Kaukauna Area School District FINANCING FOR WISCONSIN PUBLIC SCHOOL DISTRICTS

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1 1 Kaukauna Area School District FINANCING FOR WISCONSIN PUBLIC SCHOOL DISTRICTS

2 Financing Public Schools in Wisconsin 2 Overview of a complicated and complex matter State mandated fund accounting Debt service Revenue limits, tax levies, and fund balances General operating budget Comparing Kaukauna to other Districts Five year budget forecast model

3 Fund accounting 3 Wisconsin Uniform Financial Accounting Requirements 426 Wisconsin Public School Districts must follow guidelines set forth by the Department of Public Instruction with regards to accounting for school district funds. DPI created the Wisconsin Uniform Financial Accounting Requirements that allow districts to report information to the State of Wisconsin in a concise manner which then allows for cross reference between all districts with regards to fiscal governance All Districts must report financial data annually via a minimum chart of accounts. DPI has set protocols and benchmarks in the reporting package to cross check submitted financials which keeps all public school districts on the same page WUFAR is continually updated to allow for properly accounting for new programs and procedures

4 Fund accounting 4 WUFAR baseline WUFAR is based on fund accounting a system in which revenues, expenditures, and balance sheet values are kept in separate silos The silos are based on areas that fall within a school district s operations and must be accounted for due to fiscal activity From DPI.fund accounting is defined as: A fiscal and accounting entity with a self-balancing set of accounts which are segregated for the purpose of carrying on specific activities in accordance with special regulations, restrictions, or limitations Fund accounting produces a fund balance which, in essence, is the amount of money in the checkbook at any given date

5 Fund accounting 5 General operations General district operations fall into two distinct categories: Fund 10, General Education Revenues and expenditures associated with the education of all students in the school district Fund 27, Special Education Revenues and expenditures associated directly with the education of students deemed to need special education Debt service Funds borrowed by a school district for operation or improvement of the district Fund 38, non-referendum debt service Debt secured by a District that falls within the revenue limit (general operating revenue) Fund 39, referendum approved debt service Funds secured through approved public vote Specific programs Other areas of general accounting Fund 49, bond sale expenditures Accounting for projects made possible through the sale of bonds or promissory notes Fund 50, food service District food service program Fund 73, other post employment benefits Accounting for a district s post employment benefits Fund 80, community service fund Operations within a school district that pertain directly to public service rather than general education

6 Fund 39, Referendum Approved Debt Service 6 Fund 39, Referendum Approved Debt In 1997 the Kaukauna Area School District secured nearly $29,000,000 to create a new Kaukauna High School and renovate the newly named River View Middle School through an approved referendum Given WUFAR standards all debt service payments for the KHS/River View project were recorded in Fund 39 Following two refinancing options the debt service payments for Kaukauna High School and River View Middle School will sunset with the tax levy Final payment on this is due March 1, 2017, at a total cost of $2,601,000 Kaukauna School has NO other referendum approved debt service on the books When the KHS/River View debt is done the tax levy for the District will drop by $2,601,000 per year or approximately $1.34 per $1,000 of property value ($134 for a $100,000 property, $201 for a $150,000 property, etc)

7 Fund 39, Referendum Approved Debt Service 7 Fund 39 Rules and Regulations Kaukauna School District Debt With few minor exceptions (energy efficiency exemptions, shrinking enrollment, school voucher program) a district must pass a referendum in order to exceed revenue limits placed upon the district by the State of Wisconsin Kaukauna School District has positioned itself with a one-year buffer when it comes to debt service through the use of a revenue limit exemption (energy efficiency projects) which will cushion the drop in tax levy for Despite Kaukauna s position of debt service falling off during the school year the only way that KASD could regain any, all, or more of the current debt service tax levy amount ($2.6 million) would be to have a successful referendum The revenue limit exemption will be discussed during the Fund 38, nonreferendum debt service discussion KASD will be assessing a levy of $1,595,302 in to help offset the loss of referendum approved debt service after the fiscal year

8 Fund 39 Tax Levy Comparison The Kaukauna Area School District Fund 39 tax levy for 2016 is $1.33 which ranks on the low end of the area school district Fund 39 levies (referendum approved debt) 2016 Tax Levy Mill Rate Comparison - Area School Districts Fd 10 Fd 38 Fd 39 Fd 41 Fd 80 Nonreferendum 8 Total District Year General debt Referendum debt Capital projects fund Community service fund Tax Levy M ill Rate Chilton Sch Dist 2016 $ 6.40 $ 0.35 $ 4.34 $ 0.24 $ 0.22 $ Brillion Sch Dist 2016 $ 5.94 $ 0.33 $ 3.99 $ - $ 0.10 $ Two Rivers Public Sch Dist 2016 $ 6.16 $ 0.42 $ 3.67 $ - $ 0.21 $ Hilbert Sch Dist 2016 $ 8.99 $ - $ 3.37 $ - $ 0.07 $ De Pere Sch Dist 2016 $ 7.80 $ 0.19 $ 2.81 $ - $ 0.01 $ Wrightstown Community Sch Dist 2016 $ 7.50 $ - $ 2.34 $ - $ - $ 9.84 West De Pere Sch Dist 2016 $ 8.49 $ 0.10 $ 2.31 $ - $ - $ Kimberly Area Sch Dist 2016 $ 7.42 $ - $ 2.27 $ - $ 0.03 $ 9.72 Menasha Joint Sch Dist 2016 $ 7.53 $ 0.99 $ 2.26 $ - $ 0.49 $ Sheboygan Falls Sch Dist 2016 $ 7.96 $ 0.16 $ 2.01 $ - $ 0.16 $ Little Chute Area Sch Dist 2016 $ 8.65 $ 0.16 $ 1.96 $ 0.05 $ 0.15 $ Howard-Suamico Sch Dist 2016 $ 6.99 $ 0.12 $ 1.95 $ - $ 0.14 $ 9.20 Rosendale-Brandon Sch Dist 2016 $ 6.73 $ 0.35 $ 1.79 $ - $ - $ 8.87 Hortonville Area Sch Dist 2016 $ 8.12 $ - $ 1.68 $ - $ - $ 9.80 Freedom Area Sch Dist 2016 $ 6.71 $ 0.28 $ 1.67 $ - $ 0.03 $ 8.69 Fond du Lac Sch Dist 2016 $ 7.65 $ 0.19 $ 1.59 $ - $ 0.45 $ 9.88 Kohler Sch Dist 2016 $ 8.60 $ 0.18 $ 1.54 $ - $ 0.16 $ Kaukauna Area Sch Dist 2016 $ 7.51 $ 0.25 $ 1.33 $ - $ 0.04 $ 9.13 Howards Grove Sch Dist 2016 $ 8.15 $ 0.16 $ 1.24 $ - $ - $ 9.55 Seymour Community Sch Dist 2016 $ 8.21 $ - $ 1.22 $ - $ 0.07 $ 9.50 Sheboygan Area Sch Dist 2016 $ 9.67 $ 0.49 $ 1.02 $ 0.32 $ 0.39 $ Pulaski Community Sch Dist 2016 $ 7.38 $ 0.21 $ 1.00 $ 0.16 $ 0.09 $ 8.84 Green Bay Area Public Sch Dist 2016 $ 8.84 $ - $ 0.98 $ - $ 0.34 $ Stockbridge Sch Dist 2016 $ $ 0.86 $ 0.93 $ - $ - $ Ashwaubenon Sch Dist 2016 $ 9.05 $ 0.06 $ 0.67 $ - $ 0.21 $ 9.99 Appleton Area Sch Dist 2016 $ 8.38 $ 0.20 $ 0.47 $ 0.35 $ 0.21 $ 9.61 Oshkosh Area Sch Dist 2016 $ 8.32 $ 0.79 $ 0.20 $ - $ 0.29 $ 9.60 Neenah Joint Sch Dist 2016 $ 8.45 $ 0.01 $ - $ 0.06 $ 0.05 $ 8.57 Manitowoc Sch Dist 2016 $ 8.91 $ - $ - $ - $ - $ 8.91 Average $ 7.96 $ 0.24 $ 1.75 $ 0.04 $ 0.13 $ 10.12

9 Fund 39, Tax Levy Summary 9 Original debt service The original debt service schedule for the KHS/River View project showed the following principal and interest payments Principal $28,890,000 Interest $21,248,907 Total cost $50,138,907 The original estimated principal and interest cost Refinanced debt service Based on several refinancing options secured by the District the KHS/River View project will show the following Principal $28,890,000 Interest $15,463,322 Total cost $44,353,322 Kaukauna Schools reduced total payments on debt service over five million dollars due to refinancing during the 20-year cycle of the loan

10 10 Fund 39, Referendum Approved Debt Service QUESTIONS DISCUSSION COMMENTS

11 Fund 50, Food Service 11 Food service Wisconsin Public School Districts may choose to offer a food service programs to students and staff which can include breakfast, lunch, and/or other snack/meal options Kaukauna Schools operates a breakfast and lunch program with Chartwells contracted as its food service management company Food service management company contracts must be bid out every five years based on DPI specifications DPI provides template bid documents for the bid process and scoring is done through a scale provided by DPI Chartwells has just been awarded its third five-year contract for food service in District Prior to the food service management contract Kaukauna Schools operated its own food service program Cost constraints led to the choice by the Board of Education to go with a food service management contract rather than internally handling the staff Food service contracts are prevalent in 60% of public schools in Wisconsin There is no rule, regulation, or law that states a school district must offer a food service program

12 Fund 50, District Operated vs Contracted 12 District operated food service Employees All employees would be part of the Kaukauna Area School District with full salary, benefit, and risk associated with each employee falling on the District Goods and materials Given stringent federal rules for public school food service programs the goods and materials (food served) would mirror that of any other District or contracted food service company In order to receive federal and state aid schools must follow all guidelines set by the feds thus fluctuation in products is limited Contracted food service Employees All employees fall under the food service management company including the risks associated with working in the food service environment Equipment All equipment belongs to the District thus if a food service company changes all equipment remains in place Competitive contract Based on the KASD contract the FSMC must earn a profit at the end of the year to allow KASD to reinvest in the program KASD has kept its equipment current at all sites based on the past decade s performance by Chartwells

13 Fund 50, Food Service Accounting 13 Accounting for Food Service All financial activity associated with food service is done through Fund 50 Revenue must meet or exceed expenditures at the end of each fiscal year in Fund 50 or expenditures can be higher than revenues should a District be carrying a fund balance heading into that particular year Basically, Fund 50 should run like a business within a school system Any gain in fund balance (profit) should be reinvested directly into the program for goods, materials, equipment, or services Should a loss occur and there not be a fund balance to cover the loss a district must transfer money from the general operating fund to re-balance the food service account Fund 50 is not part of the District s revenue limit and has NO bearing on the tax levy or general operations unless there is a deficit and it must be covered through the general fund Kaukauna Schools does include 10% of the District s maintenance costs in Fund 50 based on time spent in the food service areas

14 Fund 50, Food Service Facts and Figures 14 Annual food service figures Fund balance history Kaukauna Schools serves the following during a normal school year The District s food service account balance history is shown below 60,000 school age breakfasts $ 27, ,000 school age lunches $ 30,104 Approximately 30% of the District s student population is approved for either free or reduced price breakfast or lunch Chartwells/Kaukauna Schools services several other areas with catering including the new wrap around daycare program at Tanner School $ 4, $ 52, $129, $ 61, $ 16, $ 3,950 KASD has utilized fund balance dollars to pay for items such as food service area upgrades, lunch table replacement, and capital equipment (dishwashers, ovens, ala carte items at KHS)

15 The Future of Food Service 15 Menasha High School revamped A revamped serving area at Menasha High School has rejuvenated the program. Kaukauna Schools is looking to do the same type of modernization shown below at its high school

16 16 Fund 50, Food Service QUESTIONS DISCUSSION COMMENTS

17 Fund 80, Community Service Fund 17 Community Service Fund Public School Districts in Wisconsin that offer services to ALL constituents of the District may account for costs associated with those services in Fund 80, Community Service Fund Community Service activities may not be limited to the students of a particular school or school district Fund 80 is a direct tax levy over and above the revenue limit tax for a public school DPI and the State of Wisconsin has been watching Community Service Fund spending very closely over the past five years due to abuse of the fund and adding to the tax levy above the legal revenue limit DPI was forced by the legislature to create rules for Fund 80 thus trying to eliminate areas of spending that were buried against a tax levy yet were part of the everyday operations of a school system

18 Fund 80, Community Service DPI Rules 18 Wisconsin Department of Public Instruction Fund 80 standards This fund is used to account for activities such as adult education, community recreation programs such as evening swimming pool operation and softball leagues, elderly food service programs, non-special education preschool, day care services, and other programs which are not elementary and secondary educational programs but have the primary function of serving the community The School Board must establish a Community Service Fund pursuant to s (19). A budget for the Community Service Fund must be adopted as required by s Any tax necessary to operate the Community Service Fund is considered an "operation" levy subject to s (8) and s (3).

19 Fund 80, Community Service DPI Rules 19 Non-allowed items Excluded from a Community Service Fund are any academic subjects and extracurricular activities available only to pupils enrolled in the district. Student activities such as inter-scholastic athletics and other extra-curricular activities, pupil clubs, dances, field trips, student seminars and symposiums also may not be funded through Community Service Costs for any program or service that is limited to only school district pupils. Costs for any program or service whose schedule presents a significant barrier for ageappropriate school district residents to participate in the program or service. Costs that are not the actual, additional cost to operate community programs and services under s (19), Stats. Costs that would be incurred by the school district if the community programs and services were not provided by the school district.

20 Kaukauna School District Fund 80 Activity 20 Fund 80, Community Service and the Kaukauna Area School District Kaukauna Area School District currently levies approximately $80,000 for Community Service activities 50% of the police liaison services contracted through the City of Kaukauna are charged to Fund 80 50% of the District s Activities and Athletics Department administrative assistant salary and benefit package is costed to Fund 80 Kerber, Rose, and Associates, the District s independent audit team, as certified that the District s use of Fund 80 does meet regulations set by DPI KASD has accounted for the same items in Fund 80 for the past five years without audit issues The levy for Fund 80, which was frozen for two years by state statute, is no longer set and may be decreased or increased as the Board of Education sees fit

21 Kaukauna School District Fund 80 Activity 21 Wisconsin DPI Yes, Maybe, or No to Fund 80 DPI has weighed in on activities that Wisconsin public school districts have paid for through Fund 80. Below is a quick list of activities and DPI s stance: Middle school athletics Yes If any student in the district can participate Police liaison services Maybe Must have outreach to parochials, other duties Custodial and maintenance costs Yes Must have proof cost associated with activities Public relations for District No Not allowed due to promotion of district only Nursing services No School based service Scheduling facilities, software Yes Only a portion of the salary/benefit package Salaried staff member No School based service Day care program Yes If open to all students in the District

22 KASD and the Community Service Fund 22 Current state of affairs Options for the future KASD pays about $45,000 of the $100,000 City of Kaukauna police liaison officer invoice from Fund 80 KASD pays $35,000 of the $65,000 salary and benefit package for the administrative assistant in the District s Athletics Department The $80,000 tax levy adds about $0.05 cents to the mill rate ($9.13 per $1,000 in overall) With the tax levy mill rate scheduled to drop dramatically over the next five years due to debt retirement the District could explore options to transfer costs to the Community Service Fund, if legal, or take on new expenditures that are tied directly to Fund 80 New facilities may have added costs to the District budget would could be tied to community activities and Fund 80 Age appropriate student transportation via a Kobussen Buses contract and city type bussing may be possible with a tie to Fund 80

23 23 Fund 80, Community Service Fund QUESTIONS DISCUSSION COMMENTS

24 Fund 73, Other Post Employment Benefits 24 Other Post Employment Benefits Wisconsin public school districts may choose to fund post employment benefits via a pay as you go program or through an employee benefit trust account Employee benefit trust accounts must be registered with the State of Wisconsin, accounted for in Fund 73, and verified through an actuarial study completed by an accredited firm District s choosing to utilize a benefit trust account must deposit necessary funds from their operating budget account into the benefit trust account in order to pay for post employment benefits The Kaukauna Area School District is registered with the State of Wisconsin to pay for post employment benefits through a benefit trust account Fund 73, Employee Benefit Trust Accounts, may gain interest on investments Gain on investments in Fund 73 must be used to help offset future post employment benefit costs Pay as you go simply means funds come directly from a district s operating budget to pay for post employment benefits No matter the funding mechanism Other Post Employment Benefits are expenditures on employees that are no longer part of the active staff in the district and reduce the amount of money that can be spent on students in any given year

25 Kaukauna Schools Post Employment Benefit Program 25 Current Post Employment Benefit Program Kaukauna Schools Per the adopted employee handbook, the Kaukauna Area School District offers the following post employment benefits Three full years of health and dental insurance for any employee retiring from the District after 25 years of at least 750 hours of service per year Should the employee continue in the health and dental insurance program after retirement the employee must pay his/her portion of the insurance (currently 12.6% of the total cost for full time employees, more for those between 750 hours and 1,496 hours of employment per year) Employee only eligible until Medicare takes over Approximate cost to KASD for three years of family insurance is $32,000, $17,000 for single Employee may earn an additional two years of health and dental insurance at retirement based on the number of paid leave days the employee has at retirement date Five paid leave days equate to one month of insurance Employee may use up to 120 paid leave days toward health and dental insurance thus two years additional coverage is possible (120 days/5 days per month of insurance = 24 months maximum) Approximate cost to KASD for two additional years of family insurance is $21,500, $11,500 for a single plan Employees who pay for their life insurance plan from the time they retire until age 65 will receive five years of additional life insurance coverage paid by the District Average cost to KASD for an employee earning life insurance from age 65 to age 70 is $1,500

26 Kaukauna Schools Post Employment Benefit Program 26 Past post employment benefit program Based on post employment benefit changes made by the District following the passage of Wisconsin Act 10 the 30-year projected benefit costs were reduced from $48,000,000 to $30,232,000 Prior to Act 10 KASD paid post employment benefits by contract Upon retirement, employees with 15 years of experience in Kaukauna would receive up to 10 years of health insurance and 10 years of dental insurance paid in full The projected average cost for this plan was $120,000 for an employee with family insurance, $70,000 for single Life insurance was paid from age 65 to age 70 should the employee make payments from retirement age through age 65

27 Employee Benefit Trust Account: Earnings History 27 OPEB Trust Fund Balance Ending balance in KASD Employee Benefit Trust Fund account $1,047, $1,823, $1,971, $2,693, $1,032,924 District buy-down of OPEB Trust Fund began OPEB Trust Fund Earnings Earnings history for the KASD Employee Benefit Trust Fund account by year $7, % $28, % $15, % $14, % $5, %

28 KASD Employee Benefit Trust Account: Board of Education Action 28 Board of Education Action Given the earnings on the Kaukauna Area School District Employee Benefit Trust Account the Board of Education voted to buy down the balance in Fund 73 and payoff post employment benefits rather continuing to fund the Trust Account The buy down of Fund 73 started in and will conclude in The $2.6 million balance, which was accumulating interest and gains on investment at about 0.5%, was used to offset a portion of the cost associated with the Kaukauna High School Renovation Project KASD will continue paying post employment benefits through its operating budget, a strategy used up through the fiscal year

29 Employee Benefit Trust Account: Cost History and Actuarial Projection 29 Fund 73 OPEB Cost History Five year history of Kaukauna School District post employment benefit costs $1,278, $1,226, $1,035, $1,058, $1,448, cost included an early retirement program with full benefits paid during that year Fund 73 Actuarial Cost Projection Key Benefit Concepts projected post employment costs for KASD based on current benefit structure $1,086, $ 766, $ 701, $ 661, $ 660,000 Note all payments for OPEB after will be directly taken from the operating budget and completed through Fund 73

30 Fund 73 KASD Summary 30 Summary of Other Post Employment Benefits KASD has significantly reduced its future post employment benefit cost The Board of Education made an informed and educated decision to move away from the Employee Benefit Trust Account due to less than a 1% return on investment KASD shows a drop in post employment benefit costs per year over the next five years with higher amounts to follow based on the current actuarial study KASD will move back to the pay-as-you-go model for post employment benefit costs given the decision to back away from a long-range savings plan KASD continues to explore other retirement scenarios and the costs associated with plans

31 31 Fund 73, Other Post Employment Benefits QUESTIONS DISCUSSION COMMENTS

32 Kaukauna School District Other Funds 32 Fund 21, Special Trust Fund Special Revenue Trust Fund District or staff controlled activity accounts, donations, revenues and expenditures for WIAA tournament events, and other fund raisers fall within the Special Revenue Trust Fund account Funds may carryover from yearto-year which allows for annual contributions to meet a longterm goal Use of Fund 21 keeps donations out of Fund 10, General Operations, which then maintains full aid funding from the State Fund 49, Capital Projects Capital Projects Fund Fund 49 accounts for expenditures that are financed through an issuance of debt such as bonds, promissory notes issued per statute 67.12(12), state trust fund loans or land contracts Expenditures financed through a tax levy are not recorded in Fund 49 KASD utilized Fund 49 in as part of the Kaukauna High School Renovation Project funding Fund 60, Student Activities Student Activity Fund Student Activity funds are established to account for monies used to support the activities of student organizations and clubs The students in the organization are involved in the management of the organization s activities Disbursement of the organization s moneys is subject to the approval of the student organization and its supervisor The above funds do not affect the day-to-day operations of the District

33 Kaukauna Area School District General Operating Funds 33 Fund 10 General Education Fund 10 accounts for all revenues and expenditures utilized for the general education of all students All daily activities of a school district are accounted for in Fund 10 General revenues from both the State of Wisconsin, United States Government, and local tax payers all flow into Fund 10 to cover normal operating costs Fund 27 Special Education Fund 27 accounts for special education revenues and expenditures Costs directly associated with educating a student with special needs is tied directly to Fund 27 Students who qualify for special education are technically costed out in both Fund 10 and Fund 27 Fund 38 Non-referendum debt Fund 38 accounts for revenues and expenditures created through the use of nonreferendum based debt service Board of Education action and not a referendum creates Fund 38 Fund 38 revenues are part of the revenue limit formula and generally have NO impact on the tax levy

34 Kaukauna Area School District Building the Operating Budget 34 Building an operating budget Revenue limit formula Wisconsin Act 16 implemented revenue limits beginning with the school year. A district's revenue limit is the maximum amount of revenue that may be raised through state general aid and property tax for the General, Non-Referendum Debt (authorized after August 12, 1993), and Capital Expansion Funds, also referred to as Funds 10, 38, and 41 respectively The maximum limit is based upon enrollment changes, an inflationary increment, and each district's prior year controlled revenue. Upon application and approval by the Department, a district may increase its maximum limit by an additional amount for specific exemptions. A district then determines the maximum allowable levy for Funds 10, 38, and 41 by subtracting the Department-provided October 15 General Aid Certification and Poverty Aid estimates from the district's maximum revenue limit

35 Kaukauna Area School District Building the Operating Budget 35 Building and Operating Budget Revenue limit, as implied by the terminology, drives the operating budget creation. Estimation of the maximum revenue allowed creates a base in which expenditures can be built against Key components to the revenue limit formula Prior year base revenue Three year rolling average student count Recurring exemptions Allowed per pupil allocation change Exemptions to the revenue limit formula State equalized (general) aid For KASD the funds generated through the revenue limit formula equate to approximately 95% of the total Fund 10 annual revenues ($41.8 million of $44 million in )

36 Kaukauna Area School District Building the Operating Budget 36 Building the Revenue Limit A district s revenue limit for the current year is built off prior year figures. Key revenue limit components include: Prior year state equalization (general) aid Prior year computer aid received Prior year tax levy for non-referendum debt Three year rolling pupil average Total base year revenue is created off prior year figures and then moved forward to create a current year revenue limit Membership count drives per pupil allocation For KASD base year per pupil allocation will be $40,746,906 divided by 4,378 students or $9, per pupil General Aid Certification (14-15 Line 12A, src 621) + 26,160, Computer Aid Received (14-15 Line 17, Src 691) + 33, Hi Pov Aid (14-15 Line 12B, src 628) Fnd 10 Levy Cert (14-15 Line 18, Src 211) + 14,068, Fnd 38 Levy Cert (14-15 Line 14B, Src 210) + 482, Fnd 41 Levy Cert (14-15 Line 14C, Src 210) Aid Penalty for Over Levy (14-15 FINAL Rev Limit Worksheet) Total Levy for All Levied Non-Recurring Exemptions* - 0 Line 1 NET Base Revenue = 40,746,906 September & Summer FTE Membership Averages Count Ch. 220 Inter-District Resident Transfer 75%. Line 2: Base Avg:(12+.4ss)+(13+.4ss)+(14+.4ss) / 3 = 4, Summer fte: % (40,40,40) Sept fte: 4,278 4,353 4,410 Total fte 4,310 4,386 4,439 Line 6: Curr Avg:(13+.4ss)+(14+.4ss)+(15+.4ss) / 3 = 4, Summer fte: % (40,40,40) Sept fte: 4,353 4,410 4,418 Total fte 4,386 4,439 4,453

37 Kaukauna Area School District Building the Operating Budget 37 Building the Revenue Limit As shown, the revenue limit uses the figures from the previous slide to create the maximum allowable revenues before exemptions base revenue membership Base revenue per member Revenue Limit Worksheet Base Revenue (Funds 10, 38, 41) (from left) 40,746,906 Base Sept Membership Avg (12+.4ss, 13+.4ss, 14+.4ss/3) (from left) 4, Base Revenue Per Member (Ln 1 / Ln2) (w ith cents) 9, Per Member Change (A+B) 0.00 Allow ed Per Member Change (15-16 = +$0.00/Member) 0.00 Low Rev Incr ((9,100 - (3 + 4A))-4C) Not < 0 0 Low Rev Dist in CCDEB (Enter DPI Adjustment) Maximum Revenue / Member (Ln 3 + Ln 4) 9, Current Membership Avg (13+.4ss, 14+.4ss, 15+.4ss/3) (from left) 4, Rev Limit, No Exemptions (Ln7A + Ln 7B) (rounded) 41,193, membership revenue limit KASD had a base revenue limit of $40,746,906 in which increased to $41,193,667 in Non-recurring Exemptions Non-recurring exemptions may be added to the revenue limit of a Wisconsin public school district on an annual basis. Examples of nonrecurring exemptions include declining enrollment, approved energy efficiency costs, prior year open enrollment students not counted on Third Friday count, and adjustment for private school choice students. Kaukauna Schools received $233,000 in non-recurring exemptions in The amount does not carry forward to the base revenue for

38 Kaukauna Area School District Building the Operating Budget 41 Building the Operating Budget Breaking down the revenue limit formula History of student full time equivalency count The District has shown steady growth in the three year rolling average FTE Expected trending over the next five years which is key to the revenue limit formula shows a flattening out of the three year average figure which then creates less operating revenue For the first time in about 10 years the District had a nearly flat student count from to (4,410 to 4,418 FTE) which will play out in the rolling average over the next three years KASD 3 Year Rolling Average Pupil Count

39 Kaukauna Area School District Building the Operating Budget 48 Building the Operating Budget Revenue limit formula build General aid Based on the state aid formula shown in the previous two slides KASD will receive $26,609,000 for That amount is inserted into line 12 of the revenue limit formula Property tax levy Subtracting the state aid figure from the maximum revenue limit creates the operating tax levy for the fiscal year ($15,242,059 for ) before referendum passed debt service is applied Total tax levy KASD levied $17,811,016 in or $9.12 per $1,000 of equalized value to build not only the operating budget but also the overall District spending plan Revenue Limit With All Exemptions (Ln 9 + Ln 10) 41,851, Total Aid to be Used in Computation (12A + 12B) 26,609,832 A EST of October 15 Certification of General Aid 26,609,832 B. State Aid to High Poverty Districts (not all dists) 0 DISTRICTS MUST ESTIMATE AN AMOUNT FOR THE OCTOBER 15, 2015 AID CERTIFICATION. 13. Allowable Limited Revenue: (Line 11 - Line 12) 15,242,059 (10, 38, 41 Levies + Src 691. Src 691 is DOR Computer Aid.) 14. Total Limited Revenue To Be Used (A+B+C) Not >line 13 15,242,059 Entries Required Below: Amnts Needed by Purpose and Fund: A. Gen Operations: Fnd 10 including Src 211 & Src ,754,449 (Proposed Fund 10) B. Non-Referendum Debt (inside limit) Fnd 38 Src ,610 (to Budget Rpt) C. Capital Exp, Annual Meeting Approved: Fnd 41 Src 210 (to Budget Rpt) 15. Total Revenue from Other Levies (A+B+C+D) (A+B+C+D): 2,665,073 A. Referendum Apprvd Debt (Non Fund 38 Debt-Src 210) 2,585,700 B. Community Services (Fnd 80 Src 210) 79,373 (to Budget Rpt) C. Prior Year Levy Chargeback (Src 212) (to Budget Rpt) D. Other Levy Revenue - Milwaukee & Kenosha Only (to Budget Rpt) 16. Total Levy + Src 691, "Proposed Levy" (Ln 14 + Ln 15) 15,145,943 17,907, Est Src 691 (Comp Aid) Based on Ln 16 & Values Entered (to Budget Rpt) 96, Fnd 10 Src 211 (Ln 14A-Ln 17), Budget 14,658,333 Line 18 ( not 14A) is the Fund 10 Levy certified by the Board. 19. Total Fall, 2015 All Fund Tax Levy (14B + 14C ) 17,811,016 Line 19 is the total levy to be apportioned in the PI-401. Levy Rate =

40 Kaukauna Area School District Tax Levy 49 Building the Operating Budget Tax Levy While it may seem easy to solve budgetary woes by adding to the tax levy to cover additional costs the revenue limit formula specifically stops non-referendum taxes from being added to cover normal operating costs KASD levies in Fund 10, General Operations; Fund 38, Non-referendum debt service; Fund 39, Referendum debt service; and Fund 80, Community service Fund 10 and Fund 38 taxes fall under the revenue limit authority The Board of Education set the tax levy at $9.13 per $1,000 of property value, the same as it was the previous year. Given the soon-to-be completed debt service on Kaukauna High School KASD will see, without some type of approved referendum, a significant drop in the tax levy and mill rate within three years

41 50 Kaukauna Area School District Tax Levy Tax Levy Comparison A comparison of tax levy amounts, based on mill rate and category, is shown at the right The chart is sorted by mill rate for general operations Note the $1.33 for KASD referendum debt will be removed in two years thus dropping the amount charged for taxes without significant change (referendum) 2016 Tax Levy Mill Rate Comparison - Area School Districts Fd 10 Fd 38 Fd 39 Fd 41 Fd 80 Total District Year General Nonreferendum debt Referendum debt Capital projects fund Community service fund Tax Levy M ill Rate Brillion Sch Dist 2016 $ 5.94 $ 0.33 $ 3.99 $ - $ 0.10 $ Two Rivers Public Sch Dist 2016 $ 6.16 $ 0.42 $ 3.67 $ - $ 0.21 $ Chilton Sch Dist 2016 $ 6.40 $ 0.35 $ 4.34 $ 0.24 $ 0.22 $ Freedom Area Sch Dist 2016 $ 6.71 $ 0.28 $ 1.67 $ - $ 0.03 $ 8.69 Rosendale-Brandon Sch Dist 2016 $ 6.73 $ 0.35 $ 1.79 $ - $ - $ 8.87 Howard-Suamico Sch Dist 2016 $ 6.99 $ 0.12 $ 1.95 $ - $ 0.14 $ 9.20 Pulaski Community Sch Dist 2016 $ 7.38 $ 0.21 $ 1.00 $ 0.16 $ 0.09 $ 8.84 Kimberly Area Sch Dist 2016 $ 7.42 $ - $ 2.27 $ - $ 0.03 $ 9.72 Wrightstown Community Sch Dist 2016 $ 7.50 $ - $ 2.34 $ - $ - $ 9.84 Kaukauna Area Sch Dist 2016 $ 7.51 $ 0.25 $ 1.33 $ - $ 0.04 $ 9.13 Menasha Joint Sch Dist 2016 $ 7.53 $ 0.99 $ 2.26 $ - $ 0.49 $ Fond du Lac Sch Dist 2016 $ 7.65 $ 0.19 $ 1.59 $ - $ 0.45 $ 9.88 De Pere Sch Dist 2016 $ 7.80 $ 0.19 $ 2.81 $ - $ 0.01 $ Sheboygan Falls Sch Dist 2016 $ 7.96 $ 0.16 $ 2.01 $ - $ 0.16 $ Hortonville Area Sch Dist 2016 $ 8.12 $ - $ 1.68 $ - $ - $ 9.80 Howards Grove Sch Dist 2016 $ 8.15 $ 0.16 $ 1.24 $ - $ - $ 9.55 Seymour Community Sch Dist 2016 $ 8.21 $ - $ 1.22 $ - $ 0.07 $ 9.50 Oshkosh Area Sch Dist 2016 $ 8.32 $ 0.79 $ 0.20 $ - $ 0.29 $ 9.60 Appleton Area Sch Dist 2016 $ 8.38 $ 0.20 $ 0.47 $ 0.35 $ 0.21 $ 9.61 Neenah Joint Sch Dist 2016 $ 8.45 $ 0.01 $ - $ 0.06 $ 0.05 $ 8.57 West De Pere Sch Dist 2016 $ 8.49 $ 0.10 $ 2.31 $ - $ - $ Kohler Sch Dist 2016 $ 8.60 $ 0.18 $ 1.54 $ - $ 0.16 $ Little Chute Area Sch Dist 2016 $ 8.65 $ 0.16 $ 1.96 $ 0.05 $ 0.15 $ Green Bay Area Public Sch Dist 2016 $ 8.84 $ - $ 0.98 $ - $ 0.34 $ Manitowoc Sch Dist 2016 $ 8.91 $ - $ - $ - $ - $ 8.91 Hilbert Sch Dist 2016 $ 8.99 $ - $ 3.37 $ - $ 0.07 $ Ashwaubenon Sch Dist 2016 $ 9.05 $ 0.06 $ 0.67 $ - $ 0.21 $ 9.99 Sheboygan Area Sch Dist 2016 $ 9.67 $ 0.49 $ 1.02 $ 0.32 $ 0.39 $ Stockbridge Sch Dist 2016 $ $ 0.86 $ 0.93 $ - $ - $ Average $ 7.96 $ 0.24 $ 1.75 $ 0.04 $ 0.13 $ 10.12

42 Kaukauna Area School District Building the Operating Budget 51 Operating Budget Revenues Revenue limit funds, other funds As noted the revenue limit amount accounts for over 90% of the total operating budget. Other areas that fill the remainder of the budget include revenues from local sources, other state aid revenue, and federal revenue Local revenues include items such as ticket sales, entry fees, transportation reimbursements, and revenue from area districts for open enrollment Other state revenue includes student transportation aid, library aid, and small AODA grants Federal aid includes Title I, Title II, and Title III funds, special education flow through and preschool aid, and special project grants Fund 10 and Fund 27 revenue total $46,500,000 for KASD

43 Kaukauna Area School District Building the Operating Budget 52 Building the Operating Budget Revenue breakdown A breakdown of revenues by source category is shown to the right Property tax funds are part of 200, revenue from local sources, while general state aid is housed in 600, state revenues Kaukauna Area School District - Revenue Budget Breakdown Fund 10 - General Operations Revised Budget Breakdown 200 Revenue from Loca l Sources $ 15,202, % 300 Revenue from Intermedi a te Sources $ 726, % 500 Revenue from Other Sources $ 27, % 600 State Revenues $ 27,692, % 700 Federa l Revenues $ 435, % 900 Other Revenues $ % Fund 10 General Operations $ 44,084, Note that total special education revenue totals $2.4 million with the majority of that coming from state aid on prior year SPED expenditures KASD Operating Revenue = $46,523,318 Fund 27 - Special Education 300 Revenue from Intermedi a te Sources $ 70, % 500 Revenue from Other Sources $ 3, % 600 State Revenues $ 1,499, % 700 Federa l Revenues $ 865, % Fund 27 Special Education $ 2,438, Total Operating Revenues $ 46,523, %

44 Kaukauna Area School District Building the Operating Budget 53 Building the Operating Budget Non-referendum debt service Fund 38, non-referendum debt service is locked in annually and is part of the overall spending plan. Non-referendum debt has been approved through Board of Education action and is generally tied to a bond sale or note sale School boards may borrow up to $1 million for any reason without input from the District constituents Non-referendum debt issues in excess of $1 million must be posted in the District s official newspaper, have a public hearing held, and go to formal referendum should enough signatures be collected from registered voters Non-referendum debt service falls WITHIN the revenue limit and is part of a district s operating budget

45 57 General Operations Building the Operating Budget QUESTIONS DISCUSSION COMMENTS

46 KASD Operating Expenditures by % % 0.49% 0.00% 0.53% 0.22% 26.65% 19.06% 48.53% Kaukauna Area School District Expenditures by % of Budget 58 Salaries Benefits Purchased services Non-capital objects Capital objects Debt retirement Property insurance Other objects 0.41% 3.36% KASD Operating Expenditures by % % 0.00% 0.17% 31.34% 49.95% 15.38% Salaries Benefits Purchased services Non-capital objects Capital objects Debt retirement Property insurance Other objects KASD Operating Expenditures by % % 3.76% 0.04% 0.69% 0.14% 33.49% 51.26% District operating expenditures by percentage over a three year cycle Note salary and benefit costs far outweigh all other areas and beyond will see an increase in the salary/benefit percentage with the elimination of the KHS project cost 15.48% Salaries Benefits Purchased services Non-capital objects Capital objects Debt retirement Property insurance Other objects

47 59 Kaukauna Area School District Major Operating Expenditures Like all other school districts there are large scale operating costs associated with particular activities. A listing of high end and potentially controllable cost categories are shown to the right High end operating expenditures Listed below are traditionally high cost areas by percentage of the normal operating budget Salaries Employee and post-employment benefits Open enrollment out students Student transportation Capital projects Information technology

48 Kaukauna Area School District Major Expenditure Areas 60 Salaries KASD is slated to spend $22.8 million on salaries in or roughly 47.3% of the operating budget KASD has increased its salary cost over the past five years from $19.8 million to $22.8 million or roughly 15% Classroom teaching staff salaries have gone from $14.7 million in to a projected $17.2 million in (17% increase) Special education teaching salaries increased $700,000 over the past five years (up 29.6%) Special education teaching assistant salaries have increased $160,000 over the same time frame or 14.2% KASD administrative costs moved from $1.4 million to $1.7 million over the past five years (21.4% increase) KASD has educated roughly the same number of students each year over the past five years (3,922) Salary increases, based on the Wisconsin Act 10 amounts and CPI, have averaged 1.99% since

49 61 Kaukauna Area School District Major Expenditure Areas Salaries Data is shown regarding Kaukauna Area School District operating salaries costs were prior to Wisconsin Act 10 KASD employed 237 certified staff members in KASD employs 281 certified staff members in KASD employed 13 admins in in Figures includes.6 FTE assistants at elementary schools KASD employed 79 Educational Assistants in KASD has 100 Educational Assistants on staff $23,500, $23,000, $22,500, $22,000, $21,500, $21,000, $20,500, $20,000, $19,500, $19,000, $18,500, $18,000, $19,838, $21,084, KASD 10-year Salary History $21,664, $22,099, $21,343, $21,173, $19,785, $20,163, $21,601, $22,817, $22,233,

50 Kaukauna Area School District Major Expenditure Areas 62 Salaries Staffing additions Reduced class sizes have played a significant role in the staffing additions along with a modified schedule for students at River View Middle School and trimester approach at Kaukauna High School A chart showing class sizes for grades 4K-6 th from and illustrates the change and a partial reason for added staff KASD added 9.0 FTE for grades 4K-6 th from (classroom teaching staff) to while educating 54 less students in the same grade levels Student:Staff Ratio Comparison Classroom FTE Per Student Avg Class Sz Avg Class Sz Difference Cert Staff Cert Staff Difference 4-yr old Kdg yr old Kdg st grade nd grade rd grade th grade th grade th grade KASD educated 2,290 students in Grades 4K-6 in , 2,236 in Grades 4K-6 in

51 Kaukauna Area School District Major Expenditure Areas 63 Salaries Certified Staff Salary Comparison Based on information gathered by the Human Resources Department and presented to the Board of Education on January 11, 2016, KASD has the highest average salary for certified staff of any Fox Valley Association school district Based on figures (most recent available) the conference average was $53,469 with 14.3 years of experience KASD average salary in was $61,694 with 15.6 years experience Base level starting wages in ranged from $28,983 to $39,310 while top wage rates were from $69,968 to $80,864 Kaukauna s base pay was $37,804 (now $40,000) and top pay was the $80,864 (now $82,660) Additional staff are placed somewhere within the salary ranges thus added costs are bestowed upon districts with higher pay schedules compared to those with lower schedules when adding employees Fox Valley Association - Certified Staff Salary/Experience Comparison Based on PI1202 Data/DPI School District Avg Salary Local Exp Total Exp Oshkosh Area School District $ 48, Hortonville Area School District $ 49, Kimberly Area School District $ 51, Neenah Joint School District $ 56, Appleton Area School District $ 57, Fond du Lac Area School District $ 57, Kaukauna Area School District $ 61, Average $ 54, KASD comparison to FVA average 280 $ 7,050 $ 1,974,080 FTE Difference Budget Diff

52 Kaukauna Area School District Major Expenditure Areas 64 Salaries Future Salary Costs Based on current staffing levels, additional staff needed to implement and maintain the Technology Plan, and staff increases due to enrollment at varied levels the District is currently forecasting salary costs to escalate to $24.7 million by , up from $22.8 million in Salaries are projected on a CPI of 1.6% following CPI for is likely to be in the 0.15% range and the budget is built on that number Additions to or reductions from current staffing levels outside those outlined above will skew the numbers shown $25,000, $24,500, $24,000, $23,500, $23,000, $22,500, $22,000, KASD 5-Year Salary Forecast $24,761, $24,371, $23,987, $23,604, $23,124, FY Activity FY Activity FY Activity FY Activity FY Activity Kaukauna Area School District Operating Budget Salaries FY Activity FY Activity FY Activity FY Activity FY Activity Total Salary Cost $ 23,124, $ 23,604, $ 23,987, $ 24,371, $ 24,761, Total Operating Budget $ 45,999, $ 46,973, $ 47,633, $ 48,358, $ 49,319, Salaries % of Operating Budget 50.27% 50.25% 50.36% 50.40% 50.21%

53 Kaukauna Area School District Major Expenditure Areas 65 Employee Benefits The Kaukauna Area School District offers a fairly lucrative and costly benefit package to its employees which also carries over to include a majority of retirees KASD is required to pay 50% of an employee s cost for FICA and Medicare tax KASD is required to pay 50% of all eligible employee s Wisconsin Retirement System payment Total cost is 13.2% of salary for calendar year 2016 KASD pays 6.6% for all employees that qualify by working at least 440 hours in a year School districts used to pay the full amount of WRS but this was changed with Act 10 KASD offers a health and dental insurance package paid at 87.4% of total cost for full time employees (1,496 hours per year or more) and prorated for those working at least 748 hours per year KASD offers long term disability insurance and life insurance paid at 100% to employees working 748 hours per year or more KASD offers health and dental insurance to retirees who had qualified for the benefit while employed. The post employment benefit program is based on the following: Employee must have worked for the District for 25 years at the time of retirement If qualification is met the employee will receive three years of health insurance and three years of dental insurance paid at the same percentage by the District as when the employee retired (currently paid at 87.4%) Employee can purchase up to two more years of health and dental insurance based on the number of paid leave days remaining in the employee s bank at the time of retirement (60 unused paid leave days constitutes one year of insurance) The benefit sunsets at Medicare age

54 Kaukauna Area School District Major Expenditure Areas 66 Employee Benefits Overall Cost of Benefits KASD is projected to spend $8,053,000 on employee benefits during the school year Roughly 16.7% of the operating budget will be devoted to current and former employees for benefits KASD will spend $2,058 per student on employee benefit costs in Prior to Wisconsin Act 10 being implemented KASD spent $10.8 million on employee benefits ( ) Benefit package at the time included full WRS payment by KASD as well as a fully vested health insurance plan, lengthier post employment benefits, and long term care for every employee In , 24.5% of the operating budget was devoted to employee benefits Projections show employee benefit costs growing to $8.5 million in Health insurance costs are projected at 6%, post employment benefit costs are down in this forecast Employee benefit costs are controllable The benefit package offered to employees can be modified at any time through Wisconsin Act 10 protocols Insurance packages and percentages are no longer negotiated items leaving districts with discretion as to carriers and plans

55 Kaukauna Area School District Major Expenditure Areas Employee Benefit Costs KASD historical and projected overall benefit costs are shown below The , pre Wisconsin Act 10 benefit costs are $2.8 million higher than the current year s projected costs and $2.3 million more than the anticipated benefit expenditures Recurring Cost: A recurring cost is a regular cost that must be carried in a budget from year-to-year with likelihood that the cost will not be reduced. Salary and benefit costs are recurring costs. Staffing additions create recurring costs. $12,000, $10,000, $8,000, $6,000, $4,000, $2,000, $- KASD TOTAL EMPLOYEE BENEFIT COSTS Total Employee Benefit Costs $ 10,843, $ 8,433, $ 7,594, $ 8,483, $ 8,393, $ 8,053, $ 7,652, $ 7,793, $ 8,013, $ 8,188, $ 8,504, Total Operating Budget $ 44,381, $ 40,860, $ 43,302, $ 44,514, $ 45,029, $ 48,216, $ 45,999, $ 46,973, $ 47,633, $ 48,358, $ 49,319, Benefit % of Operating Budget 24.43% 20.64% 17.54% 19.06% 18.64% 16.70% 16.64% 16.59% 16.82% 16.93% 17.24%

56 Kaukauna Area School District Major Expenditure Areas 69 Salaries and benefits Salary and benefit costs shown as a percentage of the overall operating budget KASD Operating Cost by % KASD Operating Cost by % KASD Operating Cost by % Salary/benefit total cost All other costs Salary/benefit total cost All other costs Salary/benefit total cost All other costs 28% 36% 33% 72% 64% 67%

57 Kaukauna Area School District Major Expenditure Areas 70 Open Enrollment Aid transfer The inter-district public school open enrollment program allows parents to apply for their children to attend public school in a school district other than the one in which they reside Both the nonresident and resident school districts may deny an application for reasons specified in state law. If an application is denied by either the resident or nonresident school district, the parent may file an appeal with the DPI within 30 days. The DPI is required to affirm the school district s decision unless the DPI determines that the decision was arbitrary or unreasonable The resident school district counts the pupil in membership for state aid and revenue limit purposes For each regular education pupil, a uniform state-set amount is transferred from the resident school district to the nonresident school district in the final state aid payment each year - $6,639 per student in For each student coming to Kaukauna from another school district KASD will receive $6,639. For KASD students leaving and attending another public school there will be $6,639 in aid removed from Kaukauna For children with disabilities, no aid transfer is made. Instead, the nonresident school district must bill the resident school district for the basic open enrollment amount plus any actual, additional costs to provide special education to the pupil For DPI has mandated a $12,000 per pupil transfer for SPED students. Given that the majority of KASD s transfers in the past cost $6,600 this mandate cost KASD an additional $200,000 in open enrollment expense

58 Kaukauna Area School District Major Expenditure Areas 71 Open Enrollment Historical Perspective for KASD 757 students living within the Kaukauna School District boundary lines enrolled into another public school for students living outside KASD boundary lines enrolled into the District for Comparatively 275 students were open enrolled out in and 36 in 6.5% of the District s population enrolled into another public school in while 16.61% enrolled out to public schools this year Kaukauna School District Open Enrollment Summary Open Enroll Open Enroll Out Open Enroll Open Enroll In Out % of FTE In % of FTE % % % % % % % % % % % % % % % % While a return of an open enrollment student out will add to the class size somewhere across the District careful analysis of OE out shows a similar number of students partaking from each grade level there are no enrollment spikes in a particular grade

59 Kaukauna Area School District Major Expenditure Areas 72 Open Enrollment Aid transfer The Kaukauna Area School District will receive $761,000 in aid from other school districts for educating their students during the school year KASD will lose $4,643,000 in state aid to other public schools for educating KASD students in Net loss = $3,882, % of KASD s operating budget goes to other public school districts to educate Kaukauna students Kaukauna School District Open Enrollment Summary State Aid State Aid Net Open OE Out Out In Enroll Loss % of Budget $ 1,718, $ 279, $ 1,438, % $ 2,240, $ 342, $ 1,897, % $ 2,733, $ 426, $ 2,307, % $ 3,192, $ 421, $ 2,771, % $ 3,249, $ 493, $ 2,756, % $ 3,743, $ 575, $ 3,167, % $ 4,510, $ 556, $ 3,953, % $ 4,643, $ 761, $ 3,882, % Open enrollment continues to be a major cost for KASD. The District ranks in the top 10 in the State of Wisconsin for students lost compared to students gained for public school open enrollment

60 Kaukauna Area School District Major Expenditure Areas 73 Student Transportation KASD is projected to spend $2.285 million on student transportation in or 4.74% of its operating budget The projected budget is $143,000 less than the cost. KASD is down a couple of routes this year, gas costs are down, and special education transportation has been reduced Cost is actually down from a five year high of $2.437 million in Tanner Early Learning Center will account for $532,000 of the transportation budget based on District policy regarding bussing Athletic team transportation is budgeted at less than $70,000 for the current year Vehicle gas/diesel costs have dropped dramatically over the past five years with the budget for $90,000 less than what was spent in Regular Education Transportation Costs FY Activity FY Activity FY Activity FY Activity Revised Budget 10 E TANNER Regular $ 413, $ 531, $ 524, $ 522, $ 532, E RIVERVW Athletics $ 4, $ 3, $ 6, $ 8, $ 8, E KHS Athletics $ 59, $ 43, $ 54, $ 61, $ 60, E KHS Field trips $ $ 1, $ 3, $ 4, $ 4, E DISTRIC Vehicle gas $ 240, $ 240, $ 194, $ 204, $ 158, E DISTRIC Regular transportation $ 804, $ 902, $ 850, $ 882, $ 844, E DISTRIC Parochial school transport $ 315, $ 320, $ 295, $ 199, $ 189, E DISTRIC Summer school $ 6, $ 8, $ 7, $ 13, $ 10, E DISTRIC Parent contract reimburse $ 14, $ 9, $ 18, $ 118, $ 118, E DISTRIC Field trips $ 22, $ 18, $ 15, $ 28, $ 25, Special Education Transportation Costs Kaukauna Area School District - Student Transportation Cost 5-Year History General Operations $ 1,884, $ 2,080, $ 1,970, $ 2,043, $ 1,950, E KHS Athletics $ 3, $ 7, $ 7, $ 7, $ 7, E DISTRIC SPED transportation $ 234, $ 183, $ 172, $ 371, $ 53, E DISTRIC SPED transportation $ 1, $ 150, $ 192, $ 243, E DISTRIC SPED transportation $ 67, $ 9, $ 25, E DISTRIC Field trips $ $ 4, $ 9, $ 6, $ 6, Special Education $ 306, $ 356, $ 382, $ 385, $ 335, TOTAL STUDENT TRANSPORTATION COST $ 2,191, $ 2,437, $ 2,353, $ 2,428, $ 2,285,588.43

61 Kaukauna Area School District Major Expenditure Areas 74 KASD Transportation Policy KASD Policy Highlights Students transported based on distance from school 4K, 5K =.5 miles or more from school with door-to-door pick-up Grades 1-4 = 1.0 miles or more from school with designated stops Grades 5-12 = 2.0 miles or more from school with designated stops Any student will be transported should the route to school be deemed hazardous Special education students with transportation designated in their individual plan will be transported no matter what distance they live from school Parochial school students residing in the District will be transported based on the same protocols as public school students Open enrollment students do not receive District provided transportation State Mandated Student Transportation State of Wisconsin Policy Highlights Students must be transported to and from school based on distance from school Under Section (2),Wisconsin Statutes, a pupil attending a public elementary or secondary school, including four- and five-year-old kindergarten, is entitled to transportation by the public school district in which the pupil resides if the pupil resides two or more miles from the nearest public school the pupil is entitled to attend School districts may also elect to provide transportation for pupils who are not required by law to be transported. If a school district elects to provide such transportation to some, but not to all such pupils, the law requires reasonable uniformity in the minimum distance that pupils attending public and private schools will be transported Any student will be transported should the route to/from school be deemed hazardous

62 75 Kaukauna Area School District Major Expenditure Areas Student Transportation High Cost Centers When compared to state statute Kaukauna s student transportation policy creates riding opportunities for many more students than necessary. For reference the following would constitute major cost centers for student transportation due to policy 4K, 5K student transportation over.5 miles from school and door-to-door pick-up KASD also utilizes 29 passenger buses for all Tanner School routes due to the door-to-door pick-up policy Normal capacity on a school bus is 72 thus 29 passenger buses basically create three routes to one with a 72 passenger bus each route costs approximately $30,000 with gas Grades 1-4 at 1.0 miles or more from school getting free bussing compared to the 2.0 mile minimum in state statute

63 Kaukauna Area School District Major Expenditure Areas 76 Student Transportation Cost Comparison A comparison of costs in regular education transportation across the area shows KASD spends more of its operating budget on bussing by percentage and also more per pupil than any other district While land mass of a district does dictate student bussing cost, transportation policy can be used to offset the square miles of a District by limiting the number of students riding

64 Kaukauna Area School District Major Expenditure Areas 77 Student Transportation Cost savings/contract In order to create cost savings in student transportation a policy change would have to take place Student transportation has been on the radar screen of the Board of Education for several years but no changes have been enacted Kobussen Buses The District transportation contract with Kobussen Buses runs through the school year KASD route prices will increase 2.5% next year after a 1.85% increase this year KASD is reviewing options for the contract following the school year

65 Kaukauna Area School District Major Expenditure Areas 78 Capital Projects $900,000 Capital Projects/Maintenance Budget Since the Kaukauna Area School District Board of Education has allocated $900,000 toward capital projects in an effort to maintain the capital assets of the District At present the replacement value of the six buildings owned by KASD totals $350 million Board action in allocated a line item to maintain buildings $900,000 allocation does not include any normal maintenance department line items such as toilet repairs, paint, floor cleaning, etc The Buildings and Grounds Committee essentially allocates funds each year for projects to be taken on by the District. All projects are run through the Board of Education for approval The $900,000 allocation is approximately 2.5% of the overall operating budget for KASD Prior to creation of the budget line for capital projects the District utilized a system in which projects were only done when an emergency came into play and generally the money was taken from fund balance to pay for the task

66 79 Kaukauna Area School District Major Expenditure Areas Capital Projects $900,000 allocation Carryover of funds has yet to occur since its inception. Each year the budget is fully allocated and spent down The amount could be carried over annually, allocated in the fund balance, and a very large scale project completed although state aid would be lost Capital Project List A partial capital project list showing how the $900,000 allocation has been utilized over the past five years is shown below Park School Renovation Project (partial) Roof replacements River View, Quinney Playground replacement Tanner Playground drainage correct Quinney Asphalt projects Haen, Tanner Energy efficiency project district wide Gym floor reworks River View, Quinney Renovation project River View Renovation project Kaukauna High School

67 Kaukauna Area School District Major Expenditure Areas 80 Options for taking care of the District s capital assets Annual allocation Budget funds annually As KASD is doing right now funds are budgeted annually, a list of projects is developed, and Board action approves projects within the budget Cyclical in nature Board has ultimate say in amount allocated thus no set amount Long range planning tool Emergency only No annual budget Building maintenance done through emergency repairs or replacement only with no annual budget set aside Cost for repairs comes from other areas within the operating budget that year or fund balance Floats maintenance annually could be minimal one year and maximum the next year Referendum request Public approval for additional funds for maintenance Approved referendum to tax more than the legal limit for either recurring or nonrecurring maintenance issues Must pass in the public first Can be used with the emergency only aspect of capital asset repairs Long range payback on current year issues

68 Kaukauna Area School District Major Expenditure Areas 81 Capital Projects KASD Commitment At present the Board of Education through the Buildings and Grounds Committee is committed to the capital projects budget allocation of $900,000 Future budgetary constraints, which will be discussed at the end of this presentation, may yield a change in the way capital projects are paid for The Energy Efficiency Exemption model is being considered by the Board of Education as an alternative to the $900,000 capital projects line item. Utilizing the non-recurring exemption allows the $900,000 to be allocated to other District operations The current model has shown great success in the District Park School, energy efficiency, and Kaukauna High School upgrades are just three of the prime examples that the nearly $1 million allocation is working Buildings and Grounds is working through a laundry list of possible projects for summer, 2016, although nothing has been set in stone The Board of Education will have discussion on the capital projects line item prior to setting the budget

69 Kaukauna Area School District Major Expenditure Areas 82 Information Technology Operating Budget The IT Department operating budget for is $670,100 or roughly 1.4% of KASD s overall spend for the current year With the exception of the school year, when unallocated funds were utilized by the IT Department, the overall cost for this area has been at 1.4% of total operations includes funds received by credit from Microsoft that will be spent during the fiscal year Fund 10 - General Operations FY Activity FY Activity FY Activity FY Activity Revised Budget Fund 27 - Special Education Kaukauna Area School District - Information Technology Budget History 310 PERSONAL SERVICES $ 76, $ 127, $ 156, $ 155, $ 185, EMPLOYEE TRAVEL $ 2, $ 4, $ 3, $ 3, $ 3, DATA PROCESSING $ 6, $ 1, $ 5, $ 5, CESA PAYMENTS $ 5, $ 5, $ 1, GENERAL SUPPLIES $ 177, $ 451, $ 133, $ 204, $ 68, NON-CAPITAL EQUIPMENT $ 186, $ 398, $ 163, $ 166, $ 230, NEW EQUIPMENT $ 75, $ 74, $ 87, $ 30, $ 126, DUES & FEES $ 23, $ 6, $ 4, $ $ 6, Fund 10 Expense $ 552, $ 1,068, $ 556, $ 561, $ 626, PERSONAL SERVICES $ 15, $ 7, $ 35, $ 26, EMPLOYEE TRAVEL $ CESA PAYMENTS $ GENERAL SUPPLIES $ 18, $ 279, $ 54, $ 44, $ 44, NON-CAPITAL EQUIPMENT $ 12, $ 20, NEW EQUIPMENT $ 4, $ 13, DUES & FEES $ 1, Fund 27 Expense $ 54, $ 320, $ 89, $ 70, $ 44, TOTAL IT DEPARTMENT COST $ 607, $ 1,389, $ 645, $ 632, $ 670,101.10

70 Kaukauna Area School District Major Expenditure Areas 83 Information Technology Technology Plan The future of technology for students in the District will change dramatically starting in as the recently approved Technology Plan is put in place A commitment of approximately $500,000 per year, annually, will be added to the IT Department budget - $300,000 for equipment and $200,000 for staffing as the District begins to step-in a plan that will see computers readily available in all elementary school classrooms (eventually) and a device for every student in the middle and high schools The offset to this cost is via health insurance savings due to a carrier change made by the District on January 1, 2016 The IT Department budget will swell to about $1.2 million per year with the additional employees or 2.5% of the operating budget

71 Kaukauna Area School District Major Expenditure Areas 84 Summary Major Expenditure Areas vs Total Operating Budget The major expenditure areas discussed equate to $40.0 million for out of the $48,000,000 operating budget (83.3%) All other cost centers are in the $8 million remaining. This would include items such as building utilities, general maintenance, supplies and materials for classrooms, offices, athletics/activities, property and casualty insurance including workers compensation insurance ($300,000 for KASD), dues and fees, purchased services, and communications KASD has an annual cleaning contract with Building Services Group for daytime building coverage and general/summer cleaning of $813,000 (1.7% of the budget) KASD contracts with CESA 6, a regional education provider for multiple schools, for services not possible to provide on its own. The total for this contract is $475,000 (1.0%)

72 Kaukauna Area School District Other Expenditures 85 Some interesting and eye opening expenditures for the Kaukauna Area School District outside the major cost centers shown earlier include the following: KASD will spend $44,000 on copy paper during the school year Based on that budget figure KASD will purchase and use 8,800,000 sheets of paper or approximately 2,250 sheets for every student educated in the District KASD will pay approximately $36,000 this year for trash/recycling fees The District s total electricity bill for will be $350,000 The cost of paper toweling for the District s restrooms is $17,000 for a fiscal year District athletics yield $135,000 in revenues compared with $563,000 in expenditures for a net cost of $428,000 for Revenues include ticket sales, entry fees, and student fees Expenditures include the Athletic Department salaries and benefits along with all coaching and event worker salaries and benefits, bussing, and supplies/materials/fees KASD carriers property, liability, and workers compensation insurance at a cost of $290,000 per year The District s work comp cost is $190,000 per year due to very high claim amounts over the past five years.

73 Kaukauna Area School District Fiscal Sustainability 86 Fiscal Sustainability District Goal One of the three goals of the District is fiscal sustainability. KASD contracts with PMA Financial Services to create a five year budget outlook with District data driving the final outcome PMA has created a model that is used by over 100 schools in Wisconsin to allow school boards to look forward from a fiscal lens R.W. Baird does the same for another 150 schools in the state Both models allow districts to manipulate data and come up with final projected balances in their operating budget, food service area, and associated accounts For projection purposes KASD generally leans toward the conservative side with numbers Student counts drive data more than any other number in the projection. KASD has projected flat enrollment over the next five years utilizing the trending tool in the PMA model KASD has pushed all salary/benefit costs forward with projected cost of living added in. Four additional staff members have been added into the operating budget over the next two years (this on top of the additional staff needed for the Technology Plan) Revenue forecasts were taken from PMA s estimates without modification

74 Kaukauna Area School District Five Year Budget Forecast 87 KASD Membership Forecast FTE Membership for Revenue Limit Calculations Initial Base Forecast Actual Enrollment Projected Enrollment September Counts Summer School Summer School (40%) September FTE 4,182 4,223 4,278 4,353 4,410 4,418 4,393 4,406 4,365 4,327 4,341 Total FTE 4,220 4,249 4,310 4,386 4,439 4,453 4,428 4,441 4,400 4,362 4,376 FTE Change (25) 13 (41) (38) 14 % Change 0.69% 1.44% 1.76% 1.21% 0.32% -0.56% 0.29% -0.92% -0.86% 0.32% Actual Projected FY-2013 FY-2014 FY-2015 FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 Current Average 4,260 4,315 4,378 4,426 4,440 4,441 4,423 4,401 4,379 Change (18) (22) (22) % Change 1.29% 1.46% 1.10% 0.32% 0.02% -0.41% -0.50% -0.50%

75 Kaukauna Area School District Five Year Budget Forecast 88 KASD Membership Forecast

76 Kaukauna Area School District Five Year Budget Forecast 89 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 ($5,000,000) KASD State Aid Forecast General Aid Composition FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 Adjustments Tertiary Aid Kaukauna Area School District General Aid Analysis Initial Base Forecast FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY-2021 Aid Membership 4,476 4,497 4,472 4,485 4,444 4,406 Change 21 (25) 13 (41) (38) Percent Change 0.5% -0.6% 0.3% -0.9% -0.9% Shared Costs Net Cost - General Fund $40,377,923 $43,056,409 $40,388,969 $41,347,175 $41,984,721 $42,686,080 Net Cost - Debt Service $3,129,069 $3,175,493 $3,247,022 $2,194,179 $501,269 $647,810 Adjustments $0 $0 $0 $0 $0 $0 Shared Costs for Equalized Aid $43,506,992 $46,231,901 $43,635,991 $43,541,354 $42,485,990 $43,333,890 Change $2,724,910 ($2,595,911) ($94,637) ($1,055,364) $847,900 Percent Change 6.3% -5.6% -0.2% -2.4% 2.0% Equalized Valuation $1,888,219,847 $1,961,830,693 $2,001,067,307 $2,041,088,653 $2,081,910,426 $2,123,548,635 Change $73,610,846 $39,236,614 $40,021,346 $40,821,773 $41,638,209 Percent Change 3.9% 2.0% 2.0% 2.0% 2.0% Equalized Aid Primary Aid $3,497,616 $3,480,476 $3,435,146 $3,427,410 $3,365,259 $3,305,686 Secondary Aid $23,198,208 $23,892,440 $24,076,034 $24,024,834 $23,277,449 $23,742,119 Tertiary Aid $326,086 $681,586 $0 $0 $0 $0 Special Adj./Chapt. 220 Aid $0 $0 $0 $0 $0 $0 Adjustments ($412,078) ($450,678) ($441,949) ($441,003) ($427,998) ($434,506) Total Aid $26,609,832 $27,603,824 $27,069,231 $27,011,241 $26,214,710 $26,613,299 Change $993,992 ($534,593) ($57,990) ($796,531) $398,589 Percent Change 3.7% -1.9% -0.2% -2.9% 1.5%

77 Kaukauna Area School District Five Year Budget Forecast 90 KASD Revenue Limit Forecast Kaukauna Area School District Revenue Limit Analysis Initial Base Forecast FY-2016 FY-2017 FY-2018 FY-2019 FY-2020 FY ) Base Revenue 40,746,906 41,851,891 42,171,232 42,180,751 42,341,512 42,460,980 2) Base Average Membership 4,378 4,426 4,440 4,441 4,423 4,401 3) Base Revenue per Member 9, , , , , , ) Per-Member Increase ) Maximum Revenue per Member 9, , , , , , ) Current Average Membership 4,426 4,440 4,441 4,423 4,401 4,379 7) Total Maximum Rev Limit (No Exemptions) 41,193,667 41,984,285 42,180,751 42,341,512 42,460,980 42,577,148 7.a. Max Rev per Member x Current Membership 41,193,667 41,984,285 42,180,751 42,341,512 42,460,980 42,577,148 8) Total Recurring Exemptions 845, , a. Prior Year Carryover 845, , ) Limit with Recurring Exemptions 42,038,838 42,171,232 42,180,751 42,341,512 42,460,980 42,577,148 10) Total Non-Recurring Exemptions 233, ,178 1,673, , , , B. Declining Enrollment Exemption , , , C. Energy Efficiency Exemption 103, ,106 1,580, E. Prior Year Open Enrollment (uncounted pupils) 37, H. Adjustment for New Choice Pupils 93,072 93,072 93,072 93,072 93,072 93,072 11) Maximum Revenue Limit with All Exemptions 42,272,062 42,371,410 43,854,626 42,606,899 42,766,309 42,884,127 Under-Levy Amount 420, Under-Levy Eligible to Carryover 186, Change in Maximum Revenue Limit (Line 11) 99,348 1,483,216 (1,247,727) 159, ,818