For Fiscal Year July 1, June 30, 2013

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1 For Fiscal Year July 1, June 30, 2013 Artist: Erica Stepp School: Mountain Range High School Grade: 10

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4 Association of School Business Officials International This Meritorious Budget Award is presented to Adams 12 Five Star Schools For excellence in the preparation and issuance of its school system budget for the Fiscal Year The budget is judged to conform to the principles and standards of the ASBO International Meritorious Budget Awards Program. President Executive Director

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6 BOARD OF EDUCATION Mr. Mark D. Clark... President Mr. Norman L. Jennings... Vice President Mr. R. Max Willsey... Secretary Dr. Frederick J. Schaefer... Director Mr. Enrico Figueroa... Director Frances Mullins... Executive Assistant to the Board SENIOR STAFF Christopher Gdowski... Superintendent of Schools Shelley Becker... Chief Financial Officer Paul Gordon... Chief Academic Officer Mark Hinson... Chief Human Resources Officer Ashish Mahajan... Chief Information Technology Officer Robert Webber... Chief Operating Officer Cheryl Karstaedt, Esq... General Counsel Pat Hamilton... Executive Director of Business Operations Henri Vos... Executive Director of Facilities Kim Walsh... Executive Director of School Leadership Elementary Schools Kari Cocozzella... Executive Director of School Leadership Elementary Schools Janette Walters... Executive Director of School Leadership Secondary Schools Dave Bahna... Director of School Assessment Amy Bruce... Director of Grants and Federal/State Programs Dawn Barnard... Executive Assistant i

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8 TABLE OF CONTENTS Board of Education/Senior Staff... i INTRODUCTORY SECTION Executive Budget Summary... 1 ORGANIZATIONAL SECTION District Organization/Facilities/Services Organizational Chart Fund Accounting Basis of Budgeting District-Wide Goals and Objectives Board of Education General Ends Policy and Budget Goals Revenue Assumptions for Budget Development Expenditure Assumptions for Budget Development Financial Policies Budgetary Statutes, Policies & Guidelines Amendments or Revisions of Budget Summary by Month of Significant Budget Preparation Participation in the Budget Process FINANCIAL SECTION- GENERAL FUND Assumptions & Planning Criteria Mill Levy Override Elections General Fund Summary of Revenues, Expenditures, & Fund Balance General Fund Summary of Revenues General Fund Summary of Expenditures FINANCIAL SECTION- OTHER FUNDS Governmental Designated-Purpose Grant Fund Statement of Program Governmental Designated-Purpose Grant Fund, Statement of Revenues, Expenditures, & Fund Balance Governmental Designated-Purpose Grant-Special Revenue Fund Interscholastic Athletic Fund Statement of Program Interscholastic Athletic-Statement of Revenues, Expenditures, & Fund Balance Interscholastic Athletic-Special Revenue Fund Pupil Activity Fund Statement of Program Pupil Activity Agency Fund Bond Redemption Fund Statement of Program Bond Redemption- Debt Service Fund Bond Redemption- General Obligation Bonds iii

9 Bond Redemption Fund- Net Outstanding Debt per Pupil Bond Redemption Fund Debt Guidelines Print Shop Fund Statement of Program Print Shop Internal Service Fund Insurance Reserve Fund Statement of Program Insurance Reserve Statement of Revenues, Expenditures, & Fund Balance Capital Reserve Fund Statement of Program Capital Reserve Statement of Revenue, Expenditures, & Fund Balance Building Capital Projects Fund Statement of Program Building - Capital Projects Fund Nutrition Services Proprietary Fund Statement of Program Nutrition Services- Proprietary Fund Before, After & Summer Enrichment Program Fund Statement of Program Before, After & Summer Enrichment Program Fund- Proprietary Fund Charter Schools Academy General Fund Academy Insurance Reserve Fund Academy Capital Reserve Fund Academy Governmental Designated-Purpose Grant Fund Academy Pupil Activity Agency Fund Academy Nutrition Services Proprietary Fund Academy Before and After School Education Program Proprietary Fund Stargate General Fund Stargate Insurance Reserve Fund Stargate Foundation Construction/Bond Fund Stargate Governmental Designated-Purpose Grant Fund Stargate Pupil Activity Agency Fund COVA General Fund COVA Governmental Designated-Purpose Grant Fund Westgate General Fund Westgate Insurance Reserve Fund Westgate Capital Reserve Fund Westgate Governmental Designated-Purpose Grant Fund Westgate Pupil Activity Agency Fund Prospect Ridge General Fund Prospect Ridge Capital Reserve Fund Prospect Ridge Governmental Designated-Purpose Grant Fund Global Village GLOSSARY Glossary of Terms iv

10 June 20, 2012 To the Board of Education and Patrons of Adams 12 Five Star Schools: Based on the State s latest revenue forecast and the Colorado Joint Budget Committee finalizing its figure-setting for K-12 education, Adams 12 Five Star Schools anticipates needing to cut $12 million from its budget for Fiscal Year Since the Fiscal Year , Adams 12 has cut approximately $59.6 million from its budget. Faced with budget cuts over multiple years, the Five Star District has had to cut jobs, reduce compensation, eliminate programs, increase fees and raise class sizes. The graph below depicts the amount of per pupil funding that Adams 12 has or is projected to receive. As shown, the per pupil state funding in Fiscal Year and Fiscal Year is well below the funding we received four years ago, while costs have increased for instructional programming, utilities, healthcare and the state s retirement plan. Adams 12 Five Star Schools Per Pupil Funding

11 Budget Reduction Process As was the case for past budget cuts, the Five Star District developed a multi-step process for getting input from staff and the community for the Fiscal Year budget cut plan. Staff, parents and community members provided their budget values and priorities during a multi-step public engagement process. District leadership considered the input of more than 4,250 people who participated in the budget survey, and about 100 people who participated in two dialogue sessions in February Through proposed reductions in compensation, this plan minimizes further job loss. Previous budget cuts involved more job losses and fewer reductions in employee compensation. The net number of positions eliminated for Fiscal Year is about 60 FTE (fulltime equivalents). The breakdown by employee group: Administrative/Technical 4.33 FTE (a 2.1 percent cut) Classified (support staff) 4.82 FTE ( a 0.5 percent cut) Certified (teachers) FTE (a 2.5 percent cut) Normal attrition is expected to account for most of the reduction in teaching positions. The plan also calls for a 3 percent reduction in compensation for employees, or about $6.8 million, through such options as furlough days and an increased contribution to the retirement system (PERA) for employees. Specifics related to employee contributions will be determined through negotiations. Given the current funding situation at the state level, without additional sources of revenue, school districts will continue to face substantial cuts in the future. Areas of Focus for the Fiscal Year School Year The proposed budget is designed so that the district achieves, or makes substantial progress toward achievement, of Ends established by the Board of Education. Areas of focus for the Fiscal Year school year are largely the same as during the school year and include the following: Continued implementation of the Teaching/Learning Cycle throughout all District schools so that educators can share best teaching practices with one another through collaborative planning opportunities. T/LC implementation results in focused instruction which takes into account each child s strengths and growth. We anticipate acceleration in the number of students who master state content standards as T/LC practices become more institutionalized in our District; Expanded student participation in career and technical education (CTE) courses through the Bollman Technical Education Center; expansion of additional credit recovery options for students short of credits required for graduation; and implementation of a skills-based diploma that will be awarded upon satisfactory

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13 EXECUTIVE BUDGET SUMMARY FISCAL YEAR This summary provides an overview of the adopted Fiscal Year Budget for the Adams 12 Five Star School District. State law requires the Board of Education to adopt and appropriate a budget for all District funds each year. Information in this summary is based upon the adopted budget submitted to the Board of Education in June Supporting data for the information contained in this summary may be found in the detailed information reported in the other sections of this document. The budget document is available upon request from the Financial Services Department of the District. Financial Budgeting and Accounting The District follows generally accepted accounting principles (GAAP) established by the Governmental Accounting Standards Board (GASB) for both accounting and budgeting. The majority of the day-to-day operations of the school district are accounted for in the General Fund. Complete definitions of each of the funds maintained by the District are presented later in this executive summary. The Board of Education has established an important "Ends" statement - expectations for District staff and our students - it is: Adams 12 Five Star Schools exists so the students it serves are well-prepared for the next stage of their lives and obtain the skills, knowledge and expertise to thrive in our world, at a level that justifies the resources used. The Board monitors the work of district staff on an ongoing basis and holds the district superintendent accountable for accomplishment of these Ends. The superintendent, along with district staff, prepares monitoring reports on a regularly scheduled basis. These monitoring reports indicate whether the District is meeting the policies set by the Board. The Board of Education Ends priorities are: 1. The first priority is that students enrolled in our schools have the knowledge, learning and life skills necessary to prepare them for further learning in the next grade level. a. Using appropriate assessment data the policy interpretations shall include district, school and sub-group performance. b. Monitored annually October. 2. The second priority is that with decreasing variability among the District high schools - at a minimum the District will consistently increase its four year graduation rate at a rate greater than the state average; at a minimum, the District will consistently increase its five year graduation rate at a rate greater than the state average; of the students who choose to pursue post-secondary education, the number and proportion of graduates requiring remedial college course work or training will decrease each year; and of the students who choose to enter the workforce, the number and proportion of graduates able to do so without further workforce training will increase each year. 1

14 EXECUTIVE BUDGET SUMMARY FISCAL YEAR a. Using appropriate data, the policy interpretations shall include district, school and sub-group graduation rates and a report on how many graduates required remedial courses or training. b. Monitored annually April. 3. The third priority is that the educational value provided to students who are served by Adams 12 Five Star Schools shall be reasonable compared to the costs of the resources used to provide that education. a. The value added by educating school-age children and young adults and graduating them shall be reasonable compared to the costs expended annually toward those ends. b. Monitored annually May. 4. In order to achieve the General Ends Policies and for all Adams 12 Five Star Schools students to become more effective learners, aspirations of the District are prioritized and being responsive to the vision(s) of our community, the goals are as follows: a. Throughout Adams 12 Five Star Schools, there will be consistent technology resources provided to all schools. b. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current magnet schools and programs at various locations throughout the District. c. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current technical educational programs at various locations throughout the District. d. Adams 12 Five Star Schools will develop and offer full day kindergarten programs at each elementary school throughout the District. e. Adams 12 Five Star Schools will expand the world language programs to the elementary level beginning between 1 st and 3 rd grade and until serving all grades kindergarten through 12 th grade. f. Adams 12 Five Star Schools will develop and offer pre-school programs at each elementary school throughout the District. i. Monitored annually February. In the fall, the District begins to forecast pupil enrollment. This forecast is used to develop other key budget assumptions as well as determine allocations for school staffing equivalents and budgets. In addition to the pupil enrollment forecasts, the District has specific budget development goals for the fiscal year. During May and June, the Board deliberates the proposed budget and provides opportunities for public input. The Board must adopt and appropriate the budget by formal resolution no later than June 30. 2

15 EXECUTIVE BUDGET SUMMARY FISCAL YEAR Budget Goals Board Policy 2.3, Financial Planning and Budgeting, states the following: Financial planning for any fiscal year or the remaining part of any fiscal year shall not deviate materially from Board s Ends priorities, risk fiscal jeopardy, or fail to be derived from a multi-year plan. Further, without limiting the scope of the foregoing by this enumeration, he or she shall not: 1. Fail to include credible projections of revenues, carryover funds and expenses, separation of capital and operational items, and disclosure of planning assumptions for the organization as a whole, for each school and operating unit, and for each fund. 2. Provide less for Board prerogatives during the year than is set forth in the Cost of Governance policy. 3. Budget in a manner that risks incurring those conditions prohibited in our policy on Financial Condition and Activities Policy. Budget Preparation Timeline School budgets are revised in December based on actual enrollment following the October pupil count process. In January multi-year projections are updated based on new assumptions including enrollment projections. In February and March funding needs and the prioritization of the allocation of resources are reviewed. Budget information is distributed to schools and departments. Throughout the month of April, school and department budgets are completed and submitted to Financial Services. The proposed budget information is prepared while receiving input and review from the District Budget Review Advisory Committee. In May the Board of Education receives the proposed budget and the public budget hearing is held. During the second board meeting in June, the Board adopts the budget along with an appropriation resolution. General Fund The General Fund adopted budget expenditures and transfers for Fiscal Year totals $ million. Available funds are comprised of the beginning fund balance plus the revenues projected to be received during the ensuing fiscal year. Decreases in the revenues mainly result from adjustments by the state legislature related to the school finance act. 3

16 EXECUTIVE BUDGET SUMMARY FISCAL YEAR Beginning Fund Balance Colorado Statutes require that certain reserves must be funded while other designations may be approved by the Board of Education. The total fund equity, both reserved and available for appropriation in Fiscal Year is estimated to be $27.05 million. Fund balance is generally defined as the difference between a fund s assets and liabilities. An adequate fund balance is necessary for numerous reasons, such as to have funds available in case of an emergency or unexpected events, to maintain or enhance the District s financial position and related bond ratings, to provide cash for operations prior to receipt of property tax revenues, and to maximize investment earnings. Sources of Revenue The Public School Finance Act of 1994 provides a funding formula, which generates $275,530,040 for the District s General Fund revenue (including mill levy override funds and Charter Schools). The largest source of revenue for the General Fund, approximately 59.9%, is from state aid. Local property taxes provide a total of 31.1%, which includes special voter approved tax equal to 13.5% of total revenue. Other sources of revenue include specific ownership taxes from vehicle registrations, other local sources, and other state categorical sources. Major Revenue Source Assumptions The major changes in revenue sources for Fiscal Year are as follows: Use of enrollment projections, provided by the Planning Department, with an enrollment net increase of 869 pupils, including charter schools. Changes to the School Finance Act for Fiscal Year : o o o o For Fiscal Year the statewide base per pupil funding was increased for inflation by 3.7%. Prior to application of the negative factor, Total Program Funding for Adams 12 is estimated at $328,442,055 and takes into account inflation, growth in pupil count, atrisk counts, assessed valuation and specific ownership taxes. The negative factor for Fiscal Year was calculated at 16.11%, resulting in a difference of ($52,912,015) to Total Program Funding. Statewide Average Per Pupil Funding was $6,474 for Fiscal Year and will remain the same for Fiscal Year For Adams 12 the per pupil revenue is $6,278. 4

17 EXECUTIVE BUDGET SUMMARY FISCAL YEAR The following graph and table illustrate General Fund sources of revenue for Fiscal Year Changes in total resources available in the General Fund from Fiscal Year to Fiscal Year : Fiscal Year Fiscal Year Resource Revised Adopted Budget Adopted Budget State Equalization Funding $ 220,795,294 $ 225,789,502 Property Tax (Finance Act) 45,907,828 45,995,990 Property Tax (Override) 35,400,000 35,400,000 Specific Ownership Tax 8,000,000 8,000,000 Categoricals 8,732,900 10,058,500 Tuition/Fee's 4,381,111 4,007,111 Rentals-Community Use 805, ,412 Miscellaneous 1,028, ,320 Allocation to Charter Schools (63,100,298) (68,961,334) Total Resources Available $ 261,950,568 $ 262,008,501 5

18 EXECUTIVE BUDGET SUMMARY FISCAL YEAR Total Program Funding The Total Program Funding formula is set forth by the School Finance Act of Total Program Funding, or the portion of state and local revenue available from school finance laws, is determined using a complex per pupil revenue formula multiplied by a pupil count adjusted to equate to fulltime equivalent pupils. During each session of the General Assembly, legislators set a base dollar amount for each funded pupil in Colorado s 178 school districts. Legislators also review factors related to staffing costs, cost-of-living, district size and at-risk pupils. The end result of the formula is the amount the state deems necessary to educate a child in a given district. Categorical Programs Funding In addition to the Total Program funding provided by the Public School Finance Act of 1994, Colorado school districts receive state funding to pay for specific programs designed to serve particular groups of students or particular student needs. Such programs are referred to as categorical programs. Adams 12 Five Star Schools expects to receive approximately $10.0 million in Fiscal Year in categorical funding for vocational education, special education, transportation and gifted and talented. Student Enrollment A key element of the Total Program Funding formula is the Funded Pupil Count. The Funded Pupil Count is equal to the number of students enrolled in the district as of October 1 adjusted for characteristics of certain student groups such as half-time kindergarten students. 6

19 EXECUTIVE BUDGET SUMMARY FISCAL YEAR The following graph illustrates the past history and projected future funded pupil counts for the District. Projected future counts are shown as estimated in the year of projection. Actual funded count includes Fiscal Year to ; projected funded count includes Fiscal Year to

20 EXECUTIVE BUDGET SUMMARY FISCAL YEAR Assessed Valuation, Property Tax Mill Levy and Property Tax Assessed valuation is the taxable value of real estate as established by the county assessor. Assessed values for various property classifications are taxed at the applicable rates set by state law. The 2012 rate for commercial property is 29% and the rate for residential property is 7.96%. Each odd numbered year, property is reassessed based on market activity from the preceding 18- month period. This process is the result of the Gallagher amendment to the state constitution passed in The property tax rate and related revenues are determined by calculating the growth and inflation (Denver-Boulder CPI for the previous year) times the prior year property tax levy and dividing by the total assessed value for Fiscal Year Annual Property Tax Information Summary Homeowner Tax Burden Assessment Year Estimated Market value* $ 206,373 $ 210,500 $ 210,500 $ 210,500 $ 204,185 $ 198,060 $ 196,079 $ 194,118 Assessment rate 7.96% 7.96% 7.96% 7.96% 7.96% 7.96% 7.96% 7.96% Assessment value $ 16,427 $ 16,756 $ 16,756 $ 16,756 $ 16,253 $ 15,766 $ 15,608 $ 15,452 School District Mill Levies: School Finance Levy Abatement Levy Override Levy Debt Service Levy Total District Levy School taxes before inflation $ 1,130 $ 1,124 $ 1,123 $ 1,082 $ 1,132 $ 1,106 $ 1,098 $ 1,086 *Estimated market value increase 2% per year until 2006, 0% for 2007, 2008, (3%) for 2009, 2010, (1%) for 2011, 2012 and 0% for

21 EXECUTIVE BUDGET SUMMARY FISCAL YEAR This is an example only, each residential property is unique and the final levy must be set in December 2012 after all factors are finalized. Expenditures Expenditures for the General Fund are allocated by program which identifies specific activities such as regular education, special education, maintenance, etc. Within each program, expenditures are further allocated to specific objects such as salaries, benefits, purchased services, etc. Expenditures by Program General Fund expenditures are grouped into major program categories as specified by the Colorado Uniform Chart of Accounts. The majority of the expenditures budgeted within the General Fund are allocated for direct instruction and student support. These categories include costs for all teachers, counselors, teacher training, library media, classroom supplies and equipment, field trips and support of extra-curricular programs. 9

22 EXECUTIVE BUDGET SUMMARY FISCAL YEAR Expenditures by Object In addition to budgeting expenditures by program, expenditures are also budgeted into groupings referred to as objects. Objects refer to the service or item that is being purchased. There are eight major object groups required by the state. Those groups are salaries, benefits, purchased professional services, purchased property services, other purchased services, supplies, property and other uses. Costs for salaries, benefits and supplies are self-explanatory. Purchased professional services include non-employee costs for services provided by lawyers, auditors, bankers and consultants. Purchased property services include non-employee costs for repair of buildings and equipment, rental of facilities or equipment and water and trash services. Other purchased services include costs related to field trips, tuition paid to other entities, communications, printing, postage, insurance premiums and travel. Major Changes in Budgeted Expenditures The changes in budgeted expenditures for Fiscal Year mainly result from the following components: Budget realignments of ($12.3 million) in Fiscal Year The District is seeking to have employees contribute 1.5% in September and 2.0% in January toward the employees mandatory PERA increase under the statute through a reduction in salary. The District is proposing three furlough days and not granting experience steps. (The District does plan to grant education lanes.) Additionally, the District is pursuing a reduction in the large retirement stipend that employees receive upon retirement with certain years of service. PERA rate increase of.90% Health insurance increase of 6.0% Enrollment increases, including charter schools, of 869 pupils 10

23 OTHER DISTRICT FUNDS Special Revenue Funds Designated-Purpose Grant Fund Designated-purpose grants are external funds that are received mostly from the U.S. Department of Education to provide for a particular group or need. Generally, the funds must supplement the District s expenditures for these activities/needs and should not be used to supplant District responsibilities. The fund is used to account for a variety of grants that are detailed in the specific budget section. The Grant Fund maintains an ending fund balance of zero, as expenditures are only incurred based upon available revenue. Expenditures are estimated to be $19.4 million in Fiscal Year Athletic Fund The Athletic Fund provides the funding for the day-to-day operation of the athletic programs at five high schools (20 sports) and intramurals at seven middle schools and three K-8 schools. Financial support for student athlete transportation, athletic uniforms, materials & supplies, equipment, facility maintenance, game officials, game workers, student athlete awards, and League and State membership dues are all provided by this fund. In Fiscal Year , the planned expenditure budget totals $936 thousand. Agency Funds Pupil Activity Fund This fund is used to account for resources obtained from parent organizations, community members/parents and other fund raising organizations. The Pupil Activity Fund is used to record financial transactions related to school-sponsored pupil organizations and activities. These activities are self-supporting and do not receive any District financial support. In Fiscal planned expenditures total $7.0 million. 11

24 OTHER DISTRICT FUNDS Debt Service Funds Bond Redemption Fund Colorado Revised Statutes require that the revenues from a tax levy for the purpose of satisfying bond obligations, both principal and interest, be recorded in the Bond Redemption Fund. The amount necessary to service the voter-approved long-term debt in the District is approximately $38.4 million for Fiscal Year The projected mill levy is anticipated to be mills. During the fiscal year, $19,670,697 is budgeted for reduction of debt principal. The District will have $305,713,676 in outstanding principal at the end of Fiscal Year The Board of Education approved a bond issue request and the voters approved $180 million of additional school bonds in November Bonds were issued in the amount of $95 million in February 2005, $38.3 million in April 2006, $42.4 million in March 2007 and the remaining $4.3 million were issued in January The ending fund balance in the Bond Redemption Fund is sufficient to make the subsequent December debt service payment. This is necessary as current year revenues are not received in time to cover this payment. The majority of tax collections are received from February through June each year. Sub-Funds of the General Fund Insurance Reserve Fund The Insurance Reserve Fund is used to account for the resources to self-insure a portion of the District s liability, property and workers compensation insurance needs and provide overall risk management activities for the District. Colorado state law no longer requires a minimum per pupil allocation to the Capital Reserve Fund and/or the Insurance Reserve Fund. The District has allocated sufficient funds to the Insurance Reserve Fund in Fiscal Year to provide for the District s risk management activities of $3.9 million. The Insurance Reserve Fund has a year-end reserve, which equals or exceeds the amount required to be held in the Adams County BOCES (Board of Cooperative Education Services) Insurance Pool. Internal Service Funds Print Shop Fund The Print Shop Fund is an internal service fund which accounts for operations that are financed and operated in a manner similar to private enterprises, where the cost of providing goods or services to school District operating units is financed or recovered primarily by user charges. A minimum of one month operating reserve is maintained in the Print Shop Fund. This fund receives resources from user charges, which may be adjusted annually, to support ongoing expenditure needs. A minimum fund balance is maintained to reduce the impact on District departments and schools. 12

25 OTHER DISTRICT FUNDS The print shop at Adams 12 has been in existence for fifteen years and currently has seven employees. It is a full service shop that provides service to internal and external clients such as Adams 14, Adams 50 and Mapleton School Districts, as well as The Ranch Country Club. Building Fund The District uses the Building Fund as its Capital Projects Fund to budget and account for the major capital outlays for school facilities, authorized and funded by the issuance of general obligation school bonds. In November of 2000 the voters approved the issuance of $180 million of general obligation school bonds. Bonds in the amount of $95 million were issued in March of 2001 and the remaining $85 million were issued in December of The bond has allowed for numerous school renovations, constructing two new elementary schools and one new middle school, replacing a middle school with new construction creating added capacity and constructing a new high school. In November of 2004 the voters approved the issuance of $180 million of general obligation school bonds. Bonds in the amount of $95 million were issued in February 2005, $38.3 million were issued in April 2006, $42.4 million were issued in March 2007 and the remaining $4.3 million were issued in January Fiscal Year expenditures will be approximately $2.75 million, leaving $814 thousand for future years. Proprietary Funds Nutrition Services Fund The Nutrition Services Fund operates in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing services on a continuing basis be financed or recovered primarily through user charges. The Nutrition Services Fund accounts for all financial functions associated with the District s school food program. The program expenses include purchasing food and supplies for the preparation and consumption of meals according to the Federal Child Nutrition Program guidelines. The program will continue to implement guidelines of the Health and Hunger Free Kids Act of 2010 in Fiscal Year Expenditures are projected to be $9.2 million for Fiscal Year The Nutrition Services Fund retains an ending fund balance equal to a minimum of one month of operating expenditures to allow for emergencies. Statutory regulations require that no more than six months of operating funds be held in reserve and food prices be kept at a minimum to reduce the impact on the community. 13

26 OTHER DISTRICT FUNDS Before, After & Summer Enrichment Program The Before, After & Summer Enrichment Program (BASE) also operates in a manner similar to private business enterprises where the costs associated with the program are primarily financed through user charges. BASE is a fee based program offering before and after school programs, summer programs and Kindergarten Extended Day Enrichment Programs (KEEP). In Fiscal Year , the District plans to operate 29 sites to service an estimated 2,150 children. Planned expenditures are projected to be $6.7 million in Fiscal Year Capital Project Funds Capital Reserve Fund The Capital Reserve Fund accounts for transfers or revenue allocations from the General Fund and other revenues allocated to or earned in this fund, and the expenditures for the ongoing capital needs of the District, such as site acquisitions, building additions and improvements, and purchases of equipment, technology, and vehicles. Colorado state law no longer requires a minimum per pupil allocation to the Capital Reserve Fund and/or the Insurance Reserve Fund. The District has allocated sufficient funds to the Capital Reserve Fund in Fiscal Year to provide for the District s capital needs. Capital Reserve Fund expenditures of $16.6 million for Fiscal Year are budgeted for the acquisition of property, furniture, equipment and vehicles. Expenditures are also authorized and budgeted for construction, renovations and improvements to buildings and grounds. 14

27 MULTI-YEAR BUDGET PROJECTIONS FISCAL YEAR THROUGH FISCAL YEAR A multi-year budget projection is prepared yearly as part of the budget development process. Board Policy 2.3 Financial Planning and Budgeting states the following: Financial planning for any fiscal year or the remaining part of any fiscal year shall not deviate materially from Board s Ends priorities, risk fiscal jeopardy, or fail to be derived from a multi-year plan. These projections include the Fiscal Year Adopted Budget as year one. The budget projection is one of many tools used in the budget development process. Projected numbers are reviewed and revised as future assumptions are known. Following are the assumptions used for the various fund projections. A budget projection summary for Governmental Funds is also included in the informational section. General Fund At this time the District is projecting flat pupil enrollment over the next five years. The compensation increases planned are 0% for Fiscal Year Health care increases are expected to be approximately 6% each year. Future budget reductions will be needed in order to maintain a fund balance of 10% of expenditures each year per Board Policy. Governmental Designated-Purpose Grants Special Revenue Fund Fiscal Year reflects stable funding and expenditures. As the District continues to explore new funding options to provide educational opportunities for students of Adams 12, new grant awards estimated of nearly $3.0 million are expected in Fiscal Year Athletic Special Revenue Fund Athletic revenues and expenses are expected to remain relatively stable in the future years presented. Bond Redemption Debt Service Fund The principal and interest payments in the Bond Redemption Fund are consistent over the time presented. In Fiscal Year and , fund balance is projected to increase as debt is paid and the tax levy remains constant. A future bond election has not been planned at this time. Capital Reserve Capital Projects Fund Beginning in Fiscal 2010, the District is no longer required to fund the Capital Reserve Fund due to changes in statute. However, the allocation to this fund is planned to remain level to continue to address capital needs. Building Capital Projects Fund The majority of funds remaining in the Building Fund for planned projects will be spent in Fiscal Year and Fiscal Year The District will continue to monitor the economy and building needs to determine the appropriate year to request additional funds with a ballot issue for voter approval to fund additional construction activity. 15

28 STUDENT PERFORMANCE In addition to the Board of Education s regular and thorough monitoring of the District s performance, the state of Colorado has established an accountability system to measure and evaluate the performance of schools and school districts: State Accreditation. Accreditation All schools in the Adams 12 Five Star District must meet rigorous performance standards in order to earn the state's quality seal of accreditation. Among our other accomplishments, we demonstrate a safe school environment, an effective professional development program, and strategies for closing the achievement gap between student subgroups. Utilizing the new State accountability system, the Adams 12 Five Star School District and all schools were fully accredited for by the Colorado Department of Education. Factors Considered for Accreditation District and school accreditation are based on a number of factors: academic achievement, academic growth, academic growth gaps, and postsecondary and workforce readiness (high schools only). The measures used for each factor are Academic Achievement the percentage of students scoring proficient and advanced on the CSAP (now the TCAP) assessments Academic Growth a median percentile rating determined based on all students who have completed the CSAP (TCAP) two or more years in a row Academic Growth Gaps a median percentile rating determined based on all students within five subgroups who have completed the CSAP (TCAP) two or more years in a row. The subgroups included are students receiving free or reduced lunch, English language learners, students with and individual education plan, minority students, and students performing below the proficient performance level Postsecondary and Workforce Readiness a combination determined using the mean composite ACT score, graduation rate, and drop-out rate. As mentioned previously, based on these factors, the Adams 12 Five Star School District and all its schools were fully accredited for b y the Colorado Department of Education. 16

29 DISTRICT ORGANIZATION/FACILITIES/SERVICES THE BOARD OF EDUCATION The five members of the Board are elected at successive biennial elections by the registered electors of the District to staggered four-year terms of office. The Board is a policy-making body whose primary functions are to establish policies for the District, provide for the general operation and personnel of the District and oversee the property, facilities and financial affairs of the District. Members of the Board serve without compensation. The present Board members, their offices on the Board, and terms of offices are as follows: District Board of Education Term Expires Name Office (November) Mr. Mark D. Clark President 2015 Mr. Norman L. Jennings Vice President 2015 Mr. R. Max Willsey Secretary 2015 Dr. Frederick J. Schaefer Director 2013 Mr. Enrico Figueroa Director 2013 ORGANIZATION AND GENERAL DESCRIPTION Adams 12 Five Star School District (the District), which is a fiscally independent unit of government, is located just seven miles north of downtown Denver and comprises 62 square miles. The District is close to the conveniences of a major city center yet far enough to offer the quiet of the suburbs. The District serves all or part of the cities of Federal Heights, Northglenn, Thornton, Westminster, and Broomfield and portions of unincorporated Adams County. The population within the District s boundaries is approximately 196,000 and the December 2011 certified assessed valuation is $1,730,572,217. The District, with 43,946 students (funded pupil count) projected for , is the 5 th largest of the 178 school districts in the state. In the District will be operating with one central administration facility, one transportation facility, twenty-nine elementary schools, three K-8 schools, one Arts Magnet school, two K-8 STEM (science, technology, engineering and mathematics) Magnet schools, seven middle schools, five high schools, three alternative programs, six charter schools and two stadiums. CURRICULUM, INSTRUCTION AND ACCREDITATION The District offers a wide range of educational opportunities in academic and vocational areas as well as the arts, to its students from kindergarten through twelfth grade. The District has a comprehensive special education program for students with disabilities, for gifted and talented students, and a program for limited English proficiency students. The 17

30 DISTRICT ORGANIZATION/FACILITIES/SERVICES District has received high accolades from the Colorado Department of Education for its innovative programs, unique ability to reach students at all levels within the education spectrum, and its untiring ability to teach all facets of the community to engage in the education system. The District s five high schools are fully accredited by the North Central Association of Schools and Colleges. This has been made possible by the community, which has regularly supported a rigorous and robust education system for its youth. SCHOOL DISTRICT POWERS The District is a school district, political subdivision and body corporate, duly organized and existing under the School District Organization Act of 1965, Article 30, Title 22, Colorado Revised Statutes. Its purpose is to operate and maintain an educational program for those persons residing within its boundaries. The District has all rights and powers delegated under the laws of the State for exercise by school districts, including the right to hold property for any purpose authorized by law; to sue and be sued; and to be a party to contracts for any purpose authorized by law. State statutes grant to the Board of Education (the Board ) the power to govern the District. General duties which the Board is empowered to perform include the following: to adopt policies and prescribe rules and regulations necessary and proper for the administration of the District; to carry out the educational programs of the District; to fix and pay personnel compensation; to determine the educational programs to be provided by the District; to prescribe the textbooks for any course of instruction to study in such programs; to adopt written policies, rules and regulations relating to the study, discipline, conduct, safety and welfare of all pupils; and to comply with all the rules and regulations adopted by the State Board of Education. The Board of Education of the District is also granted specific powers to be exercised in its judgment. Notable among these are the powers to purchase, lease or rent, with or without an option to purchase, undeveloped or improved property located within or outside District boundaries or equipment as the Board of Education of the District deems necessary for use as school sites, buildings or structures, or for any school purpose authorized by law; to rent or lease District property for a term up to 50 years if the Board anticipates that the District will become the subtenant of the property under a sublease; to sell District properties which may not be needed in the foreseeable future for any purpose authorized by law, upon such terms and conditions as the Board of Education of the District may approve; to determine the location of each school site, building or structure; to construct, erect, repair, alter and remodel buildings and structures; to provide furniture, equipment, library books and such other items as may be needed to carry out the District s educational programs; to discharge or otherwise terminate the employment of any personnel; to procure group life, health or accident insurance covering employees of the District; to fix attendance boundaries; to procure appropriate property damage casualty, public liability and accident insurance; and to contract for the transportation of pupils enrolled in the District s public schools. 18

31 Adams 12 Five Star Schools Organizational Chart Board of Education Executive Assistant to the Board Executive Assistant to the Superintendent Superintendent Chris Gdowski Chief Academic Officer Chief Operating Officer Chief Human Resources Officer Chief Financial Officer Communications Manager General Counsel Elementary Schools, Middle Schools, High Schools Curriculum Instruction Student Support Services Athletics Language Acquisition Gifted / Talented Staff Development Grants/ Federal Programs Vocational Education Intervention Services Transportation Personnel Services Budget Media Relations Facilities Maintenance Business Operations Safe, Secure Environments Enterprise Services Nutrition Services Before & After School Enrichment Benefits Administration Employee/ Labor Relations Compensation Employment & Recruitment Services Teacher Induction Human Resources Information Systems Substitute Teacher Services Risk Management Volunteers Payroll Accounts Payable Accounting Internal Auditing District Web Site Governmental Relations Community Outreach District Publications Public Engagement Crisis Communication Cable TV Legal Services Policy Services Chief Information and Technology Officer Infrastructure Services Help Desk Application Services School & Educational Technology Assessment Charter Liaison Specialized Student Populations 19

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33 FUND ACCOUNTING The accounts of the District are organized on the basis of fund and account groups, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenses. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. Any budgeted fund that represents more than ten percent of the total appropriated expenditures is considered a major fund. The following fund categories are presented in the budget as follows: a. Governmental Funds General Fund This major fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund. Insurance Reserve Fund, a sub-fund of the General Fund This fund is used to account for the resources to self-insure a portion of the District s liability, property and workers compensation insurance needs and provide overall risk management activities for the District. Bond Redemption Debt Service Fund This major fund is used to account for the accumulation of resources for, and the payment of, general long-term debt principal, interest, and related costs. Building Capital Projects Fund This non-major fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by proprietary funds and trust funds), generally funded by bond proceeds. Capital Reserve Capital Projects Fund This non-major fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities and equipment (other than those financed by proprietary funds and trust funds), funded by state sources in accordance with Colorado School Finance Act and other sources. b. Governmental Special Revenue Funds Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or for major capital projects) that are legally restricted to expenditures for specific purposes. The District maintains two Special Revenue Funds which are both non-major: Governmental Designated-Purpose Grant Fund This fund is used to account for the various federal, state and local grants awarded to the District to accomplish specific activities. Interscholastic Athletic Fund This fund is used to account for the activities of the interscholastic athletic programs in the District. 21

34 FUND ACCOUNTING c. Proprietary Funds Business Type Activities Enterprise Funds are used to account for operations that are financed and operated in a manner similar to private business enterprises where the intent of the governing body is that the costs (expenses, including depreciation) of providing services on a continuing basis be financed or recovered primarily through user charges. Both of these funds are considered non-major. Nutrition Services Fund This fund accounts for all financial activities associated with the District s school breakfast and lunch programs. Before, After and Summer Enrichment Program This fund accounts for all financial activities associated with the District s school-age child care. d. Internal Service Fund The District uses Internal Service Funds to account for the financing on a cost-reimbursement basis of goods and services provided by one department or agency to other departments or agencies within the same government or to other governments or not-for-profit organizations. Print Shop Fund This non-major fund is used to account for the resources to provide printing services to the District and external customers. e. Fiduciary Fund Pupil Activity Agency Fund This non-major fund is used to record financial transactions related to school-sponsored organizations and activities. These activities are selfsupporting and do not receive any direct or indirect District support. BASIS OF ACCOUNTING AND MEASUREMENT FOCUS: All governmental fund types use the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Measurable means the amount of the transaction can be determined and available means collectible within the current period, or soon enough thereafter, to pay liabilities of the current period. Revenues are considered to be available if collected within 60 days after year-end. Governmental fund types are reported using the current financial resources measurement focus. The proprietary fund types are accounted for on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of related cash flows. The measurement focus in these funds is on the flow of economic resources and emphasizes the determination of net income. 22

35 BASIS OF BUDGETING Budgeting for revenue or income and expenditures or expenses of the various funds of the District is based on either the modified accrual basis or the accrual basis. Modified Accrual Basis for Governmental Funds: The District s governmental fund types use the modified accrual basis of budgeting. Revenues are recognized as soon as they are both measurable and available. Measurable means the amount of the transaction can be determined and available means collectible within the current period, or soon enough thereafter, to pay liabilities of the current period. Revenues are considered to be available if collected within 60 days after year-end. Expenditures are recognized when funds are either expended or encumbered. Appropriations not spent or encumbered lapse at the end of the fiscal year. Encumbrances are treated as expenditures for budgeting purposes in those funds using the modified accrual basis and are documented by purchase orders or contracts. Fund equity is referred to as fund balance under this basis of accounting and budgeting. Accrual Basis for Proprietary Enterprise Funds: The proprietary fund types use the accrual basis of budgeting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of the timing of related cash flows. Expenses are recorded when liability for the payment of the expense is incurred. Encumbrances are not considered to be expenses. Fund equity is referred to as retained earnings or net assets under this basis of accounting and budgeting. The following list summarizes the basis used for budgeting purposes for each fund of the District. All of these funds are budgeted in Fiscal Year Governmental Funds General Fund Insurance Reserve Fund Bond Redemption Fund Building Fund Capital Reserve Fund Designated Purpose Grant Fund Interscholastic Athletic Fund Internal Service Fund Print Shop Fund Proprietary Funds Nutrition Services Fund Child Care Fund Fiduciary Fund Pupil Activity Fund Budgeting Basis Modified Accrual Modified Accrual Modified Accrual Modified Accrual Modified Accrual Modified Accrual Modified Accrual Budgeting Basis Accrual Budgeting Basis Accrual Accrual Budgeting Basis Modified Accrual 23

36 DISTRICT-WIDE GOALS AND OBJECTIVES Mission: Adams 12 Five Star Schools exists so the students it serves are well-prepared for the next stage of their lives and obtain the skills, knowledge and expertise to thrive in our world, at a level that justifies the resources used. Ends Policies: The Board of Education has established a set of policies, Ends, which are expectations for District staff and students. The Board monitors the work of district staff on an ongoing basis and holds the district superintendent accountable for accomplishment of these Ends. The superintendent, along with district staff, prepares monitoring reports on a regularly scheduled basis. These monitoring reports indicate whether the District is meeting the policies set by the Board. The Board has set the following Ends policies for the District in regard to student achievement: The first priority is that students enrolled in our schools have the knowledge, learning and life skills necessary to prepare them for further learning in the next grade level. o o o o o o o o Students shall demonstrate competent skills by meeting state mastery expectations of all Academic Standards. Students shall obtain 21 st century learning and life skills as described by the Colorado Department of Education and Department of Higher Education Postsecondary and Workforce Readiness Definition. Each year, a greater percentage of Adams 12 students shall score at the proficient or advanced achievement level. Each year, a greater percentage of Adams 12 students will demonstrate adequate growth to catch up as compared to the state average (the state average being a minimum comparison) in reading, writing and math. Each year, a greater percentage of Adams 12 students will demonstrate adequate growth to keep up as compared to the state average (the state average being a minimum comparison) in reading, writing and math. Each of the schools in Adams 12 Five Star Schools shall be in the Accredited with Distinction or Accredited with Performance Plan category. Any school not at the Accredited with Performance Plan category or higher shall demonstrate median adequate growth each year. Using appropriate assessment data the policy interpretations shall include district, school and sub-group performance. Monitored annually October. 24

37 DISTRICT-WIDE GOALS AND OBJECTIVES With decreasing variability among the District high schools: o o o o o o At a minimum the District will consistently increase its four year graduation rate at a rate greater than the state average. At a minimum, the District will consistently increase its five year graduation rate at a rate greater than the state average. Of the students who choose to pursue post-secondary education, the number and proportion of graduates requiring remedial college course work or training will decrease each year. Of the students who choose to enter the workforce, the number and proportion of graduates able to do so without further workforce training will increase each year. Using appropriate data, the policy interpretations shall include district, school and sub-group graduation rates and a report on how many graduates required remedial courses or training. Monitored annually April. The educational value provided to students who are served by Adams 12 Five Star Schools shall be reasonable compared to the costs of the resources used to provide that education. o o o The value added by educating school-age children and young adults and graduating them shall be reasonable compared to the costs expended annually toward those ends. The Colorado School District Performance Framework scores-to-cost ratio shall improve annually 1) compared to the previous year and 2) compared to similar school districts. This ratio is the combined total of all pointed earned by the District on the District s performance framework divided by District operating fund expenditures during the same year. Monitored annually May. In order to achieve the General Ends Policies and for all Adams 12 Five Star Schools students to become more effective learners, aspirations of the District are prioritized and being responsive to the vision(s) of our community, the goals are as follows: o o o Throughout Adams 12 Five Star Schools, there will be consistent technology resources provided to all schools. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current magnet schools and programs at various locations throughout the District. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current technical educational programs at various locations throughout the District. 25

38 DISTRICT-WIDE GOALS AND OBJECTIVES o o o o Adams 12 Five Star Schools will develop and offer full day kindergarten programs at each elementary school throughout the District. Adams 12 Five Star Schools will expand the world language programs to the elementary level beginning between 1 st and 3 rd grade and until serving all grades kindergarten through 12 th grade. Adams 12 Five Star Schools will develop and offer pre-school programs at each elementary school throughout the District. Monitored annually February. Goals: The Superintendent of the Adams 12 Five Star School District has established the following education goals: Accelerate growth in student achievement Decrease achievement gaps between subgroups of students Increase graduation rates Expand magnet programs while managing District resources in a fiscally responsible manner 26

39 BOARD OF EDUCATION GENERAL ENDS POLICY AND BUDGET GOALS The Board of Education of the Adams 12 Five Star School District is an active participant in the ownership of the district. In response to feedback from over 39 focus groups including parents, faith-based groups, business owners, elected officials, service organizations, senior citizens, volunteers and other taxpayers, the Board of Education has established an important "Ends" statement - expectations for District staff and our students- it is: Adams 12 Five Star Schools exists so the students it serves are well-prepared for the next stage of their lives and obtain the skills, knowledge and expertise to thrive in our world, at a level that justifies the resources used The Board of Education checks in with the ownership groups continually, monitors the work of district staff on an ongoing basis, and holds the district superintendent accountable for accomplishment of the Ends. These important statements define fiscal responsibility and guide strategies used throughout the organization. Far beyond a single test score, the Board of Education and its ownership recognize that academic excellence is a result of well-educated students, defined by specific traits that when fully developed will result in competent and capable young citizens. The Board and District staff also recognizes these efforts cannot be accomplished in isolation. Budget Goals Board Policy 2.3, Financial Planning and Budgeting states the following: Financial planning for any fiscal year or the remaining part of any fiscal year shall not deviate materially from Board s Ends priorities, risk fiscal jeopardy, or fail to be derived from a multi-year plan. Further, without limiting the scope of the foregoing by this enumeration, he or she shall not: 1. Fail to include credible projections of revenues, carryover funds and expenses, separation of capital and operational items, and disclosure of planning assumptions for the organization as a whole, for each school and operating unit, and for each fund. 2. Provide less for Board prerogatives during the year than is set forth in the Cost of Governance policy. 3. Budget in a manner that risks incurring those conditions prohibited in our policy on Financial Condition and Activities Policy. The Board of Education has established a set of policies, Ends, which are expectations for District staff and students. The Board monitors the work of district staff on an ongoing basis and holds the district superintendent accountable for accomplishment of these Ends. The superintendent, along with district staff, prepares monitoring reports on a regularly scheduled basis. These monitoring reports indicate whether the District is meeting the policies set by the Board. 27

40 BOARD OF EDUCATION GENERAL ENDS POLICY AND BUDGET GOALS The Board of Education Ends priorities are: 1. The first priority is that students enrolled in our schools have the knowledge, learning and life skills necessary to prepare them for further learning in the next grade level. a. Using appropriate assessment data the policy interpretations shall include district, school and sub-group performance. b. Monitored annually October. 2. The second priority is that with decreasing variability among the District high schools - at a minimum the District will consistently increase its four year graduation rate at a rate greater than the state average; at a minimum, the District will consistently increase its five year graduation rate at a rate greater than the state average; of the students who choose to pursue post-secondary education, the number and proportion of graduates requiring remedial college course work or training will decrease each year and of the student who choose to enter the workforce, the number and proportion of graduates able to do so without further workforce training will increase each year. a. Using appropriate data, the policy interpretations shall include district, school and sub-group graduation rates and a report on how many graduates required remedial courses or training. b. Monitored annually April. 3. The third priority is that the educational value provided to students who are served by Adams 12 Five Star Schools shall be reasonable compared to the costs of the resources used to provide that education. a. The value added by educating school-age children and young adults and graduating them shall be reasonable compared to the costs expended annually toward those ends. b. Monitored annually May. 4. In order to achieve the General Ends Policies and for all Adams 12 Five Star Schools students to become more effective learners, aspirations of the District are prioritized and being responsive to the vision(s) of our community, the goals are as follows: a. Throughout Adams 12 Five Star Schools, there will be consistent technology resources provided to all schools. b. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current magnet schools and programs at various locations throughout the District. 28

41 BOARD OF EDUCATION GENERAL ENDS POLICY AND BUDGET GOALS c. Adams 12 Five Star Schools will develop and expand the offerings of relevant and current technical educational programs at various locations throughout the District. d. Adams 12 Five Star Schools will develop and offer full day kindergarten programs at each elementary school throughout the District. e. Adams 12 Five Star Schools will expand the world language programs to the elementary level beginning between 1 st and 3 rd grade and until serving all grades kindergarten through 12 th grade. f. Adams 12 Five Star Schools will develop and offer pre-school programs at each elementary school throughout the District. i. Monitored annually February. 29

42 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR TOTAL PROGRAM FUNDING The total program funding formula provides the majority of the District s General Fund revenue (including mill levy override funds), which is set forth by the Public School Finance Act of 1994 (the Act). Each year since, legislative action has created modifications to the formula. In addition to the base-funding factor, the Act includes several other factors that are used to determine the District s total per pupil funding level before and after at-risk funding. The adopted budget assumes the other factors will remain the same as the prior year. In the event that legislation changes any factors, the effect on total program revenue will be included in the adopted budget as presented in June The budget is based on the following school finance factors: Base funding $5, Cost of living factor District size factor Personnel cost factor Non-personnel cost factor State Negative Factor (16.11%) Cost-of-living factor A cost-of-living factor is certified by the Legislative Council Staff to the Department of Education for each school district based upon the cost-of-living analysis. The cost-of-living factor reflects differences among the state s 178 districts in the costs of housing, goods and services. A new costof-living analysis is required of the Legislative Council Staff every two years. The cost-of-living calculation changed in Fiscal Year , replacing inflation with the increase in household income level. A district s cost of living factor is increased based on its cost of living increase above the household income increase, rather than its increase above inflation. The cost-of-living factor for Adams 12 Five Star Schools is District personnel costs factor The personnel costs factor is formula driven and differs by school district based on enrollment. This factor increases as enrollment increases, from a low of percent to percent. The district personnel costs factor is multiplied by the statewide base per pupil funding amount to determine the portion of the statewide base to which the cost-of-living factor would be applied. The personnel costs factor for Adams 12 Five Star Schools is 90.50%. District size factor The size factor is determined using an enrollment-based calculation and is unique to each school district. This factor is included to recognize purchasing power differences among districts. The district size adjustment for Adams 12 Five Star Schools remains at for Fiscal Year

43 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR State Negative Factor The General Assembly determined that stabilization of the state budget requires a reduction in the appropriation of the state s share of total program funding for all districts. This negative factor is (16.11%) for Fiscal Year The formula uses these factors to calculate the per-pupil amount before at-risk funding: ((Base funding x Cost of living factor x Personnel costs factor) + (Base funding x Nonpersonnel costs)) x District size factor At-Risk Funding: Eligibility for participation in the federal free lunch program, and English Language Learner pupils that are not eligible for free lunch, are used to determine each school district s at-risk population. Increased funding is provided to recognize that expenses among districts vary, as pupil populations vary, especially at-risk populations. Under the School Finance Act of 1994, each student in the pupil count who is enrolled in grades 1 through 8 and who is eligible to receive free lunch is used as the basis for determining the number of at-risk students in grades 1 through 12. For example, the total number of free lunch students in grades 1 through 8 is divided by the total number of all students in grades 1 through 8. The percent derived from this calculation is applied to the District s total number of students in kindergarten through grade 12. The at-risk factor is 12% for Fiscal Year and Adams 12 Five Star Schools expects to receive approximately $12 million in At-Risk Funding. After the total per-pupil finding level is determined, the amount is multiplied by the projected pupil count on October 1, 2012 to calculate the District s projected total program funding. Total program funding is comprised of the following three revenue components: 1) property taxes, assuming 100% collection; 2) General Fund specific ownership taxes actually received in the prior fiscal year and 3) state equalization. Actual total program funding could be lower or higher depending on how well the formula variable projects compare to the actual variable values. Total program funding for every school district will be adjusted by the Colorado Department of Education about mid-way through the fiscal year to reflect the actual pupil count, the actual number of students eligible for free lunch, the statewide percentage of free lunch students, the school district assessed valuation and actual specific ownership tax revenues received in Fiscal Year

44 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR Total Program Funding to school districts is based on a per-pupil formula which provides a base per-pupil amount of money plus additional money to recognize district-by-district variances in costs of living, personnel costs, and sizes. The Total Program amount also includes additional funding for at-risk pupils. The district s per pupil funding level is the product of the following calculation: Funded Pupil Count (October 1 st ) X Total Per + + Pupil Funding At Risk Funding Online Funding FUNDED PUPIL COUNT Funding under the school finance act provisions will be based on the October 2012 enrollment count, which is within the school district budget year. For planning purposes, the District uses planning department enrollment projections, which have been proven to be reasonable and accurate to plus or minus 1% over the last five years. STATE EQUALIZATION This is the District s primary revenue component. It is anticipated that the District s total program funding, as determined by the School Finance Act of 1994, will be funded for Fiscal Year by the state of Colorado at an estimated per-pupil program funding level (including at-risk funding) of $6,278. The amount of state equalization anticipated to be received in Fiscal Year is $213,167,029 and together with specific ownership and local property taxes comprises total program funding. ASSESSED VALUATION, PROPERTY TAX MILL LEVY AND PROPERTY TAX The assessed valuation of property in Colorado is related to the 1982 Gallagher amendment. This amendment balances residential and commercial tax growth. The county assessed valuation must be maintained at a 45% residential and 55% all other property (mainly commercial) proportion. For example, the appraisal value of residential property may increase by 8% but the assessment rate may decline by 10% to maintain the proportion of 45% residential and 55% other property. The estimated assessed valuation upon which property taxes are levied and collected during calendar year 2013 is $1,734,040,043, which is an increase of.20% from the 2012 level of $1,730,572,217. There is potential for the assessed valuation to go up or down prior to the final calculation in December May 2012 is the month taxpayers can protest their assessed valuation. A final decision on an appeal could be as late as December Also, business personal property tax reports are not due until June 2012, which affects the commercial property assessed valuation. 32

45 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR The General Fund mill levy is established in accordance with state statutes and constitutional limitations and may be adjusted to compensate for tax credits, abatements and omissions under those legal restrictions. For purposes of developing the Fiscal Year budget, the school finance General Fund mill levy for property tax to be collected in 2013, exclusive of any level for tax abatements, is anticipated to be $27.0 million before mill levy overrides. Property tax revenue for the District s fiscal year budget is actually collected in two different calendar years. The property tax revenue estimate for Fiscal Year is based on the anticipated tax collections from September 2012 through August Additionally, the property tax revenue estimate is adjusted for estimated uncollectible taxes. This method of budgeting property tax revenues is in compliance with generally accepted accounting principles (GAAP). All other tax revenue budgets (specific ownership tax) are based on collections anticipated to be received during the fiscal year (July 1 through June 30). DELINQUENT PROPERTY TAXES AND PROPERTY TAX ABATEMENTS, CREDITS AND REFUNDS Delinquent property taxes are taxes which were payable in earlier years but were collected by the county treasurer during the current year. Estimated tax abatements are $90,000 for Fiscal Year Delinquent tax, credits and refunds are granted to taxpayers based on successful appeal for reversal of taxes paid in prior years. Current state statutes require the county to rebate the current year s taxes and possibly the preceding year s taxes for all successful tax protests. This is projected at $823,091 for Fiscal Year SPECIFIC OWNERSHIP TAXES Specific ownership tax revenues are generated primarily through a state mandated tax collected by the county treasurer when motor vehicles are registered each year. These tax revenues are distributed among local governmental agencies based on the percentage of the total property tax attributed to each agency. A portion of the General Fund specific ownership taxes is a component of the total program funding formula described in the School Finance Act. The Act also exempts the specific ownership taxes generated by bond redemption mill levies and mill levy overrides from the total program funding formula. Adams 12 Five Star Schools anticipates that specific ownership tax revenues will remain stable for Fiscal Year The General Fund specific ownership tax revenues are estimated to be $8,000,000 for Fiscal Year As a result of changes in specific ownership tax levels, total program funding actually received in Fiscal Year may vary significantly from the projected funding level. The formula for determining program funding is based in part on the amount of specific ownership tax revenue actually received by the District in the prior fiscal year. 33

46 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR REVENUE ALLOCATED TO OTHER FUNDS Capital Reserve Fund and Insurance Reserve Fund Allocations For Fiscal Year and any budget year thereafter districts are no longer required to budget a minimum amount to the Capital Reserve and/or Insurance Reserve Funds. To address capital and insurance needs of the District, the budget for Fiscal Year includes an allocation of $3,950,000 to the Insurance Reserve Fund and $6,419,230 to the Capital Reserve Fund. Fiscal Year Fiscal Year Fiscal Year Fiscal Year Budgeted Capital Reserve Allocation $ 5,946,230 $ 5,946,230 $ 5,946,230 $ 6,419,230 Budgeted Insurance Reserve Allocation $ 2,500,000 $ 3,600,000 $ 3,950,000 $ 3,950,000 Projected Non-Charter Funded Pupil Count 32, , , ,514.5 Minimum Required Per-Pupil Allocation n/a n/a n/a n/a Preschool Fund Allocation Effective July 1, 2001, a new revenue allocation was created by the Colorado Department of Education (CDE). This allocation is a reduction of the General Fund equalization revenue and is shown as revenue in the newly created Colorado Preschool Program (CPP). The allocation is based on the per-pupil funding amount multiplied by the number of approved slots the District receives from CDE. The number of slots approved for Fiscal Year is 271 FTE (full time equivalents). The total amount of the allocation to the Preschool Fund is $1,694,563. Charter School Allocation Adams 12 Five Star Schools has six charter schools: Academy of Charter Schools, Stargate Charter School, Westgate Charter School, Colorado Virtual Academy (COVA), Prospect Ridge Charter School and Global Village Charter School and one charter school within district boundaries which is a member of the Charter School Institute Pinnacle Charter School. Charter school students must be included in the District s Funded Pupil Count. The estimated pupil enrollment for all charter schools is 11,262 FTE (full-time equivalents). Current charter school law requires a minimum of 95% of the per-pupil revenue (PPR) be made available to an approved charter school for each student counted during the District s pupil count period. The total estimated charter school allocation is $68,961,334 for Fiscal Year INTEREST EARNINGS Investment earnings revenue budgets are based on prior history of interest revenue and interest rate projections. Fiscal Year investment earnings are estimated to be $350,

47 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR OTHER STATE REVENUES In accordance with state and federal laws, the state of Colorado partially reimburses school districts for a portion of total allowable expenses related to transportation of students to and from school, special education programs, vocational education programs, and English language proficiency programs. State reimbursement levels fluctuate as school district reimbursable costs change across the state from year to year. Adams 12 anticipates the Fiscal Year funding for these categorical programs as shown below: Actual Actual Estimated Estimated Fiscal Year Fiscal Year Fiscal Year Fiscal Year Transportation $ 1,714,297 $ 1,835,648 $ 1,776,152 $ 1,776,208 Vocational Education 1,608,363 1,522,629 1,718,746 1,718,800 Special Education 5,564,006 5,702,550 6,180,729 6,180,800 Gifted and Talented 382, , , ,700 Hold Harmless Kindergarten 177, , , ,323 ELPA (English language proficiency) 1 296, , , ,000 Total $ 9,743,508 $ 10,124,365 $ 10,716,643 $ 10,796,831 1 ELPA revenue and expenditures are recorded in the Designated Purpose Grant Fund. COMMUNITY USE, RENTAL INCOME AND TRANSPORTATION FEES Income generated from the use of District buses and facilities is included in the General Fund along with the cost of staff to schedule and supervise facility use. For Fiscal Year the estimated revenue is as follows: Estimated Fiscal Year Transportation Fees $ 390,660 Conference Center 96,487 Community Use 458,925 Antennas 120,000 Athletic Venues 80,000 Common Area Maintenance Fees 197,129 Total $ 1,343,201 35

48 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR TUITION Tuition revenue is based on estimated participation along with projected fees. The estimated revenue for tuition for Fiscal Year is as follows: Estimated Fiscal Year Tuition/Fees Drivers Education $ 8,750 Special Ed Preschool 731,000 Special Ed Day Treatment 15,000 Extended Day Kindergarten 1,795,500 Instructional Materials Fee 500,000 Bright Horizons Preschool $ 369,572 3,419,822 MILL LEVY OVERRIDES The taxpayers of Adams 12 Five Star Schools have approved four property tax increases, called mill levy overrides. These additional levies are as follows: Property Tax Mills Revenue November 1991 election $ 5,400,000 November 2000 election ,200,000 November 2004 election ,900,000 November 2008 election ,900,000 Total $ 35,400,000 To maximize accountability for the tax increase, the District has implemented the following measures: Mill Levy Override Spending Plan to restrict expenditures for authorized purposes. Creation of Mill Levy Override Funds to separately account for revenue and expenditures. The additional funding through tax overrides is capped by state regulation. At this time, Adams 12 still has capacity for an additional $43.5 million in overrides. All override revenues are part of property taxes. A district s authorization to raise and expend override revenues does not affect the amount of state funding the district receives. 36

49 REVENUE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR SERVICES PROVIDED CHARTER SCHOOLS This represents revenue for services provided between the District and Districtauthorized charter schools. MISCELLANEOUS SUNDRY RECEIPTS This revenue line is used to account for incidental revenues not already categorized above. BEGINNING FUND BALANCE, RESTRICTED AND UNRESTRICTED Beginning fund balances are projected conservatively and comply with generally accepted accounting principles (GAAP). All funds reflect GAAP accounting for salary accruals. The July 1, 2012 beginning fund balance projections are based on the first nine months of actual revenue and expenditures and estimates of the final three months for Fiscal Year Audited fund balance adjustments will be made to projections in January 2013 during the mid-year budget update process in planning for future years. Beginning General Fund balance is made up of legal reserves; carry forward of funds, designated and undesignated reserves. The Board of Education monitors these reserves quarterly to ensure they are spent or retained as intended. USE OF BEGINNING FUND BALANCE The budgetary fund balance for the General Fund is expected to decrease from $50.5 million to $44.3 million in Fiscal Year The decrease is a result of in year planned spending. The primary difference between the budgetary basis presentation of fund balance and the GAAP presentation are reserves which are appropriated, but are not expected to be spent. The encumbrance and carryover reserve is appropriated in the event that schools and departments decide to spend more than anticipated during the fiscal year. The TABOR reserve is not intended to be spent; however the Colorado Department of Education recommends that this reserve be appropriated. 37

50 SALARIES EXPENDITURE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR If the Board continued the current Salary Schedule unamended as the new salary schedule for , the Board would be contractually required by the Agreement to expend moneys in excess of the amounts set forth in the General Fund budget and appropriated herein; Therefore, the Board will adopt two salary schedules for the School Year, which reflect the 1.5% reduction of salaries for employees beginning September 2012 and continuing until January 2013 when the reduction becomes 2.0%. The funds generated by the reductions will be used to offset PERA contribution increases. Additionally, the District is proposing three furlough days and not granting experience steps and is not budgeting money to fund the granting of experience steps. (The District does plan to grant education lanes.) Additionally, the District is pursuing a reduction in the large retirement stipend that employees receive upon retirement with certain years of service. EMPLOYEE BENEFITS The District provides funding for several mandatory and District sponsored employee benefit plans. The mandatory plans include participation in the Public Employee Retirement Association (PERA) of Colorado and the federal Medicare insurance program. PERA As a result of legislation, the District contribution rate to PERA will increase from 15.65% to 16.55% on January 1, 2013, for each employee s qualifying compensation, with employees contributing 8%. The District s contribution rate represents an increase of 0.9% for Fiscal Year The District is seeking to have employees contribute 1.5% in September and 2.0% in January toward the employees mandatory PERA increase under the statute through a reduction in salary. Medicare Insurance Tax In accordance with federal law, a Medicare insurance charge of 1.45% is paid by the District on salary for individuals hired after March 31, Employees also have 1.45% deducted from their salary as required by law. Benefit Plans The District sponsored employee benefit plans for which District funding is provided include medical and dental insurance as well as vision and term life insurance. The District currently pays 95% of the employee-only coverage for certified, classified and administrative staff for medical, dental, vision and term life insurance plans. The District moved to a single provider for health care as of January 1, The District has budgeted an increase of 6% for health insurance expenses for Fiscal Year

51 EXPENDITURE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR Unemployment Workers compensation and unemployment insurance are provided in accordance with state law. LIABILITY ACCRUALS Liabilities for compensated absences (temporary leave, vacation, professional and personal leave) are accrued in accordance with Governmental Accounting Standards Board (GASB) Statement 16. Liabilities for these benefits are accrued to the extent required by Board of Education approved agreements, resolutions or policies and are reported in the District s Comprehensive Annual Financial Report (CAFR) each year. District policy allows employees to accumulate unused vacation to the extent of one year s leave beyond the current year. District policy allows employees to accumulate unused temporary leave at a rate of one day per month. Classified hourly employees may accumulate a maximum of 150 days or 1200 hours, certificated and administrative employees may accumulate up to 180 days of temporary leave. POST-EMPLOYMENT BENEFITS The budget is adopted at levels that will support payment to individuals after they retire as required by Board of Education approved agreements, resolutions and retirement incentive plans. The District has provided its employees with a financial incentive for early retirement. Certified and classified employees with at least twenty years of service in the District may elect early retirement. These benefits are based upon years of service and a percentage of current base salary. Early retirement benefits are payable annually. The District budgets the subsequent year s available financial resources for each year s anticipated payments for early retirement benefits. Administrative employees receive a contribution to a 401k or tax shelter annuity based on years of service. Beginning in January 2007, all newly hired certified staff receive an extra $1,000 annually in compensation rather than the prior retirement plan. Currently the General Fund pays retirement incentive payments for most of the eligible employees regardless of whether the employee was paid from the General Fund during all of their employment. The exception is the proprietary funds, which pay their own post employment benefits. OPENING OF NEW SCHOOLS Major capital improvements paid for with school bond funds, primarily for new school facilities, and for expansions to existing school facilities are budgeted in the Building Fund of the District. The additional operating costs, which will be incurred when these facilities are completed and put into use, will consist primarily of additional school support, maintenance and custodial charges, as well as additional utility charges. The General Fund will include the budgeted expenditures considered adequate to cover the expected annual maintenance, custodial, utility and security costs of the District. 39

52 EXPENDITURE ASSUMPTIONS FOR BUDGET DEVELOPMENT FISCAL YEAR OTHER POST EMPLOYMENT BENEFITS (OPEB) Under GASB statement number 45, all plans of state and local government entities that provide other post employment benefits (OPEB) are required to report the cost of these benefits on their financial statements. Adams 12 previously offered its retirees the option to participate in the District s post-retirement medical benefit plan. This practice has been discontinued for future retirees. The grandfathered-in retirees pay the full premium for their coverage, however since the premium is the same as that used for active employees, there is an implied subsidy provided by the District. GASB Statement No. 45 does not require employers to advance fund OPEB. The District is not funding the implicit subsidy for retiree health care premiums as this would reduce the amount of funding available for instructional programs and other general fund operations. 40

53 FINANCIAL POLICIES Guidelines Financial planning for any fiscal year shall not deviate materially from Board s Ends priorities, risk fiscal jeopardy, or fail to be derived from a multi-year plan. Balanced Budget State statutes require the school District budget be balanced. A balanced budget may not have expenditures, interfund transfers, or reserves, in excess of available revenues and beginning fund balances. Total available resources must equal or exceed total expenditures and transfers. The Board of Education must approve the use of beginning fund balance. Planning The District annually prepares a five-year forecast to anticipate future needs and resources. This forecast will include estimated operating costs of future capital improvements and will include credible projections of revenues, carryover funds and expenses, separation of capital and operational items, and disclosure of planning assumptions for the organization as a whole, for each school and operating unit and for each fund. Asset Inventory The District will not allow assets to be unprotected, inadequately maintained or unnecessarily risked. For specific prohibitions, see Board Policy 2.5 Asset Protection, in the Information Section. Fixed Asset Procedures Fixed assets include buildings, equipment, furniture and vehicles. Once purchased, all capital items are maintained in the physical inventory until disposed. The District follows GFOA s recommended capitalization threshold for individual items of $5,000. Revenue Policies The District estimates its annual revenues by an objective, analytical process, wherever practical. The District projects revenues for the next year and updates this projection annually. Each existing and potential revenue source is reexamined annually. The use of District planning department enrollment projections has proven to be reasonable and accurate. Revenue estimates are based on the Colorado Department of Education s and other state agencies projections, current legislation impacting School Finance Act Revenue, interest rate forecasts from local government investment pools, historical trends for specific ownership taxes and various economic news releases. Debt Capacity The debt limitation for all school Districts in Colorado is 20% of the valuation for the taxable property in the District as certified by the county assessor or 25% if the District qualified as a high growth District. To qualify as a high growth District, three years of consecutive enrollment growth of 2.5% or more each year is required. The District no longer qualifies as high growth and therefore is subject to the 20% debt limitation. More information about the District s Debt Policies can be found in the Financial Section Other Funds. 41

54 FINANCIAL POLICIES Debt Management Policies When applicable, the District will review its outstanding debt annually for the purpose of determining if debt issues can be refunded to lessen the District s debt service costs. In order to consider the possible refunding of an issue, a present value savings of 2% over the life of the respective issue, at a minimum, must be attainable. The District will confine long-term borrowing to capital improvements or projects that cannot be financed from current revenues. The District will strive to have the final maturity of general obligation bonds at, or below, twenty years. The District will not use long-term debt for current operations. The District will maintain good communications with bond rating agencies regarding its financial condition. The District will follow a policy of full disclosure on every financial report and borrowing prospectus. The District will follow a policy of full disclosure in future Comprehensive Annual Financial Reports and bond prospectuses. Financial Reserve Policies The District will not use any reserves other than as intended and permitted by law; and will not allow the general fund reserves to be less than 10% of general fund expenditures for the previous twelve months. In addition, the District will maintain reasonable fund balances in other funds and maintain sufficient appropriated reserves. Operating Expenditure Accountability Budget to actual expenditure comparisons are prepared on a monthly basis for all funds and distributed to members of the Board of Education along with executive staff of the District. In addition, a quarterly monitoring report is prepared to monitor compliance with Board Policy 2.4 Financial Conditions and Activities. Capital Improvement Policies The District develops a multi-year plan for capital improvements and updates it annually. The annual capital budget is based on the multi-year capital improvement plan. The District coordinates development of the capital improvement budget with development of the operating budget. Future operating costs associated with new capital improvements are projected and included in operating budget forecasts. The District maintains all its assets at a level adequate to protect the District s capital interest and to minimize future maintenance and replacement costs. The District identifies the estimated costs and potential funding sources for each capital project proposal and determines the least costly financing method for all new projects. 42

55 FINANCIAL POLICIES Investment Policy This policy shall apply to the investment of all District funds. In order to effectively make use of the District s cash resources, all cash shall be pooled into one account and accounted for separately. The investment income derived from this account shall be distributed to the various District funds as directed by the Superintendent in accordance with state law. All District cash allocated to a specific use but temporarily not needed for disbursements shall be invested by the Investment Officer, his designee or other administrator appointed by the Superintendent in accordance with state law. Cash shall be invested in a manner designed to accomplish the following objectives: To ensure the safety of the moneys invested; To ensure that adequate cash is available to meet the daily financial obligations of the District; To earn a market rate of return on the investments; and To ensure that all cash is deposited and invested in accordance with state law and this policy. Procedures shall be established in order to achieve the above cash management and investment objectives and responsibility shall be delegated to appropriate staff for the discharge of these functions. 43

56 BUDGETARY STATUTES, POLICIES & GUIDELINES The purpose of a budget is to provide a plan of financial operation embodying an estimate of proposed expenditures for a given period and purpose, and the proposed means of financing that plan. To achieve this basic purpose, a comprehensive budget system must be integrated with the financial accounting system. Detailed budget planning allows the District to reflect educational values and needs. The structure and format provided by a well-designed budget promotes rational decisionmaking regarding the importance of various school district services. In this way, administrators and the Board of Education are assisted in educational planning as well as in the prioritization and planning of all District operations through the allocation of resources. The Budget Process The budget process involves multiple steps, which includes identification of district goals, budget calendar, budget projections, budget content, program budgeting and the utilization and presentation of prescribed forms. In addition to the preparation of the operating budget, the capital budget must be prepared. The capital budget is based on a five-year plan, prioritized based on maintenance, safety and improvements to district buildings. The impact of capital projects is considered when developing the operating budget. Major capital improvements paid for with school bond funds, primarily for new school facilities, and for expansions to existing school facilities are budgeted in the Building Fund of the District. Major capital improvements funded with capital reserve funds, including new school facilities and expansions to existing school facilities are budgeted in the Capital Reserve Fund. The additional operating costs, which will be incurred when these facilities are completed and put into use, will consist primarily of additional school support, maintenance and custodial charges, as well as additional utility charges. The General Fund will include the budgeted expenditures considered adequate to cover the expected school support, annual maintenance, custodial, utility and security costs of the District. Proposed bond initiatives are compiled by the Bond Planning Committee, a group of District staff that plans for major capital outlay needs. Bond initiatives proposed by the Bond Planning Committee, comprised of district staff and community members, are presented to the Superintendent for approval. Once approved, bond funding initiatives are presented to the Board of Education for their review and approval. District staff and community leaders meet with community members to provide information and respond to inquiries regarding the bond funding initiatives. The approved bond funding initiatives are then included on the election ballot to be voted on by the community. A. Budgetary Accounting Budgeting for revenue and expenses of the District is based on either of two methods: modified accrual basis or accrual basis. The basis of budgeting is the same as the basis of accounting used in the District s Comprehensive Annual Financial Report for both Governmental Fund and Proprietary Funds. 44

57 BUDGETARY STATUTES, POLICIES & GUIDELINES B. Budget Projections In order to prepare budget projections for the ensuing fiscal year, the District has developed underlying assumptions, aligned with Board policies, Board goals, and the 6 Essential Questions, for use in forecasting sources and uses of funds. 1. Beginning Fund Balance/Retained Earnings The District determines an estimate of the end-of-year fund balances/retained earnings to be carried forward to the ensuing year as beginning balances/earnings. This activity requires projections of accounts payable and receivable, expenditures and revenues for the remaining portion of the current budget year. 2. Revenues Major revenue sources and the projection process are presented in the section titled Revenue Assumptions for Budget Development. 3. Expenditures Expenditure needs of the District, including adjustments for compensation and inflation are analyzed and addressed through available funds including enrollment growth, budget realignment and periodic program evaluation. These are reasonable as the District has experience in adjusting expenditures with consideration of the following factors: analyzing non-instructional versus instructional expenses, class-size adjustments, program effectiveness and efficiency studies. A review of the District s expenditure projections are presented in the section titled Expenditure Assumptions for Budget Development. Budget Publication and Adoption The Board of Education of the District must adopt a budget and an appropriation resolution for each fund that presents a complete financial plan for the ensuing fiscal year. In accordance with budget law, the budget shall include actual revenues and expenditures in detail for the last completed fiscal year, and revenues and expenditures anticipated, budgeted, or both, for the current fiscal year, and proposed revenues and expenditures for the ensuing fiscal year. C.R.S (1) A. Notice of Budget Publication The proposed budget shall be submitted to the Board of Education at least 30 days prior to the beginning of the fiscal year (by May 31). Within ten days after the submission of the proposed budget, the Board of Education must publish a notice stating that the proposed budget is on file at the principal administrative offices of the district; that the proposed budget is available for inspection during 45

58 BUDGETARY STATUTES, POLICIES & GUIDELINES reasonable business hours; that any person paying school taxes in the district may file or register an objection thereto at any time prior to its adoption; and that the board of education of the district will consider adoption of the proposed budget for the ensuing fiscal year on the date, time and place specified in the notice. C.R.S (1) State law requires that a public meeting be held at which the proposed budget will be considered. C.R.S (1) B. Budget Adoption The Board of Education must adopt a budget for each fiscal year prior to the beginning of the fiscal year (July 1). C.R.S (1) After adoption of the budget, the Board may modify the budget any time prior to January 31 st of the fiscal year for which the budget was adopted. Changes to the budget after January 31 st are authorized under supplemental budget provisions. C.R.S (5) C. Appropriation Resolution The Board of Education must adopt the budget by appropriate resolution duly recorded prior to the beginning of the fiscal year. The appropriation resolution must specify the amount of money appropriated to each fund. The amounts appropriated to a fund must not exceed the amount thereof as specified in the adopted budget. C.R.S (1)(2) The Board of Education cannot expend any monies in excess of the amount appropriated by resolution for a particular fund. C.R.S D. Budget Filing The budget is also to remain on file at the main administrative office of the District throughout the year and must be open for public inspection during reasonable business hours. C.R.S (1) E. Failure to Adopt a Budget If either the budget or the appropriation resolution is not adopted, then 90% of the last duly adopted budget and appropriation resolution shall be deemed to be budgeted and appropriated. C.R.S

59 BUDGETARY STATUTES, POLICIES & GUIDELINES Budget Management Principals at schools and department supervisors are responsible for the proper budgeting and expenditure of all resources allocated to a school or department. This responsibility includes: Ensuring that adequate funds are available in a program and object code prior to expending funds against that account. Ensuring that expenditures and transfers are recorded using the appropriate program and object codes. Principals and department supervisors have some flexibility to transfer funds or expenditures to respond to changing program requirements. Budget transfers are the transfer of budgeted funds from one program or location to another. The primary reason for transferring budgeted funds is to ensure that sufficient funds are available in an account prior to charging an expenditure. The majority of budget transfers are handled electronically. The District s software allows department supervisors and principals to key in and save budget transfers. The finance office then reviews the transfers and decides whether to post or delete the transfer. Deficit budgets are not permitted and transactions that would create deficits are rejected by the District s accounting system. Overriding of transactions that create deficits on occasion is allowed to facilitate posting of required entries. In those cases, department supervisors are informed of deficits and required to move budget to cover. All financial commitments must have approved budgets prior to the issuance of purchase orders, contracts, etc. 47

60 AMENDMENTS OR REVISIONS OF BUDGET The Board of Education or management may amend the District s budget, adopted in June of the year prior to the budget year. Management may only amend individual school, departmental and program line item amounts within the budget. The Board of Education may revise the total budget for any of the funds due to unforeseen circumstances, which did not exist at the time of the original budget adoption, such as emergencies or unanticipated revenues. Amendments of the total budget amount or amendments changing the amount appropriated by fund need the approval of the Board of Education. The description of the reasons that necessitated the budget amendment and the related amounts to be revised are included in a Board of Education Resolution. An opportunity for public hearing and comment is provided at a scheduled meeting of the Board of Education. Following consideration of the resolution and comments from the public, the Board of Education approves or amends as necessary the budget resolution, or does not approve the resolution. If approved, the revised budget amounts are then incorporated into the District s budget and accounting system. In accordance with State of Colorado Revised Statutes, after the adoption of the budget, the Board of Education may review and change the budget, with respect to both revenues and expenditures, at any time prior to January 31 of the fiscal year for which the budget was adopted. After January 31, the budget may not be changed; except where funds for a specific purpose, from other than ad valorem taxes, subsequently become available to meet a contingency need, the Board of Education may adopt and appropriate a supplemental budget for expenditures not to exceed the amount of the additional funds. 48

61 Summary by Month of Significant Budget Preparation, Review, and Adoption Activities FISCAL YEAR November December Revise school budgets based on actual enrollment per the October Pupil Count process. Receive preliminary economic news from the State of Colorado January February March Update multi-year projections based on new assumptions including enrollment projections. Adjust budget estimates in response to projected funding information from the State for Fiscal Year Review funding needs and prioritize allocation of resources. Community survey on budget priorities. Budget dialogue sessions with the public. Preliminary budget information provided to DSIT (District School Improvement Team). April Superintendent presents budget plan to the Board of Education Distribute budget information to schools and departments Receive school and department budgets and begin preparation of the Proposed Budget. Updated budget information provided to DSIT. May Board of Education Receives the Fiscal Year Proposed Budget. Publish a public hearing notice within ten days after submission of the proposed budget. Continue to meet with DSIT. Public Budget Hearing. June Board of Education Adoption of the Fiscal Year Financial Plan and Budget. 49

62 PARTICIPATION IN THE BUDGET PROCESS Invitation to Participate All interested individuals are invited and encouraged to participate in the annual budget development process. Community members suggestions and input are important to the decision making processes involved in developing the annual budget. Parents, other community members, staff and students may become involved in a number of ways: Parent/teacher organizations in the schools Advisory groups and committees such as DSIT (District School Improvement Team) which focus on a number of common concerns and interests Board of Education meetings, including a public hearing in June during which budget recommendations are reviewed and discussed in detail Contact Information For more information on how to provide suggestions or to contact the groups that are currently working with the Adams 12 Five Star School District, please contact: The principal of a neighborhood school District School Improvement Team (DSIT) members The communications office in the District Educational Support Center The District website also provides contact information as well as information on schools, departments, programs and financial data. 50

63 GENERAL FUND ASSUMPTIONS AND PLANNING CRITERIA FISCAL YEAR BUDGET DEVELOPMENT The General Fund is the main operating fund for Adams 12 Five Star Schools. The budgets for the schools and departments are included within the General Fund. The Fiscal Year budget includes revenue and expenditure realignments of $12.3 million. The funding sources for the General Fund are comprised largely from state and local sources. The main component for funding is provided through the Public School Finance Act and is amended each year by the Colorado General Assembly. Major factors that impact funding include changes in student enrollment, inflationary factor based on the Denver/Boulder consumer price index and assessed valuation of property within the District. The majority of the expenditures for the General Fund are salaries and benefits. The projections are impacted by student enrollment, inflationary salary and benefit increases, as well as increased costs for the District s retirement program through the Public Employees Retirement Association. Funding is provided to enhance student achievement through numerous programs. Cost increases in the building utilities and vehicle fuel accounts impact the General Fund budget. MAJOR REVENUE SOURCES Program Funding is mandated by state statute, C.R.S , which requires school districts be funded on a per pupil basis. Funding is based on the Public School Finance Act of 1994, and was amended by HB by the 2012 Colorado General Assembly. Funding is based on enrollment and a statewide base per pupil. Additional factors are then applied to the formula to arrive at each district s funding. Statewide base per pupil funding has been increased by 3.7% for inflation. The statewide base funding will be $5,843.26, an increase of $ over the fiscal year base of $5, Personnel cost factor varies by school district and is based on enrollment size. The personnel cost factor ranges from to The personnel cost factor for the District is Cost of living factor reflects differences among districts for costs of goods, services and housing among regions. Cost of living factors range from to 1.65 and is applied only to the statewide base per pupil funding allocated for personnel costs. The current cost of living factor the Five Star Schools is Non-personnel cost factor is basically the difference between 100 and the district s personnel cost factor. The district s non-personnel cost factor is

64 GENERAL FUND ASSUMPTIONS AND PLANNING CRITERIA FISCAL YEAR BUDGET DEVELOPMENT District size factor is based on enrollment and per pupil expenditures. The largest size factor is given to districts with low enrollment. The size factors range from to The size factor for the Adams 12 Five Star Schools is Negative Factor is a method used by the State of Colorado to balance the State budget. Recent economic conditions have placed financial hardships on the state and have caused extensive budget reductions. The current negative factor for all districts is 16.11%. This amounts to approximately $52.9 million less funding for Adams 12 Five Star Schools. At-Risk funding is additional monies provided for at-risk students, which includes English Language Learners. The projected district at-risk enrollment is 13,835 students and will provide nearly $12 million in additional funding for fiscal year On-line funding is provided for student enrollment in on-line educational programs. Enrollment for the on-line programs is projected to be 4,832 students and will provide an estimated $34 million in funding. These funding components are projected to be $275.5 million for the Adams 12 Five Star Schools in Fiscal Year Property tax revenue is comprised of a base property tax amount, mill levy overrides and uncollectable property taxes. Total property tax revenue is projected to be $81.4 million. This includes the base portion of property tax revenue that must be used to fund a portion of the total program funding allocation. This base mill rate is set by the state and is currently mills. Based on a projected assessed valuation of $1,734,040,043, the district s base property tax revenue used for program funding is $46.8 million. Mill Levy Overrides are additional revenues which have been approved by the voters of the District. The Adams 12 Five Star Schools has successfully passed 4 mill levy overrides which total $35.4 million in additional revenues. Uncollectable property tax revenue is estimated to be $823 thousand. Specific ownership taxes are collected by the counties when vehicles are purchased and registered. A portion of the tax collected must be used as a funding source of program funding as required by the Public School Finance Act. Specific ownership tax is projected to be $8 million, of which $3.1 million will be used to fund program funding. 52

65 GENERAL FUND ASSUMPTIONS AND PLANNING CRITERIA FISCAL YEAR BUDGET DEVELOPMENT Special Education funding is available through The Exceptional Children s Educational Act (ECEA) of Projected funding of $6.2 million is planned for Fiscal Year Transportation funding of $1.8 million is budgeted for Fiscal Year as partial reimbursement from the State for costs incurred while transporting students to and from school. This is provided through the Public School Transportation Fund, C.R.S Vocational Education funds are available through the Career Education Act of Estimated revenue of $1.7 million is projected for Fiscal Year EXPENDITURES The General Fund accounts for the vast majority of the District s expenditures. General Fund expenditures and transfers are budgeted at $279.2 million for Fiscal Year This includes planned reductions and budget alignments of $12.3 million. Salaries and benefits are the largest component of the General Fund expenditures. They account for $243.2 million or 87% of the total expenditure budget. The District is seeking to have employees contribute 1.5% in September and 2.0% in January toward the employees mandatory PERA increase under the statute through a reduction in salary. The District is proposing three furlough days and not granting experience steps. (The District does plan to grant education lanes.) Additionally, the District is pursuing a reduction in the large retirement stipend that employees receive upon retirement with certain years of service. RESERVES Legal reserves have been established to meet the requirements of Article X, Section 20 of the Colorado Constitution (TABOR). The required TABOR reserve is estimated to be $8.1 million. The Adams 12 Five Star Schools required reserve of 10% is $26.9 million. The required District reserve of 10% includes the TABOR reserve, as well as the full funding of contract provisions, carryover and encumbrance reserve. ENROLLMENT The enrollment projections are provided by the District s Planning Department. Enrollment for Fiscal Year is projected to be 43,946, an increase of 869 students. The District uses an extended five-year plan for enrollment growth. The projected enrollment is used for estimating future funding, planned expenditures and new school needs. 53

66 MILL LEVY OVERRIDE ELECTIONS FISCAL YEAR BUDGET DEVELOPMENT Through the years, Adams 12 Five Star Schools has been successful in passing 4 mill levy override elections. These mill levy override elections provide $35,400,000 annually as funding resources for the District. * November, $5,400,000 * November, $9,900,000 * November, $10,200,000 * November, $9,900,000 The override elections provide funding to continue to deliver a high quality education to district students and to maintain jobs and services. Limit class size increases Maintain individualized teacher support for struggling student Meet the needs of second language learners Continuation of Art Program Provide up-to-date textbooks for students Continue academic achievement in reading, writing, math and science Maintain the District's rigorous graduation requirements Bus transportation services Support increased cost of fuel 54

67 MILL LEVY OVERRIDE ELECTIONS FISCAL YEAR BUDGET DEVELOPMENT Enhance Learning Services Incorporate technology improvements into the curriculum Continue to provide special education opportunities for students Staff Development Core Teachers Gifted and Talented Retention of highly qualified staff Maintain excellent District facilities Maintenance Support Telecommunication enhancements Offset the increased cost of utilities and health care Expand the current senior citizen tax work-off program to more senior citizens for a minimum of three years 55

68 Mission To engage and inspire all students to innovate, achieve, and succeed in a safe and supportive environment by ensuring high quality instruction in every classroom, every day. Vision Adams 12 Five Star Schools exists so the students it serves are well-prepared for the next stage of their lives and obtain the skills, knowledge and expertise to thrive in our world, at a level that justifies the resources used. Goal By 2015, all schools will meet or exceed the state proficiency average in reading, writing, math and science. Schools exceeding the state proficiency average in reading, writing, math, and science will increase the percentage of students performing at proficient and advanced each year. 56

69 GENERAL FUND SUMMARY OF REVENUES, EXPENDITURES, AND FUND BALANCE FISCAL YEARS to Actual Actual Actual Revised Estimated Budget Budget Actual Beginning Fund Balance $ 43,486,881 $ 46,058,258 $ 49,424,642 $50,538,026 $50,538,026 $ 44,248,032 Revenues 315,413, ,524, ,310, ,950, ,011, ,008,501 Total Available Resources 358,900, ,583, ,734, ,488, ,549, ,256,534 Expenditures and Transfers Expenditures 303,096, ,712, ,850, ,753, ,404, ,792,492 Transfers 9,746,230 8,446,230 9,346,230 9,896,230 9,896,230 10,369,230 Total Expenditures and Transfers 312,842, ,158, ,196, ,649, ,301, ,161,722 Revenue over (under) Expenditures 2,571,377 3,366,384 1,113,384 (20,699,034) (6,289,994) (17,153,221) Ending Fund Balance: $ 46,058,258 $ 49,424,642 $ 50,538,026 $ 29,838,992 $ 44,248,032 $ 27,094,812 Fund Balance % of Expenditures 15.20% 18.26% 19.01% 10.94% 16.99% 10.08% 5,000,000 Revenue Over (Under) Expenditures 0 (5,000,000) (10,000,000) (15,000,000) (20,000,000) (25,000,000) 57

70 GENERAL FUND SUMMARY OF REVENUES FISCAL YEARS to Actual Actual Actual Revised Estimated Budget Budget Actual Local Property Taxes: Base Mill Levy $ 47,407,945 $ 47,074,526 $ 48,662,482 $ 45,907,828 $ 45,907,828 $ 45,995,990 Mill Levy Override Elections 35,400,000 35,400,000 35,400,000 35,400,000 35,400,000 35,400,000 Total Property Taxes 82,807,945 82,474,526 84,062,482 81,307,828 81,307,828 81,395,990 Other Local: Delinquent Taxes 152, , Specific Ownership Taxes 9,151,434 8,475,048 7,994,040 8,000,000 8,000,000 8,000,000 Community Use 2,752,826 2,819,016 3,256,805 1,759,712 1,759,712 1,759,712 Investment Earnings 2,013, , , , , ,000 Tuition/Fees 1,635,063 2,019,680 1,705,793 4,184,482 3,954,482 3,810,482 Transfers (536,372) (612,774) 695,650 (194,350) (194,350) (194,350) Total Other Local 15,169,229 13,504,325 14,171,802 14,214,844 13,984,844 13,725,844 Total Local 97,977,174 95,978,851 98,234,284 95,522,672 95,292,672 95,121,834 State Funding: State Equalization 208,758, ,988, ,658, ,971, ,636, ,631,102 Allocation to Charter Schools (47,747,380) (43,910,735) (62,135,078) (62,135,078) (68,961,334) Other State: Transportation 1,443,077 1,714,297 1,835,648 1,755,208 1,776,152 1,776,200 Vocational Education 1,633,131 1,608,363 1,522,629 1,522,629 1,718,746 1,718,800 Special Education 5,254,201 5,564,006 5,702,550 4,772,370 6,180,729 6,180,800 Hold Harmless Full Day Kindergarten , , , ,400 Gifted and Talented Program 347, , , , , ,700 Total Other State 8,678,172 9,269,359 9,603,322 8,591,223 10,216,643 10,216,900 Total State 217,436, ,510, ,351, ,427, ,718, ,886,667 Federal Funding: Federal State Education Stabilization Funds - 35,241 10,724, Total Federal - 35,241 10,724, Total Revenues $ 315,413,943 $ 282,524,979 $ 276,310,288 $ 261,950,568 $ 264,011,208 $ 262,008,501 Prior to FY , Charter school allocations were included in District revenue and treated as an expense. 58

71 GENERAL FUND SUMMARY OF REVENUES FISCAL YEAR Revenue Sources State Categorical Funding 4% Local Property Taxes 31% State Equalization 60% Specific Ownership 3% Other Local 2% General Fund Revenue Summary Local Property Taxes $81,395, % Specific Ownership 8,000, % Other Local 5,725, % State Equalization 156,669, % State Categorical Funding 10,216, % $262,008, % State funding and property taxes make up 94.8% of total revenue 59

72 EXPENDITURE SUMMARY FISCAL YEAR ENDING JUNE 30, 2013 Salaries: % of Budget Certificated Personnel $ 128,256, % Classified Personnel 38,311, % Administrative Personnel 17,861, % Other Salaries 5,906, % Total Salaries 190,336, % Benefits: PERA and Medicare 36,046, % Insurances and Other Benefits 16,800, % Total Benefits 52,847, % Total Salaries and Benefits 243,183, % Purchased Services 25,863, % Supplies and Materials 11,400, % Capital Outlay 645, % Reductions Pending Contract Negotiations (12,300,000) -4.41% Total Expenditures Before Transfers 268,792, % Transfers to Capital Reserve and Insurance Reserve Funds 10,369, % Total - Expenditures and Transfers $ 279,161, % Appropriated Reserves: Encumbrances and Carryovers 9,100,000 Required Tabor Reserve 8,054,451 Other Designated Reserves 1,147,039 Total Appropriated Reserves 18,301,490 Total Expenses and Appropriated Reserves 297,463,211 Unappropriated Reserves: Full Funding of Contract Provisions 10,000,000 Total Unappropriated Reserves 10,000,000 Total Expenditures and Reserves $ 307,463,211 Total Expenditures Salaries Salaries $190,336,165 Benefits $190,336,165 68% $52,847,406 Other Objects $35,978,150 Benefits $52,847,406 19% Other Objects $35,978,150 13% 60

73 Other District Funds 61

74 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS SPECIAL REVENUE FUND FISCAL YEAR Statement of Program The Governmental Designated-Purpose Grants fund is provided to maintain a separate accounting for fully funded federal, state and local grant programs. These programs are restricted as to the type of expenditures for which they may be used and normally have a different fiscal period than that of the District. These grant funds supplement the regular District educational programs. The following list includes some of the major grants received by the District: State Grants English Language Proficiency Act (ELPA) The mission of the English Language Acquisition Unit is to provide educational leadership and guidance by offering information to educators, parents/guardians, students and community so that all migrant, immigrant, refugee and English language learners succeed linguistically, socially and academically. The ELPA program is funded annually on a per pupil basis. Federal Grants Carl Perkins Federal Vocational Act This grant is intended to help school districts fund vocational education programs. Money is allocated to teacher salaries and benefits, workshops, equipment, training and conferences. Medicaid The Medicaid Reimbursement Program provides funds for the benefit of all students in healthrelated areas and to assist students who are uninsured or under-insured. PL Education of the Handicapped PL Handicapped Pre-School These grants represent the federal government s continuing contribution (since 1975) to special education programs. The salaries and benefits for special education teachers and teacher assistants in the District are supported by these funds. 62

75 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS SPECIAL REVENUE FUND FISCAL YEAR School to Work Alliance Program (SWAP) This program supports an estimated fifty percent of the operating funds for the District s School to Work Program. Approximately 100 students who need assistance going from school to the working world receive services each year. The SWAP staff helps place students in apprenticeship programs through Vocational Rehabilitation. Many of the federal grants fall under the No Child Left Behind Act of The goal of this act is for every child to meet state academic achievement standards. Title I, Part A: Improving the Academic Achievement of the Disadvantaged This grant provides the programs and resources for disadvantaged students to meet state academic achievement goals, with focus on reading and math. The district is required to close the achievement gap, to place highly qualified teachers in every classroom and to improve qualifications for paraprofessionals who work with disadvantaged students. Title II, Part A: Teacher and Principal Training and Recruiting Fund (Teacher Quality) This grant provides resources for teacher and paraprofessional training to accomplish the requirement for the highly qualified teacher and paraprofessional as well as professional development to improve teaching that is aligned with Colorado State Education Standards. Funding also supports the recruitment, hiring, and retention of highly qualified teachers. Another aim of this grant is to reduce class size, particularly in the early grades. Title IID: Technology The primary goal of this grant is to improve academic achievement through the use of technology. Additional goals of this program are to ensure that all 8th grade students are technologically literate by the time the student finishes the eighth grade and to encourage effective integration of technology curriculum development to establish research-based instructional methods that can be widely implemented as best practices by State and local educational agencies. Title III, Language Instruction for Limited English Proficient and Immigrant Students This grant is designed to help children who are limited English proficient, to attain English proficiency, develop high levels of academic attainment in English, and meet the state academic achievement standards set for each grade level. Title III also addresses the need for family literacy, providing English language instruction for parents and preschool-age children. 21 st Century Community Learning Centers The purpose of this program is to establish or expand community learning centers that provide students, particularly those who attend high-poverty and low-performing schools, with academic enrichment opportunities along with activities designed to complement the students regular academic program. Community learning centers must also offer families of these students literacy and related educational development. Centers, which can be located in elementary or secondary schools or other similarly accessible facilities, provide a range of high-quality services during nonschool hours or periods when school is not in session (such as before and after school, or during summer break). These services support student learning and development and may include: tutoring/mentoring, homework help, academic enrichment (such as hands-on science or technology programs), community service opportunities, as well as music, arts, sports and cultural activities. 63

76 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS SPECIAL REVENUE FUND FISCAL YEAR Communities Putting Prevention to Work (CPPW) The goal of The CPPW Initiative is to increase opportunities for the residents of Adams, Arapahoe, and Douglas Counties to make healthy choices related to food and physical activity. We will accomplish this by making sustainable policy, systems and environmental changes in schools and communities. Title X, Part C of NCLB - McKinney-Vento Education of Homeless Children and Youth This program works to increase educational access, school stability and academic success for students experiencing homelessness in public school districts. Colorado Graduation Pathways The project, titled Colorado Graduation Pathways involves partnering with high schools to implement dropout prevention and recovery projects that are research based and provide support, enrichment and motivation to student at risk of dropping out or that seek to reenter and complete school. Migrant Ed Grant The Migrant Education Program (MEP) is authorized by Part C of Title I of the Elementary and Secondary Education Act of 1965, as amended (ESEA). The MEP provides formula grants to State educational agencies (SEAs) to establish and improve education programs for migratory children. These grants assist states in improving educational opportunities for migratory children to help them succeed in the regular school program, meet the same state academic content and student academic achievement standards that all children are expected to meet, and graduate from high school. Formative Assessment Grant The Colorado Department of Education has funds to provide funding for districts to implement a formative assessment pilot that is designed to increase student achievement in the following ways: Expand the capacity of low performing school districts to use results from formative assessments; Use results to guide instructional decisions and monitor student progress; and Enhance the Colorado growth model by integrating formative assessment results. 64

77 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS SPECIAL REVENUE FUND FISCAL YEAR Recruitment and Retention Grant The purpose of this program is to increase the academic achievement of all students by helping schools and districts improve teacher and principal quality and ensure that all teachers are highly qualified. This particular grant is aimed at encouraging districts to assess staffing needs and consider innovative approaches to addressing those needs and must align with the Unified Plan. Colorado Prevention Partnership for Success (CPPS) -Binge Drinking Prevention Grant The CPPS project employs a public health model to demonstrate positive statewide change to prevent the onset and reduce the progression of underage and binge drinking among Hispanic/Latino high school youth. Safe Routes to School-CDOT The Safe Routes grant mission is to advocate for safe walking and bicycling to and from schools, and in daily life. The objective is to improve the health and well-being of America s children and to foster the creation of livable, sustainable communities. Indian Education Federal Grant This program is designed to address the unique education and culturally related academic needs of American Indian and Alaska Native students, including preschool children, so that these students can achieve to the same state performance standards expected of all students. Safe Schools Healthy Students (SSHS) Grant The SS/HS Initiative is a unique Federal grant-making program designed to prevent violence and substance abuse among our Nation's youth, schools, and communities. Race to the Top Race to the Top provides funding for the advancement of targeted K-12 reforms aimed at improving student achievement, specifically by increasing access to science, technology, engineering and mathematics (STEM) education. 65

78 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS - SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FISCAL YEARS to Actual Actual Actual Budget Budget Revenues: Local $ 1,301 $ 772 $ (29) $ 5,000 $ 231,585 State 677, , ,450 2,514,550 3,141,651 Federal 13,896,288 22,674,497 19,351,112 14,592,450 16,063,592 Total Revenues 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Expenditures: Current Operating: Instruction 8,952,948 15,581,635 11,442,839 11,492,316 13,053,656 Supporting Services 5,621,772 7,619,341 8,519,699 5,619,684 6,383,172 Community Services , Total Expenditures 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Fund Balance, July Fund Balance, June 30 $ - $ - $ - $ - $ - 66

79 GOVERNMENTAL DESIGNATED-PURPOSE GRANTS - SPECIAL REVENUE FUND SUMMARY OF REVENUE AND EXPENDITURES FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Fund Balance $ - $ - $ - $ - $ - Revenues: Governmental Grants 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Total Revenues 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Total Funds Available 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Expenditures: Title II - Teacher Quality 934, , , , ,006 Title II - Technology 24,052 82,684 25,505 14,000 - Education of Handicapped Children 5,589,410 6,823,651 5,294,313 6,565,414 7,365,414 Title I - No Child Left Behind 3,568,731 4,218,712 4,224,509 4,577,228 4,110,151 Title III - English Language Learner 526, , , , ,269 Title V - Innovative Programs 19, Vocational Education Programs 198, , , , ,000 Title IV - Substance Abuse/Drug Free 105,308 68,684 39, ELPA 297, , , , ,000 American Recovery & Reinvestment Act - 6,206,839 4,646, Other State Grants 409, , ,408 2,014,550 1,161,651 Other Federal Grants 2,898,712 3,539,389 3,696,399 1,762,267 1,490,839 Other Non-Government Grants 1, (29) 5, ,585 New Grant Awards 2,995,913 Total Expenditures 14,574,720 23,200,976 20,086,533 17,112,000 19,436,828 Total Ending Fund Balance $ - $ - $ - $ - $ - $25 Per Pupil Expenditures $20 $15 $10 $5 $ Actual Actual Actual Budget Budget 67

80 ATHLETIC SPECIAL REVENUE FUND FISCAL YEAR Statement of Program The Athletic Fund provides the funding for the day-to-day operation of the high school athletic programs and intramurals for middle school students in the Five Star School District. The Colorado High School Activities and Athletics Association (CHAASA) sanction athletic sports for all schools in Colorado. Currently Adams 12 Five Star Schools offer 20 sporting opportunities for the students. High school students are charged an athletic fee. For fiscal year , the fee is $130 per sport, per student. The fee is limited to the first two sports per student. There is no charge for middle school students to participate in the intramural program. Revenue is also generated from gate receipts at the athletic events. Financial support for a portion of student athlete transportation, athletic uniforms, materials & supplies, equipment, facility maintenance, game officials, game workers, student athlete awards, and League and State membership dues are all provided by the Athletic Fund. 68

81 ATHLETIC - SPECIAL REVENUE FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FISCAL YEARS to Actual Actual Actual Budget Budget Revenues: Local $ 623,804 $ 734,992 $ 603,300 $ 520,500 $ 551,882 Total Revenues 623, , , , ,882 Expenditures: Current Operating: Interscholastic Athletics 1,282,716 1,110, , , ,370 Total Expenditures 1,282,716 1,110, , , ,370 Excess of Revenues Over (Under) Expenditures (658,912) (375,825) (307,994) (438,260) (387,488) Other Financing Sources (Uses): Transfer In 536, , , , ,582 Total Other Financing Sources (Uses) 536, , , , ,582 Excess or Revenue and Other Sources Over (Under) Expenditures (122,540) 236,949 (3,644) (243,910) (257,906) and Other Uses Fund Balance, July 1 231, , , , ,000 Fund Balance, June 30 $ 108,853 $ 345,802 $ 342,158 $ 98,248 $ 92,094 Per Pupil Expenditures per pupil # of pupils Total Budget $ $40 Actual $ ,282,716 $ $30 Actual $ ,110,817 $ $20 Actual $ ,294 $ $10 Budget $ , $5 Budget $ ,370 $ Actual Actual Actual Budget Budget 69

82 ATHLETIC - SPECIAL REVENUE FUND SUMMARY OF REVENUE AND EXPENDITURES FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Fund Balance: $ 231,393 $ 108,853 $ 345,802 $ 342,158 $ 350,000 Revenues: Transfer in from the General Fund 536, , , , ,582 Century Middle 19,840 20,842 10, Huron/Silver Hills Middle 20,626 15,625 7, Hulstrom Middle 2,812 4,267 2, Northglenn Middle 10,850 11,909 6, Niver Creek Middle 5,914 6,805 2, Rocky Top Middle 26,439 24,143 11, Shadow Ridge Middle 21,854 22,113 9, Thornton Middle 5,037 7,858 3, Westlake Middle 15,522 15,796 4, Horizon Sr 93,857 99, , , ,939 Legacy Sr 122, , , , ,091 Mountain Range Sr 120, , , , ,301 Northglenn Sr 64,653 54,505 65,675 65,000 66,688 Thornton Sr 48,183 47,500 63,945 60,000 55,363 District 40, ,074 10, Investment Earnings 4,321 4, Total Revenues 1,160,176 1,347, , , ,464 Total Funds Available 1,391,569 1,456,619 1,253,452 1,057,008 1,031,464 Expenditures: Century Middle 9,432 8,027 2, Huron/Silver Hills Middle 11,814 8,773 3, STEM Lab Hulstrom Middle 1,537 3,446 1, Northglenn Middle 10,054 13,485 1, STEM Launch 7,471 4,765 2, Rocky Top Middle 5,554 11,003 2, Shadow Ridge Middle 9,778 8,429 2, Thornton Middle 10,653 9,592 2, Westlake Middle 8,559 13,308 1, Horizon Sr 94,596 86,003 81,893 80,000 76,000 Legacy Sr 82,493 66,997 95,411 80,000 76,000 Mountain Range Sr 84,766 85,060 88,335 83,500 79,325 Northglenn Sr 78,640 87,885 79,446 80,000 76,000 Thornton Sr 81,442 85,119 88,751 81,300 77,235 Athletic Transportation Certified Athletic Trainers Stadium District 785, , , , ,310 Total Expenditures 1,282,716 1,110, , , ,370 Ending Fund Balance $ 108,853 $ 345,802 $ 342,158 $ 350,000 $ 92,094 70

83 Focus Area for the Athletic Fund ATHLETIC SPECIAL REVENUE FUND FISCAL YEAR The Athletic Program provides students with the opportunity to participate in healthy, wholesome and safe student activities that promote fair play and rewards hard work in a supervised competitive environment. Participation in athletic programs provides students with a sense of belonging and ownership in their school and community. Research has shown that participants in co-curricular activities, like athletics, have higher grade point averages, better attendance in school, higher graduation rates, and better standardized test scores than students who do not participate in extra school activities. 71

84 PUPIL ACTIVITY AGENCY FUND FISCAL YEAR Statement of Program This fund is used to account for resources obtained from parent organizations, community members/parents and other fund raising organizations. These funds are related to schoolsponsored pupil organizations and activities. These activities are self-supporting and do not receive any financial support from District sources. Adams 12 Five Star Schools use these funds in a variety of ways, a few examples include: Field trip entrance fees New playground equipment Student clubs/organizations School sponsored theatre productions Student fees for class materials (chemistry, art, etc.) 72

85 PUPIL ACTIVITY - AGENCY FUND SUMMARY OF REVENUE AND EXPENDITURES FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Balance $ 3,011,119 $ 3,068,901 $ 3,269,447 $ 3,586,208 $ 3,586,208 Cash Receipts: Elementary Schools 1,909,294 1,893,679 2,177,674 2,132,437 2,157,337 Middle Schools 1,057, , , , ,336 Senior High Schools 3,880,035 4,072,748 3,934,003 4,112,565 3,978,494 Miscellaneous Programs 85,010 91, ,344 79, ,012 Earnings on Investments 29,380 9,916 6,663 6,962 4,821 Total Receipts 6,960,874 7,058,129 6,960,598 7,200,000 7,000,000 Total Funds Available 9,971,993 10,127,030 10,230,045 10,786,208 10,586,208 Cash Disbursements: Elementary Schools 1,915,188 1,969,262 2,148,181 2,219,718 2,195,005 Middle Schools 1,083, , , , ,317 Senior High Schools 3,845,528 3,808,726 3,751,172 4,045,220 4,033,627 Miscellaneous Programs 59,120 93,219 80,331 94, ,051 Total 6,903,092 6,857,583 6,643,837 7,200,000 7,000,000 Ending Balance $ 3,068,901 $ 3,269,447 $ 3,586,208 $ 3,586,208 $ 3,586,208 $50 Per Pupil Expenditures $40 $30 $20 $10 $ Actual Actual Actual Budget Budget 73

86 BOND REDEMPTION DEBT SERVICE FUND FISCAL YEAR Statement of Program The Bond Redemption Fund is used to account for property taxes levied to provide for payment of general long-term debt principal retirement, semi-annual interest and related fees. The District s long-term debt, in the form of general obligation bonds, totals $325,384,373 as of June 30, The budgeted amount for this debt service in fiscal year is $38,350,839. Property taxes provide the revenue for this fund. The debt limitation for all school districts in Colorado is 20% of the valuation for the taxable property in the district as certified by the county assessor or 25% if the district qualified as a high growth district. To qualify as a high growth district, three years of consecutive enrollment growth of 2.5% or more each year is required. Adams 12 Five Star Schools is no longer considered a high growth district as of June 30, The anticipated debt limit of $346.8 million for fiscal year exceeds the net amount of the District s bonds payable, less funds available for debt service payment, by approximately $21.4 million. Funding for capital construction and maintenance of facilities is a budget concern for all school districts in Colorado. Legislation allowing for capital construction grants has been implemented; however, these funds are allocated to the schools with the most need. It is unlikely that the District would receive funding from these grants because the schools in Adams 12, in general, are in better condition than many of the other districts in Colorado. As enrollment growth of the District slows, there will be less of a need for new schools. However, maintenance and replacement of aging facilities will continue to require funding. The District will explore various options including additional general fund money being diverted to capital needs, redirecting capital reserve funds, and consideration of requesting an ongoing general fund mill levy for voter approval which would provide additional capital funding. It is also possible that new legislation will be enacted to provide additional funds to school districts for these purposes. The District s enrollment has been increasing at approximately 2.99% per year for the past five years and slower growth increases are expected for the next several years. District needs for additional school facilities will be carefully analyzed to reflect the changing student population. The need for the issuance of bonds to provide for future school facilities is carefully considered with the assistance of the District s Planning Committee. The property tax levy for principal and interest on bonds is budgeted at mills for 2013, which is approximately 32.4% of the total projected tax levy of mills. The annual principal and interest payments on the currently outstanding bonds range from $38.4 million to $31.6 million annually through 2014 and then decrease over the years to approximately $31.6 million per year. No significant financial impact on current or future operations of maintaining the scheduled repayment of the current long-term debt is expected. Additional information relative to the principal and interest of the general obligation bonds through fiscal year 2027 is presented on the following pages. 74

87 The accompanying Bond Redemption Fund graph includes annual comparative indicators of the level of total bonded indebtedness and the annual debt service, presented on a per pupil basis. The net bonded debt per pupil will continue to decrease each year as bond principal payments are made and enrollment increases, unless additional bonds are issued. Bond Ratings: The Adams 12 Five Star School District has maintained excellent ratings for many years. The most recent bond ratings are as follows: Moody s Standard & Poor s General obligation bonds Aa3 AA- Certificates of participation A1 A+ Ratings are a forecast or indicator of the potential for credit loss due to a failure to make payment, delay in payment, or partial payment to the investor. Credit loss is the difference between what the issuer has promised to pay and what is actually received. Ratings measure total credit loss including both the probability an issuer will default and the expected severity of loss after a default occurs. Moody s rating scale, running from a high of Aaa to a low of C, comprises 21 notches. It is divided into two sections, investment grade and speculative grade. The lowest investment-grade rating is Baa3. The highest speculative-grade rating is Ba1. The District s long-term debt ratings fall into the upper-medium to high investment grade category. Standard & Poor s ratings range from AAA to D. The ratings from 'AA' to 'CCC' may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories. A long-term debt rating of AA differs from the highest-rated obligations only to a small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong. An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong. 75

88 BOND REDEMPTION - DEBT SERVICE FUND SUMMARY OF REVENUE AND EXPENDITURES FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Fund Balance: $ 32,780,893 $ 34,626,727 $ 35,933,845 $ 37,500,858 $ 37,749,120 Revenues: Local Property Taxes 40,271,407 39,701,110 39,895,047 38,883,290 39,080,667 Delinquent Property Taxes 81, , ,977 30, ,000 Earnings on Investments Total Revenues 40,353,068 39,825,403 40,051,024 38,913,290 39,200,667 Total Funds Available 73,133,961 74,452,130 75,984,869 76,414,148 76,949,787 Expenditures: Retirement of Bonds 21,382,833 22,248,389 23,121,654 18,508,819 19,670,697 Interest on Bonds Outstanding 17,121,176 16,269,146 15,357,607 20,146,209 18,680,142 Paying Agent, Refunding, and Other Charges 3, ,750 10,000 10,000 Total Expenditures 38,507,234 38,518,285 38,484,011 38,665,028 38,360,839 Ending Fund Balance: $ 34,626,727 $ 35,933,845 $ 37,500,858 $ 37,749,120 $ 38,588,949 Assessed Valuation (in billions) $ $ $ $ $ Mill Levy Outstanding Bonded Debt at Year End $ 391,773,234 $ 369,524,845 $ 346,403,190 $ 325,384,373 $ 305,713,676 $40 $35 Principal and Interest $17.12 $16.27 $15.36 $20.15 $18.68 $30 in millions $25 $20 $15 $21.38 $22.25 $23.12 $18.51 $19.67 Interest Principal $10 $5 $

89 BOND REDEMPTION DEBT SERVICE FUND GENERAL OBLIGATION BONDS Yearly Debt Service Fiscal Year Principal Interest Total $ 19,670,696 $ 18,680,142 $ 38,350, ,130,801 12,204,625 31,335, ,569,075 11,711,051 31,280, ,040,388 11,283,925 31,324, ,702,527 10,589,591 31,292, ,842,575 10,449,463 31,292, ,710,344 9,894,350 31,604, ,313,217 9,318,395 31,631, ,887,089 8,674,174 31,561, ,629,968 7,864,707 31,494, ,493,812 7,043,794 31,537, ,276,225 6,299,469 31,575, ,030,807 5,395,168 31,425, ,010,388 6,122,462 32,132, ,076,461 19,607,652 32,684,113 Total $ 325,384,373 $ 155,138,968 $ 480,523,341 Bond Series Summary Series Principal Interest Total 1995A $ 4,035,697 $ 7,224,303 $ 11,260, ,160, ,200 4,269, Refunding 15,175,000 1,115,625 16,290, Refunding 39,280,000 10,399,338 49,679, Refunding 58,305,000 18,100,706 76,405, G.O.Bonds 38,273,210 30,261,790 68,535, A 42,400,466 41,614,534 84,015, A 4,325,000 1,705,888 6,030, A Refunding 15,280,000 1,405,718 16,685, B Taxable Refunding 10,690,000 1,863,141 12,553, Refunding 93,460,000 41,338, ,798,725 Total $ 325,384,373 $ 155,138,968 $ 480,523,341 Principal and Interest $155,138,968 $325,384,373 Principal $ 325,384,373 Interest $ 155,138,968 Principal Interest 77

90 Net Outstanding Debt Per Pupil Net Outstanding Debt per Pupil Annual Debt Service per Pupil Annual Debt Service Per Pupil $12,000 $1,050 $10,000 $1,000 $8,000 $950 $6,000 $900 $4,000 $850 $2,000 $800 $- $750 Net Outstanding Debt Per Pupil Annual Debt Service Per Pupil 78

91 BOND REDEMPTION - DEBT SERVICE FUND DEBT GUIDELINES The Adams 12 Five Star Schools Board of Education may submit to the registered voters of the school district, at any regular school election or at a special election called for the purpose, the question of contracting a bonded indebtedness for any of the following purposes: Constructing or erecting school buildings Enlarging, improving, remodeling, repairing or making additions to any school building Acquiring or purchasing buildings or land Improving school grounds Equipping or furnishing any school building, but only in conjunction with a construction project for a new building or for an addition to an existing building or in conjunction with a project for substantial remodeling, improvement or repair of an existing building Funding floating indebtedness Before such a bond election, the specific needs for facilities shall be made clear to the general public with careful estimates as to the amounts required for the sites, buildings and equipment. Following approval by the voters, the bonds to be issued will be advertised in newspapers and national financial journals, the date of the issue being coordinated with tax collection dates, payments on bonds already outstanding and favorable market conditions. The bonds will be sold by public sale on the basis of sealed bids. The Board reserves the right to reject any and all bids. After a successful bond election, taxes are levied and subsequently deposited into the Bond Redemption Debt Service Fund for the purpose of paying the debt. The initial receipts from the sale of the bonds are deposited into the Building Fund. Expenditures for sites, buildings and equipment are made from the Building Fund. The Board of Education will adopt an annual budget resolution authorizing the withdrawal from the fund of the amounts needed to meet the payments due to architects, contractors and other individuals or firms. The Board receives periodic reports on the expenditures made from the Building Fund with a comparison of the original appropriations for the various projects. 79

92 PRINT SHOP - INTERNAL SERVICE FUND FISCAL YEAR Statement of Program The Print Shop Fund is an internal service fund, which accounts for operations that are financed and operated in a manner similar to private enterprises, where the cost of providing goods or services to school district operating units is financed or recovered primarily by user charges. The full service print shop provides services to both internal and external clients. Several local school districts utilize the services of the print shop, including Adams 12 Five Star Schools, Adams 50 Westminster and Mapleton School Districts The print shop has been in existence for over 15 years and currently has 7 employees. They manage over 155 copiers throughout the District. 80

93 PRINT SHOP - INTERNAL SERVICE FUND FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Net Assets $ 281,230 $ 276,883 $ 309,633 $ 291,354 $ 298,354 Revenues: User Charges - District 693, , , , ,000 User Charges - Other 129, ,881 83,819 82,000 55,000 Other Revenue 1,840 2, Total Revenues 824, , , , ,000 Total Funds Available 1,105,810 1,053, ,395 1,018, ,354 Expenditures: Salaries and Benefits 239, , , , ,000 Equipment Lease 268, , , , ,000 Services 79,134 89,298 67,460 81,000 80,000 Bindery ,000 Supplies 206, , , , ,000 Depreciation 35,171 33,516 31,255 34,000 32,000 Total Expenditures 828, , , , ,000 Change in Net Assets (4,347) 32,750 (18,279) 7,000 16,000 Total Ending Net Assets $ 276,883 $ 309,633 $ 291,354 $ 298,354 $ 314,354 Salaries and Benefits Equipment Lease Services Supplies Other Salaries and Benefits 40% Expenditures Equipment Lease 23% Other 7% Supplies 18% Services 12% 81

94 INSURANCE RESERVE SUB FUND OF THE GENERAL FUND FISCAL YEAR Statement of Program The Insurance Reserve Fund is used to account for the resources to self-insure a portion of the District s liability, property and workers compensation insurance needs and provide overall risk management activities for the District. Colorado state law no longer requires a minimum per pupil allocation to the Capital Reserve Fund and/or the Insurance Reserve Fund. The District has allocated sufficient funds to the Insurance Reserve Fund in fiscal year to provide for the District s risk management activities. 82

95 INSURANCE RESERVE - SUB FUND OF THE GENERAL FUND STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE FISCAL YEARS to Actual Actual Actual Budget Budget Revenues: State Equalization $ 3,800,000 $ 2,500,000 $ 3,400,000 $ 3,950,000 $ 3,950,000 Expenditures: Insurance Premiums 1,528,946 2,236,727 2,082,685 2,300,000 2,240,000 Uninsured Claims 74, , ,717 90, ,000 Security Monitoring 839, , , , ,000 Environmental Services 47,990 31,137 62,930 98, ,000 Program Administration 534, , , , ,000 Total Expenditures 3,025,153 3,876,686 3,580,098 3,888,000 3,890,000 Excess of Revenues Over (Under) Expenditures 774,847 (1,376,686) (180,098) 62,000 60,000 Fund Balance, July 1 3,174,875 3,949,722 2,573,036 2,392,938 2,454,938 Fund Balance, June 30 $ 3,949,722 $ 2,573,036 $ 2,392,938 $ 2,454,938 $ 2,514,938 Program Administration 15% Fiscal Year Environmental Services 3% Security Monitoring 21% Insurance Premiums 57% Uninsured Claims 4% 83

96 CAPITAL RESERVE - CAPITAL PROJECTS FUND FISCAL YEAR Statement of Program The Capital Reserve Fund accounts for transfers or revenue allocations from the General Fund and other revenues allocated to or earned in this fund. The expenditures are for the ongoing capital needs of the District, such as site acquisitions, building additions and improvements, and purchases of equipment, technology, and vehicles. Colorado state law no longer requires a minimum per pupil allocation to the Capital Reserve Fund and/or the Insurance Reserve Fund. The District has allocated sufficient funds to the Capital Reserve Fund in fiscal 2013 to provide for the District s capital needs. Capital Reserve Fund expenditures are budgeted for the acquisition of property, furniture, equipment, vehicles and software licensing agreements. Expenditures are also authorized and budgeted for construction, renovations and improvements to buildings and grounds. Capital reserve funding is allocated per the following categories: Department equipment Replacement equipment Major facility improvements Technology equipment Bus/vehicle replacement Large instructional equipment The principal and interest payments for the Certificates of Participation providing funding for the Support Services Center, joint use Aquatics Center and to replace an existing elementary school are included in the Capital Reserve budget and total $3.6 million for fiscal year Funding requests for capital reserve projects, which can include replacement equipment, major facility improvements, technology improvements and equipment and bus/vehicle replacements, are prepared by requesting departments and submitted to the Chief Operating Officer for review and approval. Department equipment funding is based upon predetermined needs. Requests for large instructional equipment are prepared by school principals and submitted for review and approval by the Chief Operating Officer, the Chief Academic Officer and the Chief Information Technology Officer. 84

97 CAPITAL RESERVE - CAPITAL PROJECTS FUND SUMMARY OF REVENUE AND EXPENDITURES FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Fund Balance: $ 46,106,554 $ 29,089,878 $ 29,324,911 $ 17,767,958 $ 15,084,788 Revenues: Rental and Miscellaneous 1,442,253 1,302,510 3,559, , ,000 Investment Earnings 319,263 47,367 17,982 25,000 1,000 Proceeds from Sale of Land/Buildings 141,400 7,592, , Proceeds from Lease Purchase - - 1,002, Allocation of School Finance Act Revenue 5,946,230 5,946,230 5,946,230 5,946,230 6,419,230 Total Revenues 7,849,146 14,888,818 10,659,226 6,655,230 7,053,230 Total Funds Available 53,955,700 43,978,696 39,984,137 24,423,188 22,138,018 Expenditures: Debt Service 3,507,548 3,629,273 3,390,099 3,517,000 3,602,000 Sites, Buildings and Building Improvements 18,632,669 7,619,318 15,957,854 5,239,400 11,499,000 Vehicles and Other Equipment 2,532,261 2,751,936 2,440, ,000 1,548,000 Other Charges 193, , ,590 7,000 - Total Expenditures 24,865,822 14,653,785 22,216,179 9,338,400 16,649,000 Total Ending Fund Balance $ 29,089,878 $ 29,324,911 $ 17,767,958 $ 15,084,788 $ 5,489,018 Vehicles and Other Equipment 9% Expenditures Debt Service 22% Sites, Buildings and Building Improvements 69% 85

98 Planning and Budgeting for School Facilities BUILDING - CAPITAL PROJECTS FUND FISCAL YEAR Statement of Program The District uses the Building Fund as its Capital Projects Fund to budget and account for the major capital outlays for school facilities, authorized and funded by the issuance of general obligation school bonds. To meet the student housing needs, caused by continuing increases in student enrollment, community representatives of the District Long Range Financial Planning Committee developed and presented facility planning recommendations for new school facilities and other school facility projects to the Board of Education for their approval. These recommendations were approved and the funding issue was placed on the ballot. In November of 2000 the voters approved the issuance of $180 million of general obligation school bonds. Bonds in the amount of $95 million were issued in March of 2001 and the remaining $85 million were issued in December of The bond proceeds and the investment income earned on the funds received is the funding source for, among others, numerous school renovations, constructing two new elementary schools and one new middle school, replacing a middle school with new construction creating added capacity and constructing a new high school. In November of 2004 the voters approved the issuance of $180 million of general obligation school bonds. Bonds in the amount of $95 million were issued in February 2005, $38.3 million were issued in April 2006, $42.4 million were issued in March 2007 and $4.3 million were issued in January The total bond proceeds and the investment income earned on the funds received are the funding source for, among others, repairing, renewing and replacing existing District facilities, constructing a new middle school to replace an existing middle school and create additional student capacity, installing air conditioning units, constructing school additions for additional classrooms, replacing or renovating elementary school playgrounds, constructing two new elementary schools, purchasing land to address growth, constructing a new auxiliary sports stadium, purchasing and renovating a building for a graduation center and providing funding for construction of a new elementary school to replace an existing elementary school and a joint use aquatics center. The District provides periodic updates to the Board of Education and the Bond Review Committee on the progress of current building projects. The Bond Review Committee, which includes District staff and community members, independently monitors, reviews and provides feedback on bond projects, including work yet to be completed. Proposed bond initiatives are compiled by the Bond Planning Committee, a group of District staff that plans for major capital outlay needs. Bond initiatives proposed by the Bond Planning Committee, comprised of district staff and community members, are presented to the Superintendent for approval. Once approved, bond funding initiatives are presented to the Board of Education for their review and approval. District staff and community leaders meet with community members to provide information and respond to inquiries regarding the bond funding initiatives. The approved bond funding initiatives are then included on the election ballot to be voted on by the community. 86

99 BUILDING - CAPITAL PROJECTS FUND FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Fund Balance: $ 39,700,035 $ 27,967,759 $ 14,795,441 $ 8,074,417 $ 3,563,417 Revenues: Miscellaneous Revenue 169,731 1,696, , Earnings on Investments 1,639, ,577 26,267 20,000 - Total Revenues 1,808,907 2,527, ,786 20,000 - Total Funds Available 41,508,942 30,495,554 14,991,227 8,094,417 3,563,417 Expenditures: Approved Building Projects 13,541,183 15,700,113 6,916,810 4,531,000 2,749,000 Total Expenditures 13,541,183 15,700,113 6,916,810 4,531,000 2,749,000 Ending Fund Balances: Reserve for Capital Improvements 13,499,391 11,460,628 8,074,417 3,113,000 1,138,000 Reserve for Year End Encumbrances 14,468,368 3,334, ,000 - Total Ending Fund Balance $ 27,967,759 $ 14,795,441 $ 8,074,417 $ 3,563,417 $ 814,417 87

100 NUTRITION SERVICES PROPRIETARY FUND FISCAL YEAR Statement of Program The Nutrition Services Fund accounts for all financial activities associated with the District school breakfast, lunch, snack and summer food and fresh fruit and vegetable grant programs. The program operates on a financially self-supporting basis. This Proprietary Fund accounts for operations that are financed and operated in a manner similar to private enterprises, where the cost of providing goods or services to the general public is financed or recovered primarily by user charges. The office staff assesses the needs of the department and its customers, sets measurable goals, and maintains a philosophy of customer service in dealing with students, parents, school staff and the community. The program purchases food and supplies for preparation and service of meals according to Federal Child Nutrition Program guidelines. The department prepares applicable records and reports to meet state and federal requirements. Employees are hired and scheduled for 42 school kitchen sites. During the Fiscal Year school year approximately 15,000 lunches, 2,300 breakfasts and 400 snacks were served each day to students and staff. Meal prices each year are evaluated and adjusted to cover the increased costs of operations. Focus Areas for Nutrition Services Provide healthy and nutritious meals to enhance student learning. Continue to assist schools to conform and comply with the Authorized Personnel in School Kitchens Superintendent policy. Concentrate on operating efficiencies and consistency standards. Continue to use reusable trays, flatware, and environmentally friendly products. Assist kitchens to implement the guidelines for Healthy and Hunger Free Kids Act Transform the menus to conform to the Healthier US School Challenge and to the Healthy and Hunger Free Kids Act $400 Per Pupil Expenditures $350 $300 $250 $200 $150 $100 $50 $ Actual Actual Actual Budget Budget 88

101 NUTRITION SERVICES - PROPRIETARY FUND FISCAL YEARS to Actual Actual Actual Budget Budget Beginning Net Assets: $ 4,988,760 $ 5,801,949 $ 6,743,361 $ 7,700,844 $ 7,700,844 Revenues: Food Sales (1) 4,592,122 4,393,297 3,973,120 5,277,143 3,845,000 Reimbursements - State & Federal 4,188,795 4,711,813 5,013,280 4,987,500 5,187,000 U.S.D.A. Commodities Received 852, ,961 1,090, , ,000 Other Revenue - Interest Earnings 14,285 21,962 5,404 22,000 3,000 Gain (Loss) on Sale of Fixed Assets - (8,973) Capital Contribution from District (2a) 19,935 82, District Indirect Contribution (3a) ,111 - Total Revenues 9,667,171 10,100,977 10,081,918 11,011,754 9,935,000 Total Funds Available 14,655,931 15,902,926 16,825,279 18,712,598 17,635,844 Expenditures: Salaries and Employee Benefits 3,537,806 3,879,061 3,842,990 4,215,775 4,042,000 Cost of Food Used 3,521,347 3,535,092 3,474,381 4,851,000 3,274,000 U.S.D.A. Commodities Consumed 531, , , , ,000 CDHS Commodities Administrative Fee ,000 23,000 Cost of Non-Food and Supplies 340, , , , ,000 Small Equipment , ,000 Equipment Repair/Maintenance Services 202,518 84,502 90, ,000 58,000 Equipment Depreciation (2b) 325, , , , ,000 District Overhead (4) 225, , , , ,505 District Indirect Services (3b) ,111 - Food Storage and Handling 7,364 10,080 11,136 22,000 20,000 Other Expenses 162, , , ,000 Total Expenditures 8,853,982 9,159,565 9,124,435 11,011,754 9,174,505 Ending Net Assets: Invested in Capital Assets, Net of Depreciation 1,591,726 1,458,628 1,247,837 1,200,000 - Unrestricted 4,210,223 5,284,733 6,453,007 6,500,844 8,461,339 Total Ending Net Assets $ 5,801,949 $ 6,743,361 $ 7,700,844 $ 7,700,844 $ 8,461,339 (1) Meal prices are evaluated each year and adjusted to cover the increase in cost of operations. (2a) District capital reserve or bond funds are used to fund new kitchens and large projects which are then depreciated. (2b) The Food Service Fund uses a proprietary (commercial-type) accounting basis rather than the traditional "Governmental Fund" basis. This basis of accounting presents the financial results of operations including the charging of depreciation expense. (3a) The department contributes to the educational process and to the increases in at-risk funding as a result of the Free and Reduced meal application process. (3b) Indirect services are the unreimbursed costs for the remainder of the utilities provided in support of the department. (4) Nutrition Services reimbursements for financial services, human resources, graphic design, resource operations, information technology, trash and utilities provided by the District. 89

102 BEFORE, AFTER AND SUMMER ENRICHMENT PROGRAM PROPRIETARY FUND FISCAL YEAR Statement of Program The Before, After & Summer Enrichment Program (BASE) is a fee-based enterprise program which is self-funded. The programs offered in BASE are before & after school, summer, and KEEP (kindergarten extended day enrichment) programs. BASE is offered in most of the elementary schools in the District. Students enjoy an educational setting rather than attend a typical daycare center. This program offers time for the children to play Everyday Math and Science games, read, participate in physical activities and educational field trips, and learn social skills. Focus Areas for BASE Provide a nurturing community for children. Provide healthful snacks for optimal growth and health. Provide physical activities and nutrition education. Provide assistance to enhance learning. Develop core competencies for staff. Concentrate on operating efficiencies and consistency standards. Upgrade the financial and child tracking data system. 90