Comprehensive Annual Financial Report - Cleveland - Cleveland

Comprehensive Annual Financial Report - Cleveland - Cleveland

Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012 1380 East Sixth Street, Cleveland, Ohio 216-574-8000 • cmsdnet.net The primary ...

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Comprehensive Annual Financial Report Fiscal Year Ended June 30, 2012

1380 East Sixth Street, Cleveland, Ohio 216-574-8000 • cmsdnet.net The primary goal of the Cleveland Municipal School District is to become a premier school district in the United States.

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11/13/12 9:55 AM

Comprehensive Annual Financial Report of the

Cleveland Municipal School District For the

FISCAL YEAR ENDED JUNE 30, 2012 Prepared by

Finance Department John W. Scanlan Chief Financial and Administrative Officer

1380 East Sixth Street * Cleveland, Ohio 44114

Cleveland MUNICIPAL School District Board of Education

Denise W. Link Board Chair

Patricia Crutchfield

Robert M. Heard, Sr.

Iris M. Rodriguez

Dr. Ronald M. Berkman Ex Officio Member

Louise P. Dempsey Board Vice Chair

Willetta A. Milam

Dr. Lisa Thomas

Dr. Jerry Sue Thornton Ex Officio Member

Shaletha T. Mitchell

Eric L. Wobser

Eric S. Gordon Chief Executive Officer

John W. Scanlan Chief Financial & Administrative Officer

Introductory Section

Cleveland Municipal School District Comprehensive Annual Financial Report For the Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS I. INTRODUCTORY SECTION Table of Contents ................................................................................................................................. T1 Letter of Transmittal ............................................................................................................................. T3 Board Members .................................................................................................................................. T20 Senior Appointed Officials ................................................................................................................. T21 Organizational Chart .......................................................................................................................... T22 GFOA Certificate of Achievement ..................................................................................................... T23 ASBO Certificate of Excellence ......................................................................................................... T24 II. FINANCIAL SECTION Independent Accountants’ Report .......................................................................................................... 1 Management’s Discussion and Analysis ................................................................................................ 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets........................................................................................................... 16 Statement of Activities ............................................................................................................ 17 Fund Financial Statements: Balance Sheet – Governmental Funds ..................................................................................... 18 Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities.................................................................................................... 19 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ......................................................................................................... 20 Reconciliation of the Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................................................................ 21 Statement of Revenues, Expenditures and Changes in Fund Balance – Budget (Non-GAAP Basis) and Actual – General Fund .................................................. 22 Statement of Fund Net Assets - Proprietary Fund ................................................................... 23 Statement of Revenues, Expenses and Changes in Fund Net Assets – Proprietary Fund ............................................................................................................... 24 Statement of Cash Flows – Proprietary Fund .......................................................................... 25 Statement of Fiduciary Assets and Liabilities – Agency Funds .............................................. 26 Notes to the Basic Financial Statements ........................................................................................ 27 Combining Statements and Individual Fund Schedules: Combining Statements – Nonmajor Governmental Funds: Fund Descriptions.................................................................................................................... 60 Combining Balance Sheet – Nonmajor Governmental Funds................................................. 62 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Governmental Funds ........................................................................................ 63 Combining Balance Sheet – Nonmajor Special Revenue Funds ............................................. 64 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Special Revenue Funds .................................................................................... 66 Combining Balance Sheet – Nonmajor Capital Projects Funds ............................................. 72 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Nonmajor Capital Projects Funds ..................................................................................... 73 Combining Statements – Internal Service Funds: Fund Descriptions.................................................................................................................... 74 Combining Statement of Fund Net Assets – Internal Service Funds ...................................... 75 Combining Statement of Revenues, Expenses and Changes in Fund Assets – Internal Service Funds ...................................................................................................... 76 Combining Statement of Cash Flows – Internal Service Funds .............................................. 77 - T1 -

Combining Statements – Fiduciary Funds: Fund Descriptions.................................................................................................................... 78 Combining Statement of Changes in Assets and Liabilities – All Agency Funds ............................................................................................................. 79 Individual Fund Schedules of Revenues, Expenditures/Expenses and Changes in Fund Balance/Fund Equity - Budget (Non-GAAP Basis) and Actual: Debt Service Fund ...................................................................................................... 81 Classroom Facilities Fund .......................................................................................... 82 Educational Special Trust Fund ................................................................................. 83 Classroom Facilities Maintenance Fund .................................................................... 84 Other Local Funds ...................................................................................................... 85 Auxiliary Services (NPSS) Fund ................................................................................ 86 Miscellaneous State Grants Fund ............................................................................... 87 Other State Funds ....................................................................................................... 88 Food Service Fund ..................................................................................................... 89 Race to the Top Fund ................................................................................................. 90 Title VI-B Special Education Fund ............................................................................ 91 Vocational Education Fund ........................................................................................ 92 Title I .......................................................................................................................... 93 Improving Teacher Quality Title II-A Fund............................................................... 94 Miscellaneous Federal Grants Fund ........................................................................... 95 Other Federal Funds ................................................................................................... 96 Permanent Improvement Fund ................................................................................... 97 Building Renovation Fund ......................................................................................... 98 Liability Self-Insurance Fund..................................................................................... 99 Employee Benefits Self-Insurance Fund .................................................................. 100 III. STATISTICAL SECTION Statistical Section ................................................................................................................................. S1 Net Assets by Component – Last Two Fiscal Years............................................................................. S2 Changes in Net Assets of Governmental Activities – Last Ten Fiscal Years....................................... S4 Fund Balances, Governmental Funds – Last Two Fiscal Years ........................................................... S8 Governmental Funds Revenues – Last Ten Fiscal Years ................................................................... S10 Governmental Funds Expenditures and Debt Service Ratio – Last Ten Fiscal Years ....................... S12 Other Financing Sources and Uses and Net Change in Fund Balances, Governmental Funds – Last Ten Fiscal Years................................................................................................................... S14 Assessed and Estimated Actual Value of Taxable Property – Last Ten Collection Years ................. S16 Ad Valorem Property Tax Rates – All Direct and Overlapping Governments – Last Ten Collection Years ........................................................................................................... S18 Principal Property Tax Payers – 2011 and 2002 ................................................................................. S20 Property Tax Levies and Collections – Ad Valorem Real and Tangible Personal Property Taxes – Last Ten Fiscal Years................................................................................................................... S21 Ratio of Bonded Debt to Personal Income and Debt per Capita – Last Ten Fiscal Years................................................................................................................... S22 Legal Debt Margin Information – Last Ten Fiscal Years................................................................... S24 Direct and Overlapping Debt Governmental Activities Debt As of June 30, 2012 ...................................................................................................................... S26 Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................ S27 Principal Employers – Current Year and Nine Years Ago ................................................................. S28 Full-Time Equivalent District Employees by Type – Last Ten Fiscal Years ..................................... S29 Operating Statistics – Last Ten Fiscal Years ...................................................................................... S30 Teacher Base Salaries – Last Ten Fiscal Years .................................................................................. S32 School Building Information - Last Ten Fiscal Years ........................................................................ S33

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John W. Scanlan

Chief Financial and Administrative Officer Eric Gordon Chief Executive Officer Board of Education

Denise W. Link

Chair

Louise P. Dempsey

Vice Chair

Patricia Crutchfield Robert M. Heard, Sr. Willetta A. Milam Shaletha Mitchell Iris M. Rodriguez Dr. Lisa Thomas Eric Wobser

Ex Officio Members

Dr. Ronald M. Berkman Dr. Jerry Sue Thornton

1380 East Sixth Street, Cleveland, OH 44114 · 216.574.8246 · Fax 216.574.8317 · www.cmsdnet.net

December 28, 2012 Members of the Board of Education and the Citizens of Cleveland, Ohio We are pleased to submit to you the Comprehensive Annual Financial Report (CAFR) of the Cleveland Municipal School District (the “School District”) for the fiscal year ended June 30, 2012. This CAFR includes an opinion from the State Auditor and conforms to generally accepted accounting principles as applicable to governmental activities. Responsibility for the accuracy of the data presented and the completeness and fairness of the presentation, including all disclosures, rests with the School District. To the best of our knowledge and belief, the enclosed data are accurate in all material respects and are reported in a manner designed to present fairly the financial position and results of operations of the School District. This report will provide the taxpayers of the School District with comprehensive financial data in a format which will enable them to gain an understanding of the School District’s financial affairs. Copies will be made available to taxpayers, financial rating services and other interested parties. Generally Accepted Accounting Principles (GAAP) require that management provide a narrative introduction, overview and analysis of the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The School District’s MD&A can be found immediately following the independent accountants’ report. The School District The Board of Education and Administration The Board of Education of the School District (the “Board”) is a political and corporate body charged with the responsibility of managing and controlling the affairs of the School District, and is governed by the general laws of the State of Ohio (the “Ohio Revised Code”). The Board is comprised of nine members who are appointed by the Mayor of the City of Cleveland.

The primary goal of the Cleveland Municipal School District is to become a premier school district in the United States of America.

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The Chief Executive Officer of the School District has the responsibility for directing and assigning teachers and other employees, assigning the pupils to the proper schools, grades and performing such other duties as determined by the appointed Board. In May of 2011, the Board with the concurrence of the Mayor appointed Eric Gordon as the School District’s Chief Executive Officer with a one-year contract effective July 1, 2011 through June 30, 2012. Mr. Gordon’s contract was renewed and is scheduled to expire on June 30, 2015. Prior to being named the Chief Executive Officer, Mr. Gordon served as the District’s Chief Academic Officer since 2007. The Chief Financial Officer/Treasurer is the chief fiscal officer of the Board and the School District. Under the current administrative structure, the Chief Financial Officer/Treasurer reports to the Chief Executive Officer. On November 15, 2011 the District formally announced the appointment of John W. Scanlan as the Chief Financial and Administrative Officer effective January 1, 2012. Mr. Scanlan was previously the Deputy Superintendent of Administration in New York’s Rochester City School District and the Chief Operating Officer of the Oklahoma City Public School District. The School District and its Facilities Of the School District's area of approximately 82 square miles, 81.44 square miles (or 99.32 percent) are in the City of Cleveland. The balance of the School District's area is located in and serves the entire area of the Villages of Newburgh Heights, Linndale and Bratenahl and a small portion of the City of Garfield Heights. The School District is located entirely within Cuyahoga County, and, with the exception of a portion of the City of Cleveland located in the Shaker Heights City School District, its boundaries are generally coterminous with the corporate boundaries of the City of Cleveland. The purpose and responsibility of the School District is to provide an efficient educational system for the children enrolled in the public schools, whereby each child has access to programs and services that are appropriate to his or her needs. In addition to regular educational programs, the School District offers comprehensive programs in the areas of vocational education, special education and bilingual education. Through its specialty school programs, the School District offers advanced educational programs in such areas as fine arts, computer science, healthcare professions, law and municipal professions, business, and technical trades. In fiscal year 2012, the School District enrolled 40,758 students (compared to 43,363 the previous year) in 76 K-8 schools, and 22 senior high schools. In addition, classes were provided in four residential school programs. The School District also operated a variety of specialized educational facilities (consisting of gardens, athletic fields, a sheltered workshop and a greenhouse), eight administration facilities (including a central kitchen and two leased sites) and two transportation depots. The School District has completed its tenth year of a massive school facility construction/renovation project, which is described in more detail in the Management’s Discussion and Analysis section. The project commenced in 2001 to address the condition and age of the existing classroom facilities (which ranged from 25 to 113 years old). Charter/Community Schools Beginning in fiscal year 1999, State of Ohio legislation allowed for the creation of charter/community schools. By law the School District receives State Foundation Aid for students attending charter/community schools that are residents of the School District on a per pupil basis. That aid, which includes an imputed local match, is paid out to the charter/community schools for their operations on a one-for-one basis. The number of students attending charter/community schools has grown in the past ten years to 16,614 for fiscal 2012, resulting in the payment from the School District of state aid of $117.0 million.

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Employee Relations As of June 30, 2012 the School District had 6,557 full and part-time employees (compared to 8,373 the previous year). In the fiscal year ended June 30, 2012, the School District paid $376.6 million in salaries and wages and $146.5 million for fringe benefits such as employer retirement contributions, health care, life insurance, and certain other benefits. The School District's certificated administrators and supervisors (such as principals, assistant principals and many central office staff) are not members of any bargaining unit but are represented by the Cleveland Council Administrators and supervisors; however, many of these individuals are employees at an at-will basis. Teachers and educational specialists, including aides, are represented by the Cleveland Teachers Union ("CTU"). In July 2010, the District entered into a contract with CTU for a three-year period ending June 30, 2013. This contract provides for 4.62% wage reductions effective for the first year only, generally speaking, and healthcare concessions that are in effect for the term of the agreement. The contract includes a reopener on economic terms in the second and third years, and the District and CTU reached an agreement in December 2011 for wage concession of approximately 2.3%. The parties are currently in negotiations for the 2012-13 reopener. Classified employees (secretarial-clerical, custodial, maintenance, transportation and cafeteria staff) of the School District are represented for collective bargaining purposes by different unions, including:     



the International Brotherhood of Teamsters Local 407 (school bus drivers and bus attendants), with a three-year contract (with no reopeners) ending June 30, 2013; the City, County, and State Truck Drivers Union Local 244 (truck drivers), with a two-year agreement ending on June 30, 2013, with a 5% compensation reduction, 10% health care contribution, and a freeze of longevity pay for the eight individuals in this union; the National Conference of Fireman and Oilers Local 860 (assistant custodians, laborers, and mechanics), with a contract that expires June 30, 2013. For 2011-2012 and 2012-2013 members agreed to wage concessions of approximately 5.40%; the International Brotherhood of Teamsters Local 436 (security officers), with a contract that expires June 30, 2013. The parties entered into an agreement that became effective January 1, 2012 and included a wage reduction of 5.0%; the Service Employees International Union Local 1199 (clerical, food service and cleaning staff), with a three-year contract ending June 30, 2013 and which includes a wage reopener in years two and three. As a result of the 2011-2012 reopener, members agreed to a two-year wage reduction averaging approximately 5.5%; and the Cleveland Building Trades Council (trades people) and the carpenters union, entered into contracts through June 30, 2013 providing for wage concessions of approximately 5.25%.

In addition, the National Conference of Fireman and Oilers Local 777 (custodians), has a three-year contract ending June 30, 2013, that contained a reopener in years two and three. As a result of recent negotiation, the District and Local 777 finalized an agreement for the remainder of the contract period that no longer is subject to a reopener (unless mutually agreed upon between both parties). The new contract generally provides for 5.5% salary and wage reductions and healthcare concessions that are in effect for the term of the agreement.

The Reporting Entity The School District has reviewed its reporting entity definition in order to insure conformance with the Governmental Accounting Standards Board Statement No. 14, "The Financial Reporting Entity”, and Statement No. 39, “Determining Whether Certain Organizations are Component Units.” The basic financial statements include all organizations, activities and functions for which the School District is financially accountable.

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Excluded from the reporting entity because they are fiscally independent of the School District are the City of Cleveland and the Cleveland Public Library. The City of Cleveland and the Cleveland Public Library are related organizations whose relationships to the School District are described in Note 19 to the basic financial statements. The School District also participates in the Ohio Schools Council, which is a jointly governed organization. In 2001 the School District created the Bond Accountability Commission (“BAC"), which is also a jointly governed organization. These relationships are described in Note 20 to the basic financial statements. The School District is an independent municipal school district and is not a component unit of another government. A complete discussion of the School District's reporting entity is provided in Note 1 to the basic financial statements.

Economic Condition and Outlook The School District’s primary sources of revenues are from the State of Ohio through the State Foundation program and through the levying of property taxes on real property located within the School District. These two sources combined represent approximately 96 percent of the School District’s fiscal year 2012 budget basis General Fund operating revenues. The following discussion provides additional information pertaining to these revenue sources. Taxes Property taxes are levied and assessed on a calendar year basis. Second half distributions generally occur in a new fiscal year. Property taxes include amounts levied against all real and public utility located in the School District. Real property taxes are levied after April 1 on the assessed value listed as of the prior January 1, the lien date. Public utility property taxes attached as a lien on December 31 of the prior year were levied April 1 and are collected with real property taxes. Assessed values for real property taxes are established by State law at 35 percent of appraised market value. All property is required to be revalued every six years. A table showing the assessed valuation of property in the School District subject to ad valorem taxes by the Board for the most recent ten years is presented in the statistical section. The assessed valuation of real property is fixed at 35 percent of true value and is determined pursuant to rules of the State Tax Commissioner, except that real property devoted exclusively to agricultural use is assessed at not more than 35 percent of its current agricultural use value. Fiscal year 2013 property taxes are currently estimated by the Cuyahoga County Auditor’s Office based on a collection rate of 78.9%, down from 80.9%. The forecast through 2017 assumes a collection rate of 78.9%. The Ohio Revised Code and Ohio Administrative Code mandate Cuyahoga County to conduct a re-appraisal every six years, an update every three years and annual valuation of improvements based upon building permits received from each city annually. The next update will be in 2012, with the next re-appraisal scheduled for the year 2015. State law grants tax relief to property owners (property tax rollbacks) in the form of a 10% reduction in real property tax bills. In addition, a 2.5% rollback is granted for owner occupied homesteads (total of 12.5%). The State reimburses the School District for the loss of real property taxes as a result of the rollback provision. HB 66 eliminated the 10% rollback on commercial property; hence the School District will no longer receive a State reimbursement for those dollars, as it will receive those payments directly from commercial property owners. Public utilities include electric companies, gas companies, and local and long distance telecommunications companies. Historically, utility property taxes have been assessed at rates of 100% and 88% of true value, depending on the type of property. SB 3, the Electric Utility Deregulation bill, was passed in 1999. This act revised the tax assessment rates for most classes of public utility property. The tax assessment rate for all

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tangible personal property of an electric company, except transmission and distribution property, was reduced by 25%. By enacting a kilowatt-hour excise tax and requiring the funding of a replacement fund (to make up for losses in assessed value), the Legislature intends to hold school districts financially harmless due to electric deregulation. A similar hold harmless provision was built into SB 287, dealing with the re-evaluation of public utility property for natural gas utilities. HB 66, the 2006-2007 biennium budget bill enacted a number of changes to the public utility property tax. The assessment rate of all electric transmission and distribution of personal property was reduced from 88% to 85%. The assessment rate for all other electric personal property was reduced from 25% to 24%. A School Property Tax Replacement Fund was established to reimburse school districts for the loss in taxable value resulting from deregulation of the electric and gas utility industries. House Bill 66 phases out the tax on the tangible personal property of general businesses, telephone and telecommunications, and railroads. The tax on general business and railroad property was eliminated in 2009, and the tax on telephone and telecommunications property was eliminated in 2011. The tax is phased out by reducing the assessment rate on the property each year. HB 66 makes provision to replace revenue lost due to the phase out of the tangible personal property tax. Businesses are now subject to a commercial activity tax (CAT) that will provide some replacement income to school districts for the lost tangible property revenues. Ohio law grants tax credits to offset increases in taxes resulting from increases in the true value of real property. Legislation implementing a 1980 constitutional amendment classifies real property between (1) residential and agricultural and (2) all other real property, and provides for tax reduction factors to be separately computed for and applied to each class. These credits apply to certain voted levies on real property, and do not apply to unvoted tax levies or voted tax levies to pay debt service on general obligation debt. Additionally, in 1976 the General Assembly passed House Bill 920. This law provides that real property owners receive tax credits equal to any tax increase caused by an increase in value of all real property in taxing districts as a result of reappraisal, update or readjustment. This does not apply to inside non-voted millage, tangible property or new construction. In effect, H.B. 920 removes inflationary revenue growth from the applicable real property by requiring an adjustment to the voted millage rate, thereby resulting in a lower effective millage rate. Property tax levies and collections for the last ten years are shown in comparative format in the statistical section. School Foundation The State’s School Foundation Program is another major source of revenue for the School District’s General Fund. The State assists public school districts under a statutory program, which includes direct payments to districts based upon a statutory formula. Such payments are made through the School Foundation Program established by the Ohio Revised Code. School Foundation Program funds distributed to a School District are required to be used for current operating expenses, unless specifically allocated by the State for some other purpose. Basic eligibility for School Foundation Program payments is based on a School District’s compliance with State-mandated minimum standards. The State Budget Act repealed the current funding system for city, exempted village and local school districts that was known as the Evidence Based Model and was enacted as part of the previous Sate biennial budget act. In its place, the State Budget Act creates a temporary formula allocating funding to school districts based on a wealth-adjusted portion of their State education aid for Fiscal Year 2011 under the Evidence Based Model. The temporary formula funds school districts for the next biennium in anticipation of a permanent system to replace the Evidence Based Model to be devised at a later, unspecified date.

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Under the temporary formula in the State Budget Act, the Ohio Department of Education (ODE) will compute and pay to each city, exempted village and local school district, for Fiscal Year 2012 and 2013, education aid based on the per pupil funding it received for Fiscal Year 2011, adjusted by its share of a Statewide per pupil adjustment amount that is indexed by the district’s relative tax valuation per pupil. The Statewide per pupil adjustment amount must be determined by the Department such that the State’s total education aid obligation does not exceed the aggregate appropriated amount. A supplemental funding provision for Fiscal Years 2012 and 2013 guarantees to each school district operating funding in an amount equal to at least the amount of State operating funding (excluding any State Fiscal Stabilization Fund money) the district received for Fiscal Year 2011 under the Evidence Based Model. ODE is required to pay an additional amount of $17 per student to each school district that is rated as “Excellent with Distinction” or “Excellent” on the annual district and school academic performance report cards. At present, the District is rated as “Academic Emergency”. The former Foundation Program relied on a per pupil “formula amount” to compute base-cost funding and some categorical funding. The Evidence Based Model and the temporary formula in the State Budget Act do not rely on such a per-pupil formula amount for that purpose, but do prescribe a formula amount to compute transfer payments for students attending community schools, STEM schools and other districts through open enrollment. The State Budget Act sets the formula amount at $5,653 for both Fiscal Years 2012 and 2013. The formula amount for Fiscal Year 2009 under the Foundation Program, and for Fiscal Years 2010 and 2011 under the Evidence Based Model, was $5,732. The State Budget Act continues use of the latter amount for computing additional weighted funding for special education and vocational education transfers to community schools, STEM schools and other districts. There can be no assurance concerning future funding levels for or the details of State funding for school districts. As has been the case with Evidence Based Model and Foundation Program, funding has also been subject to adjustment during a biennium. As indicated above, the General Assembly has the power to amend the system of State school funding. The District cannot predict whether, when or in what form a new permanent system of State school funding will be enacted into law. Local Economy The City of Cleveland is located on the southern shores of Lake Erie, and is the county seat of Cuyahoga County. The City is included in the Cleveland-Elyria-Mentor, OH Metropolitan Statistical Area (MSA), comprised of Cuyahoga, Lake, Lorain, Geauga, and Medina counties. This MSA is the 26th largest of 366 Metropolitan Areas in the United States, and the largest Metropolitan Area in the State of Ohio. Founded in 1796, Cleveland quickly established economic strengths in heavy industry, including oil, iron and steel, and combined with its favorable location on major shipping channels soon emerged as the dominant manufacturing and business center of Northeast Ohio. While the City’s economy has shifted more toward health care and financial services, its manufacturing base has assumed a smaller, yet still vital role. Competitive pressures in manufacturing have limited job creation, but the competitive position of Clevelandbased industrial companies has improved. Cleveland’s economic condition draws strength and stability from its evolving role as a focal point of a growing, changing and substantial regional economy. The City is located at the center of one of the nation’s heaviest population concentrations. The Cleveland metropolitan area is a significant local market, housing 2.1 million people. Cleveland also provides superior links to the global markets. The Cleveland-Cuyahoga Port Authority handles the largest amount of overseas cargo on Lake Erie and includes a Foreign Trade Zone. The City is also well-served with extensive highways, and the Cleveland Hopkins International Airport services as a United Airlines Hub and is serviced by all major airlines. The re-emergence of downtown Cleveland as a vibrant center for national and regional entertainment and major cultural activities signals a turning point in the City’s overall fortunes and is paving the way for further economic expansion that will be significantly more entrepreneurial in scope.

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The following projects currently underway will provide the momentum necessary to continue rebuilding the City’s economic base: 

The former Crown Plaza hotel was purchased by Optima 777 LLC which has signed with Westin Hotels for a $73 million hotel renovation project across from Public Hall and Convention Center. Construction is underway and the hotel is expected to open a few months prior to the opening of the Convention Center and Medical Mart in 2013.



Renovations totaling nearly $37 million at the historic East Ohio Gas building at East Sixth and Rockwell have been completed for the new headquarters for Calfee, Halter, and Griswold LLP. The building is seven floors and 115,500 square feet.



Medical Mart and Convention Center – Merchandise Mart Properties began construction in early 2011 of its Medical Mart and Convention Center at the site of the former convention center in downtown Cleveland, which is expected to be completed sometime in 2013. Once completed, the estimated $425 million center is projected to generate significant economic activity in the City.



Flats East Bank – Construction continues on the approximately $270 million Cleveland Flats East Development Project. The project consists of an approximately 450,000 square foot, 18-story office tower, approximately 31,000 square feet of restaurant and retail space, a 150-room Starwood brand hotel called “Aloft” and an approximately 550-space parking garage. The housing portion of the development has been moved to the second phase of the project, in deference to current housing market issues. Three large corporate tenants have agreed to lease more than sixty percent of the office tower. The building is slated to open in 2013.



Flats West Bank – Renovation of the historic Powerhouse is underway. The new Greater Cleveland Aquarium opened in early 2012 and attracted 265,000 visitors in its first six months of operation. Phase I of the project cost approximately $33 million. The Aquarium features 45,000 square feet of exhibits, including the SeaTube®, an underwater walk-through experience.



In recent years, Cleveland State University (CSU) has continued its commitment to investing in downtown Cleveland. In 2010 CSU completed construction of a new $36 million College of Education and Human Services and $50 million Student Center. CSU is now focused on additional student housing for over 1,500 students. It has prepared and released bids and is in the selection process for a developer. The new development at CSU has caused several investors to purchase and renovate buildings in the general area, now called “College Town.” The Collegetown Lofts project includes a Barnes and Noble bookstore on two floors and apartments and condos above. Total project cost is $900,000. Allegro Realty purchased a building on Euclid Avenue across from the University and moved its headquarters to the second floor and added three retail spaces to the first floor.



Also in the University Circle area, construction was recently completed on the 158,000 square foot “Uptown” project, a new markets tax credit project that includes restaurants, retail and market rate rental housing and which received funding from a variety of public, private and philanthropic partners. A second new markets tax credit project for the financing of “Uptown II” is underway and developers are hoping to begin construction before the end of 2012. The $20 million dollar project to redevelop the historic Tudor Arms property was completed with the opening of a Doubletree Hotel in May 2011. The Veterans Administration is constructing facilities to consolidate its operations to the Wade Park Campus in the City. Phase I of the project, including an office building, domiciliary and parking garage, opened in May 2011. Phase II of the project includes funding for the restoration and renovation of the 240 bed hospital. This $120 million project will create 1,200 new jobs. The project currently underway.

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The City of Cleveland unveiled a new waterfront development plan that capitalizes on the City’s number one asset, Lake Erie. The plan proposes a walkway, urban development of the waterfront. As part of the plan, the City received a $1,450,400 grant to design and construct a Transient Marina in North Coast Harbor. The marina will attract many visitors of the City of Cleveland.



Overall, the downtown housing market has a 96% occupancy rate, and many properties have long wait lists. A local developer recently acquired and closed financing on the Hanna Annex Building on East 13th Street to convert the upper floor offices into 102 apartments consisting of primarily market rate rental housing that will include some corporate and affordable housing units. The developer is working in conjunction with an affiliate of the PlayhouseSquare Foundation to renovate and lease out the lower level space to retail and commercial tenants. The total project cost is over $25 million. Other housing activity in downtown includes the Campus District area. Cleveland State University has contracted with Polaris Real Estate Equities to build 300 market rate apartments adjacent to the north end of campus. The $50 million Campus Village project will also have 8,000 square feet of amenities including a movie theatre, meeting rooms and a cyber café at the corner of East 23rd and Chester Avenue.



Ohio has become the 13th state to allow casinos, as voters approved gaming halls in Cleveland, Columbus, Cincinnati, and Toledo. The $600 million Horseshoe Casino Cleveland is being developed in two phases by Rock Ohio Caesars LLC, a joint venture of Rock Gaming LLC and Caesars Entertainment Corporation and will carry the Caesars’ Horseshoe brand used in other cities. Phase I of the project opened on May 14, 2012 in the renovated historic downtown Higbee building, and employs nearly 1,600 workers. Phase I development cost approximately $350 million. The developer has purchased the property for Phase II, adjacent to the Phase I site, but construction has not started and an expected completion date has not been announced.

Major Initiatives The Cleveland Plan (H.B. 525) On July 7, 2012, Governor John Kasich signed House Bill 525, also known as “The Cleveland Plan” (the Plan), into law. Cleveland Mayor Frank Jackson, Governor Kasich, the General Assembly, the Cleveland Teacher’s Union and the Cleveland business community collaborated to create a plan for the District to improve standards, reward, retain, and recruit high-quality educators, and increase school autonomy and accountability. The goal of the Plan is to ensure that every child in the District attends a high-quality school and that every neighborhood has a multitude of great schools from which families can choose. To reach this goal, the District will need to transition from a traditional, single-source school district to a new system of district and charter schools that are held to the highest standards and work in partnership to create dramatic student achievement gains for every child. The plan is built upon growing the number of excellent schools in Cleveland, regardless of provider, and giving these schools autonomy over staff and budgets in exchange for high accountability for performance. It aims to create an environment that empowers and values principals and teachers as professionals and makes certain that District students are held to the highest expectations. The Plan is grounded in an emerging national approach known as the “portfolio strategy,” which is showing promising results in cities such as Baltimore, Denver, and New York. The principal focus of this work is to significantly increase the number of high-performing schools while reducing and eventually eliminating lowperforming schools. To do this, the District will employ four distinct strategies. (1) Promote, expand, and replicate existing high-performing district and charter schools. Great schools, measured by a consistent standard of quality will have full autonomy over school budgets, staff selection and assignment, academic and student support programs, school calendar and school schedules in exchange for high accountability standards and access to financial and other resources. (2) Start new schools. The District will endeavor to attract the best national education models, invent schools that are unique to the City and encourage local community

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partners and teachers within the District to co-create new and innovative school models. (3) Refocus and strengthen mid-performing schools. For those schools that meet minimum state standards and have some critical academic and social conditions in place, the District will employ precise, customized and differentiated interventions and investments and grant some levels of autonomy. (4) Repurpose and address low-performing schools. The lowest performing schools will be targeted for immediate and dramatic action, including closure and reassignment of student to better schools, closure and start-up of a new school, phase-in of a new program and phase-out of the old program, or turning the school over to a capable charter operator. In addition, organizational roles and relationships will change in three fundamental ways. First, the primary roles of central office will be to oversee the portfolio of schools to ensure continuous improvement, provide system coordination for essential functions (enrollment, data systems, etc.) and provide some targeted services directly to schools. Secondly, schools will be given varying levels of autonomy based on their level of performance and will be accountable for delivering an excellent education. All schools will have to abide by certain state and federal requirements, such as state testing and serving students with disabilities and English language learners, among others. Finally, the district will shift to a weighted per-pupil funding system for all schools and transfer a majority of spending control to schools based on the number and needs of the students they enroll. This will include the transfer of some locally generated tax revenues to high-performing charter schools that are sponsored by or have agreements with the district. Beyond the investments in this new, performance-based system of schools, the District will invest in several fundamental building blocks upon which this plan must be built high quality preschool education, college and workforce readiness, year-round calendar, talent recruitment and capacity building, academic technology enhancement, and support for high-quality charter schools. The Cleveland Transformation Alliance, a public-private partnership with representatives from the District, the charter sector and the community, will be charged with ensuring the growth of the portfolio of highperforming district and charter schools within the District. Currently, there is no “one” organization that is responsible for the quality of all public school students in Cleveland. Approximately 70 percent of public school students attend district schools under the governance of the Cleveland Board of Education. Another 30 percent attend charter schools, each with its own governing board and authorizer. Currently, there are ten authorizers in the county that sponsor schools in Cleveland. This dispersed authority can be a strength. It ensures that no single entity holds a monopoly over school, encourage entrepreneurship, fosters the development of new models and can limit bureaucracy. But it also has limitations. Most notably, the public, and our parents in particular, lack consistent, useful information about the quality of schools in Cleveland. The Cleveland Transformation Alliance will be created to address this challenge. Finally, the Plan includes a new type of property tax levy that may be pursued by municipal school districts. If approved by the electors, the board of education can levy a tax for the current expenses of the school district and also for current expenses of partnering community schools, which are, generally speaking, those community schools located within the territory of the school district and that are either (i) sponsored by the school district, or (ii) have entered into an agreement with the school district “whereby the district and the community school endorse each other’s programs”. The School District successfully placed such a levy on the November 6, 2012 ballot, specifically, a 15-mill current expense levy with 14 mills being allocated to the current expenses of the School District and one mill being allocated to the current expenses of partnering community schools (through distributions by the School District to such community schools upon receipt of tax proceeds and related revenue). As result of the passage of this levy, the CEO released a draft implementation strategy for the Cleveland Plan seeking comment from community members and business leaders. The implementation strategy identified the following goals as the basis for measuring educational progress under the Plan: 

Increase the number of students enrolled in high-performing schools: At the end of six years, triple the number of Cleveland students enrolled in high-performing district and charter schools from the

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approximately 11,000 students currently enrolled in these schools to approximately 33,000 by 20182019. 

Eliminate failing schools: At the end of six years, (by 2018-2019) eliminate the District’s 63 failing schools



Increase the graduation rate and graduate more students ready for college and careers: The current graduation rate, as computed by the state using a four-year cohort graduation rate computation is 56.0%. The goal is to cut in half the gap between this rate and the state’s 90% graduation rate goal, thereby increasing the graduation rate to 71% by 2017-2018.



Raise student achievement while closing achievement gaps: While all subjects and all grades will be targeted, the primary focus will be to raise student achievement rates in reading and math by 20172018, with a goal toward cutting in half the gap that exists between current achievement levels and 100% proficiency, and to do so by 2017-2018. This also includes the identification of specific achievement goals.



Increase college enrollment: The goal is to increase college enrollment rates from the current baseline of 63.1% of graduates to 68.6% by 2017-2018. (This goal exceeds the 2011 national college going rate of 68.2%)



Significantly improve the conditions for learning: Currently, 58.5% of District students rate their school experience as “adequate” or better. The goal is to significantly improve students’ school experience – cutting the proportion of students who report that the conditions in their building as needing improvement in half, thereby increasing student satisfaction to 79.5%, by 2017-2018.

CMSD Mission/Vision Statement “The primary goal of the Cleveland Metropolitan School District is to become a premier school district in the United States of America.” The Cleveland Metropolitan School District envisions 21st Century Schools of Choice, where students are challenged with a rigorous curriculum that considers the individual learning styles, program preferences and academic needs of each student and where the skills of high quality educators, administrators and staff are supported and developed. Transformation Strategy The District is committed to preparing 21st Century graduates in dynamic contextual learning environments and to improving student achievement through increased mastery of rigorous curriculum. District Goals 

Create and support quality schools: To meet this goal, the District must: o Transform the lowest performing schools; o Support middle and high-performing schools; o Open new school models; o Establish additional district-sponsored charter schools; o Develop a geographic and demographic analysis o Implement policies and practices supporting building level autonomy; and o Develop resource allocation processes (weighted student funding and school-based budgets.

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Build capacity of quality teachers and leaders: To meet this goal, the District must: o Implement new human capital management system, policy and procedures; o Develop multiple measures of student growth; o Implement teacher and administrator development and evaluation systems; o Develop and implement a professional development program; o Implement a talent seeking and development system; and o Develop and implement differentiated compensation.



Design effective curriculum assessment and instruction: To meet this goal, the District must: o Implement the Enhanced Core Curriculum (ECC); o Ensure effective data analysis and use; o Design and use instructional improvement system; o Expand social and emotional learning investments; o Expand early childhood opportunities; o Provide support for students with disabilities and English language learners; o Expand career and workforce experience for student; and o Design central office supports to provide technical assistance and practical support in key areas.



Create demand for our schools: To meet this goal, the District must: o Develop and implement community outreach and engagement activities; o Improve student enrollment and assignment practices; o Improve school safety and enforce discipline; o Increase parent involvement and engagement; o Develop communications and marketing strategy; and o Develop and implement a formal district customer service program.



Serve as effective resource stewards: To meet this goal, the District must: o Implement modern human capital management system; o Redesign district budget processes; o Develop business intelligence analytic capacity; o Identify and solicit external investments; o Oversee management of district facilities; o Plans for technology needs; o Partner with non-district sponsored charter schools; and o Develop academic program partnerships.

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The Strategic Map To guide the details of the District’s implementation work, the district has created a comprehensive strategy map (below) which outlines a theory of action for the successful implementation of The Cleveland Plan. This theory of action states that: If CMSD focuses on five strategic actions: (1) creating and supporting quality schools; (2) strengthening the capacity of teachers and leaders; (3) designing effective curriculum, assessment and instructional resources; (4) creating demand for our schools, and (5) serving as effective resource stewards), then CMSD students can expect improved student achievement demonstrated by an increased mastery of rigorous curriculum learned within dynamic, contextual learning environments.

Four-Year Strategy Plan (2012-2016)          

Attract, retain and develop excellent teachers Replace failing school with new, high quality schools Increase graduation rates in every neighborhood Ensure all graduates are prepared for college, career and work Update textbooks, computers and technologies Maintain disciplined classrooms where students learn every day Provide real world education in local businesses Lengthen the school year for students who need it most Help fund outstanding, accountable charter schools Base Teacher and principal pay more on performance

Significant Accomplishments The School District has made great strides during the last several years. Some of the key accomplishments include:

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During the 2011-2012 school year, the District achieved the following benchmarks on the state report card: o Valley View Elementary School earned an “Excellent with Distinction” designation; o Five schools achieved and “Excellent” designation, including Whitney Young, John Hay Early College, John Hay School of Architecture and Design, John Hay School of Science and Medicine, and Riverside; o Thirteen schools were rated as “Effective”; o John Hay Early College High School had the highest Performance Index of any high school in the state of Ohio; o The District earned a record high performance in 6th grade reading proficiency and in 8th grade science proficiency for the second consecutive year; o The District also earned a record high performance in 8th grade math proficiency; o Also, the District achieved a 4-year graduation rate of 56.0%, up from 52.2% the previous year.



Community Engagement Initiatives: o o o o o

CMSD Parent University Annual Back to School Fair STEAM Program (Science, Technology, Engineering, Arts, Math) Monthly Parent Advisory Meetings Quarterly School/Parent Organization District Leadership



In the 2011-2012 school year, the District started a pilot program called The Bookshelf Project for 6th through 12th graders designed to replace outdated printed textbooks with updatable digital content from Houghton Mifflin Harcourt. Initially, a total of approximately 400 students in grades 6 – 8 at Mound Elementary School and Washington Park High School will be provided with Nook Color Tablets purchased at a discount from Barnes & Noble through a grant from Third Federal Foundation. For the 2012-2013 school year, The District purchased Nook Color Tablets for the following High Schools: Max Hayes, Martin Luther King Campus, and Jane Addams.



In the 2010-2011 school year, the District opened the International Newcomers Academy and the Ninth Grade Academy at Thomas Jefferson, a school newly renovated as part of the District’s capital improvement plan. The school centers around academic excellence along with ensuring all students their social-emotional needs can be met. Community organizations assist both of the schools at Thomas Jefferson both during the school day, and after school. There is high visibility by both administrators and teachers created to collaborate with the various cultures housed at the school. Staff works continuously to teach students to respect others, regardless of differences in language or culture; respecting culture is a primary focus of the school. The International Newcomers Academy has students from all over the world, speaking sixteen different languages. The innovative programming allows students to feel comfortable with their differences, and allows them to focus on learning.



During the 2008-2009 school year, the School District began offering the following opportunities for students in our district and region: o

MC2 STEM High School offers the regional need for advance high school education in science, technology, engineering and math. The MC2 STEM High School is a unique opportunity school of choice that accepts 75 percent of its students from the School District and 25 percent from the region. This high school is the first incubator STEM school in Cleveland that provides innovative instruction for students with multiple educational centers that compliment their curriculum of a dynamic real-world learning environment with a foundation of rigorous STEM based academic principles. Freshman campus is located

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within the Cleveland Science Center in the heart of downtown Cleveland, while the sophomore experience is held on the fortune campus of General Electric Nela Park, and finally the junior and senior years take place on a college campus. This is the first high school in the nation to be housed on the campus of a Fortune 500 company. o

Design Lab Early College combines creating thinking, refined technical skills and artistic application of design. The students participate in the full evolution of projects from conception and design to fabrication and presentation. The School District is partnering with Cuyahoga Community College Metro Campus for this dynamic opportunity. The first class of Design Lab graduated in the 2011-2012 school year

Both schools offer an innovative four year high school experience. During the senior year, students attend the majority of their classes on a college campus. The School District believes these opportunities of schools of choice will not only be attractive to students and faculty but also position our students to compete on a global scale. 

In the fall of 2007 the School District opened four single gender schools for students in grade Pre K8. According to a survey conducted by the Cleveland Foundation, parents of students at these single gender schools report a 94 percent satisfaction rate with the schools. The Valley View Boys Leadership Academy received their first Excellent on their 2009-2010 state report card. Beginning in the 2012-13 school year, the academies will serve students Pre K – 7th grade.



Named after noted Glenville High School football coach Ted Ginn, Sr., this school opened in fall of 2007 and is designed to create a productive, holistic learning environment for the School District’s atrisk make students. Plans are to establish a residency-based school environment. Other elements include coordinated services with city an regional social service agencies. In the school’s first three years of operation, the Academy scored a rating of “Continuous Improvement” on its Ohio Department of Educational Report Card. In 2010-2011, Ginn Academy had its first class of graduation seniors.



To enhance safety and security, independent audits are being conducted to assess the current level of support, services personnel and security equipment for the purpose of extracting strategic insights and making recommendations to improve School District safety and security. The School District has installed metal detectors and increased security guards to all buildings.



The School District continued the 3Rs (Rights, Responsibilities, Realities) collaboration with the Cleveland Bar Association in which more than 700 lawyers, judges and other volunteers of the legal community have gone into 10th-grade classrooms in our high schools. Their mission is to improve understanding of the law and the Constitution; improve passage of the Ohio Graduation Test; and to provide practical career counseling to focus students on their potential beyond high school.



The District opened two new schools at the beginning of the school year Anton Grdina and Mound. Both schools are elementary buildings. Construction began and continued on Almira, Cleveland School of Arts, Louisa May Alcott, Miles, Orchard, Paul L. Dunbar, John Marshall, and Max Hayes. Construction has yet to begin on Case, Glenville Area Elementary, New West Side High School, and Buckeye-Woodland.



P.R.I.D.E Initiative: Priority Recognition Increased Data & Efficiency was a new program that was piloted at ten schools throughout the District in the 2011-2012 school year. The two main components of the program are the visitor management segment and the student ID segment. This program will be a great example of the importance of hardware and humanware working together. The visitor management segment identification, and screening of visitors. The system will verify visitor identities by scanning the driver’s license or state identification. The system will also issue an

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alert if a “high risk” visitor should enter a building. The student ID displays the District’s logo with an up-to-date picture of the student. Each ID includes a bar code that will be swiped for logging various activities and transactions. They can be used to increase efficiency in the cafeteria, media center, hallways and dealing with tardy students. A handheld device will be used to assist with gathering climate data and tracking some discipline issues. The features of this system will also allow everyone at the schools to account for all individuals who enter our facilities. This program was rolled out throughout the entire district in the 2012-2013 school year. 

A District-wide uniform policy was instituted for grades K-8 in 2008. In 2009, high school students were required to participate in the District-wide uniform policy. This has been a successful initiative for the District Community.

The listing above represents just a sample of what is being achieved. Things will continue to change for the better in the years to come.

Long-Term Financial Planning The Board of Education has assigned responsibility for annual and long-term financial planning to the Chief Financial Officer/Treasurer. The policies require that the first objective of financial management planning is to provide for the education of the School District’s children. We are expected to use the best available techniques for budget development and management, as well as to engage in strategic, long-term financial planning which attempts to forecast the need for future educational and capital expenditures. The School District has implemented a 14-year, ten segment Master Facility Plan, that will require approximately $1.5 billion to repair, renovate and rebuild its school facilities. The revised Master Facility Plan called for the construction/replacement of 50 schools, renovation of 15 existing facilities and maintain and repair 6 existing facilities as resources allow. Segment one of the construction projects began in 2002. Through June 30, 2012, the School District has constructed 26 new schools and renovated 5 existing facilities.

Relevant Financial Policies At the beginning of each fiscal year, the School District adopts either a temporary or permanent appropriation measure for that fiscal year. If a temporary appropriation measure is first adopted, the permanent appropriation measure must be adopted upon receipt from the County Auditor of an amended certificate of estimated resources based on final assessed values and tax rates, which is usually within the first three months of the fiscal year. Annual appropriations may not exceed the County Budget Commission's official estimate of resources. The County Auditor must certify that the School District's appropriation measures, including any supplements or amendments, do not exceed the amount set forth in the latest of those official estimates. All disbursements and transfers of cash between funds require appropriation authority. Budgets are controlled at the fund level. All purchase order requests must be approved by the appropriate levels of authority and certified by the Chief Financial Officer/Treasurer; necessary funds are then encumbered and purchase orders are released to vendors. The accounting system used by the School District provides interim financial reports which detail year-to-date expenditures and encumbrances versus the original appropriation plus any additional appropriations made to date. Each administrator and school principal is furnished monthly reports showing the status of the budget accounts for which they are responsible. In addition, an on-line inquiry system is available for each cost center site. The School District pursues an aggressive cash management program by expediting the receipt of revenues and prudently investing and depositing available cash in obligations collateralized by instruments issued by the

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United States Government, governmental agencies, corporations or the State of Ohio or insured by the Federal Deposit Insurance Corporation (FDIC) and/or the Securities Investor Protection Corporation (SIPC). Protection of the School District’s deposits is provided by the federal deposit insurance corporation and/or by qualified securities pledged by the institution holding the assets. By law, financial intuitions may establish a collateral pool to cover all public deposits. The market value of the pooled collateral must equal at least 105 percent of public funds deposited. Collateral is held by trustees including the Federal Reserve Bank and other designated third-party trustees of the financial institutions. Internal Controls Management of the School District is responsible for establishing and maintaining an internal control structure designed to ensure that the assets of the School District are protected from loss, theft or misuse. The internal control structure ensures that accounting data is compiled to allow for the preparation of financial statements in conformity with GAAP. The internal control structure is designed to provide reasonable assurance that these objectives are met. The concept of reasonable assurance recognizes that (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management. As a recipient of federal, state, and county financial assistance, the School District is also responsible for maintaining a rigorous internal control structure that ensures full compliance with applicable laws and regulations related to those programs. This internal control structure is subject to periodic evaluation by management, external auditors and the internal audit staff of the School District. The School District is required to undergo an annual audit in conformity with the provisions of the Single Audit Act and U.S. Office of Management and Budget Circular A-133, Audits of State and Local Governments and Non-profit Organizations. The information related to the Single Audit, including the schedule of federal awards expenditures, findings and recommendations, and auditor’s reports on the internal control structure and compliance with applicable laws and regulations are included in a separate report.

Awards GFOA Certificate of Achievement The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the School District for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report must satisfy both generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement is valid for a period of one year only. We believe that our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. ASBO International Certificate of Excellence The School District received the Association of School Business Officials (ASBO) International Certificate of Excellence in Financial Reporting for its Comprehensive Annual Financial Report for the fiscal year ended June 30, 2011. This award certifies that the report substantially conforms to the principles and standards of financial reporting as recommended and adopted by ASBO. The award is granted only after an intensive review of financial reports by an expert ASBO panel of review consisting of certified public accountants and practicing School business officials. Receiving the award is recognition that a School system has met the highest standards of excellence in School financial reporting.

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Cleveland Municipal School District Board Members Appointed by Mayor of City of Cleveland

Began Service as a Board Member

Present Term Expires June 30

Denise W. Link, Chair

2007

2015

Louise P. Dempsey, Vice Chair

1998

2015

Patricia Crutchfield

2009

2013

Robert M. Heard, Sr.

2004

2013

Willetta A. Milam

2003

2013

Shaletha Mitchell

2011

2015

Iris M. Rodriguez (a)

2008

2015

Dr. Lisa Thomas

2011

2013

Eric Wobser

2011

2015

Name

Dr. Ronald M. Berkman, ex-officio Dr. Jerry Sue Thornton, ex-officio

(a) Resigned December 11, 2012; effective December 31, 2012

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Cleveland Municipal School District Senior Appointed Officials

Eric Gordon

Chief Executive Officer

Michelle N. Pierre-Farid (a) John Scanlan (b) Christine Fowler-Mack Patrick Zohn

Chief Academic Officer Chief Financial and Administrative Officer Chief of New and Innovative Schools and Programs Chief Operating Officer

Diana Ehlert Nicholas Jackson Gary Sautter Karen Thompson Dennis Kubick Serena Houston-Edwards (c) TBD Wayne Belock Joseph Podach Dr. Russell Brown Lester Fultz

Deputy Chief, Academic Resources Deputy Chief, Business Operations Deputy Chief, Capitol Programs Deputy Chief, Curriculum and Instruction Deputy Chief, Financial Officer/Controller Deputy Chief, Human Resources (interim) Deputy Chief, Leadership and Growth Deputy Chief, Legal Counsel Deputy Chief, Operations and Performance Improvement Deputy Chief, Organizational Accountability Deputy Chief, Safety and Security

Rojeana Howell-Curtis Dr. Laura Purnell (d) Luther Johnson (e) Donald Jolly (f) Valentina Moxon Lisa Farmer Cole Dr. Roseann Canfora

Academic Superintendent, Growth Schools Academic Superintendent, Refocus Schools Academic Superintendent, Refocus Schools (interim) Academic Superintendent, Repurpose Schools (interim) Academic Superintendent, School Improvement Grant Schools Director, Innovative Portfolio Schools District Communications Officer

George Anagnostou Tracy Hill Regis Balaban Larry Johnston Donna Bowen (g) Blessing Nwaozuzu

Executive Director, Budgets Executive Director, Family and Community Engagement Executive Director, Food Services Executive Director, Internal Auditor Executive Director, Intervention Services (interim) Executive Director, Student Services

( a ) Appointed August 1, 2012 ( b ) Appointed November 15, 2011; Effective January 1, 2012 ( c ) Appointed July 9, 2012 ( d ) Retired January 1, 2013 ( e ) Appointed November 7, 2012 ( f ) Appointed November 7, 2012 ( g ) Appointed July 23, 2012

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Financial Section

INDEPENDENT ACCOUNTANTS’ REPORT

Cleveland Municipal School District Cuyahoga County 1380 East Sixth Street Cleveland, Ohio 44114

To the Board of Education: We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Cleveland Municipal School District, Cuyahoga County, Ohio (the District), as of and for the year ended June 30, 2012, 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. 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 the Comptroller General of the United States’ Government Auditing Standards. Those standards require that we plan and perform the audit to reasonably assure 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 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, each major fund, and the aggregate remaining fund information of the Cleveland Municipal School District, Cuyahoga County, Ohio, as of June 30, 2012, and the respective changes in financial position and where applicable, cash flows, thereof and the budgetary comparison for the General Fund 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 December 28, 2012, on our consideration of the 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. While we did not opine on the internal control over financial reporting or on compliance, that report describes the scope of our testing of internal control over financial reporting and compliance and the results of that testing. That report is an integral part of an audit performed in accordance with Government Auditing Standards. You should read it in conjunction with this report in assessing the results of our audit.

Lausche Building / 615 Superior Ave., NW / Twelfth Floor / Cleveland, OH 44113-1801 Telephone: (216) 787-3665 (800) 626-2297 Fax: (216) 787-3361 www.auditor.state.oh.us

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Cleveland Municipal School District Cuyahoga County Independent Accountants’ Report Page 2

Accounting principles generally accepted in the United States of America require this presentation to include Management’s discussion and analysis, as listed in the table of contents, to supplement the basic financial statements. Although this information is not part of the basic financial statements, the Governmental Accounting Standards Board considers it essential for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any other assurance. We conducted our audit to opine on the financial statements that collectively comprise the District’s basic financial statements taken as a whole. The introductory section, the financial section’s combining statements, individual fund statements and schedules, and the statistical section information provide additional analysis and are not a required part of the basic financial statements. The financial section’s combining statements, individual fund statements and schedules are management’s responsibility, and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. These statements and schedules were subject to the auditing procedures we applied to the basic financial statements. We also applied certain additional procedures, including comparing and reconciling this information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, in accordance with auditing standards generally accepted in the United States of America. In our opinion, this information is fairly stated in all material respects in relation to the basic financial statements taken as a whole. We did not subject the introductory section and statistical section information to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we express no opinion or any other assurance on them.

Dave Yost Auditor of State December 28, 2012

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Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

The discussion and analysis of the School District’s financial performance provides an overall review of the School District’s financial activities for the fiscal year ended June 30, 2012. The intent of this discussion and analysis is to look at the School District’s financial performance as a whole; readers should also review the transmittal letter, notes to the basic financial statements and financial statements to enhance their understanding of the School District’s financial performance.

Financial Highlights Key financial highlights for 2012 are as follows: 

Total current and other assets decreased by $0.6 million and capital assets decreased by $2.2 million, resulting in a net decrease in total assets of $2.8 million in Governmental Activities.



Total short-term liabilities decreased $6.4 million and total long-term liabilities decreased $28.5 million, resulting in a net decrease in total liabilities of $34.9 million in Governmental Activities.



Total net assets increased $32.0 million in Governmental Activities.



General revenues accounted for $671.3 million in revenue or 80.1% of all revenues for Governmental Activities. Program specific revenues in the form of charges for services, sales, grants or contributions accounted for $166.4 million or 19.9% of total revenues of $837.7 million.



Total program expenses were $805.7 million in Governmental Activities.



Among major funds, the General Fund had $632.1 million in revenues and other financing sources and $638.4 million in expenditures and other financing uses. The General Fund’s fund balance decreased by $6.4 million.

Using this Comprehensive Annual Financial Report (CAFR) This annual report consists of a series of financial statements and notes to those statements. These statements are organized so the reader can understand The School District as an entire operating entity. The statements begin at a summary level and expand to detailed financial activities. The Statement of Net Assets and Statement of Activities provide information about the activities of the entire School District, presenting both an aggregate view of the School District’s current finances and a longer-term view of those finances. Fund financial statements provide the next level of detail. For governmental funds, these statements present how services were financed in the short-term as well as what remains for future spending. The fund financial statements also look at the School District’s most significant funds with all other nonmajor funds presented in total in one column. The General Fund, the Debt Service Fund, and the Classroom Facilities Fund, are the most significant governmental funds. Reporting the School District on a Government-Wide Basis Statement of Net Assets and the Statement of Activities While this document contains the large number of funds utilized by the School District to provide programs and activities, the view of the School District as an entity looks at all financial transactions and asks the -3-

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

question, “How did we do financially during 2012?” The Statement of Net Assets and the Statement of Activities answer this question. These statements include all assets and liabilities using the accrual basis of accounting similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year’s revenues and expenses regardless of when cash was received or paid. These two statements report the School District’s net assets and changes in those net assets. This change in net assets is important because it tells the reader whether the financial position of the School District, as a whole, has improved or diminished. The causes of this change may be the result of many factors, some financial, some not. Non-financial factors include the School District’s property tax base, current property tax laws in Ohio restricting revenue growth, facility conditions, required educational programs, general inflation and other factors. All of the School District’s programs and services are reported as Governmental Activities in the Statement of Net Assets and the Statement of Activities. Governmental Activities consists of functions that are principally supported by taxes and intergovernmental revenues. Such activities include instruction, support services, operation and maintenance of plant, pupil transportation, operation of non-instructional services and extracurricular activities among others for the School District. Currently, the School District has no Business-Type Activities, which include functions that are intended to recover all or a significant portion of their costs through user fees and charges. Reporting the School District’s Most Significant Funds Fund Financial Statements The analysis of the School District’s major funds begins on page 18. Fund financial reports provide detailed information about the School District’s major funds. The School District uses many funds to account for its financial transactions. However, these fund financial statements concentrate on the School District’s most significant funds. The School District’s major governmental funds are the General Fund, the Debt Service Fund, and the Classroom Facilities Fund. Governmental Funds - Most of the School District’s activities are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year-end available for spending in future periods. These funds are reported using modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the School District’s general government operations and the basic services it provides. Governmental fund information helps the reader determine the amount of financial resources that can be spent in the near future to finance educational programs. The relationship (or differences) between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds is reconciled in the financial statements. Proprietary Funds - Proprietary funds have historically operated as enterprise and internal service funds using the same basis of accounting as business-type activities. The School District has no enterprise funds. The internal service fund is used to account for and finance its uninsured risks of loss and associated expenses attributable to deductibles and self-insured retention limits for general liability and property damage claim settlements and judgments. Also, it used to account for and finance the Districts self-insurance programs for employee medical benefits. -4-

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

The School District on a Government-Wide Basis The Statement of Net Assets provides the perspective of the School District as a whole. Table 1 provides a summary of the School District’s net assets for 2012 compared to 2011: Table 1 Net Assets Governmental Activities ($ In Millions) Governmental Activities 2012 2011 Assets Current and Other Assets Capital Assets

$

Total Assets

737.7 711.5

$

738.3 713.7

Change $

(0.6) (2.2)

1,449.2

1,452.0

(2.8)

Liabilities Current Liabilities Long-Term Liabilities

230.5 237.4

236.9 265.9

(6.4) (28.5)

Total Liabilities

467.9

502.8

(34.9)

518.8

504.0

14.8

51.2 278.9 19.0 31.5 1.5 2.1 0.8 0.7 3.4 73.3

48.2 260.6 19.4 28.3 1.5 0.5 1.0 0.9 26.1 58.7

3.0 18.3 (0.4) 3.2 0.0 1.6 (0.2) (0.2) (22.7) 14.6

Net Assets Invested in Capital Assets Net of Related Debt Restricted Restricted for Debt Service Restricted for Capital Projects Restricted for Educational Special Trust Restricted for Classroom Facilities Maintenance Restricted for Auxiliary Serivces Restricted for Miscellaneous State Grants Restricted for Food Service Restricted for Miscellaneous Federal Grants Restricted for Other Purposes Unassigned Total Net Assets

$

-5-

981.2

$

949.2

$

32.0

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

Graph 1 Net Assets Governmental Activities ($ In Millions)

$1,600 $1,400 $1,200 $1,000 2012

$800 $600

2011

$400 $200 $0 Assets

Liabilities

Net Assets

Current and other assets decreased by $0.6 million and capital assets decreased by $2.2 million, resulting in an overall decrease in total assets of $2.8 million. The decrease in current and other assets is mostly attributable to a net decrease in Intergovernmental Receivable of $2.8 million. The primary reason for the decrease in capital assets is that the School District sold five of its school buildings in fiscal year 2012. Current liabilities decreased by $6.4 million and long-term liabilities decreased by $28.5 million, resulting in an overall decrease in total liabilities of $34.9 million. The decrease in current liabilities is due primarily to the decrease of Unearned Revenue of $5.8 million. The decrease in long-term liabilities is due primarily to the decrease in long-term debt payments of $17.1 million and the decrease in compensated absences of $10.9 million. Total net assets increased by $32.0 million. This is mainly the result of an $18.3 million increase of the fund balance in the Capital Projects Funds. The Capital Project Funds balance increased because the intergovernmental receivable increased by $27.3 million due the district and the State of Ohio coming to agreement to start segment 6 of the ongoing construction program. Also, net assets increased due to the unassigned net assets increasing by $14.6 million. This increase was due to long term liabilities decreasing by $10.9 million. Long term liabilities decreased because the district offered an Employee Separation Plan to the members of the Cleveland Teachers Union during fiscal year 2012. At the end of the current year, the School District is able to report positive balances in all three categories of net assets.

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Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

Table 2 shows the change in net assets for fiscal years 2012 and 2011. Table 2 Changes in Net Assets Governmental Activities ($ In Millions) Governmental Activities 2012 2011 Revenues General Revenues: Property Taxes Miscellaneous Investments Income Grants and Entitlements Program Revenues: Charges for Services Operating Grants Capital Grants

$

Total Revenues Program Expenses Instruction Support Services: Pupil and Instructional Staff Board of Education, Administration, Fiscal and Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Interest and Fiscal Charges Total Expenses Change in Net Assets Net Assets Beginning of Year Net Assets End of Year

$

-7-

185.6 18.5 1.9 465.3

$

Change

189.6 13.7 3.5 465.5

$

(4.0) 4.8 (1.6) (0.2)

4.6 118.8 43.0

6.0 243.7 2.0

(1.4) (124.9) 41.0

837.7

924.0

(86.3)

512.4

522.7

(10.3)

87.1

96.7

(9.6)

56.0 55.1 27.9 12.0 39.7 5.9 9.6

60.6 63.2 28.9 12.4 42.2 6.4 9.9

(4.6) (8.1) (1.0) (0.4) (2.5) (0.5) (0.3)

805.7

843.0

(37.3)

32.0

81.0

(49.0)

949.2

868.2

81.0

981.2

$

949.2

$

32.0

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

Graph 2 Revenue for Governmental Activities ($ In Millions) 2012 671.3 166.4 $ 837.7

General Revenues Program Revenues Total Revenues

$

2011 672.3 251.7 $ 924.0 $

Governmental Activities - Revenue $800 $600 $400 $200 $0 2012

2011

Program Revenues

General Revenues

General Revenues General revenues for the School District are comprised almost entirely of property tax collections and grants from various sources. Property taxes made up 27.7% and 28.2% and grants made up 69.3% and 69.2% of general revenues for governmental activities for the School District in fiscal years 2012 and 2011, respectively. The unusual nature of property tax legislation in the State of Ohio creates the need to routinely seek voter approval for increases in operating funds to maintain a constant level of service. As a result of legislation enacted in 1976, the overall revenue generated by a voted millage does not increase as a result of inflation. As an example, a homeowner with a home valued at $100,000 (assessed value of $35,000) and taxed at 1.0 mill would pay $35.00 annually in taxes. If three years later the home was reappraised and increased to $200,000 (assessed value of $70,000) the effective tax rate would become .5 mill and the owner would still pay $35.00. Because of this taxation methodology, real property tax assessments due to the School District have held steady for the past several years. Collection rates have declined and there has been some increase in delinquencies in the past several years due to the slowing economy and slightly higher unemployment rates for the City of Cleveland. The voters of the City of Cleveland approved a new property tax levy in May 2001 (Issue 14), the first since 1996. This levy was approved to support the payment of the debt service for bonds issued for the school facility construction/renovation program and to support the ongoing maintenance of those facilities. Collections cannot be used to support the general operations of the School District. The collection on that levy began in January 2002. The primary source of grant revenue is State general operating aid known as the “Foundation Program Aid”. Established by Ohio law and funded by biennial appropriations, the Foundation Program is a statutory program through which the State currently makes direct payments to school districts based upon a statutory -8-

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

formula. Moneys distributed to a school district under the existing Foundation Program are required to be used for current operating expenses, unless specifically allocated by the State for some other purpose. Program Revenues Operating and capital grants comprise 97.3% of total program revenues of the School District. These grants, obtained mainly from the Federal Government, State of Ohio and the Ohio School Facilities Commission, support specific educational programs and objectives as defined by these agencies as well as the capital programs. The amount available to the School District may vary from year to year depending on amounts made available by these agencies and the needs of the School District. Table 3 Total and Net Cost of Program Services Governmental Activities ($ In Millions) Total Cost of Services 2012

Net Cost of Services 2012

Total Cost of Services 2011

Net Cost of Services 2011

Instruction Support Services: Pupil and Instructional Staff Board of Education, Administration, Fiscal and Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Interest and Fiscal Charges

$

$

$

$

Total Expenses

$

512.4

(416.1)

522.7

(372.1)

87.1

(53.6)

96.7

(50.2)

56.0 55.1 27.9 12.0 39.7 5.9 9.6

(52.8) (52.6) (27.4) (11.7) (10.3) (5.2) (9.6)

60.6 63.2 28.9 12.4 42.2 6.4 9.9

(52.5) (62.0) (25.7) (12.0) (1.2) (5.7) (9.9)

805.7

$

(639.3)

$

843.0

$

(591.3)

The Statement of Activities shows the cost of program services and the charges for services and grants offsetting those services. Table 3 above shows, for governmental activities, (services supported by tax revenue and unrestricted State entitlements), the total cost of services and the net cost of services. The largest Governmental Activities program expense remains instruction, comprising 63.6% of the total cost of services. When combined with pupil and instructional support these categories make up 74.4% of the total cost of services. This make-up is consistent with the general educational objectives of the School District. The dependence upon general revenues for governmental activities is apparent. 80.1% of instruction activities are mainly supported through taxes and general revenues. Similarly, for all governmental activities general revenue support is 79.3%. The community, as a whole, is by far the primary support for the School District students.

-9-

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

The School District’s Funds Information about the School District’s major funds starts on page 18. These funds are accounted for using the modified accrual basis of accounting. All governmental funds had total revenues and other financing sources of $890.4 million and expenditures and other financing uses of $849.7 million, resulting in a net increase in fund balances of $40.7 million. The General Fund is the chief operating fund of the School District. At the end of the current fiscal year, unassigned fund balance of the general fund was $2.5 million, while total fund balance decreased to a $15.2 million surplus. The net changes in fund balances for the year were most significant in the General Fund, the Classroom Facilities Capital Projects Fund and Other Governmental Funds. The fund balance in the General Fund decreased $6.4 million. The decrease in fund balance can be attributed to several items related to increasing expenditures. Regular instruction expenses increased 18.8% and special instruction expenses increased 8.1% from the previous year. These increases were due to the District’s continuing efforts to improve the education for the students of the District. The Classroom Facilities capital projects fund balance decreased $8.7 million. The decrease was due to the transferring excess funds to the Permanent Improvement Fund. Funding of this program is described in more detail in the Capital Assets and Debt Administration section. The Title I fund balance increased by $36.5 million. The increase in fund balance was due to the expenditures decrease by $55.5 million from the previous year. This decrease was due to the expiration of the ARRA Title I grants. The School District continues to seek grant monies to provide services to our students. General Fund Budgeting Highlights The School District’s budget is prepared according to Ohio law and is based on accounting for transactions on a cash basis for receipts, disbursements and encumbrances. The General Fund is the most significant fund to be budgeted and is the main operating fund of the School District. For the General Fund total actual revenues and other financing sources were $636.6 million, which was $5.1 million more than the final budget estimate. The final expenditure and other financing uses budget was $660.0 million. Total actual expenditures and other financing uses was $640.8 million, or $19.2 million below the final budget estimates. This was mainly due to a continuing effort by the School District’s management to reduce its expenditures to lower future operating deficits and postpone the need to appeal to the voters for an additional operating levy. The General Fund’s ending unencumbered cash balance totaled $30.7 million, which was $24.3 million more than the final budgeted amount.

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Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

Capital Assets and Debt Administration Capital Assets At the end of fiscal year 2012 the School District had $711.5 million invested in capital assets. Table 4 shows fiscal year 2012 balances compared to 2011: Table 4 Capital Assets at June 30 (Net of Depreciation) ($ In Millions) Governmental Activities 2012 2011

Change

Land Land Improvements Buildings and Improvements Vehicles and Equipment Intangible Assets Construction in Progress

$

33.2 0.3 628.2 3.8 4.1 41.9

$

34.2 0.3 610.4 4.9 4.7 59.2

$

(1.0) 0.0 17.8 (1.1) (0.6) (17.3)

Totals

$

711.5

$

713.7

$

(2.2)

All capital assets, except for land and construction in progress, are reported net of depreciation. In 2000, a Facilities Assessment Commission was established to review the condition of the School District’s facilities. The Commission recommended that a complete renovation program of all School District facilities be undertaken and that a substantial contribution from the State of Ohio (through the Ohio School Facilities Commission) could be included in the proposed construction and renovation plan by participation in the Classroom Facilities Assistance Program (CFAP). Since then, the School District and the Ohio School Facilities Commission have created a Master Facilities Plan, which was revised in 2008, that addresses the needs of all buildings in the School District and the unique needs of the School District and its students. The Revised Master Facilities Plan has been approved by the School District’s Board, the Ohio School Facilities Commission and the State Controlling Board. The cost for the entire program is an estimated $1.5 billion, of which the School District’s cost share under the CFAP will be 32% or approximately $560 million with the remaining portion (approximately $940 million) to be paid by the State. As the program continues, factors such as enrollment projections, construction costs, locally funded non-matchable project components and inflation will affect the total scope of the program and the funds required to complete it. Construction began in 2002 utilizing funding from several sources as described below under Debt Administration. Initial work focused mainly on making every facility warm, safe and dry. Concurrently, new facilities have been constructed and others significantly renovated and others inactivated for student use. The complete program is currently estimated to take about sixteen years. See Note 11 to the basic financial statements for additional information on capital assets.

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Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

Debt Administration At June 30, 2012 the School District had $192.7 million in bonds and notes outstanding, $6.5 million due within one year. Table 5 summarizes bonds and notes outstanding. Table 5 Outstanding Debt, at Year End ($ In Millions) Governmental Activities 2012 General Obligation Bonds and Notes: 2001 H.B. 264 Energy Conservation Notes $ 4.5 2002 Library Refunding Bonds 0.0 2002 School Facilities Improvement Bonds 6.2 2004 School Facilities Improvement Bonds 84.8 2010 School Facilities Improvement Bonds 55.0 2012 School Facilities Improvement Bonds 20.9 QZAB Bonds: 2001 QZAB - Technology Academy 5.5 2001 QZAB - Arts Academy 5.8 2001 QZAB - Literacy Academy 10.0 $ 192.7 Total

Graph 3 Debt and Debt Limit ($ In Millions) 2012 Total Debt $ 192.7 Total Debt Limit $ 512.7

Governmental Activities 2011 $

$

5.4 2.9 36.9 88.3 55.0 0.0 5.5 5.8 10.0 209.8

2011 $ 209.8 $ 513.0

Debt and Debt Limit At June 30 Amounts in Millions

$600 $500 $400 $300 $200 $100 $0 2012

2011 Fiscal Year

Total Debt

Total Debt Limit

In order to undertake the initial stages of planning and to perform some required work on its facilities to make them “warm, safe and dry,” the School District utilized several borrowing/funding sources. One source totaling $21.3 million, the Qualified Zone Academy Bonds (QZAB), was put in place just before the - 12 -

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

beginning of the 2002 fiscal year. These bonds are being used to support facility renovations at seven specific school sites. Another source, the $11.5 million H.B. 264 Energy Conservation Notes was used to renovate the environmental controls at school facilities across the School District. In November 2001, the School District issued $35 million School Facility Bond Anticipation Notes. These Notes represented the first installment of the $335 million of facility construction/renovation borrowing approved by voters in May 2001. In October 2002, the School District replaced the short-term School Facility Bond Anticipation Notes with long-term School Facility Bonds. An additional $40 million of new proceeds was borrowed at that time, representing the second installment of the $335 million approved borrowing capacity. In July 2004, the School District issued $125 million of School Improvement Bonds, the third installment. In December 2005, the School District issued $30 million of School Facility Bond Anticipation Notes, representing the fourth installment of the $335 million approved borrowing capacity. In March 2007, the School District issued $30 million of School Facility Bond Anticipation Notes, representing the fifth installment of the $335 million approved borrowing capacity. In December 2007, the School District issued an additional $5 million of new proceeds representing the sixth installment of the $335 million approved borrowing capacity. In December 2008, the School District issued $15 million of School Improvement Bond Anticipation Notes representing the seventh installment of the $335 million approved borrowing capacity. In September 2010, the School District issued $55 million of School Improvement Bond Anticipation notes representing the eighth and final installment of the $335 million approved borrowing capacity. Due to the School District’s participation in the Credit Enhancement Program, Fitch, Moody’s and S&P have assigned programmatic ratings of “AA”, “Aa2”, and “AA”, respectively, to the School District’s bonds. The School District applied for underlying ratings from Fitch, S&P and Moody’s. As a result of the application process, Fitch assigned an underlying rating of “A-“ to the bonds, Moody’s assigned an underlying rating of “A2” to the bonds, and S&P assigned an underlying rating of “BBB+” to the bonds. The School District’s underlying ratings and the ratings with regard to the School District’s participation in the Credit Enhancement Program have been published by the respective rating services. At June 30, 2012, the School District’s overall legal debt margin was $374.2 million, with an unvoted debt margin of $5.7 million. See Note 17 to the basic financial statements for additional information on all longterm obligations. Current Issues In November 2012, the voters of the city of Cleveland approved a four year 15 mill operating levy. With the passing of the levy, the District is projecting a balanced budget through the levy period. In addition, there are other ongoing issues to be addressed over the next five years as described below. Education Jobs Fund – The Education Jobs Fund (Ed Jobs) is a new Federal program that provided $10 billion in assistance to States to save or create education jobs for the 2010-2011 or 2011-2012 school years. Jobs funded under this program included those that provide educational and related services for early childhood, elementary, and secondary education. The State of Ohio was awarded approximately $361 million in funding. The School District was awarded $17.7 million of the awarded grant from the State to use during the 2012 Fiscal year. Race to the Top Fund – The Race to the Top Fund is a new program in result of the American Recovery and Reinvestment Act of 2009 (ARRA). The ARRA provided $4.35 billion for the Race to the Top Fund, a - 13 -

Cleveland Municipal School District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2012 Unaudited

competitive grant program designed to encourage and reward States that are creating the conditions for education innovation and reform; achieving significant improvement in student outcomes, including making substantial gains in student achievement, closing the achievement gaps, improving high school graduation rates, and ensuring student preparation for success in college and careers; and implementing ambitions plans in four core education reform areas. Race to the Top rewarded States that have demonstrated success in raising student achievement and have the best plans to accelerate their reforms in the future. These States will offer models for others to follow and will spread the best reform ideas across their States, and the country. As a result of this, the State of Ohio was awarded $400,000,000 on August 24, 2010. The School District was awarded a percentage of the awarded grant from the State to use during the 2012 fiscal year. State Foundation Payments – HB 1 replaced the prior funding formula (HB 119) with the Ohio Evidence Based Funding Model. Under the final version of the HB 1, calculations include funding for both Cleveland Municipal School District and Charter School students. HB 1 mandates that all school district pay tuition for all students who reside in the School District and attend a charter school. Foundation payments under the Ohio Revised Code (HB 1) are calculated by the Ohio Department of Education (ODE). State fund allocations for fiscal year 2012 and beyond are projected to be based on Average Daily Membership. Commercial Activity Tax – HB 66 makes provisions to replace some revenue lost due to the phase out of the Tangible Personal Property Tax. Businesses are now subject to a Commercial Activity Tax (CAT) that will provide some replacement income to school districts for lost tangible property revenues. School Property Tax Replacement – The legislature established a School Property Tax Replacement Fund to reimburse school districts for the loss in taxable value resulting from deregulation of the electric and gas utility industries (SB 3 and 287). This reimbursement was phased out in fiscal year 2012. Homestead Exemption – The recent budget bill (HB 119) included significant property tax reductions for senior citizens. The Homestead Exemption will allow senior citizen homeowners and permanently/totally disabled homeowners, regardless of income, to withhold $25,000 of market value of their owner occupied home from property taxes. Financial Forecast – The School District is required to adopt a five-year financial forecast of revenues and expenditures each year. A deficit was projected in fiscal years 2014 and beyond. With the passing of the levy in November 2012, the district is no longer projecting a deficit in fiscal year 2014. The forecast includes several revenue and expense assumptions based upon recent legislation, historical trends, and future assumptions. Although the most recent forecast anticipates continuing reductions in School District student enrollment and continued increasing enrollment to charter schools, it projects a positive cash balance through fiscal year 2013. Contacting the School District’s Financial Management This financial report is designed to provide our citizen’s, taxpayers, and investors and creditors with a general overview of the School District’s finances and to show the School District’s accountability for the money it receives. If you have questions about this report or need additional financial information contact Mr. John Scanlan, Chief Financial and Administration Officer/Treasurer at Cleveland Municipal School District, 1380 East Sixth Street, Cleveland, Ohio 44114 or by email [email protected] - 14 -

Basic Financial Statements

- 15 -

Cleveland Municipal School District Statement of Net Assets-Governmental Activities June 30, 2012

Total Assets Equity in Pooled Cash and Cash Equivalents Cash and Cash Equivalents with Fiscal Agents Investments Investments with Fiscal Agents Receivables: Taxes Accounts Intergovernmental Accrued Interest Materials and Supplies Inventory Nondepreciable Capital Assets Depreciable Capital Assets, Net

$

145,523,615 665,277 117,953,632 15,360,256 302,586,630 577,431 149,035,733 556,050 5,447,173 75,107,821 636,358,683

Total Assets

1,449,172,301

Liabilities Accounts Payable Accrued Wages and Benefits Retainage Payable Intergovernmental Payable Unearned Revenue Matured Compensated Absences Payable Accrued Interest Payable Claims Payable Long-Term Obligations: Due Within One Year Due in More Than One Year

12,300,878 38,422,827 847,183 25,547,202 149,813,754 39,589 553,761 2,958,636 11,902,538 225,578,074

Total Liabilities

467,964,442

Net Assets Invested in Capital Assets, Net of Related Debt Restricted Restricted for Debt Service Restricted for Capital Programs Restricted for Educational Special Trust Restricted for Classroom Facilities Maintenance Restricted for Auxiliary Services Restricted for Miscellaneous State Grants Restricted for Food Services Restricted for Miscellaneous Federal Grants Restricted for Other Purposes Unrestricted

518,814,295 51,217,114 278,969,178 19,074,226 31,486,741 1,472,876 2,061,192 836,012 651,118 3,362,461 73,262,646

Total Net Assets

$

See accompanying notes to the basic financial statements

- 16 -

981,207,859

Cleveland Municipal School District Statement of Activities-Governmental Activities For the Fiscal Year Ended June 30, 2012

Program Revenues

Functions/Programs Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Interest and Fiscal Charges Totals

Expenses

$ 322,367,731 174,228,202 11,316,290 4,493,188

Charges for Services and Sales

$

$ 805,699,631

$ (256,798,608) (145,214,563) (9,682,270) (4,415,479)

0 0 0 0 0 0 0 0 0 0 0 0

(29,416,785) (24,040,810) (281,223) (39,194,748) (11,665,879) (1,677,524) (52,575,683) (27,444,687) (11,739,075) (10,288,411) (5,245,577) (9,640,956)

43,033,556

(639,322,278)

General Revenues Property Taxes Levied For: General Purposes Debt Service Capital Outlay Investment Income Miscellaneous Grants and Entitlements not Restricted to Specific Programs

155,316,742 28,235,142 2,083,420 1,910,966 18,445,756 465,318,126

Total General Revenues

671,310,152

$

$

20,734,813 28,181,385 1,572,223 49,095

Capital Grants and Contributions

43,033,556 0 0 0

36,216,356 50,834,523 285,033 41,533,976 12,498,573 1,700,249 55,146,243 27,896,118 11,966,119 39,718,319 5,857,755 9,640,956

1,800,754 832,254 61,797 28,614

Operating Grants and Contributions

190,315 144,317 1,831 237,566 68,264 10,921 336,066 170,981 75,555 15,927 575,250 0

6,609,256 26,649,396 1,979 2,101,662 764,430 11,804 2,234,494 280,450 151,489 29,413,981 36,928 0

4,550,412

$ 118,793,385

Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year See accompanying notes to the basic financial statements

- 17 -

$

Total Net (Expense) Revenue and Changes in Net Assets

$

31,987,874 949,219,985 $ 981,207,859

Cleveland Municipal School District Balance Sheet Governmental Funds June 30, 2012

Debt Service

General Assets Equity in Pooled Cash and Cash Equivalents Cash and Cash Equivalents with Fiscal Agents Investments Investments with Fiscal Agents Receivables: Taxes Accounts Intergovernmental Accrued Interest Interfund Materials and Supplies Inventory

$

44,443,739 0 0 0

$

21,875,004 0 0 0

Classroom Facilities $

24,305,976 572,403 95,424,822 0

Other Governmental Funds $

44,613,863 92,874 22,528,810 15,360,256

Total Governmental Funds $

135,238,582 665,277 117,953,632 15,360,256

246,903,005 542,014 758,388 72,929 2,242,665 4,920,465

51,908,015 0 0 0 0 0

0 0 142,492,490 112,470 0 0

3,775,610 35,417 5,784,855 370,651 0 526,708

302,586,630 577,431 149,035,733 556,050 2,242,665 5,447,173

Total Assets

299,883,205

73,783,019

262,908,161

93,089,044

729,663,429

Liabilities Accounts Payable Accrued Wages and Benefits Retainage Payable Interfund Payable Intergovernmental Payable Deferred Revenue Matured Compensated Absences Payable

4,447,663 31,802,722 0 0 21,198,162 227,215,875 39,589

0 0 0 0 0 47,229,467 0

2,887,698 0 754,309 0 0 142,492,490 0

4,965,517 6,620,105 92,874 2,242,665 4,349,040 5,695,753 0

12,300,878 38,422,827 847,183 2,242,665 25,547,202 422,633,585 39,589

Total Liabilities

284,704,011

47,229,467

146,134,497

23,965,954

502,033,929

Fund Balance: Nonspendable Restricted Committed Assigned Unassigned

4,920,465 0 7,802,251 0 2,456,478

0 21,981,311 0 4,572,241 0

0 51,411,022 65,362,642 0 0

526,708 59,345,806 15,518,051 333,271 (6,600,746)

5,447,173 132,738,139 88,682,944 4,905,512 (4,144,268)

15,179,194

26,553,552

116,773,664

69,123,090

227,629,500

Total Fund Balances Total Liabilities and Fund Balances

$

299,883,205

$

See accompanying notes to the basic financial statements

- 18 -

73,783,019

$

262,908,161

$

93,089,044

$

729,663,429

Cleveland Municipal School District Reconciliation of Total Governmental Fund Balances to Net Assets of Governmental Activities June 30, 2012

Total Governmental Funds Balances

$

227,629,500

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds Other long-term assets are not available to pay for currentperiod expenditures and therefore are deferred in the funds: Property Taxes Grants Total

711,466,504

128,065,213 144,754,618 272,819,831

An internal service fund is used by management to charge the costs of insurance to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statement of net assets.

7,326,397

In the statement of activities, interest is accrued on outstanding bonds, whereas in governmental funds, an interest expenditure is reported when due. Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds: General Obligation Bonds QZAB Bonds Compensated Absences Worker's Compensation Claims Unamortized Premium on Bond Total

(553,761)

(164,928,566) (21,250,000) (37,335,058) (7,493,345) (6,473,643) (237,480,612)

Net Assets of Governmental Activities

$

See accompanying notes to the basic financial statements

- 19 -

981,207,859

Cleveland Municipal School District Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds For the Fiscal Year Ended June 30, 2012

Debt Service

General Revenues: Local Sources: Taxes Investment Income Tuition and Fees Extracurricular Activities Contributions and Donations Sale of Personal Property Miscellaneous State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Federal Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Capital Outlay Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures

150,441,710 496,929 3,984,121 0 9,853 3,899 12,141,372

$

Other Governmental Funds

Classroom Facilities

27,249,331 79,225 0 0 0 0 1,385,696

$

0 667,744 0 0 0 0 0

$

1,994,444 667,068 15,209 541,229 2,617,322 1,370,408 3,544,381

Total Governmental Funds

$

179,685,485 1,910,966 3,999,330 541,229 2,627,175 1,374,307 17,071,449

457,635,453 4,316,561

4,394,304 0

0 15,746,373

472,931 11,787,628

462,502,688 31,850,562

3,060,502 0 632,090,400

0 0 33,108,556

0 0 16,414,117

0 149,294,345 172,304,965

3,060,502 149,294,345 853,918,038

295,559,717 129,573,586 9,622,054 4,454,898

0 0 0 0

0 0 0 0

1,030,071 44,695,382 1,694,992 110,764

296,589,788 174,268,968 11,317,046 4,565,662

29,977,159 21,958,877 274,705 30,075,309 10,656,098 1,689,243 52,449,279 27,071,645 11,825,950 2,479,567 5,295,479 5,109

0 0 0 0 777,874 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0 12,954,259

6,707,923 28,703,001 0 2,899,588 1,354,248 0 2,819,521 267,814 192,883 35,476,351 561,321 12,170,216

36,685,082 50,661,878 274,705 32,974,897 12,788,220 1,689,243 55,268,800 27,339,459 12,018,833 37,955,918 5,856,800 25,129,584

870,082 366,919 634,205,676

36,670,000 9,990,521 47,438,395

0 0 12,954,259

0 0 138,684,075

37,540,082 10,357,440 833,282,405

Excess (Deficiency) of Revenues Over (Under) Expenditures

(2,115,276)

(14,329,839)

3,459,858

33,620,890

20,635,633

Other Financing Sources (Uses): Issuance of Sale of Bonds Transfers In Transfers Out Total Other Financing Sources (Uses)

0 0 (4,238,000) (4,238,000)

20,855,000 0 0 20,855,000

0 0 (12,152,182) (12,152,182)

0 15,596,576 0 15,596,576

20,855,000 15,596,576 (16,390,182) 20,061,394

Net Change in Fund Balances

(6,353,276)

6,525,161

(8,692,324)

49,217,466

40,697,027

Fund Balances at Beginning of Year Restated

21,532,470

20,028,391

19,905,624

186,932,473

Fund Balances at End of Year

$

15,179,194

$

See accompanying notes to the basic financial statements

- 20 -

26,553,552

125,465,988 $

116,773,664

$

69,123,090

$

227,629,500

Cleveland Municipal School District Reconciliation of the Changes in Fund Balances of Governmental Funds to the Statement of Activities For the Fiscal Year Ended June 30, 2012

Net Change in Fund Balances - Total Governmental Funds

$

40,697,027

Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. This is the amount by which capital outlay exceeded depreciation in the current period. Capital Assets Additions Current Year Depreciation Total

25,787,407 (25,320,526) 466,881

Governmental funds only report the disposal of assets to the extent proceeds are received from the sale. In the statement of activities, a gain or loss is reported for each disposal. Revenues in the statement of activities that do not provide current financial resources are not reported in the funds. These revenues were attributed to property taxes and intergovernmental receivables Property Taxes Ohio School Facilities Grant Other Grants Total

(2,692,889)

5,949,819 27,287,183 (68,940,414) (35,703,412)

Proceeds from the sale of bonds in the statement of revenues, expenditures and changes in fund balances that are reported as other financing sources are not reported as revenues in the statement of activities.

(20,855,000)

Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. In the statement of activities, interest is accrued on outstanding bonds and bond premiums are amortized over the terms of the bonds, whereas in the governmental funds the expenditure is reported when the bonds are issued: Accrued Interest on Bonds Amortization of Bond Premiums Total Some expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds: Compensated Absences Worker's Compensation Claims Total

37,540,082

313,146 403,338 716,484

10,903,094 439,552 11,342,646

The internal service funds used by management to charge the the costs of insurance to individual funds are not reported in the District-wide statement of activities. Governmental fund expenditures and the related internal service fund revenues are eliminated. The net revenue (expense) of the internal service fund is allocated among the governmental activities.

476,055 $

Change in Net Assets of Governmental Activities See accompanying notes to the basic financial statements

- 21 -

31,987,874

Cleveland Municipal School District Statement of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual General Fund For the Fiscal Year Ended June 30, 2012 Variance With Final Budget Positive (Negative)

Budgeted Amounts Original Revenues: Local Sources: Taxes Investment Income Tuition and Fees Contributions and Donations Miscellaneous Sale of Personal Property State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Federal Sources: Unrestricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Service Extracurricular Activities Capital Outlay Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Sources (Uses): Advances In Advances Out Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

147,456,686 548,671 4,373,460 9,728 13,921,903 3,849

Final

$

148,143,343 551,226 4,393,826 9,773 13,976,886 3,867

Actual

$

149,353,165 555,728 4,429,708 9,853 14,073,761 3,899

$

1,209,822 4,502 35,882 80 96,875 32

451,824,422 4,261,750

453,928,417 4,281,595

457,635,453 4,316,561

3,707,036 34,966

2,673,558 625,074,027

2,686,008 627,974,941

2,707,943 633,086,071

21,935 5,111,130

284,828,153 125,975,937 9,525,207 4,511,430

291,287,299 130,990,705 11,137,613 4,862,112

289,159,998 127,556,089 10,780,253 4,721,066

2,127,301 3,434,616 357,360 141,046

29,296,794 21,603,742 268,829 29,568,882 10,061,550 1,600,616 52,563,577 27,484,189 11,528,802 2,732,340 5,245,806 5,286

30,426,755 22,691,799 294,350 33,279,380 12,822,082 2,330,597 57,634,702 28,578,446 16,395,707 2,930,177 6,534,045 12,894

29,724,860 22,091,054 281,138 30,264,042 11,061,235 2,175,733 55,126,564 28,093,021 15,755,998 2,782,473 5,700,608 5,350

701,895 600,745 13,212 3,015,338 1,760,847 154,864 2,508,138 485,425 639,709 147,704 833,437 7,544

859,754 362,564 618,023,458

870,082 366,919 653,445,664

870,082 366,919 636,516,483

0 0 16,929,181

7,050,569

(25,470,723)

(3,430,412)

22,040,311

3,516,000 (1,800,000) (4,738,000) (3,022,000)

3,516,000 (1,800,000) (4,738,000) (3,022,000)

3,516,000 0 (4,238,000) (722,000)

0 1,800,000 500,000 2,300,000

4,028,569

(28,492,723)

(4,152,412)

24,340,311

26,491,756

26,491,756

26,491,756

0

8,282,102

8,282,102

8,282,102

0

38,802,427

See accompanying notes to the basic financial statements

- 22 -

$

6,281,135

$

30,621,446

$

24,340,311

Cleveland Municipal School District Statement of Fund Net Assets Proprietary Fund June 30, 2012

Governmental Activities Internal Service Fund Assets: Current Assets: Equity in Pooled Cash and Cash Equivalents

$

Liabilities: Current Liabilities: Claims Payable

10,285,033

2,958,636

Net Assets: Unrestricted

$

See accompanying notes to the basic financial statements

- 23 -

7,326,397

Cleveland Municipal School District Statement of Revenues, Expenses and Changes in Fund Net Assets Proprietary Fund For the Fiscal Year Ended June 30, 2012

Governmental Activities Internal Service Fund Operating Revenues: Charges for Services

$

Operating Expenses: Claims and Claim Adjustment Expenses

57,601,373

57,918,924

Operating Loss

(317,551)

Nonoperating Revenues (Expenses): Transfers In

793,606

Change in Net Assets

476,055

Net Assets Beginning of Year

6,850,342

Net Assets End of Year

$

See accompanying notes to the basic financial statements

- 24 -

7,326,397

Cleveland Municipal School District Statement of Cash Flows Proprietary Fund For the Fiscal Year Ended June 30, 2012

Governmental Activities Internal Service Fund Increase In Cash and Cash Equivalents: Cash Flows from Operating Activities: Cash Received from Interfund Services Provided Cash Payments for Claims and Claim Adjustment Expenses

$

Net Cash Provided by Operating Activities

58,394,979 (58,567,990) (173,011)

Cash and Cash Equivalents at Beginning of Year

10,458,044

Cash and Cash Equivalents at End of Year

$

10,285,033

$

476,055

Reconciliation of Income to Net Cash Provided by Operating Activities Operating Gain Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities Increase in Claims Payable

(649,066)

Net Cash Provided by Operating Activities

$

See accompanying notes to the basic financial statements

- 25 -

(173,011)

Cleveland Municipal School District Statement of Fiduciary Assets and Liabilities Agency Funds June 30, 2012

Assets Equity in Pooled Cash and Cash Equivalents

$

2,291,443

Liabilities Due to Students Payroll Withholdings

$

528,291 1,763,152

Total Liabilities

$

2,291,443

See accompanying notes to the basic financial statements

- 26 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Note 1 - Description of The School District and Reporting Entity A. School District and Board of Education The Board of Education of the School District (the “Board”) is a political and corporate body charged with the responsibility of managing and controlling the affairs of the School District, and is governed by the general laws of the State of Ohio (the “Ohio Revised Code”). The Board is comprised of nine members who were appointed by the Mayor of the City of Cleveland. On November 5, 2002, the voters of Cleveland elected to maintain the current government structure, which gives the Mayor the authority to continue appointing board members. B. Financial Reporting Entity A reporting entity is comprised of the primary government, component units and other organizations that are included to insure that the financial statements are not misleading. The primary government of the School District consists of all funds, departments, boards and agencies that are not legally separate from the School District. For the School District, this includes general operations, food service, capital projects and student related activities of the School District. Within the School District boundaries, there are also various non-public schools. Current State legislation provides funding to these non-public schools. These monies are received and disbursed on behalf of the non-public school by the Chief Financial Officer of the School District, as directed by the non-public school. The activity of these State monies by the School District is reflected in a special revenue fund for financial reporting purposes. Component units are legally separate organizations for which the School District is financially accountable. The School District is financially accountable for an organization if the School District appoints a voting majority of the organization's governing board and (1) the School District is able to significantly influence the programs or services performed or provided by the organization; or (2) the School District is legally entitled to or can otherwise access the organization’s resources; the School District is legally obligated or has otherwise assumed the responsibility to finance the deficits of, or provide financial support to, the organization; or the School District is obligated for the debt of the organization. Component units may also include organizations that are fiscally dependent on the School District in that the School District approves the budget, the issuance of debt or the levying of taxes. The School District has no component units. The Cleveland Public Library and the City of Cleveland have been defined as related organizations and the Ohio Schools Council and the Bond Accountability Commission as jointly governed organizations. These organizations are discussed further in Note 19 and Note 20 to the basic financial statements.

Note 2 - Summary of Significant Accounting Policies The financial statements of the Cleveland Municipal School District have been prepared in conformity with generally accepted accounting principles (GAAP) as applied to local governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The School District also applies Financial Accounting Standards Board (FASB) Statements and Interpretations issued on or before November 30, 1989, to its governmental activities and to its internal service funds unless those - 27 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

pronouncements conflict with or contradict GASB pronouncements. The most significant of the School District’s accounting policies are described below. A. Basis of Presentation The School District’s basic financial statements consist of government-wide statements, including a statement of net assets and a statement of activities, and fund financial statements which provide a more detailed level of financial information. Government-wide Financial Statements The statement of net assets and the statement of activities display information about the School District as a whole. These statements include the financial activities of the primary government, except for fiduciary funds. The activity of the internal service fund is eliminated to avoid “doubling up” revenues and expenses. The statement of net assets presents the financial condition of the governmental activities of the School District at fiscal year-end. The statement of activities presents a comparison between direct expenses and program revenues for each program or function of the School District’s governmental activities. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program, grants and contributions that are restricted to meeting the operational or capital requirements of a particular program and interest earned on grants that is required to be used to support a particular program. Revenues which are not classified as program revenues are presented as general revenues of the School District, with limited exceptions. The comparison of direct expenses with program revenues identifies the extent to which each governmental activity program is self-financing or draws from the general revenues of the School District. Fund Financial Statements During the year, the School District segregates transactions related to certain School District functions or activities in separate funds in order to aid financial management and to demonstrate legal compliance. Fund financial statements are designed to present financial information of the School District at this more detailed level. The focus of governmental fund financial statements is on major funds. Each major fund is presented in a separate column. Nonmajor funds are aggregated and presented in a single column. The internal service funds are presented in a single column on the face of the proprietary fund statements. Fiduciary funds are reported by type. B. Fund Accounting The School District uses funds to maintain its financial records during the year. Fund accounting is designed to demonstrate legal compliance and to aid management by segregating transactions related to certain School District functions or activities. A fund is defined as a fiscal and accounting entity with a self-balancing set of accounts. The various funds of the School District are grouped into the categories of governmental, proprietary, and fiduciary. Governmental Funds Governmental funds are those through which most governmental functions typically are financed. Governmental fund reporting focuses on the sources, uses and balances of current financial resources. Expendable assets are assigned to the various governmental funds according to the purposes for which they may or must be used. Current liabilities are assigned to the fund from which they will be paid. The difference between governmental fund assets and liabilities is reported as fund balance. The following are the School District's major governmental funds:

- 28 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

General Fund The general fund is used to account for all financial resources, except those required to be accounted for in another fund. The general fund is available to the School District for any purpose provided it is expended or transferred according to the general laws of Ohio. Debt Service Fund The debt service fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest and related costs. Classroom Facilities Fund The classroom facilities fund is used to account for monies received and expended in connection with contracts entered into by the School District for the construction or renovation to classroom facilities. The other governmental funds of the School District account for grants and other resources whose use is restricted to a particular purpose. Proprietary Fund Type Proprietary funds focus on the determination of operating income, changes in net asset, financial position and cash flows and are classified as either enterprise or internal service. The School District only has internal service funds. Internal Service Funds The internal service funds account for the financing of services provided by one department or agency to other departments or agencies of the School District on a costreimbursement basis. The internal service fund is used to account for and finance its uninsured risks of loss and associated expenses attributable to deductibles and self-insured retention limits for general liability and property damage claim settlements and judgments and self-insurance programs for employee medical benefits. Fiduciary Funds Fiduciary fund reporting focuses on net assets and changes in net assets. The fiduciary fund category is split into four classifications: pension trust funds, investment trust funds, private-purpose trust and agency funds. Trust funds are used to account for assets held by the School District under a trust agreement for individuals, private organizations, or other governments and are therefore not available to support the School District’s own programs. The School District has no trust funds. Agency funds are custodial in nature (assets equal liabilities) and do not involve measurement of results of operations. The School District has two agency funds, one which accounts for student activities and one which accounts for various payroll withholding items. C. Measurement Focus Government-wide Financial Statements The government-wide financial statements are prepared using the economic resources measurement focus. All assets and all liabilities associated with the operation of the School District are included on the statement of net assets. The statement of activities presents increases (i.e. revenues) and decreases (i.e. expenses) in total net assets. Fund Financial Statements All governmental funds are accounted for using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities generally are included on the balance sheet. The statement of revenues, expenditures and changes in fund balances reports on the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. This approach differs from the manner in which the governmental activities of the government-wide financial statements are prepared. Governmental fund financial statements therefore include a reconciliation with brief explanations to better identify the relationship between the government-wide statements and the statements for governmental funds. - 29 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Like the government-wide statements, the internal service funds are accounted for on a flow of economic resources measurement focus. All assets and all liabilities associated with the operation of this fund are included on the statement of net assets. The statement of changes in fund net assets presents increases (i.e., revenues) and decreases (i.e., expenses) in total net assets. The statement of cash flows provides information about how the School District finances and meets the cash flow needs of its internal service fund activities. D. Basis of Accounting Basis of accounting determines when transactions are recorded in the financial records and reported on the financial statements. Government-wide financial statements are prepared using the accrual basis of accounting. Governmental funds use the modified accrual basis of accounting. Proprietary and fiduciary funds also use the accrual basis of accounting. Differences in the accrual and the modified accrual basis of accounting arise in the recognition of revenue, the recording of deferred revenue, and in the presentation of expenses versus expenditures. Revenues - Exchange and Non-Exchange Transactions Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. On a modified accrual basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means that the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. For the School District, available means expected to be received within sixty days of the fiscal year-end. Nonexchange transactions, in which the School District receives value without directly giving equal value in return, include property taxes, grants, entitlements and donations. On an accrual basis, revenue from property taxes is recognized in the fiscal year for which the taxes are levied (See Note 8). Revenue from grants, entitlements and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, matching requirements, in which the School District must provide local resources to be used for a specified purpose, and expenditure requirements, in which the resources are provided to the School District on a reimbursement basis. On a modified accrual basis, revenue from nonexchange transactions must also be available before it can be recognized. Under the modified accrual basis, the following revenue sources are considered to be both measurable and available at fiscal year-end: advance on property taxes, investment income, the State’s share of the classroom facility project, tuition, grants and student fees. Deferred Revenue Deferred revenue arises when assets are recognized before revenue recognition criteria have been satisfied. Property taxes for which there is an enforceable legal claim as of June 30, 2012, but which were levied to finance fiscal year 2012 operations, have been recorded as deferred revenue. Grants and entitlements received before the eligibility requirements are met are also recorded as deferred revenue. The remaining state share of the classroom facility projects for segments 1, 4, 5, and 6 have also been recorded as deferred revenue. On governmental fund financial statements, receivables that will not be collected within the available period have also been reported as deferred revenue. - 30 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Expenses/Expenditures On the accrual basis of accounting, expenses are recognized at the time they are incurred. The fair value of donated commodities used during the year is reported on the operating statement as an expense with a like amount reported as donated commodities revenue. Unused donated commodities are also reported as donated commodities revenue. The measurement focus of governmental fund accounting is on decreases in net financial resources (expenditures) rather than expenses. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable. Allocations of cost, such as depreciation and amortization, are not recognized in governmental funds. E. Budgetary Data All funds, other than agency funds, are legally required to be budgeted and appropriated. The major documents prepared are the tax budget, the appropriation resolution and the certificate of estimated resources, which are prepared on the budgetary basis of accounting. The tax budget demonstrates a need for existing or increased tax rates. The certificate of estimated resources establishes a limit on the amounts that the Board may appropriate. The appropriation resolution is the Board’s authorization to spend resources and sets annual limits on expenditures plus encumbrances at a level of control selected by the Board. The legal level of control has been established by the Board at the fund level. The certificate of estimated resources may be amended during the year if projected increases or decreases in revenue are identified by the Chief Financial Officer/Treasurer. The amounts reported as the original budgeted amounts in the budgetary statements reflect the amounts in the certificate when the original appropriations were adopted. The amounts reported as the final budgeted amounts in the budgetary statements reflect the amounts in the final amended certificate that was in effect at the time the final appropriations were passed by the Board of Education. The appropriation resolution is subject to amendment by the Board throughout the year with the restriction that appropriations may not exceed estimated revenues. The amounts reported as the original budgeted amounts reflect the first appropriation for that fund that covered the entire fiscal year, including amounts automatically carried over from prior years. The amounts reported as the final budgeted amounts represent the final appropriation amounts passed by the Board during the fiscal year. F. Cash and Cash Equivalents To improve cash management, cash received by the School District is pooled. Monies for all funds, including the proprietary fund, are maintained in this pool. Individual fund integrity is maintained through School District records. Each fund’s interest in the pool is presented as “Equity in Pooled Cash and Cash Equivalents” or “Investments” on the financial statements. The School District utilizes a fiscal agent to hold monies set-aside for debt service payments. Monies are placed with a fiscal agent to ensure adequate payment of debt when it comes due. The balances in these accounts are presented on the financial statements as “Cash and Cash Equivalents with Fiscal Agents” and “Investments with Fiscal Agents”. During fiscal year 2012, investments were limited to STAR Ohio, repurchase agreements, certificates of deposit, treasury notes and bills, federal agency securities and commercial paper.

- 31 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Except for nonparticipating investment contracts, investments are reported at fair value, which is based on quoted market prices. Nonparticipating investment contracts, such as repurchase agreements, are reported at cost. The School District has invested funds in the State Treasury Asset Reserve of Ohio (STAR Ohio) during fiscal year 2012. STAR Ohio is an investment pool managed by the State Treasurer’s Office, which allows governments within the State to pool their funds for investment purposes. STAR Ohio is not registered with the SEC as an investment company, but does operate in a manner consistent with Rule 2a7 of the Investment Company Act of 1940. Investments in STAR Ohio are valued at STAR Ohio’s share price, which is the price the investment could be sold for on June 30, 2012. Under existing Ohio statute, interest earnings are allocated to the general fund unless the Board of Education has, by resolution, specified funds to receive an allocation of interest earnings. Interest revenue credited to the general fund during fiscal year 2012 amounted to $496,929 which includes $316,112 assigned from other School District funds. For presentation on the financial statements, investments of the cash management pool and investments with an original maturity of three months or less at the time they are purchased by the School District are considered to be cash equivalents. Investments with an initial maturity of more than three months are reported as investments. G. Fund Balance Fund Balance is divided into five classifications based primarily on the extent to which the District is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows: Nonspendable: The nonspendable fund balance category included amounts that cannot be spent because they are not in spendable form, or legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash. Restricted: Fund balance is reported as restricted when constraints placed on the use of resources are either externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or is imposed by law through constitutional provisions or enabling legislation. Committed: The committed fund balance classification includes amounts that can be used only for the specific purposes imposed by a formal action (resolution) of the Board of Education. Those committed amounts cannot be used for any other purpose unless the Board of Education removes or changes the specified use by taking the same type of action (resolution) it employed to previously commit those amounts. In contrast to fund balance that is restricted by enabling legislation, committed fund balance classification may be redeployed for other purposes with appropriate due process. Constraints imposed on the use of committed amounts are imposed by the Board of Education, separate from the authorization to raise the underlying revenue; therefore, compliance with these restraints is not considered to be legally enforceable. Committed fund balance also incorporates contractual obligations to the extent that existing resources in the fund have been specifically committed for use in satisfying those contractual requirements. - 32 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Assigned: Amounts in the assigned fund balance classification are intended to be used by the District for specific purposes but do not meet the criteria to be classified as restricted or committed. In governmental funds other than the General Fund, assigned fund balance represents the remaining amount that is not restricted or committed. In the General Fund, assigned amount represents intended uses established by the Board of Education or a District official delegated that authority by the CEO. Unassigned: Unassigned fund balance is the residual classification for the General Fund and includes all spendable amounts not contained in the other classifications. In other governmental funds, the unassigned classification is used only to report a deficit balance resulting from overspending for a specific purpose for which amounts had been restricted, committed, or assigned. The District applies restricted resources first when expenditures are incurred for purposes for which either restricted or unrestricted (committed, assigned, and unassigned) amounts are available. Similarly, within unrestricted fund balance, committed amounts are reduced first followed by assigned, and then unassigned amounts when expenditures are incurred for purposes for which amounts in any of the unrestricted fund balance classifications could be used. H. Prepaid Items Payments made to vendors for services that will benefit periods beyond June 30, 2012 are recorded as prepaid items using the consumption method. A current asset for the prepaid amount is recorded at the time of the purchase and an expenditure/expense is reported in the year in which services are consumed. I. Inventory Inventories are presented at cost on a first-in, first-out basis and are expended/expensed when used. Inventories consisted of donated and purchased food and materials and supplies held for consumption. J. Capital Assets General capital assets are those assets not specifically related to activities reported in proprietary funds. These assets generally result from expenditures in the governmental funds. These assets are reported in the government-wide statement of net assets but are not reported on the fund financial statements. All capital assets are capitalized at cost (or estimated historical cost) and updated for additions and reductions during the year. Donated capital assets are recorded at their fair market values as of the date received. The School District maintains a capitalization threshold of twenty five thousand dollars. The School District does not possess any infrastructure. Improvements are capitalized; the costs of normal maintenance and repairs that do not add to the value of the asset or materially extend an asset’s life are not capitalized. Interest incurred during the construction of capital assets is also not capitalized. All reported capital assets, except land and construction in progress, are depreciated. Improvements are depreciated over the remaining useful lives of the related capital assets. Intangible assets identified pursuant to GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets, have been classified separately from other assets capitalized by the School District. Depreciation is computed using the straight-line method over the following useful lives:

- 33 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Governmental Activities Estimated Lives

Description Land Improvements Buildings and Improvements Vehicles and Equipment Internal Generated Software

25 years 25 - 50 years 7 - 15 years 5-10 years

Estimated lives for buildings and improvements of schools that will be demolished or inactivated for educational purposes under the current capital facility plan have been adjusted so they are fully depreciated by the anticipated year of demolition or inactivation. K. Interfund Balances On fund financial statements, receivables and payables resulting from short-term interfund loans are classified as “interfund receivables/payables”. These amounts are eliminated in the governmental activities column of the statement of net assets. L. Compensated Absences Vacation benefits are accrued as a liability as the benefits are earned if the employees’ rights to receive compensation are attributable to services already rendered and it is probable that the School District will compensate the employees for the benefits through paid time off or some other means. The School District records a liability for accumulated unused vacation time when earned for all employees with more than one year of service. Sick leave benefits are accrued as a liability using the termination payment method. An accrual for earned sick leave is made to the extent it is probable that benefits will result in termination payments. The liability is an estimate based on actuarial calculations prepared by an outside actuarial firm. The entire compensated absence liability is reported on the government-wide financial statements. For governmental fund financial statements, compensated absences are recognized as a liability and expenditure to the extent payments come due each period upon the occurrence of employee resignations and retirements. These amounts are recorded in the account "accrued wages and benefits" in the fund from which the employees who have accumulated leave are paid. M. Bond Premium On the government-wide financial statements, bond premiums are deferred and amortized over the term of the bonds using the effective interest method. Bond premiums are presented as an increase of the face amount of the bonds payable. On governmental fund statements, bond premiums are reported as another financing source when received. N. Accrued Liabilities and Long-term Obligations All payables, accrued liabilities and long-term obligations are reported in the government-wide financial statements. - 34 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

In general, governmental fund payables and accrued liabilities that, once incurred, are paid in a timely manner and in full from current financial resources, are reported as obligations of the funds. However, claims and judgments, compensated absences, contractually required pension contributions, capital lease obligations, and EPA asbestos abatement loans that will be paid from governmental funds are reported as a liability in the fund financial statements only to the extent that they are due for payment during the current year. In general, liabilities that mature or come due for payment during the fiscal year are considered to have been made with current available financial resources. Bonds and other long-term obligations that will be paid from governmental funds are recognized as a liability in the fund financial statements when due. O. Net Assets Net Assets represent the difference between assets and liabilities. Net Assets invested in capital assets, net of related debt consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction, or improvement of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the School District or through external restrictions imposed by creditors, grantors or laws, or regulations of other governments. The government-wide statement of net assets reports $389,130,918 of restricted net assets, none of which is restricted by enabling legislation. The School District applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. P. Internal Activity Transfers between governmental activities are eliminated on the government-wide financial statements. Internal events that are allocations of overhead expenses from one function to another or within the same function are eliminated on the Statement of Activities. Interfund payments for services provided and used are not eliminated. Exchange transactions between funds are reported as revenues in the seller funds and as expenditures/expenses in the purchaser funds. Flows of cash or goods from one fund to another without a requirement for repayment are reported as interfund transfers. Interfund transfers are reported as other financing sources/uses in governmental funds and after nonoperating revenues/expenses in the proprietary funds. Repayments from funds responsible for particular expenditures/expenses to the funds that initially paid for them are not presented on the financial statements. Q. Operating Revenue and Expenses Operating revenues are those revenues that are generated directly from the primary activity of the proprietary funds. For the School District, these revenues are charges for services for self-insurance programs. Operating expenses are necessary costs incurred to provide the good or service that is the primary activity of the fund. Any revenues and expenses not meeting the definitions of operating are reported as nonoperating.

- 35 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

R. Contribution of Capital Contributions of capital in proprietary fund financial statements arise from outside contributions of capital assets, or from grants or outside contributions of resources restricted to capital acquisition and construction. The proprietary fund received no contributions of capital during the current fiscal year. S. Extraordinary and Special Items Extraordinary items are transactions or events that are both unusual in nature and infrequent in occurrence. Special items are transactions or events that are within the control of the Board of Education and that are either unusual in nature or infrequent in occurrence. Neither type of transaction occurred during the current fiscal year. T. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. U. Restatement of Fund Balance During fiscal year 2012, the School District reevaluated its major funds and the Title I Fund was no longer required to be shown as a major fund. Therefore, the June 30, 2011 Title I Fund balance of ($35,448,458) was reclassified to other Governmental Funds resulting in a revised balance of $20,233,899. In addition in fiscal year 2012, the School District restated the fund balance in the General Fund, Debt Service Fund, and the Classroom Facilities Maintenance Fund by $4,845,910. Tax collection fees were only charged to the General Fund instead of all three funds. The years restated are fiscal year 2005 through fiscal year 2011.

General Fund Debt Service Fund Classroom Facilities Fund Other Governmental Funds

Revised Fund Balance 6/30/2011 $ 16,686,560 24,546,026 125,465,988 20,233,899

Additions $ 4,845,910 0 0 0

Deductions $ 0 (4,517,635) 0 (328,275)

Restated Fund Balance 6/30/2011 $ 21,532,470 20,028,391 125,465,988 19,905,624

$ 186,932,473

$ 4,845,910

$ (4,845,910)

$ 186,932,473

Note 3 – Change in Accounting Principles For 2012, the School District has implemented Governmental Accounting Standards Board (GASB) GASB Statement No. 57, “OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans”, and GASB Statement No. 64, “Derivative Instruments: Application of Hedge Accounting Termination Provisions – and amendment of GASB Statement No. 53”

- 36 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

GASB Statement No. 57 “OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans” addresses the provisions related to the frequency and timing of measurements for actuarial valuations first used to report funded status information in OPEB plan financial statements. The implementation of GASB Statement No. 57 did not an effect on the financial statements of the District. GASB Statement No. 64 “Derivative Instruments: Application of Hedge Accounting Termination Provisions-an amendment of GASB Statement No. 53” clarifies whether an effective hedging relationship continues after the replacement of a swap counterparty or a swap counterparty’s credit support provider. This statement sets forth criteria that establish when the effective hedging relationship continues and hedge accounting should continue to be applied. The implementation of GASB Statement No. 64 did not have an effect on the financial statements of the District.

Note 4 – Fund Deficits The following funds had deficit fund balances as of June 30, 2012: Special Revenue Funds Race to the Top Title VI-B Special Education Vocational Education Improving Teacher Quality Title II-A Other Federal

532,292 1,120,384 601,543 1,205,273 2,044,518

The deficits in the special revenue funds resulted from the recognition of accrued liabilities. The general fund is liable for any deficit in these funds and provides operating transfers when cash is required, rather than when accruals occur.

Note 5 – Fund Balances Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the School District is bound to observe constraints imposed upon the use of the resources in the government funds. The constraints placed on fund balance for the major governmental funds and all other governmental funds are presented below:

- 37 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Fund Balances

General

Nonmajor Governmental Funds

Classroom Facilites

Debt Service

Total

Nonspendable Inventory

$

4,920,465

$

0

$

0

$

526,708

$

5,447,173

Restricted for Debt Service Payments

0

21,981,311

0

0

21,981,311

Capital Improvements

0

0

51,411,022

36,849,357

88,260,379

Title I

0

0

0

519,763

519,763

Food Service Operations

0

0

0

569,644

569,644

Other Local Grants

0

0

0

205,915

205,915

Other State Grants

0

0

0

249,035

249,035

Other Purposes

0

0

0

20,952,092

20,952,092

0

21,981,311

51,411,022

59,345,806

132,738,139

Capital Improvements

0

0

65,362,642

11,807,510

77,170,152

Facility Maintenance

0

0

0

452,812

452,812

Title I

0

0

0

512,596

512,596

Total Restricted Committed to:

Food Service Operations

0

0

0

85,787

85,787

Non-Public Schools

0

0

0

455,265

455,265

Special Education

0

0

0

264,170

264,170

Vocational Education

0

0

0

244,434

244,434

Other Purposes

7,802,251

0

0

1,695,477

9,497,728

Total Committed

7,802,251

0

65,362,642

15,518,051

88,682,944

Facility Maintenance

0

0

0

333,271

333,271

Debt Service Payments

0

4,572,241

0

0

4,572,241

0

4,572,241

0

333,271

4,905,512

2,456,478

0

0

$ 15,179,194

$ 26,553,552

$ 116,773,664

Assigned to:

Total Assigned Unassigned (Deficit) Total Fund Balances

(6,600,746) $

69,123,090

(4,144,268) $ 227,629,500

Note 6 - Budgetary Basis of Accounting While the School District is reporting financial position, results of operations and changes in fund balance on the basis of generally accepted accounting principles (GAAP basis), the budgetary basis as provided by law is based upon accounting for certain transactions on a basis of cash receipts, disbursements and encumbrances. The Statement of Revenues, Expenditures and Changes in Fund Balance - Budget (NonGAAP Basis) and Actual presented for the general fund is presented on the budgetary basis to provide a meaningful comparison of actual results with the budget. The major differences between the budget basis and GAAP basis are that:

- 38 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

1.

Revenues are recorded when received in cash (budget basis) as opposed to when susceptible to accrual (GAAP basis);

2.

Expenditures are recorded when paid in cash (budget basis) as opposed to when the liability is incurred (GAAP basis);

3.

In order to determine compliance with Ohio law, and to reserve that portion of the applicable appropriation, total outstanding encumbrances (budget basis) are recorded as the equivalent of an expenditure, as opposed to assigned or committed fund balance for that portion of outstanding encumbrances not already recognized as an account payable (GAAP basis);

4.

Investments are reported at cost (budget basis) rather than fair value (GAAP basis).

The following table summarizes the adjustments necessary to reconcile the GAAP basis statement to the budgetary basis statement on a fund type basis for the general fund.

Net Change in Fund Balance GAAP Basis Net Adjustment for Revenue Accruals Advances In Beginning Fair Value Adjustment for Investments Ending Fair Value Adjustment for Investments Net Adjustment for Expenditure Accruals Adjustment for Encumbrances Budget Basis

$

(6,353,276) 843,862 3,516,000 91,648 60,161 8,758,082 (11,068,889) $ (4,152,412)

Note 7 - Deposits and Investments The School District has chosen to follow State statutes in order to classify monies held by the School District into three categories. Active deposits are public deposits necessary to meet current demands on the School District treasury. Active monies must be maintained either as cash in the School District treasury, in commercial accounts payable or withdrawable on demand, including negotiable order of withdrawal (NOW) accounts, or in money market deposit accounts. Inactive deposits are public deposits that the Board has identified as not required for use within the current five year period of designation of depositories. Inactive deposits must either be evidenced by certificates of deposit maturing not later than the end of the current period of designation of depositories, or by savings or deposit accounts including, but not limited to, passbook accounts. Interim deposits are deposits of interim monies. Interim monies are those monies which are not needed for immediate use but which will be needed before the end of the current period of designation of depositories. Interim deposits must be evidenced by time certificates of deposit maturing not more than one year from the date of deposit or by savings or deposit accounts including passbook accounts.

- 39 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Protection of the School District’s deposits is provided by the Federal Deposit Insurance Corporation (FDIC) and/or Securities Investor Protection Corporation (SIPC), by eligible securities pledged by the financial institution as security for repayment or by a single collateral pool established by the financial institution to secure the repayment of all public monies deposited with the institution. Under Ohio statutes and School District investment policy, interim monies may be deposited or invested in the following securities: 1.

United States Treasury Notes, Bills, Bonds, or any other obligation or security issued by the United States Treasury or any other obligation guaranteed as to principal and interest by the United States;

2.

Bonds, notes, debentures, or any other obligations or securities issued by any federal government agency or instrumentality, including but not limited to, the Federal National Mortgage Association, Federal Home Loan Bank, Federal Farm Credit Bank, Federal Home Loan Mortgage Corporation, Government National Mortgage Association, and Student Loan Marketing Association. All federal agency securities shall be direct issuances of federal government agencies or instrumentalities;

3.

Written repurchase agreements in the securities listed above provided that the market value of the securities subject to the repurchase agreement must exceed the principal value of the agreement by at least two percent and be marked to market daily, and that the term of the agreement must not exceed thirty days;

4.

Bonds and other obligations of the State of Ohio;

5.

No-load money market mutual funds consisting exclusively of obligations described in division (1) or (2) of this section and repurchase agreements secured by such obligations, provided that investments in securities described in this division are made only through eligible institutions;

6.

The State Treasurer's investment pool (STAR Ohio);

7.

Certain banker’s acceptances and commercial paper notes for a period not to exceed one hundred and eighty days in an amount not to exceed twenty-five percent of the interim monies available for investment at any one time; and,

8.

Under limited circumstances, corporate debt interests rated in either of the two highest classifications by at least two nationally recognized rating agencies.

Investments in stripped principal or interest obligations, reverse repurchase agreements and derivatives are prohibited. The issuance of taxable notes for the purpose of arbitrage, the use of leverage and short selling are also prohibited. An investment must mature within five years from the date of purchase unless matched to a specific obligation or debt of the School District, and must be purchased with the expectation that it will be held to maturity. Investments may only be made through specified dealers and institutions. Payment for investments may be made only upon delivery of the securities representing the investments to the Chief Financial Officer/Treasurer or, if the securities are not represented by a certificate, upon receipt of confirmation or transfer from the custodian. - 40 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Deposits Custodial Credit Risk Custodial credit risk for deposits is the risk that in the event of bank failure, the School District’s deposits may not be returned to it. Protection of School District deposits is provided by the Federal Deposit Insurance Corporation (FDIC) as well as qualified securities pledged by the financial institution holding the assets. By Ohio law, financial institutions must collateralize public deposits. The face value of the pooled collateral must equal at least 105 percent of public funds deposited. Collateral is held by trustees including the Federal Reserve Bank and other designated third party trustees of the financial institutions. At fiscal year end, the School District’s bank balance was $86,250,270. Of the bank balance, $1,504,973 was covered by federal depository insurance and $84,745,297 was uninsured but collateralized with securities held by a pledging financial institution or by its trust department or agent although not in the School District’s name. Investments Investments are reported at fair value. As of June 30, 2012, the School District had the following investments: Maturity More Than One Year But Less Than Five Years

Less Than One Year U.S. Agency Obligations

$

STAR Ohio Total Portfolio

27,461,529

$

187,994 $

27,649,523

Total

165,216,494

$

0 $

165,216,494

192,678,023 187,994

$

192,866,017

Interest Rate Risk Ohio Revised Code and School District investment policy limits security purchases to those that mature within five years of the settlement date. School District investment policy also limits commercial paper purchases to issues from companies incorporated in the United States which have assets in excess of $500 million and whose issues are rated in the highest classification by at least two standard rating services. The commercial paper must mature within 180 days of settlement date and the total holding of commercial paper may not exceed 25 percent of the portfolio, under Ohio Revised Code and School District investment policy. Money market mutual funds must be rated in the highest classification by at least one standard rating service and invest exclusively in eligible securities listed above, under School District investment policy. Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the School District will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Federal Home Loan Bank Bonds, Federal National Mortgage Association Bonds, Federal Home Loan Mortgage Corporation Bonds, Federal Farm Credit Bank and Federal Home Loan Mortgage Corporation Discounted Notes are exposed to custodial credit risk in that they are uninsured, unregistered and held by the counterparty’s trust department or agent but not in the School District’s name. The School District has no investment policy dealing with investment custodial credit risk beyond the requirement in State statute that prohibits payment for

- 41 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

investments prior to the delivery of the securities representing such investments to the treasurer or qualified trustee. Credit Risk The School District’s investments at June 30, 2012 in FHLMC, FNMA, FFCB and FHLB agency securities were rated AAA by Standard & Poor’s. The investments in STAR Ohio were rated AAAm by Standard & Poor’s. The School District has an investment policy to minimize credit risk by diversifying assets by issuer, ensuring that required minimum credit quality ratings exist and maintaining adequate collateralization of certificates of deposits. Concentration of Credit Risk The School District places no limit on the amount it may invest in any one issuer. The following is the School District’s allocation as of June 30, 2012: Percentage of Investments

Investments FNMA

46.87%

FHLB

35.38%

FHLMC

12.20%

FFCB

2.85%

FAMCA

2.60%

STAR Ohio

0.10%

Note 8 - Property Taxes Property taxes are levied and assessed on a calendar year basis while the school district fiscal year runs from July through June. First half tax collections are received by the school district in the second half of the fiscal year. Second half tax distributions occur in the first half of the following fiscal year. Property taxes include amounts levied against all real and public utility located in the School District. Real property tax revenue received in calendar 2012 represents collections of calendar year 2012 taxes. Real property taxes received in calendar year 2012 were levied after April 1, 2011, on the assessed value listed as of January 1, 2011, the lien date. Assessed values for real property taxes are established by State law at thirty-five percent of appraised market value. Real property taxes are payable annually or semiannually. If paid annually, payment is due December 31; if paid semi-annually, the first payment is due December 31 with the remainder payable by June 20. Under certain circumstances, State statute permits alternate payment dates to be established. Public utility property tax revenue received in calendar 2012 represents collections of calendar year 2011 taxes. Public utility real and tangible personal property taxes received in calendar year 2012 became a lien December 31, 2010, were levied after April 1, 2011 and are collected in 2011 with real property taxes. Public utility real property is assessed at thirty-five percent of true value; public utility tangible personal property currently is assessed at varying percentages of true value. The School District receives property taxes from Cuyahoga County. The County Auditor periodically advances to the School District its portion of the taxes collected. Second-half real property tax payments collected by the County by June 30, 2012, are available to finance fiscal year 2012 operations. The amount available to be advanced can vary based on the date the tax bills are sent. - 42 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Accrued property taxes receivable includes real property and public utility property taxes which are measurable as of June 30, 2012 and for which there is an enforceable legal claim. Although total property tax collections for the next fiscal year are measurable, only the amount of real property taxes available as an advance at June 30 were levied to finance current fiscal year operations and are reported as revenue at fiscal year end. The portion of the receivable not levied to finance current fiscal year operations is offset by a credit to deferred revenue. The amount available as an advance at June 30, 2012 was $23,741,303, which is compromised of $18,835,791 in the general fund, $4,572,241 in the debt service fund and $333,271 in the classroom facilities maintenance special revenue fund. The amount available as an advance at June 30, 2011, was $22,802,711, which is compromised of $18,062,268 in the general fund, $4,421,366 in the debt service fund and $319,077 in the classroom facilities maintenance special revenue fund. The late tax settlement made by the County for fiscal year 2012 was $851,339 in the general fund, $106,307 in the debt service fund and $8,714 in the classroom facilities maintenance special revenue fund. On a full accrual basis, collectible delinquent property taxes have been recorded as a receivable and revenue, while on a modified accrual basis the revenue has been deferred. The assessed values upon which the fiscal year 2012 taxes were collected are:

2011 SecondHalf Collections (in thousands of dollars) Amount Percent Agricultural/Residential and Other Real Estate Public Utility Property Total Full voted tax rate per $1,000 of assessed valuation

$ $

5,455,841 243,660 5,699,501

95.72% 4.28 100.00%

$64.80

2012 FirstHalf Collections (in thousands of dollars) Amount Percent $ $

5,449,321 247,613 5,696,934

95.65% 4.35 100.00%

$64.80

Note 9 - Receivables Receivables at June 30, 2012, consist of taxes, accounts (rent and student fees) and intergovernmental grants. All receivables are considered collectible in full due to the ability to foreclose for the nonpayment of taxes, the stable condition of State programs, and the current fiscal year guarantee of federal funds. All receivables are expected to be collected within one year except delinquent property taxes and Ohio Schools Facilities Grant.

- 43 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

A summary of the principal items of intergovernmental receivables follows: Governmental Activities

Amount

Ohio Department of Job and Family Services Ohio Bureau of Workers Compensation Central Collection Agency City of Cleveland Defense Finance and Accounting Services Ohio School Facilities Grant Miscellaneous State Grants and Subsidies Other State Grant and Subsidies Food Service Race to the Top Grant and Subsidies Title VI-B Grant and Subsidies Vocational Education Federal Grant and Subsidies Title I Grant and Subsidies Improving Teacher Quality Tiitle II-A Grant and Subsidies Miscellaneous Federal Grants and Subsidies Other Federal Grant and Subsidies Other

$

340,341 273,906 61,022 47,622 34,997 142,492,490 1,042,368 68,966 2,479,246 226,612 397,574 32,917 108,939 7,391 227,581 1,182,136 11,625

Total Intergovernmental Receivables

$

149,035,733

Note 10 – Contingencies A. Grants The School District received financial assistance from federal and state agencies in the form of grants. The expenditure of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material adverse effect on the overall financial position of the School District at June 30, 2012. B. Litigation The School District is party to various legal proceedings. The School District is of the opinion that ultimate disposition of all such claims will not have a material effect, if any, on the financial condition of the School District. C. Attendance Audit The Auditor of State is currently performing a statewide review of supporting documentation for student attendance data reported to the Ohio Department of Education. The results of this review are still pending and will be reported separately to the Ohio Department of Education at a later date. The School District received financial assistance from federal and state agencies in the form of grants. The expenditure of funds received under these programs generally requires compliance with terms and - 44 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

conditions specified in the grant agreements and is subject to audit by the grantor agencies. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds.. This also encompasses the Auditor of State’s ongoing review of student attendance data. However, the effect of any such disallowed claims on the overall financial position of the School District at June 30, 2012, if applicable, cannot be determined at this time.

Note 11 - Capital Assets Capital asset activity for the fiscal year ended June 30, 2012, was as follows: Balance 6/30/11

Additions

Balance 6/30/12

Deletions

Governmental Activities Capital Assets, not being depreciated: Land

$

34,185,239

$

0

$

(984,075)

$

33,201,164

Construction in Progress

59,217,917

29,039,580

(46,350,840)

41,906,657

Total Capital Assets, not being Depreciated

93,403,156

29,039,580

(47,334,915)

75,107,821

Capital Assets, being Depreciated Land Improvements Buildings and Improvemets Vehicles and Equipment Internal Generated Software Total Capital Assets, being Depreciated

1,736,777

0

898,783,923

43,942,897

(14,732,016)

927,994,804

24,479,860

57,045

(53,696)

24,483,209

5,816,106

82,800

930,816,666

44,082,742

0

1,736,777

0

5,898,906

(14,785,712)

960,113,696

Less: Accumulated Depreciation: Land Improvements Buildings and Improvements Vehicles and Equipment Internal Generated Software Total Accumulated Depreciation

(63,364)

0

(1,475,599)

(288,352,771)

(23,530,591)

12,052,252

(299,831,110)

(19,606,738)

(1,119,576)

40,571

(20,685,743)

(1,155,566)

(606,995)

0

(1,762,561)

12,092,823

(323,755,013)

(2,692,889)

636,358,683

(310,527,310)

Total Capital Assets, being Depreciated, Net Governmental Activities Capital Assets, Net

(1,412,235)

(25,320,526) *

620,289,356 $

713,692,512

- 45 -

18,762,216 $

47,801,796

$

(50,027,804)

$

711,466,504

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

* Depreciation expense was charged to governmental functions as follows: Instruction: Regular Special Vocational Support Services: Instructional Staff Administration Pupil Transportation Central Operation of Non-Instructional Services Capital Outlay

$

22,622,197 69,678 9,466 4,104 1,520,777 1,042,940 16,798 33,071 1,495

Total Depreciation Expense

$

25,320,526

Construction in progress is composed of the following at June 30, 2012: Project Authorization

Expended to June 30, 2012

Committed

Regular Instruction Support Services - Administration

$

162,120,789 418,960

$

41,906,657 418,960

$

120,214,132 0

Total

$

162,539,749

$

42,325,617

$

120,214,132

Note 12 - Risk Management A. Property and Liability The School District is exposed to various loss potentials including but not limited to: torts, damage to, and destruction of assets, errors and omissions, injuries to employees, and natural disasters. The School District insures through commercial insurance companies for the following:

Liability Limits

Coverage During Fiscal Year Property (Physical Damage) Insurance Boiler and Machinery Commerical Crime Insurance Inland Marine Public Officials Bond (Treasurer Bond) Builders's Risk Student Athletic

$

- 46 -

200,000,000 50,000,000 1,000,000 5,000,000 1,000,000 30,000,000 2,000,000

Deductible $

250,000 250,000 100,000 250,000 N/A 50,000 N/A

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Liability Limits

Coverage During Fiscal Year Coverage A - School Liability General Liability Automobile Liability Law Enforcement Liability Nurse' Professional Liability Ohio Stop Gap Liability Coverage B - Educators Liabilty School Leaders Errors & Omissions (includes lawyer professional liability) Employment Practices Liability Sexual Harassment Sexual Misconduct/Abuse Employee Benefits Liability

Self- Insured Retention

$

6,000,000

$

250,000

$

6,000,000

$

250,000

Settled claims have not exceeded this commercial coverage in any of the past three years, and there has been no significant reduction in insurance coverage from last year. Because of the prohibitive cost of commercial insurance, the School District in 1987, established a selfinsurance fund (an internal service fund) to account for and finance its uninsured risks of loss (insurance deductibles and/or self-insured retentions) and associated expenses attributing to liability and property damage claim settlements and judgments. Estimates of claims liabilities, based on historical cost information, for incurred claims (including incurred but not reported claims) as calculated by the School District’s Risk Management Division for all outstanding unsettled claims total $2,958,636 as of June 30, 2012, and are recorded in the Liability Self-Insurance internal service fund. B. Employee Health Benefits The School District has elected to provide medical and prescription drug benefits through a self insured program utilizing providers Medical Mutual of Ohio and Aetna Insurance companies. The maintenance of these benefits is accounted for in the Employee Benefits Self-Insurance internal service fund. Specific stop loss threshold covered per person is $350,000 a claim and there is an unlimited maximum, which is in compliance with the Federal Healthcare Reform. C. Workers’ Compensation The School District participates in the Ohio Bureau of Workers’ Compensation (BWC) Retrospective Rating Plan. Under the retrospective rating plan, the School District assumes a portion of the risk in return for a reduction in current premiums. Estimates of claims liabilities based on actuarial methods, for incurred claims as calculated by the BWC for the cumulative retrospective rating period January 1, 2001, through June 30, 2012, including the estimate for incurred but not reported (IBNR) claims totals $7,493,345. The self insurance fund is funded from the General Fund, while the workers’ compensation claims are charged to the same fund as the respective employee’s salaries are charged, utilizing a historical percentage allocation method. - 47 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

The claims liability reported at June 30, 2012 for liability and property damage claim settlements and judgments, medical and prescription drug benefits and workers’ compensation is based on the requirements of Governmental Accounting Standards Board Statement No. 30 which requires that a liability for unpaid claims costs, including estimates of costs relating to incurred but not reported claims, be reported. The estimate was not affected by incremental claim adjustment expenses and does not include other allocated or unallocated claim adjustment expenses. Changes in claims activity for fiscal years 2011 and 2012 are as follows:

Balance at Beginning of Year 2011 2012

$

10,945,501 11,540,600

Current Year Claims 63,978,244 63,664,615

Claim Payments

Balance at End of Year

63,383,145 64,753,234

$ 11,540,600 10,451,981

Note 13 – Defined Benefit Pension Plans A. School Employees Retirement System Plan Description - The School District contributes to the School Employees Retirement System of Ohio (SERS), a cost-sharing multiple employer pension plan. SERS provides retirement, disability and survivor benefits: annual cost-of-living adjustments; and death benefits to plan members and beneficiaries. Authority to establish and amend benefits is provided by state statute per Chapter 3309 of the Ohio Revised Code. SERS issues a publicly available, stand-alone financial report that includes financial statements and required supplementary information. That report may be obtained by contacting the School Employees Retirement System of Ohio, 300 East Broad Street, Suite 100, Columbus, Ohio 43215-3746 or by calling toll free (800) 878-5853. It is also posted on SERS’ website at www.ohsers.org under Employers/Audit Resources. Funding Policy - Plan members are required to contribute 10 percent of their annual covered salary and the School District is required to contribute at an actuarially determined rate. The current School District rate is 14 percent of annual covered payroll. The contribution requirements of plan members and employers are established and may be amended, up to statutory maximum amounts, by the SERS’ Retirement Board. The Retirement Board acting with the advice of the actuary, allocates the employer contribution rate among four of the funds (Pension Trust Fund, Death Benefit Fund, Medicare B Fund and Health Care Fund) of the System. For fiscal year ending June 30, 2012, the allocation to pension and death benefits is 12.70 percent. The remaining 1.30 percent of the 14 percent employer contribution rate is allocated to the Health Care and Medicare B Funds. The School District’s contributions to SERS for the fiscal years ended June 30, 2012, 2011 and 2010 were $11,238,769, $11,086,845, and $13,056,233, respectively; 32.74 percent has been contributed for fiscal year 2012 and 100 percent for fiscal years 2011 and 2010. B. State Teachers Retirement System Plan Description - The School District participates in the State Teachers Retirement System of Ohio (STRS Ohio), a cost-sharing, multiple employer public employee retirement system. STRS Ohio provides retirement and disability benefits to members and death and survivor benefits to beneficiaries. STRS Ohio issues a stand-alone financial report that may be obtained by writing to STRS Ohio, 275 East Broad Street, Columbus, Ohio 43215-3371 or by calling (888) 227-7877, or by visiting the STRS Ohio website at www.strsoh.org. - 48 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

New members have a choice of three retirement plans, a Defined Benefit (DB) Plan, a Defined Contribution (DC) Plan and a Combined Plan. The DB plan offers an annual retirement allowance based on final average salary times a percentage that varies based on years of service, or an allowance based on a member’s lifetime contributions and earned interest matched by STRS Ohio funds divided by an actuarially determined annuity factor. The DC Plan allows members to place all their member contributions and employer contributions equal to 10.5 percent of earned compensation into an investment account. Investment decisions are made by the member. A member is eligible to receive a retirement benefit at age 50 and termination of employment. The member may elect to receive a lifetime monthly annuity or a lump sum withdrawal. The Combined Plan offers features of both the DC Plan and the DB Plan. In the Combined Plan, member contributions are invested by the member, and employer contributions are used to fund the defined benefit payment at a reduced level from the regular DB Plan. The DB portion of the Combined Plan payment is payable to a member on or after age 60; the DC portion of the account may be taken as a lump sum or converted to a lifetime monthly annuity at age 50. Benefits are established by Chapter 3307 of the Ohio Revised Code. A DB or Combined Plan member with five or more years credited service who becomes disabled may qualify for a disability benefit. Eligible spouses and dependents of these active members who die before retirement may qualify for survivor benefits. Members in the DC Plan who become disabled are entitled only to their account balance. If a member dies before retirement benefits begin, the member’s designated beneficiary is entitled to receive the member’s account balance. Funding Policy - For the fiscal year ended June 30, 2012, plan members were required to contribute 10 percent of their annual covered salaries. The School District was required to contribute 14 percent; 13 percent was the portion used to fund pension obligations. For fiscal year 2011, the portion used to fund pension obligations was also 13 percent. Contribution rates are established by the State Teachers Retirement Board, upon recommendations of its consulting actuary, not to exceed statutory maximum rates of 10 percent for members and 14 percent for employers. Chapter 3307 of the Ohio Revised Code provides statutory authority for member and employer contributions. The School District’s required contributions for pension obligations to the STRS Ohio for the fiscal years ended June 30, 2012, 2011, and 2010 were $37,451,090, $40,820,492, and $43,998,101, respectively; 81.04 percent has been contributed for fiscal year 2012 and 100 percent for fiscal years 2011 and 2010. Contributions to the DC and Combined Plans for fiscal year 2012 were $1,276,874 made by the School District and $912,053 made by the plan members. C. Social Security System Effective July 1, 1991, all employees not otherwise covered by the School Employees Retirement System or the Teachers Retirement System of Ohio have an option to choose Social Security or the School Retirement System. As June 30, 2012, no members of the Board of Education have elected Social Security.

Note 14 - Postemployment Benefits A. School Employees Retirement System Plan Description - The School District participates in two cost-sharing multiple employer defined benefit OPEB plans administered by the School Employees Retirement System for non-certificated retirees and their beneficiaries, a Health Care Plan and a Medicare Part B plan. The Health Care Plan includes - 49 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

hospitalization and physicians’ fees through several types of plans including HMO’s, PPO’s and traditional indemnity plans as well as a prescription drug program. The Medicare Part B Plan reimburses Medicare Part B premiums paid by eligible retirees and beneficiaries up to a statutory limit. Benefit provisions and the obligations to contribute are established by the System based on authority granted by State statute. The financial reports of both Plans are included in the SERS Comprehensive Annual Financial Report which can be obtained on SERS’ website at www.ohsers.org under Employers/Audit Resources. Funding Policy – State statute permits SERS to fund the health care benefits through employer contributions. Each year, after the allocation for statutorily required benefits, the Retirement Board allocates the remainder of the employer contribution of 14 percent of covered payroll to the Health Care Fund. The Health Care Fund was established and is administered in accordance with Internal Revenue Code Section 401h. For 2012, 0.55 percent of covered payroll was allocated to health care. In addition, employers pay a surcharge for employees earning less than an actuarially determined amount; for 2012 this amount was $1,712,713. Active employee members do not contribute to the Health Care Plan. Retirees and their beneficiaries are required to pay a health care premium that varies depending on the plan selected, the number of qualified years of service, Medicare eligibility and retirement status. The School District’s contributions for health care for the fiscal years ended June 30, 2012, 2011, and 2010 were $486,789, $1,342,438, and $469,943 respectively; 32.74 percent has been contributed for fiscal year 2012 and 100 percent for fiscal years 2011 and 2010. The Retirement Board, acting with advice of the actuary, allocates a portion of the employer contribution to the Medicare B Fund. For 2012, this actuarially required allocation was 0.75 percent of covered payroll. The School District’s contributions for Medicare Part B for the fiscal years ended June 30, 2012, 2011 and 2010 were $663,707, $713,463, and $776,427 respectively; 32.74 percent has been contributed for fiscal year 2012 and 100 percent for fiscal years 2011 and 2010. B. School Teachers Retirement System Plan Description - The School District contributes to the cost sharing multiple employer defined benefit Health Plan administered by the State Teachers Retirement System of Ohio (STRS Ohio) for eligible retirees who participate in the defined benefit or combined pension plans offered by STRS Ohio. Benefits include hospitalization, physicians’ fees, prescription drugs and reimbursement of monthly Medicare Part B premiums. The plan is included in the report of STRS Ohio which may be obtained by visiting www.strsoh.org or by calling (888) 227-7877. Funding Policy – Ohio law authorizes STRS Ohio to offer the Plan and gives the Retirement Board authority over how much, if any, of the health care costs will be absorbed by STRS Ohio. Active employee members do not contribute to the Plan. All benefit recipients pay a monthly premium. Under Ohio Law, funding for post-employment health care may be deducted from employer contributions. For 2012, STRS Ohio allocated employer contributions equal to one percent of covered payroll to the Health Care Stabilization Fund. The School District’s contributions for health care for the fiscal years ended June 30, 2012, 2011, and 2010 were $2,880,853, $3,140,038, and $3,384,469 respectively; 81.04 percent has been contributed for fiscal year 2012 and 100 percent for fiscal years 2011 and 2010.

- 50 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Note 15 – Other Employee Benefits A. Compensated Absences The criteria for determining vacation and sick leave benefits are derived from negotiated agreements and State laws. Classified employees earn five to thirty days of vacation per year, depending upon length of service and hours worked. Accumulated unused vacation time is paid to classified employees upon termination of employment. Teachers do not earn vacation time. School District employees earn sick leave, which, if not taken, accumulates until retirement. Employees may receive payment for up to 30 percent (varying by bargaining group) of accumulated sick leave of varying maximums up to $30,000. B. Insurance The School District provides life insurance to most employees through Consumer Life Insurance in the amount of $10,000 for each employee ($50,000 for certain classes of employees). The School District also provides medical and prescription drug benefits through Medical Mutual of Ohio, Aetna and Kaiser Permanente, dental benefits through MetLife and vision through Spectera and Union Eye Care to all eligible employees.

Note 16 - Set-Asides The School District is required by State statute to annually set aside, in the general fund, an amount based upon statutory formula for the acquisition and construction of capital improvements. Amounts not spent by fiscal year-end or offset by similarly restricted resources received during the year must be held in cash at year-end and carried forward to be used for the same purposes in future years. The School District may still establish a budget reserve, if it so chooses; however, the requirement is no longer mandatory. The School District is also required to set aside money for any unspent portions of a bus purchase subsidy received annually from the State. The following cash basis information describes the change in fiscal year-end set-aside amounts for capital acquisitions. Disclosure of this information is required by State statute. Capital Improvements Set-Aside Reserve Balance as of June 30, 2011 Current Year Set-Aside Requirement Current Year Offsets: Tax Levy for Classroom Facilities and Maintenance Qualifying Disbursements Totals

$

(1,973,546) (887,851) (15,078,607)

Set-Aside Balances Carried Forward to Future Fiscal Years Set-Aside Reserve Balance as of June 30, 2012

- 51 -

(19,625,649) 7,408,439

(15,078,607) $

0

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Note 17 – Long-Term Obligations Changes in long-term obligations of the School District during fiscal year 2012, were as follows: Balance Outstanding 06/30/11 Governmental Activities: General Obligation Bonds and Notes: 2001 H.B. 264 Energy Conservation Notes 2002 Library Refunding Bonds 2002 School Facilities Improvement Bonds Unamortized Premium 2004 School Facilities Improvement Bonds Unamortized Premium 2010 School Facilities Improvement Bonds 2012 School Facilities Improvement Refunding Bonds

$

Additions

5,388,648 2,895,000

$

Balance Outstanding 06/30/12

Deletions

0 0

$

870,082 2,895,000

$

4,518,566 0

Amounts Due in One Year

$

915,914 0

32,345,000 4,607,996

0 0

30,430,000 280,690

1,915,000 4,327,306

1,915,000 0

85,985,000 2,268,985

0 0

3,345,000 122,648

82,640,000 2,146,337

3,475,000 0

55,000,000

0

0

55,000,000

0

0

20,855,000

0

20,855,000

245,000

188,490,629

20,855,000

37,943,420

171,402,209

6,550,914

QZAB Bonds: 2001 QZAB - Technology Academy 2001 QZAB - Arts Academy 2001 QZAB - Literacy Academy

5,500,000 5,750,000 10,000,000

0 0 0

0 0 0

5,500,000 5,750,000 10,000,000

0 0 0

Total QZAB Bonds

21,250,000

0

0

21,250,000

0

Other Long-Term Obligations: Compensated Absences Workers' Compensation Claims

48,238,152 7,932,897

1,007,071 7,053,793

11,910,165 7,493,345

37,335,058 7,493,345

1,587,866 3,763,758

Total Other Long-Term Obligations

56,171,049

8,060,864

19,403,510

44,828,403

5,351,624

Total General Obligation Bonds and Notes

Total Governmental Activities

$

265,911,678

$

28,915,864

$

57,346,930

$

237,480,612

$

11,902,538

On January 11, 2012, the School District issued $20,855,000 of School Improvement Refunding Bonds, Series 2012, at a true interest cost of approximately 3%. Proceeds of this bond issue (including a portion of the original issue premium), together with $8,000,000 of cash on hand in the District’s bond retirement fund, for a total of $29,998,078, was deposited in an escrow fund which will be used to pay principal of and interest on $28,600,000 in aggregate principal amount of certain of the District’s Various Purpose Improvement and Refunding Bonds, Series 2002, through December 1, 2012, the date of optional early redemption of those Series 2002 Bonds. As a result, those Series 2002 Bonds was defeased and considered no longer outstanding for purposes of the District’s direct debt limitations. This refunding transaction resulted in a reduction in future debt service of $12,368,587, which has a present value of approximately $10,307,766. The net present value savings attributable to the issuance of the refunding bonds alone is approximately $2,312,223 On December 21, 2010, the School District utilized cash on hand to defease $14,675,000 principal amount of outstanding 2002 School Facilities Improvement Bonds. The School District placed - 52 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

$15,848,185 from the debt service fund in an escrow account which was used to pay principal and interest on the defeased bonds. As a result, the bonds are considered defeased and the liability for those bonds was removed from long-term debt. The defeasance will result in a reduction in future debt service of $25,172,925. The School District saved $10,497,925 in interest, which has a present value of about $4,079,265. On September 29, 2010, the School District issued $55,000,000 of School Improvement Bonds, bearing interest at the rate of 5.20% per annum. The series 2010 bond issue is the third long term financing bond issue related to the School District’s participation in the Ohio School Facilities Assistance Program. The District made mandatory sinking fund payments to an escrow fund, which is part of the District’s Bond Retirement Fund, held by The Bank of New York Mellon Trust Company, N.A., as escrow agent, in the amount of $3,235,294 on December 1st of each year starting in 2010, reducing the outstanding principal amount of this series of bonds by that aggregate amount pursuant to Sections 133.01 and 133.04 of the Revised Code. On July 8, 2004, the School District issued $125,000,000 of School Facility Improvement Bonds, bearing interest at the rate of 2.00% - 5.25% per annum. The premium received on this bond issue was $3,066,194 of which $2,163,792 was transferred to the Debt Service Fund. The series 2004 bond issue is the second long-term financing drawdown of the $335 million approved by voters on May 8, 2001 (Issue 14) related to the School District’s 12-year, $1.5 billion capital plan. This debt will be retired from the Debt Service Fund. On October 1, 2002, the School District issued $124,920,000 of Various Purpose Improvement and Refunding Bonds, bearing interest at the rate of 1.45% - 5.00% per annum. $57,515,000 of the proceeds together with other available money was used to refund all of the District’s outstanding General Obligation Unlimited Tax Library Improvement Bonds, Series 1992A. $27,405,000 of the proceeds together with other available money was used to refund the District’s outstanding $35,000,000 School Facility Bond Anticipation Notes, Series 2001. $40,000,000 of the new proceeds along with the $35,000,000 that was refunded are being used to pay costs of renovating, rehabilitating, constructing, furnishing, equipping and otherwise improving school facilities and acquiring and improving their sites. This represented the first long-term drawdown of the $335 million approved by voters on May 8, 2001 (Issue 14). This debt will be retired from the Debt Service Fund. As a result of the refunding, the District reduced its total debt service requirements by $14.3 million, which resulted in an economic gain (difference between the present value of the debt service payments on the old and the new debt) of $9.3 million. On October 1, 2002, the School District cash defeased all of the General Obligation Unlimited Tax School Improvement Bonds, Series 1992B by utilizing available resources in the Debt Service Fund. The defeasance was undertaken to remove restrictive bond covenants associated with the bonds. During fiscal year 2009, the School Improvement Bonds were considered defeased. On July 12, 2001, the School District entered into a 15-year installment payment agreement with Citicorp North America, Incorporated for $11,500,000, bearing interest at the rate of 5.20% per annum. The proceeds will be used for the purpose of renovating and otherwise improving environmental controls at school facilities. This agreement was made in accordance with Ohio H.B. 264 and is therefore exempt from the debt limit set by Ohio bond statute. This debt will be retired from the General Fund. Qualified Zone Academy Bonds-Literacy Academy - On June 18, 2001, the School District issued $10,000,000 of non-interest-bearing obligations in order to remodel Central Middle School, Franklin D. - 53 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Roosevelt Middle School, Harry E. Davis Middle School, and Martin Luther King, Jr. Middle School. The obligations were issued for a fourteen-year period with final maturity at June 17, 2015. These obligations are not general obligation bonds and will be retired from the Educational Special Trust Fund. Qualified Zone Academy Bonds-Arts Academy - On April 3, 2001, the School District issued $5,750,000 of obligations yielding 0.87 percent in order to remodel the Cleveland School of the Arts and Newton D. Baker Elementary School. The obligations were issued for a fourteen-year period with final maturity at April 2, 2015. These obligations are not general obligation bonds and will be retired from the Educational Special Trust Fund. Qualified Zone Academy Bonds-Technology Academy - On April 3, 2001, the School District issued $5,500,000 of obligations yielding 0.87 percent in order to remodel the Collinwood School. The obligations were issued for a fourteen-year period with final maturity at April 2, 2015. These obligations are not general obligation bonds and will be retired from the Educational Special Trust Fund. The School District is placing money from the General Fund for these Qualified Zone Academy Bonds into a separate escrow account held by a trustee, Huntington National Bank, in order to repay the obligation at maturity and the activity of this separate escrow account is reflected in the Educational Special Trust Fund. Compensated absences and workers’ compensation costs will be paid from the fund from which the employee is paid which, for the School District, is primarily the general fund. The School District’s overall legal debt margin was $374,157,064 with an unvoted debt margin of $5,696,934 at June 30, 2012. The School District is subject to federal arbitrage regulations. As of June 30, 2012 the District has not accrued any liability. Principal and interest requirements to retire general obligation debt, QZAB bonds and H.B. 264 Energy Conservation Notes, outstanding at June 30, 2012, are as follows:

Fiscal Year Ending June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028

Principal $ 6,550,914 6,144,161 27,674,949 6,728,412 6,480,130 34,320,000 90,975,000 7,305,000 $ 186,178,566

- 54 -

$

$

Interest 8,154,761 7,855,165 7,562,877 7,150,888 6,813,183 29,221,756 19,035,806 182,625 85,977,061

Total $ 14,705,675 13,999,326 35,237,826 13,879,300 13,293,313 63,541,756 110,010,806 7,487,625 $ 272,155,627

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

Note 18 – Interfund Transfers and Balances A. Transfers Transfers made during the year ended June 30, 2012 were as follows: Transfers Out

Transfers To Non-Major Governmental Funds: Permanent Improvement Educational Special Trust Food Service Self Insurance Fund Totals

Classroom Facilites

General

Totals

$

0 944,394 2,500,000 793,606

$

12,152,182 0 0 0

$

12,152,182 944,394 2,500,000 793,606

$

4,238,000

$

12,152,182

$

16,390,182

The purpose of the transfer from the classroom facilities capital projects fund to the permanent improvement capital projects fund was to transfer excess dollars from one fund to another. This transfer is in compliance with the Ohio Revised Code. The purpose of the transfer from the general fund to the educational special trust special revenue fund was to fund the future debt payment of the Qualified Zone Academy Bonds, which are due in 2015. The purpose of the transfer from the general fund to the food service special revenue fund was to subsidize a portion of the expenditures for the food service programs. The purpose of the transfer from the general fund to the self insurance fund was to fund the account for legal expenditures. B. Interfund Balances Interfund balances at June 30, 2012, consist of the following individual fund receivables and payables: Interfund Receivable Interfund Payable Non-Major Governmental Funds: Other State Food Service Vocational Education Other Federal Totals

- 55 -

General $

15,664 832,160 171,400 1,223,441

$

2,242,665

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

The interfund receivable and payable are due to the timing of the receipt of grant monies by the nonmajor funds. The School District expects to receive the grant monies and repay the advance within the next fiscal year.

Note 19 - Related Organizations A. Cleveland Public Library The Cleveland Public Library (Library) is a distinct political subdivision of the State of Ohio created under Chapter 3375 of the Ohio Revised Code. A Board of Trustees appointed by the Cleveland Municipal School District Board of Education governs the Library. The Board of Trustees possesses its own contracting and budgeting authority, hires and fires personnel and does not depend on the School District for operational subsidies. Although the School District does serve as the taxing authority and issues all tax related debt on behalf of the Library, its role is limited to a ministerial function. The determination to request approval of a tax, the rate and the purpose are discretionary decisions made solely by the Board of Trustees. Financial information can be obtained from the Business Director of the Cleveland Public Library at 325 Superior Avenue, NE, Cleveland, Ohio 44114. B. City of Cleveland In November 1998, the Mayor of the City of Cleveland was given appointment authority for the School District. As approved by the State legislature, the Ohio Revised Code provided for the Mayor to appoint a Chief Executive Officer who was to be approved by the Board. The Board is comprised of nine members who were appointed by the Mayor from a pool of candidates presented to the Mayor by an independent nominating panel. The City of Cleveland’s accountability for the School District does not extend beyond appointment authority and therefore the School District is considered to be a related organization rather than a component unit of the City of Cleveland. A copy of the City of Cleveland’s comprehensive annual financial report can be obtained from the Finance Director of the City of Cleveland at 601 Lakeside Avenue, Cleveland, Ohio 44114.

Note 20 - Jointly Governed Organizations A. Ohio Schools’ Council Association The Ohio Schools Council (Council) is a jointly governed organization among various school districts in northern Ohio. The jointly governed organization was formed to purchase quality products and services at the lowest possible cost to the member districts. Each district supports the Council by paying an annual participation fee. The Council’s Board consists of seven superintendents of the participating districts whose term rotates every year. The degree of control exercised by any school district is limited to its representation on the Board. Financial information can be obtained by contacting the Executive Director of the Ohio Schools Council at 6133 Rockside Road, Suite #10, Independence, Ohio 44131.

- 56 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

B. Bond Accountability Commission The Bond Accountability Commission (BAC) is an independent nonprofit agency that monitors the Cleveland Municipal School District’s construction and renovation program and the spending of Issue 14 tax money approved by voters in May 2001. As a commission created by the Board, the BAC is a “public body” subject to the Ohio Sunshine Law as set forth in Section 121.22 of the Ohio Revised Code, and shall conduct its business in accordance with the provisions of the Sunshine Law, including, but not limited to, establishing a reasonable method of notifying the public of the time, place and purpose of its meetings, and preparing, filing and maintaining minutes of its meetings. Other than the Board directing the Chief Executive Officer to secure initial external funding in the amount of $200,000, the Board does not assume any ongoing financial interest or responsibility for the BAC and, as a result, is considered a jointly governed organization. In fiscal year 2011, the District extended the contract with the BAC for three years in the amount of $240,000. Annual reports can be obtained by contacting James G. Darr, Administrator Bond Accountability Commission c/o Cuyahoga Community College, 2900 Community College Avenue MBA, Room 221, Cleveland, Ohio 44115.

Note 21 – Construction and Other Significant Commitments Committed Amount

Projects

Amount Paid

Remaining on Commitment

Segment 1 Segment 2 Segment 3 Segment 4 Segment 5 Segment 6 Local Funding Initiatives

$

223,975,810 105,553,352 133,691,654 136,749,655 201,317,868 52,431,221 103,703,935

$

218,857,472 100,537,211 132,687,992 133,050,886 14,167,938 176,887 84,686,950

$

5,118,338 5,016,141 1,003,662 3,698,769 187,149,930 52,254,334 19,016,985

Total

$

957,423,495

$

684,165,336

$

273,258,159

Segment 1 consisted of the warm, safe, dry and security updates to all buildings in addition to the construction of five buildings and renovation of three buildings. Segment 2, 3, 4, 5 and 6 consisted of the construction of thirty-two buildings, the renovation of five buildings and the demolishing of thirteen buildings. Local Funding Initiatives consisted of various projects throughout the School District.

Note 22 – Subsequent Event A. On November 6, 2012, the voters of the City of Cleveland passed a new four year 15 mill operating levy, the first operating levy since 1996. This levy was approved to support The Cleveland Plan (H.B. 525) that was signed into law on July 7, 2012. 14 mills will be allocated to the current expenses of the District and one mill will be allocated to the current expenses of partnering community schools. Based on current tax collection rates, the levy is expected to generate $58.3 million for the District, of which $3.9 million will be distributed to high quality community schools. Collections will begin in calendar year 2013.

- 57 -

Cleveland Municipal School District Notes to the Basic Financial Statements For the Fiscal Year Ended June 30, 2012

B. On October 23, 2012, the Board of Education authorized the issuance and sale of bonds in a maximum aggregate principal amount of $75,520,000, for the purpose of refunding at a lower interest cost certain of the District’s School Improvement Bonds, series 2004, dated July 8, 2004. Proceeds of this bond issue, together with approximately $7,000,000 of cash on hand in the District’s bond retirement fund, will be deposited in an escrow fund which will be used to pay principal and interest on the District’s Various Purpose Improvement and Refunding Bonds, Series 2004. Currently the District is estimating that the refunding will be in the amount of $40,600,000. The estimated date of the refunding is January 15, 2013. The District estimates that this refunding transaction will result in a reduction in future debt service of $21,937,796, which has a present value savings of approximately $13,042,347. The net present value savings attributable to issuance of the refunding bonds alone is approximately $7,198,846.

- 58 -

(THIS PAGE INTENTIONALLY LEFT BLANK)

- 59 -

Combining Statements and Individual Fund Schedules Fund Descriptions – Nonmajor Governmental Funds Nonmajor Special Revenue Funds

Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than capital projects) that are legally restricted to expenditures for specific purposes. Local Funds: Educational Special Trust Fund – This fund accounts for monies received from private individuals, companies and foundations for specified activities for purposes. This fund also accounts for monies being placed from the general fund for the Qualified Zone Academy Bonds into a escrow account held by a trustee in order to repay the obligation at maturity. Classroom Facilities Maintenance Fund – This fund accounts for the proceeds of a levy for the maintenance of facilities. Other Local Funds – This fund accounts for all activity in other local funds including Public School Support, Other Grants, and District Managed Activity. State Funds: Auxiliary Services (NPSS) Fund – This fund accounts for State funds which provide services and materials to pupils attending non-public schools within the School District. Miscellaneous State Grants Fund – This fund is used to account for various monies received from State agencies which are not classified elsewhere including all money for students who resides in the district but are enrolled in a community school. Other State Funds – This fund accounts for all activity in other State funds including Post-Secondary Vocational Education, Teacher Development, Management Information Systems, Public School Preschool, Data Communications for School Buildings, Interactive Video Distance Learning, Vocational Education Enhancement and Alternative Schools. Federal Funds: Food Service Fund – This fund is used to record financial transactions related to food service operations. Adult Basic Education Fund – This fund accounts for State and Federal monies used to provide financial support to programs in reading, writing and math competency for adults that do not have a high school diploma. Education Jobs Fund – This fund accounts for compensation and benefits and other expenses, such as support services, necessary to retain existing employees, to recall or rehire former employees, and to hire new employees, in order to provide early childhood, elementary, or secondary educational and related services. Race to the Top Fund – This fund accounts for federal monies used to provide for either a new program or expansion of an existing program to support initiatives in the following areas: Standards and Assessments; Using Data to improve Instructions; Great Teachers and Leaders; and Turning Around the Lowest-Achieving Schools. (continued) - 60 -

Fund Descriptions – Nonmajor Governmental Funds (continued) Nonmajor Special Revenue Funds (continued)

Title VI-B, Special Education Fund - This fund accounts for Federal monies used to assist schools in the identification of handicapped children, development of procedural safeguards, implementation of least restrictive alternative service patterns, and provision of full educational opportunities to handicapped children at the preschool, elementary, and secondary levels. Vocational Education Fund – This fund accounts for revenues used in the development of vocational education programs in the following categories: secondary, post-secondary, adult, disadvantaged and handicapped persons, exemplary programs, cooperative education, construction of educational schools, ancillary services, research, advisory committees and work-study projects, including sex equity grants. Fiscal Stabilization Fund – This fund accounts for restricted Federal monies from the American Recovery and Reinvestment Act in State Fiscal Stabilization Funds (SFSF) to help stabilize state and local budgets in order to minimize and avoid reductions in education and other essential services. Title I – This fund accounts for Federal Monies used to assist the School District in meeting the special needs of economically and educationally deprived children. Improving Teacher Quality Title II-A Fund – Funding for professional development and other programs to ensure teachers meet high quality standards. This fund also accounts for monies used to hire additional classroom teachers in elementary grades, so that the number of students per teacher will be reduced. Miscellaneous Federal Grants Fund – This fund accounts for various monies received through State agencies from the Federal Government or directly from the Federal Government which are not required to be in a separate fund. Other Federal Funds – This fund accounts for all activity in other Federal funds including Job Training Partnership Act (JTPA), Title II Technology, Title I Subsidiary A, Title I Subsidiary G, Bilingual Education Program, Transition for Refugee Children, Title V, Drug Free School Grant and IDEA Preschool Grant for the Handicapped.

Nonmajor Capital Projects Funds

The Capital Projects funds are used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds). Permanent Improvement Fund – This fund accounts for local funding initiatives associated with the School Districts facility project. Building Renovation Fund – This fund accounts for the receipts and expenditures related to the Qualified Zone Academy Bonds.

- 61 -

Cleveland Municipal School District Combining Balance Sheet Nonmajor Governmental Funds June 30, 2012

Assets Equity in Pooled Cash and Cash Equivalents Cash and Cash Equivalents With Fiscal Agents Investments Investments with Fiscal Agents Receivables: Taxes Accounts Intergovernmental Accrued Interest Materials and Supplies Inventory

$

Nonmajor

Nonmajor

Total

Special Revenue Funds

Capital Projects Funds

Nonmajor Governmental Funds

44,457,504 0 0 15,360,256

$

3,775,610 35,417 5,784,855 334,994 526,708

Total Assets Liabilities Accounts Payable Accrued Wages and Benefits Retainage Payable Interfund Payable Intergovernmental Payable Deferred Revenue

156,359 92,874 22,528,810 0

$

0 0 0 35,657 0

44,613,863 92,874 22,528,810 15,360,256 3,775,610 35,417 5,784,855 370,651 526,708

$

70,275,344

$

22,813,700

$

93,089,044

$

2,056,892 6,584,929 0 2,242,665 4,325,947 5,695,753

$

2,908,625 35,176 92,874 0 23,093 0

$

4,965,517 6,620,105 92,874 2,242,665 4,349,040 5,695,753

Total Liabilities

20,906,186

3,059,768

23,965,954

Fund Balance: Nonspendable Restricted Committed Assigned Unassigned

526,708 51,399,384 3,710,541 333,271 (6,600,746)

0 7,946,422 11,807,510 0 0

526,708 59,345,806 15,518,051 333,271 (6,600,746)

Total Fund Balances

49,369,158

19,753,932

69,123,090

Total Liabilities and Fund Balances

$

- 62 -

70,275,344

$

22,813,700

$

93,089,044

Cleveland Municipal School District Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds For the Fiscal Year Ended June 30, 2012

Revenues: Local Sources: Taxes Investment Income Tuition and Fees Extracurricular Activities Contributions and Donations Sale of Personal Property Miscellaneous State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Federal Sources: Restricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Administration Fiscal Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Capital Outlay Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Sources: Transfers In Total Other Financing Sources (Uses) Net Change in Fund Balances

Nonmajor

Nonmajor

Total

Special Revenue Funds

Capital Projects Funds

Nonmajor Governmental Funds

1,994,444 582,817 15,209 541,229 2,617,322 0 3,542,471

$

$

- 63 -

1,994,444 667,068 15,209 541,229 2,617,322 1,370,408 3,544,381

0 0

472,931 11,787,628

149,294,345 170,848,396

0 1,456,569

149,294,345 172,304,965

1,030,071 44,695,382 1,694,992 110,764

0 0 0 0

1,030,071 44,695,382 1,694,992 110,764

6,707,923 28,703,001 2,899,588 1,354,248 1,145,571 267,814 192,883 35,476,351 561,321 10,787 124,850,696

0 0 0 0 1,673,950 0 0 0 0 12,159,429 13,833,379

6,707,923 28,703,001 2,899,588 1,354,248 2,819,521 267,814 192,883 35,476,351 561,321 12,170,216 138,684,075

45,997,700

(12,376,810)

33,620,890

3,444,394 3,444,394

12,152,182 12,152,182

15,596,576 15,596,576

(224,628)

(72,936)

Fund Balances at End of Year

$

472,931 11,787,628

49,442,094

Fund Balances at Beginning of Year Restated

0 84,251 0 0 0 1,370,408 1,910

49,369,158

49,217,466

19,978,560 $

19,753,932

19,905,624 $

69,123,090

Cleveland Municipal School District Combining Balance Sheet Nonmajor Special Revenue Funds June 30, 2012

Classroom

Educational Special Trust Assets Equity in Pooled Cash and Cash Equivalents Investments with Fiscal Agents Receivables: Taxes Accounts Intergovernmental Accrued Interest Materials and Supplies Inventory

$

4,117,149 15,360,256

Facilities Maintenance $

0 34,284 11,125 334,994 0

Total Assets Liabilities Accounts Payable Accrued Wages and Benefits Interfund Payable Intergovernmental Payable Deferred Revenue

29,354,291 0

Other Local $

3,775,610 0 0 0 0

612,864 0 0 0 0 0 0

$

19,857,808

$

33,129,901

$

612,864

$

65,667 364,697 0 239,429 0

$

7,258 0 0 0 3,433,625

$

0 180,218 0 118,317 0

Total Liabilities

669,793

3,440,883

298,535

Fund Balance: Nonspendable Restricted Committed Assigned

0 18,732,750 455,265 0

0 28,902,935 452,812 333,271

0 205,915 108,414 0

Total Fund Balances (Deficit)

19,188,015

29,689,018

314,329

Total Liabilities and Fund Balances

$

- 64 -

19,857,808

$

33,129,901

$

612,864

Miscellaneous State Grants

Auxiliary Services (NPSS) $

1,990,443 0

$

0 0 0 0 0

1,021,637 0

Other State $

0 0 1,042,368 0 0

515,669 0

Adult Basic Education

Food Service $

0 0 68,966 0 0

18,763 0

$

0 1,133 2,479,246 0 526,708

Education Jobs 0 0

$

0 0 0 0 0

0 0 0 0 0 0 0

$

1,990,443

$

2,064,005

$

584,635

$

3,025,850

$

0

$

0

$

232,109 148,719 0 97,637 0

$

2,098 432 0 283 1,110,710

$

87,963 22,802 15,664 14,971 72,599

$

118,389 537,491 832,160 355,671 0

$

0 0 0 0 0

$

0 0 0 0 0

$

478,465

1,113,523

213,999

1,843,711

0

0

0 735,646 776,332 0

0 907,835 42,647 0

0 249,035 121,601 0

526,708 569,644 85,787 0

0 0 0 0

0 0 0 0

1,511,978

950,482

370,636

1,182,139

0

0

1,990,443

$

2,064,005

$

584,635

$

3,025,850

$

0

$

0 (continued)

- 65 -

Cleveland Municipal School District Combining Balance Sheet Nonmajor Special Revenue Funds (continued) June 30, 2012

Race To The Top Assets Equity in Pooled Cash and Cash Equivalents Investments with Fiscal Agents Receivables: Taxes Accounts Intergovernmental Accrued Interest Materials and Supplies Inventory

$

227,094 0

Title VI-B Special Education $

0 0 226,612 0 0

Total Assets Liabilities Accounts Payable Accrued Wages and Benefits Interfund Payable Intergovernmental Payable Deferred Revenue

Vocational Education

450,314 0

$

0 0 397,574

1 0 0 0 32,917 0 0

0

$

453,706

$

847,888

$

32,918

$

577,446 109,833 0 72,107 226,612

$

165,547 848,257 0 556,894 397,574

$

358,309 43,365 171,400 28,470 32,917

Total Liabilities

985,998

1,968,272

634,461

Fund Balance: Nonspendable Restricted Committed Assigned Unassigned

0 0 0 0 (532,292)

0 0 264,170 0 (1,384,554)

0 0 244,434 0 (845,977)

Total Fund Balances (Deficit)

(532,292)

(1,120,384)

(601,543)

Total Liabilities and Fund Balances

$

- 66 -

453,706

$

847,888

$

32,918

Total Fiscal Stabilization $

Title I 0 0

$

0 0 0 0 0

5,539,652 0

Improving Teacher Quality Title II-A $

0 0 108,939 0 0

10,183 0

Miscellaneous Federal Grants $

0 0 7,391 0 0

531,880 0

Other Federal $

0 0 227,581 0 0

67,564 0

Nonmajor Special Revenue Funds $

0 0 1,182,136 0 0

44,457,504 15,360,256 3,775,610 35,417 5,784,855 334,994 526,708

$

0

$

5,648,591

$

17,574

$

759,461

$

1,249,700

$

70,275,344

$

0 0 0 0 0

$

68,121 2,679,803 0 1,759,369 108,939

$

0 733,743 0 481,713 7,391

$

92,846 9,355 0 6,142 16,906

$

281,139 906,214 1,223,441 594,944 288,480

$

2,056,892 6,584,929 2,242,665 4,325,947 5,695,753

$

0

4,616,232

0 0 0 0 0 0 0

$

1,222,847

125,249

3,294,218

20,906,186

0 519,763 512,596 0 0

0 0 0 0 (1,205,273)

0 575,758 58,454 0 0

0 103 588,029 0 (2,632,650)

526,708 51,399,384 3,710,541 333,271 (6,600,746)

1,032,359

(1,205,273)

634,212

(2,044,518)

49,369,158

5,648,591

$

17,574

$

- 67 -

759,461

$

1,249,700

$

70,275,344

Cleveland Municipal School District Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds For the Fiscal Year Ended June 30, 2012

Classroom

Educational Special Trust Revenues: Local Sources: Taxes Investment Income Tuition and Fees Extracurricular Activities Contributions and Donations Miscellaneous State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Federal Sources: Restricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Administration Fiscal Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures

0 569,395 0 0 2,617,322 0

$

- 68 -

0 0 0 541,229 0 2,423,475

0 3,186,717

0 4,409,673

0 2,964,704

6,028 1,848 0 101,797

0 0 0 0

1,421,282 280,482 0 0

50,022 4,148,628 116,516 0 0 0 0 0 268 0 4,425,107

0 0 0 56,824 892,646 0 0 0 0 10,787 960,257

169,173 0 278,320 178,002 140,274 0 0 0 561,053 0 3,028,586

3,449,416

19,188,015

(63,882)

0 0

19,482,011 $

$

0 0

(293,996)

Fund Balances (Deficit) at Beginning of Year Restated

1,994,444 12,091 0 0 0 0 472,931 1,930,207

944,394 944,394

Net Change in Fund Balances

Other Local

0 0

(1,238,390)

Other Financing Sources: Transfers In Total Other Financing Sources (Uses)

Fund Balances (Deficit) at End of Year

Facilities Maintenance

$

0 0

3,449,416

(63,882)

26,239,602

378,211

29,689,018

$

314,329

Miscellaneous State Grants

Auxiliary Services (NPSS)

$

0 1,072 0 0 0 266,714

$

$

Adult Basic Education

Food Service

0 0 15,209 0 0 0

$

0 259 0 0 0 852,282

$

Education Jobs

0 0 0 0 0 0

$

0 0 0 0 0 0

0 6,620,966

0 2,119,225

0 653,990

0 463,240

0 0

0 0

0 6,888,752

0 2,119,225

0 669,199

17,880,885 19,196,666

31,951 31,951

17,653,148 17,653,148

0 0 0 0

617 0 0 0

145,116 0 4,000 0

0 0 0 0

0 0 0 0

17,653,148 0 0 0

0 237,261 0 0 21,319 0 0 6,692,144 0 0 6,950,724

0 1,068,686 0 0 0 0 0 2,216 0 0 1,071,519

152,523 49,868 91,363 0 0 520 192,883 0 0 0 636,273

0 0 0 0 0 0 0 21,913,835 0 0 21,913,835

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 17,653,148

1,047,706

32,926

(2,717,169)

31,951

0

0 0

0 0

0 0

0 0

1,047,706

32,926

31,951

0

(31,951)

0

(61,972)

0 0 (61,972) 1,573,950 $

0 0 0 0 0 0

Other State

1,511,978

(97,224) $

950,482

2,500,000 2,500,000 (217,169)

337,710 $

370,636

1,399,308 $

1,182,139

$

0

$

0 (continued)

- 69 -

Cleveland Municipal School District Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds (continued) For the Fiscal Year Ended June 30, 2012

Race To The Top Revenues: Local Sources: Taxes Investment Income Tuition and Fees Extracurricular Activities Contributions and Donations Miscellaneous State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Federal Sources: Restricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Administration Fiscal Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Capital Outlay Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures

Title VI-B Special Education

0 0 0 0 0 0

$

0 0 0 0 0 0

$

0 0 0 0 0 0

0 0

0 0

0 0

3,886,400 3,886,400

21,485,176 21,485,176

2,229,701 2,229,701

0 0 0 0

0 5,959,133 0 0

0 0 1,676,394 0

0 4,065,184 67,760 0 0 0 0 0 0 0 4,132,944

3,427,273 6,498,520 824,381 212,105 0 0 0 566,312 0 0 17,487,724

0 772,823 2,169 0 2,479 0 0 0 0 0 2,453,865

(246,544)

Other Financing Sources: Transfers In Total Other Financing Sources (Uses)

Vocational Education

3,997,452

0 0

(224,164)

0 0

0 0

Net Change in Fund Balances

(246,544)

3,997,452

(224,164)

Fund Balances (Deficit) at Beginning of Year Restated

(285,748)

(5,117,836)

(377,379)

Fund Balances (Deficit) at End of Year

$

- 70 -

(532,292)

$

(1,120,384)

$

(601,543)

Total Fiscal Stabilization

$

$

Improving Teacher Quality Title II-A

Title I

0 0 0 0 0 0

$

0 0 0 0 0 0

$

0 0 0 0 0 0

Miscellaneous Federal Grants

$

0 0 0 0 0 0

Nonmajor Special Revenue Funds

Other Federal

$

0 0 0 0 0 0

$

1,994,444 582,817 15,209 541,229 2,617,322 3,542,471

0 0

0 0

0 0

0 0

0 0

472,931 11,787,628

0 0

74,142,498 74,142,498

8,859,557 8,859,557

1,732,375 1,732,375

19,045,802 19,045,802

149,294,345 170,848,396

(2,245,643) 0 0 0

1,017,455 25,645,182 0 1,609

0 8,742,685 0 0

213,490 0 14,598 7,358

471,726 4,066,052 0 0

1,030,071 44,695,382 1,694,992 110,764

0 0 0 0 0 0 0 0 0 0 (2,245,643)

27,197 2,472,953 1,452,187 433,803 87,256 251,715 0 6,272,324 0 0 37,661,681

0 76,922 66,534 153,562 0 0 0 0 0 0 9,039,703

45,649 0 0 3,311 0 10,249 0 1,658 0 0 296,313

2,836,086 9,312,156 358 316,641 1,597 5,330 0 27,862 0 0 17,037,808

6,707,923 28,703,001 2,899,588 1,354,248 1,145,571 267,814 192,883 35,476,351 561,321 10,787 124,850,696

2,245,643

36,480,817

1,436,062

2,007,994

45,997,700

0 0

0 0

0 0

0 0

3,444,394 3,444,394

2,245,643

36,480,817

1,436,062

2,007,994

49,442,094

(2,245,643)

(35,448,458)

0

$

1,032,359

(180,146)

0 0 (180,146) (1,025,127) $

(1,205,273)

(801,850) $

- 71 -

634,212

(4,052,512) $

(2,044,518)

(72,936) $

49,369,158

Cleveland Municipal School District Combining Balance Sheet Nonmajor Capital Projects Funds June 30, 2012

Total Permanent Improvement Assets Equity in Pooled Cash and Cash Equivalents Cash and Cash Equivalents With Fiscal Agents Investments Receivables: Accrued Interest Total Assets Liabilities Accounts Payable Accrued Wages and Benefits Retainage Payable Intergovernmental Payable

$

4,873 92,874 22,528,810

Nonmajor Capital Projects Funds

Building Renovation $

35,657

151,486 0 0

$

0

156,359 92,874 22,528,810 35,657

$

22,662,214

$

151,486

$

22,813,700

$

2,908,625 35,176 92,874 23,093

$

0 0 0 0

$

2,908,625 35,176 92,874 23,093

Total Liabilities

3,059,768

0

3,059,768

Fund Balance: Restricted Committed

7,946,422 11,656,024

0 151,486

7,946,422 11,807,510

Total Fund Balances

19,602,446

151,486

19,753,932

Total Liabilities and Fund Balances

$

22,662,214

- 72 -

$

151,486

$

22,813,700

Cleveland Municipal School District Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Capital Projects Funds For the Fiscal Year Ended June 30, 2012

Total Permanent Improvement Revenues: Local Sources: Investment Income Sale of Personal Property Miscellaneous Total Revenues

$

Expenditures: Current: Support Services: Operation and Maintenance of Plant Capital Outlay Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Uses: Operating Transfers In Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year

$

84,251 1,370,408 1,910 1,456,569

Nonmajor Capital Projects Funds

Building Renovation

$

0 0 0 0

$

84,251 1,370,408 1,910 1,456,569

434,370 12,159,429 12,593,799

1,239,580 0 1,239,580

1,673,950 12,159,429 13,833,379

(11,137,230)

(1,239,580)

(12,376,810)

12,152,182

0

1,014,952

(1,239,580)

18,587,494

1,391,066

19,602,446

- 73 -

$

151,486

12,152,182 (224,628) 19,978,560 $

19,753,932

Fund Descriptions – Internal Service Funds

Internal Service Funds are established to account for the providing of goods or services by one department to other departments of the School District on a cost reimbursement basis. The following is the School District’s internal service fund types:

Internal Service Funds Liability Self-Insurance Fund – This fund accounts for the self-insurance of uninsured risks of loss and associated expenses attributable to deductibles and self-insured retention limits for general liability and property damage claim settlements and judgments. Employee Benefits Self-Insurance Fund – This fund accounts for the medical benefits self-insurance program for employees of the School District. Monthly fees are paid and any balance on hand is held until used.

- 74 -

Cleveland Municipal School District Combining Statement of Fund Net Assets Internal Service Funds June 30, 2012

Employee Benefits Self-Insurance

Liability Self-Insurance Assets Current Assets: Equity in Pooled Cash and Cash Equivalents

$

2,550,850

Liabilities Current Liabilities: Claims Payable Net Assets Unrestricted

$

2,958,636

$

(407,786)

- 75 -

Totals

7,734,183

$

0

$

7,734,183

10,285,033

2,958,636

$

7,326,397

Cleveland Municipal School District Combining Statement of Revenues, Expenses and Changes in Fund Net Assets Internal Service Funds For the Fiscal Year Ended June 30, 2012

Employee Benefits Self-Insurance

Liability Self-Insurance Operating Revenues: Charges for Services

$

Operating Expenses: Claims and Claim Adjustment Expenses Operating Income (Loss)

0

57,601,373

1,352,823

56,566,101

(1,352,823)

1,035,272

Operating Transfers In Total Other Financing Sources (Uses)

793,606 793,606

Change in Net Assets Net Assets at Beginning of Year Net Assets at End of Year

$

Totals

$

57,601,373

57,918,924 (317,551)

0 0

793,606 793,606

(559,217)

1,035,272

476,055

151,431

6,698,911

6,850,342

(407,786)

- 76 -

$

$

7,734,183

$

7,326,397

Cleveland Municipal School District Combining Statement of Cash Flows Internal Service Funds For the Fiscal Year Ended June 30, 2012

Employee Benefits Self-Insurance

Liability Self-Insurance

Totals

Increase (Decrease) In Cash and Cash Equivalents: Cash Flows from Operating Activities: Cash Received from Interfund Services Provided Cash Payments for Claims and Claim Adjustment Expenses

$

Net Cash Provided (Used) by Operating Activities

$

27,159

Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year

793,606 (766,447)

57,601,373 (57,801,543)

$

(200,170)

2,523,691

58,394,979 (58,567,990) (173,011)

7,934,353

10,458,044

$

2,550,850

$

7,734,183

$

$

(1,352,823)

$

1,035,272

$

10,285,033

Reconciliation of Income to Net Cash Provided (Used) by Operating Activities Operating Income (Loss) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Increase (Decrease) in Claims Payable Net Cash Provided by Operating Activities

586,376 $

- 77 -

(766,447)

(1,235,442) $

(200,170)

(317,551)

(649,066) $

(966,617)

Fund Descriptions – Fiduciary Funds

Fiduciary funds are used to account for assets held by the School District in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. The following is the School District’s fiduciary fund type:

Agency Funds District Agency Fund – This fund reflects resources which accounts for various payroll withholding items. Student Managed Activity – This fund reflects resources that belong to the student bodies of the various schools.

- 78 -

Cleveland Municipal School District Combining Statement of Changes in Assets and Liabilities All Agency Funds For the Fiscal Year Ended June 30, 2012

Beginning Balance July 1, 2011

Additions

Ending Balance June 30, 2012

Deductions

District Agency Fund Assets: Equity in Pooled Cash and Cash Equivalents

$

3,213,483

$

0

$

1,450,331

$

1,763,152

Liabilities: Payroll Withholdings

$

3,213,483

$

0

$

1,450,331

$

1,763,152

Student Managed Activity Assets: Equity in Pooled Cash and Cash Equivalents

$

682,928

$

789,898

$

944,535

$

528,291

Liabilities: Due to Students

$

682,928

$

789,898

$

944,535

$

528,291

All Agency Funds Assets: Equity in Pooled Cash and Cash Equivalents

$

3,896,411

$

789,898

$

2,394,866

$

2,291,443

Liabilities: Due To Students Payroll Withholdings

$

682,928 3,213,483

$

789,898 0

$

944,535 1,450,331

$

528,291 1,763,152

Total Liabilities

$

3,896,411

$

789,898

$

2,394,866

$

2,291,443

- 79 -

Individual Fund Schedules of Revenues, Expenditures/Expenses and Changes in Fund Balance/Fund Equity – Budget (Non-GAAP Basis) and Actual

- 80 -

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Debt Service Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Taxes Investment Income Miscellaneous State Sources: Unrestricted Grants-in-Aid Total Revenues

$

Expenditures: Support Services: Fiscal Debt Service: Principal Retirement Interest and Fiscal Charges Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Sources: Proceeds from Sale of Bonds Total Other Financing Sources Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year

$

- 81 -

27,065,019 32,000 1,385,000

Variance With Final Budget Positive (Negative)

Actual

$

27,016,674 79,225 1,385,696

$

(48,345) 47,225 696

4,394,067 32,876,086

4,394,304 32,875,899

900,095

777,874

122,221

37,061,569 9,990,521 47,952,185

36,670,000 9,990,521 47,438,395

391,569 0 513,790

(15,076,099)

(14,562,496)

513,603

20,855,000 20,855,000

20,855,000 20,855,000

0 0

5,778,901

6,292,504

513,603

20,100,135

20,100,135

0

25,879,036

$

26,392,639

237 (187)

$

513,603

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Classroom Facilities Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Investment Income State Sources: Restricted Grants-in-Aid Total Revenues

$

Expenditures: Capital Outlay Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Sources: Operating Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 82 -

1,000,000

Variance With Final Budget Positive (Negative)

Actual

$

953,353

$

(46,647)

15,700,000 16,700,000

15,746,373 16,699,726

133,546,313 133,546,313

82,226,752 82,226,752

51,319,561 51,319,561

(116,846,313)

(65,527,026)

51,319,287

(12,152,182) (12,152,182)

(12,152,182) (12,152,182)

0 0

(128,998,495)

(77,679,208)

51,319,287

112,346,676

112,346,676

0

17,346,312

17,346,312

0

694,493

$

52,013,780

46,373 (274)

$

51,319,287

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Educational Special Trust Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Investment Income Contributions and Donations Total Revenues

$

Expenditures: Current: Instruction: Regular Special Vocational Other Support Services: Pupils Instructional Staff Board of Education Administration Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Total Expenditures Excess of Revenues Over (Under) Expenditures

155,000 3,750,606 3,905,606

Actual

$

508,579 3,338,098 3,846,677

$

353,579 (412,508) (58,929)

233,506 27,884 20 240,501

10,043 1,848 20 167,300

223,463 26,036 0 73,201

74,824 6,737,989 8,049 412,208 203,303 57,845 6,323 46,064 8,048,516

50,741 3,994,792 0 220,336 2,067 5,251 718 1,119 4,454,235

24,083 2,743,197 8,049 191,872 201,236 52,594 5,605 44,945 3,594,281

(4,142,910)

Other Financing Sources: Transfers In Total Other Financing Sources (Uses)

Variance With Final Budget Positive (Negative)

(607,558)

944,394 944,394

3,535,352

944,394 944,394

0 0

336,836

3,535,352

Net Change in Fund Balances

(3,198,516)

Fund Balances at Beginning of Year

18,149,431

18,149,431

0

448,749

448,749

0

Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 83 -

15,399,664

$

18,935,016

$

3,535,352

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Classroom Facilities Maintenance Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Taxes Investment Income State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Total Revenues

$

1,969,562 12,000

Variance With Final Budget Positive (Negative)

Actual

$

1,973,546 12,091

$

3,984 91

477,660 1,930,000 4,389,222

472,931 1,930,207 4,388,775

Expenditures: Support Services: Fiscal Operation and Maintenance of Plant Capital Outlay Total Expenditures

56,824 1,784,438 104,937 1,946,199

56,824 1,463,007 34,787 1,554,618

0 321,431 70,150 391,581

Net Change in Fund Balances

2,443,023

2,834,157

391,134

25,849,643

25,849,643

0

539,954

539,954

0

Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 84 -

28,832,620

$

29,223,754

(4,729) 207 (447)

$

391,134

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Other Local Funds For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Extracurricular Activities Miscellaneous Total Revenues

$

Expenditures: Current: Instruction: Regular Special Support Services: Pupils Administration Fiscal Operation and Maintenance of Plant Extracurricular Activities Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures

541,700 2,474,000 3,015,700

Variance With Final Budget Positive (Negative)

Actual

$

541,229 2,473,475 3,014,704

$

(471) (525) (996)

1,340,732 263,954

1,340,732 263,954

0 0

156,726 268,841 169,406 140,590 1,035,235 3,375,484

156,726 268,841 169,406 140,590 675,616 3,015,865

0 0 0 0 359,619 359,619

(359,784)

(1,161)

358,623

(27,000) (27,000)

(27,000) (27,000)

0 0

(386,784)

(28,161)

358,623

Fund Balances at Beginning of Year

422,053

422,053

0

Prior Year Encumbrances Appropriated

110,560

110,560

0

Other Financing Sources (Uses): Advances Out Total Other Financing Sources (Uses) Net Change in Fund Balances

Fund Balances at End of Year

$

- 85 -

145,829

$

504,452

$

358,623

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Auxiliary Services (NPSS) Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Investment Income Miscellaneous State Sources: Restricted Grants-in-Aid Total Revenues

$

Expenditures: Current: Support Services: Instructional Staff Operation and Maintenance of Plant Operation of Non-Instructional Services Total Expenditures Net Change in Fund Balances Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 86 -

Variance With Final Budget Positive (Negative)

Actual

1,000 266,000

$

1,072 266,714

$

72 714

6,622,000 6,889,000

6,620,966 6,888,752

(1,034) (248)

257,268 64,750 8,757,396 9,079,414

234,881 21,319 7,844,246 8,100,446

22,387 43,431 913,150 978,968

(2,190,414)

(1,211,694)

978,720

119,015

119,015

0

2,071,962

2,071,962

0

563

$

979,283

$

978,720

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Miscellaneous State Grants Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: State Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Instruction: Regular Adult/Continuing Other Support Services: Pupils Instructional Staff Operation and Maintenance of Plant Pupil Transportation Operation of Non-Instructional Services Total Expenditures Deficiency of Revenues Under Expenditures

2,000,000

Variance With Final Budget Positive (Negative)

Actual

$

1,982,812

$

(17,188)

27,093 54,782 589

617 3,559 0

26,476 51,223 589

16,964 1,817,052 5,473 7,966 7,399 1,937,318

0 1,134,608 0 1,602 2,216 1,142,602

16,964 682,444 5,473 6,364 5,183 794,716

62,682

840,210

777,528

62,682

840,210

777,528

118,117

118,117

0

18,565

18,565

0

Other Financing Sources: Net Change in Fund Balances Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 87 -

199,364

$

976,892

$

777,528

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Other State Funds For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Tuition and Fees State Sources: Restricted Grants-in-Aid Total Revenues

$

15,000

Variance With Final Budget Positive (Negative)

Actual

$

15,209

$

209

654,200 669,200

575,395 590,604

(78,805) (78,596)

145,732 4,000

143,281 4,000

2,451 0

252,049 49,426 90,347 25,721 3,350 489,287 1,059,912

162,487 45,532 90,347 0 520 249,795 695,962

89,562 3,894 0 25,721 2,830 239,492 363,950

(390,712)

(105,358)

285,354

(1,000) (1,000)

(1,000) (1,000)

0 0

(391,712)

(106,358)

285,354

Fund Balances at Beginning of Year

298,754

298,754

0

Prior Year Encumbrances Appropriated

158,488

158,488

0

Expenditures: Current: Instruction: Regular Vocational Support Services: Pupils Instructional Staff Administration Operation and Maintenance of Plant Pupil Transportation Central Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Uses: Advances Out Total Other Financing Sources (Uses) Net Change in Fund Balances

Fund Balances at End of Year

$

- 88 -

65,530

$

350,884

$

285,354

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Food Service Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Investment Income Miscellaneous State Sources: Restricted Grants-in-Aid Federal Sources: Restricted Grants-in-Aid Total Revenues

$

Variance With Final Budget Positive (Negative)

Actual

300 774,000

$

259 862,705

$

(41) 88,705

438,000

463,240

20,820,700 22,033,000

18,555,309 19,881,513

(2,265,391) (2,151,487)

Expenditures: Current: Operation of Non-Instructional Services

23,733,777

22,492,492

1,241,285

Deficiency of Revenues Under Expenditures

(1,700,777)

(2,610,979)

Other Financing Sources: Advances Out Transfers In

(1,151,000) 2,500,000

(1,151,000) 2,500,000

(351,777)

(1,261,979)

Net Change in Fund Balances Fund Balance at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 89 -

25,240

(910,202)

0 0 (910,202)

57

57

0

352,238

352,238

0

518

$

(909,684)

$

(910,202)

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Race to the Top Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Support Services: Instructional Staff Administration Total Expenditures

4,000,000

Variance With Final Budget Positive (Negative)

Actual

$

4,048,892 142,765 4,191,657

3,644,213

$

3,778,818 75,454 3,854,272

(355,787)

270,074 67,311 337,385

Excess of Revenues Over Expenditures

(191,657)

(210,059)

(18,402)

Net Change in Fund Balances

(191,657)

(210,059)

(18,402)

179,432

179,432

0

62,755

62,755

0

Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 90 -

50,530

$

32,128

$

(18,402)

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Title VI-B Special Education Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Instruction: Special Support Services: Pupils Instructional Staff Administration Fiscal Operation of Non-Instructional Services Total Expenditures

Variance With Final Budget Positive (Negative)

Actual

18,652,000

$

17,598,440

$

(1,053,560)

5,996,128

5,982,001

14,127

3,748,717 6,916,475 1,120,614 318,017 876,265 18,976,216

3,690,418 6,572,532 847,360 212,105 605,966 17,910,382

58,299 343,943 273,254 105,912 270,299 1,065,834

Excess of Revenues Over (Under) Expenditures

(324,216)

(311,942)

12,274

Other Financing Sources (Uses): Advances Out Total Other Financing Sources (Uses)

(302,000) (302,000)

(302,000) (302,000)

0 0

Net Change in Fund Balances

(626,216)

(613,942)

12,274

Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 91 -

284

284

0

634,254

634,254

0

8,322

$

20,596

$

12,274

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Vocational Education Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Instruction: Vocational Support Services: Instructional Staff Administration Operation and Maintenance of Plant Total Expenditures

Deficiency of Revenues Under Expenditures

Variance With Final Budget Positive (Negative)

Actual

2,840,000

$

2,196,462

1,937,478

14,757

815,331 6,669 2,479 2,776,714

808,766 6,669 2,479 2,755,392

6,565 0 0 21,322

(558,930)

Other Financing Sources: Advances Out Total Other Financing Sources (Uses)

(436,000) (436,000)

(436,000) (436,000)

Net Change in Fund Balances

(372,714)

(994,930)

Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 92 -

(643,538)

1,952,235

63,286

Fund Balances at Beginning of Year

$

(622,216)

0 0 (622,216)

449

449

0

520,477

520,477

0

148,212

$

(474,004)

$

(622,216)

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Title I Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

42,050,000

Variance With Final Budget Positive (Negative)

Actual

$

42,008,448

$

(41,552)

Expenditures: Current: Instruction: Regular Special Other Support Services: Pupils Instructional Staff Administration Fiscal Operation and Maintenance of Plant Pupil Transportation Operation of Non-Instructional Services Total Expenditures

1,718,473 30,958,796 671,438

1,716,093 30,920,335 1,609

2,380 38,461 669,829

39,091 7,241,344 2,268,717 729,188 239,136 259,103 7,388,881 51,514,167

39,091 4,512,848 1,621,293 433,803 239,136 259,064 6,856,566 46,599,838

0 2,728,496 647,424 295,385 0 39 532,315 4,914,329

Net Change in Fund Balances

(9,464,167)

(4,591,390)

4,872,777

Fund Balances at Beginning of Year

4,150,440

4,150,440

0

Prior Year Encumbrances Appropriated

5,399,850

5,399,850

0

Fund Balances at End of Year

$

- 93 -

86,123

$

4,958,900

$

4,872,777

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Improving Teacher Quality Title II-A Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Instruction: Special Support Services: Instructional Staff Administration Fiscal Total Expenditures Net Change in Fund Balances Fund Balances at Beginning of Year Fund Balances at End of Year

$

- 94 -

8,250,000

Variance With Final Budget Positive (Negative)

Actual

$

8,233,576

$

(16,424)

8,560,212

8,560,041

171

70,824 69,916 158,604 8,859,556

69,917 65,855 153,562 8,849,375

907 4,061 5,042 10,181

(609,556)

(615,799)

625,982

625,982

16,426

$

10,183

(6,243) 0 $

(6,243)

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Miscellaneous Federal Grants Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Variance With Final Budget Positive (Negative)

Actual

820,000

$

774,197

$

(45,803)

Expenditures: Current: Instruction: Regular Vocational Other Support Services: Pupils Instructional Staff Fiscal Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Total Expenditures

355,394 50,960 131,390

215,169 14,598 53,149

140,225 36,362 78,241

64,986 1,340 5,473 3,831 15,982 7,752 11,845 648,953

64,334 1,340 3,311 0 10,249 0 1,708 363,858

652 0 2,162 3,831 5,733 7,752 10,137 285,095

Excess of Revenues Over Expenditures

171,047

410,339

239,292

Other Financing Uses: Advances Out Total Other Financing Sources (Uses)

(62,000) (62,000)

(62,000) (62,000)

Net Change in Fund Balances

109,047

348,339

239,292

219

219

0

62,268

62,268

0

Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 95 -

171,534

$

410,826

0 0

$

239,292

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Other Federal Funds For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Federal Sources: Restricted Grants-in-Aid

$

Expenditures: Current: Instruction: Regular Special Support Services: Pupils Instructional Staff Administration Fiscal Operation and Maintenance of Plant Pupil Transportation Operation of Non-Instructional Services Total Expenditures Excess (Deficiency) of Revenues Over (Under) Expenditures

18,882,000

Variance With Final Budget Positive (Negative)

Actual

$

15,829,166

$

(3,052,834)

647,231 4,244,176

647,228 4,164,207

3 79,969

2,718,143 11,409,006 252,955 119,448 6,000 9,330 32,221 19,438,510

2,717,098 11,085,563 230,597 63,827 2,068 5,330 31,163 18,947,081

1,045 323,443 22,358 55,621 3,932 4,000 1,058 491,429

(556,510)

(3,117,915)

(2,561,405)

Other Financing Sources: Advances Out Total Other Financing Sources (Uses)

(1,537,000) (1,537,000)

(1,537,000) (1,537,000)

0 0

Net Change in Fund Balances

(2,093,510)

(4,654,915)

(2,561,405)

Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 96 -

288,494

288,494

0

2,341,376

2,341,376

0

536,360

$

(2,025,045)

$

(2,561,405)

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Permanent Improvement Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Local Sources: Investment Income Sale of Personal Property Miscellaneous Total Revenues

$

Expenditures: Current: Support Services: Operation and Maintenance of Plant Capital Outlay Total Expenditures Deficiency of Revenues Under Expenditures Other Financing Sources: Operating Transfers In Total Other Financing Sources (Uses) Net Change in Fund Balances Fund Balances at Beginning of Year Prior Year Encumbrances Appropriated Fund Balances at End of Year

$

- 97 -

151,818 1,379,000 2,000 1,532,818

Variance With Final Budget Positive (Negative)

Actual

$

157,351 1,370,408 1,910 1,529,669

$

5,533 (8,592) (90) (3,149)

418,960 28,574,475 28,993,435

418,960 23,746,672 24,165,632

0 4,827,803 4,827,803

(27,460,617)

(22,635,963)

4,824,654

12,152,182 12,152,182

12,152,182 12,152,182

(15,308,435)

(10,483,781)

14,966,265

14,966,265

0

3,993,446

3,993,446

0

3,651,276

$

8,475,930

0 0 4,824,654

$

4,824,654

Cleveland Municipal School District Schedule of Revenues, Expenditures and Changes In Fund Balance - Budget (Non-GAAP Basis) and Actual Building Renovation Fund For the Fiscal Year Ended June 30, 2012

Final Budget Expenditures: Current: Operation and Maintenance of Plant Total Expenditures

$

Variance With Final Budget Positive (Negative)

Actual

1,391,066 1,391,066

$

1,391,066 1,391,066

$

0 0

Deficiency of Revenues Under Expenditures

(1,391,066)

(1,391,066)

0

Net Change in Fund Balances

(1,391,066)

(1,391,066)

0

1,391,066

1,391,066

0

Fund Balances at Beginning of Year Fund Balances at End of Year

$

- 98 -

0

$

0

$

0

Cleveland Municipal School District Schedule of Revenues, Expenses and Changes In Fund Equity - Budget (Non-GAAP Basis) and Actual Liability Self-Insurance Fund For the Fiscal Year Ended June 30, 2012

Final Budget Expenses: Claims

$

Excess of Revenues Over (Under) Expenditures Other Financing Sources (Uses): Operating Transfers In Total Other Financing Sources (Uses) Net Change in Fund Equity Fund Equity at Beginning of Year Fund Equity at End of Year

897,783

Actual

$

- 99 -

848,756

(897,783)

(848,756)

793,606 793,606

793,606 793,606

(104,177)

(55,150)

2,425,907 $

2,321,730

Variance With Final Budget Positive (Negative)

$

49,027

0 0 49,027

2,425,907 $

2,370,757

49,027

0 $

49,027

Cleveland Municipal School District Schedule of Revenues, Expenses and Changes In Fund Equity - Budget (Non-GAAP Basis) and Actual Employee Benefits Self-Insurance Fund For the Fiscal Year Ended June 30, 2012

Final Budget Revenues: Charges for Services

$

57,650,000

Expenses: Claims

58,684,421

Net Change in Fund Equity

(1,034,421)

Fund Equity at Beginning of Year Fund Equity at End of Year

Actual

$

- 100 -

6,815,511

57,601,373

$

57,874,055

761,739

7,849,932 $

7,577,250

(48,627)

810,366

(272,682)

7,849,932 $

Variance With Final Budget Positive (Negative)

0 $

761,739

Statistical Section The following statistical tables reflect social and economic data, financial trends and fiscal capacity of the School District.

- S1 -

STATISTICAL SECTION This part of the Cleveland Municipal School District’s comprehensive annual financial report presents detailed information as a context for understanding what the information in financial statements, note disclosures, and required supplementary information says about the School District overall financial health. Contents

Page

Financial Trends

S2

These schedules contain trend information to help the reader understand how the School District’s financial performance and well-being have changed over time. Revenue Capacity

S16

These schedules contain information to help the reader assess the affordability of the School District’s most significant local revenue source of Property Tax and Foundation payments. Debt Capacity

S22

These schedules present information to help the reader assess the affordability of the School District’s current levels of outstanding debt, and the ability to issue additional debt in the future. Demographic and Economic Information

S27

These schedules offer demographic and economic indicators to help the reader understand the environment within which the School District’s financial activities take place. Operating Information

S29

These schedules contain service data to help the reader understand how the information in the School District’s financial report relates to the services the School District provides and the activities it performs.

Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The School District implemented GASB Statement 34 for the year ended June 30, 2002; schedules presenting government-wide information include information beginning in that year. The School District implemented GASB Statement 54 for the year ended June 30, 2011; schedules presenting government wide fund balance information include information beginning in that year.

- S1 -

Cleveland Municipal School District Net Assets by Component Last Three Fiscal Years (accrual basis of accounting)

2010

Fund Balances Invested in Capital Assets, Net of Related Debt Restricted Restricted Debt Service Restricted Capital Projects Restricted Special Revenue Unrestricted Total Net Assets

$

500,616,971

$

47,506,378 257,882,844 41,703,464 20,520,336 868,229,993

2011

$

503,951,883

$

48,223,777 260,606,827 77,722,493 58,715,005 949,219,985

Source: School District Financial Records

Total Assets and Liabilities

$1,600,000,000 $1,400,000,000 $1 200 000 000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 $400,000,000 $200,000,000 $0

Assets

Liabilities

- S2 -

2012

$

518,814,295

$

51,217,114 278,969,178 58,944,626 73,262,646 981,207,859

(THIS PAGE INTENTIONALLY LEFT BLANK)

- S3 -

Cleveland Municipal School District Changes in Net Assets of Governmental Activities Last Ten Fiscal Years (accrual basis of accounting)

2003 Expenses Governmental Activities: Instruction: Regular Special Vocational Adult/Continuing Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services Extracurricular Activities Interest and Fiscal Charges Total Primary Government Expenses Program Revenues Governmental Activities: Charges for Services and Sales Instruction: Regular Special Vocational Adult/Continuing Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instruction Services Extracurricular Activities

$

2004

292,996,927 133,693,977 17,726,322 5,836,915 649,876

$

2005

290,987,320 143,004,004 15,994,184 5,094,891 198,400

$

2006

249,352,851 152,153,082 12,683,615 3,490,435 150

$

316,945,841 143,913,038 11,907,870 2,300,131 12,759,762

43,833,809 63,960,109 304,039 55,540,796 12,688,426 1,275,129 67,222,113 39,750,255 20,175,678 43,804,093 7,611,100 16,890,272 823,959,836

45,012,097 56,236,589 259,950 45,084,175 10,893,531 1,091,725 62,223,013 38,379,675 16,698,556 43,837,168 7,051,078 9,830,504 791,876,860

33,877,518 54,824,175 223,199 43,927,480 12,234,280 1,284,442 56,317,807 28,867,256 14,936,994 44,009,082 5,968,627 13,588,410 727,739,403

35,380,163 51,072,946 267,321 41,342,791 9,946,686 942,371 58,569,487 28,965,329 15,969,839 42,532,273 5,814,665 11,647,137 790,277,650

0 125,619 0 403,424 0

0 0 0 994,043 0

0 192,893 0 83,071 0

0 148,405 0 38,252 0

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0

0 0 0 0 0 0 0 0 0 0 0

Source: School District financial records

- S4 -

2007

$

2008

306,641,274 160,305,162 12,723,093 2,967,373 12,263,429

$

327,247,872 168,823,350 13,985,560 2,833,813 19,765,060

2009

$

2010

328,162,328 180,413,911 11,895,564 2,856,799 19,497,068

$

380,866,357 189,643,261 11,923,801 3,668,819 9,655,896

2011

$

297,907,426 207,990,072 10,336,437 132,537 6,384,172

2012

$

322,367,731 174,228,202 11,316,290 0 4,493,188

37,100,301 48,124,670 248,637 43,218,261 9,617,654 1,065,128 64,844,985 27,944,135 15,923,177 38,956,223 6,466,969 10,180,816 798,591,287

32,218,673 48,850,968 258,840 46,168,403 11,408,394 1,873,943 109,195,119 27,527,934 15,035,691 42,585,167 6,783,614 9,219,611 883,782,012

27,746,864 57,621,095 284,153 44,605,981 12,212,820 2,645,732 74,505,273 31,991,149 19,272,538 42,225,005 6,910,474 8,078,738 870,925,492

39,107,286 65,429,955 234,344 48,600,081 10,120,397 2,223,407 61,657,748 30,858,435 14,648,056 41,452,383 6,492,522 7,478,002 924,060,750

37,463,820 59,204,651 250,996 43,536,920 15,131,810 1,643,284 63,176,797 28,923,689 12,437,133 42,237,400 6,418,054 9,869,253 843,044,451

36,216,356 50,834,523 285,033 41,533,976 12,498,573 1,700,249 55,146,243 27,896,118 11,966,119 39,718,319 5,857,755 9,640,956 805,699,631

196,057 717,094 0 59,177 0

660,425 238,482 27,430 890 168

616,265 229,296 19,401 707 4,804

805,242 364,149 29,849 5,916 18,813

2,351,003 976,843 62,210 0 36,692

1,800,754 832,254 61,797 0 28,614

0 0 0 0 0 0 0 0 0 0 0

53,857 50,724 579 95,123 23,294 4,354 104,131 58,433 34,018 7,798 821,166

63,040 45,270 536 113,343 40,664 5,007 96,210 56,888 34,908 5,512 800,606

95,886 67,537 654 105,953 26,169 6,204 167,875 74,134 39,399 7,879 788,285

316,993 154,682 1,788 417,562 258,747 11,703 522,574 175,290 87,927 11,614 653,175

190,315 144,317 1,831 237,566 68,264 10,921 336,066 170,981 75,555 15,927 575,250 (continued)

- S5 -

Cleveland Municipal School District Changes in Net Assets of Governmental Activities (continued) Last Ten Fiscal Years (accrual basis of accounting)

2003 Operating Grants, Contributions and Interest Instruction: Regular Special Vocational Adult/Continuing Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operation and Maintenance of Plant Pupil Transportation Central Operation of Non-Instruction Services Extracurricular Activities Capital Grants and Contributions Instruction: Regular Support Services: Instructional Staff Operation and Maintenance of Plant Central

$

Total Program Revenues Net Expense General Revenues and Other Changes in Net Assets Governmental Activities: Property Taxes Levied For: General Purposes Debt Service Capital Outlay Investment Income Miscellaneous Grants and Entitlements not Restricted to Specific Programs Total Primary Government Change in Net Assets Total Primary Government

2004

74,627,861 47,152,401 1,450,034 2,168,935 0

$

67,676,019 47,957,446 1,227,846 1,544,153 0

2005

$

71,510,982 49,947,447 968,521 2,215,834 0

2006

$

33,931,074 63,057,863 741,042 2,451,716 11,151,414

5,820,419 28,182,013 0 4,624,996 1,941,436 0 937,093 258,201 1,121,823 40,202,642 426,863

6,427,226 30,020,207 8,822 5,091,991 1,415,851 0 619,443 822,477 1,292,861 41,527,739 1,048,436

5,702,967 32,431,931 11,126 5,347,769 1,402,369 0 672,986 635,920 1,220,287 37,057,500 849,552

7,803,544 40,672,337 7,701 4,916,688 1,068,558 0 2,547,221 1,294,475 895,218 39,136,205 895,653

0

119,629,061

109,387,736

119,828,477

65,000 5,044,270 0

1,604,924 0 0

14,867 38,370 133

0 682,985 0

214,553,030

328,908,545

319,692,261

331,268,828

$ (609,406,806)

$ (462,968,315)

$ (408,047,142)

$ (459,008,822)

$

$

$

$

186,612,352 27,133,112 2,125,297 4,688,605 4,324,953 360,708,728 585,593,047

$

(23,813,759)

- S6 -

219,596,436 40,006,114 2,980,196 2,945,010 2,840,826 346,770,558 615,139,140

$

152,170,825

193,293,701 29,573,166 2,309,596 7,362,433 2,410,759 330,273,507 565,223,162

$

157,176,020

197,583,328 31,620,440 2,459,275 16,205,770 9,715,420 384,582,569 642,166,802

$

183,157,980

2007

$

2008

34,039,005 62,362,875 1,694,687 2,444,889 11,461,176

$

2009

35,546,322 66,638,056 2,533,848 2,617,719 19,133,256

$

2010

37,192,665 62,689,317 1,637,911 2,462,002 18,403,044

$

2011

32,685,231 63,043,009 1,326,967 1,904,193 3,127,296

$

2012

38,093,482 103,872,868 1,446,826 71,032 1,663,788

$

20,734,813 28,181,385 1,572,223 0 49,095

10,539,199 27,327,018 12,989 7,231,878 1,314,680 0 7,251,442 1,190,477 578,561 34,663,348 878,738

9,175,181 30,313,516 14,767 4,546,107 1,348,188 17,476 12,818,564 1,601,296 683,303 32,764,919 70,647

5,916,754 35,440,720 2,849 4,575,772 925,564 18,548 14,781,452 1,093,004 641,824 33,961,591 61,459

5,548,551 42,964,473 1,387 4,916,794 705,052 13,164 2,447,744 894,026 568,623 31,495,919 44,017

6,100,952 39,853,992 1,240 4,190,878 3,198,202 8,117 623,740 3,096,448 299,521 41,054,534 92,068

6,609,256 26,649,396 1,979 2,101,662 764,430 11,804 2,234,494 280,450 151,489 29,413,981 36,928

89,064,023

2,395,614

150,881,349

3,376,765

2,037,682

43,033,556

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

0 0 0

293,027,313

224,399,651

372,818,282

197,667,155

251,744,173

166,377,353

$ (505,563,974)

$ (659,382,361)

$ (498,107,210)

$ (726,393,595)

$ (591,300,278)

$ (639,322,278)

$

$

$

$

$

$

198,996,360 35,760,058 2,477,222 18,843,152 1,665,345 399,493,775 657,235,912

$

151,671,938

185,684,541 33,647,336 2,347,262 18,682,784 7,100,867 410,667,785 658,130,575

$

(1,251,786)

155,294,660 10,941,106 22,122,341 9,507,759 10,669,482 419,460,527 627,995,875

$

129,888,665

156,893,542 16,654,007 17,391,407 5,756,808 11,268,565 468,463,425 676,427,754

$

- S7 -

(49,965,841)

158,760,869 28,724,375 2,097,559 3,535,089 13,723,968 465,448,410 672,290,270

$

80,989,992

155,316,742 28,235,142 2,083,420 1,910,966 18,445,756 465,318,126 671,310,152

$

31,987,874

Cleveland Municipal School District Fund Balances, Governmental Funds Last Three Fiscal Years (modified accrual basis of accounting)

2010

General Fund Nonspendable Restricted Committed Unassigned Total General Fund

$

All Other Government Funds Nonspendable Restricted Debt Service Capital Programs Special Revenue Committed Assigned Unassigned Total all Other Governmental Funds Total Governmental Funds

2011

1,920,719 (40,964,314) 2,207,974 15,781,618 (21,054,003)

798,579 21,439,876 66,946,176 19,495,855 57,405,892 3,863,098 0 169,949,476 $ 148,895,473

$

2012

3,691,170 0 5,608,988 7,386,402 16,686,560

$

4,920,465 0 7,802,251 2,456,478 15,179,194

861,912

526,708

20,124,660 126,510,249 (15,924,805) 33,933,454 4,740,443 0 170,245,913 $ 186,932,473

21,981,311 59,357,444 51,399,384 80,880,693 4,905,512 (6,600,746) 212,450,306 $ 227,629,500

Source: School District financial records Note: The School District implemented GASB 54 in 2011

Total General Fund, Fund Balance $20,000,000  $15,000,000  $10,000,000  $5,000,000  $‐ $(5,000,000) $(10,000,000) $(15,000,000) $(20,000,000) $(25,000,000) 2010

2011

- S8 -

2012

(THIS PAGE INTENTIONALLY LEFT BLANK)

- S9 -

Cleveland Municipal School District Governmental Funds Revenues Last Ten Fiscal Years (modified accrual basis of accounting)

2003

2004

2005

2006

$ 213,602,787 4,688,605 654,602 570,391 0 0 13,255,835 232,772,220

$ 246,794,199 2,945,010 1,079,586 1,044,014 0 0 9,521,102 261,383,911

$ 224,900,023 7,362,433 346,739 823,214 0 0 10,368,681 243,801,090

$ 225,725,605 16,205,770 195,468 888,418 0 0 18,124,497 261,139,758

State Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Total State Sources

302,965,559 129,821,083 432,786,642

335,747,598 109,333,452 445,081,050

322,634,276 143,316,706 465,950,982

384,220,944 130,630,795 514,851,739

Federal Sources: Unrestricted Grants-in-Aid Restricted Grants-in-Aid Total Federal Sources

19,787,241 114,895,243 134,682,484

11,022,960 118,784,282 129,807,242

7,639,231 118,920,360 126,559,591

361,625 125,743,351 126,104,976

$ 800,241,346

$ 836,272,203

$ 836,311,663

$ 902,096,473

General Revenues Local Sources: Taxes Investment Income Tuition and Fees Extracurricular Activities Contributions and Donations (1) Sale of Personal Property Miscellaneous Total Local Sources

Total Revenues

Source: School District financial records Notes: (1) 2008 was the first year the School District reported contributions and donations. Previously reported under miscellaneous revenues.

- S10 -

2007

2008

2009

2010

2011

2012

$ 229,456,774 18,843,152 983,938 862,421 0 0 7,042,147 257,188,432

$ 216,291,084 18,682,784 1,373,458 807,414 9,533,478 0 7,100,867 253,789,085

$ 198,637,233 9,507,759 1,341,693 790,764 7,984,141 0 10,669,482 228,931,072

$ 175,412,408 5,756,808 1,831,628 772,316 6,253,700 0 11,268,565 201,295,425

$ 185,815,163 3,535,089 4,181,794 612,023 8,107,354 152,615 14,816,339 217,220,377

$ 179,685,485 1,910,966 3,999,330 541,229 2,627,175 1,374,307 17,071,449 207,209,941

399,263,033 118,053,159 517,316,192

406,097,141 135,715,773 541,812,914

415,513,502 135,128,629 550,642,131

466,379,953 54,495,286 520,875,239

458,759,975 39,162,866 497,922,841

462,502,688 31,850,562 494,353,250

230,742 130,689,825 130,920,567

4,570,644 127,244,206 131,814,850

3,947,025 131,068,187 135,015,212

2,083,472 160,859,694 162,943,166

2,251,018 170,974,083 173,225,101

3,060,502 149,294,345 152,354,847

$ 905,425,191

$ 927,416,849

$ 914,588,415

$ 885,113,830

$ 888,368,319

$ 853,918,038

- S11 -

Cleveland Municipal School District Governmental Funds Expenditures and Debt Service Ratio Last Ten Fiscal Years (modified accrual basis of accounting)

Expenditures Current: Instruction: Regular Special Vocational Adult/Continuing Other Support Services: Pupils Instructional Staff Board of Education Administration Fiscal Business Operations and Maintenance of Plant Pupil Transportation Central Operation of Non-Instructional Services E t Extracurricular i l Activities A ti iti Capital Outlay Debt Service Principal Retirement Interest and Fiscal Charges Bond Issuance Costs Total Expenditures Debt Service as a Percentage of Noncapital Expenditures Noncapital Expenditures

2003

2004

2005

2006

$ 279,487,310 133,544,331 17,687,269 5,829,809 649,876

$ 282,588,920 142,508,629 15,999,270 5,102,664 198,400

$ 247,538,531 152,415,325 12,841,844 3,519,447 150

$ 311,511,315 143,898,323 11,934,317 2,321,948 12,496,611

42,077,898 64,123,973 289,091 53,270,115 12,700,693 1,243,797 76,805,490 38,221,943 20,047,777 42,915,460 7 593 763 7,593,763 21,213,426

41,479,432 56,192,266 252,707 44,542,970 10,896,259 1,082,675 70,515,379 37,217,500 16,639,171 44,336,368 7 034 194 7,034,194 54,594,406

36,034,088 54,943,213 209,576 39,700,442 12,265,464 1,289,034 60,192,807 28,199,461 15,118,320 44,051,523 6 061 353 6,061,353 81,404,824

35,284,327 51,117,118 280,079 39,129,081 9,925,994 983,446 56,628,484 27,392,258 15,972,950 40,693,064 5 823 466 5,823,466 92,090,262

3,399,908 18,159,177 0 $ 839,261,106

29,429,962 10,298,959 0 $ 870,910,131

28,978,523 13,648,029 0 $ 838,411,954

22,755,277 11,686,956 0 $ 891,925,276

-44.8% 2.6%

-418.4% 4.9%

-478.1% 5.6%

-390.8% 4.3%

Source: School District financial records

- S12 -

2007

2008

2009

2010

2011

2012

$ 301,277,356 160,202,855 12,718,124 2,968,255 12,218,420

$ 318,032,298 170,005,047 14,091,870 2,851,351 19,859,383

$ 317,468,088 180,320,570 11,903,774 2,856,799 19,463,893

$ 320,913,453 189,382,175 11,906,845 3,665,685 9,233,999

$ 285,176,732 207,710,557 10,325,890 117,389 6,470,346

$ 296,589,788 174,268,968 11,317,046 0 4,565,662

35,214,671 48,104,139 248,240 39,609,348 9,616,962 1,051,879 59,316,050 26,776,217 16,172,708 39,601,592 6 442 131 6,442,131 80,193,958

34,551,766 49,169,705 256,012 46,455,469 11,404,888 1,877,131 60,307,795 26,423,864 15,138,926 42,631,226 6 798 182 6,798,182 73,333,174

36,579,743 57,763,047 278,777 43,240,868 12,207,258 2,657,905 64,415,385 30,463,468 18,952,494 41,995,798 6 902 348 6,902,348 98,020,101

38,434,140 65,575,019 237,500 43,344,082 10,093,012 2,230,778 61,633,008 27,703,192 14,731,249 41,262,127 6 493 928 6,493,928 95,529,232

36,624,319 60,166,032 245,987 36,689,828 15,237,357 1,637,398 86,750,620 27,878,194 12,527,955 18,517,941 6 385 611 6,385,611 56,852,634

36,685,082 50,661,878 274,705 32,974,897 12,788,220 1,689,243 55,268,800 27,339,459 12,018,833 37,955,918 5 856 800 5,856,800 25,129,584

9,100,896 10,866,721 0 $ 871,700,522

24,665,132 9,633,715 0 $ 927,486,934

9,845,919 8,819,056 0 $ 964,155,291

10,193,245 8,122,103 0 $ 960,684,772

24,867,030 10,112,550 36,949 $ 904,331,319

37,540,082 10,357,440 0 $ 833,282,405

-141.3% 2.5%

-362.8% 4.0%

-142.6% 2.2%

-157.0% 2.1%

-391.7% 4.1%

-641.0% 5.9%

- S13 -

Cleveland Municipal School District Other Financing Sources and Uses and Net Change in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting)

Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) Issuance from the Sale of Bonds Proceeds from the Sale of Notes Premium from Sale of Bonds Capital Lease Refinancing Refunding Bonds Issued Payment of Capital Lease Refinancing Payment of Refunded Bond Escrow Agent Transfers In Transfers Out Total Other Financing Sources (Uses) Net Change in Fund Balances

2003

2004

$ (39,019,760)

$ (34,637,928)

40,000,000 0 0 8,404,000 91,937,253 (8,404,000) (125,182,448) 4,094,394 (4,094,394) 6,754,805

0 0 0 0 0 0 0 966,211 (966,211) 0

$ (32,264,955)

$ (34,637,928)

Source: School District financial records

- S14 -

2005

$

(2,100,291)

2006

$

125,000,000 0 3,066,194 0 0 0 0 3,108,186 (3,108,186) 128,066,194 $ 125,965,903

10,171,197

0 0 0 0 0 0 0 6,944,394 (6,944,394) 0 $

10,171,197

2007

$

33,724,669

2008

$

0 15,000,000 0 0 0 0 0 39,180,591 (39,180,591) 15,000,000 $

48,724,669

$

2009

2010

2011

(70,085)

$ (49,566,876)

$ (75,570,942)

$ (15,963,000)

0 0 0 0 0 0 0 29,532,247 (29,532,247) 0

0 0 0 0 0 0 0 3,770,394 (3,770,394) 0

0 0 0 0 0 0 0 11,072,036 (11,072,036) 0

55,000,000 0 0 0 0 0 0 14,573,314 (15,573,314) 54,000,000

(70,085)

$ (49,566,876)

$ (75,570,942)

- S15 -

$

38,037,000

2012

$

20,635,633

20,855,000 0 0 0 0 0 0 15,596,576 (16,390,182) 20,061,394 $

40,697,027

Cleveland Municipal School District Assessed and Estimated Actual Value of Taxable Property Last Ten Collection Years (in thousands of dollars)

Real Property Assessed Estimated Value Actual Value

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

$

4,609,619 4,903,040 5,007,377 4,970,503 5,629,680 5,526,506 5,544,198 5,336,350 5,455,841 5,449,321

$

13,170,340 14,008,686 14,306,791 14,201,437 16,084,800 15,790,017 15,840,565 15,246,715 15,588,117 15,569,488

Public Utility Assessed Estimated Value Actual Value $

357,125 357,470 352,432 316,245 318,454 212,297 222,204 235,305 243,660 247,613

$

405,824 406,216 400,491 359,369 361,879 241,246 252,505 267,392 276,886 281,378

Source: Office of the County Auditor, Cuyahoga County, Ohio Real property is reappraised every six years with a State mandated update of the current market value in the third year following each reappraisal. The assessed value of real property (including public utility real property) is 35 percent of estimated t true value. l Personal P l property t tax t is i assessedd on all ll tangible t ibl personall property t usedd in i business b i in i Ohio. The assessed value of public utility personal property ranges from 25 percent of true value for railroad property to 88 percent for electric transmission and distribution property. General business tangible personal property was assessed in previous years at 25 percent for machinery and equipment and 23 percent for inventories. General business tangible personal property tax was being phased out beginning in 2006. The listing percentage was 18.75 percent for 25 percent for 2006, 12.5 percent for 2007, 6.25 percent for 2008 and zero for 2009. The tangible personal property values associated with each year are the values that, when multiplied by the applicable rates, generated the property tax revenue billed in that year. For real property, the amounts generated by multiplying the assessed values by the applicable rebates would be reduced by the 10%, 2 1/2% and homestead exemptions before being billed. Beginning in 2006 collection year, the 10% rollback for commercial/industrial property was eliminated.

- S16 -

Tangible Property Assessed Estimated Value Actual Value $

852,234 723,018 674,031 679,540 556,633 424,871 221,153 0 0 0

$

3,705,365 3,143,557 2,930,570 3,624,213 4,453,064 3,398,968 3,538,448 0 0 0

Total Assessed Value $

Estimated Actual Value

5,818,978 5,983,528 6,033,840 5,966,288 6,504,767 6,163,674 5,987,555 5,571,655 5,699,501 5,696,934

$

17,281,529 17,558,458 17,637,853 18,185,019 20,899,743 19,430,231 19,631,518 15,514,107 15,865,003 15,850,866

Total Direct Rate

Ratio 34% 34 34 33 31 32 30 36 36 36

64.80 64.80 64.80 64.80 64.80 64.80 64.80 64.80 64.80 64.80

Assessed Value of Taxable Property $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2003

2004

2005 Real Property

2006

2007 Public Utility

2008

2009

Tangible Property

- S17 -

2010

2011

2012

Cleveland Municipal School District Ad Valorem Property Tax Rates - All Direct and Overlapping Governments Last Ten Collection Years (Rate Per $1,000 of Assessed Valuation)

Collection Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

City of Cleveland 12.70 12.70 12.70 12.70 12.70 12.70 12.70 12.70 12.70 12.70

Cuyahoga County 16.20 18.00 18.30 18.30 18.20 18.20 18.10 18.10 18.40 18.30

Cleveland Public Library 4.00 6.80 6.80 6.80 6.80 6.80 6.80 6.80 6.80 6.80

General Fund

Cleveland Municipal School District Building Bond Maintenance Retirement

58.20 58.20 58.20 58.20 58.20 58.20 58.20 58.20 58.20 58.20

Source: Cuyahoga County Auditor

Notes: (1) Amount represents the total for a City of Cleveland resident. (2) Certain points of the Villages of Bratenahl, Newburgh Heights and Linndale and the City of Garfield Heights are within the School District and are subject to the School District's tax.

- S18 -

0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50

6.10 6.10 6.10 6.10 6.10 6.10 6.10 6.10 6.10 6.10

Total (1) 97.70 102.30 102.60 102.60 102.50 102.50 102.40 102.40 102.70 102.60

Village of Bratenahl (2) 20.50 14.00 14.00 14.10 14.00 14.00 15.50 15.50 16.00 16.00

Village of Newburgh Heights (2)

Village of Linndale (2)

12.80 12.80 18.50 18.50 19.50 19.50 19.50 19.50 23.10 23.10

2.80 2.80 2.80 2.80 2.80 2.80 2.80 2.80 2.80 2.80

- S19 -

City of Garfield Heights (2) 20.10 20.10 21.10 21.90 21.90 21.90 23.30 28.70 24.70 24.30

Cleveland Municipal School District Principal Property Tax Payers 2011 and 2002 (1)

2011 Approximate Assessed Valuation

2002

Rank

Percent of Total District Assessed Valuation

Rank

Percent of Total District Assessed Valuation

241,151,560

1

4.23%

City of Cleveland, Ohio

87,469,400

2

1.54%

Key Center Properties LLC

83,619,320

3

1.47%

Cleveland Financial Associates

46,967,070

4

0.82%

Board of County Commissioners

39,698,830

5

0.70%

City of Cleveland Executive

36,508,320

6

0.64%

National City Bank

36,391,080

7

0.64%

Hub North Point Properties

33,309,480

8

0.58%

ISG Cleveland Inc.

26,892,690

9

0.47%

Optima One Cleveland

25,857,270

10

0.45% 139,133,450

1

2.39%

SBC Ameritech

82,569,490

2

1.42%

ISG Cleveland Inc.

71,256,730

3

1.22%

ZML - Cleveland Public Square

47,232,500

4

0.81%

NPW LTD Partnership

36,610,000

5

0.63%

GSA

35,000,000

6

0.60%

Ohio Bell Telephone

29,917,890

7

0.51%

600 Superior Place Partnership

25,970,770

8

0.45%

CG Erieview

25,202,210

9

0.43%

American Transmission System

24,285,030

10

0.42%

Taxpayer Cleveland Clinic Foundation

$

Cleveland Electric Illuminating Co.

Total Ten Largest Total District Assessed Valuation

Approximate Assessed Valuation

$

657,865,020

11.53%

$ 5,696,934,000

517,178,070 $ 5,818,978,000

Source: City of Cleveland 2012 CAFR, CMSD 2003 CAFR (1) 2012 Tax Collection Year Information Not Available.

- S20 -

8.88%

Cleveland Municipal School District Property Tax Levies and Collections Ad Valorem Real and Tangible Personal Property Taxes Last Ten Fiscal Years (in thousands of dollars)

Current Tax Levy Billed (1)

Collection Year (2) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

$

Current Collected

270,791 263,003 259,350 261,734 251,189 245,044 228,622 218,073 224,782 225,219

$

233,553 232,417 231,188 230,272 221,282 212,722 192,688 183,273 181,857 177,622

Percent Collected (1) 86.2 88.4 89.1 88.0 88.1 86.8 84.3 84.0 80.9 78.9

Collected Delinquencies $

20,463 17,296 23,533 17,260 18,022 16,160 18,439 15,452 14,888 14,652

Total Collected $

Total Collected As Percent Of Current Tax Levy

254,016 249,713 254,721 247,532 239,304 228,882 211,127 198,725 196,745 192,274

93.8 94.9 98.2 94.6 95.3 93.4 92.3 91.1 87.5 85.4

Total Percent Collected 100.0  95.0  90.0  85.0  80.0  75.0  2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Office of the Auditor, Cuyahoga County, Ohio - Data is presented on a calendar year basis because this is the manner in which the information is maintained by the County Auditor.

Notes: (1) Includes Homestead/Rollback taxes assessed locally, but distributed through the State and reported as Intergovernmental Revenue. (2) Represents collection year. 2012 information cannot be presented because all collections have not been made by June 30.

- S21 -

Cleveland Municipal School District Ratio of Bonded Debt to Personal Income and Debt per Capita Last Ten Fiscal Years

Fiscal Year

Estimated Population (1)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

478,403 478,403 478,403 444,313 444,313 438,042 433,748 431,369 431,369 396,815

General Obligation Bonded Debt General Ratio of General General Obligation Obligation Bonded Obligation Bonded Debt to Estimated Bonded Debt Debt Actual Value per Capita

Estimated Actual Values $ 17,281,529,000 17,558,459,000 17,637,852,000 18,185,019,000 20,899,743,000 19,430,231,000 19,631,518,000 15,514,107,000 15,865,004,000 15,850,866,000

$ 124,915,000 98,695,000 197,200,000 176,130,000 168,765,000 160,890,000 152,915,000 144,670,000 176,225,000 160,410,000

Sources: (1) U.S. Bureau of the Census (2) The personal income can be found on S27

- S22 -

0.72 0.56 1.12 0.97 0.81 0.83 0.78 0.93 1.11 1.01

261 206 412 396 380 367 353 335 409 404

Other Governmental Activities Debt Energy Conservation Qualified Zone Improvement Capital Academy Bonds Notes Bonds Lease Obligation $ 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000 21,250,000

$

75,383,124 60,012,875 43,736,113 56,571,154 38,490,704 27,767,780 22,007,532 6,215,191 5,388,648 4,518,566

$

2,520,000 865,000 0 0 0 0 0 0 0 0

$

7,796,508 6,886,795 5,940,034 4,954,716 3,929,270 2,862,062 1,751,391 595,487 0 0

Total Debt

Percentage of Personal Income (2)

$ 231,864,632 187,709,670 268,126,147 258,905,870 232,434,974 212,769,842 197,923,923 172,730,678 202,863,648 186,178,566

3.39% 2.75 3.92 4.08 3.66 3.40 3.19 2.80 3.14 2.88

Per Capita $

Total Debt $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 2003

2004

2005

2006

2007

General Obligation Bonded Debt

2008

2009

2010

Other Governmental Activities Debt

- S23 -

2011

2012

485 392 560 583 523 486 456 400 470 469

Cleveland Municipal School District Legal Debt Margin Information Last Ten Fiscal Years

Legal Debt Margin Calculation for Fiscal Year 2011 Assessed Value $ 5,696,934,000 Debt Limit (9% of assessed value) 512,724,060 Debt Applicable to Limit 138,566,996 Legal Debt Margin $ 374,157,064

Debt Limit Total Net Debt Applicable to Limit Legal Debt Margin

Total Net Debt Applicable to the Limit as a Percentage of Debt Limit

2003

2004

2005

2006

$ 523,708,020

$ 538,517,520

$ 543,045,600

$ 536,965,920

97,918,533

62,033,529

157,165,358

141,812,427

$ 425,789,487

$ 476,483,991

$ 385,880,242

$ 395,153,493

18.70%

11.52%

Source: Office of the County Auditor, Cuyahoga County, Ohio Note: Ohio Bond Law sets a limit of 9% for voted debt and 1/10 of 1% for unvoted debt. Voted debt margins are determined without reference to applicable monies in the School District's Debt Service Fund

- S24 -

28.94%

26.41%

2007

2008

2009

2010

2011

2012

$ 585,429,030

$ 554,730,660

$ 538,879,947

$ 501,448,950

$ 512,955,090

$ 512,724,060

149,897,800

135,715,009

127,899,099

119,367,026

156,124,865

138,566,996

$ 435,531,230

$ 419,015,651

$ 410,980,848

$ 382,081,924

$ 356,830,225

$ 374,157,064

25.60%

24.47%

23.73%

23.80%

- S25 -

30.44%

27.03%

Cleveland Municipal School District Direct and Overlapping Debt Governmental Activities Debt As of June 30, 2012

Name of Governmental Unit

Gross Debt Outstanding

Direct Debt: Cleveland Municipal School District (2)

$ 176,359,412

Net Outstanding Debt

Percentage Applicable to Cleveland Municipal School District (1)

Amount Applicable to Cleveland Municipal School District

19,810,826

$ 156,548,586

100.00%

$ 156,548,586

Debt Service Fund (Cash Balance)

$

Overlapping Debt: City of Cleveland (3)

380,600,000

10,454,345

370,145,655

98.10

363,112,888

Cuyahoga County (3)

298,113,842

17,665,908

280,447,934

19.12

53,621,645

1,169,000

146,836

1,022,164

100.00

1,022,164

City of Garfield Heights (3)

30,578,000

231,276

30,346,724

6.32

1,917,913

Greater Cleveland Regional Transit Authority (3) Total Overlapping Debt

142,080,000 852,540,842

2,198,868 30,697,233

139,881,132 821,843,609

19.12

26,745,272 446,419,882

50,508,059

$ 978,392,195

Village of Bratenahl (3) .

Total

$ 1,028,900,254

$

Source: Office of the County Auditor, Cuyahoga County, Ohio

Notes: (1) Percentages were determined by dividing the assessed valuation of the political subdivision located within the boundaries of the School District by the total assessed valuation of the subdivision. (2) The gross debt outstanding does not include H.B. 264 Energy Conservation Note of $5,388,648 and QZAB debt of $21,250,000. (3) City of Cleveland, Cuyahoga County, Village of Bratenahl, City of Garfield Heights and the Greater Cleveland Regional Transit Authority operate on a calendar year.

- S26 -

$ 602,968,468

Cleveland Municipal School District Demographic and Economic Statistics Last Ten Fiscal Years

Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Personal Income (thousands of dollars)

City Population 478,403 478,403 478,403 444,313 444,313 438,042 433,748 431,369 396,815 396,815

$

6,836,857,273 6,836,857,273 6,836,857,273 6,349,677,083 6,349,677,083 6,260,058,222 6,198,692,668 6,164,694,379 6,468,878,130 6,468,878,130

Per Capita Personal Income $

14,291 14,291 14,291 14,291 14,291 14,291 14,291 14,291 16,302 16,302

State Unemployment Rate 6.3% 5.8 6.2 5.1 6.1 6.4 10.5 10.5 9.3 7.4

Source: U.S. Bureau of the Census, Bureau of Economic Analysis and U.S. Department of Labor Statistics.

- S27 -

Cleveland Municipal School District Principal Employers Current Year and Nine Years Ago

2012 Employer Cleveland Clinic Health System U.S. Office of Personnel Management University Hospitals Giant Eagle Incorporated Progressive Corporation Cuyahoga County City of Cleveland General Motors Key Corp MetroHealth Systems Case Western Reserve University

Number of Employees 34,000 15,095 13,726 10,311 8,612 7,859 7,089 5,975 5,827 5,558 4,620

2003

Rank

Percentage of Total Employment

1 2 3 4 5 6 7 8 9 10 11

3.22% 1.52 1.38 1.04 0.87 0.79 0.71 0.60 0.59 0.56 0.46

Cleveland Clinic Health System University Hospitals Key Corp Progressive Corp Ford Motor Company National City Corporation MetroHealth Systems Case Western Reserve SBC Ameritech Continental Airlines Giant Eagle Incorporated

Number of Employees

23,360 14,111 7,655 6,468 6,252 5,590 5,267 5,060 4,343 3,492 3,491 118,672

11.94%

Total Nonfarm Employment

994,900

85,089

Rank

1 2 3 4 5 6 7 8 9 10 11

Percentage of Total Employment

1.77% 1.31 0.71 0.60 0.58 0.48 0.49 0.47 0.40 0.32 0.32 7.92%

1,074,800

Source: Crain's Cleveland Business, 2012 Top Business Lists and 2003 Top Business Lists "Largest Northeast Ohio Employers" "Largest Cuyahoga County Employers". U.S. Department of Labor Note: Total Employment includes Cleveland, Elyria and Mentor * 2012 Employment figures include all of Northeast Ohio, including the following counties: Cuyahoga, Geauga, Lake, Lorain Mahoning, Medina, Portage, Stark, and Summit.

- S28 -

Cleveland Municipal School District Full-Time Equivalent District Employees by Type Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Percentage Change 2003-2012

Educational Staff Regular Education 3,326 Special Education 894 Vocational Education 139 Educational Services 486 Full Time (permanent) Substitute 207 Other Professional - Educational 162 Total Educational 5,214

3,181 956 133 472 115 127 4,984

2,548 903 106 382 92 91 4,122

2,058 1,335 87 386 30 74 3,970

1,943 1,383 83 371 3 19 3,802

2,020 1,250 86 389 2 14 3,761

1,956 1,244 80 378 2 13 3,673

1,945 1,212 76 384 2 10 3,629

2,392 925 83 217 0 46 3,663

1,940 775 0 14 0 27 2,756

-41.67 % -13.31 -100.00 -97.12 0.00 -83.33 -47.14

9 0 104 112 341 78 58 30 10 84 22 64 912

4 0 100 106 371 76 54 26 9 78 23 62 909

1 0 71 89 187 70 54 11 9 77 27 52 648

1 0 67 84 139 70 55 1 9 76 22 67 591

8 0 73 91 46 62 57 0 10 73 26 58 504

28 0 71 95 44 61 66 12 9 72 24 70 552

27 0 72 96 33 61 65 13 9 75 25 71 547

64 0 70 92 34 71 63 14 9 74 25 69 585

65 0 72 69 55 69 60 7 9 74 26 96 602

116 148 57 47 224 75 42 8 8 72 25 147 969

1,188.89 0.00 -45.19 -58.04 -34.31 -3.85 -27.59 -73.33 -20.00 -14.29 13.64 129.69 6.25

Support Staff Bookkeeping 14 Clerical Assignment 385 Teaching Aide 825 Other Office/Clerical 79 Attendance Officer 22 Maintenance 110 Custodial 436 Food Service Attendant 5 Guard/Watchman 225 Mechanic 38 Vehicle Operating/Dispatch 51 Computer Operating/Programmin 32 Total Support 2,222

14 358 736 71 22 96 415 4 220 38 50 31 2,055

12 281 633 49 21 71 373 4 164 27 50 21 1,706

8 257 624 30 22 66 332 4 196 26 49 13 1,627

5 260 633 37 21 92 333 5 203 26 49 10 1,674

4 259 717 25 19 69 327 5 213 26 47 7 1,718

4 259 734 44 19 33 329 5 324 59 45 7 1,862

3 246 800 21 19 30 320 5 319 57 41 6 1,867

34 275 517 109 19 35 305 4 305 50 46 17 1,716

20 220 496 24 17 31 292 4 212 50 46 25 1,437

42.86 -42.86 -39.88 -69.62 -22.73 -71.82 -33.03 -20.00 -5.78 31.58 -9.80 -21.88 -35.33

26 19 0 120 140 159 25 0 192 681

16 22 0 122 91 167 24 0 178 620

7 18 0 135 56 151 27 0 156 550

9 19 0 129 60 133 23 0 155 528

11 32 0 135 66 118 22 0 142 526

10 38 0 130 70 124 23 0 139 534

11 35 0 129 79 132 29 10 136 561

11 35 0 123 72 125 29 9 140 544

6 21 6 121 74 51 28 9 48 364

5 20 4 115 74 47 34 9 45 353

-80.77 5.26 0.00 -4.17 -47.14 -70.44 36.00 0.00 -76.56 -48.16

9,029

8,568

7,026

6,716

6,506

6,565

6,643

6,625

6,345

5,515

Student Services Curriculum Specialist Paraprofessional Counseling Librarian/Media Remedial Specialist Psychologist Registered Nurse Social Work Physical Therapist Speech/Language Therapist Occupational Therapist Other Professional Services Total Student Services

Administrative Staff Administrative Assistant Deputy/Associate Superintendent Director Principal Assistant Principal Supervisor/Manager Coordinator Education Adminstrative Speciali Other Official/Administrator Total administrative

Total Source: District records

- S29 -

-38.92 %

Cleveland Municipal School District Operating Statistics Last Ten Fiscal Years

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Enrollment 69,534 67,015 62,542 57,698 52,769 50,078 47,120 46,697 43,363 40,758

Cost Per Pupil

Operating Expenditures (1) $ 796,488,595 776,586,804 714,380,578 765,392,781 771,538,947 819,854,913 847,470,215 846,840,192 812,462,156 760,255,299

$

11,455 11,588 11,422 13,265 14,621 16,372 17,985 18,135 18,736 18,653

Source: Ohio Department of Education Notes: (1) Operating expenditures are total expenditures less debt service and capital outlays. (2) N/A = Not Available (3) Meal percentage includes lunch only.

- S30 -

Percentage Change

Expenses

4.87% 1.17 (1.43) 16.14 10.22 11.97 9.86 0.83 3.32 (0.45)

$ 807,069,564 782,046,356 714,150,993 778,630,513 786,833,933 874,562,401 862,846,754 916,582,748 833,175,198 796,058,675

Cost Per Pupil $

11,607 11,670 11,419 13,495 14,911 17,464 18,312 19,628 19,214 19,531

Percentage Change (2) 6.05% 0.54 (2.15) 18.18 10.49 17.12 4.85 7.19 -2.11 1.65

Teaching Staff 6,551 4,978 3,557 3,436 3,502 3,515 3,583 3,554 3,317 2,715

PupilTeacher Ratio

Percentage of Students Receiving Free and Reduced Paid Meals (3)

10.6 13.5 17.6 16.8 15.1 14.2 13.2 13.1 13.1 15.0

85.73% 85.75 85.43 84.83 84.83 70.34 77.85 77.88 82.01 81.87

- S31 -

Cleveland Municipal School District Teacher Base Salaries Last Ten Fiscal Years

Fiscal Year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Minimum Salary $

Statewide Average Salary

Maximum Salary

32,684 33,240 35,264 34,237 35,264 36,322 37,412 38,534 36,836 36,740

Source: Ohio Department of Education American Federation of Teachers, AFL-CIO

* Note: 2012 information is not yet available

- S32 -

$

69,325 70,504 74,798 72,619 74,798 77,042 79,353 81,734 76,736 77,929

$

45,645 47,659 49,438 50,772 53,536 53,410 54,656 55,958 56,715 N/A*

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003 2004 2005 K-8 Schools: A.B. Hart (1932) Square feet 115,452 115,452 115,452 Capacity 975 975 975 Enrollment 821 801 867 Adlai Stevenson (1967) Square feet 41,000 41,000 41,000 Capacity 525 525 525 Enrollment 285 279 238 Alexander G. Bell (1971) Square feet 70,829 70,829 70,829 Capacity 825 825 825 Enrollment 447 417 387 Alexander Hamilton (1) (1928) Square feet 89,195 89,195 89,195 Capacity 575 575 575 Enrollment 745 706 648 Alfred A. Benesch-George Washing Carver Swing Space (1) (1977) Square feet 42,133 42,133 42,133 Capacity 575 575 575 Enrollment 479 449 368 Almira (1916) Square feet 68,933 68,933 68,933 Capacity 650 650 650 Enrollment 650 634 625 Andrew J. Rickoff (2) (1920) Square feet 56,348 56,348 56,348 Capacity N/A N/A N/A Enrollment 426 360 252 Andrew J. Rickoff (2005) Square feet N/A N/A N/A Capacity N/A N/A N/A Enrollment N/A N/A N/A Anton Grdina (1959) Square feet 75,600 75,600 75,600 Capacity 700 700 700 Enrollment 513 498 589 Anton Grdina (2011) Square feet N/A N/A N/A Capacity N/A N/A N/A Enrollment N/A N/A N/A Artemus Ward (1949) Square feet 35,826 35,826 35,826 Capacity 450 450 450 Enrollment 379 362 373

2006

2007

2008

2009

2010

2011

2012

115,452 975 524

115,452 975 433

115,452 975 338

115,452 975 399

115,452 975 308

115,452 975 0

115,452 975 0

41,000 525 319

41,000 525 326

41,000 525 290

41,000 525 368

41,000 525 258

41,000 525 417

41,000 525 370

70,829 825 452

70,829 825 397

70,829 825 384

70,829 825 382

70,829 825 394

70,829 825 0

70,829 825 0

89,195 575 0

89,195 575 0

89,195 575 0

89,195 575 0

89,195 575 0

89,195 575 0

89,195 575 0

42,133 575 0

42,133 575 0

42,133 575 0

42,133 575 400

42,133 575 433

42,133 575 323

42,133 575 0

68,933 650 553

68,933 650 521

68,933 650 466

68,933 650 474

68,933 650 374

68,933 650 386

68,933 650 325

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

91,785 725 509

91,785 725 570

91,785 725 570

91,785 725 544

91,785 725 513

91,785 725 487

91,785 725 525

75,600 700 624

75,600 700 576

75,600 700 522

75,600 700 475

75,600 700 419

67,719 700 330

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

71,280 540 344

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

N/A N/A N/A

- S33 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

Artemus Ward (2009) Square feet

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

N/A

N/A

N/A

N/A

N/A

N/A

64,298

64,298

63,282

63,282

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

420

475

458

494

146,209

146,209

146,209

146,209

146,209

146,209

146,209

146,209

146,209

146,209

1,350

1,350

1,350

1,350

1,350

1,350

1,350

1,350

1,350

1,350

586

480

428

686

571

491

435

355

355

0

83,260 800 699

83,260 800 615

83,260 800 686

83,260 800 784

83,260 800 738

83,260 800 669

83,260 800 656

83,260 800 640

83,719 800 648

83,719 800 608

53,700 650 410

53,700 650 424

53,700 650 415

53,700 650 385

53,700 650 293

53,700 650 343

53,700 650 289

53,700 650 300

44,110 650 388

44,110 650 347

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

28,545 425

337

325

328

319

312

304

270

253

0

0

Audubon (1922) Square feet Capacity Enrollment Benjamin Franklin (1923) Square feet Capacity Enrollment Bolton (1971) Square feet Capacity Enrollment Brooklawn (1957) Square feet Capacity Enrollment Buckeye-Woodland (1975) Square feet

44,800

44,800

44,800

44,800

44,800

44,800

44,800

44,800

52,493

52,493

Capacity

625

625

625

625

625

625

625

625

625

625

Enrollment

401

411

429

360

304

260

262

253

319

270

Buhrer (1969) Square feet

42,086

42,086

42,086

42,086

42,086

42,086

42,086

42,086

42,086

42,086

Capacity

600

600

600

600

600

600

600

600

600

600

Enrollment

537

501

475

446

0

0

0

0

0

0

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

52,850

52,850

52,850

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

350

350

350

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

333

320

342

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

114

210

Buhrer (2009)

Campus International School

Captain Arthur Roth (1965) Square feet

70,016

70,016

70,016

70,016

70,016

70,016

70,016

70,016

66,397

N/A

Capacity

975

975

975

975

975

975

975

975

975

N/A

Enrollment

531

419

345

412

370

315

280

259

287

N/A

- S34 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003 Carl & Louis Stokes Central Academy

2004

2005

2006

2007

2008

2009

2010

2011

2012

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

120,451

120,451

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

775

775

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

544

469

Case (1975) Square feet

69,559

69,559

69,559

69,559

69,559

69,559

69,559

69,559

57,688

57,688

Capacity

800

800

800

800

800

800

800

800

800

800

Enrollment

500

404

579

553

481

413

353

412

412

367

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

50,989

50,989

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

425

406

Charles Dickens

Charles H. Lake (1961) Square feet

55,823

55,823

55,823

55,823

55,823

N/A

N/A

N/A

N/A

N/A

Capacity

675

675

675

675

675

N/A

N/A

N/A

N/A

N/A

Enrollment

399

377

315

324

289

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

152,607

152,607

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

1,400

1,400

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

742

472 N/A

Charles A. Mooney

Charles Orr (1955) Square feet

33,000

33,000

33,000

33,000

33,000

33,000

33,000

33,000

33,000

Capacity

425

425

425

425

425

425

425

425

425

N/A

Enrollment

146

0

0

0

0

146

99

143

0

N/A

104,360

104,360

104,360

104,360

104,360

104,360

104,360

104,360

90,497

90,497

1,050

1,050

1,050

1,050

1,050

1,050

1,050

1,050

1,050

1,050

827

767

648

417

342

299

316

311

447

502

Charles W. Elliot (1954) Square feet Capacity Enrollment

Clara Westropp Fundamental Education Center (1967) Square feet Capacity Enrollment

116,246

116,246

116,246

116,246

116,246

116,246

116,246

116,246

106,582

106,582

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

717

728

671

712

627

640

580

547

515

449

Clark (1973) Square feet

59,064

59,064

59,064

59,064

59,064

59,064

59,064

59,064

56,178

56,178

Capacity

525

525

525

525

525

525

525

525

525

525

Enrollment

599

635

655

605

577

579

557

584

553

592

Corlett (1) (1915) Square feet

61,800

61,800

61,800

61,800

61,800

61,800

61,800

61,800

61,800

61,800

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

435

362

387

0

0

0

0

0

0

0

- S35 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003 Cranwood-Miles Swing Space (1) (1957) Square feet

2004

2005

2006

2007

2008

2009

2010

2011

2012 50,249

50,249

50,249

50,249

50,249

50,249

50,249

50,249

50,249

50,249

Capacity

675

675

675

675

675

675

675

675

675

675

Enrollment

387

294

290

0

0

0

0

300

365

324

Daniel E. Morgan (1959) Square feet

51,272

51,272

51,272

51,272

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

825

825

825

825

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

497

455

438

423

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

66,409

66,409

66,409

66,409

66,409

66,409

Capacity

N/A

N/A

N/A

N/A

480

480

480

480

480

480

Enrollment

N/A

N/A

N/A

N/A

430

448

406

355

325

322

Daniel E. Morgan (2007)

Denison (1972) Square feet

42,714

42,714

42,714

42,714

42,714

42,714

42,714

42,714

52,351

52,351

Capacity

825

825

825

825

825

825

825

825

825

825

Enrollment

692

736

726

706

698

713

709

708

597

645

Dike Montessori-CSA Lower Campus (1971) Square feet

53,300

53,300

53,300

53,300

53,300

53,300

53,300

53,300

53,300

53,300

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

317

313

298

392

390

362

371

380

0

412

31,000

31,000

31,000

31,000

31,000

31,000

31,000

31,000

31,000

31,000

400

400

400

400

400

400

400

400

400

400

0

0

0

0

0

76

136

173

207

250

Douglas MacArthur (1) (1967) Square feet Capacity Enrollment East Clark (2) (1894) Square feet

56,755

56,755

56,755

56,755

56,755

N/A

N/A

N/A

N/A

N/A

Capacity

575

575

575

575

575

N/A

N/A

N/A

N/A

N/A

Enrollment

510

480

419

463

387

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

63,281

63,281

63,281

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

452

389

398

East Clark (2009)

Emile B. deSauze (1966) Square feet

51,457

51,457

51,457

51,457

51,457

51,457

51,457

51,457

48,860

48,860

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

416

395

339

407

360

344

304

284

258

0

Empire Computech (1915) Square feet

75,003

75,003

75,003

75,003

75,003

75,003

75,003

75,003

75,003

75,003

Capacity

900

900

900

900

900

900

900

900

900

900

Enrollment

588

592

567

423

361

330

279

236

0

0

- S36 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Euclid Park (1922) Square feet

43,182

43,182

43,182

43,182

43,182

N/A

N/A

N/A

N/A

N/A

Capacity

500

500

500

500

500

N/A

N/A

N/A

N/A

N/A

Enrollment

438

415

289

358

291

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

53,767

53,767

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

351

351

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

321

345

155,000

155,000

155,000

155,000

155,000

155,000

155,000

155,000

155,000

155,000

1,275

1,275

1,275

1,275

1,275

1,275

1,275

1,275

1,275

1,275

631

781

656

0

0

297

520

463

592

544

Euclid Park (2010)

F. D. Roosevelt (1976) Square feet Capacity Enrollment Forest Hill Parkway (1967) Square feet

51,278

51,278

51,278

51,278

51,278

51,278

51,278

51,278

51,278

51,278

Capacity

450

450

450

450

450

450

450

450

450

450

Enrollment

374

388

389

407

380

390

365

276

0

0

Fullerton (1974) Square feet

36,468

36,468

36,468

36,468

36,468

36,468

36,468

36,468

36,468

36,468

Capacity

500

500

500

500

500

500

500

500

500

500

Enrollment

483

459

352

458

401

395

379

372

407

327

Garfield (2) (1922) Square feet

31,763

31,763

31,763

31,763

31,763

31,763

31,763

31,763

31,763

31,763

Capacity

425

425

425

425

425

425

425

425

425

425

Enrollment

229

238

189

0

0

0

0

0

0

0

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

60,777

60,777

60,777

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

426

426

426

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

375

425

518

Garfield (2009)

George Washington Carver (1954) Square feet

53,800

53,800

53,800

53,800

53,800

53,800

N/A

N/A

N/A

N/A

Capacity

475

475

475

475

475

475

N/A

N/A

N/A

N/A

Enrollment

373

407

429

516

463

404

N/A

N/A

N/A

N/A

George Washington Carver (2010) Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

63,280

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

536

Giddings (1970) Square feet

53,533

53,533

53,533

53,533

53,533

53,533

53,533

53,533

49,607

49,607

Capacity

550

550

550

550

550

550

550

550

550

550

Enrollment

347

360

436

389

302

288

275

275

263

0

- S37 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Gracemount (1947) Square feet

49,922

49,922

49,922

49,922

49,922

49,922

49,922

49,922

49,922

49,922

Capacity

475

475

475

475

475

475

475

475

475

475

Enrollment

579

564

629

561

487

432

493

493

0

0

Hannah Gibbons (1960) Square feet

21,831

21,831

21,831

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

225

225

225

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

193

173

223

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

52,953

52,953

52,953

52,953

52,953

52,953

Capacity

N/A

N/A

N/A

N/A

351

351

351

351

351

351

Enrollment

N/A

N/A

N/A

N/A

267

246

237

228

226

281

Hannah Gibbons (2006)

Harvey Rice (2) (1903) Square feet

82,414

82,414

82,414

82,414

82,414

82,414

82,414

N/A

N/A

N/A

Capacity

975

975

975

975

975

975

975

N/A

N/A

N/A

Enrollment

543

511

402

352

317

267

233

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

63,280

63,280

63,280

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

362

422

446

Harvey Rice (2009)

H. Barbara Booker (1972) Square feet

53,296

53,296

53,296

53,296

53,296

53,296

53,296

53,296

53,296

53,296

Capacity

875

875

875

875

875

875

875

875

875

875

Enrollment

346

323

261

564

497

508

403

416

430

415

Harry E. Davis (1962) Cleveland School of Arts Swing Space Square feet Capacity Enrollment

115,064

115,064

115,064

115,064

115,064

115,064

115,064

115,064

115,064

115,064

1,250

1,250

1,250

1,250

1,250

1,250

1,250

1,250

1,250

1,250

562

465

320

0

0

0

0

595

595

616

Henry W. Longfellow (1924) Square feet

50,616

50,616

50,616

50,616

50,616

50,616

50,616

50,616

50,616

50,616

Capacity

337

337

337

337

337

337

337

337

337

337

Enrollment

414

353

289

362

302

321

238

252

0

0

Iowa Maple (1951) Square feet

57,842

57,842

57,842

57,842

57,842

57,842

57,842

57,842

57,842

57,842

Capacity

650

650

650

650

650

650

650

650

650

650

Enrollment

489

423

360

555

427

368

306

318

336

399

John D. Rockefeller (1961) Square feet

54,400

54,400

54,400

54,400

54,400

54,400

54,400

54,400

54,400

54,400

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

481

502

570

434

321

242

236

216

0

0

- S38 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

John W. Raper (1962) Square feet

64,556

64,556

64,556

64,556

64,556

64,556

64,556

64,556

64,556

64,556

Capacity

800

800

800

800

800

800

800

800

800

800

Enrollment

425

374

361

433

431

444

383

356

0

0

Joseph F. Landis (1963) Square feet

49,170

49,170

49,170

49,170

49,170

49,170

49,170

49,170

49,170

N/A

Capacity

725

725

725

725

725

725

725

725

725

N/A

Enrollment

463

441

368

431

379

399

341

360

0

N/A

126,816

126,816

126,816

126,816

126,816

126,816

126,816

126,816

127,266

127,266

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

1,000

838

787

889

865

762

791

771

737

654

652

Joseph M. Gallagher (1976) Square feet Capacity Enrollment Kenneth W. Clement (1) (1976) Square feet

31,400

31,400

31,400

31,400

31,400

31,400

31,400

31,400

31,400

31,400

Capacity

550

550

550

550

550

550

550

550

550

550

Enrollment

335

279

207

0

0

100

129

166

168

168

Kentucky-Paul L. Dunbar Swing Space (1940) Square feet

42,870

42,870

42,870

42,870

42,870

42,870

42,870

42,870

35,010

35,010

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

376

338

370

106

422

438

437

316

192

158

Louis Agassiz (1929) Square feet

43,074

43,074

43,074

43,074

43,074

43,074

43,074

43,074

40,185

40,185

Capacity

525

525

525

525

525

525

525

525

525

525

Enrollment

355

301

371

375

313

322

338

351

344

338

Louis Pasteur (1959) Square feet

57,835

57,835

57,835

57,835

57,835

57,835

57,835

57,835

57,835

57,835

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

366

337

308

478

375

245

0

0

0

0

Louisa May Alcott (1926) Square feet

31,240

31,240

31,240

31,240

31,240

31,240

31,240

31,240

26,277

26,277

Capacity

300

300

300

300

300

300

300

300

300

300

Enrollment

203

200

214

208

230

212

235

226

233

203

157,009

157,009

157,009

157,009

157,009

157,009

157,009

157,009

119,639

119,639

1,075

1,075

1,075

1,075

1,075

1,075

1,075

1,075

1,075

1,075

839

808

730

727

822

872

774

773

796

708

Luiz Munoz Marin (1976) Square feet Capacity Enrollment

Margaret Spellacy - Ginn Academy (1969) Square feet

116,246

116,246

116,246

116,246

116,246

116,246

116,246

116,246

106,582

106,582

Capacity

900

900

900

900

900

900

900

900

900

900

Enrollment

700

278

298

0

0

541

477

272

251

216

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Cleveland Municipal School District School Building Information Last Ten Fiscal Years

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2006

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2008

2009

2010

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2012

Marion C. Seltzer (1972) Square feet

46,835

46,835

46,835

46,835

46,835

46,835

46,835

46,835

46,835

46,835

Capacity

675

675

675

675

675

675

675

675

675

675

Enrollment

700

630

651

659

609

614

574

585

535

487

Marion Sterling (1973) Square feet

51,896

51,896

51,896

51,896

51,896

51,896

51,896

51,896

51,896

51,896

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

511

513

450

507

471

498

483

469

503

454

Mary B. Martin (2) (1963) Square feet

57,737

57,737

57,737

57,737

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

825

825

825

825

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

325

347

297

0

N/A

N/A

N/A

N/A

N/A

N/A

Mary B. Martin & Early Childhood (2006) Square feet

N/A

N/A

N/A

N/A

70,048

70,048

70,048

70,048

70,048

70,048

Capacity

N/A

N/A

N/A

N/A

490

490

490

490

490

490

Enrollment

N/A

N/A

N/A

N/A

390

340

398

343

321

445

Mary M. Bethune (2) (1964) Square feet

48,613

48,613

48,613

48,613

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

450

450

450

450

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

316

303

328

480

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

68,498

68,498

68,498

68,498

68,731

68,731

Capacity

N/A

N/A

N/A

N/A

500

500

500

500

500

500

Enrollment

N/A

N/A

N/A

N/A

417

352

344

349

363

333

Mary M. Bethune (2006)

McKinley (1922) Square feet

46,724

46,724

46,724

46,724

46,724

46,724

46,724

46,724

46,724

46,724

Capacity

375

375

375

375

375

375

375

375

375

375

Enrollment

499

466

440

404

375

343

308

288

304

304

Square feet

N/A

N/A

N/A

83,584

83,584

83,584

83,584

83,584

82,160

82,160

Capacity

N/A

N/A

N/A

625

625

625

625

625

625

625

Enrollment

N/A

N/A

N/A

501

522

454

475

480

481

464

Memorial (2005)

Michael R. White (1921) Square feet

64,598

64,598

64,598

64,598

64,598

64,598

64,598

64,598

64,598

64,598

Capacity

825

825

825

825

825

825

825

825

825

825

Enrollment

396

359

300

432

368

378

341

323

447

420

Miles (1912) Square feet

88,876

88,876

88,876

88,876

88,876

88,876

88,876

88,876

88,876

88,876

Capacity

950

950

950

950

950

950

950

950

950

950

Enrollment

456

393

483

556

426

394

314

0

0

0

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Cleveland Municipal School District School Building Information Last Ten Fiscal Years

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2008

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2012

Miles Park (2) (1971) Square feet

43,027

43,027

43,027

43,027

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

500

500

500

500

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

490

492

421

513

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

92,027

92,027

92,027

92,027

92,029

92,029

Capacity

N/A

N/A

N/A

N/A

650

650

650

650

650

650

Enrollment

N/A

N/A

N/A

N/A

461

538

430

497

556

605

Miles Park (2007)

Moses Cleaveland (1925) Square feet

79,671

79,671

79,671

79,671

79,671

79,671

79,671

79,671

79,671

79,671

Capacity

925

925

925

925

925

925

925

925

925

925

Enrollment

313

305

244

0

0

0

0

0

0

0

Mound (1904) Square feet

38,355

38,355

38,355

38,355

38,355

38,355

38,355

38,355

36,642

36,642

Capacity

500

500

500

500

500

500

500

500

500

500

Enrollment

415

400

369

416

348

287

241

234

253

0

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

63,280

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

467

Mound (2011)

Mount Auburn (1) (1922) Square feet

44,320

44,320

44,320

44,320

44,320

44,320

44,320

44,320

44,320

44,320

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

288

266

264

0

0

0

0

0

0

0

Nathan Hale (1929) Square feet

106,855

106,855

106,855

106,855

106,855

106,855

106,855

106,855

106,855

106,855

Capacity

725

725

725

725

725

725

725

725

725

725

Enrollment

818

762

651

522

442

349

311

298

0

0

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

56,348

56,348

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

400

400

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

409

436

48,375

48,375

48,375

48,375

48,375

48,375

48,375

48,375

46,502

46,502

650

650

650

650

650

650

650

650

650

650

0

0

0

0

0

345

0

0

356

0

Nathan Hale (2011)

Nathanial Hawthorne (1917) Square feet Capacity Enrollment Newton D. Baker (1954) Square feet

91,706

91,706

91,706

91,706

91,706

91,706

91,706

91,706

94,379

94,379

Capacity

550

550

550

550

550

550

550

550

550

550

Enrollment

517

541

498

505

662

671

567

441

463

366

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Cleveland Municipal School District School Building Information Last Ten Fiscal Years

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2008

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2012

Oliver Hazard Perry (1927) Square feet

55,570

55,570

55,570

55,570

55,570

55,570

55,570

55,570

50,989

50,989

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

632

647

644

564

444

385

409

406

388

331

Orchard (1901) Square feet

66,678

66,678

66,678

66,678

66,678

66,678

66,678

66,678

66,678

66,678

Capacity

800

800

800

800

800

800

800

800

800

800

Enrollment

483

490

460

378

534

576

0

0

0

0

Patrick Henry (1922) Square feet

130,443

130,443

130,443

130,443

130,443

130,443

130,443

N/A

N/A

N/A

Capacity

975

975

975

975

975

975

975

N/A

N/A

N/A

Enrollment

819

787

738

739

491

410

305

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

63,281

63,287

63,287

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

309

331

340

Patrick Henry (2009)

Paul Lawrence Dunbar (1965) Square feet

48,372

48,372

48,372

48,372

48,372

48,372

48,372

48,372

48,372

48,372

Capacity

475

475

475

475

475

475

475

475

475

475

Enrollment

357

309

301

255

330

360

228

316

0

0

Square feet

82,840

82,840

82,840

82,840

82,840

82,840

82,840

82,840

80,996

80,996

Capacity

1,125

1,125

1,125

1,125

1,125

1,125

1,125

1,125

1,125

1,125

733

713

668

502

584

483

370

370

441

456

Paul Revere (1925)

Enrollment Riverside (1935) Square feet

38,836

38,836

38,836

38,836

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

382

392

424

447

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

61,820

61,820

61,820

61,820

61,820

61,820

Capacity

N/A

N/A

N/A

N/A

450

450

450

450

450

450

Enrollment

N/A

N/A

N/A

N/A

477

516

545

521

537

465

Riverside (2005)

Robert Fulton (1929) Square feet

74,121

74,121

74,121

74,121

74,121

74,121

74,121

74,121

74,121

74,121

Capacity

675

675

675

675

675

675

675

675

675

675

Enrollment

587

485

500

429

498

386

282

292

292

0

140,000

140,000

140,000

140,000

140,000

140,000

140,000

N/A

N/A

N/A

1,125

1,125

1,125

1,125

1,125

1,125

1,125

N/A

N/A

N/A

710

766

635

698

604

563

503

N/A

N/A

N/A

Robert H. Jamison (1966) Square feet Capacity Enrollment

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Cleveland Municipal School District School Building Information Last Ten Fiscal Years

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2006

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2008

2009

2010

2011

2012

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

64,298

65,000

65,000

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

444

397

400

Robert H. Jamison (2009)

Robinson G. Jones (2) (1951) Square feet

38,311

38,311

38,311

38,311

N/A

N/A

N/A

N/A

N/A

N/A

Capacity

550

550

550

550

N/A

N/A

N/A

N/A

N/A

N/A

Enrollment

416

429

438

352

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

64,281

64,281

63,281

63,281

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

450

450

450

450

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

361

369

361

397

Robinson G. Jones (2009)

Scranton (1973) Square feet

52,575

52,575

52,575

52,575

52,575

52,575

52,575

52,575

51,447

51,447

Capacity

625

625

625

625

625

625

625

625

625

625

Enrollment

517

516

386

610

538

452

430

465

433

424

Stephen E. Howe (1) (1964) Square feet

48,613

48,613

48,613

48,613

48,613

48,613

48,613

48,613

48,613

48,613

Capacity

625

625

625

625

625

625

625

625

625

625

Enrollment

474

443

358

0

0

351

0

0

0

0

Sunbeam (1923) Square feet

78,518

78,518

78,518

78,518

78,518

78,518

78,518

78,518

70,397

70,397

Capacity

425

425

425

425

425

425

425

425

425

425

Enrollment

231

216

224

272

214

224

170

207

236

225

133,609

133,609

133,609

133,609

133,609

133,609

133,609

133,609

133,609

133,609

1,300

1,300

1,300

1,300

1,300

1,300

1,300

1,300

1,300

1,300

792

880

845

692

0

0

0

0

0

0

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

101,591

101,591

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

785

785

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

188

251

119,508

119,508

119,508

119,508

119,508

119,508

119,508

119,508

100,396

100,396

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

652

638

465

472

427

402

377

463

452

518

Thomas Jefferson (1925) Square feet Capacity Enrollment Thomas Jefferson (2011)

Tremont (1917) Square feet Capacity Enrollment Union (1969) Square feet

49,426

49,426

49,426

49,426

49,426

49,426

49,426

49,426

49,426

49,426

Capacity

550

550

550

550

550

550

550

550

550

550

Enrollment

391

384

349

373

327

248

251

220

239

0

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2008

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2011

2012

Valley View (1) (1951) Square feet

25,882

25,882

25,882

25,882

25,882

25,882

25,882

25,882

25,882

25,882

Capacity

350

350

350

350

350

350

350

350

350

350

Enrollment

166

133

128

0

0

74

106

133

169

175

Wade Park (1975) Square feet

68,600

68,600

68,600

68,600

68,600

68,600

68,600

N/A

N/A

N/A

Capacity

725

725

725

725

725

725

725

N/A

N/A

N/A

Enrollment

538

480

365

540

307

222

177

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

68,600

68,600

68,600

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

501

501

501

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

355

372

370

Wade Park (2009)

Walton (1971) Square feet

52,786

52,786

52,786

52,786

52,786

52,786

52,786

52,786

46,493

46,493

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

686

611

721

686

697

583

553

577

576

467

Square feet

N/A

N/A

N/A

N/A

N/A

75,799

75,799

75,799

75,799

75,799

Capacity

N/A

N/A

N/A

N/A

N/A

570

570

570

570

570

Enrollment

N/A

N/A

N/A

N/A

N/A

110

163

242

276

325

Warner (2007)

Watterson-Lake (1906) Square feet

65,241

65,241

65,241

65,241

65,241

65,241

65,241

65,241

69,814

69,814

Capacity

600

600

600

600

600

600

600

600

600

600

Enrollment

595

577

524

471

494

524

533

500

393

377

Waverly (1976) Square feet

72,603

72,603

72,603

72,603

72,603

72,603

72,603

72,603

55,666

55,666

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

585

513

419

360

450

458

460

430

383

340

William Cullen Bryant (1930) Square feet

42,187

42,187

42,187

42,187

42,187

42,187

42,187

42,187

42,187

42,187

Capacity

550

550

550

550

550

550

550

550

550

550

Enrollment

395

387

358

470

473

495

427

423

345

364

William R. Harper (1927) Square feet

50,989

50,989

50,989

50,989

50,989

50,989

50,989

50,989

50,989

50,989

Capacity

575

575

575

575

575

575

575

575

575

575

Enrollment

403

396

295

0

0

0

0

0

0

0

Willow (1964) Square feet

53,914

53,914

53,914

53,914

53,914

53,914

53,914

53,914

39,867

39,867

Capacity

425

425

425

425

425

425

425

425

425

425

Enrollment

255

268

274

293

273

240

218

216

234

255

- S44 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Woodland Hills (1971) Square feet

49,443

49,443

49,443

49,443

49,443

49,443

49,443

49,443

49,443

N/A

Capacity

600

600

600

600

600

600

600

600

600

N/A

Enrollment

450

411

410

510

393

376

353

300

345

N/A

Wilbur Wright (1929) Square feet

105,192

105,192

105,192

105,192

105,192

105,192

105,192

105,192

106,863

106,863

Capacity

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

1,100

Enrollment

1,099

1,073

831

624

558

588

572

596

539

437 91,290

Willson (1) (1903) Square feet

91,290

91,290

91,290

91,290

91,290

91,290

91,290

91,290

91,290

Capacity

700

700

700

700

700

700

700

700

700

700

Enrollment

568

601

463

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

76,217

76,217

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

574

574

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

385

392

Willson (2010)

Senior High Schools Carl F. Shuler (1958) Square feet

100,500

100,500

100,500

100,500

100,500

100,500

100,500

100,500

100,500

100,500

Capacity

875

875

875

875

875

875

875

875

875

875

Enrollment

718

733

671

450

387

351

363

475

360

313

Cleveland Learning Center - Halle-Orchard Swing Space (1) (1904) Square feet

41,085

41,085

41,085

41,085

41,085

41,085

41,085

41,085

49,337

49,337

Capacity

500

500

500

500

500

500

500

500

500

500

Enrollment

48

172

135

420

359

404

464

344

356

356

Cleveland School of the Arts (1910) Square feet

90,400

90,400

90,400

90,400

90,400

90,400

90,400

90,400

90,400

90,400

Capacity

850

850

850

850

850

850

850

850

850

850

Enrollment

655

655

602

601

602

558

558

0

1,114

0

Collinwood CompuTech (1924) Square feet

345,203

345,203

345,203

345,203

345,203

345,203

345,203

345,203

297,759

297,759

Capacity

2,700

2,700

2,700

2,700

2,700

2,700

2,700

2,700

2,700

2,700

Enrollment

1,350

1,812

1,488

1,121

968

962

898

793

712

623

East High (1975) Square feet

165,711

165,711

165,711

165,711

165,711

165,711

165,711

165,711

165,711

165,711

Capacity

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

Enrollment

1,114

1,113

1,091

1,008

860

715

701

717

0

0

East Technical (1972) Square feet

318,600

318,600

318,600

318,600

318,600

318,600

318,600

318,600

320,370

320,370

Capacity

1,775

1,775

1,775

1,775

1,775

1,775

1,775

1,775

1,775

1,775

Enrollment

1,080

1,191

1,101

1,020

783

785

746

1,171

817

907 - S45 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003 2004 Garrett Morgan Cleveland School of Science (1940) Square feet

2005

2006

2007

2008

2009

2010

2011

2012

101,900

101,900

101,900

101,900

101,900

101,900

101,900

101,900

76,835

76,835

Capacity

675

675

675

675

675

675

675

675

675

675

Enrollment

422

437

388

333

264

227

208

247

240

314

Glenville (1966) Square feet

248,000

248,000

248,000

248,000

248,000

248,000

248,000

248,000

207,000

207,000

Capacity

2,350

2,350

2,350

2,350

2,350

2,350

2,350

2,350

2,350

2,350

Enrollment

1,474

1,595

1,698

1,604

1,538

1,340

1,167

963

985

813

Health Careers Center (1980) Square feet

86,950

86,950

86,950

86,950

86,950

86,950

86,950

86,950

67,000

67,000

Capacity

425

425

425

425

425

425

425

425

425

425

Enrollment

369

401

368

365

0

143

196

254

277

264

James F. Rhodes (1932) Square feet

164,931

164,931

164,931

164,931

164,931

164,931

164,931

164,931

164,931

164,931

Capacity

1,225

1,225

1,225

1,225

1,225

1,225

1,225

1,225

1,225

1,225

Enrollment

1,483

1,637

1,683

1,553

1,575

1,409

1,360

1,230

1,171

1,195

Jane Addams Business Careers (1968) Square feet

214,752

214,752

214,752

214,752

214,752

214,752

214,752

214,752

157,428

157,428

Capacity

975

975

975

975

975

975

975

975

975

975

Enrollment

578

595

589

557

472

479

474

518

595

638

Square feet

N/A

N/A

N/A

N/A

224,000

224,000

224,000

224,000

222,945

222,945

Capacity

N/A

N/A

N/A

N/A

1,335

1,335

1,335

1,335

1,335

1,335

0

0

0

0

1,067

1,169

1,140

1,162

1,121

1,109

John Adams High (2007)

Enrollment John F. Kennedy (1965) Square feet

264,661

264,661

264,661

264,661

264,661

264,661

264,661

264,661

252,023

252,023

Capacity

2,075

2,075

2,075

2,075

2,075

2,075

2,075

2,075

2,075

2,075

Enrollment

1,999

1,875

1,823

1,758

1,077

940

978

839

975

804

Square feet

N/A

N/A

N/A

N/A

210,353

210,353

210,353

210,353

210,353

210,353

Capacity

N/A

N/A

N/A

N/A

1,232

1,232

1,232

1,232

1,232

1,232

Enrollment

N/A

N/A

N/A

N/A

476

576

673

857

855

835

John Hay (2006)

John Marshall (1932) Square feet

256,924

256,924

256,924

256,924

256,924

256,924

256,924

256,924

256,924

256,924

Capacity

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

Enrollment

1,943

1,969

1,905

1,788

1,715

1,643

1,668

1,519

1,213

1,039

Lincoln-West (1970) Square feet

304,645

304,645

304,645

304,645

304,645

304,645

304,645

304,645

337,548

337,548

Capacity

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

1,875

Enrollment

1,424

1,485

1,552

1,490

1,496

1,369

1,386

1,357

1,301

1,156

- S46 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003 Margaret A. Ireland Complex (1962) Square feet

2004

2005

2006

2007

2008

2009

2010

2011

2012

58,000

58,000

58,000

58,000

58,000

58,000

58,000

58,000

58,000

58,000

Capacity

525

525

525

525

525

525

525

525

525

525

Enrollment

503

0

0

0

0

172

156

0

122

0

173,359

173,359

173,359

173,359

173,359

173,359

173,359

173,359

179,544

179,544

1,175

1,175

1,175

1,175

1,175

1,175

1,175

1,175

1,175

1,175

324

894

795

765

677

550

502

233

273

262

246,282

246,282

246,282

246,282

246,282

246,282

246,282

246,282

224,329

224,329

2,150

2,150

2,150

2,150

2,150

2,150

2,150

2,150

2,150

2,150

599

562

558

509

416

468

498

506

510

877

Martin L. King Jr. (1972) Square feet Capacity Enrollment

Max S. Hayes Vocational-Genesis (1957) Square feet Capacity Enrollment

MC2 Stem Academy @ Nela Park Square feet

N/A

N/A

N/A

N/A

N/A

N/A

20,000

20,000

20,000

20,000

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

150

150

150

150

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

67

152

214

274

South (includes Washington Park) (1968) Square feet

292,518

292,518

292,518

292,518

292,518

292,518

292,518

292,518

292,518

292,518

Capacity

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,600

1,600

Enrollment

1,475

1,572

1,429

1,258

1,043

941

880

896

0

0

SuccessTech Academy Square feet

136,817

136,817

136,817

136,817

136,817

136,817

136,817

136,817

136,817

136,817

Capacity

400

400

400

400

400

400

400

400

400

400

Enrollment

77

165

198

253

243

238

243

241

227

232

Square feet

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

27,331

27,331

Capacity

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

475

475

Enrollment

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

140

146

Washington Park

Whitney Young (1950) Square feet

121,609

121,609

121,609

121,609

121,609

121,609

121,609

121,609

100,321

100,321

Capacity

725

725

725

725

725

725

725

725

725

725

Enrollment

341

319

395

375

434

415

380

339

401

332

Administrative Buildings Square Feet

8

8

8

8

8

8

8

8

8

8

556,286

556,286

556,286

556,286

556,286

556,286

556,286

556,286

556,286

556,286

Transportation Garages (3) Buses

3

3

3

3

3

3

3

3

3

3

436

341

327

311

311

305

305

305

305

305

- S47 -

Cleveland Municipal School District School Building Information Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Football Fields

4

4

4

4

4

4

4

4

4

5

Soccer Fields

3

3

3

3

3

4

4

4

4

6

Running Tracks

4

4

4

4

4

2

2

2

2

4

Baseball/Softball

0

0

0

0

0

0

0

0

0

0

Swimming Pools

6

6

7

7

7

5

5

5

5

3

Playgrounds

50

50

50

50

50

50

50

50

50

50

Athletics

Source: District Records Ohio Department of Education Notes: (1) Building was permanently inactivated for instructional activity starting in the 2005-2006 school year based on Board of Education resolution in June, 2005. (2) Building was temporarily inactivated for instructional activity starting in the 2005-2006 school year based on Board of Education resolution in June, 2005. (3) Ridge Road Bus Depot was inoperable for the 2005-2006 school year.

- S48 -

Eric S. Gordon

Chief Executive Officer Board of Education

Denise W. Link Board Chair

Louise P. Dempsey Board Vice Chair

Patricia Crutchfield Robert M. Heard, Sr. Willetta A. Milam Shaletha T. Mitchell Iris M. Rodriguez Dr. Lisa Thomas Eric L. Wobser Dr. Ronald M. Berkman Ex Officio Member Dr. Jerry Sue Thornton Ex Officio Member

1380 East Sixth Street, Cleveland, Ohio 216-574-8000 • cmsdnet.net

The Cleveland Board of Education does not discriminate in educational programs, activities or employment on the basis of race, color, national origin, sex, sexual orientation, religion or disability.

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