FY17

Tentative Budget

Community Consolidated School District 65

Board Finance Committee Meeting

August 15, 2016

Presentation Overview

I. Legal Requirements for Budget Adoption

II. Overview of FY16 Actual Revenues and

Expenditures

III. Overview of FY17 Budget

IV. Financial Projections FY18-FY21

V. Budget Summary

Legal Requirements for Budget

Adoption

Section I

Legal Requirements for Budget

Adoption

• School Districts must adopt a Budget by the end of the

first quarter of the fiscal year

• Prior to adoption, a School Board must:

1. Place the Tentative Budget on Public Display for at

least 30 days

2. Schedule a date and time for a Public Hearing on the

Proposed Budget

3. Publish a “Notice of Public Hearing” in a newspaper

of general circulation within the District

4. Conduct a Public Hearing on the date and at the time

specified in the “Notice of Public Hearing”

Overview of FY16 Revenues

and Expenditures

Section II

FY16- Financial Highlights

101% of FY16 Revenues were collected 101% FY16 Expenditures were spent FY16 ended with a $1.1 million surplus (before

prepayments), $1.1 million surplus was budgeted

A portion of the surplus was used to prepay FY17 expenditures ($0.9 million) to help balance the FY17 budget

Approximately $0.2 million of the FY16 surplus was used to increase the size of the District’s fund balance to avoid a downgrade by bond rating agencies

FY16 Budget Vs. Actuals (Operating)

Revenues Expenditures

Budget $111,746,870 $110,633,852

Actuals $112,350,090 $112,147,345

$111,746,870

$110,633,852

$112,350,090 $112,147,345

$105,000,000

$106,000,000

$107,000,000

$108,000,000

$109,000,000

$110,000,000

$111,000,000

$112,000,000

$113,000,000

Revenues Expenditures

Overview of the FY17 Budget

Section III

FY17 Budget Highlights

FY17 Operating Budget is the District’s 15th consecutive

Balanced Budget, with revenues exceeding expenditures by

$79,119

Short term measures like prepayments, budget reductions and

efficiencies helped balance the budget

A version of the Zero-Based Budgeting (ZBB) methodology was

used to develop the budget

Spending is aligned with District priorities and strategic

initiatives, including K-3 literacy, expansion of ELL services,

recruitment initiatives and focused professional development

Budget supports Strategic Plan goals, maximizes student

learning and professional development

Overview of FY17 Revenues

Operating Revenues are projected to increase by 2%

Revenues are derived from the following sources: Local

Property Taxes : growth subject to the CPI factor

(2014 CPI factor was 0.8%)

Corporate Personal Property Replacement Tax (CPPRT) subject to state adjustments resulting from the state’s calculation error

Tuition, Fees, Earnings on Investments, Lunch revenue, TIF surplus payments

Flow Through State and Federal

State General State Aid funded at 100%

Categorical Aid (four payments are scheduled)

Federal

Federal Revenues are projected to increase by 2.5%

Transfers

Transfers of interest income

FY17 Operating Revenue Sources

$114.1 million

Property Taxes , $85,528,965, 75%

Corp. Prop. Replacement Tax, $2,030,745, 2%

Other Local Revenues, $4,955,129, 4%

Flow Through Revenues, $300,000, 0% General State Aid,

$4,717,021, 4%

State Aid Categorical, $7,884,629, 7%

Federal Aid, $8,669,155, 8%

Transfers, $16,132, 0%

History of the CPI Factor

3.4

1.6

2.4

1.9

3.3 3.4

2.5

4.1

0.1

2.7

1.5

3

1.7 1.5

0.8 0.7

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15

PE

RC

EN

TA

GE

CALENDAR YEARS

CONSUMER PRICE INDEX (CPI) HISTORY

Comparison of FY17 Budget and FY16 Actuals

Operating Revenues

Property Taxes

Corp. Prop. Replacement

Tax

Other Local Revenues

Flow Through Revenues

General State Aid

State Aid Categorical

Federal Aid Transfers

FY16 ACTUALS $85,924,819 $2,030,745 $4,603,887 $0 $4,441,198 $6,980,482 $8,356,053 $12,906

FY17 BUDGET $85,528,965 $2,030,745 $4,955,129 $300,000 $4,717,021 $7,884,629 $8,669,155 $16,132

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

Overview of FY17 Expenditures

FY17 Operating Expenditures are increasing by 2% Costs are driven primarily by staffing costs, student

enrollment and services to students FY17 salaries are estimated, employee contracts and

agreements expired at the end of FY16 Salaries include additional 13.5 FTEs of instructional and

student support positions, due to higher student enrollment, as well as (partial) savings related to retirements

Student enrollment is projected to increase by 86 students to 7,457

Benefits include higher Early Retirement Option (ERO) costs of $0.8 million

Health insurance costs will be flat Costs of Special Education tuition continue to rise The net cost of Park Budget is projected to increase by

2%

FY17 Operating Expenditures

$114 million

Salaries, $82,308,385, 72%

Benefits, $14,100,320, 12%

Purchased Services, $9,550,656, 9%

Supplies, $4,601,708, 4%

Capital Outlay, $55,000, 0%

Other

Objects/Tuition/Transfers, $3,341,533, 3%

Termination Benefits, $65,054, 0%

Comparison of FY17 Budget and FY16 Actuals

Operating Expenditures

Salaries Benefits Purchased Services

Supplies Capital Outlay Other

Objects/Tuition/Transfers

Termination Benefits

FY16 ACTUALS $78,447,586 $14,997,135 $10,045,287 $4,508,988 $564,519 $3,520,670 $63,160

FY17 BUDGET $82,308,385 $14,100,320 $9,550,656 $4,601,708 $55,000 $3,341,533 $65,054

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

$90,000,000

FY17 Expenditures by Function

0%

10%

20%

30%

40%

50%

60% 52%

19%

4% 4% 6%

4% 4% 3% 3%

FY17 Non-Personnel Budget Reductions &

Efficiencies

CATEGORY OF

REDUCTIONS

AMOUNT DESCRIPTION OF REDUCTIONS

REPAIRS & MAINTENANCE $50,000 DELAYED REPAIR & MAINTENANCE PROJECTS.

REPAIRS WILL BE PRIORITIZED

CENTRAL OFFICE NON-

PERSONNEL EXPENDITURES

$100,000 VARIOUS REDUCTIONS TO PURCHASED

SERVICES, SUPPLIES AND CAPITAL OUTLAY

PURCHASES

HEATING/GAS EXPENDITURES $260,000 LOWER UTILITY COSTS

CURRICULUM SUPPLIES $100,000 REDUCTIONS TO CURRICULUM SUPPLIES WILL

EXTEND THE TIMELINE NEEDED TO IMPLEMENT

NEW CURRICULUM IN THE FUTURE

CONSULTING SERVICES $50,000 FEWER PROJECTS WILL BE COMPLETED

FURNITURE $20,000 LESS SCHOOL FURNITURE WILL BE PURCHASED

TOTAL $580,000

Other Changes to the FY17 Budget

Salary costs reflect additional 13.5 FTEs added to the FY17 budget based on enrollment and programmatic needs:

6 teaching positions (Gen Ed and ELL)

2.5 FTE coach positions

1 psychologist

3 Teacher Assistants

2 FTE central office support positions

1 fewer maintenance position

Health Insurance savings

Reduction in Net cost of Park School due to additional efficiencies in comparison with the Draft Tentative budget

Financial Projections

FY18-FY21

Section IV

FISCAL YEAR ACTUALS

2015-16

TEN. BGDT

2016-17

PROJ’D

2017-18

PROJ’D

2018-19

PROJ’D

2019-20

PROJ’D

2020-21

TOTAL REVENUES

$112,350,088

114,101,775

114,900,518

116,989,554 122,046,409

122,938,208

TOTAL

EXPENDITURES

$112,147,345 $114,022,656 $119,406,052 $123,999,351 $128,681,438 $133,527,165

REVENUES-

EXPENDITURES

$202,743

$79,119

($4,505,534)

($7,009,797)

($6,635,030)

($10,588,957)

TECHNOLOGY

EXPENDITURES N/A N/A $1,900,000 $1,900,000 $1,900,000 $1,900,000

REVENUES-

EXPENDITURES W.

TECHNOLOGY $202,743 $79,119 ($6,405,534) ($8,909,797) ($8,535,030) ($12,488,957)

PENSION COST SHIFT

(VERY LIKELY in FY18) N/A $0 ($333,998) ($695,305) ($1,083,234) ($1,501,179)

OTHER STATE

FINANCIAL THREATS N/A $0 ($2,752,258) ($6,174,548) ($9,673,172) ($12,185,582)

REVENUES-EXP’S W. ALL THREATS $202,743 $79,119 ($9,491,789) ($15,779,650) ($19,291,436) ($26,175,718)

UPDATED Financial Projections

FY18-FY21

FY18-FY21 Financial Projections

Structural Deficit

Structural Deficit

Projections of D65 Operating Fund Balance

$22,318,193 $22,397,313

$17,891,779

$10,881,982

$4,246,952

($6,342,005) ($10,000,000)

($5,000,000)

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

2015-16 2016-17 2017-18 2018-19 2019-20 2020-21

FUND BALANCE AT 25%

Budget Summary

Section V

Budget Summary

FY17 Budget is Balanced, but the majority of its costs are estimated and subject to change

Nominal increases in future revenues

Very large operating deficits projected for FY18-FY21, BEFORE taking in account capital technology expenditures and state financial threats

District’s fund balance remains low in comparison with other school districts at 20%

Uncertainty at the state level continues; future changes to the state funding formula are likely

FISCAL YEAR ACTUALS

2015-16

TEN. BGDT

2016-17

PROJ’D

2017-18

PROJ’D

2018-19

PROJ’D

2019-20

PROJ’D

2020-21

TOTAL REVENUES

$112,350,088

114,101,775

114,900,518

116,989,554 122,046,409

122,938,208

TOTAL

EXPENDITURES

$112,147,345 $114,022,656 $119,406,052 $123,999,351 $128,681,438 $133,527,165

REVENUES-

EXPENDITURES

$202,743

$79,119

($4,505,534)

($7,009,797)

($6,635,030)

($10,588,957)

TECHNOLOGY

EXPENDITURES N/A N/A $1,900,000 $1,900,000 $1,900,000 $1,900,000

REVENUES-

EXPENDITURES W.

TECHNOLOGY $202,743 $79,119 ($6,405,534) ($8,909,797) ($8,535,030) ($12,488,957)

PENSION COST SHIFT

(VERY LIKELY in FY18) N/A $0 ($333,998) ($695,305) ($1,083,234) ($1,501,179)

OTHER STATE

FINANCIAL THREATS N/A $0 ($2,752,258) ($6,174,548) ($9,673,172) ($12,185,582)

REVENUES-EXP’S W. ALL THREATS $202,743 $79,119 ($9,491,789) ($15,779,650) ($19,291,436) ($26,175,718)

Budget Summary: UPDATED Financial

Projections FY18-FY21