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Home My WebLink About99-07016 d v s I• w 0 0 lA li• [is Ile ?reeirnwn?t ?f G'onrpair?, PC u0 le I• `7Lo. `1% • 'Jv /G Ccw! 7v dib i n BIG SPRING SCHOOL DISTRICT - ' .n i NEVIVILLE, PENNSYLVANIA M JUNE 30, 1999• la I dY 10 I V I v 0 INDEX ? Page Number Independent auditors, report 1 Combined balance sheet - M all fund types and account groups - June 30, 1999 2 Combined statement of revenue, expenditures and changes in fund balances - All Governmental Fund Types - M year ended June 3o, 1999 3 1 Statement of revenue, expenditures and changes in fund balances - actual and budget - General and Athletic Funds - year ended June 30, 1999 4 - 5 ~ Statement of revenue, expenses and changes in fund balance/retained earnings - i Food Service Fund - year ended June 30, 1999 6 j Statement of cash flows - Food Service Fund - year ended June 30, 1999 7 Notes to financial statements - June 30, 1999 8 - 18 Required supplementary information 19 V HO 41 U ?I \' ® GREENAWALT & COMPANY, P.C. CERTIFIED PUBLIC ACCOUNTANTS JAMES E. LYONS P.O. Box 6 400 WEST MAIN STREET 67 WEST POMFRFT STREET HOWARD R. GREENAWALT CARLISLE. PA 17,111 CAF'FDON R. HOFFMAN MECHANICSBURG. PENNSYLVMIIA DOSS (717) 741-MIZ JOHN H. KLPIGItR 47171760 478] FAX OIn 7190772 DaK)RAH J. KELLY R. A. GREENAWALT (19'16179)) 1"17171 7664731 A. A. R®RNGER (REnIDD) C. EDWARD ROGERS. JR. INDEPENDENT AUDITORS' REPORT A Board of School Directors Big Spring School District Newville, Pennsylvania We have audited the accompanying general-purpose financial statements of Big Spring F,y School District as of June 30, 1999 and for the year then ended. These general-purpose financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these general-purpose financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards and ry Government Auditing Standards issued by the comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the general-purpose financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the accompanying general-purpose financial statements present fairly, in all material respects, the financial position of Big Spring School District as of June 30, 1999, the results of its operations and the cash flows of its Food Service Fund G for the year then ended, in conformity with generally accepted accounting principles. The supplementary information on page 19 is not a required part of the general-purpose financial statements but is supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted principally of inquiries of management regarding the procedures used and presentation O of the supplementary information. However, we did not audit the information and express no opinion on it. In accordance with Government Auditing Standards, we have also issued reports dated October 14, 1999 on our consideration of Big Spring School District's internal control over financial reporting and our tests of its compliance with certain provisions of 7 laws, regulations, contracts and grants. GREENAWALT & COh1 A[Ty, P.c. v October 14, 1999 Mechanicsburg, Pennsylvania - 1 - J MEMBERS - AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS - PENNSYLVANIA INSTITUTE OF CERTIFIED PUBLIC ACCOUNfA.YTS ni BIG SPRING SCHOOL DISTRICT ?I COMBINED BALANCE SHEET - ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 1999 n Governmental Fund TyReS Capital Capital General Athletic Reserve Projects Assets and other debits . $ 1,970,725 $ 8,546 $ 143,056 $ 1,068,769 Cash 28,420,390 Investments 3,280,758 - - 829 373 ' Due from other funds 126,553 , - Accounts receivable 957,379 Delinquent taxes receivable (net of $ 375,531 allowance _ for uncollectibles) 420,000 - G Food service inventories - Food service equipment (net of $ 245,038 accumulated depreciation) - - Land, buildings and equipment - - Amount to be provided for -term debt l lon - - g genera Total assets and 415 55 546 $ 8 $ 516,885 $ 29.489,159 other debits , $ 6,7 , Liabilities Payroll and benefits payable $ Accounts payable Deferred revenue Due to other funds Due to student organizations Bonds and notes payable Compensated absences Total liabilities Fund equity and other credits invested in general fixed assets Fund balances/ retained earnings Reserved Unreserved Total fund equity and other credits Total liabilities, fund equity and other credits 928,966 $ - $ $ 236,026 - 97,753 208,368 278,465 - - 373,829 - - - 1,817.286 -0- 97,753 208.368 - al 29,280,791 4,938,129 8,546 419.132 4,938,129 8,546 419,132 29,280,791 $ 6,755,415 $ 8,546 $ 516,885 $ 29,489,159 The accompanying notes are an integral part of these financial statements. - 2 - ll IA Proprietary Fiduciary Fund Types Fund Tvnes Account Groups Food General General Service Activity Fixed Assets Long-Term Debt $ 232,553 $ 174,044 $ - $ _ 28,861 29,897 126,055 - - 17,162,017 - - _ 35,073,050 $ 4174366 $ _ 174.044 $ 17,162,017 $ 35,073,050 $ 3,337 $ - $ _ $ _ 15,075 126,553 - - 174,044 - _ 34,380,000 78.840 - 693,050 223,805 174,044 -0- 35,073,050 0 47,215 146,346 193,561 -0_ 17,162,017 U U W V_ 17,162,017 -0- 417,366 $ _ 174,044 $ 17,162,017 $ 35,073,050 BIG SPRING SCHOOL DISTRICT COMBINED STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES ALL GOVERNMENTAL FUND TYPES YEAR ENDED JUNE 30, 1999 • Capital Capital General Athletic Reserve Projects Revenue Local sources $ 10,831,136 $ 54,115 $ 55,232 $ 419,808 • State sources 10,102,259 ral sources d F 311,384 - - - e e Total revenue 21,244,779 54,115 55,232 419,808 Expenditures Instruction 12,818,905 131,233 Support services 6,144,467 - 752,246 405,295 Operation of nonin- structional services 331,286 101,347 - - Facilities acquisition, construction and ® improvement - 335,636 Debt service 626,531 - - 393,918 Total expenditures 19,921,189 101,347 883,479 1,134,849 Excess of revenue over (under) expenditures 1,323,590 (47,232) (828,247) (715,041) Other financing sources (uses) Bond proceeds - - - 29,995,000 Sale of fixed assets 115,000 - - - Tuition from other ® districts 21,833 - - Governmental fund transfers (1,007,929) 45,000 1,019,989 (57,060) Food service transfers (28,000) - - " Total other financing • sources (uses) (899,096) 45,000 1,019,989 29,937,940 Excess of revenue and other financing sources over (under) expenditures and other financing uses 424,494 (2,232) 191,742 29,222,899 ® Fund balances, July 1, 1998 4,513,635 10,778 227,390 57,892 Fund balances, June 30, 1999 $ 4,938,129 $ 8,546 $ 419,132 $ 29,280,791 O The accompanying notes are an integral part of these financial statements. ?0 - 3 BIG SPRING SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - ACTUAL AND BUDGET GENERAL AND ATHLETIC FUNDS YEAR ENDED JUNE 30, 1999 I General Variance Favorable Actual Budget (Unfavorable) r Revenue $ 10,831,136 $ 10,374,658 $ 456,478 Local sources 1011021259 9,930,672 171,587 State sources 311,384 301,454 9,930 Federal sources Total revenue 21,244,779 20,606,784 637,995 Expenditures Instruction 9,570,519 9,623,311 52,792 Regular programs 235,268 2 2,385,670 150,402 Special programs , 736 429 436,063 6,327 Vocational education programs , 82 024 602 18,642 G Other instructional programs 583,3 , 527 8 _ 8,527 , Adult education programs Total instruction 12,818,905 13,055,595 236,690 Support services 862 502 541,468 38,606 G Pupil personnel , 148 633 713,448 80,300 Instructional staff , 1,313,204 1,313,251 47 Administration 020 161 163,588 2,568 Pupil health , 443,343 474,862 31,519 Business Operation and maintenance of 1,662071 , 1,850,569 188,498 G plant services es i 377 729 1 1,377,755 26 c Student transportation serv , , 684 51 594 Other Support services 51,090 , i 467 144 6 6,486,625 342,158 ces Total support serv , , L, (Continued) - 4 - `) • • Athletic Variance Favorable Actual Budget (unfavorable) A $ 54,115 $ 40,393 $ 13,722 54,115 40,393 13,722 N -0- p_ -0- f I -0- +I, I .:J A i ? I i I ?! J BIG SPRING SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENDITURES AND CHANGES IN FUND BALANCES - ACTUAL AND BUDGET ?-, GENERAL AND ATHLETIC FUNDS (Cont'd.) YEAR ENDED JUNE 30, 1999 General Variance Favorable Actual Budget (Unfavorable) Expenditures (Cont'd.) Operation of noninstructional services 795 $ 316 $ 329,444 $ 12,649 Student activities , 076 15 585 Community services 14,491 . - t Total operation of non- 520 344 13.234 V, instructional services 331,286 . • 626.531 677.435 50.904_ k'= Debt service Total expenditures 19,921.189 20 564,175 642,986 Excess of revenue over (under) 609 42 1,280,981 expenditures 1 323,590 , Other financing sources (uses) _ 000 115 Sale of fixed assets 115,000 - , 21,833 a Tuition from other districts 21,833 929) 035 (1 (1,035,929) _ ? ' Fund transfers , , - (6,680) 6,680 '•? ' Budgetary reserve .( . Total other financing (899,096) (1,042,609) 143.513_ c.I sources (uses) Excess of revenue and other financing 1. sources over (under) expenditures 494 424 000,000) (1, 1,424,494 and other financing uses , 4 513 635 5,015,104 (501,469) Fund balances, July 1, 1998 , , Fund balances, June 30, 1999 $ 4,938,129 $ 4,015,104 $ 923,025 The accompanying notes are an integral part of these fi nancial statements. - 5 - 41+1 ee a Athletic Variance Favorable Actual Budget (Unfavorable) $ 101,347 $ 116,693 $ 15,346 101,347 116,693 15,346 CD -0- -0- -0- 101,347 116,693 15,346 (47,232) (76,300) 29,068 45,000 76,300 (31,300) 45,000 76,300 (31,300) u (2,232) -0- (2,232) 10,778 -0- 10,778 $ 8,546 $ -0- $ 8.546 C.) ®A BIG SPRING SCHOOL DISTRICT STATEMENT OF REVENUE, EXPENSES AND CHANGES IN FUND BALANCE/RETAINED EARNINGS ® FOOD SERVICE FUND YEAR ENDED JUNE 30, 1999 Operating revenue Sales $ 584,581 Operating expenses Salaries and wages 293,487 Employee benefits 122,039 Food and milk 369,964 General supplies 11,504 Repairs and maintenance 10,887 Utilities and fuel 35,000 Depreciation 23,746 03 Total operating expenses 866,627 Operating loss (282,046) Nonoperating revenue State sources Meal subsidies 19,505 Social security and retirement subsidies 19,600 Federal sources Meal subsidies 179,019 Donated commodities 47,924 Interest earned 6,322 Total nonoperating revenue 272,370 Loss before transfers (9,676) Fund transfers General Fund contributed services 28,000 Net income 18,324 Fund balance/retained earnings, July 1, 1998 175,237 ?- Fund balance/retained earnings, June 30, 1999 $ 193,561 The accompanying notes are an integral part of these financial statements. 0 - 6 - U I-16 BIG SPRING SCHOOL DISTRICT STATEMENT OF CASH FLOWS FOOD SERVICE FUND 04 YEAR ENDED JUDIE 30, 1999 Operating activities $ (282,046) Operating loss Adjustments to reconcile operating loss to 64 net cash used in operating activities 23,746 Depreciation Donated commodities earned 47,924 General Fund contributed services 28,000 Decrease (increase) in assets Accounts receivable (4,074) 64 (2,455) Inventories Increase (decrease) in liabilities Payroll and benefits payable 3,337 Accounts payable (35,737) Deferred revenue 828 Due to other funds 40,332 `F'? Compensated absences (6,297) Net cash used in operating activities (186,442) Non capital financing activities Grants and subsidies 39,105 State sources 179,019 Federal sources Net cash provided by non capital financing activities 218,124 Investing activities Decrease in investments 78,732 Interest earned 6,322 Net cash provided by investing activities 85,054 Net increase in cash 116,736 Cash, July 1, 1998 115,817 Cash, June 30, 1999 $ 232,553 .J Supplemental disclosure of noncash financing activities Donated commodities received $ 48,752 General Fund contributed services 28,000 The accompanying notes are an integral part of these financial statements. - 7 - J 0 a 1. Reporting entity BIG SPRING SCHOOL DISTPICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 1999 Big Spring School District is the level of government which has oversight responsibility and control over activities related to public school education. The report includes services provided by the District to residents within its boundaries: the Cumberland County Townships of Cooke, Lower Frankford, Upper Frankford, Lower Mifflin, Upper Mifflin, North Newton, South Newton, Penn and West Pennsboro, and the Borough of Newville. Services provided include a comprehensive curriculum for primary and secondary education as well as special education and vocational education programs. The District receives revenue from local, state and federal sources and must comply with the requirements of these funding sources. M Criteria established in Governmental Accounting Standards Board Statement Number 14 were used in determining the entities to be included in the reporting entity. These criteria include basic items such as financial interdependency, selection of governing authority, designation of management, ability to significantly influence operations, accountability for fiscal matters, scope of public service w1 and special financing relationships. All operations of the District are included in the reporting entity. There are no component units that meet the above criteria for inclusion in this reporting entity. However, the District is a participant in two jointly-governed operations, each of which is a separate legal entity that offers educational services to the District and its residents. Each entity serves several school districts, so the following entities are not included in this reporting entity. Capital Area Intermediate Unit provides special education services and programs. 0 Cumberland-Perry Area Vocational-Technical School provides vocational and technical education services and programs. 2. Summary of significant accounting policies The accounting records of Big Spring School District are maintained on the basis of accounting practices prescribed or permitted by the Manual of Accounting and Related Financial Procedures for Pennsylvania School Systems, issued by the Pennsylvania Department of Education in accordance with the provisions of the School Laws of Pennsylvania. These practices are in conformity with generally accepted accounting principles as applicable to governmental units. A summary of the more significant accounting policies is as follows: U Fund accounting The accounting records of the District are organized on the basis of fund types and account groups. Each fund type may consist of several different funds. Each fund is a separate entity with self-balancing accounts which comprise its assets, C'J liabilities, fund balance/retained earnings, revenues and expenditures /expenses as appropriate. The fund types and account groups utilized by Big Spring School District are as follows: - 8 - U • BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JULIE 30. 1999 n 2. Summary of significant accounting policies (Cont'd.) Fund accounting (COnt'd.) ® Governmental Fund Types - These are the funds through which most governmental functions are provided. The acquisition, use and balances of the District's expendable financial resources and related liabilities (except those accounted for in proprietary funds) are accounted for through governmental funds. • The General Fund accounts for all financial resources except those required to be accounted for in other funds. The majority of District activities, including instruction, administration and other services are accounted for in this fund. W The Athletic Fund is a special revenue fund that accounts for the revenues and expenditures for athletic purposes. The Capital Reserve Fund provides for unspecified future construction or equipment needs. The Capital Projects Fund accounts for bond proceeds and the expenditure of those funds. Proprietary Fund Types - These funds account for operations using accounting pronouncements required for private business enterprises, unless those pronouncements conflict with or contradict governmental M accounting pronouncements. The Food Service Fund accounts for the financial transactions associated with the operations of the cafeterias. Fiduciary Fund Types (Trust and Agency Funds) - These funds account for assets held in a trustee capacity or as an agent for other funds or entities. The Activity Fund accounts for programs operated and sponsored by various clubs and organizations within the schools. !? - Account Groups - These account groups are not funds. They are only concerned with the measurement of financial position and are not involved with the measurement of results of operation. General Fixed Assets accounts for land, buildings and equipment. V General Long-Term Debt accounts for bonds, notes and compensated absences payable in future years. - 9 - I ?.+ a BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENT (Cont'd.) A JUNE 30, 1999 2. Summary of significant accounting policies (Cont'd.) A Basis of presentation The accounting and financial presentation methods of the different fund types are based on their measurement focus, which determines when revenues and expenditures are recognized. si Governmental Fund Types - These funds use the "current financial resources" measurement focus, which is a modified accrual method. Revenues are recorded when susceptible to accrual (both measurable and available). Available means collected within the current period or soon enough thereafter to pay current liabilities. Expenditures are generally recognized when the related fund liability is incurred. Exceptions to this general rule include principal and interest on general long-term debt which is recognized when due. Disbursements for inventory type items and prepaid expenses are considered expenditures at the time of purchase. K7 Proprietary Fund Tunes - The Food Service Fund uses the "flow of economic resources" measurement focus, which is a full accrual method. Donated commodities are inventoried at an estimated value when received. Inventories (valued on the first-in, first-out method) tp are recorded as an asset, and the portion represented by donated commodities is recorded as deferred revenue. Food service equipment is capitalized, with depreciation (computed on the straight-line method using an estimated useful life of 12 years) recorded as an operating expense. The equipment (net of accumulated depreciation) is offset by a reserved portion of retained f earnings. Compensated absences are recognized as operating expenses and the cumulative amount is recorded as a liability within the fund. The liability is offset by a reduction in the reserved portion of retained ?: earnings. Fiduciary Fund Types (Trust and AgenCV Funds) - These funds use a modified accrual method. They are custodial in nature (assets equal liabilities), and are not involved with the measurement of results of operations (revenues and expenditures). Q - 10 - U e BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENT (Cont'd.) JUNE 30, 1999 A 2. summary of significant accounting policies (Cont'd.) Basis of presentation (Cont'd.) ~ Account Groups - Land, buildings and equipment are presented at cost. Depreciation is not computed on these assets. Additions and disposals had been estimated since the previous outside valuation report, which was updated to October 1, 1998. Long-term debt is offset by an amount to be provided by future 60 taxation or other revenue sources. General obligation bonds and notes payable in future years are recorded as District debt. Interest on these bonds and notes is recognized when such interest is due. Compensated absences (those for which employees receive pay) are W presented using the termination payment method. A liability is computed using estimates which apply historical data to current factors. The District maintains records of unused leave and applies the contracted rate for employees eligible for termination payments. The District allows only restricted sabbatical leave and therefore does not present any liability in advance of the sabbatical. W Budgets The District adopts, prior to the beginning of each fiscal year, an annual budget for the General Fund and Athletic Fund. A part of this budget process is the adoption of local tax rates, subject to various legal restrictions. The District approves subsequent budget revisions (primarily transfers between expenditure categories) as necessary. Unused appropriations expire at the end of each year. The General Fund budget was amended after its adoption to provide for additional revenue and expenditures of federal and state programs in the amount of $ 140,119. Revenue - Local sources V Real estate, occupation, residence and per capita taxes are levied as of July 1 with a legal, enforceable claim against the taxpayer and/or property. These taxes are recognized as revenue when received during the fiscal year and also estimated to be received within sixty days after the end of the fiscal year. Amounts estimated to be received between sixty days and one year after the end of the fiscal year are recorded as deferred revenue. An allowance for uncollectibles is recorded for taxes estimated not to be collectible within one year after the end of the fiscal year. Other tax revenues, including taxpayer-assessed revenues such as earned income taxes, are recognized as revenue when received during the fiscal year or soon enough thereafter to be susceptible to accrual. - 11 - 11 u A BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) A JUNE 30, 1999 2. Summary of significant accounting policies (Cont'd.) Revenue - State sources ® State subsidies due the District as current fiscal year entitlements are recognized as revenue in the current fiscal year. Revenue - Federal sources Federal program funds applicable to expenditures in the current fiscal year but expected to be received in the next fiscal year are recognized as revenue in the current fiscal year. Inter-fund transactions 04 Expenditures by the General Fund for the benefit of other funds are reflected in the respective statements of revenue and expenditures/expenses, based on management's estimates. The District does not attempt to allocate all costs which benefit the other funds due to the difficulties associated with the measurement of such benefits. fib Pension plan Substantially all full-time and part-time employees of the District participate in a cost-sharing multiple employer defined benefit pension plan. The District recognizes expenditures or expenses equal to its contractually-required contributions, subject to the modified accrual basis of accounting in governmental 4# funds. 3. Cash and investments Cash (other than $ 80 cash on hand) consists of checking accounts in financial institutions and pooled funds in which the Di strict owns a prorata share of the fund assets and is categorized as follows: Carrying Bank Value Balance Insured (FDIC) $ 200,000 $ 200 000 • Collateral held in the District's name -0- , -0- Collateral not held in the District's name 249,709 359,355 Pooled funds 449,709 559,355 3,147,904 3,594,987 $ 3,597,613 $ 4,154,342 - 12 - ®!..- BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) 4 JUNE 30, 1999 3. Cash and investments (Cont'd.) For purposes of the Food Service Fund statement of cash flows, cash consists of db a checking account and pooled funds. Investments, which are presented at fair value, are as follows: Fair Amortized Value Cost U.S. Government guaranteed bonds $ 23,521,679 $ 23,500,000 Repurchase agreement (pooled) 4,898,711 4,898,711 Pennsylvania Local Government Investment Trust 3,280,758 3,280.758 $ 31,701,148 $ 31,679,469 Investments are categorized as follows: Insured (U.S. Government guaranteed) $ 23,521,679 $ 23,500,000 Collateral held in the District's name _0- -0- Collateral not held in the District's name -0- _0- 23,521,679 23,500,000 w Pooled investments 8,179,469 8,179,469 $ 31,701,148 $ 31,679,469 The types of authorized investments are limited by state regulations. Investment b policies followed during the year did not significant ly alter the cat egorization of investments shown above. 4. Accounts receivable Accounts receivable are as follows: b General Food Service Fund Fund Local sources Earned income taxes $ 569,654 $ - r _ Other items 19,081 - State sources 186,408 2,839 Federal sources 76,547 26,022 Other items 105.689 $ 957,379 $ 28.861 b - 13 - 4& 10 Is 10 11 G 11 0 110 1110 BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1999 5. Delinquent taxes receivable Delinquent taxes receivable and the related deferred revenue are as follows: Real estate tares $ 359,177 occupation, residence and per capita taxes 436,354 Delinquent taxes receivable 795,531 Allowance for taxes estimated not to be collectible within one year 375,531 Estimated to be collectible within one year 420,000 Estimated to be collectible within sixty days 150,000 Deferred revenue, delinquent taxes $ 270,000 6. Land, buildings and equipment Changes in land, buildings and equipment were as follows: 1998 Additions Disposals June 30, 1999 July 1, Land and improvements $ 326,110 $ - $ - $ 326,110 Buildings and systems 13,007,900 486,771 (120,551) 13,374,120 3 290,259 186,988 Equipment (15,460) 3.461.787 General fixed assets $ 16,624,269 $ 6736759 $ (136,011) $ 17,1626017 Food service equipment $ 371,093 $ -0- $ -0- $ 371,093 The above amounts include approximately $ 110,000 for the Distric t's Centerville property. The District is in the process of selling that proper ty, pending all necessary approvals. 7. Bonds and notes payable Changes in bonds and notes payable were as follows: Scheduled End of Year suances Redemptions I June 30. 1999 Interest Rates s Description July 1, 1999 Fixed rates 1997 Series $ 4,580,000 1998 Series - Variable rates (Emmaus General Authority) 1989 F-14 Subseries 1989 H-13 subseries 1999 Series $ 4,580,000 $ - $ (195,000) $ 4,385,000 5.075% 9,995,000 - 9,995,000 3.700 to 4.650% 10,000,000 - 10,000,000 4.00096 5,000,000 - 5,000,000 4.000% 5.000 000,000 - 51000.000 4.000% $ 29,995.000 $ (195.000) $ 34,380,000 14 - • BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1999 n 1b 7. Bonds and notes payable (Cont'd.) Scheduled debt servi ce requirements are as follows: Fixed Rates Variable Rates Year Ending June 30 Principal Interest Principal Interest Total 2000 $ 710,000 $ 645,359 $ 35,000 $ 800,000 $ 2,190,359 2001 740,000 614,276 15,185,000 498,600 17,037,876 2002 770,000 581,503 195,000 191,200 1,737,703 2003 810,000 547,045 205,000 183,400 1,745,445 2004 840,000 510,798 210,000 175,200 1,735,998 2005 - 2009 4,815,000 1,942,512 1,205,000 742,000 8,704,512 2010 - 2014 2,890,000 1,021,641 1,510,000 477,600 5,899,241 2015 - 2018 2,805,000 324,896 1,455,000 148.800 4,733,696 $ 1463801000 $ 6,188.030 $ 20,000,000 $ _3"216, 800 $ 43 6784.1830 Proceeds of the bonds and notes issued during the year ended June 30, 1999 will be used for construction and improvements to facilities and for new equipment. The District is proceeding with plans to build a new High School, and anticipates opening bids in March 2000 ($ 30,500,000 current estimated cost). Interest payments on the variable rate bonds and notes will be paid from the Capital Projects Fund, including $ 393,918 during the year ended June 30, 1999. The 1989 Subseries bonds ($ 15,000,000) pay interest at a variable rate of .55% above the "weekly rate", not to exceed 15.00%. These subseries bonds are subject to mandatory repayment dates of November 1, 2000 ($ 10,000,000) and February 1, 2001 ($ 5,000,000). The District was required to obtain irrevocable letters of credit from KBC Bank N.V.. These letters of credit are to provide funds for the repayment of the 1989 Subseries bonds, if other financing has not been obtained. The letters of credit, if drawn, pay interest at a variable rate not to exceed 20.00%. The 1999 Series of notes pay interest at a variable rate of .5596 above the "weekly rate", not to exceed 25.00%. The bonds and notes payable contain options which would allow the District to call any or all remaining bonds and notes as follows: Description Callable on or After 1997 Series Not callable 1998 Series October 1, 2003 1989 Subseries Requires issuer approval V/ 1999 Series Upon 45 days notice - 15 - V r?? IA 1^ BIG SPRING SCIIOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1999 8. Compensated absences I Changes in compensated absences were as follows: 144 [7 U71 July 1, 1998 Net Chance June 30. 1999 General Long-Term Debt Teachers $ 553,347 $ (69,164) $ 484,183 Custodians 58,589 (1,104) 57,485 Secretaries 73,256 (4,037) 69,219 Aides 16,390 (835) 15,555 Administrators 65,128 1.480 66.608 $ 766,710 $ (73,660) $ 693,050 Food Service Fund $ 854137 $ (6,297) $ 78,840 Payments for compensated absences recorded in General Long-Term Debt are made through General Fund expenditures in the year the absence is taken or the employee retires. At retirement or death, while in School District service, employees (with at least 10 years service in the School District) or their beneficiaries shall choose one of the following options (subject to a maximum of $ 12,000 for administrators and $ 6,500 for all other employees) : 1. Accumulated unused sick leave days times $ 50 per day 2. Number of full years of service in the District times $ 150 per year is 10 d 9. Pension plan The District contributes to the Public School Employees' Retirement System (the System), a governmental cost sharing multiple-employer defined benefit pension plan. The plan is under the provisions of the PSERS Code (the Code), as amended. The plan provides retirement and disability, legislatively mandated ad hoc cost- of-living adjustments, and healthcare insurance premium assistance to qualifying annuitants. The System issues a comprehensive annual financial report that includes financial statements and required supplementary information for the plan. A copy of the report may be obtained by writing to PSERS, P.O. Box 125, Harrisburg, PA 17108-0125. The contribution policy is established by the Code and requires contributions by active members and employers. Active members are required to contribute 5.25 percent of their qualifying compensation if they joined the plan before July 22, 1983, and 6.25 percent if they joined on or after that date. Contributions required of employers are based upon an actuarial valuation. - 16 - c'n • BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1999 9. Pension plan (Cont'd For the fiscal year ended June 30, 1999 the employer contribution rate was 6.04 4 percent of covered payroll, composed of 5.89 percent for pension benefits and .15 Percent for health insurance premium assistance. The District's contributions to PSERS for the years ending June 30, 1999, 1998 and 1997 were $ 703,008, $ 995,585 and $ 1,175,594, respectively. Those amounts are equal to the required contribution for each year. fi 10. Postemployment benefits other than pension benefits Under the negotiations agreement with Big Spring Education Association, the District shall provide for continuance of health care insurance after retirement until age 65. This health care insurance shall be at the retiree's expense, except that employees who retire after thirty or more years with the District, N shall have up to five years of health care insurance benefits provided on the basis of the District paying 50% of the cost and the retiree paying 503 of the cost. The District finances this benefit on a pay-as-you-go basis. For the year ended June 30, 1999 the District incurred a total cost of $ 22,004 to provide this benefit to 13 participants. 11. Risk management The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District maintains commercial insurance coverage covering each of those risks of loss. Management believes such coverage is ?J sufficient to preclude any significant uninsured losses to the District. Settled claims have not exceeded this commercial coverage in any of the past three fiscal years. For State unemployment compensation laws, the District is self-insured, which is a common practice for local governmental units. Any unemployment claims are paid by the District on a quarterly basis as incurred. For workers' compensation insurance, approximately 80 Districts participate in a public entity risk sharing pool (School Districts Insurance Consortium) for processing claims and obtaining reinsurance through commercial insurance carriers. Under this plan, the District's annual cost should not exceed standard commercial II insurance rates. Over the past three years, the District's health insurance plan has evolved from a traditional (premium only) plan to the current plan which allows each participant to choose one of the three coverage options available through South Central Trust. Reserves remaining in the traditional plan at June 30, 1999 were Qi approximately $ 100,000. - 17 - IA BIG SPRING SCHOOL DISTRICT NOTES TO FINANCIAL STATEMENTS (Cont'd.) JUNE 30, 1999 IIA 11. Risk management (COnt'd.) South Central Trust is not a risk sharing pool. The Trust was established for processing claims and obtaining reinsurance through commercial insurance carriers. The Trust has reinsurance for claims in excess of $ 75,000 specific (per person) and 125% aggregate (estimated District annual cost). A summary of District transactions with the Trust is as follows: District balance, July 1, 1998 District payments to the Trust Rebate income Interest income Total receipts Claims paid by the Trust stop loss premiums (reinsurance) Administrative and other fees Total payments District balance, June 30, 1999 $ 383,371 $ 1,309,361 2,283 16,518 1,328,162 992,821 85,421 70.756 1,148,998 $ 562,535 District management considers the balance to be adequate for unpaid claims. Therefore, no amounts are presented in these financial statements as due to or due from the District as of June 30, 1999. 12. commitments and contingencies The District's contract with its teaching staff is scheduled to expire in June 2001. In the normal course of business, the District is subject to legal disputes and claims. The District does not anticipate any material losses from any pending or threatened litigation. In the normal course of preparing for the subsequent school year, the District has awarded bids for various supplies, fuel contracts, etc. No major commitments in excess of routine requirements have been made by the District. The District is also audited by the State's Department of the Auditor General. Findings, if any, from these audits could result in the repayment of funds, or the receipt of additional funds. - 18 - v 0 BIG SPRING SCHOOL DISTRICT REQUIRED SUPPLEMENTARY INFORMATION JUNE 30, 1999 The Year 2000 issue results from a computer's inability to process year-date data n accurately beyond the year 1999. The Year 2000 problem can also exist in equipment that has embedded computer chips, e.g. phone systems, fax machines, elevators, HVAC systems, security systems, fire detection systems, transportation equipment, etc. The District has completed an inventory of computer systems and other equipment ?!+ that may be affected and that are necessary to conducting District operations. The District has implemented verification procedures to test the accuracy of information received from its vendors, service providers, bankers, customers and other third-party organizations with whom it exchanges date-dependent information because these organizations also must become Year 2000 compliant. The District has not expended, and does not currently anticipate expending, a significant amount resolving Year 2000 issues. Because of the unprecedented nature of the Year 2000 issues, its effects and the success of related remediation efforts will not be fully determinable until the year 2000 and thereafter. Management cannot assure that the District is or will Ci be year 2000 ready, that the District's remediation efforts will be successful in whole or in part, or that the parties with whom the District does business will be year 2000 ready. ¦o IV It - 19 - 0 0 0 0 w hi 4;+ 0 u 9 5 S4