December 10, Butler School District 53 1

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1 December 10, 2018 Butler School District 53 1

2 Key Terms Aggregate Levy annual corporate levy other than debt service Debt Service Levy made to retire the principal or pay interest on bonds Property Tax Extension Limitation Law PTELL or Tax Caps, Public Act (October 1991) enacted to control property tax growth Consumer Price Index (CPI) Limiting Rate Tax Cap Rate (Total allowable: CPI + New Construction, excluding bond & interest) Butler School District 53 2

3 Consumer Price Index Computed on a monthly basis by Federal Bureau of Labor Statistics Measures changes in prices over time for goods and services Not always a good measure of the cost to run a school district Butler School District 53 3

4 Value Ten Year CPI History Dec 31st CPI-U Index Values with Annual % Change Last Ten Years % 2.7% 1.5% 3.0% 1.7% 1.5% 0.8% 0.7% 2.1% 2.1% Butler School District 53 4

5 CPI History Percent of Change in December CPI-U for the Last 10 Years 3.5% 3.0% 2.7% Last 10 yr Average CPI-U for this period is 1.6% 3.0% 2.5% Last 5 yr average CPI-U is 1.4% 2.0% 1.5% 1.7% 1.5% 2.1% 2.1% 1.5% 1.0% 0.8% 0.7% 0.5% 0.1% 0.0% Butler School District 53 5

6 Tax Levy Chronology 2017 Inflation Rate (CPI set in January of 2018) 2018 Tax Levy (BOE Action in December, 2018) 2019 Tax Extension (Spring, 2019) School Year (July 1, 2019-June 30, 2020) Butler School District 53 6

7 % Actual Monthly CPI-U Index Values for 2017 and 2018 thru OCT with "Rolled Forward" Values through the End of the Calendar Year 2.2% 2.5% 2.4% 2.8% 2.9% 2.9%2.7% 2.3% 2.5% 2.6% 2.1% THE DECEMBER 2018 CPI-U INCREASE WILL LIMIT THE 2019 TAX LEVY Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Butler School District 53 7

8 Tax Rate History Tax Rate History with Bond & Interest Tax Rate Butler School District 53 8

9 New Construction History New Consrruction History Projected Actual 2017 $6,722,500 $6,277, $7,180,737 $7,480, $5,500,000 $5,869, $5,500,000 $7,168, $7,858,513 $7,234, $3,265,090 $3,209,390 AVERAGE $6,004,473 $6,206, New Construction generated $70,421 Butler School District 53 9

10 CPI + New Property 5 CPI + New Property New Construction CPI Butler School District 53 10

11 Projected Needs Capital Projects Revenues Expenditures $2,000,000 $1,800,000 $1,850,000 $1,600,000 $1,400,000 $1,300,000 $1,200,000 $1,000,000 $800,000 $700,000 $600,000 $500,000 $400,000 $200,000 $173,000 $300,000 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Butler School District 53 11

12 Revenue to Fund Cap Projects Other Financing Sources & Uses $1,800,000 $1,600,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $1,000,000 $1,000,000 $1,000,000 $200,000 $0 $0 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Butler School District 53 12

13 Projected Capital Improvements Summer 2019 Life safety items include correcting door issues, stair hand railings, food service shutter (BJH), heat detectors and pull stations Butler School District 53 13

14 Summer 2020 Life safety work includes: fire prevention (walls/penetrations), ducted relief air systems, fire separation, venting Butler School District 53 14

15 Summers Butler School District 53 15

16 With Capital Projects to Begin in FY20 (Summer 2019) Butler School District 53 16

17 Our 2018 Property Tax Levy Request Ed Fund $8,731,138 O & M Fund 1,240,000 Transp. Fund 450,000 IMRF 87,500 Social Sec./Medicare 87,500 Total Request: $10,596, % Request Butler School District 53 17

18 How much do we expect to receive? 2017 Extension Base $10,096,147 X 2017 CPI 2.1% 206,200 Plus Estimated New Property 50,000 Tax Cap Total Levy $10,358,392 Estimated increase: 2.85% Total Estimated New Revenue: $262,024 Butler School District 53 18

19 Why are we asking for more than we expect? % Growth in Existing EAV The higher the growth, the lower our rate EAV of New Construction in District 53 The higher the EAV of new construction, the higher our tax total revenue Limiting Tax Rate for 2018 Levy The higher the tax rate, the greater access to EAV 19

20 The unknown In order to gain access to the tax revenue generated by new construction, we must levy (request) it. Our problem? Our inability to know the value of new construction on all property throughout the district. Therefore, we ask for more than we expect to receive (inflated levy) so that we can access every possible dollar generated by new construction. Butler School District 53 20

21 Please remember No matter how much we levy, we will only receive what the caps will allow us to receive. Butler School District 53 21

22 Finances in Butler District 53 Consistently receives highest Financial Profile Score (4.0) from the Illinois State Board of Education for financial management Consistently rated AAA by Standard & Poor s Has successfully internally funded $8M in facility improvements over the last four years without a special referendum or tax increase Utilizes a zero-based budgeting process that allocates resources based on the specific needs in a given year. Requires purchase orders for spending that require three levels of approval Maintains a low debt service extension base with current bonds retiring in 2021 Butler School District 53 22

23 Challenges moving forward New State of Illinois education funding model Evidence-based Funding for Student Success Act Property tax freeze Pension cost shift Tax levy objections High cost of student transportation Butler School District 53 23

24 Budgeted Revenue Allocation by Source Evidence Based Funding 3% Other Local Revenue 8% Other State Revenue Federal Revenue 1% 0% Flow-Through Revenue 0% Property Taxes 88% Butler School District 53 24

25 Budgeted Expenditure Allocation by Object Other Objects 5% Provision for Contingencies 3% Capital Outlay 2% Supplies And Materials 5% Purchased Services 17% Salaries 57% Benefits 11% Butler School District 53 25

26 Salaries 4 yr. history + current $6,400, Salaries $6,200, $6,186, $6,000, $5,993, $5,800, $5,721, $5,771, $5,600, $5,400, $5,200, $5,288, $5,000, $4,800, Source: Annual Financial Report Butler School District 53 26

27 Benefits 4 yr. history + current $1,200, Benefits $1,150, $1,146, $1,100, $1,104, $1,050, $1,039, $1,000, $977, $979, $950, $900, $850, Source: Annual Financial Report Butler School District 53 27

28 Fund as a Percent to Total Aggregate Fund (Excludes Transfers & Capital Projects) Revenue Allocation by Fund Transportation 4% Debt Service 1% O & M 9% IMRF / SS 1% Capital Projects 0% Working Cash 0% Tort 0% Fire Prevention & Safety 0% Educational 85% Butler School District 53 28

29 Expenditure by Fund Expenditure Allocation by Fund Operations & Maintenance 11% Debt Service 2% Transportation 4% IMRF / SS 2% Educational 75% Capital Projects 6% Working Cash 0% Tort 0% Fire Prevention & Safety 0% Butler School District 53 29

30 Butler School District 53 30

31 What s next Priorities as of January 1, 2019 Payroll Benefits and Deductions Vendor Payment Butler School District 53 31

32 December 10, 2018 Butler School District 53 32