Table of Contents Page # Executive Summary 2. District Summary of Finances 10

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1 Three Year Financial Plan

2 Table of Contents Page # Executive Summary 2 Financial Assumptions Three Year Deficit Reduction Plan District Summary of Finances 10 Available Debt and Liabilities Appendix Page 1

3 Streator Elementary School District #44 Three Year Financial Projection Plan July 2016 Executive Summary Between the school year and the school year, District 44 Board of Education, Administration, Employees, and Streator Education Association (SEA) leadership have worked together to improve the financial outlook of the district. Unfortunately, some programs and student services have been reduced or eliminated and class sizes have been increased in order to maintain a balanced budget annually. However, the staff continues to strive to offer the students of our school district the best education possible. Summary of Financial Progress from through Board Approved Deficit Reduction Plan Every School Year Since Budget Reductions of $5,701,069 Over the Last Eight School Years Closed One Elementary School Reduced Certified Staff by 34 FTE Reduced Nearly All Non-Certified Staff to Part-Time, 29 Hours per week Negotiated Hard Freeze for FY 2015 and Step Increases for FYs 2016 and 2017 for all Teachers Community Supported Groups Partially Funding Band and Sports/Clubs Received $5.5 Million Qualified School Construction Bonds to be utilized for Health/Life and Safety needs identified in the upcoming Ten Year Safety Survey Completed all priorities from prior Ten Year Health/Life Safety Surveys The district and SEA (Streator Education Association) have developed a productive working relationship based on open and honest discussions regarding the financial outlook of the school district. Working together, an opportunity has been created to open contractual language prior to our next negations period in spring 2017 to bid our group health insurance plan with the expectation to reduce costs. Bids are expected in November with a renewal date of January 1, After two failed attempts, the Board of Education chose not to seek a third attempt at an Education Fund Tax Referendum until they can prove to the public they are making fundamental changes to cut expenses. The following three year projection will show that based on assumptions developed in consultation with our state board regional financial consultant that we are continuing to move toward achieving the goal of reaching a balanced operating budget over the next three school years. Page 2

4 Financial Assumptions # 1 FY 2017 FY 2018 FY 2019 Estimated EAV 0% increase 0% increase 0% increase # 2a $ Increase in Student Foundation Level Foundation Level 100% w/loss Limitation/ Equity Grants Maintain at 100% w/o Loss Limitation/Equity Grants Maintain at 100% w/o Loss Limitation/Equity Grants # 2b ADA Best 3 Months 3 Year Average ADA # 3 1, , % Salary Increase 2% # 4 1, , Unknown, held flat Retiree Raises 1, , Unknown, held flat Retirement Raises % Health Insurance 15% 8% 8% Equalized Assessed Value (EAV) The flat EAV projections are estimated given the decreases over last year. The district does have a Tax Increment Financing District (TIF) agreement with the city that pays the school district approximately $37,000 each school year. However, the City of Streator recently approved two new TIF districts and no Intergovernmental Agreement to address possible EAV losses has been reached at this time. General State Aid (GSA) Components Over the last five years, the GSA proration has resulted in a $4 million loss to the district. For the school year, the school district will receive additional GSA revenue of $286,233 due to the Equity Grant. However, due to declining student enrollment, if the school district loses the GSA Loss Limitation Grant and Equity Grant for the school year, it would result in a loss of $888,905 in school district revenue. In FY19, the potential loss of GSA, $274,238, is due to projected declining student enrollment. It is unknown at this time if the legislature will continue to fund the GSA Loss Limitation and Equity Grant provisions for the next two school years. It is also unknown if the legislature will change the school funding formula over the next two school years. Even though the district s DHS Low Income Count has been declining over the past five years, the amount of the GSA Poverty Grant increased each year through FY In FY 2016 and 2017 the GSA Poverty Grant decreased and is projected to decrease through FY For the amount of GSA Poverty Grant per average DHS low income pupil, see the Three Year Average DHS Count and Amount of GSA Poverty Grant graph on page 5. Page 3

5 Declining enrollment, decreasing DHS low income counts, and the loss of the GSA Loss Limitation Grant and Equity Grant could substantially change the school district s revenue projections in this plan for the next two school years. All other state grants were held flat at FY16 levels. Potential Loss: FY16 vs FY17 FY17 vs. FY18 FY18 vs. FY19 GSA Formula and Poverty Grant $0 $(303,567) $(274,238) Loss Limitation $0 $(299,105) $0 Equity Grant $286,233 $(286,233) $0 Total Change $286,233 $(888,905) $(274,238) Page 4

6 3 Year Average DHS Count Per Pupil $1,317 Per Pupil $1,515 Per Pupil $1,638 Per Pupil $1,777 Per Pupil $1,784 Per Pupil $1,710 Per Pupil $1,678 Per Pupil $1,613 Three Year Average DHS Count and Amount of GSA Poverty Grant 1,400 1,200 1, FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 Projected Projected ,500,000 2,000,000 1,500,000 1,000, ,000 0 Amount of GSA Poverty Grant DHS Low Income Three-Year Average GSA Poverty Grant The school district is severely dependent on General State Aid. The school district has the lowest 2013 EAV in LaSalle County at $87,552 per pupil. Also, at 72% free and reduced lunch student population, we are a high poverty funded school district. The overall 2014 tax rate for the school district is $3.52 which is lower than the state average of $3.92. Of the 369 elementary school districts in the state, Streator School District 44 is ranked 185 from the highest elementary total tax rate. School District 2013 EAV Per Pupil Streator ESD 44 $ 87,552 Marseilles ESD 150 $ 91,486 La Salle ESD 122 $ 93,005 Ottawa ESD 141 $ 137,767 Seneca CCSD 170 $1,252,170 Cash Flow Method The district issued a $1.5 million line of credit and sold a working cash bond during the school year to maintain cash flow. Through good cash management, we have been successful in meeting all payrolls and financial obligations. As long as State reimbursement funding comes through, the school district s projected Lines of Credit and Working Cash Bonds will enable the district to maintain cash flow for the next three fiscal years. See Appendix for Cash Flow Estimates. Page 5

7 Projected Student Enrollment and Average Class Sizes FY2017 FY2018 FY2019 Student Enrollment: 1,692 1,659 1,644 Grade Level: K-1 6 Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections Sections (K-8 figures do not include self-contained Special Education) Three Year Deficit Reduction Plan Year Administration School Knights of Columbus Hall Donations to use the hall $ (1,200) Instructional Supplies paid with Schoolwide Title Funds instead of district funds $ (20,000) Copy Paper Rationing Estimate (Assign Copying Codes and Paper Allotment) $ (1,000) $ (22,200) Licensed Staff- Teachers Reduce 4 regular education teachers due to decreased enrollment (6 sections of 3-6) $ (236,460) Reduce 3 regular education teachers due to resign/decreased enrollment (6 sections of K-2) $ (206,120) Reduce Social Worker (retirement) $ (80,231) Total $ (522,811) Support Staff Eliminate 1 10-Month Secretary $ (45,832) Eliminate 10 Streator High School Students Assisting as Elementary Classroom Helpers $ (35,228) Total $ (81,060) District Insurance Savings-Plan A $ (100,000) Total $ (100,000) FY17 Subtotal Total Reductions $ (726,071) Contract Obligation Staff Raises $ 298,399 Contract Obligation Staff Benefit Increase $ 421,182 FY17 Net Savings $ (6,490) Page 6

8 Year Close Sherman Elementary (Reconfigure Attendance Centers PreK-1, 2-4, 5-8) Administration Eliminate 1 Building Administrator $ (115,453) Support Staff Eliminate 1 10-Month Secretary $ (36,015) Eliminate 1 Lunch Hour Supervisor-office clerk $ (7,370) Eliminate 1 Part-Time Head Custodian $ (57,148) Eliminate 2 Part-Time Custodians $ (43,018) Eliminate 6 Part-Time Lunch Hour Supervisors $ (33,670) Eliminate 2 Lunch Servers $ (10,916) Eliminate 1 Library Clerk $ (8,821) Total - Close Sherman School $ (312,411) Additional Administration Eliminate 1 Assistant Principal at Northlawn $ (102,685) Total $ (102,685) Licensed Staff- Teachers Retirement Attrition (1 Teacher - replace with new hire) $ (54,854) Reduce 7th grade to 6 sections due to decreased enrollment (Do not replace 1 retiring teacher) $ (93,854) Total $ (148,708) District Insurance Savings - Plan A $ (200,000) Eliminate Vehicle Replacement $ (35,000) Total $ (235,000) FY18 Subtotal Total Reductions $ (798,804) Contract Obligation Staff Raises $ 53,932 Contract Obligation Staff Benefit Increase $ 205,381 FY18 Net Savings $ (539,491) Page 7

9 Year Licensed Staff- Teachers Retirement Attrition (4 Teachers/1 SP/Path, Use LEASE for SP/Path, Do not replace NL Dean) $ (185,462) Reduce 8th grade to 6 sections due to decreased enrollment (Do not replace 1 retiring teacher) $ (95,396) Reduce 4 teachers and move Reading Teachers to classrooms $ (249,586) Total $ (530,444) Support Staff Eliminate 1 Maintenance Worker Position $ (48,621) Eliminate 2 Part-Time Night Custodians $ (44,838) Eliminate 1 Part-Time Cook at NL $ (12,413) Eliminate 3 Library Clerks $ (34,581) Eliminate 4 Part-Time RtI Behavior Interventionists Positions $ (68,364) Total $ (208,817) District Selling the administration building ($200,000 for a savings of $125,000 after expenses of relocation) $ (125,000) Total $ (125,000) FY19 Subtotal Total Reductions $ (864,261) Contract Obligation Staff Raises $ 13,560 Contract Obligation Staff Benefit Increase $ 199,799 FY19 Net Savings $ (650,902) Summary of Total FY17, FY18, and FY19 Budget Reductions $ (2,389,136) Contract Obligation Staff Raises FY17, FY18, and FY19 $ 365,891 Contract Obligation Staff Benefit Increase FY17, FY18, and FY19 $ 826,362 Summary of Total FY17, FY18, and FY19 Net Savings $ (1,196,883) Page 8

10 Other Potential Budget Reduction Plan B, should the health insurance savings bidding/negotiations fall short Reducing 3-10 month Building Secretaries to PT $ (101,823) Reducing 1-12 month Building Secretary to PT $ (23,695) Eliminate Elementary Music (K-4 Teacher Plan Time) $ (64,476) Eliminate Elementary Art (K-4 Teacher Plan Time)(reassign art teacher to classroomsavings from releasing a teacher) $ (57,821) Eliminate Jr High Band/Chorus (1/2 cost due to band aids contribution in the past years) $ (54,000) Total $ (301,815) Other Possible Budget Reductions Opportunity in FY18 to negotiate group health insurance package with goal to reduce costs by an additional $700,000 Opportunity in FY17 (April 4, 2017) Education Fund Tax Referendum $.75 generates $1 million Band Aids Offsetting Revenue: FY17 $51,283, FY18 $54,000, and FY19 $58,000 Booster Club Offsetting Revenue: FY17 $10,073, FY18 $10,073, and FY19 $10,073 Debt Needs: Working Cash Bonds: FY17 $1 million and FY18 $1 million Qualified School Construction/Life Health Safety Bonds: FY17 $5.5 million Line of Credit: FY17 $1.5 million, FY18 $1.5 million, and FY19 $1.5 million Page 9

11 District Summary of Finances FY2012 FY2013 FY2014 FY2015 Beginning Fund Balance $ 704,717 $ 568,285 $(2,256,500) $(2,533,309) Revenues $16,743,988 $16,453,790 $16,430,249 $15,144,354 Expenditures $19,076,520 $19,278,575 $16,707,058 $16,990,323 Result of Operation $(2,332,532) $(2,824,785) $ (276,809) $(1,845,969) Other Funding Sources/Uses $ 2,196,100 $ 0 $ 0 $ 2,393,196 Ending Fund Balance $ 568,285 $(2,256,500) $(2,533,309) $(1,986,082) Profile Score Profile Designation Watch Watch Watch Watch FY2016* FY2017** FY2018** FY2019** Beginning Fund Balance $(1,986,082) $(1,407,550) $ (885,599) $ (721,323) Revenues $15,941,150 $16,212,055 $15,331,410 $15,058,468 Expenditures $16,349,798 $16,690,104 $16,167,134 $15,604,783 Results $ (408,648) $ (478,049) $ (835,724) $ (546,315) Other Funding Sources/Uses $ 987,180 $ 1,000,000 $ 1,000,000 $ 1,125,000 Ending Fund Balance $(1,407,550) $ (885,599) $ (721,323) $ (142,638) Profile Score Profile Designation Watch Watch Watch Watch *Unaudited FY2016 Figures **Projected Figures FY2017-FY2019 $25,000,000 Historical and **Projected - Summary of Operations (Operating Fund) $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 ($5,000,000) Operating Total Revenues Operating Total Expenditures Ending Fund Balance Available Debt and Liabilities Page 10

12 Most of the school district s issued long-term debt is Funding Bonds and Working Cash Bonds. The school district has the authority to sell $2 million in Working Cash Bonds over the next two school years. The school district also plans to issue short-term liabilities of $1.5 million as Lines of Credit with our local bank for each of the next three school years. An estimate of the health/life safety concerns in the district is approximately $5.5 million. The school district is completing its Ten Year Health Life Safety Resurvey this summer. On February 10, 2016, the school district was awarded $5.5 million in Qualified School Construction Bonds (QSCB). The bonds are expected to save the school district $1.3 million in interest over a 10-year period. The school district has until August 10, 2017 to issue all of the bonds. Completing these health/life safety construction projects will allow the school district to continue to provide a safe learning environment for children. Fiscal Year Debt Limit Summary of Estimated Long-Term Debt Working Cash Issue QSCB Issue Bond Repayment Outstanding Debt Available Debt FY2015 $9,891,095 $1,000,000 $1,000,000 $3,425,000 $6,466,095 FY2016 $9,905,642 $1,000,000 $1,000,000 $2,425,000 $7,480,642 FY2017 $9,835,106 $1,000,000 $5,500,000 $2,400,000 $7,925,000 $1,910,106 FY2018 $9,835,106 $1,000,000 $1,550,000 $7,375,000 $2,460,106 FY2019 $9,835,106 $1,000,000 $1,550,000 $7,825,000 $2,010,106 Fiscal Year ED TAW Limit Summary of Estimated Short-Term Debt Line of Credit Available Line of Credit Issued Line of Credit Repayment Line of Credit Available FY2015 $ 1,608,378 $ 1,500,000 $ 1,400,000 $ 100,000 FY2016 $ 1,610,743 $ 1,500,000 $ 1,500,000 $ (1,400,000) $ - FY2017 $ 1,599,274 $ 1,500,000 $ 1,500,000 $ (1,500,000) $ - FY2018 $ 1,599,274 $ 1,500,000 $ 1,500,000 $ (1,500,000) $ - FY2019 $ 1,599,274 $ 1,500,000 $ 1,500,000 $ (1,500,000) $ - Page 11

13 APPENDIX: Below shows the estimated cash flow with the utilization of the $1.5 million Line of Credit and issuing $1 million in Working Cash Bonds each year, 2017, 2018, and $500,000 $- $(500,000) $(1,000,000) $(1,500,000) $(2,000,000) FY 2016 Operating Funds Estimated Cash Flow Estimated Ending Cash Balance $2,000,000 $1,500,000 $1,000,000 $500,000 $- FY 2017 Operating Funds Estimated Cash Flow Estimated Ending Cash Balance Page 12

14 FY 2018 Operating Funds Estimated Cash Flow $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Estimated Ending Cash Balance FY 2019 Operating Funds Estimated Cash Flow $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $- Estimated Ending Cash Balance 7 Page 13