1. Aggregate Overview of Extension District Finances in Iowa
* FYE16 Actual Revenue and Expenditure Data
* FY 17 Projected Taxation Data
December 20, 2016
By Craig Hertel

2. Presentation includes:
Financial Insight into this $52 Million Combined Operation
State of the Extension Districts on Revenues
Comparison of District Expenses and its Components
Introducing a Financial Health Index

3. Revenues -- Actuals FYE 2016
Total State
Mean
Median
Maximum
Minimum
Total Tax Revenue
61.2%
67.1%
70.1%
95%
28%
Other Revenue
2.1%
1.9%
1.2%
12% 0%
Program Fee Revenue
21.9%
20.6%
18.6%
66% 3%
Grant & Contract Revenue
14.8%
10.4%
4.1%
61%
Total Revenue all Sources
100.0%
100%

4. Extension Law Taxation Caps FY 17 & 18
The Double Cap Issue:
2010 Population
Dollar Cap Increases Each Year by
Levy Rate
FY 2017
FY 2018
Less than 30,000
$6,000
0.3000
$ ,000
$ ,000
30,000 to 49,999
$7,000
0.2025
$ ,000
$ ,000
50,000 to 89,999
$9,000
0.1350
$ ,500
$ ,500
90,000 to 199,999
$15,000
$ ,000
$ ,000
More than 200,000
$25,000
0.0500
$ ,000
$ ,000

5. Tax Law – Effective Valuations:
Translates into the aggregate District Taxable Valuation needed to avoid the double cap, the Levy cap:
FY 2017
FY 2018
Less than 30,000
0.3000
$ ,000,000
$ ,000,000
30,000 to 49,999
0.2025
$ 1,343,209,877
$ 1,377,777,778
50,000 to 89,999
0.1350
$ 2,566,666,667
$ 2,633,333,333
90,000 to 199,999
$ 4,000,000,000
$ 4,111,111,111
Greater than 200,000
0.0500
$ 16,000,000,000
$ 16,500,000,000

6. Where Do Districts Stand in FY17 Tax Revenue?
59 Districts currently have a single cap - $ only
41 Districts now have the “double cap” – both $ and levy cap
22 of those districts can not raise even 75% of the dollar cap
10 of those districts can not raise even 50% of the dollar cap
Another 12 Districts vulnerable to levy cap within 3 years if no significant valuation changes in their county
Almost all of the Districts with these double cap challenges are in the “below 30,000 population bracket” with majority of counties below 11,000 in population
NOTE: only 21 Districts have a $100,000+ cushion this yr.

7. Are Real Estate Taxable Values Increasing?
Budget Year
Total Valuation in State
% Change
FY 17
$ ,537,709,312
4.4%
FY 16
$ ,057,683,315
2.3%
FY 15
$ ,812,456,827

8. Summary on Tax Revenues
1/3 ---of the counties levy 100% for Extension Education fund as well as levy for either Tort, Unemployment, or both 1/3 ---of the counties levy 100% of the Extension Education fund but did not levy for Tort Liability fund or the Unemployment Compensation fund this past year 1/3 ---of the counties did not levy to their first their cap -- $600,000 left just in the Extension Education fund

9. “Tax” Expenses – Actuals FY16
District Expenses as a Percent of Tax Sub-Fund Revenue
Mean
Median
Maximum
Minimum
Standard Deviation
Personnel Expense
72.4%
71.6%
109%
44%
12.4%
Facility Expense
9.9%
8.7%
42% 0%
6.3%
General Office Expense
12.8%
12.1%
24% 7%
3.8%
Non-Fee Expense
2.9%
1.3%
23%
4.3%
Residual: Net Gain or Loss
2.0%
4.1%
-35%
10.7%
Note: Tax sub-fund includes interest, rental, resale & other revenues too

10. What about the Double-Capped Counties Rev & Exp Structure?
Hypothesis: As their taxation is limited, there would be a difference in the expenditure category mix
Nope! Percentages in each category nearly identical to the whole set
Implies good financial management – “We Make Do with What We Have”

11. Extension District Workforce
District Employees Working with:
Identified Working as:
100% Responsibility as:
100% Responsibility & Full-Time:
Youth & 4-H
202*
137 92
Human Sciences 98 51 12
Agriculture & Natural Resources 76 24 15
Support Staff
186
168 75
Extension Educators
127
101 58
Associate Extension Educators
154
135 79
* Reviewing data, many front counter staff not identified working with youth. Therefore, this is a low number.
As of

12. Analysis of Wages & Salaries
Medium 1/3
Low 1/3
High 1/3
Full & Associate Educators
$4.6 Million
40%
49%
41%
36%
Executive Director, County Manager
$2.4 Million
21%
11%
20%
26%
Support Staff
$4.1 Million
37%
35%
Other 3% 4%
FY '16 All Districts Wages
$ 11,529,000

13. What do Districts Spend to Staff the Front Counter & Phone?
Support Staff
$4.1 Million
36%
Coverage:
100 Districts x 40 Hours/Week x $ 14.00/Hr. Est. Average = $2.8 million (68%)
Other Staff are Covering too:
100 Districts x 10 Hours/Week x $ 14.00/Hr = $700,000
NOTE: This is wage expense only. Does not include employee benefits, travel or professional development expense.

14. New Ways – Example $ Ratios
Ending Operating Account Balance FYE 16
Mean
Median
Maximum
Minimum
Standard Deviation
As a % of Actual Tax Revenue for the Year
82.3%
75.3%
274%
30%
34.0%
As a % of all Actual Expense for the Year
54.8%
53.5%
138%
23%
20.6%

15. Time for a Financial Health Index?
Reasons For:
Could be our equivalent to the bank’s stress test
Early warning system
Objective measure to help council members
Natural next step of collected data and our financial system
Accreditation metric
Debt…
Reasons Against:
Agreeing on the criteria
Would it be used?
Do we need to know if a district is having financial issues?
Would it ultimately lead to improved performance?

16. Financial Health Categories?
“SEVERE”
Use of Warrants to pay bills -or-
Projection for year shows using warrants or-
Total Operating Account at FYE is 10% or less of budgeted expenses
Implications – Considerations:
Dissolving discussions
Merger options
MOU stipulations
Authority to offer programs revoked (4-H, PPAT, etc)
Mandatory financial SWAT team

17. Next Category of Concern
“VULNERABLE”
FYE operating account is 10-25% of projected expense -and-
Decreasing % Operating Account carryover 1-2 years and-
Decreasing % Tax Sub-Fund balance and-
Personnel expenses shows lack of sustainability
Rapidly draining Program Fee balances

18. One more level of concern…
“Watch List”
?? Double-capped taxation
-and-
?? Leveraged with debt
Decreasing FYE operating account balances 3 straight years
Other objective measures

19. AND – Other End of Spectrum!
“Under-investing notation”
Districts with good financial ability and capacity, BUT:
Do not demonstrate investing in at least 3 of the 4 program areas, either hiring their own staff or working with multiple Field Specialists
No plan to offer a comprehensive educational program plan within their financial means
Easy, objective measures such as Extension Calendar indicates a lack of educational offering against set standards

20. Summary Taxation Revenue Source – What to Monitor
Non-Taxation Revenue Sources – Closer Examination
Expenses To Purposely Manage:
Human Resources – Increased Skill Development of our:
Educators/Associate Educators group
Front Counter (Support Staff) group
Management & Leadership group
Facilities
Continue to Improve All our Systems Impacting the $52 Million Field Operation