Township High School District 2112016-2017 Tentative Budget

PresentationAugust 18, 2016

2016-2017 Tentative Budget Parameters

0% Levy Increase from Prior Year Levy

FY17 Total Expenditures Less than FY16 Expenditure Budget

$2 Million Abatement of Debt Service Levy

No issuance of Phase II Life Safety Bonds ($10 million)

Committed Budget Reductions

Balanced Budget in Operating Funds

Driven by Strategic Priorities

Legal Requirements for Budget Adoption

School Districts must adopt a Budget by September 30, 2016 (105 ILCS 5/17-1)Prior to adoption, a School Board must:

1. Place the Tentative Budget on Public Display for at least 30 days

2. Publish a “Notice of Public Hearing” in a newspaper of general circulation within the District

3. Hold a public hearing4. Submit the budget electronically to ISBE within 30

days of adoption

EDUCATIONAL AND MUNICIPAL RETIREMENT/ SOCIAL SECURITY FUND

Educational Fund: Revenue Marginal increase in property tax

revenue

General State Aid not prorated for fist time since FY09

Categorical Aid increase due to special education student population changes and service allocation

Flat food service sales and tuition expected

CPPRT increase due to multi-year refund that was recorded in FY16

Other income increased due to expected revenue from sale of 2 building construction homes

Federal Aid decreased due to timing of payments in FY16

Budget % IncreaseREVENUE BY CATEGORY 2016-2017 (Decrease)

LOCAL PROPERTY TAXES 166,500,000 0.6%INTEREST ON INVESTMENTS 212,000 2.4%GENERAL STATE AID 6,660,600 5.5%CATEGORICAL STATE AID 5,808,300 3.7%FOOD SERVICE SALES 3,171,900 (0.2%)CORPORATE P.P.R. TAX 1,000,000 146.7%FEES & OTHER 3,575,550 7.1%TUITION 1,146,200 0.2%FEDERAL AID 6,591,400 (11.3%)

TOTAL REVENUE: 194,665,950 0.8%

FY17 Budget vs. FY16 Actuals

Educational Fund: Expenditures

Change in accounting method to reflect total salary and benefit costs

Purchased Services and Supplies account for additional grant funds, software licensing, and textbook replacements

Capital outlay decrease due to completion of software projects

Tuition increase due to accounting adjustment for NSSEO tuition costs

Non-Capitalized equipment decrease due to payment of copy equipment and iPads in FY16

Other income increased due to timing of expenditures with building construction homes

Budget % IncreaseEXPENDITURES BY CATEGORY 2016-2017 (Decrease)

SALARIES 134,428,390 10.6%EMPLOYEE BENEFITS 28,255,600 (21.8%)PURCHASED SERVICES 5,352,800 10.4%SUPPLIES & MATERIALS 7,150,840 7.0%CAPITAL OUTLAY 1,445,780 (37.2%)TUITION 7,415,000 11.0%NON-CAPITALIZED EQUIPMENT 2,631,200 (13.8%)OTHER 1,306,830 20.1%

TOTAL EXPENDITURES: 187,986,440 3.1%

FY17 Budget vs. FY16 Actuals

Educational Fund: Salaries & Benefits 9% TRS EMPLOYEE paid

benefit shifted from benefits to salaries in budget

This amount is the employee’s responsibility and is a deduction from their gross salary

There is no change to an employee’s gross salary or reporting of salary amounts as a result of this accounting change

TOTAL SALARY INCREASES ARE BUDGETED AT 2.3% AND TOTAL BENEFIT INCREASES ARE BUDGETED AT 4.8% FOR ALL EDUCATIONAL FUND EMPLOYEES

Budget % IncreaseEXPENDITURES BY CATEGORY 2016-2017 (Decrease)

SALARIES 134,428,390 10.6%EMPLOYEE BENEFITS 28,255,600 (21.8%)

Municipal Retirement/ Social Security Fund

Budget % IncreaseLOCAL REVENUE 2016-2017 (Decrease)

Local Property Taxes 9,560,000 0.4%Corporate Per. Prop. Repl. Tax 1,000,000 (16.7%)Interest on Investments 16,800 4.8%

TOTAL REVENUE: 10,576,800 (1.5%)

Budget % IncreaseEMPLOYER PENSION CONTRIB. 2016-2017 (Decrease)

Municipal Retirement (IMRF) 4,850,000 2.0%Social Security/Medicare 4,700,000 (3.9%)

TOTAL EXPENDITURES: 9,550,000 (1.0%)

OPERATING BUDGET BALANCE + (-) 1,026,800

SPECIAL ITEM - ADDT PMT TO IMFR (3,500,000)

FY17 Budget to FY16 Actual

FY17 Budget to FY16 Actual C.P.P.R.T revenue projected to

decrease following notice of overpayment in FY16

Decrease in benefits due to special education benefit allocation to Ed. Fund

Special payment of $3.5 million to IMRF in December 2016

Planned decrease in IMRF reserves

FY17 TENTATIVE BUDGETOverview of Revenues and Expenditures

2016-2017 Fiscal YearBeginning

Fund BalanceDirect

RevenueDirect

ExpendituresSurplus

(Deficit)Transfers In

(Out)

Additional IMRF

Payment

Projected Ending

Fund BalanceEducational 100,598,636 194,665,950 187,986,440 6,679,510 (12,937,000) 0 94,341,146Operations/Maintenance 15,968,753 31,025,800 28,247,550 2,778,250 0 18,747,003Debt Service 1,001,566 1,306,000 3,697,000 (2,391,000) 2,437,000 0 1,047,566Transportation 7,447,664 11,877,800 11,228,100 649,700 (1,500,000) 0 6,597,364Municipal Retirement/Social Security 8,010,975 10,576,800 9,550,000 1,026,800 0 (3,500,000) 5,537,775Capital Projects 1,620,724 10,000 13,785,000 (13,775,000) 14,000,000 0 1,845,724Working Cash 11,447,537 18,500 0 18,500 (5,000,000) 0 6,466,037Life Safety 116 5,000 1,900,000 (1,895,000) 3,000,000 0 1,105,116

146,095,971 249,485,850 256,394,090 (6,908,240) 0 (3,500,000) 135,687,731

2016-2017 Tentative Budget by Fund

Planned decrease of $10 million in

reserves

Revenue by Category

Local Property Tax Revenue is based off of the 2015 tax levy: 0% increase from prior year

Approximately 91% of all revenue from local sources

Revenue Summary- All Funds

Budget Actual % Increase

2016-2017 2015-2016 (Decrease)LOCAL PROPERTY TAXES 212,974,000 213,720,398 (0.3%)INTEREST ON INVESTMENT 313,900 305,563 2.7%GENERAL STATE AID 6,660,600 6,312,907 5.5%CATEGORICAL STATE AID 10,443,500 9,964,973 4.8%FOOD SERVICE SALES 3,171,900 3,178,099 (0.2%)CORPORATE P.P.R. TAX 3,000,000 2,605,366 15.1%FEES & OTHER 5,184,350 5,365,953 (3.4%)TUITION 1,146,200 1,143,651 0.2%FEDERAL AID 6,591,400 7,433,897 (11.3%)

249,485,850 250,030,807 (0.2%)

REVENUE BY CATEGORY

TOTAL DIRECT REVENUE:

FY17 Budget to FY16 Actual

Property tax revenue decrease due to prior year collections and debt service levy

Assumes 4 out of 5 State payments

C.P.P.R.T. revenue increases due to multi-year return of overpayment in FY16

Federal Aid decrease related to timing of payments in FY16

Expenditures by Category

Staffing levels to support enrollment and instructional programs

Continuation of multi-year capital improvement plan

73% of total expenditures are spent in the Educational Fund supporting the instructional program

Expenditure Summary-All Funds

Budget Actual % Increase

EXPENDITURES BY CATEGORY 2016-2017 2015-2016 (Decrease)SALARIES 151,435,040 138,139,551 9.6%EMPLOYEE BENEFITS 42,013,600 49,913,633 (15.8%)PURCHASED SERVICES 11,137,100 10,717,672 3.9%SUPPLIES & MATERIALS 9,110,840 8,875,957 2.6%UTILITIES 4,149,000 4,092,238 1.4%CAPITAL OUTLAY 22,752,480 28,679,325 (20.7%)DEBT SERVICE 3,697,000 7,847,434 (52.9%)TUITION 7,415,000 6,681,578 11.0%NON-CAPITALIZED EQUIPMENT 2,977,200 3,073,980 (3.1%)MISCELLANEOUS 1,706,830 1,472,331 15.9%TOTAL DIRECT EXPENDITURES: 256,394,090 259,493,699 (1.2%)

FY17 Budget to FY16 Actual

Salaries and benefits reflect reporting shift in accounting practice

Purchased services and supplies include additional grant fund expenditures, textbooks, software support, and Equal Opportunity Schools

Continuation of 5-year capital improvement plan

2016-2017 Facility Improvement ProjectsCapital Improvement Projects Total Budget Building

Pool Renovations 10,260,000 P,F,C,S,H

Media Center Renovations 1,425,000 P,F

Athletic Field Renovations 1,800,000 F,C,S

Bathroom Remodel 300,000 S

Total Capital Projects Expenditures: 13,785,000

Life Safety Projects Total Budget BuildingRoofs, Domestic Water Piping, Glass/Door Replacement

1,600,000 H

Roof, Domestic Water Piping 300,000 FTotal Life Safety Expenditures: 1,900,000

Interfund Transfers

Utilizes existing reserves to fund non-recurring improvement

projects without bonds

2016-2017 Tentative Budget SummaryFY17 Budget FY16 Actual FY16 Budget FY17 Budget to FY16

Actuals % Increase/ (Decrease)

Total Revenue $248,164,850 $247,740,711 239,346,500 0.2%

Total Expenditures $237,012,090 $232,543,419 238,941,500 1.9%

Excess of Revenue Over Expenditures

$11,152,760 $15,197,292 405,000

Other Sources/ Uses (Use of Reserves)

($22,937,000) ($4,590,600) (4,590,600)

OPERATING FUND SUMMARYs

FY17 Budget FY16 Actual FY16 Budget FY17 Budget to FY16 Actuals

% Increase/ (Decrease)

Total Revenue $249,485,850 $250,030,807 242,670,000 (0.2%)

Total Expenditures $256,394,090 $259,493,699 267,401,000 (1.2%)

Excess of Revenue Over Expenditures

$(6,908,240) (9,462,892) (24,731,000)

Additional IMRF Payment

($3,500,000) 0 0

ALL FUND SUMMARY

Tentative Budget Highlights

Academic Program Enhance-

ments

Balanced Budget

0% Levy Increase

Planned Use of

Existing Reserves

Expenditure Reduction

Budget Surplus Funds Future Capital Projects

IMRF Liability Payment

No Additional Debt

Continued Budget

Efficiencies

FIVE-YEAR FINANCIAL PROJECTIONS

Financial Projection AssumptionsAssumes CPI of 1.3% in 2018/2019 through 2020/2021Assumes no further bonded debtAssumes no pension cost shift, property tax freeze, or state

funding reform changesAssumes $10 million in capital projects each year for the

completion of projects identified for the next phase of improvements

Roof ReplacementsMechanical Equipment Replacement Restroom and Locker Room Renovations Turf Replacement Kitchen Renovations

Five-Year Financial Projections: OPERATING FUNDSCash Basis 2016‐2017 2017‐2018 2018‐2019 2019‐2020 2020‐2021

Budgeted % +(‐) Projected % +(‐) Projected % +(‐) Projected % +(‐) Projected % +(‐)BEGINNING FUND BALANCE 143,473,565$         131,689,325$         125,988,347$         121,589,744$         116,408,400$        

 TOTAL DIRECT REVENUE 248,164,850    0.2% 250,180,468    0.8% 253,946,937    1.5% 257,751,871    1.5% 261,670,987    1.5%

TOTAL DIRECT EXPENDITURES 237,012,090           1.9% 241,550,946           1.9% 245,915,040           1.8% 250,933,215           2.0% 256,572,532           2.2%

BUDGET SURPLUS/ (DEFICIT) 11,152,760              8,629,522                8,031,897                6,818,656                5,098,455               

Transfer of Budget Surplus to Fund Future Capital Improvements, Life Safety Projects and IMRF Payment

Five-Year Financial Projection: ALL FUNDSCash Basis 2016‐2017 2017‐2018 2018‐2019 2019‐2020 2020‐2021

Budgeted % +(‐) Projected % +(‐) Projected % +(‐) Projected % +(‐) Projected % +(‐)BEGINNING FUND BALANCE 146,095,971$         135,687,731$         126,258,731$         121,855,731$         116,674,731$        

TOTAL DIRECT REVENUE 249,485,850     ‐0.2% 252,188,000     1.1% 253,943,000     0.7% 257,752,000     1.5% 261,671,000     1.5%

TOTAL DIRECT EXPENDITURES 256,394,090     ‐1.2% 259,617,000     1.3% 256,346,000     ‐1.3% 260,933,000     1.8% 267,773,000     2.6%

BUDGET SURPLUS/ (DEFICIT) (6,908,240)               (7,429,000)               (2,403,000)               (3,181,000)               (6,102,000)              

TRANSFERS IN 20,330,500              18,430,500              18,000,000              12,500,000              10,000,000             TRANSFERS OUT (20,330,500)            (18,430,500)            (18,000,000)            (12,500,000)            (10,000,000)           

SPECIAL PMT TO IMRF 3,500,000                2,000,000                2,000,000                2,000,000                2,000,000               

ENDING FUND BALANCE  135,687,731$         126,258,731$         121,855,731$         116,674,731$         108,572,731$        

Planned budget deficit as a result of the transfer of annual budget surpluses to fund future capital improvement projects

Operating Fund Balance % 52% 49% 47% 44% 40%of Next Yr. Expenditures

Next Steps

Approve the 2016-2017 tentative budget and place on file for public inspection for 30 days

Publish public hearing notice Conduct public hearing at the September 22, 2016

Board of Education meetingAdopt the final budget prior to September 30, 2016File the approved budget with ISBE within 30 days of

adoption