PARK HILL SCHOOL DISTRICT 7703 NW Barry Road Kansas City, Missouri (816) FINANCIAL SECTION

Transcription

1 FINANCIAL SECTION Budgets are financial planning and decision-making documents. The Financial Section is the heart of the school budget document. The budget financial schedules present the proposed and adopted budgets for the district compared with the results of past budget plans. PARK HILL SCHOOL DISTRICT 7703 NW Barry Road Kansas City, Missouri (816)

2 This Page Left Intentionally Blank 84

3 BUDGET ASSUMPTIONS Annually, Park Hill School District administration prepares a budget forecast to facilitate building the financial planning and budget preparation process for the district and to attain the stated goals and objectives of the school district. The forecast is created using assumptions that reflect a conservative understanding of future indicators that impact the financial obligations of the district. Throughout the budget preparation process, assumptions are modified to reflect new information as it becomes available. In developing the budget, the district has identified the following issues and considerations as the budget assumptions that have significantly impacted the final product. The Park Hill School District budget assumptions are organized into four budget dimensions: Revenue, Expenditures, Debt Service and Fund Balances. REVENUE The state of Missouri requires that school districts report revenues by source. Each source of revenue is organized within one of five? major classes: Local/ County, State, Federal, Non-Current and Amounts Received from Other LEAs. Park Hill School District does not have revenue received from Other LEAs. LOCAL/COUNTY Local Assessed Valuation. The taxes derived from local assessed valuation of property are the primary source of revenue in the Park Hill School District. The assessed value of property is determined by a property s market value and is set by the Platte County Assessor annually. The aggregate assessed valuation of all property in the school district, including real, commercial, agricultural and personal, is submitted to the school district annually in August and is the key value that drives operating and debt service revenue for the school district. Park Hill School District s aggregate assessed valuation increased by 4.1% to $1,573,825,427 largely due to an increase in the aggregate assessed valuation of residential real and personal property. This increase in total assessed valuation was also aided by a relatively large amount of new construction and county wide improvements ($43.0 million in new assessed property). This 4.1% increase in the total assessed valuation comes after four consecutive years of growth just above 1.2% per year. Overall, the aggregate assessed valuation of the school district has increased by 7.2% over the last five years. 85

4 Park Hill School District Aggregate Assessed Valuation 1,310,454,667 1,398,771,715 1,427,317,699 1,452,010,209 $1,440,437,815 1,467,449,564 1,479,652,805 1,491,554,721 1,511,453,822 1,573,825,427 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000, Budget An increasing number of new housing permits within the school district in the school year, coupled with a local economy that has consistently outperformed surrounding counties in commercial growth is anticipated to result in an increase of the assessed valuation for The 2017 aggregate assessed valuation, which drives local revenue for , is budgeted to increase by 1.57% to $1.60 billion. This increase will result in approximately $1.3 million in new operating revenue. Certified assessed valuation figures are expected to be released by the Platte County Assessor and Clerk in August, a month after the budget must be approved by the Board of Education. The Board of Education is required to set the tax levy at a public hearing prior to September 1, It is scheduled that the Board of Education will conduct the tax rate hearing on August 24, District Tax Levy. The Park Hill School District currently has a total tax levy of $ per $100 of assessed valuation. This total levy is split between operating and debt service funds as shown in the following tables. 86

5 Operating Levy FUND Tax Rate Tax Rate FUND 1 - Operation/Incidental FUND 2 - Special Revenue / Teachers FUND 4 - Capital Fund SUBTOTAL OPERATING Debt Service Levy FUND Tax Rate Tax Rate FUND 3 -Debt Service SUBTOTAL DEBT SERVICE Total Levy FUND Tax Rate Tax Rate Operating Levy (All Operating Funds) Debt Service Levy SUBTOTAL DEBT SERVICE Currently, Park Hill School District s total tax rate ($5.5290) ranks as the second lowest of twelve suburban districts in the greater Kansas City area. The debt service tax levy ($0.6107) is the lowest debt service levy in the same comparison group. Operating Levy. Missouri Boards of Education can approve an operating tax rate no higher than (a) the last voter approved tax rate; and (b) the tax rate ceiling calculated annually by the Missouri State Auditor based upon a formula detailed within Missouri s Hancock Amendment. The last Park Hill School District voter-approved operating tax levy was set at $ in The operating tax levy may not exceed the last voter-approved tax rate without a vote of the community. In addition, the state of Missouri annually applies the Hancock Amendment, a tax limitation measure adopted in 1980, that legally requires tax levies to be adjusted based upon reassessment of property, ensuring that reassessment alone does not yield new revenue to taxing jurisdictions. The annual maximum rate set by the state after application of the Hancock Amendment is known as the tax rate ceiling, and changes year to year based upon reassessment of existing property within the school district. Based upon both positive or negative reassessment and the application of the state s Hancock Amendment, the State Auditor will change the operating tax rate annually, although, under no circumstance can the State Auditor set a tax rate ceiling higher than the last voter-approved levy within the school district. Each year, the Board of Education must decide (in August) whether to adopt this tax levy ceiling or take a voluntary rollback from the legal ceiling and tax at a lower rate. For the school year, the State Auditor set the operating tax rate ceiling to 87

6 be $4.9183, and the Park Hill School District Board of Education voted to set the levy at the tax rate ceiling approved by the State Auditor. Debt Service Levy. Under Missouri law the only way a school district can legally borrow money for school facility improvements or construction on a full faith and credit basis is to seek voter approval of a general obligation bond issue. A general obligation means that the school district can and must levy sufficient taxes (via a debt service levy) to repay the principal and interest associated with the bonds. This financing process gains access to numerous investors at favorable terms compared to what would happen if the district was dependent upon a single lender to supply the funding. The interest earned by the investors is exempt from federal and state of Missouri income taxes. With the interest being tax-exempt, the actual rate the district has to pay is much lower than would otherwise be the case for a typical loan. The Park Hill School District voters approved the sale of bonds in 2006 and 2011 for the construction of schools to support enrollment growth, and for improvements to existing facilities. The $ debt service levy is set annually by the Board of Education in an amount necessary to repay the bonds sold in prior years. Currently, the district has $72.2 million in existing debt, scheduled to be repaid through the school year. It has been determined that the $ debt service levy is sufficient to repay principal and internet based upon the current repayment schedule. Additional debt is scheduled to be added after the sale of general obligation bonds approved by voters in April, The first sale is scheduled for Fall, 2017 and is currently anticipated to be around $20 million Budget The budget is being prepared based on the assumption of no change to the current operating tax levy of $ and debt service levy of $ Proposition C. Missouri s Proposition C was adopted as a 1-cent sales tax for education by referendum in November, 1982 originally intended to replace (reduce) local tax levied on property with an amount generated from a state wide sales tax. In effect, Proposition C generates a flat-grant allocation of additional aid to every school district in Missouri. Because the referendum originally was intended to replace local property tax revenue, Proposition C revenue is counted as local revenue for each Missouri public school district. Proposition C revenues are paid per a Weighted Average Daily Attendance (WADA) figure calculated from the prior year. The amount paid per WADA fluctuates from year to year, and even month to month, based upon State revenues and the economic conditions that drive changes to state sales tax receipts. The Proposition C payment per WADA and total Proposition C revenue for the last five years is reflected in the table that follows: 88

7 Year Prior Year District Weighted Average Daily Attendance (WADA) Proposition C WADA Payment District Proposition C Revenue , $835 per WADA 8,388, , $884 per WADA 8,907, , $921 per WADA 9,399, , $947 per WADA 10,296, , $977 per WADA * 10,830,905 * , * $985 per WADA* 11,332,167* *estimated DESE has stated that Proposition C revenues per WADA for schools will increase slightly over levels due to a slight uptick in the state economy from prior years and a commitment from the governor to increase school funding. Park Hill s Proposition C revenue for (which is based upon actual WADA) is anticipated to increase over the prior year due to three factors: (1) increased enrollment during the school year; (2) the impact of increased enrollment on the calculation of WADA; and (3) an anticipated increase in the WADA allocation. The state advised school districts to budget a payment of $985 per WADA for the school year, up from $977. The combination of these factors will result in a project increase in revenue of approximately $539,000 from Other Local Revenues. Other local revenues include other tax payments (i.e. M and M Surtax, Financial Institution Tax, etc.), revenues generated by student activity accounts (i.e. admission to student activities, fundraisers) and community programs (i.e. Pre-School, Community Education, School Age Childcare. None of these revenue sources are expected to change dramatically from prior years, with small increases that correlate with increased enrollment. The largest remaining local revenue item is local food service. These local revenues are collected from students and parents as they participate in the K-12 food service program (i.e. school breakfast, school lunch). Local revenues for this program exceed $3.6 million annually and are expected to increase slightly due to mandated cost increases and despite nutritional requirements which have shown historically to negatively impact student participation. An additional $2.3 million is received from Federal sources via the National School Lunch Program. All of the revenue from this program is utilized within the food services program to pay for staff salaries, food and other associated costs. STATE Basic Formula. The Missouri Foundation Formula was passed in 2005 to help ensure that all of Missouri s elementary and secondary education students have access to adequate educational resources. The formula is used to establish a concrete spending target the amount of money that should be spent (at minimum) in order to educate the average K-12 student in Missouri per academic year. The four basic pieces of the Missouri Foundation Formula are: 89

8 Weighted Average Daily Attendance. Weighted Average Daily Attendance (WADA) accounts for the average daily attendance of students in each school district as compared to the total number of hours that each student could possibly be in school during that academic year in that district. A detailed weighting system is then used to account for the fact that some students simply need more help (and in turn, require more resources from their districts) than others do to achieve the same academic and/or behavioral results. The state has identified three categories of students whose attendance in schools is weighted: those on free and reduced lunches, those with individualized learning plans and those who are deemed limited in English language proficiency. Because there are necessary enrollment thresholds a school district must meet for a population of students to positively influence the weighted enrollment value, the only category that influences Park Hill School District's WADA are students who qualify for English language proficiency services. Park Hill's WADA values are reflected in the following table. The increases are due to an increased K-12 enrollment within a growing community, and the increase of summer school attendance (optional program, but funded by the state in the same manner as the regular year) in this same timeframe. School Year Park Hill School District WADA , , , , , , , , , , ,277* *estimated While additional WADA will produce additional revenue through the foundation formula, there will be offsetting costs in the form of expenditures to support the program. State Adequacy Target. Two terms are used in context of the State Adequacy Target (SAT) and it s important to understand the difference between them. Adequacy means providing each student with an education that is adequate. In other words, adequacy accounts for meeting baseline educational needs. Equity, on the other hand, means that each school district receives total funding that is fair relative to the total funding received by other districts. The SAT helps the state to educate students adequately by funding districts equitably. When the Missouri Foundation Formula is fully funded, the SAT ensures that each student in the state of Missouri receives (at 90

9 minimum) the equivalent of the target education investment for that academic year. This amount is reviewed every two years and was increased from $6,117 in 2006 to $6,131 in Although the SAT for was set at $6,810, the state adjusts the SAT (downward) until such time as there is funding available to increase the SAT to the calculated level. In short, the state does not budget adequately to fully fund the foundation formula and pro-rates the formula by reducing the SAT to an amount that matches allocated resources by the state for K-12 public schools. It is estimated that the adjusted SAT for will be in the vicinity of $6,180. The adjusted SAT for is expected to be $6,241 Dollar Value Modifier. The Dollar Value Modifier (DVM) is an index of the relative purchasing power of a dollar across the state of Missouri. In other words, the DVM accounts for the various costs of living in different communities. The DVM comes into play in the Foundation Formula by providing more money to schools that operate in areas with higher costs of living. Park Hill School District's DVM is currently The state has set the DVM for the school year to drop slightly to Local Effort. While the WADA, SAT, and DVM help determine the total target amount of money that it should cost to adequately and equitably educate Missouri s public school students, local effort describes the portion of that total cost that can be generated by local sources like property taxes. After calculating WADA, SAT, and DVM, the state subtracts Local Effort. The difference is the amount of money that the state must provide in order to ensure that the spending target is met for each student. The result of this final piece of the Foundation Formula is that in communities where more school funding can be generated locally, the state offers less fiscal support. The reverse is also true: in areas where less local funding is available for schools, the state s Foundation Formula helps make up the difference to ensure that enough funding is provided so that students across the state regardless of local wealth receive an adequate public education. In Park Hill School District's case, the state calculates the total target amount to educate students in as $74,270,911. Park Hill's local effort is calculated to be $40,699,031 which means the remainder, $33,571,880 is to be funded by the state. The economic downturn since 2009 has significantly reduced state revenues and negatively impacted state funding for public education. The Department of Elementary and Secondary Education (DESE) has addressed the uncertainty and reduction in state revenues by prorating the foundation formula for all Missouri school districts to match actual state revenues. For example, should the state fund the formula as written with a SAT of $6,810 (rather than an adjusted SAT of $6,241), the fully funded formula would generate an additional $6.5 million per year for and Based upon formula calculations using predictions for and a SAT of $6,241, revenue generated from the basic formula is expected to increase by $837,000 from This increase is primarily due to the impact of enrollment growth on the WADA. While new revenue is generated from the state foundation formula based upon student enrollment, a corresponding increase in expenditures from educating the additional students offsets the revenue increases. 91

10 Transportation. The state transportation program provides public school districts with 75% maximum reimbursement entitlement of their allowable costs eligible for state transportation aid. Public school districts that provide transportation services receive state aid the ensuing year for the pupil transportation on the basis of the cost for the service in the current year. Due to state budget constraints in recent years, the reimbursement to Park Hill School District for transportation services has steadily declined in spite of eligible miles and student enrollment increases in those years. For example, in , the school district received $3.0 million in transportation reimbursement. In , the reimbursement is projected to be $1.1 million ($1.9 million decrease), in spite of additional students and eligible miles. Based upon the state budget, it is anticipated that state transportation revenue will remain flat for the school year. It is important to note that any shortfalls in state revenues could impact transportation funding as it has in the past. FEDERAL Title Programs. Title I, Title II and Title III revenues for are expected to remain fairly flat after a significant reduction in prior years due to federal budget cuts and/or sequestration. These targeted dollars, about $1.4 million annually, pay for specific programming in district schools. Title I services are used district wide to support students who are not performing to grade level in reading and math. Title II supports the professional development efforts of district certified staff. Title III provides services to students with limited English proficiency. IDEA Part B Entitlement Funds. IDEA Part B Entitlement Funds (Section 611) are federal funds school districts receive to help support special education programming and implement IDEA. These allocations have been reduced in prior years due to federal budget cuts and/or sequestration and now amount to approximately $1.9 million annually. This is a fraction of the amount the school district spends to fully implement IDEA. Other Federal Revenue. The largest remaining federal revenue item supports students who qualify for the free and reduced lunch program. Students/families who qualify pay a reduced rate for school breakfast and lunch and the differential is paid to the school district through the national school lunch program. This accounts for over $2.4 million annually. Revenue from this program is utilized within the food services program to pay for staff salaries, food and other associated costs. NON-CURRENT Bond Revenues. In April, 2017, district taxpayers overwhelmingly passed (83.9%) a $110.0 million bond issue for the purpose of acquiring, constructing, renovating, improving, furnishing and equipping school facilities. More specifically, the projects within this bond included (a) constructing, furnishing and equipping a new middle school, (b) constructing, furnishing and equipping a new elementary school, (c) constructing, furnishing and equipping a facility for use by high school students, (d) constructing and equipping a facility for school support services, and (e) improvements and renovations to various school buildings. Planning for the district s Middle School #4 and Elementary School #11 are currently underway and both are planned to open in the Fall, 2019 ( school year). A high school facility is planned to open a year later. The timelines for other projects, including the construction of a new Support Services facility, will be finalized after the sale of the first series of bonds. 92

11 The district is planning to sell bonds to support these projects over a three-year period, beginning with the first sale slated for Fall, The strategic sale of revenue bonds over time supports (a) the cash flow necessary to construct the facilities within the timelines above; and (b) structure the debt over time as to maintain the district s current $ debt service levy per $100 of the assessed valuation of real and personal property, resulting in no tax increase for district taxpayers. The district s current debt service tax levy is the lowest in the greater Kansas City area. District staff and financial advisors will also consider assessed valuation growth, the bond market, interest rates, and interest rate risk to determine the size and number of the bond sales, the total not to exceed the $110 million authorized by voters. For budgeting purposes, the budget document reflects a sale of $20 million in , $60 million in , and $30 million in These figures and years may change based upon the factors listed above. EXPENDITURES The following are significant issues impacting the budget from the four major organizational structures (departments) in the school district: Academic Services, Human Resources, School Improvement and Business Services. These considerations note the significant changes in the budget process and policies and the underlying causes of those changes. ACADEMIC SERVICES Academic Achievement Programming. The district is committed to identifying, implementing, and evaluating research-based, future-focused initiatives to ensure high achievement and a successful future for each student. The Comprehensive School Improvement Plan (CSIP), the district's 5-year strategic plan, is a key driver of educational programming changes. The academic goal and objectives outlined in the CSIP are; Goal: Provide a relevant educational experience that prepares all students for college and career success. Objective 1: Close the College and Career Readiness Gap between ethnic and socioeconomic groups, as measured by each student s College and Career Readiness Index. Objective 2: Increase the percentage of students with a readiness score of 75% or higher, as measured by each students College and Career Readiness Index. Objective 3: Increase the percentage of students proficient in 21st century skills. Initiatives included in the budget that directly support the goal and objectives above include: (1) Deployment of the AVID culturally responsive teaching approach to support cultural responsiveness and eliminate instructional barriers to closing the achievement gap. 93

12 (2) Equity in educational and programmatic resource allocation. (3) Training and instructional resources to support the district-wide Response to Intervention student support model. (4) Full-day summer school, which continues to be important for Park Hill in that it provides extended educational opportunities that eliminate the summer slide that occurs during summer months. This program also generates more state revenue than it expends, providing some financial benefit as well. (5) Expansion of early childhood program availability for Title I students so that more students in poverty have access to high quality preschool education, reducing a key concern affecting the achievement gap. (6) Autism program increases due to increases in enrollment of students with autism. (7) LEAD Innovation Studio program development and resource allocation. (8) Expansion of the professional studies programs, in which high school students are immersed in professional environments engaging in curriculum developed by industry professionals and program instructors ensuring that what is taught in the classroom is relevant to the workforce. Learning is enhanced by project work direct from industry partners who engage to mentor students and ensure timely, accurate and real project results. (9) Training to support instructional technology integration and the success of the one-to-one model. (10) Continuation of the use of Schoology, realizing significant cost savings versus our previous Learning Management System. (11) Changes to the assessment program due to increased costs for current assessment programs. Changing Demographics and Increased Enrollment. Increasing populations of mobile students, ethnically diverse students, students qualifying for free and reduced lunch, and non-english speaking students creates new opportunities and challenges for the district. The total district enrollment of 11,287 in reflects 1.6% enrollment growth from , and is consistent with the annual growth the district has seen over the last 30 years. Student enrollment has increased in the Park Hill School District for 33 consecutive years. Enrollment impacts both short- and long-term planning for staffing and facility needs. K-12 enrollment is projected to be up 1.4%, to 11,446 students, in One approach to calculating cost per pupil is calculated for Missouri school districts by DESE as current expenditures per Weighted Average Daily Attendance (WADA). According to state records, the school district s expenditures per WADA has increased by an average of 2.4% per year over the last five years. The final WADA for has not yet been certified by the state; therefore, is the most current WADA available for this table. 94

13 Year Current Expenditures per Weighted Average Daily Attendance (WADA) , , , , , , , ,081 Cost per pupil calculations are made by DESE at the end of the fiscal year after audited financials have been provided to the state. It is anticipated the cost per pupil calculation will increase slightly in and over prior years primarily due to staff compensation increases. Technology. During the school year, in order to prepare students with 21st century skills including digital literacy, the Board of Education established a steering committee to develop a pilot and a comprehensive plan to significantly expand computer access for students. A one-to-one student to computer program was piloted at selected elementary schools during the school year with the first year of full implementation at all district elementary schools beginning in During the school year, the one-to-one student to computer access expanded to all 6 th graders. During the school year 7 th and 8 th graders were included. Full high school implementation was completed during the school year. Future budgets include additional computers for new students as well as a maintenance cycle to replace outdated equipment. HUMAN RESOURCES Competitive Salaries. The Park Hill School District Board of Education has maintained a commitment to competitive salaries for all employee groups. Benchmark data supports that the Park Hill School District continues to be at the top in relation to comparison districts for salaries in all employee groups. The budget has been developed to maintain competitive salaries for all employee groups. Through a collaborative process with staff during the school year, the district has agreed to fund salary schedules that reflect 2.58% increases in staff salaries for the school year, with a 2.74% increase in total compensation. 95

14 Additional Staffing. The staffing plan for the school year is developed by Human Resources in conjunction with the administration and Board of Education. The budget reflects the district s plan on adding staff to maintain student to teacher and student to staff member ratios. In addition, additional Technology Support positions are budgeted to maintain an adequate staff support to device ratio with the increase in devices with the rollout of the one-to-one initiative at the high schools. Staffing for Food Service and Community Education programs are based upon program needs and revenue generated. Staffing adjustments are based upon available revenue flow to support additional staff. A summary of current and new positions is reflected in the following table. Values are reflected in Full Time Equivalency or FTE. Position BUDGET Administrator Community Services Instructional Support Office Staff Operations Other Support Student Health Student Nutrition Substitute Workers Teacher Grand Total ,580.2 Employee Benefits. The district continues to maintain competitive benefits for employees including health, dental, vision and life insurance. Health insurance premiums for district employees are fixed through December 31, It is anticipated that district loss ratios and market adjustments for pricing will cause increases to health insurance. The district budget has budgeted for a 3.0% increase in district-paid benefit premiums, a topic discussed with staff during salary discussions in Spring, Employee Retirement. Teacher and non-teacher retirement rates are scheduled to remain unchanged at 14.5% and 6.86% for non-teacher retirement. The rates are set annually by the Missouri Public School and Education Employee Retirement System to ensure proper funding levels to support payments to retirees. The rate is paid by the employee and matched by the school district each month. There is not an anticipated increase in these rates for the school year. Although, increased expenditures will occur based upon staffing and compensation increases. SCHOOL IMPROVEMENT 96

15 Support for the District s Strategic Plan. The Missouri School Improvement Program (MSIP) requires each district to develop a 5-year Comprehensive School Improvement Plan (CSIP), focused on the MSIP 5 Performance Standards. The MSIP 5 Performance Standards are: (1) Academic Achievement; (2) Subgroup Achievement; (3) College and Career Readiness (4) Attendance Rate; and (5) Graduation Rate. The school year will mark the fifth year of implementation of the Park Hill School District five-year strategic plan. During budget planning, strategic focus area champions will include proposed expenditures within their department budgets to directly support the goals outlined in the CSIP. In addition to the completion of the CSIP, the Park Hill School District will begin the strategic planning process for the Comprehensive School Improvement Plan. During the budget planning, there will be considerations made for planning meetings and resources as this team comes together more frequently during our planning cycle years. The Budget will include funding for multiple areas (academic, school safety initiatives, professional development, support services, etc.) to directly support the activities of the CSIP. These costs are a combination of departmental expenditures and redirected funds, and exclude the personnel hours needed to manage and accomplish the activities. Action plans that are specific to CSIP execution are included in our District Initiatives Model and would include, but not be limited to: Financial - District Efficiency Task Force deployment, Patron Insight annual survey. Academic - College and Career Readiness, Guaranteed and viable curriculum, Professional studies programming, AVID implementation, Culturally Relevant/Responsive Teaching models/training, Response to Intervention deployment (RtI), Summer school, Innovation Studio, and One-to-one technology in the classroom. Climate - Anti-bullying programming development and adoption, Mental Health Support and Training, Further CI Classroom model deployment. Employee - Potential new surveying methods for Employee Engagement, Further NEE deployment, Classified Staff leadership development. Quality and Continuous Improvement Processes. The Park Hill School District has adopted the Malcolm Baldrige Performance Excellence Program and Missouri Quality Award (MQA) program criteria for performance excellence as a management framework and model of continuous improvement that addresses multiple organizational aspects including leadership; strategic planning; customer focus; measurement, analysis, and knowledge management; workforce focus; operations focus; and results. Activities in support of district-wide deployment and continuous improvement efforts include the continued implementation of the CSIP with the deployment of vision, mission, and values throughout the district; use of balanced scorecards that incorporate the district s strategic focus areas; the district s process improvement model, and planning for operational continuity in the event of an emergency. In addition, the Adult Learning Framework will continue to be deployed to support the use of continuous improvement practices throughout the district. The Adult Learning Framework specifies the expectations for implementation of continuous improvement processes from the classroom to the district office. Expenditures will be made to support professional development for teachers and administrators in the continued implementation of the Adult Learning Framework. The CI classroom (Continuous Improvement Classroom) development team is going 97

16 through a process to update, integrate, and improve the Adult Learning Framework into a more comprehensive Quality Classroom Framework. Expenditures in this area will also reflect the continued involvement in the Malcolm Baldrige Performance Excellence Program (MBNQA) and Missouri Quality Award (MQA) program. The Park Hill School District was a recipient of the 2015 Missouri Quality Award, which includes a feedback report that outlines the district's strengths and opportunities for improvement. After a thorough analysis of the feedback report, expenditures may occur to address identified areas of improvement. To support this effort, senior leaders and select administrators will serve as Missouri Quality Award examiners for the 2018 review cycle. Park Hill will also serve as a leader in the implementation of quality processes by hosting site visits and presenting at local, state and national conferences. In November 2016, it was determined by the senior leadership team that the Park Hill School District will submit a Malcolm Baldrige National Quality Award (MBNQA) application. This application is written in the spring of 2017 and supported through budgeted funds. One of the goals within this process is for the Park Hill School District to receive a site visit in the Fall of Expenditures for site visit will be incurred if we are awarded a site visit and this budgeting cycle will use assumptions that plan for this to occur. Costs for site visit include fees, examination team travel and accommodations on site, resources, and consulting in preparation and during the site visit. Student Services. The Park Hill School District recognizes that providing a safe, caring, respectful and welcoming learning environment is essential to providing a quality educational experience. Two major focus areas from the CSIP Climate team include Mental Health Support and Anti-Bullying initiatives. Further, all safety, health services, and other social services will be supported through Student Services. Other expenditures will occur in the following areas: ongoing safety training and crisis response plans and resources, active shooter training, threat assessment and recognition of mental health issues in students - signs of suicide (SOS) and trauma sensitive training; continued improvements to the verification process for students who attend the Park Hill School District under a residency waiver; costs associated with maintaining health services offices with devices to use in case of a life-threatening allergic reaction (Epi-pens and Albuterol); health room staffing, and maintenance of AED and other emergency medical devices. Finally, the CSIP FACT team for Climate has identified anti-bullying as a strategic focus for and likely into the next CSIP cycle. Expenditures related to development, adoption, or deployment of a district-wide anti-bullying model or program are expected. BUSINESS SERVICES Capital Planning. Maintaining quality facilities has been a long tradition for the Park Hill School District. The district utilizes a capital planning process that includes a committee of staff and the community to prioritize major capital projects. This committee was instrumental in establishing the set of projects that were made a part of the district s last bond issue. In April, 2017, district taxpayers overwhelmingly passed (83.9%) a $110.0 million bond issue for the purpose of acquiring, constructing, renovating, improving, furnishing and equipping school facilities. More specifically, the projects within this bond included (a) constructing, furnishing and equipping a new middle school, (b) constructing, furnishing and equipping a new elementary school, (c) constructing, furnishing and equipping a facility for use by high school students, (d) constructing and equipping a facility for school support services, and (e) improvements and 98

17 renovations to various school buildings. Planning for the district s Middle School #4 and Elementary School #11 are currently underway and both are planned to open in the Fall, 2019 ( school year). A high school facility is planned to open a year later. The timelines for other projects, including the construction of a new Support Services facility, will be finalized after the sale of the first series of bonds. The district is planning to sell bonds to support these projects over a three-year period, beginning with the first sale slated for Fall, The strategic sale of revenue bonds over time supports (a) the cash flow necessary to construct the facilities within the timelines above; and (b) structure the debt over time as to maintain the district s current $ debt service levy per $100 of the assessed valuation of real and personal property, resulting in no tax increase for district taxpayers. The district s current debt service tax levy is the lowest in the greater Kansas City area. District staff and financial advisors will also consider assessed valuation growth, the bond market, interest rates, and interest rate risk to determine the size and number of the bond sales, the total not to exceed the $110 million authorized by voters. For budgeting purposes, the budget document reflects a sale of $20 million in , $60 million in , and $30 million in These figures and years may change based upon the factors listed above. The projected costs of the capital plan in are $28.0 million, with $20.0 million from bond revenues used specifically for the design and construction of Middle School #4 and Elementary School #11. Specific plans for capital items being considered outside of bond projects for the budget from technology and operations include the following projects: Planned replacement of technology data center servers at the end of their useable life ($250,000) Upgraded cabled telecommunications infrastructure at three district school facilities ($427,000) Planned replacement of the Lenel access control software to improve security and provide a more reliable solution ($120,000) Planned replacement of internal video surveillance cameras at eight district school facilities ($48,000) Planned replacement of HVAC equipment ($650,000) across the school district (maintenance cycle) Planned repairs in outdoor surfacing ($200,000) and masonry work ($100,000) throughout the school district Planned updated cabling, renovations to restrooms, lighting fixtures and other improvements to Lakeview Middle School ($1,650,000) Operational Efficiencies. The Board of Education continues to expect staff to identify cost reductions and operating efficiencies as the Park Hill School District becomes increasingly dependent on local tax base growth. One specific goal outlined in the district s strategic plan includes the creation of an energy efficiency plan which includes district buildings and future construction. The plan will consider, but is not limited to, the incorporation of Leadership in Energy and Environmental Design ( LEED ) standards and other energy efficiency initiatives with new construction and renovation projects. As a part of the strategic plan, the district identifies operational efficiencies through the formation of a District Efficiency Task Force ( DETF ) with measurable objectives and savings reported annually to the Board of Education. The DETF has submitted a cost savings plan to go into effect during the school year and is incorporated into the budget. Utility and Energy Costs. The budget has been prepared with increases in utility and fuel budgets in anticipation of rising costs for these items. Adjustments in utility costs were made based on the past 12 months 99

18 usage with a 6.0% anticipated rate increase over based upon cost increases proposed by local utility companies. Operations budgeted to replace existing light fixtures with LED technology beginning in in order to seek more efficiency in utility costs in future years. Student Transportation. The school district contracts with First Student to provide transportation for students to and from school and school activities. Per the existing contract with First Student, there will be a 2.5% increase in costs projected for the school year, resulting in an anticipated $164,000 in new costs. DEBT SERVICE The district has managed debt strategically over the last decade, resulting in the ability to issue $110 million in General Obligation Bonds after voter approval in April, 2017 without an increase to the existing debt service levy. In , the Board of Education approved a refinancing of $8.8 million of bonds (Series 2011) resulting in debt service savings to the district taxpayer of over $1.0 million based upon existing interest rate estimates, and district bond rating. It is budgeted that the district will receive $10.2 million in debt service revenue through the debt service tax levy. The debt expenditures, including principal and interest, are expected to be $12.6 million. The district will utilize debt service fund balance accumulated in prior years to pay the fiscal year deficit. The strategic use of fund balances has been planned by past and current Boards of Education. State law limits school district bonded indebtedness to a maximum of 15% of assessed valuation. Based upon the 2016 assessed valuation figures, Park Hill has a bonded indebtedness limit of over $230 million. Currently, the district has $72.2 million in existing debt, scheduled to be repaid through the school year. Over the next three budget years, the district is planning to issue up to $110 million in additional debt to support the projects outlined in the April, 2017 No-Tax-Increase bond issue. FUND BALANCES Operating and Capital Fund Balance. The operating fund balance allows the district to meet cash flow demands throughout the school year, as well as contributes to the exemplary bond rating given the district, and monies for contingencies. In short, fund balance contributes to the economic stability of the school district. The Park Hill Board of Education has established an expected range for operational fund balance at 18 to 22%. A commitment was made to the district community in 2002 to increase the fund balance in order to enhance the economic stability of the school district. Since that time, the fund balance has increased steadily from 9.6% and has consistently met the Board of Education s guideline of 18 to 22%. The opening unrestricted operating fund balance for the budget was $30.1 million, 23.2% of operating expenditures, or approximately nine weeks of operating cash. Over the last three years, the Board of Education has strategically built fund balances to offset future deficit budgets that may occur with the rollout of increased instructional technology (i.e. One-to-one). 100

19 It is anticipated that the district s unrestricted operating fund balance will decrease from 23.2 to 22.9% at the completion of the school year (June 30, 2017). The planned decrease was due to planned increased costs for technology, including the purchase of laptop computers for all students grades 5 through 12, and the construction of a district fiber optic network. The decrease also supports the commitment by the Board of Education to utilize unrestricted operating fund balances accumulated in prior years to support the implementation of instructional technology, and to offset fiscal operating deficits. The budget has been structured in a manner by which the operating fund balance remains between 18 and 22% of operating expenditures at the end of the fiscal year. In addition, the budget will be constructed to maintain a balance of $9.6 million in unrestricted capital funds. The use of the operating and capital fund balances to support the operational budget is a part of a long-range financial plan that includes supporting the new operating costs, such as technology implementation, and other one-time operational costs. Using forecasts for future years, planned budgets through will utilize fund balances to offset annual deficit budgets, but will be developed to maintain operational fund balances above 18%, and capital fund balances above 65%. Debt Service Fund Balance. It is expected that the debt service fund balance to begin the school year will be approximately $11.5 million. This fund balance can only be utilized to pay debt and is generated from the debt service property tax levy paid by district taxpayers. The debt service fund balance is used strategically in a longrange plan of debt that has included the No-Tax-Increase bond issue that voters approved in 2006 and Revenues into the debt service fund are expected to be approximately $10.2 million with scheduled debt payments to be $12.6 million in Therefore, the debt service fund balance is expected to decrease at the conclusion of the school year to $9.1 million. This balance will be used in subsequent years to pay for debt scheduled in years through State law limits the amount that school districts can maintain in the debt service fund balance to one calendar years worth of debt. 101

20 PRESENTATION OF FINANCIAL DATA ORGANIZATION OF DATA PYRAMID APPROACH In this section of the budget document, financial data will be presented using a pyramid approach. A pyramid approach presents financial data initially at a very high-level view followed by progressive levels of detail. The pyramid consists of four levels. Level One - Summary of All Funds Revenue by District Fund Expenditures by District Fund Revenue by Source - Sources specify the origin of the revenue, such as local, county, state, federal or other sources. Expenditures by Object An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies or capital projects. Level Two - Summary Data for All Operating Funds Level One Summary of All Funds Level Two Summary Data For All Operating Funds Level Three Summary Data for Individual Funds Level Four Information by Administrative Unit Revenue by District Fund Expenditures by District Fund Expenditures by Object Revenue by District Fund Expenditure by DIstrict Fund Revenue by Source Expenditures by Object Expenditures by Function Revenue by Source Expenditures by Object Expenditures by Function Revenue by Source Expenditures by Object Revenue by District Fund (Operating Funds) Expenditures by District Fund (Operating Funds) Revenue by Source (Operating Funds)- Sources specify the origin of the revenue, such as local, county, state, federal or other sources. Expenditures by Object (Operating Funds) An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies or capital projects. Expenditures by Function (Operating Funds) Expenditures by function describe the action, purpose or program in which activities are performed such as special education services. Level Three - Summary Data for Individual Funds Revenue by Source - Sources specify the origin of the revenue, such as local, county, state, federal or other sources. 102

21 Expenditures by Object An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies or capital projects. Expenditures by Function Expenditures by function describe the action, purpose or program in which activities are performed such as special education services. Level Four - Information by Administrative Unit Expenditure Administrative Units are utilized to identify the program or school in which the expenditure is being made and approved. Revenue by Source - Sources specify the origin of the revenue, such as local, county, state, federal or other sources. Expenditures by Object An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies or capital projects. Following each table in the Financial Section, accounting groupings are defined to provide the reader an understanding of the organization and meaning of the data. PRESENTATION OF FISCAL YEARS Tables in the Financial Section will utilize the following data and format. School Year Financial Data Presented Actual values (audited) and posted to DESE Actual values (audited) and posted to DESE Actual values (audited) and posted to DESE Estimated values based upon actual data through May, 2016 and using estimates for June, These values are highlighted in green Budgeted values using annual budgeting processes. These values are highlighted in blue Estimated values based upon forecasts using methodologies described below Estimated values based upon forecasts using methodologies described below Estimated values based upon forecasts using methodologies described below 103

22 BUDGET Budget forecasts help in the assessment of the fiscal consequences of budget proposals. Sometimes the consequences of budget decisions are not realized until subsequent years. For example, the full cost of a new program that is implemented mid-year will not be realized until the following year. The budget forecasts will also reveal the financial consequences on future year budgets of the use of non-recurring revenues to fund recurring expenditures. The Park Hill School District uses both qualitative methods and quantitative models to project future financial performance. Qualitative methods, generally considered to be expert-driven, have generally been successful with short-term financial projections by estimating annual key revenue and expenditure measures such as aggregate assessed valuation growth, enrollment growth, state revenues, and employee benefit costs. Experts include but are not limited to the Platte County Assessor, area demographic experts, Missouri s Director of School Finance, the state Governor, and external consultants. Park Hill School District also uses quantitative models that discount the expert factor and use historical data and patterns to predict future financial trends. These models are typically used to project financials beyond a single school year into years where expert opinions do not exist or have proven to be less reliable. For example, student activity accounts funded primarily by fundraising receipts and student participation are difficult to project from an expert driven qualitative approach. In this case, district-wide historical trends based upon aggregated data from prior school years are used to form a model to project future revenues, expenditures, and financial performance. Criteria that are typically used to forecast revenue and expenditures for future years include: Student Enrollment. Student enrollment is a major criterion for determining the number of staff that will be required. A student headcount is taken each September and January to provide a consistent basis for development of budget forecasting. Expenditures associated with salaries and benefits, along with the student headcount are the main factors in developing the annual budget. Salaries and benefits account for 75% of the operating budget. Projections for student enrollment are presented to the Board of Education prior to budget presentations in the Spring of each year. Local Economy. The largest source of revenue for the district is local real estate and personal property taxes (cars, boats, trailers, etc.) that are based on the assessed valuation of the property. Reassessment of all real estate and personal property every other year (odd numbered years) is the district s basis of the creation of the tax levy that generates local revenues. The district works closely with local, state and federal government entities to monitor these values. State Economy. Economic conditions in the state impact substantial revenue streams, including Proposition C sales tax, state foundation formula, and transportation aid. CPI. In order to further determine expenditures beyond salary and benefit costs, expenditures are based on a Consumer Price Index (CPI) escalator. This indicator relates to current economic indicators with regard to consumables, supplies, equipment and other purchased goods. Costs for materials and supplies, as well as major capital additions or changes are an important factor in determining expenses for future school terms. Construction costs have to be calculated into the budget including increased labor and material costs, the purchase of land, professional fees, and inflation. 104

23 Competitive Salary and Compensation Environment. The Park Hill Board of Education has established the desire to maintain competitive compensation for all employee groups in the district. The district monitors trends and ranks position in salary measures compared to benchmark school districts in the greater Kansas City area. The district has adopted the Association of School Business Officials (ASBO) Meritorious Budget standards which requires three years of financial forecasts beyond the budgeted year. The qualitative methods and quantitative models described above are used to generate these forecasts which are shared with the Board of Education and public in the annual budget report and in reports throughout the school year. Park Hill School District also uses these financial forecasts to project future fund balances which serve as the key sustainability measure featured on the district s financial scorecard. Forecasting for the fiscal years through is based on historical data and other information as it becomes known. Budget forecast figures for the through school years are provided throughout the document. It is highlighted in the financial information presented above, specifically in the Fund Balance table and commentary provided on the preceding three pages. PRESENTATION OF VALUES In order to simplify the presentation, values within tables throughout the financial section have been rounded to the nearest dollar (whole number). Subtotals and grand totals have also been rounded. In some cases, totals in the table and the sums of the numbers presented may differ slightly due to rounding, but these differences are not material, and are not deemed by the school district as misrepresentation or errors. 105

24 LEVEL ONE SUMMARY OF ALL FUNDS Level One of the pyramid approach presents a summary of all funds. This includes the revenues and expenditures for all fund types. To assist the reader, the data is organized by Revenue by District Fund, Expenditures by District Fund, Revenue by Source, and Expenditures by Object. DISTRICT FUND SUMMARY (ALL FUNDS) REVENUE BY DISTRICT FUND (ALL FUNDS) The Park Hill School District accounts for revenues in eight specific funds. FUND ESTIMATED BUDGET General Fund 82,617,481 84,343,352 83,251,275 84,834,519 88,816,456 90,460,781 92,520,482 95,015, Special Revenue Fund 32,441,259 35,919,211 39,997,154 42,162,753 46,519,996 48,157,997 49,857,271 51,802, Debt Service Fund 9,512,462 9,638,142 30,566,506 19,522,138 10,263,624 10,475,958 10,703,417 10,976, Capital Projects Fund 3,998,249 6,635,612 9,984,764 9,743,766 4,981,781 5,145,058 5,322,216 5,523, Student Activity Fund 2,443,489 2,072,639 1,495,308 2,209,976 2,298,616 2,305,288 2,312,021 2,318, Food Services Fund 5,270,897 5,558,496 5,862,674 5,757,346 6,017,283 6,225,762 6,442,363 6,667, Bond Projects Fund - 7,717 11,461 12,965 20,075,243 60,225,729 30,112,865 56, Community Services Fund 3,455,747 3,934,087 4,336,140 4,184,314 4,255,448 4,333,838 4,413,701 4,495,451 Grand Total 139,739, ,109, ,505, ,427, ,228, ,330, ,684, ,855,818 Explanation of Major Shifts from Current Year The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. In addition, increases in revenue are expected from the Early Childhood Special Education reimbursement (fully reimbursed by the state based upon prior year qualifying expenditures), and increased allocations and reimbursement within Federal Title programs (Title I, Title II, Title III). 106

25 The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. The significant decrease in Fund 003 revenue is primarily due to an abnormally high revenue in due to a refinancing of $8.8 million of bonds (Series 2011) in Fall, The $10.2 million in debt service revenue in is consistent with years in which no refinancing occurs. The sharp decrease in Fund 004 are due to moving a portion of the district s operating tax levy from Fund 004 to Fund 001, and moving all of the Classroom Trust Fund from Fund 004 to Fund 002. This movement between funds is strategic due to the influx of capital dollars within Fund 008 (Bond) over the next three years. The slight increase in Fund 005 is due to activities planned by schools to increase student activity revenue, such as fundraisers. Fund 007 revenues are exclusively that of the school nutrition program and reflect an increase in participation and lunch prices which drive revenue higher. These increases are offset by increased expenditures due to increased participation. It is anticipated that Fund 008 revenues will significantly increase primarily due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. Increases in revenue into Fund 011 are exclusively from community services such as pre-school and fee-based child-care (Adventure Club). These revenues are expected to increase based upon increased participation in these programs. Definition of Funds Fund 001 Operating Fund/General/Incidental This fund is used to account for all financial resources except those required to be accounted for in another fund. Transactions in this fund are general operating expenditures that are not grouped by another fund. Typical expenditures here include, but are not limited to support staff salaries, benefits and instructional supplies and materials. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Special Revenue Fund/Teachers This fund is used to account for revenue sources legally restricted to expenditures for the purpose of certified salaries, health insurance, benefits, and tuition payments to other districts. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Debt Service Fund This fund is used to account for yearly accumulation of resources for, and the payment of, general long-term debt principal, interest, and fees. This fund is classified as a Non-Operating Fund throughout the budget. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). 107

26 Fund Capital Projects Fund/Building This fund is used to account for facility acquisition, construction, lease purchase, and other expenditures for classroom instructional equipment and support services equipment. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Student Activity Fund This fund is administered as a revenue and expenditure fund to account for specific transactions relating to services for public school pupils such as entertainment, publications, clubs, band, student council, and other extra-curricular activities. This fund is merged with the General (Incidental) Fund for final state reports. This is considered a Fiduciary Fund under Generally Accepted Accounting Principles (GAAP). Fund Food Services Fund This fund is administrated as a revenue and expenditure fund to account for transactions relating to district food service operations. This fund is merged with the General (Incidental) Fund for final state reports. This is considered a Proprietary Fund under Generally Accepted Accounting Principles (GAAP). Fund Bond Projects Fund/Capital Outlay This fund is used to account for facility acquisition, construction, lease purchase, and all other capital outlay (equipment, furniture, architectural fees, etc.) expenditures resulting from a bond issue. This fund is merged with the Capital Projects Fund/Building for final state reports. This fund is classified as a Non-Operating Fund throughout the budget. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund 011 Community Services Fund/Education and Child Care This fund is administrated as a revenue and expenditure fund to account for specific transactions relating to Adventure Club, Pre School, Aquatic Center, and Community Education programs. This fund is merged with Operating Fund/General (Incidental) for final state reports. This is considered a Proprietary Fund under Generally Accepted Accounting Principles (GAAP). 108

27 EXPENDITURES BY DISTRICT FUND (ALL FUNDS) The Park Hill School District accounts for expenditures in eight specific funds: ESTIMATED BUDGET FUND General Fund 39,296,445 42,312,873 44,287,027 47,550,756 51,893,862 53,631,049 54,587,876 56,176, Special Revenue Fund 70,585,417 72,184,288 73,879,387 77,066,794 81,062,425 83,704,569 87,093,002 89,251, Debt Service Fund 8,423,849 9,356,713 28,044,555 11,407,903 12,619,070 17,379,007 8,129,981 6,779, Capital Projects Fund 6,664,048 11,873,837 13,936,628 12,496,583 8,032,776 8,097,171 8,048,611 7,860, Student Activity Fund 2,414,678 1,824,072 2,421,764 2,142,874 1,871,246 1,888,551 1,906,033 1,923, Food Services Fund 5,085,919 5,371,661 5,641,483 5,643,958 6,187,991 6,300,702 6,415,775 6,549, Bond Projects Fund 11,145,316 7,649,916 83,279 5,523,746 20,024,000 60,276,972 30,112,865 56, Community Services Fund 3,441,327 3,599,061 3,851,785 3,970,654 4,019,487 4,237,582 4,467,590 4,728,537 Grand Total 147,056, ,172, ,145, ,803, ,710, ,515, ,761, ,326,402 Explanation of Major Shifts from Current Year The increase in Fund 001 is largely due to increases in classified staffing to meet the service demand of student enrollment growth. In addition to additional employees, compensation increases are also a factor in the increase. Increases are also budgeted in contracted student transportation, and fixed cost items such as fuel, paper, textbooks, utilities and other items. Fund 001 increases are also due to increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. Increased expenditures in Fund 002 are also due to increased certified staffing (i.e. teachers, administrators, substitute teachers) to support enrollment growth as well as a 2.7% average compensation increase for the school year. The increase in expenditures in Fund 003 is due to scheduled principal and interest payments on debt incurred in prior years. The decrease in Fund 004 expenditures is primarily due to moving most capital expenditures to Fund

28 The increase in Fund 007 expenditures is due to increased participation of students within the school lunch program, resulting in higher food, supply and labor costs. Revenue to support these expenditures are generated from Food Services sources, including school lunch prices, and federal revenue generated through participation in the National School Lunch Program. The significant increase in Fund 008 expenditures is primarily due the expenditures related to the projects outlined in the April, 2017 No-Tax-Increase bond issue, including the construction of Middle School #4, and Elementary School #11. Both of these facilities are scheduled to open in Fall, The increase in Fund 011 expenditures is due to the anticipated increased costs associated with an increase in participation in district community based programs, including pre-school, school-aged child care (Adventure Club), and Community Education. Definition of Funds Fund 001 Operating Fund/General/Incidental This fund is used to account for all financial resources except those required to be accounted for in another fund. Transactions in this fund are general operating expenditures that are not grouped by another fund. Typical expenditures here include, but are not limited to support staff salaries, benefits and instructional supplies and materials. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Special Revenue Fund/Teachers This fund is used to account for revenue sources legally restricted to expenditures for the purpose of certified salaries, health insurance, benefits, and tuition payments to other districts. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Debt Service Fund This fund is used to account for yearly accumulation of resources for, and the payment of, general long-term debt principal, interest, and fees. This fund is classified as a Non-Operating Fund throughout the budget. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Capital Projects Fund/Building This fund is used to account for facility acquisition, construction, lease purchase, and other expenditures for classroom instructional equipment and support services equipment. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund Student Activity Fund This fund is administered as a revenue and expenditure fund to account for specific transactions relating to services for public school pupils such as entertainment, publications, clubs, band, student council, and other extra-curricular activities. This fund is merged with the General (Incidental) Fund for final state reports. This is considered a Fiduciary Fund under Generally Accepted Accounting Principles (GAAP). 110

29 Fund Food Services Fund This fund is administrated as a revenue and expenditure fund to account for transactions relating to district food service operations. This fund is merged with the General (Incidental) Fund for final state reports. This is considered a Proprietary Fund under Generally Accepted Accounting Principles (GAAP). Fund Bond Projects Fund/Capital Outlay This fund is used to account for facility acquisition, construction, lease purchase, and all other capital outlay (equipment, furniture, architectural fees, etc.) expenditures resulting from a bond issue. This fund is merged with the Capital Projects Fund/Building for final state reports. This fund is classified as a Non-Operating Fund throughout the budget. This is considered a Governmental Fund under Generally Accepted Accounting Principles (GAAP). Fund 011 Community Services Fund/Education and Child Care This fund is administrated as a revenue and expenditure fund to account for specific transactions relating to Adventure Club, Pre School, Aquatic Center, and Community Education programs. This fund is merged with Operating Fund/General (Incidental) for final state reports. This is considered a Proprietary Fund under Generally Accepted Accounting Principles (GAAP). 111

30 REVENUE BY SOURCE (ALL FUNDS) In addition to funds, the Park Hill School District accounts for revenue by source. Sources specify the origin of the revenue, such as local, county, state, federal or other sources (noted as Non-Current ). ESTIMATED BUDGET FUND Revenue From Local Sources 102,491, ,102, ,158, ,628, ,752, ,467, ,220, ,552, Revenue From County Sources 4,110,105 3,984,257 4,984,750 4,441,112 4,533,555 4,628,675 4,726,578 4,827, Revenue From State Sources 28,098,371 33,281,034 36,695,268 37,749,417 38,738,917 39,931,920 41,162,613 42,614, Revenue From Federal Sources 4,990,541 5,679,726 5,527,305 5,727,328 6,141,522 6,227,736 6,485,318 6,753, Non-Current Revenue 49,386 61,971 20,139,031 8,881,767 20,062,120 60,074,544 30,089, ,344 Grand Total 139,739, ,109, ,505, ,427, ,228, ,330, ,684, ,855,818 Explanation of Major Shifts from Current Year The increase in revenue in Local Sources is primarily due to an anticipated increase in current, delinquent and Proposition C sales tax revenue and the growth of local revenue generating programs such as pre-school, school-aged childcare, and Community Education. Increases in County Sources come as a result of anticipated increases in state assessed utility valuation. The increase in State Sources is due to expected increases in the state foundation formula which will generate increased revenues based upon the overall enrollment growth seen over the last year. Budgeted increases in Federal Sources are due relatively to the increases planned for federally-supported programs such as Title I, Title II, Title III and IDEA, and the school lunch program. The abnormally high increase in revenue in Non-Current sources in is due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. Sources 112

31 5100-Revenue from Local Sources Revenue received directly by the school district, including local property taxes, Proposition C sales tax, School Food Service sales, student activity and fundraising revenues, and interest on investments Revenue from County Sources Revenues collected by the county and distributed to school districts, including county fines, escheats, and state assessed railroad and utility taxes Revenue from State Sources Revenues generated by state taxes or collected by the state and distributed to school districts through various formulas based on enrollment, attendance and/or demographic variables. These revenues include the state foundation formula, classroom trust fund, transportation reimbursement, reimbursement for Early Childhood Special Education and Parents as Teachers programming Revenue from Federal Sources Revenues generated at federal level and distributed to the state and/or LEA through the state. These include Title programs, IDEA reimbursement, Medicaid, School Lunch/Breakfast reimbursement for qualifying students, and various grants Non-Current Revenue Revenues such as the sale or refunding of general obligation bonds and sale of property. 113

32 EXPENDITURES BY OBJECT (ALL FUNDS) In addition to District Fund, the Park Hill School District also accounts for expenditures by object. An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies or capital projects. ESTIMATED BUDGET FUND Salaries 76,461,022 78,543,011 81,425,364 85,242,913 89,506,112 92,386,176 95,976,099 98,473, Employee Benefits 19,815,661 20,774,218 22,488,162 23,485,599 25,356,055 26,331,991 27,523,896 28,414, Purchased Services 15,115,600 15,438,673 16,287,854 16,752,546 18,735,637 19,314,384 18,946,525 19,429, Supplies and Materials 9,479,790 10,556,419 9,880,065 10,365,303 10,760,726 11,043,455 11,327,194 11,604, Capital Outlay 17,396,998 19,141,970 13,658,577 17,402,157 28,724,257 69,060,590 38,858,038 8,623, Long- and Short-Term Debt 8,787,926 9,718,129 28,405,884 12,554,750 12,628,070 17,379,007 8,129,981 6,779,468 Grand Total 147,056, ,172, ,145, ,803, ,710, ,515, ,761, ,326,402 Explanation of Major Shifts from Current Year The increase in Object 6100-Salaries is attributed to the increase in staffing and budgeted compensation increases (2.7%) for all employee groups. The increase in Object 6200-Employee Benefits is due to an increase within salaries and a budgeted increase for employer paid health benefits. The increase in Object 6300-Purchased Services is primarily due to increases in contracted student transportation and increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. The increase in Object Supplies and Materials is largely due to increases in fixed cost items such as textbooks, fuel, paper, utilities and other items. The significant increase in Object 6500-Capital Outlay expenditures is primarily due the expenditures related to the projects outlined in the April, 2017 No-Tax- Increase bond issue, including the construction of Middle School #4, and Elementary School #11. Both of these facilities are scheduled to open in Fall, Long- and short-term debt (6600) expenditures are expected to remain consistent between the two years. Objects 114

33 6100-Salaries Amounts paid to LEA employees who are considered to be in a position of permanent nature or hired temporarily, including personnel substituting for those in permanent positions. This includes gross salary for personal services rendered while on the LEA payroll Employee Benefits Amounts paid by LEAs on behalf of employees. These amounts are over and above the gross salary. Such payments are fringe benefits and, while not paid directly to employees, are part of the cost of salaries and benefits. These charges should be distributed to functions in accordance with the salary function of the employee or group of employees Purchased Services Amounts paid for services rendered by personnel who are not on the LEA s payroll and for other services that LEAs may purchase. While a product may or may not result from the transaction, the primary reason for the purchase is the service provided in order to obtain the desired result Supplies and Materials Amounts paid for material items of an expendable nature that are consumed, worn-out, deteriorate in use, or items that lose their identity through fabrication or incorporation into different or more complex units or substances. It should be noted that a more thorough classification of expenditures would be achieved by identifying the object with the function, for example, the type of supplies, such as audiovisual supplies or classroom teaching supplies. For evaluation of a particular supply object, supplies can be broken into subdivisions such as food and other supplies in the food services program. To determine the merit of prepared food versus raw food, two further breakouts could be used: (1) food prepared for serving and (2) unprepared food Capital Outlay Expenditures for the acquisition of capital assets or additions to capital assets. They include expenditures for land or existing buildings; improvements of grounds; construction of buildings; additions to buildings; remodeling of buildings; initial equipment; additional equipment; and replacement of equipment. Lease purchase principal and interest with intent to acquire title must be treated as Capital Outlay. It is important to differentiate between expenditure object Long- and Short-Term Debt Expenditures for the retirement of debt, the payment of interest on debt and the payment of fees. 115

34 FUND BALANCES (ALL FUNDS) The closing balances (June 30) fund balances in each Park Hill School District fund appears below. FUND ESTIMATED BUDGET General Fund 27,053,391 28,078,698 28,264,693 29,304,503 31,684,668 30,967,828 30,664,703 30,554, Special Revenue Fund 003-Debt Service Fund 9,868,480 10,149,910 12,671,861 20,837,412 18,481,966 11,578,917 14,152,353 18,349, Capital Projects Fund 10,641,900 10,143,770 11,087,928 12,766,805 9,715,810 8,763,697 7,037,302 6,199, Student Activity Fund 2,939,185 3,187,751 2,261,295 2,249,473 2,676,843 3,093,580 3,499,568 3,894, Food Services Fund (766,526) (579,691) (358,500) (265,236) (435,944) (510,884) (484,296) (366,402) 008-Bond Projects Fund 13,224,798 5,582,598 5,510,781 51, Community Services Fund (517,966) (182,940) 301, , , , , ,717 Grand Total 62,443,261 56,380,097 59,739,474 65,423,431 62,941,021 54,755,829 55,678,432 59,207,848 SIGNIFICANT CHANGES IN FUND BALANCES No significant changes in total operating fund balances (Fund 001, 002, 004, 005, 007, 011) are planned as the district is budgeting for operating fund balances to remain between 18 and 22% of prior year expenditures. Fund 002 has no balance as it is zeroed out at the end of each fiscal year via a state-approved transfer between Fund 001 and 002. Fund 003 balances may only be used to pay debt. The district is planning for the repayment of debt through school year. Fund 007 shows a negative fund balance that resulted from prior years. This balance is absorbed into the general fund and reported as a portion of the operating fund balance. Fund 008 shows no balance in forecasted years based upon a plan to sell approved general obligation bonds at a rate by which annual expenditures on bond projects will match the amount of bonds sold in that school year. 116

35 LEVEL TWO - SUMMARY DATA FOR ALL OPERATING FUNDS Level Two of the pyramid approach presents a summary of operating funds. Operating funds exclude debt service (Fund 003) and bond projects (Fund 008). This includes the revenues and expenditures for all fund types. To assist the reader, the data is organized by Revenues by Source, Expenditures by Object and Expenditures by Function. DISTRICT FUND SUMMARY (OPERATING FUNDS) REVENUE BY DISTRICT FUND (OPERATING FUNDS) The Park Hill School District accounts for operating revenues in six specific funds. ESTIMATED BUDGET FUND General Fund 82,617,481 84,343,352 83,251,275 84,834,519 88,816,456 90,460,781 92,520,482 95,015, Special Revenue Fund 32,441,259 35,919,211 39,997,154 42,162,753 46,519,996 48,157,997 49,857,271 51,802, Capital Projects Fund 3,998,249 6,635,612 9,984,764 9,743,766 4,981,781 5,145,058 5,322,216 5,523, Student Activity Fund 2,443,489 2,072,639 1,495,308 2,209,976 2,298,616 2,305,288 2,312,021 2,318, Food Services Fund 5,270,897 5,558,496 5,862,674 5,757,346 6,017,283 6,225,762 6,442,363 6,667, Community Services Fund 3,455,747 3,934,087 4,336,140 4,184,314 4,255,448 4,333,838 4,413,701 4,495,451 Grand Total 130,227, ,463, ,927, ,892, ,889, ,628, ,868, ,822,870 Explanation of Major Shifts from Current Year The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. In addition, increases in revenue are expected from the Early Childhood Special Education reimbursement (fully reimbursed by the state based upon prior year qualifying expenditures), and increased allocations and reimbursement within Federal Title programs (Title I, Title II, Title III). The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. 117

36 The sharp decrease in Fund 004 are due to moving a portion of the district s operating tax levy from Fund 004 to Fund 001, and moving all of the Classroom Trust Fund from Fund 004 to Fund 002. This movement between funds is a strategic due to the influx of capital dollars within Fund 008 (Bond) over the next three years. The slight increase in Fund 005 is due to activities planned by schools to increase student activity revenue, such as fundraisers. Fund 007 revenues are exclusively that of the school nutrition program and reflect an increase in participation and lunch prices which drive revenue higher. These increases are offset by increased expenditures due to increased participation. Increases in revenue into Fund 011 are exclusively from community services such as pre-school and fee-based child-care (Adventure Club). These revenues are expected to increase based upon increased participation in these programs Operating Funds Fund 001 Operating Fund/General/Incidental This fund is used to account for all financial resources except those required to be accounted for in another fund. Transactions in this fund are general operating expenditures that are not grouped by another fund. Typical expenditures here include, but are not limited to support staff salaries, benefits and instructional supplies and materials. Fund Special Revenue Fund/Teachers This fund is used to account for revenue sources legally restricted to expenditures for the purpose of certified salaries, health insurance, benefits, and tuition payments to other districts. Fund Capital Projects Fund/Building This fund is used to account for facility acquisition, construction, lease purchase, and other expenditures for classroom instructional equipment and support services equipment. Fund Student Activity Fund This fund is administered as a revenue and expenditure fund to account for specific transactions relating to services for public school pupils such as entertainment, publications, clubs, band, student council, and other extra-curricular activities. This fund is merged with the General (Incidental) Fund for final state reports. Fund Food Services Fund This fund is administrated as a revenue and expenditure fund to account for transactions relating to district food service operations. This fund is merged with the General (Incidental) Fund for final state reports. Fund 011 Community Services Fund/Education and Child Care This fund is administrated as a revenue and expenditure fund to account for specific transactions relating to Adventure Club, Pre School, Aquatic Center, and Community Education programs. This fund is merged with Operating Fund/General (Incidental) for final state reports. 118

37 EXPENDITURE BY DISTRICT FUND (OPERATING FUNDS) The Park Hill School District accounts for operating expenditures in six specific funds. ESTIMATED BUDGET FUND General Fund 39,296,445 42,312,873 44,287,027 47,550,756 51,893,862 53,631,049 54,587,876 56,176, Special Revenue Fund 70,585,417 72,184,288 73,879,387 77,066,794 81,062,425 83,704,569 87,093,002 89,251, Capital Projects Fund 6,664,048 11,873,837 13,936,628 12,496,583 8,032,776 8,097,171 8,048,611 7,860, Student Activity Fund 2,414,678 1,824,072 2,421,764 2,142,874 1,871,246 1,888,551 1,906,033 1,923, Food Services Fund 5,085,919 5,371,661 5,641,483 5,643,958 6,187,991 6,300,702 6,415,775 6,549, Community Services Fund 3,441,327 3,599,061 3,851,785 3,970,654 4,019,487 4,237,582 4,467,590 4,728,537 Grand Total 127,487, ,165, ,018, ,871, ,067, ,859, ,518, ,490,501 Explanation of Major Shifts from Current Year The increase in Fund 001 is largely due to increases in classified staffing to meet the service demand of student enrollment growth. In addition to additional employees, compensation increases are also a factor in the increase. Increases are also budgeted in contracted student transportation, and fixed cost items such as fuel, paper, textbooks, utilities and other items. Fund 001 increases are also due to increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. Increased expenditures in Fund 002 are also due to increased certified staffing (i.e. teachers, administrators, substitute teachers) to support enrollment growth as well as a 2.7% average compensation increase for the school year. The decrease in Fund 004 expenditures is primarily due moving most capital expenditures to Fund 008. The increase in Fund 007 expenditures is due to increased participation of students within the school lunch program, resulting in higher food, supply and labor costs. Revenue to support these expenditures are generated from Food Services sources, including school lunch prices, and federal revenue generated through participation in the National School Lunch Program. The increase in Fund 011 expenditures is due to the anticipated increased costs associated with an increase in participation in district community based programs, including pre-school, school-aged child care (Adventure Club), and Community Education. 119

38 Operating Funds Fund 001 Operating Fund/General/Incidental This fund is used to account for all financial resources except those required to be accounted for in another fund. Transactions in this fund are general operating expenditures that are not grouped by another fund. Typical expenditures here include, but are not limited to support staff salaries, benefits and instructional supplies and materials. Fund Special Revenue Fund/Teachers This fund is used to account for revenue sources legally restricted to expenditures for the purpose of certified salaries, health insurance, benefits, and tuition payments to other districts. Fund Capital Projects Fund/Building This fund is used to account for facility acquisition, construction, lease purchase, and other expenditures for classroom instructional equipment and support services equipment. Fund Student Activity Fund This fund is administered as a revenue and expenditure fund to account for specific transactions relating to services for public school pupils such as entertainment, publications, clubs, band, student council, and other extra-curricular activities. This fund is merged with the General (Incidental) Fund for final state reports. Fund Food Services Fund This fund is administrated as a revenue and expenditure fund to account for transactions relating to district food service operations. This fund is merged with the General (Incidental) Fund for final state reports. Fund 011 Community Services Fund/Education and Child Care This fund is administrated as a revenue and expenditure fund to account for specific transactions relating to Adventure Club, Pre School, Aquatic Center, and Community Education programs. This fund is merged with Operating Fund/General (Incidental) for final state reports. 120

39 REVENUE BY SOURCE (OPERATING FUNDS) In addition to District Funds, the Park Hill School District accounts for revenue by source. Sources specify the origin of the revenue, such as local, county, state, federal or other sources (noted as Non-Current ). ESTIMATED BUDGET SOURCE Revenue From Local Sources 93,446,583 95,896,920 98,263, ,413, ,911, ,270, ,916, ,039, Revenue From County Sources 3,642,241 3,543,745 4,411,870 3,950,831 4,035,920 4,123,575 4,213,901 4,307, Revenue From State Sources 28,098,371 33,281,034 36,695,268 37,749,417 38,738,917 39,931,920 41,162,613 42,614, Revenue From Federal Sources 4,990,541 5,679,726 5,527,305 5,727,328 6,141,522 6,227,736 6,485,318 6,753, Non-Current Revenue 49,386 61,971 29,031 51,767 62,120 74,544 89, ,344 Grand Total 130,227, ,463, ,927, ,892, ,889, ,628, ,868, ,822,870 Explanation of Major Shifts from Current Year The increase in revenue in Local Sources is primarily due to an anticipated increase in current, delinquent and Proposition C sales tax revenue and the growth of local revenue generating programs such as pre-school, school-aged childcare, and Community Education. Increases in County Sources come as a result of anticipated increases in state assessed utility valuation. The increase in State Sources is due to expected increases in the state foundation formula which will generate increased revenues based upon the overall enrollment growth seen over the last year. Budgeted increases in Federal Sources are due relatively to the increases planned for federally-supported programs such as Title I, Title II, Title III and IDEA, and the school lunch program. The abnormally high increase in revenue in Non-Current sources in is due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. Sources 121

40 5100-Revenue from Local Sources Revenue received directly by the school district, including local property taxes, Proposition C sales tax, School Food Service sales, student activity and fundraising revenues, and interest on investments Revenue from County Sources Revenues collected by the county and distributed to school districts, including county fines, escheats, and state assessed railroad and utility taxes Revenue from State Sources Revenues generated by state taxes or collected by the state and distributed to school districts through various formulas based on enrollment, attendance and/or demographic variables. These revenues include the state foundation formula, classroom trust fund, transportation reimbursement, reimbursement for Early Childhood Special Education and Parents as Teachers programming Revenue from Federal Sources Revenues generated at federal level and distributed to the state and/or LEA through the state. These include Title programs, IDEA reimbursement, Medicaid, School Lunch/Breakfast reimbursement for qualifying students, and various grants Non-Current Revenue Revenues such as the sale or refunding of general obligation bonds and sale of property. 122

41 EXPENDITURES BY OBJECT (OPERATING FUNDS) In addition to District Funds, the Park Hill School District also accounts for expenditures by object. An expenditure s object identifies the service or commodity obtained, such as salaries, employee benefits, purchased services, supplies, capital projects or debt. ESTIMATED BUDGET OBJECT Salaries 76,461,022 78,543,011 81,425,364 85,242,913 89,506,112 92,386,176 95,976,099 98,473, Employee Benefits 19,815,661 20,774,218 22,488,162 23,485,599 25,356,055 26,331,991 27,523,896 28,414, Purchased Services 15,067,311 15,418,306 16,287,854 16,752,546 18,735,637 19,314,384 18,946,525 19,429, Supplies and Materials 9,479,790 10,556,419 9,880,065 10,365,303 10,760,726 11,043,455 11,327,194 11,604, Capital Outlay 6,303,144 11,512,933 13,575,724 11,878,737 8,709,257 8,783,618 8,745,173 8,567, Long- and Short-Term Debt 360, , ,904 1,146, Grand Total 127,487, ,165, ,018, ,871, ,067, ,859, ,518, ,490,501 Explanation of Major Shifts from Current Year The increase in Object 6100-Salaries is attributed to the increase in staffing and budgeted compensation increases (2.7%) for all employee groups. The increase in Object 6200-Employee Benefits is due to an increase within salaries and a budgeted increase for employer paid health benefits. The increase in Object 6300-Purchased Services is primarily due to increases in contracted student transportation and increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. The increase in Object Supplies and Materials is largely due to increases in fixed cost items such as textbooks, fuel, paper, utilities and other items. The significant increase in Object 6500-Capital Outlay expenditures is primarily due the expenditures related to the projects outlined in the April, 2017 No-Tax- Increase bond issue, including the construction of Middle School #4, and Elementary School #11. Both of these facilities are scheduled to open in Fall, Long- and short-term debt (6600) expenditures are expected to remain consistent between the two years. Objects 123

42 6100-Salaries Amounts paid to LEA employees who are considered to be in a position of permanent nature or hired temporarily, including personnel substituting for those in permanent positions. This includes gross salary for personal services rendered while on the LEA payroll Employee Benefits Amounts paid by LEAs on behalf of employees. These amounts are over and above the gross salary. Such payments are fringe benefits and, while not paid directly to employees, are part of the cost of salaries and benefits. These charges should be distributed to functions in accordance with the salary function of the employee or group of employees Purchased Services Amounts paid for services rendered by personnel who are not on the LEA s payroll and for other services that LEAs may purchase. While a product may or may not result from the transaction, the primary reason for the purchase is the service provided in order to obtain the desired result Supplies and Materials Amounts paid for material items of an expendable nature that are consumed, worn-out, deteriorate in use, or items that lose their identity through fabrication or incorporation into different or more complex units or substances. It should be noted that a more thorough classification of expenditures would be achieved by identifying the object with the function, for example, the type of supplies, such as audiovisual supplies or classroom teaching supplies. For evaluation of a particular supply object, supplies can be broken into subdivisions such as food and other supplies in the food services program. To determine the merit of prepared food versus raw food, two further breakouts could be used: (1) food prepared for serving and (2) unprepared food Capital Outlay Expenditures for the acquisition of capital assets or additions to capital assets. They include expenditures for land or existing buildings; improvements of grounds; construction of buildings; additions to buildings; remodeling of buildings; initial equipment; additional equipment; and replacement of equipment. Lease purchase principal and interest with intent to acquire title must be treated as Capital Outlay. It is important to differentiate between expenditure object Long- and Short-Term Debt Expenditures for the retirement of debt, the payment of interest on debt and the payment of fees. 124

43 EXPENDITURES BY FUNCTION (OPERATING FUNDS) In addition to District Funds, the Park Hill School District also accounts for expenditures by function. Expenditures by function describe the action, purpose or program in which activities are performed such as special education services. FUNCTION ESTIMATED BUDGET Instruction 70,007,591 76,528,998 77,043,190 75,059,327 78,657,052 81,124,782 84,256,108 86,319, Regular Programs 48,860,562 55,221,974 54,998,304 51,675,595 54,833,777 56,661,276 58,936,487 60,373, Special Programs 15,978,372 16,529,508 17,061,705 17,887,765 18,983,098 19,529,644 20,276,274 20,825, Career Education Programs 39, ,591 58,096 53,415 75,700 76,706 77,732 78, Student Activities 4,281,732 3,616,901 3,781,758 4,136,449 3,614,216 3,691,605 3,784,545 3,848, Payments to Other Districts 847, ,023 1,143,327 1,306,103 1,150,261 1,165,551 1,181,070 1,192, Support Services 53,324,058 56,298,141 62,463,379 65,545,080 70,005,596 72,128,656 73,421,510 75,063, Pupils 4,267,924 4,380,581 5,092,389 5,277,397 5,475,168 5,657,741 5,886,373 6,028, Instructional Staff 7,466,269 7,401,428 12,857,966 13,736,959 16,026,168 16,817,548 17,497,960 17,827, General Administration 1,886,755 1,924,416 1,935,970 1,987,745 2,086,276 2,138,795 2,203,848 2,249, School Administration 6,922,652 7,195,281 7,348,866 7,688,740 8,092,841 8,372,062 8,723,636 8,937, Business 31,300,790 33,822,143 33,151,328 34,441,300 35,709,474 36,443,753 36,309,458 37,150, Central Office 1,479,667 1,574,292 2,076,860 2,412,939 2,615,669 2,698,757 2,800,235 2,868, Community Services 3,678,401 3,889,041 4,030,948 4,276,527 4,355,138 4,560,045 4,798,973 5,069, Community Services 1,848,802 1,983,072 2,152,003 2,288,300 2,384,610 2,515,146 2,652,870 2,808, Community Recreation Services 218, , , , , , , , Early Childhood Program 1,550,053 1,588,584 1,538,936 1,631,695 1,643,505 1,701,763 1,786,022 1,881, Non-Public School Pupils Services 12,481 14,699 11,820 8,139 13,405 13,875 14,360 14, Custody/Care of Children Services 36,596 38,931 45,920 51,255 54,838 56,492 58,198 60, Other Community Services 11,946 11,968 9,492 29,739 7,445 7,668 7,898 8,

44 FUNCTION ESTIMATED BUDGET FacilitiesAcq/Construction Services 116,878 88, ,652 2,844,164 50,001 46,141 42,296 38, FacilitiesAcq/Const. Services 116,878 88, ,652 2,844,164 50,001 46,141 42,296 38, Long-andShort-TermDebt 360, , ,904 1,146, Principal 289, , ,260 1,125, Interest 71,366 60,702 49,644 20, OtherDebtRelatedFees Grand Total 127,487, ,165, ,018, ,871, ,067, ,859, ,518, ,490,501 Explanation of Major Shifts from Current Year The increase in Function 1000-Instruction expenditures reflects compensation increases for all district staff as well as staffing increases to maintain student to staff ratios. The increase in Function 3000-Community Services expenditures is due to the anticipated increased costs associated with an increase in participation in district community based programs, including pre-school, school-aged child care, and Community Education. The increase in 5000-Long- and Short-Term Debt expenditures is primarily due to increases in existing lease payments, including the district support services lease and DNR energy loan. Functions Instruction. Instruction includes the activities dealing directly with the teaching of pupils, or the interaction between teachers and pupils. Teaching may be provided for pupils in a school classroom, in another location such as in a home or hospital, and in other learning situations such as those involving cocurricular activities. Instruction may also be provided through some other approved medium such as television, radio, telephone, and correspondence. Included here are the activities of aides or assistants of any type (clerks, graders, teaching machines, etc.) that assist in the instructional process Regular Programs. Instructional activities that provide pupils in grades K-12 with learning experiences to prepare them for activities as citizens, family members, and non-vocational workers; and are contrasted with programs designed to improve or overcome physical, mental, social, and/or emotional handicaps. 126

45 1200-Special Programs. Instructional activities designed primarily to deal with pupil exceptionalities. The Special Program Service Area includes pre-kindergarten, kindergarten, elementary and secondary service for the (1) Gifted and Talented; (2) Mentally Retarded; (3) Physically Handicapped; (4) Socially and/or Emotionally Handicapped; (5) Culturally Disadvantaged; (6) Pupils with Learning Disabilities; (7) Bilingual Education; and (8) Other Special Programs for other types of students Career Education Programs. Learning experiences which will provide individuals with the opportunity to develop the necessary knowledge, skills, and attitudes needed for employment in an occupational area Student Activities. Direct and personal services for public school pupils, such as entertainment, publications, clubs, band and orchestra, that are managed or operated by the student body under the guidance and direction of an adult, and are not a part of the regular instructional program. These activities are characterized by being not-forcredit, other than school hours, interests of students and partially or wholly self-sustaining via dues and admissions. Codes may be incremented sequentially by one to cover the various activities individually. Contracted non-route transportation expenses incurred transporting students to and from activity or field trips are included here Payments to Other Districts. Conduit-type payments to the district generally for tuition for services rendered to pupils residing in the paying district. (These are not counted in state totals of expenditures.) Support Services. Support services are those services which provide administrative, technical (such as guidance and health), and logistical support to facilitate and enhance instruction, and to a lesser degree, community services. Support services exist as adjuncts for the fulfillment of the objectives of instruction, rather than as entities within themselves Pupils. Activities which are designed to assess and improve the well-being of pupils and to supplement the teaching process Instructional Staff. Activities associated with assisting the instructional staff with the content and process of providing learning experiences for pupils General Administration. Activities concerned with establishing and administering policy for operating the local education agency School Administration. Those activities concerned with overall administrative responsibility for a single school or a group of schools Business. Activities concerned with purchasing, paying, transporting, exchanging, and maintaining goods and services for the district. Included are the fiscal services, property and accounting services, operation and maintenance services, and internal services for operating all schools. This code series is not meant to imply an organizational structure or administrative flow for the district Central Office. Activities, other than general administration, which support each of the other instructional and supporting services programs. These activities include planning, research, development, evaluation, information, staff, statistical, and data processing services Community Services. Community Services consist of those activities that do not directly relate to providing education for pupils in the LEA. These include services provided by the LEA for the community as a whole or some segment of the community and community welfare activities Community Services. Activities concerned with directing, managing, and supervising Community Services Community Recreation Services. Activities concerned with directing, managing, and supervising Community Services. 127

46 3500-Early Childhood Program. Activities providing programs for Parents as Teachers and for three and four-year-old children, outside of a regular classroom setting, by screening, and through parent education. Direct instruction programs should be in Function 1101, Early Childhood, or Function 1281, Special Education Non-Public School Pupils Services. Activities concerned with directing, managing, and supervising non-public school services CustodyCare of Children Services. Activities concerned with directing, managing, and supervising custody and care of children services Other Community Services. Activities concerned with directing, managing, and supervising other Community Services Facilities Acquisition/Construction Services. Those activities concerned with the acquisition of land and buildings; remodeling buildings; the construction of buildings and additions to buildings; initial installation and extensions of service systems and other built-in equipment; and improvements to sites. Costs of these items are charged here within the Capital Projects Fund Facilities Acquisition and Construction Services. Activities concerned with directing, managing, and supervising facility acquisition and construction services Long- and Short-Term Debt. Activities servicing the debt of the LEA. Categories of debt services are listed under objects Principal. Amounts paid for bonded indebtedness incurred by the school district, energy loans or other principal payments Interest. Interest paid by the school district Other Debt Related Fees. Fees associated with the repayment of debt. 128

47 FUND BALANCES (OPERATING FUNDS) The closing balances (June 30) fund balances in each Park Hill School District fund appears below. FUND ESTIMATED BUDGET General Fund 27,053,391 28,078,698 28,264,693 29,304,503 31,684,668 30,967,828 30,664,703 30,554, Special Revenue Fund Capital Projects Fund 10,641,900 10,143,770 11,087,928 12,766,805 9,715,810 8,763,697 7,037,302 6,199, Student Activity Fund 2,939,185 3,187,751 2,261,295 2,249,473 2,676,843 3,093,580 3,499,568 3,894, Food Services Fund (766,526) (579,691) (358,500) (265,236) (435,944) (510,884) (484,296) (366,402) 011-Community Services Fund (517,966) (182,940) 301, , , , , ,717 Grand Total 39,349,984 40,647,589 41,556,832 44,586,019 44,407,812 43,176,912 41,526,079 40,858,448 SIGNIFICANT CHANGES IN FUND BALANCES No significant changes in total operating fund balances (Fund 001, 002, 004, 005, 007, 011) are planned as the district is budgeting for operating fund balances to remain between 18 and 22% of prior year expenditures. Fund 002 has no balance as it is zeroed out at the end of each fiscal year via a state-approved transfer between Fund 001 and 002. Fund 004 shows a negative trend in forecasted years due to expenditures on planned capital projects. The balance in each of the forecasted years meets the Financial FACT team s goal of 65 to 85% of the average of the prior three year Fund 004 Capital expenditures. Fund 007 shows a negative fund balance that resulted from prior years. This balance is absorbed into the general fund and reported as a portion of the operating fund balance. 129

48 LEVEL THREE -SUMMARY DATA FOR INDIVIDUAL FUNDS Level Three of the pyramid approach presents all district funds by individual fund. This includes the revenues and expenditures for all fund types. To assist the reader, the data is organized by Revenue by Source, and Expenditures by Object, and Expenditures by Function. REVENUE BY SOURCE (INDIVIDUAL DISTRICT FUNDS) (ALL FUNDS) In addition to District Fund, the Park Hill School District accounts for revenue by source. Sources specify the origin of the revenue, such as local, county, state, federal or other sources (noted as Non-Current ). ESTIMATED BUDGET FUND/SOURCE General Fund 82,617,481 84,343,352 83,251,275 84,834,519 88,816,456 90,460,781 92,520,482 95,015, Revenues From Local Sources 72,814,957 74,255,816 72,435,375 74,215,410 77,698,107 79,167,662 80,879,672 83,014, Revenue From County Sources 3,015,922 2,690,327 3,448,507 2,985,240 3,030,019 3,075,469 3,121,601 3,168, Revenue From State Sources 3,729,512 3,917,874 4,191,255 4,130,011 4,281,375 4,441,133 4,607,595 4,781, Revenue From Federal Sources 3,054,782 3,479,336 3,176,138 3,503,858 3,806,955 3,776,517 3,911,614 4,051, Non-Current Revenue 2, Special Revenue Fund 32,441,259 35,919,211 39,997,154 42,162,753 46,519,996 48,157,997 49,857,271 51,802, Revenues From Local Sources 8,909,742 9,423,633 10,298,859 10,795,953 11,335,921 11,902,904 12,498,256 13,123, Revenue From County Sources 509, , , , , , , , Revenue From State Sources 23,022,278 25,761,162 28,997,544 30,628,926 34,409,307 35,441,587 36,504,834 37,782, Revenue From Federal Sources Debt Service Fund 9,512,462 9,638,142 30,566,506 19,522,138 10,263,624 10,475,958 10,703,417 10,976, Revenues From Local Sources 9,044,599 9,197,631 9,883,627 10,201,857 9,765,989 9,970,858 10,190,740 10,456, Revenue From County Sources 467, , , , , , , , Non-Current Revenue ,110,000 8,830, Capital Projects Fund 3,998,249 6,635,612 9,984,764 9,743,766 4,981,781 5,145,058 5,322,216 5,523,