAL AND MISCELLANEOUS BRIEFS 2. CHARTS 3. CONSOLIDATED INVESTMENT PORTFOLIO 4. FINANCIAL SUMMARY FOR GENERAL FUND 5. FINANCIAL REPORT BY BANK 6. FINANCIAL REPORT BY FUND 7. REVENUE ACCOUNT SUMMARY 8. BUDGET ACCOUNT SUMMARY 9. SUMMARY CHECK REGISTER ALL CHECKS 10. BOND ISSUE EXPENDITURE SUMMARY

3 1. FINANCIAL AND MISCELLANEOUS BRIEFS

4 SHAKER HEIGHTS BOARD OF EDUCATION SHAKER HEIGHTS, OHIO April 5, 2018 TO: FROM: SUBJECT: Members, Shaker Heights Board of Education Bryan C. Christman, Treasurer Financial and Miscellaneous Briefs I. MARCH 2018 FINANCIAL OVERVIEW The revenue activity for the month and for the fiscal year-to-date March 2018 has been similar to the same reporting period for the prior year with the following exceptions: Advance and Settlement tax amounts received this year vs. last for the period January through March totaled $4.9 million more, attributable to the acceleration of property tax payments at the end of December due to the Federal Tax Reform legislation. This is simply a shift from the second half of calendar 2018 collections to the first half and thus is a timing difference that crosses fiscal year end. Excluding this advance difference, there is a remaining unfavorable difference of $470,765, $126,000 of which is attributable to the favorable timing difference in the early 2 nd half advance received last May, which leaves a $345,176 2 nd half 2017 settlement permanent unfavorable variance; State Foundation core funding in Fiscal 2018 is expected to be the same as in Fiscal 2017 due to the District s transition to being on the guarantee since having reached the previous gain cap limit now no longer in effect due to declining enrollment. However, we now anticipate a $50,000 increase in preschool special education funding and special education transportation funding for the year since those funding calculations are outside the guarantee calculation. This amount combined with a projected $100,000 reduction in Charter school deductions for the year (recorded on our books as a reduction of the District s State Foundation revenue), results in the projected through fiscal yearend favorable $150,000 variance. Included in Other Local Revenue YTD is the receipt of $1.7 million of capital expenses (primarily the Middle School flat roof and cafeteria ceiling projects) paid for by the General Fund prior to the issuance of the bonds, reimbursed from the bond issuance proceeds received in late December. Additionally, $263,000 of SF-14 payments for the first semester was received in March this year, but not until after the end of last fiscal yearend in July Offsetting the increases was the $110,000 reduction of SF-6 payments received in March for this year vs last. Total Revenues are $6.7 million or 7.7% more than prior year; and $7.0 million or 8.1% above budget for YTD due to larger tax advance and capital expense reimbursement; and $1.7 million or 1.7% above budget as projected through the end of the fiscal year. As you know, we received $9.9 million from the issuance of the bond anticipation notes on December 28 th which were recorded in the Capital Projects Fund 004. On March 20 th, we priced the Series 2018A, $20.1 million of bonds at an all-in true interest cost of 3.08% and on April 4 th, we priced the Series 2018B, $8.395 million of bonds, proceeds of which will be used to refund the bond anticipation notes issued in December, at an all-in true interest cost of 3.44%, for a blended all-in true interest cost of 3.23%. Closing for Series A is scheduled for April 11 th and for Series B on April 25 th. The summary analyses of the two pricings as

5 Financial & Miscellaneous Briefs April 5, 2018 Page 2 of 10 prepared by Al Baucco of Stifel Nicolaus are included in Section C.1. of this Financial Brief. Not reflected in the General Fund financial statements are the $585,679 Permanent Improvement taxes collected YTD for the period January through March. The expenditure activity for the month and for the fiscal year-to-date March 2018 was $4.7 million or 6.8% more than the prior year amount, partially due to $1.8 million of payments related to the Middle School roof project along with expected increases in costs as well as timing differences in payment of expenditures. Expenditures were $2.1 million or 3.0% more than budget fiscal year-to-date, but only $0.7 million or 0.69% more than budget as projected through fiscal yearend. In summary the District s overall finances are on target with expectations at this time. II. MARCH 2018 FINANCIAL DETAIL REVIEW A. GENERAL FUND (As of March 31, 2018) REVENUE 1. Real Estate Taxes: $4.4 million or 6.6% more than prior year; Advance and Settlement tax amounts received this year vs. last for the period January through March totaled $4.9 million more, attributable to the acceleration of property tax payments at the end of December due to the Federal Tax Reform legislation. This is simply a shift from the second half of calendar 2018 collections to the first half and thus is a timing difference that crosses fiscal year end. Excluding this advance difference, there is a remaining unfavorable difference of $470,765, $126,000 of which is attributable to the favorable timing difference in the early 2 nd half advance received last May, which leaves a $345,176 2 nd half 2017 settlement permanent unfavorable variance; 104.7% of estimated amount received this year vs. 98.6% last year; $4.4 million or 6.6% above budget YTD due to the larger advance, but $0.3 million below budget as projected through the end of the fiscal year. 2. Investment Earnings: $610,501 received this year; $140,892 or 30.0% more than prior YTD; 97.1% of estimated amount received this year vs. 99.1% last year; $140,851 or 30.0% above budget for YTD; and $120,000 above budget as projected through the end of the fiscal year. Cash-basis interest income varies month-to-month and year-to-year due to the varying maturity dates of the investment portfolio; At their July 26, 2017, September 20, 2017, and November 1, 2017 meetings, the Federal Open Market Committee decided to maintain the target range for the federal funds rate at 1 to 1-1/4 percent. At their December 13, 2017 meeting the Committee increased the target range to 1-1/4 to 1-1/2 percent (last adjusted in June 2017). The Committee made no change at their January 31, 2018 meeting, but increased the target range for the federal funds rate by 1/4 percent to 1-1/2 to 1-3/4 percent at their March 21, 2018 meeting. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation. The Committee is maintaining its existing policy of reinvesting principal payments from its

6 Financial & Miscellaneous Briefs April 5, 2018 Page 3 of 10 holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction, and it anticipates doing so until normalization of the level of the federal funds rate is well under way. This policy, by keeping the Committee's holdings of longer-term securities at sizable levels, should help maintain accommodative financial conditions. We continue to monitor all aspects of our portfolio and the interest rate markets, in consultation with our investment advisor, the Redtree Investment Group. Portfolio activity summary comments this month include: Yield on invested securities remained at 1.56% as there were no transactions in March. Portfolio is set up to provide adequate liquidity to meet operating needs. Rates are poised to rise throughout 2018, although recent events have given investors a reason to think otherwise. Portfolio activity summary comments for the Capital Projects Fund investment account for this month include: Portfolio funded on December 28th, Portfolio is invested in high quality commercial paper currently yielding 1.9% with a duration of 4.8 months, the strategy will be to stay active throughout the project and maximize commercial paper allocations in the rising interest rate environment. As the portfolio has securities mature, RedTree will work with Shaker to make sure spending and reinvestment match up. 3. Other Local Revenue: $1.9 million or 124.0% more than prior year, mostly attributable to the receipt of $1.7 million of capital expenses (primarily the Middle School flat roof and cafeteria ceiling projects) paid for by the General Fund prior to the issuance of the bonds, reimbursed from the bond issuance proceeds received in late December. Additionally, $263,000 of SF-14 payments for the first semester was received in March this year, but not until after the end of last fiscal yearend in July Offsetting the increases was the $110,000 reduction of SF-6 payments received in March for this year vs last. First half of Fiscal 2017 collections included a delayed SF-6 tuition collection, while the first half of Fiscal 2018 included the delayed (from prior fiscal year) receipt in July of $246,010 from the State for the 1 st semester Fiscal 2017 and $359,192 for the 2 nd semester Fiscal 2017 of SF- 14 & SF-14H payments (thusly accounting for a portion of the low collections in Fiscal 2017); 195.3% of estimated amount received this year vs. 71.7% last year; $2.0 million or 144.4% above budget for YTD; and $1.85 million above budget as projected through the end of the fiscal year. 4. State Foundation: $1,908 or 0.0% less than prior year; 76.2% of estimated amount received this year vs. 74.5% last year; $189,753 or 1.5% above budget for YTD; and $150,000 above budget as projected through the end of the fiscal year. State Foundation payments are merely estimates until the ADM counts are finalized and adjusted starting in January up through the end of the fiscal year with final adjustments in the next fiscal year; however

7 Financial & Miscellaneous Briefs April 5, 2018 Page 4 of 10 Although the District is expected to receive approximately the same core funding in Fiscal 2018 as in Fiscal 2017 due to now being on the guarantee since having reached the previous gain cap limit now no longer in effect due to declining enrollment coupled with a very small increase in the State formula per pupil funding amount, we now anticipate a $50,000 increase in preschool special education funding and special education transportation funding for the year since those funding calculations are outside the guarantee calculation. This amount combined with a projected $100,000 reduction in Charter school deductions for the year (recorded on our books as a reduction of the District s State Foundation revenue), results in the projected through fiscal yearend favorable $150,000 variance. 5. Homestead Exemption & Rollback (HERB): $43,052 or 1.0% less than prior year; 49.7% of estimated amount received this year vs. 49.4% last year; $43,052 or 1.0% below budget for YTD; but $ 51,249 below budget as projected through the end of the fiscal year. 6. Other State Revenue: $168 or 0.1% more than prior YTD; 24.7% of estimated amount received this year vs. 22.1% last year; $2,024 or 0.8% below budget for YTD; and $0 below budget as projected through the end of the fiscal year. 7. Federal Receipts: $293,362 or 427.7% more receipts this fiscal YTD than last primarily due to the $49,706 receipt in September of the remaining portion of the Fiscal 2014 Medicaid reimbursement final settlement plus the earlier than expected receipt of the $260,597 Fiscal 2015 settlement in March. 82.5% of estimated amount received this year vs. 16.1% last year; $291,932 or 416.9% above budget for YTD; but $47,068 below budget as projected through the end of the fiscal year due to the lower Fiscal 2015 settlement received from what was forecasted. 8. Total Revenue: $6.7 million or 7.7% more than prior year; Variance due to differences highlighted above, but primarily due to the $4.9 million larger tax advance received this year vs. last during the period January through March, plus the $1.7 million from the bond proceeds received in December for the reimbursement of capital expenses paid by the General Fund. 95.5% of estimated amount received this year vs. 89.1% last year; $7.0 million or 8.1% above budget for YTD due to larger tax advance and capital expense reimbursement, but only $1.7 million or 1.7% above budget as projected through the end of the fiscal year. EXPENDITURES 9. Salaries & Wages: Payrolls averaged $2,310,878 YTD this year vs. $2,226,690 for prior YTD, for a 3.8% increase from last year s payrolls for the same number of year-to-date pay dates;

8 Financial & Miscellaneous Briefs April 5, 2018 Page 5 of 10 Excluding sick leave severance payments, increase of 3.6% from prior year; Overall change reflects cumulative effect of contractual and step increases, retirements and replacements that went into effect over the last 12 months, including the increase and retroactive to January payment for all teachers in accordance with the new SHTA contract that was made in March; YTD total salaries and wages (including severance payments) are 3.7% above prior year, slightly different from above due to timing of grant fund chargebacks; $1,466,660 or 3.7% more than prior year; Variance due to increased salary and wage costs; $171,944 or 0.4% below budget for YTD; and $50,000 below budget as projected through the end of the fiscal year. Classified overtime paid in March 2018 was $17,873 more than March 2017, while the cumulative YTD payments totaled $42,391 or 5.7% more than the prior YTD; Classified temporary wages this YTD are $32,797 more than last YTD, while certified temporary wages this YTD are $26,900 less than prior YTD; Sick leave severance payments increased by $64,320 or 31.4% to $269,211 through this YTD from $204,891 for prior YTD; Amount and timing of such payments vary from year to year depending on number of retirements. 10. Capital Outlay: $2.2 million or 168.8% more than prior YTD; $3.0 million or 516.7% above budget for YTD; but only $880,000 over budget as projected through the end of the year net of change in encumbrances which include the Middle School roof and cafeteria ceiling projects. 11. Total Expenditures: $4.7 million or 6.8% more than prior YTD; Variance due to timing differences in payments and expected growth in certain expenses, primarily salaries and fringe benefits, including payments totaling $1.8 million for the Middle School roof project in August, September and November; $2.1 million or 3.0% above budget for YTD; but only $0.7 million above budget as projected through the end of the fiscal year. Encumbrances current month-end total of $8.1 million, which includes $3.0 million for out-of-district tuition, are $0.6 million more than prior year. Encumbrance variance primarily attributable, to $0.050 million decrease in out-of-district tuition, $0.1 million decrease in capital outlay, $0.08 million increase in pupil transportation, $0.03 million decrease in textbooks, materials & supplies, and $0.6 million increase in professional & technical services. B. CASH BALANCES 1. Cash Balance: Cash balance reflects an increase of $8.6 million from that of one year ago. This is due to the $6.6 million higher beginning of year balance, increased by the $2.0 million larger excess of revenues over expenditures for the current YTD vs. the prior YTD.

9 Financial & Miscellaneous Briefs April 5, 2018 Page 6 of Cash Deficits - Grant Funds: The following cash deficits are due to a delay in the receipt of state or federal fund cash requests from the State: Fund $2,764; Fund $210,991; Fund $2,695; Fund $82,004; Fund $1,631; and Fund $60,702. C. OTHER ITEMS 1. Bond Issuance Process: We continue working on the bond issuance process in consultation with our bond counsel, John Larson of Squire Patton Boggs and our underwriter, Al Baucco of Stifel Nicolaus. As you know, we received $9.9 million from the issuance of the bond anticipation notes on December 28 th which were recorded in the Capital Projects Fund 004. On March 20 th, we priced the Series 2018A, $20.1 million of bonds at an all-in true interest cost of 3.08% and on April 4 th, we priced the Series 2018B, $8.395 million of bonds, proceeds of which will be used to refund the bond anticipation notes issued in December, at an all-in true interest cost of 3.44%, for a blended all-in true interest cost of 3.23%. Closing for Series A is scheduled for April 11 th and for Series B on April 25 th. The summary analyses of the two pricings as prepared by Al Baucco of Stifel Nicolaus are included below. Shaker Heights CSD Bond Issuance Analysis March 20, 2018 As you know, the District sold $22,100,000 of its Series 2018A General Obligation-Unlimited Tax Bonds today, Tuesday, March 20 th, which means that interest rates were set and investors placed orders for the bonds. The issue will close on April 11 th, when Stifel will wire the District all bond proceeds as well as the deposit of excess proceeds to the Bond Retirement Fund. The Series 2018A financing was the second of three transactions that will, in total, provide the District with a $30,000,000 project fund and a 20 year amortization for the associated bonds. The District issued bank qualified Bond Anticipation Notes issued in December 2017 and will conclude the plan of finance with a final bank qualified series of bonds (Series 2018B), scheduled to price on Wednesday, April 4 th and close on Wednesday, April 25 th. In preparation for the Series 2018 bond issues, District officials held conference calls with Moody s Investors Service and Standard & Poor s to discuss the bond issues, including the overall financing plan, the facilities plan funded by the Bonds, and other credit characteristics of the District such as tax base, District management, operating philosophy, finances, etc. Standard & Poor s affirmed the District s AA+ rating, however, as you know, Moody s downgraded the District s rating from the highest possible level of Aaa to Aa1. Though Moody s noted the District s very healthy financial position, prudent financial management, strong voter support for new taxes, and affluent tax base, the District has high leverage ratios (combined pension and debt) compared to other Aaa Districts nationwide. Moody s did acknowledge that the relatively rapid 20 year final maturity on the Series 2018 bonds will lead to moderating debt levels in the near term. Despite the one-notch downgrade, the District was well-positioned for strong pricing results with two high investment-grade ratings. In the months and weeks leading up to pricing, tax-exempt interest rates generally increased after hitting a relative low point on December 6, Since then, the benchmark municipal yield curve increased by

10 Financial & Miscellaneous Briefs April 5, 2018 Page 7 of 10 approximately 37 basis points (0.37%). The volatility that characterized December 2017 was driven by uncertainties surrounding the Tax Bill, the Federal Reserve gradually raising the Fed Funds target rate, and positive consumer spending figures continuing into the new year. However, in the week or so prior to pricing the Bonds, tax-exempt interest rates were steady. The municipal market was stable in the two days leading into pricing, as the Municipal Market Data (MMD) Index changed by only one basis point (0.01%) in some years. Interest rates in the municipal market are also heavily influenced by supply of municipal bond issuance. In Ohio, the District s Bond issue was the largest issue in the state for the week of March 19. The only other long-term negotiated bond issuance in Ohio scheduled for this week was Olentangy Local School District with a $17,500,000 refunding bond sale. Nationally for the week of March 19, new issuance tax-exempt bond volume of approximately $3.2 billion was a nearly 50% reduction from the volume during the prior week. These factors provided focus for investors to concentrate on the District s bond issue. When marketing the Bond issue in the days leading up to the pricing date, investors were providing positive feedback both on the high credit quality of the District and the pricing levels. Stifel opened the order period at9:30 am ET on Tuesday, March 20 th, allowing investors to place orders for the Bonds until 11:00 a.m. ET. As the order period began, the Treasury markets were off slightly and the municipal market was unchanged from the previous day s closing. The District s bonds were met with strong demand. During the 90 minute order period, the District s bond issue received over $38 million in orders from a variety of institutional and retail buyers. Orders ranged from retail orders of $25,000 to orders in the $7-$8 million range from large insurance companies such as State Farm and Allstate. Other buyers included some of the most prominent bond market investors, including Lord Abbett, Nuveen, Blackrock, Eaton Vance, Northern Trust, and Goldman Sachs Private Wealth. At the end of the initial order period, bonds in the 2018, 2019 and maturities remained unsold a total of $2.8 million or about 14% of the total issuance. The demand for the District s Bonds allowed for a downward adjustment of interest rates after the order period ranging from 1 to 4 basis points in maturities that were oversold, while other maturities saw yields increase slightly, from 1 to 5 basis points in certain years. With a final coupon adjustment in the 2026 maturity from 4% to 5%, Stifel was able to place all of the bonds with the exception of $285,000 in the 2025 maturity. Stifel underwrote these remaining bonds, completing the sale for the District. The Olentangy Local Schools District that also priced today provided a notable comparison for the Shaker Heights bonds. Olentangy has general obligation ratings of Aa1 from Moody s and AAA from S&P, which is overall one notch higher than the ratings for Shaker Heights. The structure of the Olentangy bonds were such that there were only three maturities in common between the two transactions ( ). In these years, the spreads to MMD for Olentangy were 2-3 basis points lower than Shaker Heights (on a yield to maturity basis). This suggests that, although Stifel s desk estimated that the impact of the Moody s downgrade was a hypothetical 5-7 basis points in a given year for the District, today s market conditions, particularly the low levels of supply, resulted in compressed credit spreads, minimizing the relative impact of differences in ratings. This is especially true for highly rated credits. The 2-3 basis points in higher interest rates from the Moody s bond rating reduction cost the District approximately $85,000.

11 Financial & Miscellaneous Briefs April 5, 2018 Page 8 of 10 At the end of the day, the District was able to successfully sell all $20,100,000 of Bonds at a weighted average all-in true interest cost of 3.08%. By all metrics this issue was a successful sale for the District and the District s taxpayers. The Bond issue was structured to provide for overall level debt service when combined with the upcoming bank qualified Series 2018B Bonds. The Series 2018A Bonds were sold with an optional call provision allowing the District to refund for economic savings at some point in the future bonds maturing on and after December 15, Thanks again to you, Dr. Hutchings, Dr. Wilkins, your staff, and the other members of the Board of Education for all the hard work in preparing to sell the bonds and allowing us to assist with the bond sale. Congratulations, and we look forward to another successful pricing in early April. Shaker Heights CSD Bond Issuance Analysis April 4, 2018 Today, Wednesday, April 4, the Shaker Heights City School District accessed the municipal bond market for the second time in two weeks to sell its $8,395,000 Series 2018B General Obligation-Unlimited Tax Bonds. This bond sale comes just 15 days after the District priced and sold its $20,100,000 Series 2018A Bonds (March 20), bringing to a close a three-part plan of finance that provides the District with $30 million in accordance with the bond levy passed in May The purpose of this second series of bonds (Series 2018B) is to allow the District to issue bank qualified bonds, a special tax status that offers additional tax-exemption advantages to certain municipal bond investors (i.e. banking institutions). The benefit of bank qualified bonds is passed along to the District in the form of lower interest rates, which in today s market is worth approximately 10 to 15 basis points (0.10% to 0.15%) at particular points on the yield curve, beginning in year 10. The District s overall plan of finance incorporated the ability to issue this type of bond from the outset when the District issued bank qualified bond anticipation notes in December The Series 2018B Bonds will pay off these notes when they come due in July. The par amount of this bond was significantly less than the $9.9 million of Notes issued in December 2017 because the Series 2018A Bonds generated over $1.2 million in excess premium, which was then available to pay down the outstanding Notes. In addition, the District projects that 2018 tax receipts will exceed the required debt service for 2018 by about $560,000. The availability of these excess taxes over debt service enabled the District to further reduce the amount of Series 2018B bonds that were needed to be issued to pay off the outstanding notes. When the Series 2018B Bonds close on April 25, the District will have a 20 year amortization period to pay the bonds associated with its $30 million project fund, made up of its Series 2018A and Series 2018B Bonds. The Series 2018A Bonds mature from 2018 to 2033, while the majority of Series 2018B Bonds mature from 2034 to Like the Series 2018A Bonds, the District s Series 2018B Bonds carried the District s Aa1 and AA+ general obligation credit ratings from Moody s and Standard & Poor s.

12 Financial & Miscellaneous Briefs April 5, 2018 Page 9 of 10 In the intervening weeks between the Series 2018A pricing on March 20 and today s pricing, the benchmark AAA Municipal Market Data (MMD) Index generally decreased in the years relevant to the Series 2018B Bonds. In 2034 through 2037, the MMD yields fell by 8 basis points. In Ohio, the District s bond sale was one of three long-term issuances for the week of April 2, the largest being a $68.9 million limited tax general obligation refunding for the Cincinnati City School District. The high credit ratings for Shaker Heights and the bank qualification of the Series 2018B Bonds meant for relatively little overlap in the investor pool for other Ohio issues for the week. Nationally for the week of April 2, new issuance bond volume of approximately $8.1 billion was more than double the volume of the holidayshortened prior week. When marketing the Bond issue in the days leading up to the pricing date, investors offered positive feedback both on the high credit quality of the District and the bank qualified status. There have been relatively few bank qualified deals available in Ohio thus far in On the afternoon of April 3, Stifel s underwriting desk received indications from an investor who was interested in a single term bond, maturing in 2037 and priced at par to yield 3.35%. This structure would save the District approximately $20,000 in debt service because the preliminary structure at that point included callable premium bonds in , which are subject to the yield to maturity pricing (i.e. higher yields). Stifel opened the order period at 9:30 am ET on Wednesday, April 4, allowing investors to place orders for the Bonds until 11:00 a.m. ET. As the order period began, the Treasury markets were strong as equity markets sold off. The municipal market saw cuts (increases) of 2 basis points the previous afternoon. During the 90 minute order period, the District s bond issue received $13.2 million in orders, including two orders for the term bond in 2037 priced at par (First National Bank of Pittsburgh, the investor who expressed interest the prior day, and FTN Financial Portfolio Advisors, an entity that manages money for smaller banks). The District also received orders for the smaller serial bonds in 2023, 2024, and 2026 from US Bank. At the end of the order period, bonds in the , 2025 and 2027 maturities remained unsold a total of $175,000 or only 2% of the total issuance. Stifel underwrote these remaining bonds, completing the sale for the District. After a successful order period, the District was able to sell all $8,395,000 of bonds at a weighted average all-in true interest cost of 3.44%. This all-in rate represents an improvement of 19 basis points from the estimated results as of March 20, when the sale of the Series 2018A Bonds occurred. On a combined basis, the Series 2018A and Series 2018B Bonds represent a 20 year amortization with a weighted average all-in true interest cost of 3.23%. Annual debt service on the combined financing is approximately $2.1 million. Just like the Series 2018A Bonds, the Series 2018B Bonds were sold with an optional call provision allowing the District to refund for economic savings at some point in the future bonds maturing on and after December 15, Enterprise Resource Planning System Status Update: A SunGard webinar presentation was given to the Finance & Audit Committee meeting on March 22 nd. The Shaker administrative team is scheduled to visit the Brunswick City School District, which has been using SunGard since the summer of 2017, on April 26 th, and we are in the process of scheduling a visit

13 Financial & Miscellaneous Briefs April 5, 2018 Page 10 of 10 to Beachwood Schools, which has been using SunGard since January 1 st of this year. 3. Medicaid Final Settlement for Fiscal 2015 Received: We received the $260,597 final settlement of District Medicaid claims reimbursement for Fiscal 2015 in the month of March, which is recorded in the Federal revenue line. As reported last month when we received the final adjudication order from the State, the settlement is $78,403 below the budgeted amount of $339,000. The unfavorable variance is reflected in the projected through fiscal year-end statement in Section 4 of this report.

14 2. CHARTS

15 SHAKER HEIGHTS CITY SCHOOL DISTRICT GENERAL FUND CASH BALANCE $75,000,000 $70,000,000 $65,000,000 $60,000,000 $55,000,000 $50,000,000 $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN March 31, 2018

16 SHAKER HEIGHTS CITY SCHOOL DISTRICT GENERAL FUND (Fiscal Year to Date) $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 RECEIPTS $94,134,420 EXPENDITURES $73,209,854 March 31, 2018

17 SHAKER HEIGHTS CITY SCHOOL DISTRICT GENERAL FUND RECEIPTS $28,000,000 $26,000,000 $24,000,000 $22,000,000 $20,000,000 $18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 March 31, 2018 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN

18 SHAKER HEIGHTS CITY SCHOOL DISTRICT GENERAL FUND EXPENDITURES $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN March 31, 2018

19 3. CONSOLIDATED INVESTMENT PORTFOLIO

20 Monthly Investment Report March 2018 Call Maturity Settle Yield Wtd Security Coupon Date Date Date Quantity Cost Basis Market Value at Cost Maturity CASH STAR Ohio-General 3/31/2018 $8,552, $8,552, $8,552, STAR Plus 3/31/2018 $0.00 $0.00 $ Tristate 3/31/2018 $0.00 $0.00 $ Huntington - Operating* 3/31/2018 $1,509, $1,509, $1,509, Cash Subtotal $10,062, $10,062, $10,062, % 0.00 SHAKER HEIGHTS CASH AND CDARS TOTAL $10,062, $10,062, $10,062, % 0.00 CERTIFICATES OF DEPOSIT GE Capital Bank, UT /6/2018 6/6/2014 $248, $248, $248, Everbank, FL /30/2018 7/30/2015 $248, $248, $247, Sallie Mae Bank, UT /30/2018 7/30/2014 $247, $247, $246, Pulaski Bank, MO /31/2018 7/31/2015 $249, $249, $248, MB Financial Bank, IL /6/2018 8/6/2015 $249, $249, $248, Compass Savings Bank, PA /7/2018 8/7/2015 $249, $249, $248, ConnectOne Bank, NJ /7/2018 8/7/2015 $249, $249, $248, Worlds Foremost Bank, NE /20/2018 8/20/2015 $200, $200, $199, Medallion Bank, UT /31/2018 8/31/2015 $248, $248, $247, Comenity Capital Bank, UT /19/ /17/2014 $249, $249, $248, Discover Bank, DE /4/2019 6/4/2014 $247, $247, $246, Barclay's Bank, DE /2/2019 7/2/2014 $247, $247, $246, American Express Bank FSB, UT /31/2019 7/31/2014 $247, $247, $246, First Business Bank, WI /31/2019 7/31/2015 $247, $247, $245, Synchrony Bank, UT /1/2019 8/1/2014 $247, $247, $246, American Express Centurion Bank, UT /30/2020 4/30/2015 $247, $247, $243, CIT Bank, UT /30/2020 7/30/2015 $247, $247, $245, Capital One, National Assoc, Mclean, VA /5/2020 8/5/2015 $247, $247, $242, Wells Fargo Bank, SD /16/ /14/2016 $249, $248, $239, Brokered Certificates of Deposit Subtotal $4,661, $4,660, $4,637, % 1.05 COMMERCIAL PAPER Canadian Imp Holdings - 4/24/2018 7/27/2017 $410, $405, $409, Bank of Tokyo - Mitsubishi UFJ - NY, USA - 5/18/2018 8/18/2017 $700, $691, $698, General Electric Capital Corp Treasury - 5/18/2018 8/21/2017 $1,670, $1,652, $1,665, Toyota Motor Credit - 5/18/2018 8/18/2017 $350, $346, $349, Bank of Montreal - 5/21/2018 8/24/2017 $1,600, $1,582, $1,595, JP Morgan - 5/24/2018 2/23/2018 $1,865, $1,855, $1,859, BNP Paribas - 6/28/2018 2/27/2018 $1,245, $1,236, $1,238, Bank of Tokyo - Mitsubishi UFJ - NY, USA - 6/28/2018 1/26/2018 $3,980, $3,949, $3,959, ING US CP - 6/28/2018 1/29/2018 $3,650, $3,621, $3,631, Natixis NY - 6/28/2018 2/27/2018 $1,520, $1,509, $1,512, TD USA - 6/28/2018 2/27/2018 $4,650, $4,618, $4,626, BNP Paribas - 6/29/2018 1/30/2018 $2,275, $2,257, $2,263, General Electric Capital Corp Treasury - 7/20/2018 2/23/2018 $1,000, $991, $992, ING US CP - 7/23/2018 2/23/2018 $1,025, $1,016, $1,017, Toyota Motor Credit - 7/27/2018 2/26/2018 $1,015, $1,006, $1,007, JP Morgan - 8/24/ /29/2017 $1,230, $1,213, $1,218, General Electric Capital Corp Treasury - 8/27/ /29/2017 $990, $977, $980, Commercial Paper Subtotal $29,175, $28,933, $29,025, % 0.24 *Earnings credit to offset bank charges; does not pay actual interest 1

21 Monthly Investment Report March 2018 Call Maturity Settle Yield Wtd Security Coupon Date Date Date Quantity Cost Basis Market Value at Cost Maturity MONEY MARKET FUNDS First American Treasury Obligations Fund 3/31/2018 $36, $36, $36, Money Market Subtotal $36, $36, $36, % 0.00 US TREASURY BILLS US Treasury Bill - 8/23/2018 2/27/2018 $1,825, $1,808, $1,811, US Treasury Bills Subtotal $1,825, $1,808, $1,811, % 0.40 US AGENCY GOVERNMENT NOTES Federal Natl Mtg Assoc /21/2018 2/26/2016 $2,830, $2,826, $2,826, Federal Natl Mtg Assoc /13/ /13/ /13/2015 $750, $750, $745, Federal Home Ln Mtg /15/2019 3/18/2016 $4,505, $4,503, $4,457, Federal Home Ln Mtg /24/2018 5/24/2019 7/14/2016 $2,855, $2,855, $2,825, Federal Natl Mtg Assoc /28/2018 6/28/2019 6/27/2016 $3,500, $3,500, $3,450, Federal Home Ln Mtg /19/2019 7/26/2016 $4,855, $4,836, $4,771, Federal Home Ln Bank /5/2019 8/8/2016 $3,000, $2,989, $2,945, Federal Natl Mtg Assoc /27/2018 7/27/2020 7/25/2016 $2,000, $2,000, $1,956, Federal Natl Mtg Assoc /28/2018 8/28/2020 8/26/2016 $3,700, $3,700, $3,602, Federal Farm Credit Bank /9/ /19/2020 8/29/2016 $3,280, $3,280, $3,200, Federal Natl Mtg Assoc /24/2018 8/24/2021 8/26/2016 $3,380, $3,380, $3,244, US Agency Government Notes Subtotal $34,655, $34,620, $34,027, % 1.59 REDTREE OPERATING PORTFOLIO TOTAL $70,352, $70,059, $69,538, % 0.96 MONEY MARKET FUNDS First American Treasury Obligations Fund 3/31/2018 $11, $11, $11, Money Market Subtotal $11, $11, $11, % 0.00 COMMERCIAL PAPER BNP Paribas - 6/29/2018 1/30/2018 $1,155, $1,146, $1,149, Natixis NY - 6/29/2018 1/30/2018 $1,150, $1,141, $1,144, JP Morgan - 7/3/2018 1/4/2018 $1,585, $1,570, $1,575, Toyota Motor Credit - 10/5/2018 1/4/2018 $2,440, $2,405, $2,410, General Electric Capital Corp Treasury - 10/22/2018 1/26/2018 $1,020, $1,005, $1,006, Toyota Motor Credit 10/26/2018 1/29/2018 $895, $881, $882, Commercial Paper Subtotal $8,245, $8,150, $8,168, % 0.40 REDTREE 2017 BOND PROCEEDS PORTFOLIO TOTAL $8,256, $8,162, $8,180, % 0.40 REDTREE INVESTMENT PORTFOLIO's TOTAL $78,608, $78,221, $77,718, % 0.90 SHAKER HEIGHTS GRAND TOTAL $88,670, $88,284, $87,780, % 0.80 Months to Maturity > < 12 $3,629,000 $9,721,000 Maturity Distribution $19,950,000 $55,370,923 $0 $10,000,000 $20,000,000 $30,000,000 $40,000,000 $50,000,000 $60,000, % 2.00% 1.50% 1.00% 0.50% 0.00% 1.58% 1.73% Yield Comparison 0.05% Shaker Heights Star Ohio *Huntington Earnings Credit 2.05% US Treas 1yr BAML Index 39% 5% 2% Investment Allocation Money Market Funds 11% 42% Commercial Paper Certificates of Deposit US Agency Notes US Treasury Securities *Earnings credit to offset bank charges; does not pay actual interest 2

22 Monthly Transaction Summary Operating Funds March 2018 Portfolio Activity Summary Yield on invested securities remained at 1.56% as there were no transactions in March. Portfolio is set up to provide adequate liquidity to meet operating needs. Rates are poised to rise throughout 2018, although recent events have given investors a reason to think otherwise. Redeemed Securities : Sales, Calls, and Maturities Security CUSIP Transaction Date Original Cost Basis Income Received N/A for March Total Redeemed Securities Purchased Securities Security CUSIP Transaction Date Cost Basis Projected Annual Income N/A for March Total Security Purchases Interest Earnings Received Asset Class Total Income Received Cash (Star Ohio, Star Plus, Huntington) $13, Money Market Funds $6, Commercial Paper + Bankers Acceptances $0 Certificates of Deposit $1, U.S. Agency Notes $0 Total Interest Earnings for the period $21, Realized Gains and Losses Security Total Realized Gains and Losses N/A for March Total Realized Gains and Losses for the period $0 3

23 Monthly Transaction Summary 2017 Proceeds Funds March 2018 Portfolio Activity Summary Portfolio funded on December 28 th, 2017 Portfolio is invested in high quality commercial paper, the strategy will be to stay active throughout the project. As the portfolio has securities mature, RedTree will work with Shaker to make sure spending and reinvestment match up. Redeemed Securities : Sales, Calls, and Maturities N/A for March Total Redeemed Securities Security CUSIP Transaction Date Original Cost Basis Income Received Purchased Securities Security CUSIP Transaction Date Cost Basis Projected Annual Income N/A for March Total Security Purchases Interest Earnings Received Asset Class Total Income Received Money Market Funds $11.37 Commercial Paper + Bankers Acceptances $0 U.S. Agency Notes $0 Total Interest Earnings for the period $11.37 Realized Gains and Losses Security Total Realized Gains and Losses N/A for March Total Realized Gains and Losses for the period $0 3

24 4. FINANCIAL SUMMARY FOR GENERAL FUND

25 SCHOOL DISTRICT General Fund - Financial Statement Fiscal Year Ending June 30, A B CD E F G H I J K L M N O P Q R Month of March Year-To-Date March Year-To-Date March Actual F18 Actual F17 $ Inc(Dec) %Inc(Dec) Actual F18 Actual F17 $ Inc(Dec) %Inc(Dec) YTDBud.F18 $ Inc(Dec) %Inc(Dec) REVENUE: Real Estate Taxes $4,101,912 $3,483,411 $618, % $72,079,583 $67,641,847 $4,437, % $67,641,847 $4,437, % Personal Property Taxes #DIV/0! 23, ,526 #DIV/0! 0 23,526 #DIV/0! Investment Earnings 19,913 11,424 8, % 610, , , % 469, , % Other Local 507, , , % 3,388,489 1,512,686 1,875, % 1,386,573 2,001, % State Foundation 1,431,440 1,377,298 54, % 13,032,661 13,034,569 (1,908) 0.0% 12,842, , % Homestead Exemption & RollBack #DIV/0! 4,377,394 4,420,446 (43,052) -1.0% 4,420,446 (43,052) -1.0% Other State #DIV/0! 260, , % 262,331 (2,024) -0.8% Federal-primarily Medicaid reimb. 272,269 14, , % 361,959 68, , % 70, , % Transfers & Advances In #DIV/0! #DIV/0! 0 0 #DIV/0! TOTAL REVENUE 6,333,442 5,184,626 1,148, % 94,134,420 87,407,893 6,726, % 87,093,782 7,040, % EXPENDITURES: Salaries & Wages 4,668,517 4,505, , % 41,560,804 40,094,144 1,466, % 41,732,748 (171,944) -0.4% Fringe Benefits: Health Insurance 761, ,110 18, % 6,790,568 6,414, , % 6,716,000 74, % Retirement Expense 734, ,995 26, % 6,599,621 6,275, , % 6,484, , % All Other Fringes 122, ,916 6, % 1,157,091 1,068,516 88, % 1,118,381 38, % Total Fringe Benefits 1,619,230 1,567,021 52, % 14,547,280 13,758, , % 14,318, , % Purchased Services: Utilities 102, ,977 (23,682) -18.8% 943, ,470 (20,948) -2.2% 1,033,402 (89,880) -8.7% Out-of-District Tuition 611, , , % 3,420,445 3,051, , % 3,204, , % Pupil Transportation 122, ,044 4, % 807, ,538 (4,827) -0.6% 853,293 (45,582) -5.3% Repairs & Maintenance 20,095 53,862 (33,767) -62.7% 599, , , % 461, , % All Other Purchased Services 342, ,403 (109,578) -24.2% 3,393,471 3,685,291 (291,820) -7.9% 4,198,682 (805,211) -19.2% Total Purchased Services 1,199,772 1,202,656 (2,884) -0.2% 9,164,557 8,957, , % 9,750,775 (586,218) -6.0% Textbooks, Materials & Supplies 109, ,772 (45,182) -29.2% 2,266,981 2,526,203 (259,222) -10.3% 2,751,305 (484,324) -17.6% Capital Outlay 312,526 11, , % 3,561,767 1,324,997 2,236, % 577,506 2,984, % Other-primarily Cty.Aud.&Treas.Fees 856, , , % 1,938,465 1,715, , % 1,775, , % Transfers & Advances Out #DIV/0! 170, ,000 15, % 175,000 (5,000) -2.9% TOTAL EXPENDITURES 8,765,802 8,058, , % 73,209,854 68,532,159 4,677, % 71,080,951 2,128, % Net Revenues/(Expenditures) (2,432,360) (2,874,088) 441, % 20,924,566 18,875,734 2,048, % 16,012,831 4,911, % Cash, Beginning of Period 71,126,890 62,955,753 8,171, % 47,769,964 41,205,931 6,564, % 47,769, % Cash, End of Month 68,694,530 60,081,665 8,612, % 68,694,530 60,081,665 8,612, % 63,782,795 4,911, % Less O/S Encumbrances 8,062,779 7,440, , % 8,062,779 7,440, , % 7,400, , % Less Budget Reserve 353, , % 353, , % 353, % Fund Balance, End of Month $60,278,681 $52,288,170 $7,990, % $60,278,681 $52,288,170 $7,990, % $56,029,725 $4,248, % % % Total General Obligation Debt Outstanding $23,849,310 $15,979, FS09Mar18 Rev pm/SummaryF18 4/5/2018

26 SHAKER HEIGHTS CITY SCHOOL DISTRICT General Fund-Budget by Month Fiscal Year Ending June 30, 2018 FS09Mar18 Rev pm F18MvgMthlyBudget 4/5/ A B AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AP AQ BUDGET BUDGET BUDGET BUDGET Adopted Var Fav/(Unfav) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Var. Deemed Total Budget Deemed REVENUE: Actual Actual Actual Actual Actual Actual Actual Actual Actual Budget Budget Budget Temporary Rev.Proj. Permanent Real Estate Taxes $10,022,000 $20,458,671 $0 $0 $0 $0 $15,091,000 $22,406,000 $4,101,912 $0 $1,172,000 $0 (4,782,912) $68,468,671 $68,813,847 ($345,176) Personal Property Taxes , , ,526 Investment Earnings 51,588 80,777 33,865 73,711 97, ,092 60,074 89,690 19,913 60,802 62,990 35,558 (20,851) 749, , ,000 Other Local 622,239 74, ,393 17,285 45,656 1,822,989 73, , ,908 99,105 49, ,467 (151,916) 3,584,835 1,734,835 1,850,000 State Foundation 1,423,682 1,467,478 1,420,400 1,536,272 1,422,639 1,446,760 1,448,052 1,435,938 1,431,440 1,422,977 1,422,977 1,422,979 (39,753) 17,261,841 17,111, ,000 Homestead Exemption & RollBack ,377, ,380,217 0 (8,197) 8,749,414 8,800,663 (51,249) Other State 0 138, , ,669 2,024 1,054,000 1,054,000 0 Federal-primarily Medicaid reimb , ,141 12,847 6,563 11, ,269 6,285 15, ,550 (339,000) 391, ,000 (47,068) Transfers & Advances In TOTAL REVENUE 12,119,509 22,219,646 1,626,222 6,004,662 1,574,227 3,409,214 16,801,654 24,045,844 6,333,442 1,589,169 7,103,012 2,797,223 (5,340,605) 100,283,219 98,583,186 1,700,033 EXPENDITURES: Salaries & Wages 4,514,259 4,483,567 4,567,175 4,600,482 4,795,473 4,738,458 4,607,201 4,585,672 4,668,517 4,728,310 4,606,599 5,200, ,944 56,218,000 56,268,000 50,000 Fringe Benefits: Health Insurance 753, , , , , , , , , , , ,000 85,432 9,129,000 8,969,000 (160,000) Retirement Expense 741, , , , , , , , , , , ,000 (123,123) 8,737,500 8,745,000 7,500 All Other Fringes 115, , , , , , , , , , , ,969 (708) 1,512,300 1,474,300 (38,000) Total Fringe Benefits 1,609,531 1,591,116 1,604,584 1,575,127 1,615,610 1,601,009 1,706,805 1,624,268 1,619,230 1,595,335 1,591,615 1,682,969 (38,399) 19,378,800 19,188,300 (190,500) Purchased Services: 15.54% 15.54% Utilities 84,945 81,095 82, , , , , , , ,075 99, , ,877 1,387,602 1,362,602 (25,000) Out-of-District Tuition 120, , , , , , , , , , , ,284 (141,102) 4,928,000 4,853,000 (75,000) Pupil Transportation 50,363 35,446 4, , , ,150 27, , ,733 65, , ,822 5,585 1,291,000 1,331,000 40,000 Repairs & Maintenance 65, , ,697 49,409 20,094 61,429 27,587 97,575 20,095 23,292 74,349 36,304 (18,353) 715, ,000 (120,000) All Other Purchased Services 261, , , , , , , , , , , , ,211 5,254,000 5,654, ,000 Total Purchased Services 583,189 1,015, ,880 1,731, ,349 1,221, ,812 1,120,798 1,199, ,732 1,348,568 1,725, ,218 13,575,602 13,795, ,000 Textbooks, Materials & Supplies 339, , , , , , , , , , , , ,324 3,012,000 3,312, ,000 Capital Outlay 71,184 1,286, , , ,534 75, ,783 73, ,526 34, ,914 20,714 (2,104,261) 1,680, ,000 (880,000) Other-primarily Cty.Aud.&Treas.Fees 74, ,423 31,711 12,964 9, ,409 20,308 16, ,167 8,194 37,980 31,965 (3,229) 2,013,375 1,853,375 (160,000) Transfers & Advances Out , , , , ,000 5,000 TOTAL EXPENDITURES 7,191,764 9,438,300 7,714,986 8,506,686 8,437,284 8,095,880 7,476,824 7,582,328 8,765,802 7,517,617 8,058,668 8,830,041 (1,473,403) 96,142,777 95,487,277 (655,500) Net Revenues/(Expenditures) 4,927,745 12,781,346 (6,088,764) (2,502,024) (6,863,057) (4,686,666) 9,324,830 16,463,516 (2,432,360) (5,928,448) (955,656) (6,032,818) (3,867,202) 4,140,442 3,095,909 1,044,533 Cash, Beginning of Period 47,769,964 52,697,709 65,479,055 59,390,291 56,888,267 50,025,210 45,338,544 54,663,374 71,126,890 68,694,530 62,766,082 61,810,426 47,769,964 47,769,964 0 Cash, End of Month 52,697,709 65,479,055 59,390,291 56,888,267 50,025,210 45,338,544 54,663,374 71,126,890 68,694,530 62,766,082 61,810,426 55,777,608 (3,867,202) 51,910,406 50,865,873 1,044,533 Less O/S Encumbrances 12,657,730 14,315,014 13,793,378 12,439,133 11,042,782 10,125,061 9,692,700 9,183,671 8,062,779 7,400,000 8,000,000 5,254, ,254,840 5,254,840 0 Less Budget Reserve 353, , , , , , , , , , , , , ,070 0 Fund Balance, End of Month $39,686,909 $50,810,971 $45,243,843 $44,096,064 $38,629,358 $34,860,413 $44,617,604 $61,590,149 $60,278,681 $55,013,012 $53,457,356 $50,169,698 ($3,867,202) $46,302,496 $45,257,963 $1,044,533