BUDGET REPORT

Transcription

1 BUDGET REPORT

2 BUDGET HEARING MONDAY, JULY 20, :00 p.m. Range Line Conference Room N. Range Line Road, Mequon WI AGENDA 1. Call to Order by School Board President 2. Presentation of Proposed Budget 3. Motion to Approve the Proposed Budget Move to approve the proposed school district budget in the total amount of $57,207, Discussion and Questions Regarding the Proposed Budget 5. Action by the School Board to Approve the Budget 6. Adjourn Budget Hearing ANNUAL MEETING AGENDA 1. Call to Order by School Board President 2. Reading of Published Notice of the Meeting by School Board Clerk 3. Election of Chairperson MONDAY, JULY 20, 2015 Immediately Following Budget Hearing Range Line Conference Room N. Range Line Road, Mequon WI Explanation of Rules Governing Annual Meeting and Adoption of Rules for Use at the Annual Meeting 5. Approval of the Agenda 6. Approval of Minutes from 2014 Annual Meeting 7. Report from the Superintendent 8. Report of the Treasurer 9. Resolution to Approve the Operational, Debt Service and Community Service Fund Tax Levy WHEREAS, it is the responsibility of the electors present at the Annual Meeting of the Mequon-Thiensville School District, to establish a tax levy for the operation of the District, and WHEREAS, the School Board has the legal authority to modify this tax levy on or before November 1. NOW, THEREFORE, BE IT RESOLVED that a tax in the amount of $37,356,331 be approved for the school year to include: a General Fund levy in the amount of $34,761,901; Debt Service tax levy in the amount of $2,366,850; and Community Service tax levy in the amount of $227, Discussion on the Operational, Debt Service and Community Service Fund Tax Levy 11. Action by Electorate to Adopt Resolution for the Operational, Debt Service and Community Service Fund Tax levy 12. Action to Authorize School Board to Establish Date for 2016 Annual Meeting 13. Adjournment Why Should You Attend The School District Annual Meeting? To hear and participate in discussion of the school district budget To help the district formulate educational policy To vote on the school district levy 2 Mequon-Thiensville School District District Budget Report

3 Letter from the Superintendent TO THE CITIZENS OF MEQUON-THIENSVILLE Dear Community Members, The citizens of the city of Mequon and village of Thiensville are formally invited to attend and actively participate in the Mequon-Thiensville School District 2015 Annual Meeting. The meeting is scheduled for July 20, 2015 in the Range Line Conference Room. The purpose of the meeting is to allow community members to review, analyze and eventually cast a vote in relation to the school year budget. In this document, you will find detailed information related to the programs and initiatives that have helped transform MTSD into the #1 K-12 public school district in Wisconsin. The school year budget was constructed with the focus of maintaining our tradition of academic and co-curricular excellence. The district s unique ability to meet the needs of all children is rooted in the community s unwavering support for its public schools. Investment in the public school system by the citizens of the Mequon-Thiensville community is well chronicled. Whether it is strongly supporting the upcoming budget at the Annual Meeting, affirmatively ratifying a recent facilities referendum or supporting the creation of additional revenue streams to ensure the district s ongoing success, the citizens of Mequon and Thiensville have been steadfast in encouraging the ongoing success of our district. Thomas Jefferson once said, the cornerstone of democracy rests on the foundation of an educated electorate. It is the public s annual support of our school system that allows the hardworking men and women charged with educating our students to execute their important roles effectively. As a staff, we are honored to serve this community and are proud to assist our children as they progress academically, socially and emotionally. Your sound investment in our schools allows us to help all children reach their fullest potential. The result of your investment has been the sustained high performance of our school district. In short, we are pleased to report ongoing success as an institution. We are sincerely thankful for your continued input and participation in our school district through the Annual Meeting. We are committed to ensuring that your support of our local public schools results in unprecedented outcomes. We are well positioned to strive upward to new heights through your continued support of the Mequon-Thiensville School District. Please accept the enclosed information as essential facts and figures in your preparation for participating at the Annual Meeting of July 20, 2015, starting promptly at 7 p.m. I look forward to seeing many of you at the meeting. Sincerely, DEMOND A. MEANS, Ed.D. Superintendent of Schools 3 Visit Mequon-Thiensville us online at School District Mequon-Thiensville District Budget School Report District 3

4 THE FUNDING FORMULA Since Wisconsin public school districts have operated under legislatively mandated revenue limits. A district s revenue limit is the maximum amount of revenue it may raise through general state aid and property taxes. Each school district s available revenue was initially based upon the amount of per pupil spending in The limit is adjusted annually (either increased or decreased) based on a threeyear rolling enrollment factor and an annual per pupil adjustment pending legislative approval. School districts must get voter approval through a referendum to expend any funds that exceed the revenue limit. As a result of the funding formula, enrollment has a significant impact on the district s budget. The Mequon-Thiensville School District has experienced a decrease in enrollment for 6 of the past 10 years. Historical, current, and projected resident enrollment data is provided in the chart below: RESIDENT K4-12 ENROLLMENT 4,500 4,000 3,500 3,827 3,723 3,687 3,587 3,624 3, ,505 3,492 3,541 3,000 2,500 2,000 1,500 1, * K4-5 ECH *1st year K4 program 4 Mequon-Thiensville School District District Budget Report

5 WHERE the MONEY COMES FROM - REVENUE SOURCES State Rules on School Funding: Wisconsin public school districts derive their revenue through four major sources: 1) state aid; 2) property tax; 3) federal aid; and 4) other local non-property tax revenues (such as fees, interest earnings, and rental income). The Mequon-Thiensville School District receives very little general state aid primarily due to high property values. Under current law, there is a limit on the annual amount of revenue each school district can raise through the combination of general state aid, computer aid and property taxes. The Mequon-Thiensville School District revenue comes from the following main sources: Property Taxes 81.1% State/Federal Aid 13.4% Other Local Sources 3.4% Other Sources 2.1% HOW the FUNDS ARE SPENT - EXPENDITURES The Mequon-Thiensville School District general operating expenditures fall into the following five major categories: Salaries; Employee Benefits; Purchased Services; Supplies/Equipment; and Debt/Insurance/Other Miscellaneous. Employee Salaries 54.3% Employee Benefits 21.9% Purchased Services 18.0% Supplies/Equipment 4.6% Debt/Insurance/Other Misc. 1.2% The majority of our operational budget is detailed in the following two categories: Salaries/Benefits: Over seventy-six percent of our operational budget is allocated for employees salaries and benefits. In addition to teachers, administrators and support staff, compensation for substitute teachers, seasonal custodial help, coaches/advisors for extracurricular activities, curriculum and staff development and early retirement benefits are also included in this figure. Purchased Services: This includes: 1) Services performed by individuals other than district employees for such things as audit, legal, pupil transportation, custodial cleaning, student tuition payments and speakers/consultants 2) Property-related services such as maintenance projects, utilities, communications, publications, and fuel for buses Visit us online at Mequon-Thiensville School District 5

6 BUDGET FREQUENTLY ASKED QUESTIONS (FAQs) The development of a school budget is a complex and challenging process, given limited funding and legislative mandates. The following questions and answers were developed to help readers gain a better understanding of the issues affecting public school finance. Why does the school district face an annual budget shortfall? A shortfall or budget deficit exists when expenses exceed revenue. To eliminate a deficit, the District must increase revenue or reduce expenditures. The largest source of revenue for the MTSD is the local property tax (81.1%). State law enacted in 1994 places a cap, or limit, on the amount a school district can collect from local property taxes. This limit is directly related to student enrollment. MTSD has experienced declining enrollment for 6 of the past 10 years. As a result, the District has less tax levy authority and ultimately receives less revenue available to support budget needs. Public school districts are a labor-intensive business. The largest expenditure is employee compensation. Increases in employee compensation, while extremely competitive with our comparables, have exceeded the growth in Mequon-Thiensville s available revenue, causing budget shortfalls or deficits. Until recently, school boards were required to offer teachers a minimum 3.8% annual increase in total compensation (salary and benefits) over the previous year or face going to mediation/arbitration, where the comparables applied were much higher and there was a risk of higher settlements. Act 10 legislation has allowed more authority to control those costs. Does the school district have the right to increase the tax levy beyond the state-imposed revenue limit? No. Districts may only exceed the revenue limit if voters approve the increase in a referendum. If enrollment declines, wouldn t costs decrease as well? Yes but not proportionately. For , the District s taxing authority (revenue) will go down by $10,658 for each full-time resident student we lose over a three-year period, but certain costs are not reduced in proportion to student headcount. For example, a classroom for 22 students has the same fixed costs to function as a classroom for 25 students, but having 3 fewer students in that classroom would result in the District losing $31,974 in revenue over a three-year period. Similarly, there is no cost savings to operate a bus transporting 70 students versus 76 students, but since the revenue available to the District is calculated on a per-student basis, there would be less revenue available to meet the costs for bussing those 70 students. Can the school district increase student fees to cover the annual deficit? No. The Wisconsin Constitution limits a school district s authority to assess fees except under limited circumstances, providing that public schools shall be free and without charge for tuition to all children between the ages of 4 and 20 years. Courts have ruled that schools may charge fees for books and items of a similar nature, except in cases of indigence, and for social and extracurricular activities because they are not necessary elements of a high school career. Schools may not charge for instructional time, such as teacher salaries, apparatus, building costs or maintenance. Any course that is credited for graduation, even if it is not required for graduation, must be provided without charge. Could the school district use fund reserves to balance the budget? That would be unwise to do on a regular basis. School District fund reserves are maintained for cash flow purposes (to minimize the expense of short-term borrowing) and to provide for unplanned expenditures. Using fund reserves to balance budgets is a borrowing technique that does not address the financial situation. Operating budgets include recurring costs that must be funded annually from a recurring source of revenue. Declining fund reserves would have a negative impact on the District s long-term financial position, resulting in lower credit ratings that increase the cost of borrowing. 6 Mequon-Thiensville School District District Budget Report

7 TAX LEVY and RATE INFORMATION The following table details the tax levy and tax rate by Fund: Fund Levy Rate* Levy Rate Inc/(Dec) Percent Changes General $34,761, $34,706, $54, % Debt Service $2,366, $2,362, $4, % Community Service $227, $227, $0 0.00% Totals $37,356, $37,296, $59, % * The levy rate is illustrated with the assumption that the budget is adopted utilizing the projected tax levy and a 0% increase in the equalized valuation of property in the Mequon-Thiensville School District. ENROLLMENT and TAXATION HISTORY Year Resident Enrollment Equalized Valuation Tax Levy Percentage Change in Tax Levy Tax Rate/$1,000 Equalized Tax Levy Per Pupil ,938 3,200,447,843 32,721, , ,980 3,436,669,403 33,972, % , ,932 3,679,041,699 35,262, % , ,914 4,002,136,393 36,354, % , ,906 4,246,693,443 37,470, % , ,827 4,481,952,659 38,326, % , ,723 4,844,264,583 39,285, % , ,687 4,770,573,610 40,433, % , ,587 4,633,148,080 40,461, % , ,624 4,484,326,853 40,335, % , ,497 4,352,780,656 37,795, % , ,472 4,214,016,365 37,561, % , ,505 4,189,188,981 37,579, % , ,492 4,369,760,180 37,296, % , ,541 4,369,760,180 37,356, % * ,550 *Estimated assuming no change in valuation and total tax levy in the amount of $37,356, Visit Mequon-Thiensville us online at School District Mequon-Thiensville District Budget School Report District 7

8 BUDGET and TAX LEVY HIGHLIGHTS The total budget proposed for the school year is $57,207,486. Net total expenditures are $52,746,702. This is an increase of 9.615% from the prior year. Expenditures include $3,500,000 in referendum bond proceeds and utilization of a $1,000,000 gift/donation for turf field upgrade. The total tax levy proposed for the school year is $37,356,331. This is an increase of $59,662 or 0.16% from the prior year. The general fund levy has increased $54,912 or 0.16% from the prior year due to increased enrollment from the 4K program. The debt service levy has increased $4,750 or 0.20% from the prior year. Assuming 0% change in equalized property valuations and a tax levy in the amount of $37,356,331, the tax rate proposed for is $8.55/$1000 of equalized property value. This is an increase of $0.01 or 0.12% from the previous year. The actual tax rate for will be finalized in October when property values are certified by the Department of Revenue. In alignment with the district strategic plan, the budget includes the following new initiatives: 1) 4 year old kindergarten program; 2) two secondary math specialists; 3) special education leadership stipends; and 4) addition of boys/girls lacrosse extra-curricular program. District outstanding debt as of July 1, 2015 is $2,000,000 in short-term notes which will be repaid on September 4, 2015 and $26,595,000 in general obligation bonds (principal only) that will be repaid through PROPOSED BUDGET for GENERAL FUND Audited Unaudited Budget Beginning Fund Balance 10,511, ,263, ,920, Ending Fund Balance 10,263, ,920, ,920, REVENUES & OTHER FINANCING SOURCES Transfers-In (Source 100) Local Sources (Source 200) 36,122, ,818, ,903, Inter-district Payments (Source ) 366, , , Intermediate Sources (Source 500) State Sources (Source 600) 2,706, ,052, ,022, Federal Sources (Source 700) 299, , , All Other Sources (Source ) 68, ,954, , TOTAL REVENUES & OTHER FINANCING SOURCES 39,563, ,734, ,089, EXPENDITURES & OTHER FINANCING USES Instruction (Function ) 19,621, ,740, ,128, Support Services (Function ) 15,002, ,098, ,041, Non-Program Transactions (Function ) 5,186, ,238, ,919, TOTAL EXPENDITURES & OTHER FINANCING USES 39,811, ,077, ,089, SPECIAL PROJECTS FUND Audited Unaudited Budget Beginning Fund Balance 16, , ,272, Ending Fund Balance 22, ,272, , REVENUES & OTHER FINANCING SOURCES 7,094, ,201, ,228, EXPENDITURES & OTHER FINANCING USES 7,088, ,951, ,188, DEBT SERVICE FUND Audited Unaudited Budget Beginning Fund Balance 288, , ,111, Ending Fund Balance 261, ,111, , REVENUES & OTHER FINANCING SOURCES 2,634, ,747, ,367, EXPENDITURES & OTHER FINANCING USES 2,661, ,897, ,212, Mequon-Thiensville School District District Budget Report

9 CAPITAL PROJECTS FUND Audited Unaudited Budget Beginning Fund Balance ,210, Ending Fund Balance ,210, ,710, REVENUES & OTHER FINANCING SOURCES ,210, EXPENDITURES & OTHER FINANCING USES ,500, FOOD SERVICE FUND Audited Unaudited Budget Beginning Fund Balance 329, , , Ending Fund Balance 292, , , REVENUES & OTHER FINANCING SOURCES 1,314, ,212, ,400, EXPENDITURES & OTHER FINANCING USES 1,350, ,212, ,400, COMMUNITY SERVICE FUND Audited Unaudited Budget Beginning Fund Balance 418, , , Ending Fund Balance 390, , , REVENUES & OTHER FINANCING SOURCES 732, , , EXPENDITURES & OTHER FINANCING USES 760, ,057, , PACKAGE & COOPERATIVE PROGRAM FUND Audited Unaudited Budget Beginning Fund Balance Ending Fund Balance REVENUES & OTHER FINANCING SOURCES EXPENDITURES & OTHER FINANCING USES TOTAL EXPENDITURES AND OTHER FINANCING USES ALL FUNDS Audited Unaudited Budget GROSS TOTAL EXPENDITURES -- ALL FUNDS 51,672, ,195, ,207, Interfund Transfers (Source 100) - ALL FUNDS 4,744, ,074, ,460, Refinancing Expenditures (FUND 30) NET TOTAL EXPENDITURES ALL FUNDS 46,927, ,120, ,746, PERCENTAGE INCREASE - NET TOTAL FUND EXPENDITURES FROM PRIOR YEAR 2.54% 9.61% PROPOSED PROPERTY TAX LEVY FUND Audited Unaudited Budget General Fund 34,983, ,706, ,761, Referendum Debt Service Fund 2,368, ,362, ,366, Non-Referendum Debt Service Fund Capital Expansion Fund Community Service Fund 227, , , TOTAL SCHOOL LEVY 37,579, ,296, ,356, PERCENTAGE INCREASE- TOTAL LEVY FROM PRIOR YEAR -0.75% 0.16% NEW PROGRAMS FINANCIAL IMPACT Addition of 4 Year Old Kindergarten $386,000 9 Visit Mequon-Thiensville us online at School District Mequon-Thiensville District Budget School Report District 9

10 #1 K-12 SCHOOL DISTRICT MTSD MAINTAINS HIGHEST BOND RATING On the state Department of Public Instruction (DPI) issued reports for 424 public school districts, MTSD is one of only two K-12 districts that fell into the significantly exceeds expectations category. MTSD ranked #1 among K-12 districts. The bond rating agency Moody s has affirmed the Mequon-Thiensville School District at the highest rating possible, Aaa, making it one of only five of Wisconsin s 424 districts to hold the top rating. This rating is based, in part, on the general good health of the district s finances. Moody s noted the following strengths in its ratings rationale for MTSD: (1) strong management team with multi-year budget forecasting plans, (2) healthy fund balance that has nearly doubled over the last seven years, and (3) affluent tax base with strong resident income profile. COMMUNITY SERVICE FUND The Community Service Fund is used to account for activities which are not elementary and secondary educational programs but have the primary function of serving the community. Transactions of this nature are accounted for in Fund 80. The district adopts a separate tax levy to support these activities Wisconsin Act 20 imposed a no-increase limit on the amount a Board may levy for the Community Service Fund for the and school years. It is uncertain whether the State Budget will continue these limits, however, the levy proposed for Community Service Fund reflects no increase and has remained the same since the fiscal year. The Mequon-Thiensville School District operates the recreation department for the communities of Mequon and Thiensville and program operations are recorded in the Community Service Fund. All of these activities take place outside of the K-12 instructional and extracurricular arena and are open to the public for participation. The Mequon-Thiensville School District has served nearly 8000 participants this past year providing recreational, leisure and enrichment activities for youth and adults. In addition, the Community Service Fund accounts life guards and supervision for the morning swim, walking and weight room programs offered daily to the community free of charge. The total Community Service Fund budget proposed for is $816,602. Expenditures in the Community Service Fund include compensation of Recreation Department office/management staff; program coaches/instructors/ supervisors; custodial services related to cleaning for programs and office staff; and building rental payments/office supplies/material all related to recreational department programs. Seventy-two percent of the revenue needed to support the Community Service Fund comes from program fees, ticket sales, and investment income. The remaining twenty-eight percent is supported by the local tax levy. The proposed tax levy for is $227,500. The levy for the Community Service Fund has not increased since the fiscal year. The Mequon-Thiensville School Board approved a one-time transfer of $250,000 of Community Service fund balance to the Special Projects fund during the school year. 10 Mequon-Thiensville School District District Budget Report

11 RULES GOVERNING THE ANNUAL MEETING of the MEQUON-THIENSVILLE SCHOOL DISTRICT 1. PROCEDURES FOR ADDRESSING THE CHAIR: Any person wishing to speak should please rise, proceed to the nearest microphone and wait to be recognized by the Chair. When recognized by the Chair, sign in and also state your name and address. If representing a group or organization, please indicate this information as well. Please limit comments to no more than 2 minutes. Please limit comments to the substance of the agenda item being discussed. Once all speakers who have indicated an interest to speak have had an opportunity, persons wishing to speak again on the agenda item being discussed will be given an additional opportunity to speak. 2. QUALIFICATIONS OF VOTERS: Each person voting at the Annual Meeting must be: U.S. Citizen 18 years of age or older on July 20, 2015 School District Resident at least 28 days prior to the Annual Meeting If a person is challenged as to his qualifications to vote, the Chair shall state the above qualifications necessary to vote to the challenged person. If the challenge is not withdrawn, the Chair shall administer the following oath and affirmation to the challenged person: You do solemnly swear that you are an actual resident of this School District and that you are qualified according to the law to vote in this matter. A person taking such oath shall be permitted to vote, but if s/he refuses to take such oath or affirmation, s/he may not vote. (Section (5), Wisconsin Statutes) Public Notification of Nondiscrimination Policy The Board of Education does not discriminate on the basis of any characteristic protected under State or Federal law including, but not limited to race, color, age, sex, creed or religion, handicap or disability, marital status, citizenship status, veteran status, membership in the national guard, State defense or reserves, sexual orientation, national origin, ancestry, arrest record, conviction record, use or non-use of lawful products off the District s premises during non-working hours, or any other characteristic protected by law. The District Administrator shall appoint and publicize the name of the compliance officer whose responsibility it will be to ensure that Federal and State regulations are complied with and that any inquiries or complaints are dealt with promptly in accordance with law. S/He shall also ensure that proper notice of nondiscrimination for Title II, Title VI, Title VII, Title IX, Section 504, and the Age Act is provided to students, their parents, staff members, and the general public , , Wis. Stats. 42 U.S.C. 2000e et seq., Civil Rights Act of U.S.C , Americans with Disabilities Act of U.S.C. 701 et seq., Rehabilitation Act of U.S.C et seq., Title IX Any questions concerning this policy should be directed to: Dr. Demond Means, Superintendent Mequon-Thiensville School District 5000 W. Mequon Road Rev: 3/1/11 11 Visit Mequon-Thiensville us online at School District Mequon-Thiensville District School Budget District Report 11

12 District Office Demond Means, Ed.D., Superintendent Matthew Joynt, Assistant Superintendent of Educational Services Gail Grieger, Executive Director of Business Services Sarah Zelazoski, Executive Director of Human Resources Melissa McCrady, Executive Director of Communications Rachel Fellenz, Executive Director of Student Services 5000 W. Mequon Rd Homestead High School Brett Bowers, Principal 5000 W. Mequon Rd Lake Shore Middle School Kate Dunning, Principal N. Range Line Rd Steffen Middle School Deborah Anderson, Principal 6633 W. Steffen Dr Donges Bay Elementary Allison Rudich, Principal 2401 W. Donges Bay Rd Oriole Lane Elementary Mary Jo Tye, Principal N. Oriole Ln. Mequon, WI Wilson Elementary Jocelyn Sulsberger, Principal N. Buntrock Rd West Mequon Road Mequon, Wisconsin Resident Mequon-Thiensville & Non-Profit Org. U.S. Postage PAID Thiensville, WI Permit No M-T Recreation Dept. Ryan Mangan, Director N. Range Line Rd BOARD of EDUCATION From L to R: Cindy Werner, Mary Cyrier (President), Stephanie Clark (Vice-President), Paul Buzzell (Treasurer), Wendy Francour (Clerk), Jon Jacobs and Kathryn Houpt