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BIG SPRING SCHOOL DISTRICT
FINANCIAL STATEMENTS
YEAR ENDED JUNE 30, 2010
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TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS' REPORT IAR - 1 to IAR - 2
MANAGEMENT'S DISCUSSION AND ANALYSIS MDA - 1 to MDA - 14
BASIC FINANCIAL STATEMENTS
District-wide financial statements
Statement of net assets FS - 1
Statement of activities FS - 2
Fund financial statements
Balance sheet - governmental funds FS - 3
Reconciliation of the governmental funds balance sheet
to the statement of net assets FS - 4
Statement of revenues, expenditures, and changes
in fund balances - governmental funds FS - 5
Reconciliation of the governmental funds statement of revenues, expenditures,
and changes in fund balances to the statement of activities FS - 6
Statement of net assets - proprietary funds FS - 7
Statement of revenues, expenses, and changes in net assets - proprietary funds FS - 8
Statement of cash flows - proprietary funds FS - 9
Statement of net assets - fiduciary funds FS - 10
NOTES TO FINANCIAL STATEMENTS FS - 11 to FS - 31
OTHER REQUIRED INFORMATION
Budgetary comparison information - general fund ORI -1
Other post employment benefit plans ORI -2
Greenawalt & Company, P.C.
CERTIFIED PUBLIC ACCOUNTANTS James E. Lyons
Howard R. Greenawalt
Since 1955 Deborah J. Kelly
Scott J. Christ
Creedon R. Hoffman
INDEPENDENT AUDITORS' REPORT
Board of School Directors
Big Spring School District
Newville, Pennsylvania
We have audited the accompanying financial statements of the governmental activities, the business-type activities,
each major fund, and the fiduciary funds of Big Spring School District as of and for the year ended June 30, 2010,
which collectively comprise the District's basic financial statements as listed in the table of contents. These financial
statements are the responsibility of the District's management. Our responsibility is to express opinions on these
financial statements based on our audit. The prior year summarized comparative information has been derived from
the District's June 30, 2009 financial statements and, in our report dated November 10, 2009 we expressed
unqualified opinions on the respective financial statements of the governmental activities, the business-type activities,
each major fund, and the fiduciary funds.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and the standards applicable to financial audits contained in Government Auditing Standards, issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our
opinions.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective
financial position of the governmental activities, the business-type activities, each major fund, and the fiduciary funds
of Big Spring School District, as of June 30, 2010, and the respective changes in financial position and, where
applicable, cash flows thereof for the year then ended in conformity with accounting principles generally accepted in
the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated November 30, 2010, on
our consideration of Big Spring School District's internal control over financial reporting and our tests of its compliance
with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control over financial reporting and compliance and the results
of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That
report is an integral part of an audit performed in accordance with Government Auditing Standards and should be
considered in assessing the results of our audit.
IAR - 1
400 West Main Street . Mechanicsburg, PA 17055 - 717.766.4763 . Fax 717.766.2731
62 West Pomfret Street . Carlisle, PA 17013 e 717.243.4822 . Fax 717.258.9372
www.greenawalt.cc
Board of Directors
Big Spring School District
Management's discussion and analysis on pages MDA - 1 through MDA - 14 and other required information on pages
ORI - 1 and ORI - 2 are not a required part of the basic financial statements but are supplementary information
required by accounting principles generally accepted in the United States of America. We have applied certain limited
procedures, which consisted principally of inquiries of management regarding the methods of measurement and
presentation of the required supplementary information. However, we did not audit the information and express no
opinion on it.
GREENAWALT & COMPANY, P.C.
November 30, 2010
Mechanicsburg, Pennsylvania
IAR - 2
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
This discussion and analysis provides an overview of the District's financial performance for the year ended
June 2010. The report format is in accordance with GASB Statement No. 34, Basic Financial Statements -
and Management's Discussion and Analysis -for State and Local Governments. Management's Discussion
and Analysis (MD&A) includes comparisons of financial position at June 2010, 2009 and 2008. The
MD&A also includes comparisons of current year financial activities to the previous year. The 2009 and
2008 amounts have come from our prior year MD&A, and are otherwise not a part of the June 2010
financial statements. Please read our discussion and analysis in conjunction with the District's financial
statements, which begin on page FS-1. To preserve readability, dollar amounts in comparative tables
derived from the financial statements are presented in millions.
FINANCIAL HIGHLIGHTS
Debt Svc, $4,079,944
Community Svc, $27,166
Stu Act& Athl, $604,254
Othr Supt Svc, $26,981
Central Svc, $70,580
Stu Trans Svcs, $2,292,507
2009-10 Expenditures ($40,130,114)
Opn & Maint, $3,597,029
Business, $473,871
Pupil Health, $417,044
Admin, $2,285,608
Staff Svcs, $1,406,464
Student Svcs, $872,447
High Ed, $550
Interfund Wer, $2,783,962
Other Instr, $103,635
Regular Ed, $14,964,337
Special Ed, $5,545,712
- Voc Ed,
$578,023
MDA - 1
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
2008-09 Revenue $38,450,349
Federal
2%
State
43% Local -
Taxes
52%
loca -
Other
3%
2009-10 Revenue $40,964,281
Federal
4%
State
39%
OtherLoca
4%
Local Taxes
53%
General Fund revenues for 2009-10 increased from $38,450,349 to $40,964,281 or 6.5% from 2008-09;
expenditures and transfers-out increased from $38,338,219 in 2008-09 to $40,130,114 in 2009-10 or 4.7%
from the prior year. The District added $834,167 to the fund balance for a total of $2,969,191 as of June 30,
2010. The current unreserved-undesignated fund balance is approximately 7.2% of the estimated 2010-11
General Fund budget of $41,000,000 and is within the 8% maximum required under state law.
The revenue graphs above shows the story of decreasing support from the Commonwealth as an overall
percentage of the District's budget. The difference is picked up by local taxes and federal funds. The federal
portion of the revenue budget grew from 2% to 4%, principally as a result of the ARRA funds. Almost $1.1
million of ARRA funds displaced Commonwealth basic education subsidy. Obviously, this creates a
challenge for the Commonwealth to replace those funds next year and forces the District to consider a
possible decrease in funding from the Commonwealth in 2010-11.
The economy's impact on the District has been most evident in two areas: investment earnings and EIT
taxes. The District collected $4.60 million in EIT taxes 2007-08, $4.12 million in 2008-09 and $4.26 million
in 2009-10. The decline in 2008-09 revenues wasn't realized until the 2009-10 Budget was already enacted
leaving a significant shortfall from the $4.5 million budget amount. In 2007-08 the District's investment
income was over $271,000; the investment income for 2009-10 was only $38,000.
The Capital Reserve Fund started the year at $6,548 and the district made three transfers to the fund; one
during the year and two more as part of the year-end closeout with the intent of funding needed capital
repairs and renovations. The 2009-10 Budget anticipated approximately $1,200,000 for capital reserves with
the balance coming from unexpected revenue in warehouse taxes and construction reimbursement from the
state. The ending balance was $2,325,265.
MDA-2
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
The District's healthcare expenses through the South Central Trust (SCT) held relatively steady compared to
last year with a very small decrease in actual claims experience. This allowed the District to increase
reserves in SCT by $250,000.
In the 2007-2008 fiscal year, the Big Spring School District completed a multi-year process that included
opening a new High School, renovating the old High School into a Middle School and renovating the old
Middle School into Mount Rock Elementary School. The District made its last payment on the 1997 Series
bonds in March 2009; however, that millage was continued in the 2009-10 Budget in order to support the
possible expansion at Newville and replacement of the Plainfield building. In December 2009 the Board
approved bids for the expansion and renovation at Newville totaling $2,774,334. Because the Board was
still considering a possible Plainfield replacement, the District arranged a short term loan of up to $3.5
million with Orrstown Bank to support the continuing costs of the Newville project.
The Board position on Plainfield replacement began to reverse as the economy went bad and enrollment was
in a slow but steady decline. In June 2010 the Board decided to stop the Plainfield planning process, add 2
more classrooms to the Newville project and directed the administration to develop an elementary school
reconfiguration using two K-3 buildings, one 4-5 building to complement the existing MS and HS.
Reorganization would allow each elementary building to focus on fewer grade levels and assist in
maintaining even class sizing should a continued drop in enrollment cause a reduction in staffing.
In October 2010 the District sold $9,240,000 in bonds that included refinancing the existing 2005 bonds
with a one-time savings of $119,000 to occur in 2010-11. The proceeds also paid off the Orrstown note used
to pay for the Newville project, provided funds needed to add the two additional classrooms to Newville,
add bathrooms and furniture to Mount Rock, upgrade technology in both buildings to support higher
utilization under possible reorganization and purchase 63 acres adjacent to the existing campus for future
use. Standard and Poor's rating of the District is A+/Stable.
The District completed its third year under Act 1 of the Special Session of 2006. Act 1 places a limit on
future increases in the District's real estate taxes and displaces a selected amount of local real estate taxes
with gaming funds. As part of Act 1, the District received $770,051 in gaming monies in 2009-10 compared
with $770,266 in 2008-09; these funds were distributed in an equal amount of $133.65 to each qualified
homestead/farmstead property.
In 2008-09 the District did not request an exception to the Act 1 index. In 2009-10 the economy continued
to devastate the PSERS retirement system and steep increases in employer contributions were forecast. With
few reserves, the District decided to take a small .03 mill exception for 2010-11 to compensate for the
increasing PSERS rate. Overall, taxes increased from 15.455 mills to 16.072 mills or 4%.
MDA - 3
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
On the expense side, several areas performed better than expected. While the Regular Education program
has almost $470,000 left over, in reality that was a result of a reduced PSERS rate compared to the
forecasted rate in effect at budget time. One area of significant savings is in 2600 Operation & Maintenance
program. The principal savings here are from energy savings realized from the geothermal project installed
under the Guaranteed Energy Savings program and an enhanced monitoring program focusing on energy
use. Over the past year the District has reduced heating set points, increased A/C set points and closed
buildings for 3-days each week during the summer.
The table below shows the original budget before any adjustments and then expenses by program (function)
and the actual spent (or received) at year end.
2009-10 Budget Actual A
Income
Local Tax $ 21,487,784 $ 21,824,617 $ 336,833
Other Local 998,000 1,430,369 432,369
State 16,336,417 15,838,355 (498,062)
Federal 1,087,268 1,870,940 783,672
Expenses
Regular Ed 15,433,427 14,964,337 469,090
Special Ed 5,354,553 5,545,712 (191,159)
Voc Ed 662,763 578,023 84,740
Other Instr 180,349 103,635 76,714
High Ed 0 550 (550)
Student Svcs 917,959 872,447 45,512
Staff Svcs 1,319,133 1,406,464 (87,331)
Admin 2,301,504 2,285,608 15,896
Pupil Health 482,296 417,044 65,252
Business 588,615 473,871 114,744
Opn & Maint 4,282,489 3,597,029 685,460
Stu Trans Svcs 2,244,781 2,292,507 (47,726)
Central Svc 43,802 70,580 (26,778)
Othr Supt Svc 36,000 26,981 9,019
Stu Act & Athletic 603,656 604,254 (598)
Community Svc 23,200 27,166 (3,966)
Debt Svc 4,682,248 4,079,944 602,304
Interfund Xfer 552,694 2,783,962 (2,231,268)
Budget Reserv 200,000 0 200,000
MDA-4
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
USING THESE FINANCIAL STATEMENTS
This report contains a series of financial statements. The statement of net assets and the statement of
activities are on pages FS-1 and FS-2. These statements provide information about the District as a whole,
and present a longer-term view of District finances than fund financial statements. Fund financial statements
are on pages FS-3, FS-5 and FS-7 through FS-10. For governmental funds, the statements show how District
services have been financed in the short term, as well as the amount remaining for future spending.
Proprietary funds statements provide information about non-governmental operations, in this case food
service. The fiduciary funds statement reports amounts held in trust by the District for student activities.
Page FS-4 reconciles total governmental fund balances to total net assets of governmental activities. Page
FS-6 reconciles the total net change in governmental fund balances to the change in net assets of
governmental activities.
District wide Financial Statements
District-wide statements present financial activities and the results of those activities in two categories,
governmental and business-type. Capital assets (land, buildings, improvements, furniture and equipment)
are included with all other assets. Long-term debt is included with all other liabilities. This is distinctly
different from the fund statements in which assets and liabilities are separated into various funds such as
General and Capital Reserve.
In the district-wide statements, the approach to measurement of revenues and expenses is similar to that
used in the private sector and is referred to as the accrual basis of accounting. This is disclosed further in the
notes to financial statements.
Fund Financial Statements
Fund statements provide financial information about the District's funds rather than the District as a whole.
There are three types of funds: Governmental, Proprietary and Fiduciary. The use of each type of fund is
disclosed in the notes to financial statements. Unlike district-wide statements that report revenues on the
accrual basis, the fund statements report revenues only to the extent cash has been received, or is expected
to be received in the near future.
MDA - 5
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
THE DISTRICT AS A WHOLE
Statement of Net Assets
Total net assets were $23,616,384 at June 30, 2010, $20,285,811 at June 2009, and $18,881,061 at June 30,
2008 which is an increase of $3,330,573 from June 2009 and $1,404,750 from June 2008. The following
summarizes the Statement of Net Assets (page FS-1).
Governmental Business-type
Activities Activities Totals
2010 2009 2008 2010 2009 2008 2010 2009 2008
Current and other assets $10.0 $ 7.9 $ 8.8 $ 0.3 $ 0.1 $ 0.2 $10.3 $ 8.0 $ 9.0
Capital assets 52.5 52.6 53.7 0.6 0.7 0.7 $53.1 $53.3 $54.4
Total assets $ 62.5 $ 60.5 $ 62.5 $ 0.9 $ 0.8 $ 0.9 $ 63.4 $61.3 $ 63.4
Current and other liabilities $ 7.2 $ 3.3 $ 3.6 $ 0.1 $ - $ - $ 7.3 $ 3.3 $ 3.6
Long-term liabilities 32.5 37.7 40.8 - - 0.1 32.5 37.7 40.9
Total liabilities 39.7 41.0 44.4 0.1 - 0.1 39.8 41.0 44
5
.
Capital assets (net of related debt) 17.6 15.9 14.0 0.6 0.7 0.7 18.2 16.6 14.7
Unrestricted 5.2 3.6 4.1 0.2 0.1 0.1 5.4 3.7 4.2
Total net assets 22.8 19.5 18.1 0.8 0.8 0.8 23.6 20.3 18.9
Total liabilities and net assets $ 62.5 $ 60.5 $ 62.5 $ 0.9 $ 0.8 $ 0.9 $ 63.4 $61.3 $ 63.4
Net assets are the difference between assets and liabilities, and represent resources that can be used to pay
for future operations and capital improvements. The majority of our 2010 net assets, $18,211,182 out of
$23,616,384 total, are invested in capital assets (net of related debt).
MDA - 6
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
Statement of Activities
The following summarizes the Statement of Activities (page FS-2). It shows that total net assets increased
by $3,330,573 during 2010 and by $1,404,750 during 2009.
Program revenues
Charges for services
Operating grants and contributions
Capital grants and contributions
General revenues
Taxes
Earnings on investments
State general subsidies
Total revenues
Direct expenses
Excess revenues (expenses) before transfers
Transfers between activities
Change in net assets
Governmental Business-type
Activities Activities Totals
2010 2009 2010 2009 2010 2008
$ 0.4 $ 0.4 $ 0.8 $ 0.9 $ 1.2 $ 1.3
8.3 7.0 0.6 0.5 8.9 7.5
1.5 1.1 - - 1.5 1.1
22.1 20.5 - - 22.1 20.5
- 0.2 - - - 0.2
8.9 9.5 - - 8.9 9.5
41.2 38.7 1.4 1.4 42.6 40.1
37.9 37.2
3.3 1.5
1.4
1.5 39.3 38.7
(0.1) 3.3 1.4
- (0.1) - 0.1 - -
$ 3.3 $ 1.4 $ - $ - $ 3.3 $ 1.4
The change in net assets is the difference between revenues and expenses using the accrual basis of
accounting.
MDA - 7
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
The following summarizes expense information from the Statement of Activities (page FS-2). Direct
expenses represents the actual cost of providing the services while the net expense represents the amount of
cost that is not recovered through program revenues, meaning user charges, grants and contributions. The
net expense must be recovered through general revenues, primarily taxes and state general subsidies.
Amounts not recovered reduce funds available for future years.
Governmental Activities
Direct Program Net
Expenses Revenues Expense
2010 2009 2010 2009 2010 2009
Instruction $ 23.2 $ 22.7 $ 6.6 $ 5.2 $ 16.6 $ 17.5
Instructional student support 2.9 2.8 0.2 0.2 2.7 2.6
Administrative and financial support 3.1 2.7 0.1 0.1 3.0 2.6
Operation and maintenance of plant 4.1 4.4 0.1 0.1 4.0 4.2
Pupil transportation 2.3 2.3 1.6 1.7 0.7 0.6
Student activities 0.8 0.6 0.1 0.1 0.7 0.6
Community services - - - - - -
Interest on long-term debt 1.5 1.6 1.5 1.1 - 0.5
$ 37.9 $ 37.2 $ 10.2 $ 8.5 27.7 28.7
Transfers to business-type activities
- 0.1
Net expenses - governmental activities 27.7 - 28.8
State general subsidies revenues 8.9 9.5
Total needs from taxes and other local sources $ 18.8 $ 19.3
Business-type Activities
Direct Program Net
Expenses Revenues Expense
2010 2009 2010 2009 2010 2009
Food service $ 1.4 $ 1.5 $ 1.4 $ 1.4 $ - $ 0.1
Transfers from governmental activities - (0.1)
Net expenses - business-type activities $ - $
MDA - 8
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
THE DISTRICT'S FUNDS
Governmental Funds - fund balances
General fund - reserved
General fund - designated
General fund - undesignated
Capital reserve fund - undesignated
Capital projects fund - reserved
Governmental Fund Balances
2009-2010 2008-2009
2010 2009 2008 Change Change
$ 0.3 $ 0.1 $ 0.5 $ 0.2 $ (0.4)
0.6 - - 0.6 -
2.1 2.0 1.5 0.1 0.5
2.3 - 0.8 2.3 (0.8)
(1.4) - - (1.4) -
$ 3.9 $ 2.1 $ 2.8 $ 1.8 $ (0.7)
Total reserved $ (1.1) $ 0.1 $ 0.5 $ (1.2) $ (0.4)
Total designated 0.6 - - 0.6 -
Total undesignated 4.4 2.0 2.3 2.4 (0.3)
$ 3.9 $ 2.1 $ 2.8 $ 1.8 $ (0.7)
Changes from 2009 to 2010
The General Fund ended 2010 with a fund balance of $2,969,191, this is an increase of $834,167 over the
2009 balance. The Board intends to commit $554,000 to future PSERS expense.
The Capital Reserve Fund, now known as the Capital Projects Fund as a result of GASB 54, started the year
at $6,548 and the District made three transfers to the fund; one during the year and two more as part of the
year-end closeout with the intent of funding needed capital repairs and renovations. The ending balance was
$2,325,263.
The negative fund balance in the Capital Projects Fund, now Construction Fund, was due to not borrowing
funds until construction payments were due. The $3,500,000 draw-down non-revolving line-of-credit was
accessed as needed until permanent financing was obtained in October 2010.
The District self funds its health insurance plans through the South Central Trust and ended the year with
$1,460,576 in the trust prior to audit. In addition to providing summer insurance coverage for the
professional staff, this amount funds approximately two months of claims and fees, with any excess
reserved for future claims. The reserved amount increased to $350,000.
MDA - 9
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
Changes from 2008 to 2009 (Previous Year)
For 2008-09 the General Fund projected no change in undesignated fund balance; at June 2009 the fund
balance was $2,135,024. This was an $112,130 increase from June 2008 and was mostly due to $249,450 in
extra revenues from real estate taxes and federal grants.
The Capital Reserve Fund decrease of $799,280 was mostly due to expenditures related to a boiler
replacement project in the DAO and Middle School.
General Fund Budget
The following summarizes the budgetary comparison information presented on page ORI-1, along with
comparisons to the previous year.
Final Budget Actual Amount Variance
2010 2009 2010 2009 2010 2009
Total revenues
Total expenditures
Excess revenues (expenditures)
Other financing sources (uses)
Net change in fund balance
$ 40.0 $ 38.2
37.5 37.9
2.5 0.3
(2.5) (0.3)
$ 40.9 $ 38.4
37.3 38.2
3.6 0.2
(2.8) (0.1)
$ 0.8 $ 0.1
$ 0.9 $ 0.2
0.2 (0.3)
1.1 (0.1)
(0.3) 0.2
$ 0.8 $ 0.1
In 2010, actual revenues exceeded the budgeted amount by $963,689. Actual expenditures were $156,746
under the budgeted amount, and transfers to other funds were $286,268 over the budgeted amount.
CAPITAL ASSETS
When construction projects are completed, the construction in progress balances are moved into the
respective categories, and depreciated over their estimated useful lives. In February 2009, the Board
awarded bids for the replacement of the heating & air conditioning in the DAO and the boilers in the Middle
School; these projects totaled $806,708 and were completed during the 2009-10 year.
In December 2009 the Board approved a project adding a 2-story 6-classroom addition to Newville to
relieve the dangerous overcrowding. It accepted bids in January for and awarded those bids in February with
an expected completion of November 2010. Because of the economy and falling enrollment, the Plainfield
project was reduced in scope November 2009 and finally cancelled in June 2010. At that time the Board
decided to add the 2 classrooms to the Newville project bringing the total to $3.3 million.
MDA - 10
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
Governmental activities
Land
Construction in progress
Buildings and improvements
Furniture and equipment
Library books
Computer equipment
Business-type activities
Furniture and equipment
Capital assets (net of depreciation)
2009-2010 2008-2009
2010 2009 2008 Change Change
$ 0.5 $ 0.5 $ 0.5 $ - $ _
1.3 0.5 - 0.8 0.5
49.0 49.8 51.3 (0.8) (1.5)
1.2 1.2 1.3 - (0.1)
0.2 0.2 0.2
0.3 0.4 0.4 (0.1) -
$ 52.5 $ 52.6 $ 53.7 $ (0.1) $ (1.1)
Capital assets in the governmental activities were $52,516,867 at June 2010, $52,607,816 at June 2009, and
$53,741,240 at June 2008. During 2010 there was $1,931,648 in capital assets purchased and $2,022,597 of
depreciation expense. During 2009, there was $810,288 of capital assets purchased and $1,943,712 of
depreciation expense.
LONGTERM LIABILITIES
The following summarizes the long-term liabilities note to financial statements (starting at page FS-23).
Most of the debt is general obligation bonds issued to pay for capital improvements. The District's ability to
raise future funds through the issuance of debt depends on how existing bonds are rated by the investment
community. Moody's Investors Service, Inc. assigned its municipal bond rating of "Aaa" to the District's
most recent series of general obligation bonds, the 2006 Series issued in March 2006.
2009-2010 2008-2009
2010 2009 2008 Change Chan
ce
Governmental activities
General obligation bonds and notes $ 35.3 $ 37.3 $ 40.5 $ (2.0) $ (3.2)
Compensated absences 0.7 0.4 0.4 0.3 -
Other post employment benefits 0.3 0.1 - 0.2 0.1
Unamortized bond costs - (0.1) (0.1) 0.1 -
$ 36.3 $ 37.7 $ 40.8 $ (1.4) $ (3.1)
MDA - 11
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
Each year, the District pays interest on the debt and a portion of the outstanding bonds and notes, referred to
as redemption. The District made regularly scheduled redemptions of $2,656,846 during 2010, $3,261,326
during 2009, and $3,141,783 during 2008.
Beginning in 2009 is the inclusion of other post employment benefits (OPEB) in our reporting process. This
primarily has to do with purchasing discounted health insurance after retirement through the District. The
District's initial actuarial accrued liability of $3,995,512 is being amortized over a period of 30 years.
Additional detail is available starting at page FS-26 of the notes.
NEXT YEAR'S BUDGET AND ECONOMIC FACTORS
Original Budget
2010-2011 20092010 Cham
Total revenue $ 40.9 $ 39.9 $ 1.0
Total expenditures and other uses 40.7 39.9 0.8
Excess revarues (expenditures) $ 0.2 $ - $ 0.2
The revenue budget for 2010-11 represents a 4% increase from the 2009-10 actual. The real estate millage
rate increases by 0.587 mills, from 15.455 to 16.072. The earned income tax rate remains at 1.65%.
The expenditure budget for 2010-11 represents a 2.6% increase over actual 2009-10. Although the salary
contract increase is 4.35%, other areas in the budget were cut including several positions. This increase
includes anticipated increases in energy, PSERS, healthcare and maintenance of debt service for the
Newville bond issue.
In recent years the District has spent more funds to send our students to external schooling. The District
participates in a consortium that requires tuition payments for special needs placements to those LEAs. The
cost of private schools, to meet our ever increasing special education requirements, increased dramatically
over the past four years.
MDA - 12
BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
Student Tuition
1,200,000.00
1,000,000.00 -
800,000.00 - -
600,000.00
400,000.00
200,000.00
0.00
2006-07
2007-08
2008-09
2009-10
¦ Other LEA/Public 258,582.00 46,543 163,352 337,637
¦ PA Charter 263,535.00 247,076 740,932 805,586
¦ Private Schls 285,865.00 615,618 946,653 1,093,034
¦ Vocational Ed 508,622.00 513,643 545,187 578,023
The increase in PSERS contributions has a major effect on budgets - for Districts and the Commonwealth
since they pay half each. An estimate of our future PSERS liability is shown in the chart below.
PSERS Expense
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
As the District considers reorganization, a review of capital projects needed to support the repair and upkeep
of existing facilities and infrastructure continues. Last year the 5-year Capital Plan included $1.502 million
in various projects across the district and $1.5 estimated for the replacement of single-pane windows in the
Middle School, Mount Rock, DAO and Newville.
MDA - 13
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BIG SPRING SCHOOL DISTRICT
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2010
In 2010 Cumberland County conducted a reassessment of properties. As the District prepares for 2012
Budget, it will need to adjust millage down to equalize revenue after the assessment goes into effect on July
2011.
BSSD Assessed Value History
1,700,000,000
1,600,000,000
1150010001000
1,400,000,000
1,300,000,000
1,200,000,000
1110010001000
11000,000,000
900,000,000
800,000,000
The economic downturn caused unexpected loss of revenues in 2009-10 and those reductions are expected
to stabilize in 2011. However, EIT revenues remain lower than 2009 levels and investment income is no
longer a significant source of revenues.
CONTACTING THE DISTRICT FINANCIAL MANAGEMENT
The District's financial report is intended to provide the readers with a general overview of the District's
finances and to show the Board's accountability for the money it receives. If you have questions about this
report or wish to request additional financial information, please contact the district office of Big Spring
School District, 45 Mount Rock Road, Newville, PA 17241, (717) 776-2000.
MDA - 14
2004 2005 2006 2007 2008 2009 2010 2010R
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BIG SPRING SCHOOL DISTRICT
STATEMENT OF NET ASSETS - PROPRIETARY FUNDS
JUNE 30, 2010
(With Summarized Financial Information for June 30, 2009)
Assets
Cash and cash equivalents
Due from other governments
Other receivables
Inventories
Total current assets
Furniture and equipment (net of accumulated depreciation)
Total assets
Liabilities
Accounts payable
Payroll and benefits payable
Due to other funds
Deferred revenues
Current portion of compensated absences
Total current liabilities
Long-term portion of compensated absences
Total liabilities
Net assets
Invested in capital assets (net of related debt)
Unrestricted
Total net assets
Total liabilities and net assets
Food Service
2010 2009
$ 230,277 $ 177,807
5,448 4,668
354 6,827
45,882 27,946
281,961 217,248
573,590 652,213
$ 855,551 $ 869,461
$ - $ 290
1,883 1,829
230 223
17,340 15,374
7,000 7,000
26,453 24,716
29,825 34,812
56,278 59,528
573,590
225,683 652,213
157,720
799,273 809,933
$ 855,551 $ 869,461
The accompanying notes are an integral part of these financial statements.
FS-7
BIG SPRING SCHOOL DISTRICT
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS - PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2010
(With Summarized Financial Information for the Year Ended June 30, 2009)
Food Service
2010 2009
Operating revenues - Food service revenue $ 805,380 $ 881,775
Operating expenses
Salaries 481,790 465,428
Employee benefits 186,935 223,267
Purchased property service 66,000 63,000
Food and milk 574,786 596,008
Other expenses 6,065 10,384
Depreciation 78,623 87,302
Total operating expenses 1,394,199 1,445,389
Operating income (loss) (588,819) (563,614)
Nonoperating revenues
Earnings on investments 341 735
State sources - social security and retirement subsidies 28,795 28,710
State sources - meal subsidies 42,509 45,626
Federal sources - meal subsidies 367,045 336,135
Federal sources - donated commodities 91,419 82,298
Total nonoperating revenues 530,109 493,504
Income (loss) before transfers (58,710) (70,110)
Transfers from other funds 48,050 64,182
Change in net assets (10,660) (5,928)
Net assets - beginning 809,933 815,861
Net assets - ending $ 799,273 $ 809,933
The accompanying notes are an integral part of these financial statements.
FS-8
BIG SPRING SCHOOL DISTRICT
STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2010
(With Summarized Financial Information for the Year Ended June 30, 2009)
Operating activities
Cash received from users
Cash payments to employees for services
Cash payments to suppliers for goods and services
Net cash provided by (used for) operating activities
Non-capital financing activities
State sources
Federal sources
General fund advances (Due to other funds)
General fund contributed services
Net cash provided by (used for) non-capital financing activities
Capital and related financing activities
Cash payments for equipment
Net cash provided by (used for) capital and related financing activities
Investing activities
Earnings on investments
Net cash provided by (used for) investing activities
Net change in cash and cash equivalents
Cash and cash equivalents - beginning
Cash and cash equivalents - ending
Reconciliation of operating income (loss) to
net cash provided by (used for) operating activities
Operating income (loss)
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities
Depreciation
Donated commodities
Net change in other assets and other liabilities
Other receivables
I nventories
Accounts payable
Payroll and benefits payable
Deferred revenues
Compensated absences
Total adjustments
Net cash provided by (used for) operating activities
Food Service
2010 2009
$ 813,819 $ 877,804
(673,658) (688,904)
(573,658) (587,752)
(433,497) (398,852)
71,293 74,669
366,276 337,065
7 14,851
48,050 64,182
485,626 490,767
(18,642)
- (18,642)
341 735
341 735
52,470 74,008
177,807 103,799
$ 230,277 $ 177,807
$ (588,819) $ (563,614)
78,623
91,419
87,302
82,298
6,473
(17,936)
(290)
54
1,966
(4,987)
155,322
$ (433,497)
(6,132)
2,790
(3,448)
54
2,161
(263)
164,762
$ (398,852)
The accompanying notes are an integral part of these financial statements.
FS-9
BIG SPRING SCHOOL DISTRICT
STATEMENT OF NET ASSETS - FIDUCIARY FUNDS
JUNE 30, 2010
(With Summarized Financial Information for June 30, 2009)
Assets
Cash and cash equivalents
Total assets
Liabilities
Due to student groups
Total liabilities
Net assets
Total liabilities and net assets
Student Activities
2010 2009
$ 151,177
$ 151,177
$ 151,177
151,177
$ 151,177
$ 143,971
$ 143,971
$ 143,971
143,971
$ 143,971
The accompanying notes are an integral part of these financial statements.
FS-10
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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.
The financial statements of Big Spring School District have been prepared in accordance with generally accepted
accounting principles as applied to governmental units. The Governmental Accounting Standards Board (GASB)
is the authoritative standard-setting body for the establishment of governmental accounting and financial reporting
principles. Accounting guidance is also provided through the Comptroller's office for Pennsylvania's Department
of Education. The more significant of these accounting policies are as follows:
Reporting entity
The GASB establishes criteria for determining the activities, organizations and functions of government to be
included in the financial statements of the reporting entity. In evaluating the District as a reporting entity,
management has addressed all potential component units which may or may not fall within the established
criteria. The criteria used to evaluate component units for possible inclusion as part of the District's reporting
entity are:
The economic resources received or held by the separate organization are entirely for the direct benefit of
the District or its constituents.
The District is entitled to (or has the ability to) access a majority of the economic resources received or held
by the separate organization.
The economic resources received or held by the separate organization that the District is entitled to (or has
the ability to) access is significant to the District.
There are no component units that meet all of the above criteria for inclusion in this reporting entity.
FS-11
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Contd.)
Jointly-governed organizations
The District is a participant in three jointly-governed organizations, each of which is a separate legal entity that
offers services to the District and its residents. Each entity serves several school districts, and therefore are not
included in this reporting entity. The entities do not have taxing power, but each is required to adopt an annual
budget, which is funded primarily by its member Districts or others that use its services. Complete financial
statements for these entities can be obtained from their administrative offices.
Capital Area Intermediate Unit provides special education services and programs.
Cumberland Perry Area Vocational Technical School provides vocational and technical education services
and programs.
Capital Tax Collection Bureau provides earned income tax collection services.
Basis of presentation - District-wide financial statements
District-wide financial statements (i.e., the statement of net assets and the statement of activities) present
information on all of the nonfiduciary activities of the District. As a general rule the effect of interfund activity has
been eliminated from these statements. Governmental activities, which normally are supported by taxes and
intergovernmental revenues, are presented separately from business-type activities which rely to a significant
extent, on fees and charges for support.
The district-wide financial statements are presented using the economic resources measurement focus and the
accrual basis of accounting as are the proprietary fund and the fiduciary fund financial statements. Revenues are
recognized when earned and expenses are recognized when a liability is incurred, regardless of the timing of
related cash flows. Real estate and personal taxes are recognized as revenues in the year for which they are
levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the
provider have been met. Net assets (total assets less total liabilities) are used as a practical measure of economic
resources and the operating statement includes all transactions and events that increased or decreased net
assets. Depreciation and amortization are charged as an expense against current operations. Capital assets (net
of accumulated depreciation) and bonds payable (net of unamortized costs) are presented in the statement of net
assets.
The statement of activities demonstrates the degree to which the direct expenses of given functions or programs
are offset by program revenues. Direct expenses are those that are clearly identifiable within a specific function or
program. Program revenues include charges to customers who purchase, use, or directly benefit from goods,
services, or privileges provided by a given function or program. In addition, program revenues include grants and
contributions that are restricted to meeting the operational or capital requirements of a particular function or
program. Taxes and other items not properly included among program revenues are presented as general
revenues.
FS-12
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation - Fund financial statements
Fund financial statements are also provided for all governmental funds, proprietary funds, and fiduciary funds of
the District. Major individual governmental funds and major individual proprietary funds are reported as separate
columns in the fund financial statements. Nonmajor funds, if any, are aggregated and presented in a single
column. Fiduciary funds are reported by fund.
The governmental funds are presented using the current financial resources measurement focus and the modified
accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are received within the current period or soon enough
thereafter to pay liabilities of the current period. For this purpose, the District considers tax revenue to be
available if received within 2 months of the end of the fiscal period. Revenue from federal, state and other grants
designated for payment of specific expenditures is recognized when the related expenditures are incurred;
accordingly, when such funds are received, they are recognized as deferred revenues until earned. Expenditures
generally are recognized when a liability is incurred, as under accrual accounting. However, debt service
expenditures, as well as expenditures related to compensated absences and claims and judgments, are
recognized only when payment is due.
Proprietary funds generally follow standards for accounting and financial presentation for private business
enterprises to the extent that those standards do not conflict with or contradict guidance of the GASB.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and
expenses generally result from providing services and producing and delivering goods in connection with the
fund's principal ongoing operations. Operating expenses for the District's proprietary fund include food production
costs, supplies, administrative costs, and depreciation on capital assets. All revenues or expenses not meeting
this definition are reported as nonoperating revenues and expenses.
Fund accounting
The accounts of the District are organized on the basis of funds, each of which is considered a separate
accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing
accounts which comprise its assets, liabilities, fund equity, revenues, and expenditures, or expenses, as
appropriate. Resources are allocated to and accounted for in individual funds based upon the purposes for which
they are to be spent.
When both restricted and unrestricted resources are available for use, it is the District's general policy to use the
restricted (primarily operating grants) resources first, then unrestricted resources as they are needed.
FS-13
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation - Fund financial statements (Cont'd.)
Fund accounting (Contd.)
The District has the following major types of funds:
Governmental Funds - These funds account for the activities through which most of the District's operations
are provided.
Proprietary Funds - These funds account for the operations of the District that are financed and operated in a
manner similar to private business enterprises.
Fiduciary Funds - These funds account for the assets held by the District as a trustee or agent for individuals,
private organizations and/or governmental units and are therefore not available to support the District's own
programs.
The District presents the following major governmental funds:
The General Fund is the primary operating fund. It accounts for all financial resources except those required
to be accounted for in another fund.
An operating budget is adopted prior to the beginning of each year on a modified accrual basis of
accounting. The General Fund is the only fund for which a budget is legally required.
The Pennsylvania School Code dictates specific procedures relative to budget adoption and financial
statement presentation. The District, before levying annual school taxes, is required to prepare an
operating budget for the succeeding fiscal year. This process includes the publishing of notices by
advertisement, that the proposed budget has been prepared and is "available for public inspection at the
administrative office of the District, and that public hearings are held on the proposed operating budget
which are required to be scheduled at least ten days prior to when final action on adoption is taken by the
Board.
Legal budgetary control is maintained at the sub-function/major object level. The Board may approve
transfers of funds appropriated to any particular item of expenditure in accordance with the Pennsylvania
School Code. Management may amend the budget at the sub-function/sub-object level without Board
approval, provided it is not at a higher level than the Board adopted budget.
In order to preserve a portion of an appropriation for which an expenditure has been committed by a
purchase order, contract or other form of commitment, an encumbrance is recognized. Unused
encumbrances expire at the end of each year.
FS-14
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Basis of presentation - Fund financial statements (Cont'd.)
Fund accounting (Contd.)
Included in the budget are program budgets as prescribed by the federal and state agencies funding the
program. These budgets are approved on a program by program basis by the federal and state funding
agencies. During the year these programs increased both revenues and expenditures of the original
budget by $ 91,123.
The Capital Reserve Fund accounts for transfers from the General Fund and expenditures of those funds for
capital outlays.
The Athletic Fund accounts for athletic revenues and transfers from the General Fund and expenditures of
those funds for athletics.
The District presents the following proprietary fund:
The Food Service Fund accounts for the operations of the cafeterias.
The District presents the following fiduciary fund:
The Student Activities Fund accounts for programs operated and sponsored by various clubs and
organizations within the schools.
Cash and cash equivalents and investments
The District's cash and cash equivalents are considered to be cash on hand, demand deposits (including pooled
investments), and short-term investments with original maturities of three months or less from the date of
acquisition.
The types of authorized investments are limited by State regulations. Pooled investment funds are required to be
operated in accordance with State regulations.
Investments, including pooled investments, are reported at fair value.
Taxes and taxes receivable
Real estate and personal taxes are levied as of July 1 with a legal, enforceable claim against the property and/or
taxpayer. Amounts not collected within six months (December 31) are considered delinquent and submitted to
outside agencies/entities for collection actions.
FS-15
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Receivables and payables between funds
Activity between funds that represent lending/borrowing arrangements outstanding at the end of the fiscal year
are referred to as "due to/from other funds". Any residual balances outstanding between the governmental
activities and business-type activities are reported in the district-wide financial statements as "internal balances".
Any balances between funds are short term items pending periodic repayments.
Inventories and prepaid items
Inventories are presented at the lower of cost or market on a first-in, first-out basis, and are expensed when
consumed. Donated commodities are recognized as revenue and are inventoried at an estimated cost value.
Certain payments, if any, to vendors reflect expenses applicable to future periods and are presented as prepaid
items in both district-wide and fund financial statements.
Capital assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, sidewalks, and
similar items), are presented in the applicable governmental or business-type activities columns in the district-
wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of
more than $ 1,500 and an estimated useful life in excess of one year. Management has elected to include certain
homogeneous groups with individual costs of less than $ 1,500 as capital assets for financial presentation
purposes. In addition, capital assets purchased with long-term debt may be capitalized regardless of the
thresholds established. Such assets are presented at historical cost or estimated historical cost if purchased or
constructed.
Major outlays for capital assets and improvements are capitalized as projects are constructed. The costs of
normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not
capitalized.
Capital assets are depreciated using the straight-line method, allowing for reasonable salvage values on
equipment, over the following estimated useful lives:
Governmental Business-type
Assets Activities Activities
Buildings 40 -
Site improvements 20 -
Furniture 15 15
Machinery and equipment 10 to 15 15
Library books 7 -
Audio visual equipment 6 -
Computer equipment 5 5
FS-16
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Long-term liabilities
In the district-wide financial statements, and proprietary fund types in the fund financial statements, bonds and
notes payable and other long-term obligations are presented as liabilities in the applicable governmental activities
or proprietary fund statement of net assets. Refunding costs and bond discounts are amortized over the life of the
bonds using the effective interest method. Bond issuance costs are presented as deferred charges and amortized
over the term of the related debt.
In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as
bond issuance and refunding costs, as current period expenditures. The face amount of debt issued is presented
as other financing sources while discounts and refunding costs on debt issuances are presented as debt service
expenditures. Issuance costs, whether or not withheld from the actual debt proceeds received, are presented as
support service expenditures.
Net assets
Net assets represent the difference between assets and liabilities. In the district-wide financial statements and
proprietary fund financial statements, net assets are classified in the following categories:
Invested in capital assets (net of related debt) - This category groups all capital assets into one
component of net assets. Accumulated depreciation and outstanding debt that are attributable to the
acquisition, construction or improvement of these assets reduce this category.
Restricted - This category presents external restrictions imposed by creditors, grantors, contributors or
laws or regulations of other governments and restrictions imposed by law through constitutional
provisions or enabling legislation.
Unrestricted - This category presents the net assets of the District, which are not restricted for any
project or other purpose. However, these funds may be internally designated for specific projects or
purposes in the fund financial statements.
Fund balance reserves and designations
In the governmental fund financial statements, reserves and designations segregate portions of the fund balance
that are either not available or have been earmarked for specific purposes. Fund balance reserves and
designations are as follows:
Reserved for prepaid health insurance - This category presents resources already utilized so they are
not considered as current available funds.
FS-17
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Contd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Fund balance reserves and designations (Cont'd.)
Reserved for capital projects - This category presents resources which must be utilized for capital
projects; therefore, they are not considered as current available funds for any other purpose.
Designated for pension plan rate increases - This category presents an amount toward the projected
increases in contractually-required contributions to the pension plan.
Recent accounting standards
In March 2009, the GASB issued Statement No. 54, Fund Balance Reporting and Governmental Fund Type
Definitions. This statement establishes fund balance classifications that comprise a hierarchy based primarily on
the extent to which a government is bound to observe constraints imposed upon the use of the resources
reported in governmental funds. The District is required to implement GASB 54 in its year beginning July 2010.
In March 2009, the GASB issued Statement No. 55, The Hierarchy of Generally Accepted Accounting Principles
for State and Local Governments. This statement incorporates the hierarchy of generally accepted accounting
principles (GAAP) for state and local governments into the GASRs authoritative literature. GASB 55 was effective
upon issuance. The District has implemented this standard in the current year.
In March 2009, the GASB issued Statement No. 56, Codification of the Accounting and Financial Reporting
Guidance Contained in the AICPA Statements on Auditing Standards. The objective of this statement is to
incorporate into the GASB's authoritative literature certain accounting and financial reporting guidance presented
in the AICPA's Statements on Auditing Standards. This statement addresses three issues not included in the
authoritative literature that establishes accounting principles: related party transactions; going concern
considerations; and subsequent events. GASB 56 was effective upon issuance. The District has implemented this
standard in the current year.
Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect certain presented amounts and disclosures.
Accordingly, actual results could differ from those estimates.
Comparative information
Comparative totals for the prior year have been presented in the accompanying financial statements in order to
provide an understanding of changes in the Districts financial position and operations. Certain amounts presented
in the prior year have been reclassified in order to be consistent with current year's presentation. However,
presentations of prior year totals by fund and activity type have not been presented in each of the statements
since their inclusion would make the statements unduly complex and difficult to read. Summarized comparative
information should be read in conjunction with the Districts financial statements for the year ended June 30, 2009,
from which the summarized information was derived.
FS-18
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.)
Subsequent events
In preparing these financial statements, the District has evaluated events and transactions for potential
recognition or disclosure through November 30, 2010, the date the financial statements were available to be
issued.
CASH AND CASH EQUIVALENTS AND INVESTMENTS
Pennsylvania statutes provide for investment of District funds into authorized investment types including U.S.
Treasury bills, other short-term U.S. and Pennsylvania government obligations, and insured or collateralized time
deposits and certificates of deposit. The statutes do not prescribe regulations related to demand deposits;
however, they do allow the pooling of funds for investment purposes.
Custodial credit risk is the risk that in the event of a depository institution failure, the District's deposits may not be
returned to it. The District does not have a formal policy for custodial credit risk. However, the District requires all
deposits in excess of FDIC insurance coverage to be collateralized by the depository institution with approved
collateral as provided by law.
As of June 30, 2010, the District's deposits totaled $ 160,331 and the depository institution balances
totaled $ 533,359. Of the depository institution balances, $ 416,068 was covered by federal depository
insurance and $ 117,291 was collateralized. The pledged collateral is held by the Federal Reserve Bank,
but is not titled in the District's name.
The District also has cash equivalents and investments with the Pennsylvania School District Liquid Asset
Fund (PSDLAF) and Pennsylvania Local Government Investment Trust (PLGIT). PSDLAF and PLGIT
operate as common law trusts established pursuant to the Intergovernmental Cooperation Act and related
statues for the purpose of pooling investments. The fundamental policy of PSDLAF and PLGIT are to
maintain a net asset value of $ 1 per share, but there can be no assurance that the net asset value will
not vary from $ 1 per share. PSDLAF and PLGIT may only purchase securities which are permitted under
PA law. As of June 30, 2010, the District's deposits in PSDLAF and PLGIT totaled $ 4,094,251 and
$ 3,562, respectively.
Interest rate risk is the risk that changes in interest rates will adversely affect the fair value of an investment. The
District does not have a formal investment policy for interest rate risk. The weighted average maturity of the
securities held by PSDLAF and PLGIT is generally less than 90 days.
Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The District
does not have a formal investment policy for credit risk. The District's deposits in PSDLAF and PLGIT were rated
"AAAm" by Standard & Poor's.
FS - 19
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
CASH AND CASH EQUIVALENTS AND INVESTMENTS (Cont'd.)
Cash and cash equivalents and investments are as follows:
Cash and Cash
Equivalents Investments
Governmental activities $ 1,376,690 $ 2,500,000
Business-type activities 230,277 -
Fiduciary funds 151.177 -
1.758.144 $ 2.500.000
Investments consist of certificates of deposit with original maturities of more than three months from the date of
acquisition.
TAXES RECEIVABLE
Taxes receivable are as follows:
Taxes Taxes
Receivable Allowance for Receivable Deferred
(Gross) Uncollectibles (Net) Tax Revenue
Real estate taxes $ 872,401 $ (2,401) $ 870,000 $ 640,000
Earned income taxes 1,980,000 - 1,980,000 1,980,000
Personal taxes 21.714 (11.714) 10.000 10.000
General Fund 2,874,115 (14,115) 2,860,000 2,630,000
Full accrual adjustment - - - (2,630,000)
Governmental activities 2.874.115 $ (14.115) -1_00_M $ -
FS - 20
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
DUE FROMITO OTHER FUNDS AND INTERFUND TRANSFERS
Interfund balances are as follows:
Assets Liabilities
General Fund $ 829,265 $ 829,265 Capital Projects Fund
General Fund 2,088 2,088 Athletic Fund
General Fund 230 230 Food Service Fund
Capital Reserve Fund 2,250,000 2,250,000 General Fund
Capital Reserve Fund 8,567 8,567 Capital Projects Fund
Interfund transfers were as follows:
Other financing sources Other financinq uses
Capital Reserve Fund $ 2,650,000 $ 2,650,000 General Fund
Athletic Fund 85,912 85,912 General Fund
Food Service Fund 48,050 48,050 General Fund
DUE FROM OTHER GOVERNMENTS
Due from other governments are as follows:
Local sources - earned income taxes
Local sources - IDEA - B grant
Local sources - other districts
Local sources - other items
State sources
Federal sources
Governmental Business-type
Activities Activities
$ 756,430 $ -
383,687 -
337,088 -
20,802 -
531,799 464
398.374 4.984
$ 2.428.180 $ 5.448
FS-21
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
CAPITAL ASSETS
Changes in capital assets were as follows:
Governmental activities
Capital assets not being depreciated
Land
Construction in progress
Capital assets being depreciated
Buildings and improvements
Furniture and equipment
Library books
Computer equipment
Accumulated depreciation
Buildings and improvements
Furniture and equipment
Library books
Computer equipment
Capital assets being depreciated, net
Governmental activities capital assets, net
Business-type activities
Capital assets being depreciated
Furniture and equipment
Accumulated depreciation
Furniture and equipment
Capital assets being depreciated, net
Business-type activities capital assets, net
Beginning Ending
Balance Increases Decreases Balance
$ 501,824 $ - $ - $ 501,824
484,161 1,703,829 (806,708) 1,381,282
985,985 1,703,829 (806,708) 1
883
106
,
,
68,463,674 806,708 - 69,270,382
3,432,333 222,829 - 3,655,162
2,308,721 - - 2,308,721
3,974,987 4,990 3,979,977
78,179,715 1,034,527 - 79
214
242
,
,
(18,681,001) (1,618,321) - (20,299,322)
(2,184,867) (291,218) - (2,476,085)
(2,077,848) - - (2,077,848)
(3,614,168) (113,058) - (3,727,226)
(26,557,884) (2,022,597) - (28,580,481)
51,621,831 (988,070) - 50,633,761
52.607.815 $ 715259 $ (806.708) $ 52.516.867
$ 1,568,486 $ - $ - $ 1,568,486
(916,273) (78,623) - (994,896)
652.213 (78,623) - 573.590
FS - 22
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
CAPITAL ASSETS (Cont'd.)
Depreciation expense was charged to functions/programs as follows:
Governmental activities
Instruction
Instructional student support
Administrative and financial support
Operation and maintenance of plant
Student activities
Business-type activities - Food service
$ 1,627,740
178,654
79,402
99,252
37,549
During the year the Middle School boiler replacement project was completed, at a total cost of $ 806,708.
The construction in progress at June 2010 was the construction project at the Newville Elementary School.
DEFERRED REVENUES
Governmental funds present deferred revenue in connection with receivables for revenues that are not
considered to be available to pay liabilities of the current period. Governmental funds also defer revenue
recognition with resources that have been received, but not yet earned. Deferred revenues in the General Fund of
$ 2,630,000 consist entirely of taxes receivable not received within 2 months of the end of the fiscal period.
Deferred revenues in the proprietary funds and the district-wide financial statements represents resources that
have been received but not yet earned.
LONG-TERM LIABILITIES
Changes in all long-term liabilities were as follows:
Beginning Ending Due Within
Balance Increases Decreases Balance One Year
Governmental activities
Bonds and notes payable $ 37,277,475 $ 689,811 $ (2,656,846) $ 35,310,440 $ 3,462,531
Compensated absences 392,700 353,506 (45,506) 700,700 100,000
Other post employment benefits 158.648 476.153 (370.916) 263.885 200,000
37.828.823 1.519.470 (3.073.268) $ 36.275.025 3.762.531
Business-type activities
Compensated absences $ 41.812 $ 4.000 $ (8.987) $ 36.825 $ 7 000
FS - 23
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Contd.)
JUNE 30, 2010
LONG-TERM LIABILITIES (Cont'd.)
Bonds and notes payable
Changes in bonds and notes payable were as follows:
Beginning Scheduled Ending
Balance New Issue Redemptions Balance
1999 Series $ 2,965,000 $ - $ (275,000) $ 2,690,000
2001 Series 2,085,000 - (715,000) 1,370,000
2003 Series 14,535,000 - (1,025,000) 13,510,000
2005 Series 3,320,000 - (420,000) 2,900,000
2006 Series 9,820,000 - (80,000) 9,740,000
2006 Notes (energy savings project) 4,552,475 - (141,846) 4,410,629
2010 Notes (short-term) - 689.811 - 689.811
$ 37.277.475 $ 689.811. $ (2.656.846) $ 35.310.440
In March 2010 the District obtained a one year $ 3,500,000 draw-down non-revolving line-of-credit from Orrstown
Bank. This 2.10% short-term note was repaid from permanent financing obtained in October 2010.
Due Within
Interest Rates Maturity Date Callable Date One Year
1999 Series (1) December 2017 45 days notice $ 290,000
2001 Series 4.40% to 5.00% February 2021 August 2011 745,000
2003 Series 3.65% to 5.00% April 2023 April 2013 1,055,000
2005 Series 3.30% to 3.80% June 2016 December 2010 435,000
2006 Series 3.50% to 4.05% March 2021 August 2011 80,000
2006 Notes 3.95% December 2021 Annually, with fees 167,720
2010 Notes 2.10% March 2011 At any time 689.811
(1) The 1999 Series pays interest at a variable rate of 1.85% above the "weekly ratd', not to exceed
25.00%. At June 2010 the'Weekly ratd'was 0.27%.
During the year ended June 2010, $ 2,300 of debt service (interest on the short-term note) was paid from the
Capital Projects Fund. Scheduled debt service requirements, payable by the General Fund (except for the short-
term note which was repaid from permanent financing), are as follows:
FS - 24
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
LONG-TERM LIABILITIES (Cont'd.)
Year Ending June Principal Interest Total
2011 $ 3,462,531 $ 1,338,534 $ 4,801,065
2012 2,900,640 1,233,624 4,134,264
2013 3,060,736 1,109,895 4,170,631
2014 3,218,151 987,724 4,205,875
2015 3,368,030 874,561 4,242,591
2016-2020 14,596,162 2,561,465 17,157,627
2021-2023 4.704.190 324,693 5,028.883
In the year ended June 2006, the District defeased a portion of the 2001 Series of bonds by creating an irrevocable
trust fund. New debt was issued (2006 Series) and the proceeds were used by the trust fund to purchase U.S.
government securities. The investments and fixed earnings are sufficient to fully service the defeased debt until it is
called or matures. For financial reporting purposes, the defeased debt was removed as a liability from the District-
wide financial statements. As of June 30, 2010 $ 9,135,000 of defeased bonds remain outstanding and are
scheduled to be called in August 2011.
Compensated absences
Compensated absences (those for which employees receive pay) are 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. Payments for compensated absences are made in the year the absence is taken or the
employee retires. At retirement or death, while in District service, employees or their beneficiaries shall choose
one of the following options (subject to a maximum of $ 12,000 for administrators and $ 13,500 for all other
employees):
1. Number of full years of service in the District multiplied by $ 200 (the employee must have a
minimum of 20 years of service in the District)
2. Accumulated unused sick leave days multiplied by 80% of the substitute per diem rate
FS - 25
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs)
The District reports OPEBs in accordance with GASB Statement No. 45 (GASB 45), which requires recognition of
OPEBs as part of the compensation package of active employees for services rendered. The cost and obligation
for OPEBs are measured by an actuarial valuation.
Plan description
Under the negotiations agreement with Big Spring Education Association, the District shall provide for
continuance of health care insurance after retirement until the retiree attains the Medicare eligible age. The
retiree will pay the monthly premiums, except that teachers who retire after 30 or more years with the District,
shall have up to five years of health care insurance benefits provided on the basis of the retiree paying 50% of
the monthly premiums.
Retired administrators, and classified employees hired prior to July 2007, receive the same benefit as
described above. Classified employees hired after June 2007 must pay the entire premium.
Retiree's premiums are less than the District's actual cost to provide health care coverage to retirees. The
premium amount retirees pay is a blended rate for covering both active and retired Plan members. The fact
that the blended rate that retirees pay is less than the cost of covering retired members and their beneficiaries
results in what is known as an "implicit rate subsidy," which creates an additional cost to the District.
Participant information
Active participants 360
Vested former members 6
Retired participants 68
Funding Policy
The District funds Plan liabilities on a "pay-as-you-go" basis, and has not established an OPEB trust fund to
accumulate assets to fund Plan obligations. The District has no statutory or contractual obligation to fund the
Plan and would only do so at the District's discretion.
FS - 26
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs) (Cont'd.)
Annual OPEB cost and net OPEB obligation
The District's annual OPEB cost (expense) is calculated based on the actuarially determined annual required
contribution (ARC) of the employer. The ARC represents the amount needed to fund the cost of benefits
attributed to the current year, plus an amortized portion of the unfunded actuarial accrued liability (UAAL). The
District has selected to have the UAAL amortized over a period of 30 years.
Components of the District's annual OPEB cost, the amount actually contributed to the Plan, and changes in
the net OPEB obligation are as follows:
Employer normal cost $ 233,464
Amortization of unfunded actuarial accrued liability 245.290
Annual required contribution 478,754
Interest on the net OPEB obligation 7,139
Adjustment to the ARC (9.740)
Annual OPEB cost 476,153
Contributed to the plan (370.916)
Increase in net OPEB obligation 105,237
Net OPEB obligation - beginning 158.648
Net OPEB obligation - end $ 263.885
The percentage of annual OPEB cost contributed was as follows:
Year ended
Percentage of
Annual Annual OPEB Net OPEB
OPEB Cost Cost Contributed Obligation
June 2010
Funding status and funding progress
$ 476,153 77.90% $ 263,885
The District's actuarial accrued liability (AAL) for OPEBs as of July 2010 was $ 3,732,005. There are no Plan
assets, thus, the entire amount is unfunded. The District does not have any current plans to fund the AAL.
Actuarial UAAL as
Actuarial Actuarial Accrued a % of
Valuation Value of Liability Unfunded Funded Covered Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
July 2010 $ - $ 3,732,005 $ 3,732,005 0.00 $16,852,109 22.15%
FS-27
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
LONG-TERM LIABILITIES (Cont'd.)
Other post employment benefits (OPEBs) (Cont'd.)
Actuarial assumptions and methods
Actuarial assumptions and methods used in the July 2010 actuarial valuation include the following:
Interest rate 4.50%
General inflation rate 3.00%
Health care cost trend rate 7.50% in 2010, decreasing by 0.50% per year to 5.50% in
2014. Rates gradually decrease from 5.30% in 2015 to
4.20% in 2019 and later
Actuarial cost method Benefits are allocated on a level basis over the earnings of
an individual from date of hire to assumed retirement date
Amortization period 30 years
Actuarial evaluations on an ongoing basis involve estimates of the reported amounts and assumptions about
the probability of events far into the future. Examples include assumptions about future employment,
mortality, and the healthcare cost trend. Actuarially determined amounts are subject to continual revision as
actual results are compared to past expectations and new estimates are made about the future.
Projections of benefits are based on the types of benefits provided under the plan at the time of each
valuation and on the pattern of sharing of benefit costs between the employer and plan members to that point
in time.
Actuarial calculations reflect a long-term perspective, and consistent with that perspective, actuarial methods
and assumptions used include techniques that are designed to reduce short-term volatility in accrued
liabilities.
The required schedule of funding progress in the other required information (ORI) immediately following the
notes to financial statements, is to present multi-year trend information about whether the actuarial value of
Plan assets is increasing or decreasing over time relative to the actuarial accrued liability for benefits.
However, because the District maintains no Plan assets, information relative to Plan asset disclosures is not
applicable. Additionally, because the year ended June 2009 was the year of implementation of GASB 45, the
OPEB disclosure standards were implemented prospectively; therefore, the ORI does not reflect similar
information for three consecutive valuations.
FS - 28
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
PENSION PLAN
Substantially all full-time and part-time employees of the District participate in the plan. The District recognizes
expenditures or expenses equal to its contractually-required contributions, subject to the modified accrual basis of
accounting in governmental funds.
The District contributes to The Public School Employees' Retirement System (the System), a governmental cost
sharing multiple-employer defined benefit plan. The plan is under the authority of the Public School Employees'
Retirement 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 the System at PO Box
125, Harrisburg, PA 17108-0125, or by accessing the System's website at www.osers.state.Pa.us.
The contribution policy is established in the Code and requires contributions by active members and employers.
Contribution rates for active members are set by law and are dependent upon members' class. In most cases, the
contribution rates based on qualified member compensation are as follows:
Membership Class T-C Active members hired before July 22, 1983 5.25%
Membership Class T-C Active members hired on or after July 22, 1983 6.25%
Membership Class T-D Active members hired before July 22, 1983 6.50%
Membership Class T-D Active members hired on or after July 22, 1983 7.50%
Active members newly hired after July 1, 2001 are automatically Class T-D. The contribution rates for all
members in Membership Class T-D were effective January 1, 2002.
Contributions required of employers are based upon an actuarial valuation. For the fiscal year ended June 2010
the employer contribution rate was 4.78 percent of covered payroll, composed of 4.00 percent for pension
benefits and 0.78 percent for healthcare insurance premium assistance. The District's contributions to the system
for the years ended June 2010, 2009 and 2008 were $ 867,260, $ 821,696, and $ 1,204,162, respectively. Those
amounts are equal to the required contributions for each year.
FS - 29
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
RISK MANAGEMENT
Health insurance
The District's health insurance plan allows each participant to choose one of the three coverage options available
through South Central Trust. 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 $ 100,000 specific (per person) and 125% aggregate (estimated District annual cost).
Financial statements of the trust are provided to the member districts. District transactions within the Trust were
as follows:
Cash balance in the trust - beginning
Payments from the District and its retirees
Benefit claims paid by the trust
Administrative and other fees, net of interest earned
Stop loss premiums
$ 1,214,169
3,843,320
$ (3,257,410)
(268,443)
(71.060)
(3.596.913)
Cash balance in the trust - ending
The amount available in the trust was as follows:
Accrual for benefit claims
Accrual for administrative and other fees
Accrual for health insurance coverage on payroll payable
Amount available for accrued costs - ending
Prepaid health insurance
Cash balance in the trust - ending
1.460.576
$ 570,576
45,000
495.000
1,110, 576
350.000
There are various methodologies for estimating a reasonable accrual for benefit claims. District management has
selected the methodology of approximately '60 days of paid claims'. District management believes this
methodology provides an adequate amount for accrued costs.
Other insurance
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 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.
FS-30
BIG SPRING SCHOOL DISTRICT
NOTES TO FINANCIAL STATEMENTS (Cont'd.)
JUNE 30, 2010
RISK MANAGEMENT (Cont'd.)
Other insurance (Cont'd.)
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 insurance
rates.
COMMITMENTS AND CONTINGENCIES
The District's contract with its teaching staff expires in June 2011.
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 participates in state and federal grant programs which are governed by various rules and regulations.
Expenditures charged to these grant programs are subject to program compliance audits and reviews by the
grantor agencies. The District is potentially liable for any expenditures which may be disallowed by the rules of
these grant programs. The District does not anticipate any material disallowance of program expenditures.
Alterations and additions to Newville Elementary School are expected to cost approximately $ 3,150,000, of which
$ 1,381,282 was completed as of June 2010.
SUBSEQUENT EVENTS
In October 2010 the District issued its 2010 Series A General Obligation Bonds in the amount of $ 9,240,000 at
an average interest rate of 2.90%. The net proceeds of $ 9,069,925 (net of bond premium, underwriter's discount
and all other issuance costs of $ 170,075) were expected to be used as follows:
Call the 2005 series of bonds $ 2,951,409
Payoff 2010 Notes (short-term) 2,840,452
Reimburse the General Fund 829,265
Reimburse the Capital Reserve Fund 8,567
Complete the Newville Elementary School project 1,128,102
Purchase land for future use 490,000
Estimated to be available for other projects 822,130
FS-31
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BIG SPRING SCHOOL DISTRICT
OTHER POST EMPLOYMENT BENEFIT PLANS
JUNE 30, 2010
HEALTH CARE BENEFITS
SCHEDULE OF FUNDING PROGRESS
Actuarial UAAL as
Actuarial Actuarial Accrued a % of
Valuation Value of Liability Unfunded Funded Covered Covered
Date Assets (AAL) AAL Ratio Payroll Payroll
July 2008 $ - $ 3,995,512 $ 3,995,512 0.00 $ 15,104,065 26.45%
July 2010 - 3,732,005 3,732,005 0.00 16,852,109 22.15
The District is required to have an actuarial valuation at least biennially (every 2 years) . If the plan experiences
significant changes, a new actuarial valuation should be performed rather than waiting for the next scheduled
valuation date.
Because the year ended June 2009 year was the implementation year for GASB 45, and the District chose to
implement prospectively, the above illustration does not reflect similar information for three consecutive
valuations.
ORI - 2