School District of Aitkin

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1 School District of Aitkin Developing a Long Range Facility Plan Community Task Force Meeting 2 January 20 th, 2016

2 Objective: Develop a thoughtful, cost effective, long term plan for reinvestment in the Aitkin Schools that the majority of residents and taxpayers will support.

3 Agenda for this evening Answer Questions from last meeting 20 minutes team 21 st century education District teaching staff & FJJ 15 min Financial overview 45 minutes District financial review Tiffany, District Tax information review Greg, Ehlers District funding options for facilities Jeff, FJJ Break into groups to begin plan development 15 minutes

4 Answering Questions Aitkin Task Force Meeting January 6, 2016 Demographics Something I am wondering About What is the reason our kids are trending out? If they are not doing it online, then where are they going? When a school is remodeled or build new, is there a typical # or % of new students who enroll because the facility is new/fresh? Where are kids trending out? What grades are they leaving? Thoughts of community since flooding and problems from summer. Is the need realized? Effectiveness vs. waiting for the roof to collapse to do maintenance improvements Do the online students attend any classes in our facility? Where are the students going if they are trending out? Answer Most kids who are open enrolling out are doing so for reasons of geography. The exception is the very small number of students/parents who are protesting the closure of Palisade school. I know of no studies on this. There are so many variables at play both in the home and adjacent districts that I wouldn't even venture into this territory. See answer above. Most tend to leave in early grades and stay. Some do. Some only take one online class and attend school for the rest of the day. Some are enrolled full time online. Enrollment PowerPoint has the recent information on this.

5 When a school is remodeled or build new, is there a typical # or % of new students who enroll because the facility is new/fresh?

6 With the declining enrollment, the space in the elementary school may be sufficient 10 years from now. If the student population is decreasing, why are we short on classroom space? Do we need to expand ECFE with projected decline in enrollment?

7 Can FJJ give an example of something creative from another district that came out of this process?

10 Simpler way to illustrate educational adequacy?

Educational Adequacy Color Key Green Adequate Meets 4 5 of the Analysis Criteria including MDE Guidelines for School Educational Adequacy Yellow Questionable Adequacy Meets only 2 3of the Analysis

11 Educational Adequacy Color Key Green Adequate Meets 4 5 of the Analysis Criteria including MDE Guidelines for School Educational Adequacy Yellow Questionable Adequacy Meets only 2 3of the Analysis Criteria, but may be considered adequate based upon current programming/enrollment and/or size of area. Red Inadequate Meets 1 or none of the Analysis Criteria Is perceived as a significant need by staff 2015 Foster Jacobs & Johnson, Inc. Proprietary use of FJJ. Not to be distributed without written consent of FJJ.

12 Aitkin Schools Educational Adequacy Summary CATEGORY ELEM HS 1 General Purpose Classroom Size/Suitability R R 2 Cafeteria/Serving Y Y 3 Security/Supervision R R 4 Main Office/Nurse/Support Services Y R 5 Science G R 6 Art G Y 7 Music G R 8 Teacher Planning Areas/Lounge R R 9 Student Break Out/Small Group Areas R R 10 Gymnasium Y Y 11 Site Suitability Playground/Green Space G R 12 Parking/Parent & Bus Drop Off R R 13 Technology Y Y 14 Media Center G G 15 Special Education R R 16 Auditorium/Performance Area NA Y 17 Career & Technical Education NA Y

13 What is the high school's utilization?

15 What's the formula/percentage cost of the project, for determining when the renovation cost is so great, and you're better off building new?

16 We need solid construction estimates before we get too deep otherwise we're just talking about blue sky.

17 Observation it seems split 50/50.

18 Summarize the Survey Results Results are projectable within +5.5% Snapshot in time (Conducted March/April of 2015) Not predictors of future public decisions Support $70 million all new $55 million new 6 12 $25 million remodel $18 million repair Support

19 How much willing to pay per month? $8 per month 20% $16 per month 21% $24 per month 12% $32 per month 4% Nothing 33% Don't know/refused 8% over $56 per month 1% $40 per month 2% $48 per month 0% $56 per month 0%

21 Describe a 21st century school.

22 Designing Schools for 21st Century Teaching and Learning Increased emphasis on: CAREER AND TECHNICAL EDUCATION 18 of the 20 fastest growing occupations in the next decade require career technical education HANDS ON LEARNING OPPORTUNITIES/VARIETY AND FLEXIBILITY IN COURSE SELECTION AND TRAINING STUDENT COMMONS/BREAK OUT SPACES FOR PERSONAL TECHNOLOGY USE AND COLLABORATIVE STUDENT GROUPING 2015 Foster Jacobs & Johnson, Inc. Proprietary use of FJJ. Not to be distributed without written consent of FJJ. 22

23 Designing Schools for 21st Century Teaching and Learning Increased emphasis on: OPTIMAL NATURAL LIGHT IN ALL LEARNING SPACES affects our motivation, energy, vision and increases student achievement by up to 17% CLUSTERS OF LEARNING classrooms, specialty rooms, break out spaces are clustered around a resource area easily adapted to a variety of teaching and learning styles MEDIA CENTERS FEATURING FLEXIBLE STUDENT/STAFF COMMONS complete with extensive tech support, Wi Fi, interactive white boards, and movable/variety of furniture 2015 Foster Jacobs & Johnson, Inc. Proprietary use of FJJ. Not to be distributed without written consent of FJJ. 23

24 Secure entrance/main office/nurse/support services

25 Community Task Force Financial Information January 20, 2016

26 School Finance 101

27 School Finance 101

28 Pop Quiz #1: Approximately how many miles does the district s fleet of vehicles travel each year? a. 119,784 b. 208,612 c. 292,519 d. 360,129

29 Pop Quiz #1: Approximately how many miles does the district s fleet of vehicles travel each year? a. 119,784 b. 208,612 c. 292,519 d. 360,129 School district size: square miles 423,968 acres

30 Pop Quiz #2: How many student school lunches were served during the school year? a. 76,923 b. 86,523 c. 163,446 d. 170,283

31 Pop Quiz #2: How many student school lunches were served during the school year? a. 76,923 (F/R student lunches) b. 86,523 (paid student lunches) c. 163,446 d. 170,283 (includes adult lunches)

32 Pop Quiz #2: How many student school lunches were served during the school year? a. 76,923 (F/R student lunches) b. 86,523 (paid student lunches) c. 163,446 d. 170,283 (includes adult lunches) Rippleside Aitkin High School October % 40.21% October % 39.38%

33 School Finance 101: Levy Aitkin Public Schools Levy History $1,400, $1,268, $1,200, $1,000, $1,070, $1,029, $1,053, $903, $891, $857, $1,083, $1,011, $879, $800, $600, $400, $200, $0.00 Pay 07 Pay 08 Pay 09 Pay 10 Pay 11 Pay 12 Pay 13 Pay 14 Pay 15 Pay 16

34 School Finance 101: Levy Levy is calculated based on. Per pupil amount and the formula set by the Legislature Property values Enrollment Legislation that affects property classifications, tax capacity calculations Other: Lease agreements, referendums Formula based For the output to change, the inputs must change

35 School Finance 101 FY16: July 1, 2015 to June 30, 2016 January 2015: Budget guidelines and development began June 2015: School Board approves preliminary budget July 1, 2015: Budget year begins Summer levy inputs for 15 PAY 16 ( revenues) June 2016: School Board approves final revisions June 30, 2016: Budget year ends October 2016: Audit will be conducted December 2016: Audit is presented for approval

36 Pop Quiz #3: What percentage of the district s revenues for FY16 are coming from the property tax levy? a. 8.22% b % c % d %

37 Pop Quiz #3: What percentage of the district s revenues for FY16 are coming from the property tax levy? a. 8.22% b % c % d % Total budgeted revenues: $13,131, PAY 15 levy: $1,083, Remainder is other sources.state and federal funding, taconite production tax, user fees, interest, grants, and miscellaneous

38 School Finance 101 FY16 Budget by Dimension Amount Percentage 100 Salaries and Wages $7,902, % 200 Employee Benefits $2,644, % 300 Purchased Services $1,280, % 400 Supplies and Materials $1,255, % 500 Capital Expenditures $783, % 700 Debt Service $117, % 800 Other Expenditures $97, % Totals $14,081, %

39 School Finance 101 FY16 Budget by Dimension Amount Percentage 100 Salaries and Wages $7,902, % is wages and 56.12% 200 Employee Benefits $2,644,813 benefits 18.78% 300 Purchased Services $1,280, % 400 Supplies and Materials $1,255, % 500 Capital Expenditures $783, % 700 Debt Service $117, % 800 Other Expenditures $97, % Totals $14,081, %

40 School Finance 101: Taxes The levy is divided out and paid by owners of parcels in the school district: Net Tax Capacity (NTC) All parcels in the school district Referendum Market Value (RMV) Some parcels are excluded, including: Agricultural property after the house, garage and 1 acre Non homestead ag land Non commercial seasonal residential recreational..

41 School Finance 101: Taxes It s all about your share of the pie : Aitkin County City of Aitkin Wealthwood Township Glen Township ISD #1 NTC ISD #1 RMV ISD #1 RMV

42 School Finance 101: Taxes Simplified scenario: $200 Levy $100K $100K $100K $100K $50 $50 $50 $50 $200 Levy $100K $100K $100K $200K $40 $40 $40 $80

43 School Finance 101: Taxes A net tax capacity is calculated for each parcel (using applicable classification rates). Those values are added together and create a total net tax capacity for the taxing jurisdiction. The levy is divided by the net tax capacity to create a tax rate. How does our tax rate compare?

44 Pop Quiz #4: These four school districts are a sampling of the ten school districts with tax parcels in Aitkin County. Select the order of tax rates for these districts, from least to greatest. a. McGregor, Hill City, Aitkin, Crosby b. Hill City, Aitkin, Crosby, McGregor c. Aitkin, McGregor, Crosby, Hill City d. Crosby, McGregor, Hill City, Aitkin

45 Pop Quiz #4: These four school districts are a sampling of the ten school districts with tax parcels in Aitkin County. Select the order of tax rates for these districts, from least to greatest. a. McGregor, Hill City, Aitkin, Crosby b. Hill City, Aitkin, Crosby, McGregor c. Aitkin, McGregor, Crosby, Hill City d. Crosby, McGregor, Hill City, Aitkin

46 School Finance 101: Fund Balance As of June 30, 2015 Nonspendable $101,497 Restricted $277,412 Assigned $1,448,951* Unassigned $5,891,641* We have 53% of budgeted expenditures in reserve.

47 Pop Quiz #5: How much debt does our school district currently have? a. None b. Less than $1M c. Between $1M and $5M d. More than $5M

48 Pop Quiz #5: How much debt does our school district currently have? a. None b. Less than $1M c. Between $1M and $5M d. More than $5M

49 School Finance 101: Financing Facilities Projects Health and Safety Only certain projects were eligible. Long Term Facilities Levied against NTC based Maintenance on approved was created by projects Deferred Maintenance ~$82,000 Operating Capital ~$298,000 In 2015, the game changed: the MN State Legislature. The Board included LTFM in the 2015 PAY 2016, and that funding will provide additional dollars and new options. General Obligation Capital Facilities Bonds ($120,000) Facilities Furniture, technology and equipment

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60 School Facility Funding: Enabling Legislation: MN School Districts have been empowered... MN Statute 123B.65 (Performance Contracting) MN Statute 123B.591 (Deferred Maintenance) MN Statute 126C.44 (Safe Schools) Operating Capital Budget & Tax neutral TBD $82,009 $46,130 $299,079 MN Statute 123B.57 (Health & Safety) MN Statute 126C.44 (Lease Levy Authority) Tax varies increase $271,657 60

61 Aitkin Public Schools LTFMR Long Term Facility Maintenance Revenue MINNESOTA S NEW EDUCATION REVENUE SOURCE

62 Long Term Facility Maintenance Revenue OVERVIEW Long Term Facilities Maintenance Revenue (LTFMR) Replaces the current Deferred Maintenance Revenue Replaces most of the current Health & Safety Revenue Replaces Alternative Facilities Revenue Program that was only available to the 25 largest districts in Minnesota. Program begins in FY17 State equalization is available to qualifying districts Creates a more flexible solution allowing Like for Like replacements, repairs, & maintenance of facilities that were not available before District is allowed to carry over the balance of revenue fund into the next year Requires the district to submit a 10 Year Plan to be updated annually 1/21/

63 Long Term Facility Maintenance Revenue OVERVIEW New Long Term Facilities Maintenance Revenue Formula: A + B = LTFMR A. ($ s / APU) x (<1 or Average Building Age Ratio 35) Annual Per Pupil Funding: $193 / APU for FY17 $292 / APU for FY18 $380 / APU for FY19 2. The lesser of: 1 or Average Building Age 35years B. The approved cost of indoor air quality, fire alarm & suppression, and asbestos abatement projects with a cost per site of $100,000 or more. 1/21/

64 Long Term Facility Maintenance Revenue USES MAY BE USED FOR: LIKE with LIKE replacements Deferred capital expenditures and maintenance projects necessary to prevent further erosion of facilities; Used for replacement or upgrades to existing items that have are past their useful life: i.e. equipment, carpet, hardware, roofs, etc Increasing accessibility of school facilities; or Health and Safety Capital Projects under section 123B.57 1/21/

65 Long Term Facility Maintenance Revenue LIMITATIONS MAY NOT BE USED FOR: Construction of new facilities, remodeling of existing facilities, or the purchase of portable classrooms. Note: Deferred capital and maintenance is more restrictive than remodeling To finance a lease purchase agreement, installment purchase agreement or other deferred payments agreement For energy efficiency projects under section 123B.65, for a building or property or part of a building or property used for postsecondary instruction or administration or a purpose unrelated to elementary and secondary education. Violence prevention and facility security, ergonomics, or emergency communication devices. 1/21/

66 PAST REVENUE INFORMATION Health & Safety Revenue Very restrictive funding source Projects needed to qualify under 123B.57 Deferred Maintenance Revenue Revenue was capped and typically not large enough to meet the deferred maintenance needs of the district. Currently 100% of the Health & Safety and revenues are levied by the local taxpayers 1/21/

67 Aitkin Public Schools ISD # 1 PAST & FUTURE REVENUE COMPARISON Fiscal Year Health & Safety Deferred Maintenance Max LTFMR State Equalization Levy Total Revenue Old Law $22,950 $82,009 $104,959 $104,959 FY2017 $247,310 $0 $247,310 $247,310 FY2018 $367,219 $0 $367,219 $367,219 FY2019 $477,888 $0 $477,888 $477,888 Long Term Facility Maintenance Revenue will increase over time due to the increase in funding per pupil ($193 in FY17, $292 in FY18, $380 in FY19) and the average building age increasing annually. 1/21/

Aitkin Public Schools ISD # 1 REVENUE PATH $500,000.00 $450,000.00 $400,000.00 $350,000.00 $300,000.00 $250,000.00 $200,000.00 $150,000.

68 Aitkin Public Schools ISD # 1 REVENUE PATH $500, $450, $400, $350, $300, $250, $200, $150, $100, $50, $0.00 Old Law Health & Safety Deferred LTFM Levy 1/21/

69 MN Statute 123B.65 (Performance Contracting) $300,000 Annual Utility Costs $250,000 $200,000 Savings to pay off debt $150,000 $100,000 $50,000 $0 Utility Costs Before After

70 Health and Safety Asbestos removal Certain safety improvements Mold abatement Ventilation improvements Indoor air quality improvements Alternative Facility Bonding Districts can borrow money and pay back over time for large ventilation projects

71 Lease Levy (MN Statute 126C.44) Districts allowed to levy for additions to school facilities for educational uses Simple Math Example: $265,000 levy authority x 15 years = $3,975,000 Addition to facility

72 Example of non voter approved project: Health and safety & ventilation improvements = $5,000,000 (AFB & H&S) 16,000 sqft addition for educational purposes = $4,000,000 (Lease Levy) Facility maintenance improvements (roofs/etc ) = $4,000,000 (LTFM) Energy Performance Contract (energy efficiency) = $500,000 (Lease) General fund money for items not covered = $2,000,000 Total: =$15,500,000

73 Things to think about: Referendum Plan and backup plan if fails? Long term plan working towards single campus down the road, not all at one time? Grade configuration discussion? Pk 4 at Rippleside?, Just new 9 12? What would be done with old HS if new? Do we need to plan for current enrollment 1,229 students? or 1,027 students from 10 year projection? 1/21/

74 Breaking up into groups 5 10 minutes 1. Status Quo Things are fine as is 2. Repair and maintain group Fix those items that need to be addressed, no remodeling or additions 3. Remodeling and/or Additions Fix items to be addressed, remodel or add spaces to meet needs. 4. Build New Group Build a new school as part of the plan. Could be PK12 or new High School or new Elementary School.

75 Next Steps Community Advisory Committee 4 meeting times/dates for Advisory Committee: January 6 th at 6:30pm January 20 th at 6:30pm February 3 rd at 6:30pm February 17 th at 6:30pm

Understanding the Consolidation Potential of:

Understanding the Consolidation Potential of: ISD 93 Carlton ISD 100 - Wrenshall Joint School Boards Presentation Presented by: Michael Hoheisel January 26, 2015 Robert W. Baird Co. Incorporated is providing