PARK HILL SCHOOL DISTRICT EXECUTIVE SUMMARY

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1 EXECUTIVE SUMMARY The Executive Summary is the first major section of the school budget document. It highlights important information contained in the budget. Users may rely on this section for an overview a summary of what can be found in the rest of the document. PARK HILL SCHOOL DISTRICT 7703 NW Barry Road Kansas City, Missouri (816)

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3 EXECUTIVE SUMMARY - ORGANIZATIONAL COMPONENT DISTRICT VISION, MISSION, VALUES AND GOALS Park Hill School District s culture of high expectations and continuous improvement is guided by the tenets of a professional learning community with a shared vision, mission, and values. The district focuses upon identified strategic focus areas and articulated goals within a five-year strategic plan that are aligned with student and stakeholder requirements/expectations. Staff members utilize collective inquiry, collaborative teams, and an action orientation to accomplish the goals of the district. The Board of Education and senior leaders have defined the vision, mission, and values of the school district. The vision of the district is: The mission is: Building Successful Futures Each Student Every Day Through the expertise of a motivated staff, the Park Hill School District provides a meaningful education in a safe, caring environment to prepare each student for success in life. The values of the district have been identified as: Student Focus Integrity High Expectations Continuous Improvement Visionary Leadership The Missouri Department of Elementary and Secondary Education (DESE) requires a five-year strategic plan for each public school in Missouri. These plans are called Comprehensive School Improvement Plans (CSIP). The current fiveyear plan was adopted by the Board of Education in with goals/objectives/actions to take place through the school year. The goals of the CSIP are monitored bi-annually by the Board of Education with revisions occurring as a result of input from the CSIP team based upon results or progress toward goals. 3

4 Goals of the CSIP have been identified within four strategic focus areas. Strategic Focus Area Financial Academic Climate Employee Goal While supporting the strategic goals of the district, the Park Hill School District will maintain a sound fiscal position with transparency, integrity and efficiency. Provide a relevant educational experience that prepares all students for college and career success. Provide a safe, respectful, welcoming and caring environment. Promote a positive and supportive work and learning environment. During the school year, the district will reconvene a team of staff members, Board of Education members, and key district stakeholders to develop the CSIP. Further detail of the CSIP, including Strategic Focus Areas (SFAs), measurable objectives, and estimated costs for each goal is within the Organizational Section of this document, beginning on page 56. BUDGET PROCESS & TIMELINE The Park Hill School District has developed systematic and repeatable budget processes to prepare the annual budget. The process includes the work of the Board of Education, district administration, and district staff throughout the school year. BUDGET PROCESS The budget has been developed over a ten-month period with input from staff, community, administration and the Board of Education. As in previous years, school-based decision recommendations were incorporated into the financial planning process. Schools and programs are provided an allocation, which includes a previous year s breakdown, a forecast of enrollment by school/program, and new allocations for each building. The school principal then allocates the amounts to specific departments based upon feedback from faculty members, either directly or through a representative such as a grade-level, department chairperson and/or faculty advisory committee. During the budget review process, budget leaders request additional allocations if necessary to support the goals and vision of the school and school district. In addition, capital improvement and maintenance requests are submitted at this time. All budget allocations and requests for each school and program are maintained in an electronic budget system. Staff salaries and benefits, which account for over 75% of the operating expenditures of the district are budgeted based upon current staffing combined with anticipated staff additions. School board policy regarding class size plays a significant role in anticipating staff additions, as each school and class cohort are analyzed for the possibility of increase or decrease in staff for the following year. This provides Park Hill School District with a salary and benefit budget closely aligned with the actual expenditures allowing more accurate salary projections for future years. 4

5 Capital budgeting takes place throughout the school year as inventories are reviewed; growth issues defined, and specific building needs are presented. Upon review of building specific needs and staff input, the building/program administrator presents a prioritized capital expenditure proposal to the Assistant Superintendent for Business and Technology for review and approval. This process usually takes place during budget reviews in January and February of each year. Unfunded capital requests are forwarded to the district s Long-Range Capital Planning Committee for future consideration. BUDGET TIMELINE/CYCLE The preparation and approval of a district budget is a cyclical 12-month process, oriented around the district s fiscal year which begins each July 1. State law requires Board of Education approval of the budget prior to July 1. Below is a chart graphic depicting the cyclical nature of budget preparation and approval. July - Beginning of Fiscal Year June - Board Amends Current Budget, Adopts Budget for Following Fiscal Year August - Board Sets Tax Rate February - Budget Leaders Present Proposed Budgets to Business & Human Resources September - Monitor Current Year Budget December - Board Establishes Budget Assumptions for Following Year Budget A Budget Calendar that includes detail of the budget monitoring, preparation and approval process can be found in the Organizational Section of this document, beginning on page 79. CHANGES IN BUDGET PROCESS AND POLICIES Key budget processes and timelines (as described above) are largely unchanged from prior years. Continuous improvement in processes are made annually by the business office after reviewing feedback from district staff. 5

6 Members of the business office manage budget processes. District administrators (i.e. Directors, Principals), with oversight from the business office, manage individual budget units (i.e. programs, schools). School bookkeepers and administrative assistants conduct day-to-day budget management. ALLOCATION OF FINANCIAL RESOURCES TO ACHIEVE GOALS AND OBJECTIVES The allocation of resources to schools and programs begins with establishing funds available for the budget year. Targets for ending year operating, capital and debt service fund balances have been established by the Board of Education. These targets serve as guidelines on the total amount of funds that can be spent in the proposed budget year. FUND BALANCES The district maintains balances in three funds: Operating, Capital and Debt Service. The Board of Education, Financial Focus Area Collaborative Team (FACT) and Missouri State Auditor have established targets for these balances for the current year, the budget year, and three fiscal years beyond the budget year in order to demonstrate financial sustainability and stability. OPERATING FUND BALANCE The Board of Education has established a guideline of maintaining a July 1 operating fund balance between 18 to 22% of prior year operating expenditures. This guideline is applied during the development of the budget, with an expectation that the operating fund balance at the conclusion of the budget year falls within this approved range. In some years, this requires a deficit operating budget in order to spend down operating balances accumulated from prior years. In addition, projections for revenue and expenditures are made for three fiscal years beyond the budget year. These projected years are expected to end with 18 to 22% fund balances. The budget has been prepared with an expectation of concluding the budget year with an operating balance of $31,715,563 or 21.9%. A full accounting of the operating fund balance for school years through appears in the Financial Section of this document on page 182. CAPITAL FUND BALANCE The district Financial Focus Area Collaborative Team (FACT), a team made up of district staff and key stakeholders, has established a target for capital fund balance between 65 and 85% of the average of the prior 3-years capital expenditures. This fund balance allows the district to address the planned capital needs without revenues from the sale of general obligation bonds. The capital needs of the district vary greatly from year to year as maintenance cycles for facility upkeep (i.e. school roofs, flooring, parking lots) converge with technology maintenance cycles (i.e. laptop, technology equipment replacements), and other one-time capital needs (playground upkeep). 6

7 Ending Capital Fund Balance Percentage is calculated by dividing the amount of remaining non-restricted capital funds at the end of each fiscal year by the capital expenditures for that year. For example, if on June 30 the district had a capital fund balance of $5 million and had $10 million in capital expenditures that year, the Ending Capital Fund Balance is 50%. The budget has been prepared with an expectation of concluding the budget year with an 84.3% operating fund balance. A full accounting of the capital fund balance for school years through appears in the Financial Section of this document on page 183. DEBT SERVICE FUND BALANCE The balance in the Debt Service Fund is highly predictable because expenditures usually consist of only two items (principal and interest) and are known in advance. Debt Service Fund monies are to be placed in a separate bank account and are not to be commingled with the district s operating (General, Special Revenue, and Capital Projects Funds) monies. The State Auditor s Office monitors the fund balance in the Debt Service Fund when calculating the maximum annual Debt Service Fund levy, and will allow a reasonable reserve up to one calendar year's payment. It is important that the Debt Service Fund have sufficient reserves to prevent any default on the bonds. The budget has been prepared with an expectation of concluding the budget year with a debt service fund balance of $18,430,650. Approximately half of this balance is restricted in escrowed funds as a result of an advanced refunding of bonds that occurred in and that will be paid in Future debt service fund balances will be based upon a plan of finance approved by the Board of Education upon the sale of the Series 2017 bonds, scheduled for September, The Board of Education is expected to approve a sale a portion of General Obligation bonds that results in projected balances in debt service sufficient to repay to bonds over the next twenty years. A full accounting of the debt service fund balance for school years through appears in the Financial Section of this document on page 179. OPERATING REVENUE Revenue is typically reported to the State, Board of Education, and community by source: local, county, state, federal or other. Operating revenue is a portion of Total Revenue that excludes revenue generated by the debt service tax levy or revenue received from the sale of general obligation bonds. Total operating revenue is expected to increase by 2.7% or $3.9 million dollars. A full accounting of the actual and anticipated operating revenue for school years through , including an explanation of major shifts from the current year, appears in the Financial Section of this document beginning on page 117. LOCAL/COUNTY OPERATING REVENUE Local/County operating revenue, which makes up 70% of all operating revenue, is anticipated to increase by 2.5% ($2.4 million) primarily due to 7

8 an increase in assessed valuation of property in the school district and with no change in the operating tax levy. an increase in School District Trust Fund (Prop C) sales tax revenue distributed by the State based upon an anticipated student enrollment count and an increase in the per pupil allocation. an increase in Food Service revenues based upon increased enrollment, participation and mandated lunch price increases. STATE OPERATING REVENUE State operating revenue, which makes up approximately 26% of all operating revenue, is anticipated to increase by 2.6% ($980 thousand) primarily due to an increase in Basic Formula monies and Classroom Trust Fund as a result of increased student enrollment. an increase in Early Childhood (3 & 4-Year-Old) Special Education (ECSE) revenue based upon fully funding the ECSE program (revenue is based upon actual expenditures, and is received the year following). FEDERAL OPERATING REVENUE Federal operating revenue, which makes up 4% of all operating revenue, is anticipated to increase by 7.2% ($414 thousand) primarily due to an increase federal funding for the National School Lunch program due to increased enrollment and participation in the school breakfast and lunch. an increase in IDEA entitlement funds due to increased enrollment and student population with Individualized Education Programs (IEPs). an increase in Title I funds due to an increased allocation (including carryover from prior years) from the Federal government. OPERATING EXPENDITURES Expenditures are typically reported to the State, Board of Education, and community by object: salaries, employee benefits, purchased services, supplies and materials, capital outlay, and debt. Operating expenditures are the portion of Total Expenditures that excludes expenditures made for debt and any expenditure made from bond funds. Total operating expenditures are expected to increase by 2.8% or $4.1 million dollars. A full accounting of the operating actual and anticipated expenditures for school years through , including an explanation of major shifts from the current year, appears in the Financial Section of this document beginning on page 123. EMPLOYEE SALARIES & BENEFITS Employee salaries and benefits make up 75.0% of all operating expenditures and are expected to increase by 5.0% ($4.2 million) primarily due to 8

9 a projected increase of 34.8 Full-Time-Equivalent (FTE) staff members to address student enrollment growth and maintain class size and other staffing ratios. a budgeted increase to insurance benefits of 3%. budgeted average compensation increases of 2.7% for returning staff members based upon the results of the district s interest-based bargaining process with teachers. PURCHASED SERVICES Purchased services make up 12.2% of all operating expenditures and are expected to increase by 11.8% ($1.9 million) primarily due to: an increase in building rentals due to the increase in mobile classrooms (due to student enrollment growth) and the leased space for the LEAD Innovation Studio. an increase in student transportation costs with First Student as outlined in the district s contract as well as an increase in routes due to student enrollment growth. an increase in trash removal costs based upon anticipated cost increases from the district s trash removal provider. SUPPLIES & MATERIALS Supplies and materials make up 7.0% of all operating expenditures and are expected to increase by 3.8% ($395 thousand) primarily due to an increase in general supplies and textbooks due to student enrollment growth. an increase in utilities and fuel due to anticipated rate increases for electric, gas, water and diesel fuel (for busses). CAPITAL OUTLAY (NON-BOND) Capital Outlay makes up 5.8% of all operating expenditures and are expected to decrease by 26.7% ($3.1 million) primarily due to large expenditures in prior years for the purchase of land to support new school facilities. large capital projects being moved from operating expenses to bond expenses based upon the authorization from voters in April, 2017 authorizing the sale of $110 million for capital projects. SUMMARY OF KEY BUDGET ASSUMPTION VARIABLES A summary of the key variables used within the budget assumptions are provided in the following tables, and are key drivers for both revenue and expenditure budgets for

10 KEY REVENUE DRIVERS Variable Actual Value Budget Estimate Aggregate Assessed Valuation of Property $1,573,825,427 $1,601,367,372 Total Tax Levy Total Weighted Average Daily Attendance (WADA) as a function of the State Foundation Formula Proposition C State Sales Tax State Adequacy Target State Transportation Reimbursement $ per $100 of assessed valuation $ per $100 of assessed valuation 11,277* 11,479 $977per WADA $985 per WADA $6,180 $6,241 $1,014,753 $1,029,974 KEY EXPENDITURE DRIVERS Variable Total Weighted Average Daily Attendance (WADA) as a function of the State Foundation Formula Actual Value Budget Estimate ,277* 11,479 Student Enrollment 11,287 11,470 Staff Total Compensation (Average Increase) 2.5% 2.7% Staffing 1,550.9 FTE 1,585.7 FTE ALLOCATION OF FINANCIAL RESOURCES TO SCHOOLS For schools, a per pupil allocations are made for supplies, services (i.e. field trips) and equipment based upon multiple factors, including projected student enrollment by grade. student enrollment count in special programs such as Special Education, ESL, and Gifted. students who qualify for free and reduced lunch through the National School Lunch Program. students participating in High School extra-curricular activities (i.e. clubs, teams, etc.) Program budgets are zero-based with the program leaders proposing new budgets based upon district goals and identified needs. All proposed budgets are reviewed, revised and ultimately approved by senior leaders and Board of Education to ensure alignment with district goals. 10

11 ALLOCATION OF HUMAN RESOURCES TO MEET GOALS OF THE DISTRICT HUMAN RESOURCES Personnel costs, specifically salary and benefits, have consistently accounted for approximately 75% of the district s annual operating expenditures. To provide support for the students, the district employs over 1,500 teachers, support personnel and administrators. School board policy regarding class size plays a significant role in anticipating certified staff additions, as each school and class cohort are analyzed for the possibility of an increase or decrease in staff for the following year. For the school year, the classroom student-to-teacher ratio was 18:1 and student to administrator ratio 223:1 (this data lags a year as DESE publishes these after the conclusion of each school year, data is expected to be available in September 2017). As a part of the district s negotiated agreement with teachers, the district has established the following class size guidelines for specific grade levels: No more than twenty-three (23) students for Kindergarten and grade 1 No more than twenty-five (25) students for grades 2 through 3 No more than twenty-seven (27) student for grades 4 through 6 No more than thirty (30) students for grades 7 through 12, except when state recommendations indicate a larger allowable class size It is recognized that in some special situations a smaller class size may need to be considered. Additions to support staff are based upon input from district staff and quantifiable service demands (i.e. work orders, overtime requests) on an annual basis during the budgeting process. The district has centralized the staffing process through the district office, with individual school leaders working collaboratively with administration on staffing budgets. Funds for employee salaries and benefits are not included in allocations made to schools as these funds are budgeted and spent from district level accounts. 11

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13 PARK HILL BOARD OF EDUCATION Board President Janice Bolin Board Vice President Bart Klein Board Treasurer Matt Pepper Board Member Todd Fane Board Member Scott Monsees Board Member Susan Newburger Board Member Kimberlee Ried Board Secretary Opal Hibbs 13

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15 PARK HILL ADMINISTRATIVE OFFICIALS SUPERINTENDENT OF SCHOOLS AND SENIOR LEADERSHIP Superintendent of Schools Dr. Jeanette Cowherd Assistant Superintendent Business and Technology Dr. Paul Kelly Assistant Superintendent Academic Services Dr. Jeff Klein Assistant Superintendent Human Resources Dr. Bill Redinger Executive Director of Quality and Evaluation Dr. Mike Kimbrel 15

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17 EXECUTIVE SUMMARY - FINANCIAL COMPONENT Missouri state statutes require school districts to prepare an annual budget to provide a definite financial policy for the direction of business operations of a school district. The district Board of Education is to formally adopt this budget in June prior to the beginning of the new school term on July 1. FUND STRUCTURE The Missouri state statutes are very specific in certain areas of school finance. These laws prescribe the duties of the treasurer and secretary of the Board of Education, establish four funds which must be used in the accounting process, and place certain limits upon the use of revenue and expenditure transactions allowed in these funds. As a result, the utilization of available money is limited and the accounting process is similarly affected. MISSOURI STATE STATUTES Chapter 165, RSMo, provides that all school monies must be accounted for within a framework of four funds: Incidental Fund Teachers Fund Debt Service Fund Capital Projects Fund GASB AND GAAP The Governmental Accounting Standards Board (GASB) statement of principle on fund accounting systems states, Governmental accounting systems should be organized and operated on a fund basis. A fund is an independent fiscal and accounting entity with its own assets, liabilities, and fund balance that are segregated to account for all financial transactions of specific activities of a local education agency s (LEA s) operations in accordance with special regulations, restrictions, or limitations. A fund type or account group may include many sub funds that are restricted in use to a specific phase of the activities. When sub funds are used, the revenue, expenditure and fund balance accounts within the fund type are divided by sub fund to provide the separate accountability necessary to comply with the legal requirements of the various sub funds. In determining the number of funds appropriate for public school operations, the purposes and legal requirements of the various activities must be considered. Generally Accepted Accounting Principles (GAAP) recommends the minimum number of funds be consistent with legal requirements. This is due to the necessity of identifying expenditures with revenues for the various activities. Through GASB, GAAP recognizes three types of funds: Governmental, Proprietary and Fiduciary. Proprietary funds are employed to report on activities financed primarily by revenues generated by the activities themselves, such as school food service. Fiduciary funds contain resources held by the school district but belong to individuals or entities other than the school district, such as student activity funds. Governmental funds account for everything else. In order to comply with GAAP, Missouri statutory funds are incorporated within this structure as follows: 17

18 Governmental Fund Types: General Fund (Fund 001) o Incidental Fund Special Revenue Fund (Fund 002) o Teachers Fund Debt Service Fund (Fund 003) Capital Projects Fund (Fund 004) Proprietary Fund Types School Food Service (Fund 007) Community Services Fund (Fund 011) Fiduciary Fund Types: Student Activities (Fund 005) PARK HILL SCHOOL DISTRICT FUND TYPES The Park Hill School District accounts for revenues and expenditures in eight specific funds, which collapse into the four major funds listed above. The fund names and their numeric codes used within district accounting reports are described below: General (Fund 001) General (Fund 001) Student Activities (Fund 005) Food Service (Fund 007) Community Services (Fund 011) Special Revenue (Teachers Fund) (Fund 002) Debt Service (Fund 003) Capital Projects (Fund 004) Capital Projects (non-bond related) (Fund 004) Bond Issue Proceeds (Fund 008) Of these funds, only the General (Fund 001), Special Revenue (Teachers Fund) (Fund 002) and Capital Projects (nonbond related) (Fund 004) allow the district flexibility to control expenditures. As a result, much of the district s focus is on these which are typically referred to as Operating funds. Funds maintained separate from the operating budget include Debt Service (Fund 003), and Capital Projects activities supported by Bond Issue Proceeds (Fund 008). 18

19 OVERVIEW OF DISTRICT REVENUES The Park Hill School District budget reports revenues by Total Fund and by Operating Fund. Total Fund reports include the four funds required by Missouri State law for school districts: General/Incidental, Special Revenue, Debt Service and Capital Projects. The Operating Fund includes General, Special Revenue and the non-bond related portion of the Capital Projects fund. Revenue detail is included to report the major sources of revenue and the proportion of those sources to the whole. TOTAL REVENUE BY DESE FUND The table below compares the total revenue budget by DESE fund utilizing actual values for , estimated year-end figures , and budgeted values for In addition, the percent of revenue in the budget is presented by DESE fund, as well as the change from the estimated values to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT DESE FUND REVENUE CHANGE Fund 001 General/Incidental 94,945,397 96,986, ,387, % +4.5% Fund Special Revenue 39,997,154 42,162,753 46,519, % +10.3% Fund Debt Service 30,566,506 19,522,138 10,263, % -47.4% Fund Capital Projects 9,996,225 9,756,731 25,057, % % Grand Total 175,505, ,427, ,228, % +8.8% The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. Increases in revenue into Fund 001 from community services such as pre-school and fee-based child-care (Adventure Club), the school lunch program, an increase in Early Childhood Special Education reimbursement, and increased allocations and programming within Federal Title programs. The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. The significant decrease in Fund 003 revenue is primarily due to an abnormally high revenue in due to a refinancing of $8.8 million of bonds (Series 2011) in Fall, The $10.2 million in debt service revenue in is consistent with years in which no refinancing occurs. It is anticipated that Fund 004 revenues will significantly increase primarily due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. This increase offsets the decreases in revenue planned due to moving a portion of operating tax levy from Fund 004 to Fund 001, and moving the entire Classroom Trust Fund revenues to Fund

20 TOTAL REVENUE BY PARK HILL FUND The following table compares the total revenue budget by Park Hill School District funds utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of revenue in the budget is presented by fund, as well as the change from the estimated values to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT PARK HILL FUND REVENUE CHANGE Fund Operating Fund 83,251,275 84,834,519 88,816, % +4.7% Fund Special Revenue Fund 39,997,154 42,162,753 46,519, % +10.3% Fund Debt Service Fund 30,566,506 19,522,138 10,263, % -47.4% Fund Capital Projects Fund 9,984,764 9,743,766 4,981, % -48.9% Fund Student Activity Fund 1,495,308 2,209,976 2,298, % +4.0% Fund Food Services Fund 5,862,674 5,757,346 6,017, % +4.5% Fund Bond Project Fund 11,461 12,965 20,075, % +154,741.8% Fund Community Services Fund 4,336,140 4,184,314 4,255, % +1.7% Grand Total 175,505, ,427, ,228, % +8.8% The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. In addition, increases in revenue are expected from the Early Childhood Special Education reimbursement (fully reimbursed by the state based upon prior year qualifying expenditures), and increased allocations and reimbursement within Federal Title programs (Title I, Title II, Title III). The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. The significant decrease in Fund 003 revenue is primarily due to an abnormally high revenue in due to a refinancing of $8.8 million of bonds (Series 2011) in Fall, The $10.2 million in debt service revenue in is consistent with years in which no refinancing occurs. The sharp decrease in Fund 004 are due to moving a portion of the district s operating tax levy from Fund 004 to Fund 001, and moving all of the Classroom Trust Fund from Fund 004 to Fund 002. This movement between funds is strategic due to the influx of capital dollars within Fund 008 (Bond) over the next three years. The slight increase in Fund 005 is due to activities planned by schools to increase student activity revenue, such as fundraisers. Fund 007 revenues are exclusively that of the school nutrition program and reflect an increase in participation and lunch prices which drive revenue higher. These increases are offset by increased expenditures due to increased participation. 20

21 It is anticipated that Fund 008 revenues will significantly increase primarily due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. Increases in revenue into Fund 011 are exclusively from community services such as pre-school and fee-based childcare (Adventure Club). These revenues are expected to increase based upon increased participation in these programs. OPERATING REVENUE BY DESE FUND Operating revenues exclude all revenues from debt service and bond sources, as these revenues are restricted for only the repayment of debt or for the completion of projects delineated within a voter approved ballot initiative. The table below compares the total operating revenue budget by DESE fund utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of revenue in the budget is presented by fund, as well as the change from the estimated values to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT DESE FUND REVENUE CHANGE Fund 001 General/Incidental 94,945,397 96,986, ,387, % +4.5% Fund Special Revenue 39,997,154 42,162,753 46,519, % +5.9% Fund Capital Projects 9,984,764 9,743,766 4,981, % -0.1% Grand Total 144,927, ,892, ,889, % +2.9% The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. Increases in revenue into Fund 001 from community services such as pre-school and fee-based child-care (Adventure Club), the school lunch program, an increase in Early Childhood Special Education reimbursement, and increased allocations and programming within Federal Title programs. The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. The slight decrease in Fund 004 are due to moving a portion of the district s operating tax levy from Fund 004 to Fund 001, and moving all of the Classroom Trust Fund from Fund 004 to Fund 002. This movement between funds is a strategic due to the influx of capital dollars within Fund 008 (Bond) over the next three years. OPERATING REVENUE BY PARK HILL FUND Operating revenues exclude all revenues from debt service and bond sources, as these revenues are restricted for only the repayment of debt or for the completion of projects delineated within a voter approved ballot initiative. 21

22 The table below compares the total operating revenue budget by Park Hill School District fund utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of revenue in the budget is presented by fund, as well as the change from the estimated values to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT PARK HILL FUND REVENUE CHANGE Fund Operating Fund 83,251,275 84,834,519 88,816, % +4.7% Fund Special Revenue Fund 39,997,154 42,162,753 46,519, % +10.3% Fund Capital Projects Fund 9,984,764 9,743,766 4,981, % -48.9% Fund Student Activity Fund 1,495,308 2,209,976 2,298, % +4.0% Fund Food Services Fund 5,862,674 5,757,346 6,017, % +4.5% Fund Community Services Fund 4,336,140 4,184,314 4,255, % +1.7% Grand Total 144,927, ,892, ,889, % +2.7% The anticipated increase in revenue in Fund 001 is primarily due to the anticipated increases in current property tax (increased valuation of property) with shifting a portion of the operating tax levy from Fund 004 to Fund 001. In addition, increases in revenue are expected from the Early Childhood Special Education reimbursement (fully reimbursed by the state based upon prior year qualifying expenditures), and increased allocations and reimbursement within Federal Title programs (Title I, Title II, Title III). The increase in Fund 002 is due to expected increases in Proposition C tax revenue and the state foundation formula, including the Classroom Trust Fund, all of which are deposited into Fund 002. The figures include shifting the entire Classroom Trust Fund revenues to Fund 002, when in prior years it was split between Fund 004 and Fund 002. The state foundation formula will generate increased revenues based upon the overall enrollment growth seen over the last year. The sharp decrease in Fund 004 are due to moving a portion of the district s operating tax levy from Fund 004 to Fund 001, and moving all of the Classroom Trust Fund from Fund 004 to Fund 002. This movement between funds is a strategic due to the influx of capital dollars within Fund 008 (Bond) over the next three years. The slight increase in Fund 005 is due to activities planned by schools to increase student activity revenue, such as fundraisers. Fund 007 revenues are exclusively that of the school nutrition program and reflect an increase in participation and lunch prices which drive revenue higher. These increases are offset by increased expenditures due to increased participation. Increases in revenue into Fund 011 are exclusively from community services such as pre-school and fee-based childcare (Adventure Club). These revenues are expected to increase based upon increased participation in these programs. 22

23 TOTAL REVENUE BY SOURCE The district monitors and reports revenue to the Board of Education through a monthly Treasurers Report. In this report, revenues are reported by source: local, county, state, federal, non-current (primarily bond funds). The table below compares the revenue budget by source, utilizing actual values for , estimated revenues for and budgeted revenues for In addition, the percent of revenue in the budget is presented by source, as well as the change from the expected revenue to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT SOURCE REVENUE CHANGE Local Sources 108,158, ,628, ,752, % +1.9% County Sources 4,984,750 4,441,112 4,533, % +2.1% State Sources 36,695,268 37,749,417 38,738, % +2.6% Federal Sources 5,527,305 5,727,328 6,141, % +7.2% Non Current 20,139,031 8,881,767 20,062, % % Grand Total 175,505, ,427, ,228, % +8.8% The increase in revenue in Local Sources is primarily due to an anticipated increase in current, delinquent and Proposition C sales tax revenue and the growth of local revenue generating programs such as pre-school, schoolaged childcare, and Community Education. Increases in County Sources come as a result of anticipated increases in state assessed utility valuation. The increase in State Sources is due to expected increases in the state foundation formula which will generate increased revenues based upon the overall enrollment growth seen over the last year. Budgeted increases in Federal Sources are due relatively to the increases planned for federally-supported programs such as Title I, Title II, Title III and IDEA, and the school lunch program. The abnormally high increase in revenue in Non-Current sources in is due to the planned sale of general obligation bonds in Fall, 2017 to support projects outlined in the April, 2017 No-Tax-Increase bond issue. 23

24 TOTAL BUDGETED REVENUES BY DESE FUND (CHART) The chart below represents the values and percentages of projected revenues by fund. The total revenue in all funds is expected to be $183,228, Capital Projects Fund, 25,057,024, 14% 003-Debt Service Fund, 10,263,624, 6% 002-Special Revenue Fund, 46,519,996, 25% 001-Incidental Fund, 101,387,803, 55% TOTAL BUDGETED REVENUES BY SOURCE (CHART) The chart below represents the values and percentages of projected revenues by source. The total revenue from all sources is expected to be $183,228, Non-Current Revenue, 5400-Revenue From 20,062,120, 11% Federal Sources, 6,141,522, 3% 5300-Revenue From State Sources, 38,738,917, 21% 5200-Revenue From County Sources, 4,533,555, 3% 5100-Revenues From Local Sources, 113,752,333, 62% 24

25 SIGNIFICANT REVENUE TRENDS, EVENTS AND INITIATIVES Total district revenues in are expected to increase substantially from wholly due to overall growth in the tax base (assessed valuation), growth in student enrollment which drives increases to Prop C sales tax and state foundation formula, increased participation in school lunch and community programs (pre-school, Adventure Club), and through the anticipated sale of $20 million in general obligation bonds budgeted operating revenues (which excludes debt service revenue) show a similar pattern to past budgets. A consistent trend in the district s revenue shows that nearly 90% of all operating revenues come from five primary sources: (1) local property taxes (current and delinquent); (2) the State Foundation Formula (including the Classroom Trust Fund); (3) Proposition C sales tax; (4) local Community Services including pre-school, community education, before/after school care (Adventure Club), and Aquatic Center receipts; and (5) local, state and federal Food Service revenues from school breakfast and lunch programs. These five line items account for over $137.4 million of the $152.8 million budget for operating revenues (89.9%). Budgeted operating revenue is expected to increase from an estimated actual amount of $148.9 million in to $152.8 million in This is due primarily to the impact of enrollment growth in the state foundation formula and slight increases to property and sales tax revenues. An increase in property tax is largely due to expected growth in the aggregate assessed valuation of the district (+1.5%). 25

26 OVERVIEW OF DISTRICT EXPENDITURES The Park Hill School District budget reports expenditures by Total Fund and by Operating Fund. Total Fund reports include the four funds required by Missouri State law for school districts (DESE Funds): Incidental, Special Revenue, Debt Service and Capital Projects. Operating Fund reports include the General, Special Revenue and the non-bond related portion of the Capital Projects fund as well as Student Activity, Food Services and Community Services funds. Expenditure detail is included to report the major expenditures and the proportion of those sources to the whole. TOTAL EXPENDITURES BY DESE FUND The table below compares the total expenditure budget by fund utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of expenditures in the budget is presented by fund, as well as the change from the expected expenditures in to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT FUND EXPENDITURES CHANGE Fund Incidental 56,202,059 59,308,242 63,972, % +7.9% Fund Special Revenue 73,879,387 77,066,794 81,062, % +5.2% Fund Debt Service 28,044,555 11,407,903 12,619, % +10.6% Fund Capital Projects 14,019,906 18,020,329 28,056, % +55.7% Grand Total 172,145, ,803, ,710, % +12.0% The increase in Fund 001 is largely due to increases in classified staffing to meet the service demand of student enrollment growth. In addition to additional employees, compensation increases are also a factor in the increase. Increases are also budgeted in contracted student transportation, and fixed cost items such as fuel, paper, textbooks, utilities and other items. Fund 001 increases are also due to increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. Increased expenditures in Fund 002 are also due to increased certified staffing (i.e. teachers, administrators, substitute teachers) to support enrollment growth as well as a 2.7% average compensation increase for the school year. The increase in expenditures in Fund 003 is due to scheduled principal and interest payments on debt incurred in prior years. The significant increase in Fund 004 expenditures is primarily due the expenditures related to the projects outlined in the April, 2017 No-Tax-Increase bond issue, including the construction of Middle School #4, and Elementary School #11. Both of these facilities are scheduled to open in Fall,

27 TOTAL EXPENDITURES BY DISTRICT FUND The table below compares the total expenditure budget by district fund utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of expenditures in the budget is presented by fund, as well as the change from the expected expenditures in to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT FUND EXPENDITURES CHANGE Fund General Fund 44,287,027 47,550,756 51,893, % +9.1% Fund Special Revenue Fund 73,879,387 77,066,794 81,062, % +5.2% Fund Debt Service Fund 28,044,555 11,407,903 12,619, % +10.6% Fund Capital Projects Fund 13,936,628 12,496,583 8,032, % -35.7% Fund Student Activity Fund 2,421,764 2,142,874 1,871, % -12.7% Fund Food Services Fund 5,641,483 5,643,958 6,187, % +9.6% Fund Bond Project Fund 83,279 5,523,746 20,024, % % Fund Community Services Fund 3,851,785 3,970,654 4,019, % +1.2% Grand Total 172,145, ,803, ,710, % +12.0% The increase in Fund 001 is largely due to increases in classified staffing to meet the service demand of student enrollment growth. In addition to additional employees, compensation increases are also a factor in the increase. Increases are also budgeted in contracted student transportation, and fixed cost items such as fuel, paper, textbooks, utilities and other items. Fund 001 increases are also due to increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. Increased expenditures in Fund 002 are also due to increased certified staffing (i.e. teachers, administrators, substitute teachers) to support enrollment growth as well as a 2.7% average compensation increase for the school year. The increase in expenditures in Fund 003 is due to scheduled principal and interest payments on debt incurred in prior years. The decrease in Fund 004 expenditures is primarily due to moving most capital expenditures to Fund 008. The increase in Fund 007 expenditures is due to increased participation of students within the school lunch program, resulting in higher food, supply and labor costs. Revenue to support these expenditures are generated from Food Services sources, including school lunch prices, and federal revenue generated through participation in the National School Lunch Program. The significant increase in Fund 008 expenditures is primarily due the expenditures related to the projects outlined in the April, 2017 No-Tax-Increase bond issue, including the construction of Middle School #4, and Elementary School #11. Both of these facilities are scheduled to open in Fall, The increase in Fund 011 expenditures is due to the anticipated increased costs associated with an increase in participation in district community based programs, including pre-school, school-aged child care (Adventure Club), and Community Education. 27

28 OPERATING EXPENDITURES BY DISTRICT FUND Operating expenditures exclude all debt and bond related expenses. The following table compares the operating expenditure budget by fund utilizing actual values for , estimated year-end figures for , and budgeted values for In addition, the percent of operating expenditures in the budget is presented by fund, as well as the change from the estimated operating expenditures in to the budget. ACTUAL ESTIMATED BUDGET PERCENT OF PERCENT FUND EXPENDITURES CHANGE Fund General Fund 44,287,027 47,550,756 51,893, % +9.1% Fund Special Revenue Fund 73,879,387 77,066,794 81,062, % +5.2% Fund Capital Projects Fund 13,936,628 12,496,583 8,032, % -35.7% Fund Student Activity Fund 2,421,764 2,142,874 1,871, % -12.7% Fund Food Services Fund 5,641,483 5,643,958 6,187, % +9.6% Fund Community Services Fund 3,851,785 3,970,654 4,019, % +1.2% Grand Total 144,018, ,871, ,067, % +2.8% The increase in Fund 001 is largely due to increases in classified staffing to meet the service demand of student enrollment growth. In addition to additional employees, compensation increases are also a factor in the increase. Increases are also budgeted in contracted student transportation, and fixed cost items such as fuel, paper, textbooks, utilities and other items. Fund 001 increases are also due to increased costs for leased property (LEAD Innovation Studio) and additional mobile units to support district enrollment growth. Increased expenditures in Fund 002 are also due to increased certified staffing (i.e. teachers, administrators, substitute teachers) to support enrollment growth as well as a 2.7% average compensation increase for the school year. The decrease in Fund 004 expenditures is primarily due moving most capital expenditures to Fund 008. The increase in Fund 007 expenditures is due to increased participation of students within the school lunch program, resulting in higher food, supply and labor costs. Revenue to support these expenditures are generated from Food Services sources, including school lunch prices, and federal revenue generated through participation in the National School Lunch Program. The increase in Fund 011 expenditures is due to the anticipated increased costs associated with an increase in participation in district community based programs, including pre-school, school-aged child care (Adventure Club), and Community Education. TOTAL EXPENDITURES BY OBJECT The district also monitors and reports total expenditures to the Board of Education regularly through the use of expenditure object codes. An expenditure object code identifies the service or commodity obtained through the expenditure such as salaries, supplies, or travel. The table below compares the total expenditure budget by object, 28