PROPOSITION FARMINGTON SCHOOLS. April 8, 2014 Bond Issue

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1 PROPOSITION FARMINGTON SCHOOLS April 8, 2014 Bond Issue

2 PROPOSITION FARMINGTON SCHOOLS - BOND LANGUAGE Shall the Board of Education of the Farmington R-7 School District of St. Francois County, Missouri, without a planned increase in the current debt service property tax levy, borrow money in the amount of Twenty Eight Million Dollars ($28,000,000) for the purpose of improving student safety and completing instructional facilities upgrades, maintenance, repairs, renovations, and improvements to existing facilities of the District including: repairing or replacing roofs; upgrading heating, ventilation and air conditioning (HVAC) systems; safety and security system enhancements with modified secure front entries, replacing exterior/interior doors and windows, and updating playgrounds for increased safety and mandated Americans with Disabilities Act (ADA) compliance; upgrading kitchen equipment and elementary/middle school gym floors; increasing instructional technology for students; safety, security and communication equipment upgrades; resurfacing selected parking lots; the site development, construction, equipping and furnishing of a new Early Childhood Center; addition of classrooms at Farmington Middle School and Roosevelt Elementary School; gymnasium, science labs, band/choir space and tennis courts at Farmington High School; purchasing new buses; to acquire additional land for district use; and issue bonds for the payment thereof? If this proposition is approved, the adjusted debt service levy of the School District is expected to remain unchanged at $0.90 per one hundred dollars of assessed valuation of real and personal property.

3 Financial Overview Tax Rate Information Bonding Capacity PROPOSITION FARMINGTON SCHOOLS

4 Fund Accounting Operating Funds Debt Service Fund District Operating Budget District Operating Fund Balance State Formula Funding FINANCIAL OVERVIEW

5 The District uses four funds to account for resources, as set forth in the Missouri Financial Accounting Manual. The General Fund, Teachers Fund and Capital Projects Fund account for District operations (operating funds). The Debt Service Fund accounts for the payments on bonded debt of the District. FINANCIAL OVERVIEW Fund Accounting

6 Revenues: Local taxes from the operating tax levy, state formula, and all other local, state and federal programs and grants. Expenditures: Personnel costs, services, supplies and equipment for all programs. (Instruction, administration, technology, transportation, food services, maintenance, support services). Payments of principal and interest on capital lease purchase agreements. FINANCIAL OVERVIEW Operating Funds

7 Revenues: Local taxes from the debt service tax levy. Expenditures: Payments of principal and interest on general obligation bonds. Restrictions: Debt Service funds cannot be used to pay operating costs. A separate bank account is required for debt service funds. FINANCIAL OVERVIEW Debt Service Fund

8 The current District operating budget includes estimated revenues of $32.3 million and proposed expenditures of $32.7 million, resulting in a projected deficit of $400,000 for fiscal year Personnel costs (salaries and benefits) comprise 82% of the District s total operating budget. Average monthly operating expenditures are $2.7 million. FINANCIAL OVERVIEW District Operating Budget

9 The District s total operating fund balances (reserves) at the beginning of fiscal year 2014 were $6.9 million. This reserve equals 21% (2.5 months) of the operating expenditures budget. The Board of Education has set a minimum operating reserve level of 15% to be maintained, for continued financial stability and adequate cash flow. FINANCIAL OVERVIEW District Operating Fund Balance

10 State formula revenue is based primarily on pupil attendance, and the state-determined cost of educating each student. Formula funds represent over one-third of the District s total revenue budget. Since fiscal year 2010, the state formula has been underfunded, resulting in a loss of revenue to Missouri public school districts. FINANCIAL OVERVIEW State Formula Funding

11 The estimated five-year total loss of revenue to the District due to the underfunding of the state formula is $3.25 million. Farmington R-7 State Formula Revenue Losses: FY 2010, Proration 98.6%, Revenue Loss $ 163,000 FY 2011, Proration 96.9%, Revenue Loss $ 373,000 FY 2012, Proration 94.1%, Revenue Loss $ 777,000 FY 2013, Proration 92.5%, Revenue Loss $1,027,000 FY 2014, Proration 93.3%, Revenue Loss $ 918,000 (Based on January, 2014 State Payment) FINANCIAL OVERVIEW State Formula Funding - Fiscal Years FY , Estimated Revenue Loss $3,258,000

12 Current Year Tax Rate Tax Rate Comparison Tax Rate History TAX RATE INFORMATION

13 The District s operating tax rate for 2013 is $2.8661, equal to the computed tax rate ceiling. The District s debt service tax rate for 2013 is $0.9000, less than the computed tax rate ceiling by $ (voluntary reduction). The 2013 tax rates were certified by the State Auditor s office on August 23, TAX RATE INFORMATION Current Year Tax Rate

14 Total tax rates for 2013 for 21 school districts in Jefferson, Madison, St. Francois and Ste. Genevieve counties range from $ (high) to $ (low). The average total tax rate for these schools is $ Farmington School District s total tax rate of $ is 4th lowest among these 21 schools. TAX RATE INFORMATION Tax Rate Comparison

15 Tax Year Operating Debt Service Total 2004 $ $ $ $ $ $ $ $ $ $ $ $ TAX RATE INFORMATION Tax Rate History 2008 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $3.7661

16 Current Bonding Capacity Bonds vs Capital Leases District Operating Budget BONDING CAPACITY

17 Bonding capacity represents the amount of general obligation debt (bonds) that can be legally issued by a school district. The District s current bonding capacity is over $35 million. Projections by L.J. Hart & Co., the District s bonding consultants, indicate that the District could issue bonds up to $35 million without increasing the current debt service tax rate. BONDING CAPACITY Current Bonding Capacity

18 General Obligation Bonds require voter approval. Payments on bonds are made from the debt service fund using tax revenues provided by the debt service levy. Capital Lease Purchases require Board of Education approval. Payments on lease certificates are made from the capital projects fund using tax revenues provided by the operating levy and other operating revenues. BONDING CAPACITY Bonds vs Capital Leases

19 Payments on Bonds are included in the debt service budget, and do not affect the operating budget. Payments for new bonds (up to $35 million) would not require an increase in the existing debt service tax rate. Payments on Capital Leases are included in the operating budget. Without new revenue, lease payments would require reallocation of funds from current District programs, and could result in reduction of fund balance reserves. BONDING CAPACITY District Operating Budget

20 Background of Successful Bond Issues Facility Needs Assessment Creating Plans for Proactive and Cost Effective Maintenance to establish a District Standard Long Range Planning Working with Hoener Associates, Inc. on District Master Planning PROPOSITION FARMINGTON SCHOOLS

21 Bond Issue Planning Staff and Department Meetings Building Committee Meetings Staff Survey PROPOSITION FARMINGTON SCHOOLS

22 Bond Issue Major Categories Safety and Security District Facility Replacements/Upgrades Additional Instructional and Activity Spaces Technology PROPOSITION FARMINGTON SCHOOLS

23 Exterior and Interior Doors* Secure Front Entries* ADA (Americans with Disabilities Act) Compliant Playgrounds* Video Cameras Phone System Exterior Lighting SAFETY AND SECURITY

24 The District has approximately 330 doors that vary greatly in terms of safety and security. We will bring all doors up to a minimum safety and security standard to increase safety for all students and staff. SAFETY AND SECURITY Exterior and Interior Doors

25 Each District Building will get a secure front entry. Increases security and monitoring of the front entries throughout the school day. SAFETY AND SECURITY Secure Front Entries

26 Playgrounds at Washington Franklin, Jefferson, Roosevelt, Lincoln and the new Early Childhood Center on the Truman campus will all have playgrounds that meet new ADA regulations. ADA compliance is a federal mandate for the school year Americans with Disabilities Act (ADA) SAFETY AND SECURITY ADA Compliant Playgrounds

27 Roofs* HVAC* Buses* Parking Lots Elementary/Middle School Gym Floors Bus Monitoring GPS System Kitchen Equipment Tennis Courts DISTRICT FACILITY REPLACEMENTS/UPGRADES

28 DISTRICT FACILITY REPLACEMENT/UPGRADES Each District Building will have a roof replaced or upgraded. Roofs that are completely replaced will have a minimum of a 20 to 25 year warranty. Roofs

29 Each District Building will receive HVAC upgrades. Energy efficiency will be the number one priority when replacing HVAC systems. Middle School will be number one priority. DISTRICT FACILITY REPLACEMENT/UPGRADES HVAC Portions of High School and Lincoln will receive VRV(Variable Refrigerant Volume) systems. Jefferson and Washington Franklin gyms will receive system upgrades.

30 District will purchase 8-10 buses. Current fleet is an average of years old. Older buses get an average of 3-4 MPG. New buses get 8-9 MPG. Cost savings will be realized for years to come due to this upgrade. DISTRICT FACILITY REPLACEMENT/UPGRADES Bus Purchases

31 Early Childhood Center* Roosevelt Classroom Addition Lincoln/MS/HS Science Labs MS/HS Band and Choir classrooms Middle School Classroom Addition High School Technology Classrooms High School Gymnasium ADDITIONAL INSTRUCTIONAL AND ACTIVITY SPACE

32 New Early Childhood building will be constructed on the Truman campus and will be attached to the back of Truman Auditorium to allow for flexible usage between the ECC and Kindergarten. The new ECC will have 10 classrooms which will allow for expansion of the ECC program for more students. It will also provide additional Music, Art, Guidance, Library Media space as well as the Parents as Teachers program. ADDITIONAL INSTRUCTIONAL AND ACTIVITY SPACE Early Childhood Center

33 District has grown from 3,572 students in to 3,957 students at the beginning of the school year. This represents a growth rate of over 10% during this time period. Additional growth is projected and Roosevelt is the logical place (newest elementary which was constructed with growth and additional construction in mind). ADDITIONAL INSTRUCTIONAL AND ACTIVITY SPACE District Growth

34 Increased Instructional Technology in All Buildings/Grade Levels Increased Wireless Coverage and Density Upgraded Network Infrastructure and Support The Board of Education has established a focus on technology implementation and has dedicated a line item amount in the annual fiscal budget focused on sustainability in the future. TECHNOLOGY

35 Increased Instructional devices at the Pre-K and Elementary classrooms. Lincoln, Middle School and High School will be 1:1 schools. Every student will have a device assigned to them. The plan is to phase in the devices over a 3 year period after teachers complete an instructional technology certification training course. TECHNOLOGY Increased Instructional Technology in all Buildings and Grade Levels

36 Bond Issue Support/Important Conversations Staff Support Community Support Informational Campaign PROPOSITION FARMINGTON SCHOOLS

37 Questions or Comments PROPOSITION FARMINGTON SCHOOLS