200809 FINAL BUDGET PRESENTATION

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2008-09 FINAL BUDGET PRESENTATION

• INDEPENDENT SCHOOL DISTRICT NO. 719
• June 23, 2008

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Topics Of Discussion

• Budget Calendar Process
• 2008 Legislative Session Review
• 2007-08 Year to Date Update
• 2008-09 Budget Assumptions
• Reserved Fund Balances
• 2008-09 Budget Graphs
• Long Range Planning
• Referendum Planning

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Budget Calendar

• Long Range Plan Update December
• Budget Development January to February
• Cost Center Budget Reduction Proposals
• Establish building FTE, equipment, and supply
  allocations
• Budget Review Committee February
• Public Hearing March
• Board Approval of Budget Reductions - April
• Preliminary Budget Approval - June
• Proposed Levy Certification September
• Audit Report November
• Truth in Taxation and Final Levy Certification
  December
• Final Budget Approval December

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Budget Calendar Flow Chart
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2008 Legislative Session Review

• General ed formula increase
• 51 per pupil unit in one-time money
• 51 per pupil unit in one-time transfer from
  operating capital to the general fund. Board
  must pass a resolution by 6/30 stating that all
  capital needs have been met prior to making the
  transfer
• Referendum ballot language change for referendum
  renewal questions
• Old language-you may be increasing your taxes
• New language-you are voting to extend an existing
  property tax referendum that is scheduled to
  expire
• Increased revenue for pre-kindergarten screening
• Increased revenue for the school milk program
• Lease levy increase from 100 to 150 per pupil
  unit

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General Education Funding FormulaHistory
Comparison of Actual Formula and Net Formula
Allowance (less shifts)
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General Education Funding FormulaHistory
Comparison if net formula had increased at the
same rate as the CPI percent change
Source MN House of Representatives, Fiscal
Analysis Department
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07-08 Estimated Year End

• Revenue Adjustments
• Current year general ed aid adjustments for pupil
  units
• Current year special education aid
• E-rate, interest, and medical assistance
• Prior year general ed aid and special ed aid
  adjustments

• Expenditures Adjustments
• Special Ed staffing added after Final budget
• Severance
• Utilities and snow removal
• Other

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Enrollment (ADM) Projection Changes from Dec 2007

• With the exception of Kindergarten, 6th grade and
  11th grade, all grade levels are slightly higher
  than projected for 07-08
• Use a declining percentage of county births based
  on the last three years history of Kindergarten
• Grade 1 to 12 May 2008 projections align close to
  demographic study low Kindergarten and low
  migration projection

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Enrollment Projections
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K Enrollment vs. Grade 12
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08-09 Budget Assumptions

• Revenue Assumptions
• 5,124 per pupil unit or a 1 basic formula
  increase
• 51 per pupil unit one time funding-to be
  designated for Redtail Ridge opening
• Kindergarten projection 480
• 7,017 average daily membership
• 8,092 pupil units
• Special education
• Regular special ed 84 proration
• Excess special ed 66 proration
• Federal programs, interest and other local
  revenues

• Expenditure Assumptions
• April 08 Budget plan
• Cost center reductions 1.1 million
• Lane Changes
• Severance estimate 10 retirees
• Special education
• Instructional Contingency for regular education
  and special education
• Health Insurance renewal
• Technology staff transfer from Capital to General
  Fund
• Federal programs based on entitlements

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Special Services Analysisaverage 48
contribution from general fund
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Reserved Fund Balances

• Learning Development
• Gifted and Talented
• Basic Skills - ELL Compensatory (Remedial)
• Staff Development
• Operating Capital
• Deferred Maintenance
• Safe Schools
• Health Safety

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Summary of Budgets - All Governmental Fund Types

• Three Sections
• Revenues
• Expenditures
• Fund Balances

• Summary of Four Funds
• General - Includes general, transportation,
  operating capital, and special services
• Special Revenue - Includes food service and
  community service
• Debt Service
• Capital Project

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Why maintain fund balance?(the District spends
5 million a month in the general fund)

• Sound fiscal management has a long term positive
  impact on the success of students
• Validates fiscal credibility with various
  reporting constituencies (I.e. taxpayers, staff,
  bond counsel, auditors, legislators, and state
  and federal agencies)
• Important to the establishment of a good credit
  rating for the District. Moodys recommends a
  fund balance between 5 and 10.

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Why is fund balance necessary?(a 5 fund balance
3 million)

• Necessary for unknown situations
• Irregular payments of state and local revenues
• State aid proration, metering of payments, and
  state shut down
• Provide service to students prior to receiving
  funding (Special Ed)
• Mandated but not funded programs
• Higher utility costs and/or other fixed costs
• Start Up costs for new buildings
• Greater than expected inflation
• Changes in enrollment and state funding
• Higher than anticipated contract settlements
• Unanticipated deficits in other operating funds
• Costs of defending and/or settlement of a lawsuit

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Fund Balance Analysis with 2008-09 Preliminary
Budget
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General Fund Revenue by Source
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Revenue-State Sources
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Revenue-Local Sources
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Revenue-Federal Sources
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General Fund Expenditure by Object
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General Fund Expenditure by Program
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Expenditures by ProgramDistrict Level
Administration
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Expenditures by ProgramDistrict Level
Administration
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Expenditures by ProgramSchool Level
Administration
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Expenditures by ProgramInstructional Support
Services
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Expenditures by ProgramFacilities, Operations
Maintenance
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Expenditures by ProgramStudent Transportation
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Long Range Financial Planning
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Revenue Long Range Planning Parameters

• Enrollment
• Use 12 year Average of County Births for
  Kindergarten
• Enrollment increase of 3 per year
• General Ed Formula Allowance
• 1 basic formula increase for 09-10 due to
  current financial condition of the state
• 1.9 basic formula increase for 10-11 and beyond
• Average basic formula increase for the last
  seventeen years
• Special education
• 08-09 regular special ed 84 proration
• 08-09 excess special ed 66 proration
• Non public transportation and gifts 3, and
  federal revenue 4
• Referendum Expiration in 2009-10

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Expenditure Long Range Planning Parameters

• Continue 2 staff development
• Utilities 6 increase
• Transportation for enrollment growth, boundary
  changes, and contract settlement
• MRVSEC and special ed tuition 7 in 09-10 and
  beyond
• Ten retirees in 08-09 with 10 increase in 09-10
  and beyond
• Lane change costs based on 07-08
• Operating capital reserve used for textbook
  adoptions, 5 yr facility plan and technology
  needs
• No additional FTE for enrollment growth in 09-10
  and beyond to be determined annually in the
  budget process
• FTE additions included in variations from base
  plan

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Fund Balance Analysis with Base Long Range
Financial Plan
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Levy Referendum Work Session Discussion

• Should levy referendum renewal be a separate
  question?
• Should there be multiple questions for requests
  to increase the levy referendum?
• What is the tax tolerance in the community?
• What dollar amount should be requested for a levy
  referendum increase?
• What should the increased revenue fund (i.e.
  opening of Redtail in 09-10, class size)?
• Should there be an inflationary increase?
• How many years should the levy referendum be for?
• Should there be a bond referendum question for an
  addition to the high school?

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School Tax Comparison
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Estimated Annual Tax Impact Based on Taxable
Market Value of Discussed Levy Referendum Options
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District Levy ComparisonNote Grandfathered
districts are allowed to levy above the state
capdistricts have inflationary increase in levy
authority
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District Levy Comparison Question 1Note
Grandfathered districts are allowed to levy above
the state capdistricts have inflationary
increase in levy authority
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District Levy Comparison Question 1 2Note
Grandfathered districts are allowed to levy above
the state capdistricts have inflationary
increase in levy authority
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District Levy Comparison Question 1, 2 3Note
Grandfathered districts are allowed to levy above
the state capdistricts have inflationary
increase in levy authority
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Summary

• The plan is to incrementally move the District in
  a positive financial direction so that all
  available resources are used to provide
  educational opportunities to students

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Summary (cont.)

• This is accomplished by
• Long Range Planning
• Maintain systems that ensure the fiscal stability
  and integrity of the District
• Communicate with Legislators
• Continue to Balance Revenue to Expenditures
• Restore and maintain fund balance

• The major ways to improve the District financial
  position are
• Increased funding from the legislature
• Voter approved levy referendum
• Budget reductions
• A combination of all of the above