2/18/13

1

Presenters: Carole Loehr

PFM Asset Management LLC

Michelle Evenson ROCORI School District

February 26, 2013

│ 2

o  Controlling receipts and disbursements of cash

o Pay the bills on time o Recognize the need to borrow o Maximize amount available for interest

earnings

│ 3

o  Good fiscal management (Best Practice)

o  Fulfill responsibility to

o  School Board – keeps them informed o  Taxpayers – maximizes interest income

and minimizes borrowing o  Students – maximizes educational opportunities

2/18/13

2

│ 4

o  To plan

o  For shortages/borrowing o  For investment portfolio optimization o  Account analysis

│ 5

Page | 5

Ideal Cash Flow

Time

Dollars$

Receipts

DisbursementsSurplus

│ 6

Page | 6

Deficit Cash Flow Forecast

Time

Dollars$

Receipts

DisbursementsDeficit

2/18/13

3

│ 7

o  Establish and maintain an adequate liquidity level

o  Maximize investment income

o Extend length (duration) of investments o Realize benefits of longer term

investments of “Core Balances” in “normal yield curve environment”

│ 8

o  Provide that all expenditures are properly funded

o Identify all material expenditures o Project cash flow timing and amount o Avoid over-funding of expenditures o Utilize JIT (Just-in-Time) funding of

expenditures

│ 9

o  Identify near-term cash short falls

o How much? and when? o Clarify short-term borrowings

2/18/13

4

│ 10

o  Identify macro fiscal trends

o  Administrative tool

o  Provide continuity and safeguards through changes in staff

│ 11

o  Two forecasting methods

o Historical analysis o If the district is relatively stable

(finances, enrollment) o If historical data is reliable and in a

consistent format

│ 12

o  Two forecasting methods

o Projection based o Is district growing/declining? o Have there been material changes to

educational programs? o Any new outsourcing? Could it effect

bill timing? o Payroll cycle change? o Revenue stream change?

2/18/13

5

│ 13

o  Be conservative

o  Keep cash flow materials updated

o  Be aware of your school board investment policy

o  Have written assumptions o Liquid balance o % increase for estimates

│ 14

o  Historical monthly receipts and disbursements

o  Historical cash flow borrowing o  Current budget o  Payroll schedule o  Board meeting schedule o  Bond and interest payment schedules o  Capital expenditure schedules o  School calendar o  Current investment schedule

│ 15

o  Which funds should be included? o  General (Transportation, Capital Service) o  Food Service o  Community Service o  Debt

o  Funds usually kept separate o  Building o  Student Activity

2/18/13

6

│ 16

The accuracy of any cash flow forecast is dependent upon the accuracy of the input data used in the spreadsheet.

o  All bank accounts

o  All current investments – noting maturity dates

│ 17

o  Receipts o  State o IDEAS o Federal through the State o Other – Finance Department

o County o Tax Settlements o School Tax Report o Levy Certification

│ 18

o  Receipts Other o Federal o Food Services o Gate Receipts o Community Services o Donations

Debt o Aid Anticipation Certificates o Interest

2/18/13

7

│ 19

County Property Tax General State Aid (GSA) State Cetegoricals and Grants Federal Aid Miscellaneous TOTAL RECEIPTSYear-Over-Year Growth Rates Year-Over-Year Growth Rates Year-Over-Year Growth Rates Year-Over-Year Growth Rates Year-Over-Year Growth Rates FY 12 - 13

FY 13-14 3.00% FY 13-14 3.00% FY 13-14 3.00% FY 13-14 3.00% FY 13-14 3.00%FY 14-15 3.00% FY 14-15 3.00% FY 14-15 3.00% FY 14-15 3.00% FY 14-15 3.00%

County Property Tax General State Aid (GSA) State Cetegoricals and Grants Federal Aid MiscellaneousDate Payment Date Payment Date Payment Date Payment Date Payment

10/22/2012 $1,000,000 7/12/2012 $254,340 9/28/2012 $470,000 7/31/2012 $162,585 7/16/2012 $50011/22/2012 $1,500,000 7/23/2012 $254,340 12/28/2012 $470,000 8/31/2012 $162,585 8/15/2012 $6,0001/31/2013 $500,000 8/13/2012 $254,340 3/29/2013 $470,000 9/28/2012 $162,585 9/17/2012 $7,0005/31/2013 $2,000,000 8/22/2012 $254,340 6/28/2013 $470,000 10/31/2012 $162,585 10/15/2012 $12,000

9/12/2012 $254,340 11/30/2012 $162,585 11/15/2012 $9,0009/24/2012 $254,340 12/31/2012 $162,585 12/17/2012 $6,000

10/12/2012 $254,340 1/31/2013 $162,585 1/16/2013 $7,00010/22/2012 $254,340 2/28/2013 $162,585 2/15/2013 $6,00011/12/2012 $254,340 3/29/2013 $162,585 3/15/2013 $5,00011/22/2012 $254,340 4/30/2013 $162,585 4/16/2013 $4,00012/12/2012 $254,340 5/31/2013 $162,585 5/15/2013 $3,00012/24/2012 $254,340 6/28/2013 $162,585 6/15/2013 $1,0001/14/2013 $254,3401/22/2013 $254,3402/12/2013 $254,3402/22/2013 $254,3403/12/2013 $254,3403/22/2013 $254,3404/12/2013 $254,3404/22/2013 $254,3405/13/2013 $254,3405/22/2013 $254,3406/12/2013 $254,3406/24/2013 $254,340

TOTAL 5,000,000.00 TOTAL 6,104,160.72 TOTAL 1,880,000.00 TOTAL 1,951,017.00 TOTAL 66,500.00

REC

EIPT

S

│ 20

o  Disbursements

Payroll o Pay dates o 12 months of net or gross payroll history o Extraordinary payroll Accounts Payable Other o Capital Projects

│ 21

o  Disbursements

o Debt o Aid Anticipation Certificates o Bonds

2/18/13

8

│ 22

Payroll Accounts Payable P & I - Debt Service NOT USEDYear-Over-Year Growth Rates Year-Over-Year Growth Rates Year-Over-Year Growth Rates Year-Over-Year Growth Rates

FY 13-14 5.00% FY 13-14 5.00% FY 13-14 5.00%FY 14-15 5.00% FY 14-15 5.00% FY 14-15 5.00%

Payroll Accounts Payable P & I - Debt Service NOT USEDDate Payment Date Payment Date Payment

7/13/2012 $500,000 7/20/2012 $1,676,346 11/30/2012 $1,250,0007/27/2012 $500,000 8/16/2012 $1,676,346 5/31/2013 $250,0008/10/2012 $500,000 9/14/2012 $676,3468/24/2012 $500,000 9/28/2012 $1,000,0009/3/2012 $800,000 10/12/2012 $676,3469/7/2012 $1,600,000 10/26/2012 $1,000,0009/21/2012 $1,600,000 11/9/2012 $1,676,34610/5/2012 $1,600,000 12/14/2012 $1,676,346

10/19/2012 $1,600,000 1/18/2013 $1,676,34611/2/2012 $1,600,000 2/8/2013 $676,346

11/12/2012 $1,600,000 2/22/2013 $1,000,00011/16/2012 $1,600,000 3/8/2013 $676,34611/30/2012 $1,600,000 3/22/2013 $1,000,00012/14/2012 $1,600,000 4/19/2013 $1,676,34612/28/2012 $1,600,000 5/3/2013 $676,3461/11/2013 $1,600,000 5/24/2013 $1,000,0001/25/2013 $1,600,000 6/7/2013 $676,3462/8/2013 $1,600,000 6/21/2013 $1,000,0002/22/2013 $1,600,0003/8/2013 $1,600,0003/22/2013 $1,600,0004/5/2013 $1,600,0004/19/2013 $1,600,0005/3/2013 $1,600,0005/17/2013 $1,600,0005/31/2013 $4,555,0006/14/2013 $525,0006/28/2013 $550,000

TOTAL 40,430,000.00 TOTAL 20,116,146.96 TOTAL 1,500,000.00

DIS

BUR

SEM

ENTS

│ 23

o  Payroll – timing and amount (any variations)

o  Accounts Payable – timing o  Minimum liquidity level o  Revenue receipts o  Non-recurring receipts and

disbursements o  Budgets (current and future years) o  Assumptions unique to each district

│ 24

o  Estimate cash receipts

o  Estimate cash disbursements

o  Record investment activity o Redemption of outstanding

investments o Purchase of future investments

2/18/13

9

│ 25

Cash Flow Schedule

Receipts Disbursements Investments

DateCounty Property

TaxGeneral State

Aid (GSA) Other PayrollAccounts Payable Debt Service

Existing Maturities &

Coupons

Proposed Portfolio

Cashflows

Total Liquid (Non-Invested) Balance w/

Investments

7/1/2012 10,000,000.00

7/2/2012 10,000,000.00

7/3/2012 10,000,000.00

7/4/2012 10,000,000.00

7/5/2012 10,000,000.00

7/6/2012 10,000,000.00

7/7/2012 10,000,000.00

7/8/2012 10,000,000.00

7/9/2012 10,000,000.00

7/10/2012 10,000,000.00

7/11/2012 10,000,000.00

7/12/2012 104,498.58 54,340.03 10,158,838.61

7/13/2012 500,000.00 500,000.00 10,158,838.61

7/14/2012 10,158,838.61

7/15/2012 10,158,838.61

7/16/2012 500.00 10,159,338.61

7/17/2012 10,159,338.61

7/18/2012 10,159,338.61

7/19/2012 10,159,338.61

7/20/2012 1,676,345.58 1,500,000.00 9,982,993.03

7/21/2012 9,982,993.03

7/22/2012 9,982,993.03

7/23/2012 54,340.03 200,000.00 10,237,333.06

7/24/2012 10,237,333.06

7/25/2012 10,237,333.06

7/26/2012 162,042.62 10,399,375.68

7/27/2012 500,000.00 400,000.00 10,299,375.68

7/28/2012 10,299,375.68

7/29/2012 10,299,375.68

7/30/2012 10,299,375.68

7/31/2012 162,584.75 10,461,960.43

Total 266,541.20 108,680.06 162,584.75 1,000,000.00 1,676,345.58 2,400,000.00 10,461,960.43

│ 26

o  “a quality cash flow forecast will…” o  Project timing and amount of receipts

and disbursements o  Maximize investment earnings o  Identify cash flow shortages o  Establish and maintain comfortable

liquidity o  Identify fiscal trends o  Provide administrative efficiency o  Provide continuity in the business office o  Be a communication tool

│ 27

Carole Loehr Senior Managing Consultant PFM Asset Management LLC Phone: 320-202-1421 Fax: 612-338-7264 E-mail: loehrc@pfm.com Michelle Evenson Accountant ROCORI School District Phone: 320-685-4936 Fax: 320-685-4906 E-mail: evensonm@rocori.k12.mn.us