Blue Valley Unified School District No. 229 Overland Park, Kansas 66283

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1 Blue Valley Unified School District No. 229 Overland Park, Kansas Comprehensive Annual Financial Report For the fiscal year ending June 30, 2017

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5 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 Financial Statements and Schedule of Expenditures of Federal Awards Year ended June 30, 2017 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal 1 4 List of Principal Officials 5 FINANCIAL SECTION Independent Auditor s Report 6-7 Management s Discussion and Analysis 8-16 Basic Financial Statements: Government-wide Financial Statements Statement of Net Position 17 Statement of Activities 18 Fund Financial Statements Balance Sheet - Governmental Funds Reconciliation of the Total Governmental Fund Balance Sheet to Net Position of Governmental Activities 21 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Reconciliation of the Governmental Funds Statement of Revenues, Expenditures And Changes in Fund Balances with the Government - Wide Statement of Activities 24 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis) General Fund 25 Supplemental General Fund 26 Special Education Fund 27 KPERS Fund 28 Capital Outlay Fund 29 Statement of Fiduciary Net Position 30 Notes to the Basic Financial Statements Required Supplementary Information: Other Post-Employment Benefits Schedule of Changes in the District s Total OPEB Liability and Related Ratios 54

6 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 Financial Statements and Schedule of Expenditures of Federal Awards Year ended June 30, 2017 TABLE OF CONTENTS - CONTINUED Page FINANCIAL SECTION - CONTINUED KPERS Pension Plan Schedule of District s Proportionate Share of the Net Pension Liability 55 Schedule of District Contributions 55 Combining Statements and Individual Fund Schedules Combining Statements - Nonmajor Funds Fund Descriptions Combining Balance Sheet - Nonmajor Special Revenue Funds Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds Individual Fund Schedules of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual (Non-GAAP Basis): Vocational Education Fund 66 At Risk (K-12) Fund 67 Driver Training Fund 68 Professional Development Fund 69 Special Assessment Fund 70 Food Service Fund 71 Bilingual Education Fund 72 Virtual Education Fund 73 Summer School Fund 74 Parent Education Program Fund 75 Extraordinary School Program Fund 76 Federal Funds Gifts and Grants Funds Special Liability Fund 81 Debt Service Fund 82 Combining Statement of Net Position - Agency Funds 83 Statement of Changes in Assets and Liabilities 84 STATISTICAL SECTION Explanation and Table of Contents 85 Net Position by Component - Last Ten Fiscal Years 86 Expense, Program Revenues, and Net [Expense]/Revenue - Last Ten Fiscal Years 87

7 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 Financial Statements and Schedule of Expenditures of Federal Awards Year ended June 30, 2017 TABLE OF CONTENTS - CONTINUED Page STATISTICAL SECTION - CONTINUED General School System Revenues and Total Change in Net Position - Last Ten Fiscal Years 88 Fund Balances, Governmental Funds - Last Ten Fiscal Years 89 Governmental Funds Revenues - Last Ten Fiscal Years Governmental Funds Expenditures and Debt Service Ratio - Last Ten Fiscal Years Other Financing Sources and Uses and Net Change in Fund Balances - Last Ten Fiscal Years 94 Assessed and Estimated Actual Value of Taxable Property - Last Ten Tax Years Property Tax Rates (Per $1,000 of Assessed Valuation) Direct and Overlapping Governments - Last Ten Tax Years Principal Taxpayers June 30, 2017 and Nine Years Ago 99 Property Tax Levies and Collections - Last Ten Years Outstanding Debt by Type - Last Ten Fiscal Years 102 Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years Computation of Direct and Overlapping Debt 105 Computation of Legal Debt Margin - Last Ten Fiscal Years 106 Demographic Statistics - Last Ten Fiscal Years Principal Employers - June 30, 2017 and Directory of School Facilities 110 Miscellaneous Statistical Data 111 Operating Statistics - Last Ten Fiscal Years 112 Sources of Revenue 113 Financial Overview of the District 114

8 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 Financial Statements and Schedule of Expenditures of Federal Awards Year ended June 30, 2017 TABLE OF CONTENTS - CONTINUED GOVERNMENTAL AUDIT SECTION Page Schedule of Expenditures of Federal Awards 115 Notes to Schedule of Expenditures of Federal Awards 116 Schedule of Findings and Questioned Costs Independent Auditor s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards Independent Auditor s Report on Compliance for Each Major Program And on Internal Control over Compliance Required by the Uniform Guidance

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11 Blue Valley Schools Metcalf - P.O. Box Overland Park, Kansas September 20, 2017 TO THE CITIZENS AND BOARD OF EDUCATION OF THE BLUE VALLEY SCHOOL DISTRICT: We are pleased to present the Comprehensive Annual Financial Report (CAFR) of the Blue Valley School District (the district ) for the fiscal year ended June 30, This report contains financial statements, supplemental statements and other related information to provide complete and full disclosure of all material financial aspects of the district for the 2017 fiscal year. It includes information on all funds as identified by the Governmental Accounting Standards Board (GASB), and all activities considered to be part of the district by Kansas statutes. Responsibility for the accuracy, completeness and fairness of this report rests with the district and more specifically, the Business and Finance Department. This department confirms that the accounting system and the budgetary and internal accounting controls of the district provide reasonable assurance that the district assets are safeguarded against loss and that financial records are reliable for preparing financial statements and maintaining accountability for assets. Based on these systems and controls, the information included in this report is believed to be accurate in all material aspects and is reported in a manner designed to fairly present the financial position and results of operations of the various funds and accounts of the Blue Valley School District. The district s financial statements have been audited by the firm of Mize Houser & Company P.A. The goal of the independent audit was to provide reasonable assurance that the financial statements of the district for the fiscal year ended June 30, 2017, are free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation. The independent auditor concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion and that the district s financial statements for the fiscal year ended June 30, 2017, are fairly presented in conformity with Generally Accepted Accounting Principles (GAAP). The independent auditor s report is presented as the first component of the financial section of this report. GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The district s MD&A can be found immediately following the report of the independent auditors. PROFILE OF THE DISTRICT The Blue Valley School District was created in 1965 when the Stilwell, Stanley and Oxford Districts unified to create a 91-square mile district in southeastern Johnson County. As of June 30, 2017, the district was comprised of 20 elementary schools, nine middle schools and five high schools with a total enrollment of 22,078 students. Blue Valley has averaged approximately 202 new students per year since Additionally, district enrollment has grown by over 10 percent since However, during the last five years the average increase has leveled to approximately 150 students per year. 1

12 Throughout its history, Blue Valley Schools has been known for the accomplishments of its students and staff. The composite ACT score recorded by 2017 graduates ties the highest ACT composite score in district history. Graduates posted an ACT score of 25.4, compared to the Kansas average of Blue Valley graduates recorded another year of strong SAT scores while exceeding state and national averages. Blue Valley students scored on average 1345 on the test that measures math, verbal and writing skills. Also, the district had 52 students named National Merit semifinalists. Blue Valley s five high schools were named to a list of America s most challenging high schools compiled by The Washington Post. The prestigious Blue Ribbon distinction from the U.S. Department of Education has been awarded 17 times to district schools for their outstanding educational programs. Blue Valley has had 12 U.S. Presidential Scholars in the last 14 years. Additionally, P21, The Partnership for 21st Century Learning, designated Blue Valley's Center for Advanced Professional Studies (CAPS) as an exemplar school for CAPS received this honor for exemplary 21st century learning practices in preparing students for success in college, career and life. The district is governed by a seven-member Board of Education. Members of the Board are elected for staggered four-year terms. In addition to making final district policy decisions, the Board appoints the Superintendent of Schools, who is responsible for carrying out Board policies. In fiscal year 2017, the Superintendent was assisted by two Deputy Superintendents and one Assistant Superintendent. During that same year, the district employed a staff of approximately 3,300 personnel, of whom approximately 1,843 were certified staff. ECONOMIC CONDITION AND OUTLOOK Over the past 20 years Johnson County, within which the district is primarily located, has experienced tremendous growth both in terms of population and employment. Johnson County has grown from a suburban residential community to a self-contained economic unit with its own employment and financial base. The area provides a comfortable work environment, which attracts new businesses and development. New businesses, office and industrial parks, shopping centers, and residential developments are still being constructed and much of this growth is located in the district, though growth has slowed a bit compared to prerecession levels. Assessed valuation for Johnson County has grown at an average rate of just under 3% over the past 10 years. The residential population has increased in the school district by approximately 15,002 since 2009 according to 1-year Census estimates. Over the last five years, the district has averaged approximately 436 new single-family building permits per year. The district anticipates continued growth in the coming years. Residential development continues to include primarily middle and upper bracket single family homes. MAJOR INITIATIVES New Elementary School Blue Valley Schools is excited for the completion of the district s newest elementary school, Wolf Springs Elementary, located at Grant and 178 th Street in the southern portion of the district. In August 2017, Wolf Springs Elementary opened for the first time to start the school year. The school, whose official colors are blue and green and official mascot is the Wolf Springs Elementary Explorers, is led by Dr. Gretchen Anderson. Incoming students have the option to enroll in Blue Valley s first dual-language program, Chinese immersion. The building also features Studio 23, a space designed by students for students to promote creativity, foster curiosity, inspire thinking, facilitate collaboration, motivate students and adults to pursue passion projects, and engage the local and global community. Facility Improvements Renovations at Blue Valley Northwest High School included a 2,685 square foot addition on the northeast corner of the school that will serve as the choir room starting in the academic school year, as well as 5,000 square feet of renovations at the existing choir and band room. The interior renovations included an increase in storage space of instrumental music and the addition of practice rooms. Improvements to Blue 2

13 Valley North High School s campus include the addition of one lighted multipurpose turf field and a new natural grass field. In addition to the new fields, the project addressed significant drainage issues on existing practice fields and needed electrical upgrades. Retaining walls and fence, net and gate installations completed the project. Bond Projects Blue Valley voters showed their commitment and dedication to Education Beyond Expectations in January 2012 by approving a $271 million bond referendum. The comprehensive list of projects is expected to be completed over a five to seven year period and all 34 schools are benefiting from the bond initiative. The initial phase of the bond projects was completed during summer 2012, followed by significant scope of design and construction work performed during the , , and school years. During the school year numerous projects were in the planning, design, or construction phase including new school construction, technology replacements and upgrades, library media center renovations, kitchen renovations, asset preservation and re-investment in existing facilities, including major mechanical systems replacement, lighting systems replacement, flooring, roofing, and replacement of other building envelope components. Re-investment in the district s aging facilities and safety enhancements are needed to create and maintain exceptional learning environments for student success. The extensive technology replacements and upgrades will continue to propel the district forward to meet the goals of the Vision 2020 strategic plan. FINANCIAL INFORMATION Budgetary Principles In addition to internal accounting controls, the district maintains budgetary controls. The budget is prepared on the cash basis of accounting as required by state statute. Kansas statutes require that an operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute) and debt service funds. The General Fund and Supplemental General Fund are subject to budgetary limitation by state statute. Other funds are not subject to statutory limitation, except the Capital Outlay Fund, which is limited as to the maximum allowable mill levy. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1 st. 2. Publication in local newspaper of the proposed budget and notice of hearing on the budget on or before August 5 th. 3. Public hearing on or before August 15 th, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25 th. Management may not amend the budget without the approval of the board of education. However, state statutes permit management to transfer budgeted amounts between line items within an individual fund without this approval. In addition, the district has policies that require that department heads obtain business office approval prior to making any such transfers. The legal level of budgetary control is at the fund level. If the board of education elects to amend the budget, it must publish a notice of public hearing in the local newspaper. At least ten days after publication, the hearing may be held and the budget may be amended at that time. Reporting Policies The district s accounting system accumulates financial information in accordance with the Kansas Accounting Handbook and tracks expenditures by fund, function and object. Further accountability is provided by responsibility budgeting. This system allows effective monitoring of the expenditure of budget appropriations at the departmental level. Reports comparing actual revenues and expenditures to budgeted amounts are prepared each month for management s use. Summarized monthly expenditure reports are also presented to the District s Board Advisory Finance Committee and Board of Education. Statutory budget control is at the fund level. Internal budget control is at the account level. Property Tax Collections 3

14 The determination of assessed valuation and the collection of taxes for all political subdivisions in the State of Kansas is the responsibility of the various counties. The Johnson County Appraiser annually determines the assessed valuation that is used as a basis for the mill levy on property located within the school district. The appraiser s determination is based on criteria established by Kansas statute. Ad valorem tax statements are mailed to Kansas taxpayers each November 1 st and may be paid in half or in full by December 20 th, with the remaining one-half due by the following May 20 th. Motor vehicles are assessed on January 1 st of the current year and the tax is due by the end of the month in which the license plate expires. Taxes are distributed to the District by the county six times per year. Tables showing the district s tax collections, mill levies and assessed valuation for the last ten years are included in the Statistical Section of this report. ACKNOWLEDGMENTS The preparation of this Comprehensive Annual Financial Report was made possible by the dedication and effort of the entire Business & Finance Department staff. We wish to express our sincere appreciation to all who assisted in its preparation. We also wish to thank the staff of Mize Houser & Company P.A. for their assistance. Finally, we wish to thank the members of the Board of Education for their interest and support in planning and conducting the financial operations of the district in a responsible and insightful manner. Sincerely, Jenni Newell, Treasurer Dr. Todd White, Superintendent Nathan Mull, Director of Accounting and Auditing 4

15 BLUE VALLEY USD #229, KANSAS List of Principal Officials June 30, 2017 BOARD OF EDUCATION President... Mike Seitz Vice President... Stacy Obringer-Varhall Board Member... Cindy Bowling Board Member... Patrick Hurley Board Member... Sue Matson Board Member... Tom Mitchell Board Member... Pam Robinson Board Clerk... Sarah Vaughn Treasurer... Jenni Newell, CPA ADMINISTRATIVE OFFICIALS Superintendent of Schools... Dr. Todd White Deputy Superintendent... Dr. Mike Slagle Deputy Superintendent... Dr. Sue Dole Assistant Superintendent Academic Services... Dr. Tonya Merrigan 5

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19 INDEPENDENT AUDITOR S REPORT Board of Education Blue Valley Unified School District No. 229 We have audited the accompanying financial statements of the governmental activities, the aggregate discretely presented component unit, each major fund, budgetary comparison information, and the aggregate remaining fund information of the Blue Valley Unified School District No. 229 (the District), as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the District s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States and the Kansas Municipal Accounting and Audit Guide. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the aggregate discretely presented component unit, each major fund, budgetary comparison information, and the aggregate remaining fund information of the District as of June 30, 2017, and the respective changes in financial position, thereof and the respective budgetary comparison for the General, Supplemental General, Special Education, KPERS, and Capital Outlay Funds for the year then ended in accordance with accounting principles generally accepted in the United States of America. mhco@mizehouser.com 534 S Kansas Ave, Suite 700 Topeka, KS p f 534 S Kansas Ave, Suite 400 Topeka, KS p f 7101 College Blvd, Suite 900 Overland Park, KS p f 211 E Eighth Suite A Lawrence, KS p f 6

20 Emphasis of Matter Prior Period Restatement As discussed in Note 3 to the financial statements, certain errors resulting in amounts previously reported as expenses and capital assets as of June 30, 2016, were discovered by management of the District during the current year. Accordingly, these amounts have been restated in the June 30, 2017, financial statements now presented, and adjustments have been made to net position to correct the error. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 8 through 16, the schedule of changes in the District s total OPEB liability and related ratios on page 54, the schedule of the District s proportionate share of the net pension liability on page 55, and the schedule of District contributions on page 55 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District s financial statements as a whole. The introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, and is also not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules, and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying account and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 20, 2017, on our consideration of the District s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, and grants agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District s internal control over financial reporting and compliance. Certified Public Accountants Lawrence, KS September 20,

21 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 This section of the Blue Valley School District s annual financial report presents its discussion and analysis of the district s financial performance during the fiscal year ended June 30, Please read it in conjunction with the District s financial statements, which immediately follow this section. FINANCIAL HIGHLIGHTS Total net position increased by $53.1 million and overall revenues were $331.7 million. The District s current assets decreased by $32.1 million which is primarily attributable to a $31 million decrease in investments. Investments decreased due largely to construction expenditures paid during the fiscal year from bond proceeds that were authorized under the 2012 and 2005 referendums. The District s total outstanding non-current liabilities decreased by $37.6 million during fiscal year A reduction of the long-term general obligation bonds of $39.6 million was the key factor in this decrease. In accordance with GASB Statements No. 74 & 75 Accounting and Financial Reporting for Post-Employment Benefits Other Than Pensions implemented during the prior year, the District had an actuarial evaluation completed as of June 30, 2016 to determine their obligation for other post-employment benefits. As a result of that evaluation, the District recorded a Total Other Post-Employment Benefits (OPEB) Liability of $17.2 million as of June 30, 2017, which is an increase of $1.2 million from the Total OPEB Liability of $16 million recorded as of June 30, OVERVIEW OF THE FINANCIAL STATEMENTS This annual report consists of three parts: management s discussion and analysis (this section), the basic financial statements and required supplementary information. These statements are organized so the reader can understand the District as a whole. The basic financial statements include two types of statements that present different views of the district. The first are the government-wide financial statements and the second are the fund financial statements. Government-Wide Financial Statements The government-wide financial statements include all assets and liabilities of the district using the accrual basis of accounting. This method of accounting is similar to how private sector companies report the results of their operations. These statements take into account all of the current year s revenues and expenses regardless of when cash is received or paid. The first of the government-wide statements is the Statement of Net Position. The Statement of Net Position presents balance information for the entire district operations at a given point in time (June 30, 2017). The assets include all cash and investments, receivables including interest and taxes assessed that remain uncollected, materials inventory, bond issuance costs and capital assets reduced by accumulated depreciation. Liabilities include accounts payable, accrued payroll earnings not yet paid, accrued interest payable, retainage payable, unearned revenue, compensated absences, net OPEB obligation, net pension liability and outstanding general obligation debt. Deferred Inflows of Resources recognize the pension differences between projected and actual investment earnings as well as expected and actual experience as of June 30, This results in a statement that encompasses the entire operations of the Blue Valley School District. Although the Statement of Net Position reports total net position of $194.6 million, the district has restrictions over the use of these funds. The investment in facilities and equipment is necessary to carry out the mission of the district. Kansas state law segregates funds and places restrictions on spending. This should be considered when reviewing the report. The second of the government-wide financial statements is the Statement of Activities. This statement shows the results of operations that caused the net position to change from the prior year amount reported to the amount reported on the Statement of Net Position as of June 30, This statement answers the question, How did we do financially during fiscal year 2017? This change in net position is important because it tells the reader that, for the school district as a whole, the financial position has improved or diminished. The causes of this change may be the result of many factors. Most notably, the results are influenced by: The property tax base, Funding at local, state and federal levels 8

22 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Operating expenditure limits imposed by Kansas law, Building improvements, Number of students served, Staffing levels, and Changes in debt levels The Statement of Activities classifies expenses by functional area. The report also shows corresponding charges for services and restricted grants for each function that helps support the expenses. The resulting Net [Expenses] Revenue and Changes in Net Position shows the remaining expenses not supported by charges for services and restricted grants. General revenues are then applied to the remaining expenses resulting in the total change in net position for the year. Fund Financial Statements Financial reports by fund follow the government-wide statements. The major funds are listed separately with all smaller funds aggregated in the column labeled Other Governmental Funds. As shown on the reconciliations on pages 16 and 19, the fund statements differ from the government-wide statements (Statement of Net Position and Statement of Activities) by including due to/due from adjustments and excluding the following: Bond issuance costs, bonds payable and related accrued interest, Cost of capital assets less accumulated depreciation, Compensated absences, Net other post-employment benefit obligations, and Net pension liability These reports provide more detail about the school district according to the various funds established under Kansas law. Due to the large number of funds, the major funds are listed separately with the remaining funds aggregated into the column labeled Other Governmental Funds. The district has two kinds of funds: governmental and fiduciary funds. Governmental Funds Most of the district s activities are reported in the governmental funds, which focus on 1) how cash and other financial assets, that can be readily converted to cash, flow in and out, and 2) the balances left at year end that are available for spending. The statements show revenue, expenditures and fund balances for each listed fund. The fund classifications provide additional information about the entity. The general, supplemental general, special education and other governmental funds encompass the major operating funds. The capital outlay fund is used primarily to repair and remodel district buildings and for equipment and technology purchases. The debt service fund is used to pay outstanding general obligation bonds and related interest charges as they become due. The capital projects fund is the primary source for the purchase of sites, buildings and building improvements and technology projects. Fiduciary Funds The District s fiduciary funds are agency funds. Agency funds are used to account for assets held in a trustee capacity or as an agent for individuals, private organizations and/or other funds. Agency funds include student organization monies at the various schools. The district accounts for these funds and students approve all of the expenditures. Also included is the Gift fund, which accounts for gifts from outside donors. Additionally, the Extraordinary Growth fund is included and this fund is used to account for collections of local taxes necessary to cover the additional costs of opening new facilities. These funds are then sent to the state as a reimbursement for the increased operating authority. Finally, the fiduciary funds include the Cost of Living fund which provides for a legal vehicle to levy taxes attributable to the weighting factor provided to school districts with high housing costs. This fund is used to channel the local tax revenues back to the state to offset the increased operating authority for districts which have residences that are higher than the statewide average value. The District s agency funds are reported on the Combining Statement of Net Position - Agency Funds. 9

23 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE The district s net position was more on June 30, 2017 than it was the year before, increasing by $53.1 million to $194.6 million. The following are the major components of the district s net position. Due to rounding, the numbers provided below may vary slightly from the amounts presented in the basic financial statements. Condensed Statement of Net Position Balance As Of Prior Period Balance, Restated Balance As Of June 30, 2016 Adjustment June 30, 2016 June 30, 2017 Statement Classifications Current assets $251,261,586 $ - $251,261,586 $219,178,816 Non-current assets Capital assets 576,934, , ,182, ,240,199 Total assets $828,195,601 $ 248,600 $828,444,201 $801,419,015 Pension $ 22,392,712 $ - $ 22,392,712 $ 46,186,883 Total deferred outflows $ 22,392,712 $ - $ 22,392,712 $ 46,186,883 Current Liabilities $ 84,172,415 - $ 84,172,415 $ 70,846,104 Non-current liabilities 596,442, ,442, ,825,724 Total liabilities $680,615,134 $ - $680,615,134 $629,671,828 Pension $28,764,227 $ - $28,764,227 $23,367,410 Total deferred inflows $28,764,227 $ - $28,764,227 $23,367,410 Net position Invested in capital assets, net of related debt $181,338,106 $ 248,600 $181,586,706 $217,858,989 Restricted 54,682,350-54,682,350 56,343,026 Unrestricted (94,811,504) - (94,811,504) (79,635,355) Total net position $141,208,952 $ 248,600 $141,457,552 $194,566,660 The increase of $53.1 million in total net position is due to several factors. It includes a decrease in current assets of $32.1 million and an increase in capital assets of $5.1 million. It also includes a decrease in current liabilities of $13.3 million and a decrease in non-current liabilities of $37.6 million. In addition, deferred outflows increased $23.8 million and deferred inflows decreased $5.4 million. Net position includes $217.9 million invested in capital assets, $56.3 million restricted for debt service and $(79.6) million unrestricted. The total costs of all programs and services amounted to $278.5 million. breakdown of total costs by functional area: The following table shows the Percentage Expense Function of Total Instruction 55% Student support services 6% Instructional support staff 4% General administration 1% School administration 4% Central Services 1% Operations and maintenance 16% 10

24 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Student transportation services 3% Food service operations 3% Other support services 3% Interest on long-term debt 4% The table below details the district s change in net position for the last two years. Changes in Net Position from Operating Results (In millions of dollars) Totals For The Totals For The Year Ended Year Ended Revenues June 30, 2016 June 30, 2017 Program revenues Charges for services $13.4 $13.2 Operating grants and contributions General revenues Property taxes Grants and entitlements* Investment earnings Miscellaneous Total revenues *not restricted to specific programs Expenses Instruction Student support services Instructional support staff General administration School administration Central services Operations and maintenance Student transportation services Food service operations Other support services Interest on long term debt Total Expenses Increase [decrease] in net position $ 20.1 $ 53.2 Total revenues exceeded expenses during the fiscal year by $53.2 million and the district s total revenues increased overall by $35 million. The increase was attributable to one primary factor and many other smaller factors. The primary factor was an increase in operating grants and contributions of $28.3 million, due largely to $31.7 million recorded for a grant from the State for bonds issued to fund KPERS. Expenses increased by $1.9 million as a result of various increases and decreases in all functional areas. 11

25 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 The table presented below presents the cost of eleven major district activities. The table also shows each activity s net cost (total cost less fees generated by the activities and intergovernmental aid provided for specific programs). The net cost shows the financial burden placed on the district s taxpayers by each of these functions. Net Cost of Governmental Activities (In millions of dollars) Total Cost Net Cost Expense Functions of Services of Services Instruction $153.6 $92.4 Student support services Instructional support staff General administration School administration Central services Operations and maintenance Student transportation services Food service operations 9.5 (0.2) Other support services Interest on long-term debt Total $278.5 $193.2 Costs of $13.2 million were financed by users of the district s programs. Federal and state governments subsidized certain programs with grants and contributions totaling $72.2 million. Most of the district s net cost of services of $193.2 million was financed by district and state taxpayers. This portion of governmental activities was financed with $131.1 million in property taxes, $108.7 million of grants and entitlements not restricted to specific programs, $1.5 million in investment earnings and $5 million in miscellaneous sources. FINANCIAL ANALYSIS OF THE DISTRICT S FUNDS As the district completed the year, its governmental funds reported combined fund balances of $192 million; a decrease of $22.2 million from last year s ending fund balance. Expenditures of $322.1 million exceeded revenues of $299.9 million by $22.2 million. The reason for this decrease in fund balance is detailed in the section below. The general, supplemental general, special education and debt service funds are the primary source of revenues for the district. These funds account for $230.6 million or 76.9% of the total revenues. Capital Outlay represents approximately 8.8% of the total and the KPERS fund represents approximately 3.9% of the total. The 2005 and 2012 Capital Projects funds represent less than 0.1% of the total with the remaining approximately 10.3% in other governmental funds. 12

26 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Kansas State laws require the use of a multitude of funds. Many of these funds do not have sufficient resources to pay the expenditures in the funds and therefore transfers must be made from other funds. Typically these transfers are made from the general and supplemental general funds. The following table categorizes the funds to simplify the analysis: Governmental Funds Revenues, Expenditures, Transfers and Fund Balance (In millions of dollars) Beginning Other Ending Fund Sources/ Fund Fund Balance Revenues Expenditures Transfers Balance Basic Education General $ 0.5 $ $ $ 0.8 Supplemental general Special education Vocational education At Risk (K-12) Professional development Bilingual Virtual education Gate receipts Student projects Instructional materials Contingency reserve Special workers comp reserve Special healthcare reserve Special liability KPERS Federal and state grants* Total Basic Education Expanded Education Driver training (0.2) - Summer school Parent education program Extraordinary school program Total Expanded Education (0.2) 1.3 Capital Capital outlay Debt service Capital projects (2005) Capital projects (2012) Special assessment Total Capital Food Service Total $214.2 $299.9 $322.1 $ - $192.0 * Federal and state grants include the following funds: DAC Grant, Title I, Blue Valley Foundation Grant, Community Grants, Title II-A, Title III and other Federal Grants. 13

27 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Overall, total expenditures exceeded revenue plus other sources (issuance of bonds), leaving an ending fund balance of $192 million. An analysis of the above table s categories follows: Basic Education expenditures exceeded revenues by $2.3 million. The general and supplemental general funds are subject to an expenditure limit. Under the Block Grant, the Legislature froze funding for school districts at 2014/15 levels for fiscal years 2015/16 and 2016/17 with minimal adjustments allowed for miscellaneous revenues. The school district has no ability to increase the resources in the general and supplemental general funds to cover inflationary increases in costs without annual changes in the statute. The textbook, student projects, student materials and gate receipts funds can be increased with school board approval, but are only a small part of the basic education group of funds. Any balances remaining in the general and supplemental general funds are used to support the subsequent year limit. Therefore, remaining balances in these funds should not be considered as additional resources available to the district in excess of the expenditure limits. The general and supplemental general funds ending fund balances represent $4.5 million (9.4%) of the basic education balance of $47.9 million. Kansas statutes allows school districts to carry a balance in the Special Education fund, the Vocational Education fund, the Professional Development fund, the Bilingual fund, the Contingency Reserve fund, the Special Reserve fund, the Special Liability fund and all other Special Revenue funds. During the school year, the Special Education fund expenditures exceeded revenues by $2.6 million. The Special Reserve fund has historically been used to protect the district from insurable losses that are not otherwise insured. The district has been self-funding their workmen s compensation coverage from this fund. The district began self-insuring their health insurance plan on January 1, 2011 and all revenues and expenditures related to this plan are tracked in the Special Healthcare Reserve fund. The Special Liability fund is used to pay the cost of providing for the school district s defense pursuant to the Kansas tort claims act. Expanded Education expenditures exceeded revenues by $0.1 million for the fiscal year. This group of funds had an ending fund balance of $1.3 million at June 30, Tuition for the summer school program and driver s education program is collected prior to June 30 th, but most of the expenditures are paid in July and August. The district can adjust revenue in the drivers education, extraordinary schools and summer school programs as these are fee based programs supported by the users of the programs. Capital funds expenditures exceeded revenues and other sources by $19.5 million, with ending fund balances totaling $140.2 million. Construction funds accounted for $19.4 million of the total ending fund balance. As of June 30, 2017 there were bond proceeds available for expenditure in the 2005 Capital Project fund. In October, 2015 the District sold the final installment of bonds of $20.2 million approved in the 2005 referendum of $ million. In addition, the District also sold $72 million in bonds from the 2012 referendum. This was the third sale from the $ referendum. The capital outlay fund has a balance of $64 million. The fund balance includes budgeted amounts for projects that are only partially completed and paid at June 30. The mill rate on this fund is currently at 8 mills which is the statutory limit. The debt service balance of $56.4 million is available to pay the bond and interest payment in October, The current mill rate is sufficient to pay the remaining bonds and interest as they become due. Food service expenditures exceeded revenues by $0.3 million leaving an ending fund balance of $2.6 million. Although transfers from other tax supported funds are allowed under Kansas law, Blue Valley s food service program operates without this support. The school board has the authority to adjust meal prices as necessary. General Fund Budgetary Highlights The following table summarizes the general fund budget variances (In millions of dollars): 14

28 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Original Final Increase/ Actual Over/[Under] Revenue Budget Budget [Decrease] Amounts Final Budget Intergovernmental [5.9] Other Revenue Total Revenue [5.7] Expenditures Instruction [2.1] Student Support Instructional Support [0.4] General Admin [0.2] School Administration [0.2] Operations/Maint [0.1] Other Support Serv [1.0] Transportation [0.2] Capital Outlay Transfers Out [5.7] Total Expenditures $149.3 $143.6 $[5.7] $143.6 $ - The final general fund expenditures budget decreased $5.7 million from the original budget. The final general fund budget is based on Block Grant limits which are at 2014/15 funding levels. Capital Asset and Debt Administration Capital Assets By the end of 2017, the district had invested $857 million in a broad range of capital assets, including school buildings, athletic facilities, computer equipment, and administrative offices. The accumulated depreciation on the capital assets amounted to $275 million, resulting in capital assets, net of depreciation of $582 million. This amount represents an increase of $5 million from last year. The value of additions in comparison to previous years was higher due largely to the construction of a new elementary school. Capital Assets (Net of depreciation, in millions of dollars) Assets As Of Prior Period Balance, Restated Assets As Of % June 30, 2016 Adjustment June 30, 2016 June 30, 2017 Depreciated Land $32.2 $ - $32.2 $32.6 n/a Construction in progress n/a Buildings and improvements % Site improvements % Infrastructure % Furniture % Technology % Vehicles % Food Service % Equipment % Total $576.8 $ 0.2 $577.0 $ % More information regarding the district s capital assets can be found in the notes to the financial statements (Note 4-C). 15

29 Blue Valley Unified School District No. 229 Management s Discussion and Analysis For the Fiscal Year Ended June 30, 2017 Long-Term Debt Moody s Investors Services and Standard & Poor s have rated the Blue Valley School District at Aaa and AA+, respectively. Kansas law limits the amount of outstanding indebtedness. The current limit for the district is at approximately $398 million, but when necessary districts may be given permission to exceed the limit by the State of Kansas. As of June 30, 2017, the district has $366.5 million of outstanding debt. The district continued to pay down its debt, retiring approximately $42.6 million of outstanding bonds. The district has a high debt per capita because of its continued growth. Building expansion has been funded with debt, and district management does not feel that the amount of debt is a burden to taxpayers. More information regarding the district s long-term debt can be found in the notes to the financial statements (Note 4-D). Contacting the District s Financial Management This financial report is designed to provide the district s citizens, taxpayers, customers and investors and creditors with a general overview of the district s finances and to demonstrate the district s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Business and Finance Department, Blue Valley School District, Metcalf, Overland Park, Kansas

30 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF NET POSITION June 30, 2017 Primary Government Total Governmental Activities ASSETS AND DEFERRED OUTFLOWS OF RESOURCES: Current assets: Cash and investments 204,655,907 Component Unit Total Governmental Activities $ $ 7,876,407 Receivables Interest 329,940 - Other 13,802,363 1,588 Material and supplies inventory 390,606 - Total current assets 219,178,816 7,877,995 Noncurrent assets: Capital assets Nondepreciable capital assets 68,987,952 56,525 Depreciable capital assets 788,060,168 55,996,186 Less: Accumulated depreciation [274,807,921] [11,884,317] Total noncurrent assets 582,240,199 44,168,394 Total assets 801,419,015 52,046,389 Deferred outflow of resources Pension - changes in proportion 14,638,693 - Pension - net difference between projected and actual earnings on pension plan investments 19,272,126 - Pension contributions subsequent to the measurement date 12,276,064 - Total deferred outflows of resources 46,186,883 - Total assets and deferred outflows of resources $ 847,605,898 $ 52,046,389 LIABILITIES AND DEFERRED INFLOWS OF RESOURCES Current liabilities: Accounts payable $ 7,085,914 $ 3,992 Accrued compensation, payroll withholdings and taxes 14,910, ,216 Current portion compensated absences 401,098 - Accrued interest payable 3,581, ,018 Retainage payable 3,013,509 - Unearned revenue 2,207, ,077 Long-term liabilities General obligation bonds due within one year 39,647,354 - Certificates of participation due within one year - 1,779,846 Total current liabilities 70,846,104 3,125,149 Noncurrent liabilities: Compensated absences 1,377,191 - Net other post employment benefit obligation 17,246,113 - Net pension liability 213,374,529 - Long-term liabilities General obligation bonds due in more than one year 326,827,891 - Certificates of participation due in more than one year - 27,576,082 Total noncurrent liabilities 558,825,724 27,576,082 Total liabilities 629,671,828 30,701,231 Deferred Inflows of Resources Pension - differences between expected and actual experience 10,073,725 - Pension - changes of assumptions 385,806 - Pension - changes in proportion 12,907,879 - Total deferred inflows of resources 23,367,410 - Total liabilities and deferred inflows of resources $ 653,039,238 $ 30,701,231 NET POSITION Net investment in capital assets $ 217,858,989 $ 15,159,752 Restricted for: Debt service 56,343,026 - Unrestricted [79,635,355] 6,185,406 Total net position $ 194,566,660 $ 21,345,158 The notes to the basic financial statements are an integral part of this statement. 17

31 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Governmental activities: Net [Expenses] Revenue and Changes in Net Position Primary Government Component Unit Operating Total Total Charges for Grants and Governmental Governmental Expenses Services Contributions Activities Activities Instruction $ 153,626,889 $ 5,985,359 $ 55,225,865 $ [92,415,665] $ - Student support services 15,129,219-3,609,112 [11,520,107] - Instructional support staff 11,388,524-2,583,821 [8,804,703] - General administration 2,219, ,099 [1,824,330] - School administration 12,099,831-2,467,921 [9,631,910] - Central services 2,581, [2,581,667] - Operations and maintenance 44,242,526-3,325,682 [40,916,844] - Student transportation services 8,071,060-12,577 [8,058,483] - Food service operations 9,528,742 7,187,588 2,522, ,646 - Other support services 7,537,513-2,062,805 [5,474,708] - Interest on long-term debt 12,121, [12,121,977] - Total primary government $ 278,547,377 $ 13,172,947 $ 72,205,682 [193,168,748] - Component unit: Program Revenues Blue Valley Recreation Commission Culture and recreation $ 11,667,191 $ 5,405,102 $ - - [6,262,089] Total component unit $ 11,667,191 $ 5,405,102 $ - - [6,262,089] General Revenues: Property taxes levied for General purposes 49,748,967 6,977,211 Debt service 55,917,059 - Capital outlay 25,476,747 - Grants and entitlements not restricted to specific programs 108,644,305 - Investments earnings 1,471,266 31,693 Miscellaneous 5,019,512 56,978 Subtotal general revenues 246,277,856 7,065,882 Change in net position 53,109, ,793 Net position - beginning 141,208,952 20,541,365 Prior period adjustment 248,600 - Net position - beginning, restated 141,457,552 20,541,365 Net position - ending $ 194,566,660 $ 21,345,158 The notes to the basic financial statements are an integral part of this statement. 18

32 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2017 Supplemental Special Capital General General Education KPERS Outlay ASSETS Cash and investments $ 6,806,064 $ 3,748,516 $ 6,808,100 $ - $ 64,138,893 Receivables Interest 307, Other 9,541, ,144,844 - Due from other funds 89, Material and supplies inventory 239, Total assets $ 16,983,450 $ 3,748,516 $ 6,809,048 $ 4,144,844 $ 64,138,893 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 1,002,299 $ - $ 93,819 $ 4,144,844 $ 179,804 Accrued liabilities 14,909, Due to other funds Retainage payable Unearned revenue 251,960-24, Total liabilities 16,164, ,184 4,144, ,804 Fund balance: Nonspendable 239, Restricted - - 6,595,779-60,701,453 Assigned 579,863-95,085-3,257,636 Unassigned - 3,748, Total fund balances 819,277 3,748,516 6,690,864-63,959,089 Total liabilities and fund balances $ 16,983,450 $ 3,748,516 $ 6,809,048 $ 4,144,844 $ 64,138,893 The notes to the basic financial statements are an integral part of this statement. 19

33 Other Total Debt Capital Capital Governmental Governmental Service Projects Projects Funds Funds $ 56,343,026 $ 4,435,468 $ 19,002,579 $ 43,373,261 $ 204,655, , , ,264 13,802, , , ,606 $ 56,343,026 $ 4,435,468 $ 19,025,032 $ 43,639,717 $ 219,267,994 $ - $ 125,338 $ 1,067,011 $ 472,799 $ 7,085, ,910, ,178 89,178-2,216, ,414-3,013, ,930,898 2,207,076-2,341,433 1,864,425 2,492,875 27,305, , ,606 56,343,026 1,356,183 5,373,267 27,356, ,726, ,852 11,787,340 13,638,838 30,096, ,748,516 56,343,026 2,094,035 17,160,607 41,146, ,962,256 $ 56,343,026 $ 4,435,468 $ 19,025,032 $ 43,639,717 $ 219,267,994 The notes to the basic financial statements are an integral part of this statement. 20

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35 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 RECONCILIATION OF THE TOTAL GOVERNMENTAL FUND BALANCE SHEET TO NET POSITION OF GOVERNMENTAL ACTIVITIES June 30, 2017 Total Governmental Fund Balances $ 191,962,256 Amounts reported for governmental activities in the statement of net position are different because Capital assets used in governmental activities are not financial resources and therefore are not reported in the funds The cost of capital assets is 857,048,120 Accumulated depreciation is 274,807, ,240,199 Pension contributions are reported as an expense in the funds and as a deferred outflow of resources in the governmental activities in the statement of net position. 46,186,883 Pension fundings are reported as a revenue in the funds and as a deferred inflow of resources in the governmental activities in the statement of net position. [236,741,939] The following liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. These liabilities at year end consist of: Bonds payable [366,475,245] Accrued compensation [1,778,289] Net other post employment benefit obligation [17,246,113] Accrued interest on the bonds [3,581,092] [389,080,739] Net Position of Governmental Activities $ 194,566,660 The notes to the basic financial statements are an integral part of this statement. 21

36 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS For the Year Ended June 30, 2017 Supplemental Special Capital General General Education KPERS Outlay REVENUES: Taxes $ - $ 32,243,585 $ 5,634,034 $ - $ 25,476,747 Intergovernmental 99,488,965-33,865,371 11,804,180 - Charges for services 79, Use of money and property 519, , ,246 Miscellaneous 1,302, Other local sources , ,094 Total revenues 101,389,999 32,243,585 40,172,794 11,804,180 26,276,087 EXPENDITURES: Current Instruction 50,709,099 26,959,767 28,606,583 7,993,079 2,656,433 Student support services 5,370,245 1,611,010 6,605, ,216 - Instructional support staff 7,215, , , ,365 13,157 General administration 1,030, , ,088 15,325 School administration 8,099,100 2,511, , ,907 - Central services ,658 Operations and maintenance 17,934, ,933 8, ,274 4,180,458 Student transportation services 1,465,038-5,996, ,169 Food service operations ,147 - Other support services 9,357, , ,233 Capital outlay 60, ,502,761 Debt service Principal retirement Interest and other charges Total expenditures 101,243,015 32,178,194 42,740,558 11,804,180 12,845,194 Excess [deficiency] of revenues over [under] expenditures 146,984 65,391 [2,567,764] - 13,430,893 OTHER FINANCING SOURCES [USES] Transfers in 174, Transfers [out] [2,938] Total other financing sources [uses] 171, Net change in fund balances 318,473 65,391 [2,567,764] - 13,430,893 Fund balance - Beginning of year 500,804 3,683,125 9,258,628-50,528,196 Fund balance - End of year $ 819,277 $ 3,748,516 $ 6,690,864 $ - $ 63,959,089 The notes to the basic financial statements are an integral part of this statement. 22

37 Other Total Debt Capital Capital Governmental Governmental Service Projects Projects Funds Funds $ 55,917,059 $ - $ - $ 11,871,348 $ 131,142, , ,084, ,102, ,093,503 13,172,947-55, , ,139 1,471, ,302, ,781,849 3,717,278 56,777,155 55, ,858 30,936, ,909, ,447, ,372, ,406 14,671, ,022,225 11,142, ,077, ,421 11,806, , ,586 23,407, ,517 8,025, ,191,395 9,416, ,626 10,613,636-11,434,362 23,258, ,507 39,749,637 39,990, ,990,000 15,126, ,126,479 55,116,479 11,434,362 23,258,455 31,499, ,119,604 1,660,676 [11,378,748] [23,004,597] [563,103] [22,210,268] , , [174,427] [177,365] [171,489] - 1,660,676 [11,378,748] [23,004,597] [734,592] [22,210,268] 54,682,350 13,472,783 40,165,204 41,881, ,172,524 $ 56,343,026 $ 2,094,035 $ 17,160,607 $ 41,146,842 $ 191,962,256 The notes to the basic financial statements are an integral part of this statement. 23

38 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES WITH THE GOVERNMENT - WIDE STATEMENT OF ACTIVITIES For the Year Ended June 30, 2017 Total Net Change In Fund Balances - Governmental Funds $ [22,210,268] Amounts reported for governmental activities in the statement of activities are different because Capital outlays to purchase or build assets are reported in governmental funds as expenditures. However, for governmental activities those costs are shown in the statement of net position and allocated over their estimated useful lives as annual depreciation expenses in the statement of activities. This is the amount by which capitalizable capital outlays exceeds depreciation in the period. Loss on sale of assets [177,464] Capital outlays 27,590,294 Depreciation expense [22,355,245] 5,057,585 Interest on long-term debt in the statement of activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the statement of activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. This is the amount by which interest increased. 401,055 In the statement of activities, certain operating expenses - compensated absences and other post employment benefits - are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used. This year, other post employment benefits paid were less than the amounts earned by $1,277,305. Compensated absences used were less than the amounts earned by $94,926. [1,372,231] Pension payments are reported as expenditures in the governmental funds and do not affect the statement of net activities [3,107,628] Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 2,603,445 Pension funding grant revenue in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. 31,747,150 Repayment of debt principal is an expenditure in the governmental funds, but it reduces long-term liabilities in the statement of net position and does not affect the statement of activities. 39,990,000 Changes In Net Position of Governmental Activities $ 53,109,108 The notes to the basic financial statements are an integral part of this statement. 24

39 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) GENERAL FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Intergovernmental: State and local $ 99,488,965 $ 9,155,340 $ 108,644,305 $ 108,914,327 $ 108,914,327 $ [270,022] Special education aid - 21,220,859 21,220,859 22,066,614 22,066,614 [845,755] KPERS aid - 11,804,180 11,804,180 16,639,583 16,639,583 [4,835,403] Total intergovernmental 99,488,965 42,180, ,669, ,620, ,620,524 [5,951,180] Use of money and property 519, , , , ,640 Miscellaneous 1,302,235-1,302,235 1,400,000 1,400,000 [97,765] Fees and charges 79,444-79,444 75,294 75,294 4,150 Total revenues 101,389,999 42,180, ,570, ,326, ,326,533 [5,756,155] EXPENDITURES: Instruction 50,709,099 [194,768] 50,514,331 52,595,594 52,595,594 2,081,263 Student support services 5,370, ,370,584 5,400,475 5,400,475 29,891 Instructional support staff 7,215,504 18,634 7,234,138 7,591,928 7,591, ,790 General administration 1,030,925 11,471 1,042,396 1,176,361 1,176, ,965 School administration 8,099,100 8,643 8,107,743 8,264,019 8,264, ,276 Operations and maintenance 17,934,879 47,180 17,982,059 18,132,614 18,132, ,555 Other support services 9,357, ,309 9,538,982 10,511,995 10,511, ,013 Transportation 1,465,038-1,465,038 1,731,436 1,731, ,398 Capital outlay 60,552-60, [60,552] Total expenditures 101,243,015 72, ,315, ,404, ,404,422 4,088,599 Excess [deficiency] of revenues over [under] expenditures 146,984 42,107,571 42,254,555 43,922,111 43,922,111 [1,667,556] OTHER FINANCING SOURCES [USES]: Transfers in 174, , , ,321 23,106 Transfers [out] [2,938] [42,426,045] [42,428,983] [44,073,432] [44,073,432] 1,644,449 Adjustments for legal max ,733,048 [5,733,048] Total other financing sources [uses] 171,489 [42,426,045] [42,254,556] [43,922,111] [38,189,063] [4,065,493] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 318,473 [318,474] [1] $ - $ 5,733,048 $ [5,733,049] FUND BALANCE - Beginning of year 500,804 [500,803] 1 FUND BALANCE - End of year $ 819,277 $ [819,277] $ - The notes to the basic financial statements are an integral part of this statement. 25

40 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SUPPLEMENTAL GENERAL FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes: In process $ 774,490 $ - $ 774,490 $ 730,527 $ 730,527 $ 43,963 Current 26,257,686 16,341,763 42,599,449 42,248,979 42,248, ,470 Delinquent 870, ,989 1,182,047 1,182,047 [311,058] Motor vehicle 4,301,713-4,301,713 4,280,807 4,280,807 20,906 Rental excise 38,707-38, ,707 Total revenues 32,243,585 16,341,763 48,585,348 48,442,360 48,442, ,988 EXPENDITURES: Instruction 26,959,767-26,959,767 28,507,561 28,507,561 1,547,794 Student support services 1,611,010-1,611,010 1,644,340 1,644,340 33,330 Instructional support staff 858, , , ,631 87,744 School administration 2,511,597-2,511,597 2,556,836 2,556,836 45,239 Operations and maintenance 236, , , ,031 43,098 Total expenditures 32,178,194-32,178,194 33,935,399 33,935,399 1,757,205 Excess [deficiency] of revenues over [under] expenditures 65,391 16,341,763 16,407,154 14,506,961 14,506,961 1,900,193 OTHER FINANCING SOURCES [USES]: Transfers out - [16,341,763] [16,341,763] [14,584,558] [14,584,558] [1,757,205] Total other financing sources [uses] - [16,341,763] [16,341,763] [14,584,558] [14,584,558] [1,757,205] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 65,391-65,391 $ [77,597] $ [77,597] $ 142,988 FUND BALANCE - Beginning of year 3,683,125-3,683,125 FUND BALANCE - End of year $ 3,748,516 $ - $ 3,748,516 The notes to the basic financial statements are an integral part of this statement. 26

41 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL EDUCATION FUND For the Year Ended June 30, 2017 REVENUES: Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] Taxes Current $ 5,634,034 $ [5,634,034] $ - $ - $ - $ - Total taxes 5,634,034 [5,634,034] Intergovernmental: Federal 3,229,805-3,229,805 4,243,649 4,243,649 [1,013,844] State and local 30,635,566 [29,621,865] 1,013, ,013,701 Total intergovernmental 33,865,371 [29,621,865] 4,243,506 4,243,649 4,243,649 [143] Use of money and property 201, , ,054 Other local sources 472, ,335 1,709,500 1,709,500 [1,237,165] Total revenues 40,172,794 [35,255,899] 4,916,895 5,953,149 5,953,149 [1,036,254] EXPENDITURES: Instruction 28,606,583 35,393 28,641,976 31,570,936 31,570,936 2,928,960 Student support services 6,605,937 5,000 6,610,937 6,736,198 6,736, ,261 Instructional support staff 428, , , ,620 22,598 General administration 923, , , ,214 39,455 School administration 171,362 29, , , ,210 [51,452] Operations and maintenance 8,670-8,670 6,550 6,550 [2,120] Transportation 5,996,225-5,996,225 6,697,767 6,697, ,542 Total expenditures 42,740,558 69,693 42,810,251 46,574,495 46,574,495 3,764,244 Excess [deficiency] of revenues over [under] expenditures [2,567,764] [35,325,592] [37,893,356] [40,621,346] [40,621,346] 2,727,990 OTHER FINANCING SOURCES [USES]: Transfers in - 35,255,899 35,255,899 31,162,252 31,162,252 4,093,647 Total other financing sources [uses] - 35,255,899 35,255,899 31,162,252 31,162,252 4,093,647 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [2,567,764] [69,693] [2,637,457] $ [9,459,094] $ [9,459,094] $ 6,821,637 FUND BALANCE - Beginning of year 9,258,628 [25,392] 9,233,236 FUND BALANCE - End of year $ 6,690,864 $ [95,085] $ 6,595,779 The notes to the basic financial statements are an integral part of this statement. 27

42 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) KPERS FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Intergovernmental $ 11,804,180 $ [11,804,180] $ - $ - $ - $ - Total revenues 11,804,180 [11,804,180] EXPENDITURES: Instruction 7,993,079-7,993,079 11,234,035 11,234,035 3,240,956 Student support services 978, ,216 1,380,801 1,380, ,585 Instructional support staff 604, , , , ,091 General administration 107, , , ,161 44,073 School administration 668, , , , ,581 Operations and maintenance 668, , , , ,736 Transportation ,617 5,617 5,617 Other support services 559, , , , ,104 Food service operations 225, , , ,807 92,660 Total expenditures 11,804,180-11,804,180 16,639,583 16,639,583 4,835,403 Excess [deficiency] of revenues over [under] expenditures - [11,804,180] [11,804,180] [16,639,583] [16,639,583] 4,835,403 OTHER FINANCING SOURCES [USES]: Transfers in - 11,804,180 11,804,180 16,639,583 16,639,583 [4,835,403] Total other financing sources [uses] - 11,804,180 11,804,180 16,639,583 16,639,583 [4,835,403] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] $ - $ - $ - FUND BALANCE - Beginning of year FUND BALANCE - End of year $ - $ - $ - The notes to the basic financial statements are an integral part of this statement. 28

43 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) CAPITAL OUTLAY FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes: In process $ 392,743 $ - $ 392,743 $ 370,396 $ 370,396 $ 22,347 Current 22,383,494-22,383,494 21,391,094 21,391, ,400 Delinquent 562, ,119 56,546 56, ,573 Motor vehicle 2,119,578-2,119,578 2,093,343 2,093,343 26,235 Rental excise 18,813-18,813 16,131 16,131 2,682 Total taxes 25,476,747-25,476,747 23,927,510 23,927,510 1,549,237 Use of money and property 336, , , , ,246 Other local sources 463, , , ,000 63,094 Total revenues 26,276,087-26,276,087 24,452,510 24,452,510 1,823,577 EXPENDITURES: Instruction 2,656, ,627 2,904,060 21,813,272 21,813,272 18,909,212 Instructional support staff 13,157-13, [13,157] General administration 15,325-15, [15,325] Central services 719, ,658 6,251,161 6,251,161 5,531,503 Operations and maintenance 4,180, ,649 4,870,107 5,757,336 5,757, ,229 Transportation 536, , ,820 1,310,252 1,310, ,432 Other support services 221,233 [31,848] 189, [189,385] Capital outlay 4,502, ,738 5,196,499 7,689,263 7,689,263 2,492,764 Total expenditures 12,845,194 1,977,817 14,823,011 42,821,284 42,821,284 27,998,273 Excess [deficiency] of revenues over [under] expenditures 13,430,893 [1,977,817] 11,453,076 $ [18,368,774] $ [18,368,774] $ 29,821,850 FUND BALANCE - Beginning of year 50,528,196 [1,279,819] 49,248,377 FUND BALANCE - End of year $ 63,959,089 $ [3,257,636] $ 60,701,453 The notes to the basic financial statements are an integral part of this statement. 29

44 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF FIDUCIARY NET POSITION June 30, 2017 Agency Funds ASSETS: Cash and investments $ 3,729,473 Total assets $ 3,729,473 LIABILITIES: Liabilities: Other liabilities $ 2,327,623 Due to student organizations 1,401,850 Total liabilities $ 3,729,473 NET POSITION: Held in trust for pension benefits $ - Total net position $ - The notes to the basic financial statements are an integral part of this statement. 30

45 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Reporting Entity The Blue Valley Unified School District No. 229 (the District) is a municipal corporation governed by an elected seven-member board. These financial statements present the District and its component unit. As required by generally accepted accounting principles (GAAP), the financial statements present data for all funds of the District and a component unit, an entity for which the District is considered to be financially accountable. The determination of financial accountability includes consideration of a number of criteria including (1) the appointment of a voting majority of an entity s governing authority and the ability of the primary government to impose its will on the entity, (2) the potential for the entity to provide specific financial benefits to, or impose specific financial burdens on, the primary government and (3) the entity s fiscal dependency on the primary government. Discretely Presented Component Unit. The following component unit is reported discretely to emphasize that it is legally separated from the District. Recreation Commission: Blue Valley Recreation Commission is governed by a seven-member board appointed by the District and oversees recreational activities. The recreation commission can sue and be sued, but acquisition of real property by the commission must be approved by the District. The District levies taxes for the recreation commission. Bond issuances must be approved by the District. Complete financial statements for the Blue Valley Recreation Commission are available from its office at 8026 W. 151 st Street, Overland Park, Kansas B. Government-wide and fund financial statements The statement of net position and the statement of activities report information on all of the nonfiduciary activities of the District as a whole. For the most part, the effect of interfund activity has been removed from these statements. All activities of the District are governmental activities. The statement of activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are specifically associated with a service, program or department and therefore clearly identifiable to a particular function. Program revenues include charges paid by the recipient of the goods or services offered by the program and grants and contributions that are restricted to meeting the operational requirements of a particular program. Taxes and other items which are not classified as program revenues are presented as general revenues of the school district. Separate financial statements are provided for governmental funds and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds are reported as separate columns in the fund financial statements. Nonmajor funds are aggregated and presented in a single column in the fund financial statements. C. Measurement focus, basis of accounting, and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. 31

46 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Measurement focus, basis of accounting, and financial statement presentation (Continued) Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the District considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to claims and judgments are recognized when the obligations are expected to be liquidated with expendable available financial resources. Property taxes and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period. Entitlements and shared revenues are recorded at the time of receipt or earlier if the susceptible to accrual criteria are met. Agency funds are custodial in nature and do not measure results of operations or have a measurement focus. Agency funds do, however, use the accrual basis of accounting. The District reports the following major governmental funds: The General Fund is used to account for the general operations of the District and all unrestricted revenues and expenditures not provided for in other funds. The Supplemental General Fund is used to account for revenues and expenditures as authorized by the local option tax budget for the District. The Special Education Fund is used to account for federal and state aid revenues received and used for the education of students with special needs. The KPERS Fund is used to account for the inflow and outflow of the State of Kansas s share of the public employee retirement system contributions. The Capital Outlay Fund is used to account for tax revenues which are primarily utilized for the acquisition, construction, and repair and remodeling of school district buildings. The Debt Service Fund is used to account for the accumulation of resources for and the payments of interest and principal on general long-term debt, which are general obligations of the District. The 2005 Capital Projects Fund is used to account for the acquisition, construction, and renovation of major capital facilities financed by the District s general obligation bond issues. The 2012 Capital Projects Fund is used to account for the acquisition, construction, and renovation of major capital facilities financed by the District s general obligation bond issues. The other governmental funds of the District account for grants and other resources whose use is restricted to a particular purpose. The Special Reserve and the Special Healthcare Reserve Funds reported separately in these financial statements are combined for State of Kansas reporting purposes. The agency funds are used to account for assets held as an agent for individuals, other governmental units, private organizations and/or other funds. 32

47 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Material and Supplies Inventory Material and supplies inventory is valued using the first in/first out cost method. For fund financial statements the cost is recorded as an expenditure in the year consumed. For fund financial statement reporting the reserve for material and supplies inventory is equal to the amount of inventories on hand to indicate that a portion of fund balance is not available for future expenditures. E. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets, are reported in the governmental activities column in the government-wide financial statements. Capital assets are defined by the District as assets with an initial, individual cost of more than $2,000. District capital assets are recorded at historical cost, or estimated historical cost if actual historical cost is not available. Donated fixed assets are valued at their estimated market value on the date donated. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Property, plant and equipment of the District is depreciated using the straight line method over the following estimated useful lives: Assets Years Buildings and Improvements 50 Site Improvements 20 Furniture 10 Technology 6 Vehicles 15 Equipment 5 Assets which have been acquired with funds received through federal grants must be used in accordance with the terms of the grant. Federal regulations require, in some cases, that the District must reimburse the federal government for any assets which the District retains for its own use after the termination of the grant unless otherwise provided for by the grantor. F. Compensated Absences Liabilities Under terms of the District s personnel policy, District employees are granted vacation and sick leave in varying amounts. In the event of termination, an employee is not paid for accumulated sick days. However, if an employee retires, is KPERS eligible and has at least ten years of service with the district, they are entitled to a payout in accordance with the Negotiated Agreement between the Blue Valley National Education Association and the Blue Valley Board of Education. The same benefit is also afforded to all classified personnel. Vacation earned by administrators may be accumulated to a maximum of 20 days. Vacation earned by full-time classified employees with less than six years of employment in the District may accumulate to a maximum of fifteen days. Vacation earned by classified employees with six or more years of employment in the District may accumulate to a maximum of 20 days. Compensated absences are recorded as a liability on the statement of net position until actually expended; once expended, the amount is recorded as an expenditure in the governmental funds. The General Fund, Supplemental General Fund, Special Education Fund, and Other Governmental have been used in prior years to liquidate the liability for compensated absences. 33

48 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) G. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. H. Fund Balance Reserves In the fund financial statements, governmental funds report fund balance in the following classifications: nonspendable, restricted, committed, assigned and unassigned. Nonspendable fund balance includes amounts that cannot be spent because they are either not in spendable form or legally or contractually required to be maintained intact. Restricted fund balance indicates that constraints have been placed on the use of resources either by being externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or imposed by law through constitutional provisions or enabling legislation. Committed fund balances include amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the Board of Education. Assigned fund balances include amounts that are constrained by the District management s intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance represents fund balance that has not been assigned to other funds and that has not been restricted, committed, or assigned to specific purposes within the General Fund. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available restricted amounts is considered to be spent first. When an expenditure is incurred for purposes for which committed, assigned, or unassigned fund balance is available, the following is the order in which resources will be expended: committed, assigned and unassigned. The following is the detail for fund balance classifications in the financial statements: Major Governmental Funds Supplemental Special Capital Bond and Capital Capital Other Total General General Education KPERS Outlay Interest Projects Projects Governmental Governmental Fund Fund Fund Fund Fund Fund Fund Fund Funds Funds Fund Balances: Nonspendable Inventory $ 239,414 $ - $ - $ - $ - $ - $ - $ - $ 151,192 $ 390,606 Restricted for: Special education instruction - - 6,595, ,595,779 Debt retirement ,343, ,343,026 School construction and equipment ,701,453-1,356,183 5,373, ,755 67,762,658 Instruction ,349,815 4,349,815 Healthcare and general liabilities ,245,984 20,245,984 Food service operations ,429,258 2,429,258 Assigned for: Special education instruction , ,085 School construction and equipment ,257, ,852 11,787,340-15,782,828 Instruction 579, ,617,881 14,197,744 Food service operations ,957 20,957 Unassigned: - 3,748, ,748,516 Total Fund Balances $ 819,277 $ 3,748,516 $ 6,690,864 $ - $ 63,959,089 $ 56,343,026 $ 2,094,035 $ 17,160,607 $ 41,146,842 $ 191,962,256 34

49 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) I. Net Position Net position represents the difference between assets and liabilities. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. Net position are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the District or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. The District applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position are available. J. Deferred Outflows/Inflows of Resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The District reports changes in the pension liability proportion, net difference between projected and actual earnings on pension plan investments and contributions made to the pension plan after the measurement date of the net pension liability as deferred outflows of resources in the government activities. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government funds report unavailable revenues from one source: property taxes. Differences between expected and actual experience, changes in assumptions, and changes in proportion are reported as deferred inflows for governmental activities. Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary Information Kansas statutes require that an operating budget be legally adopted for the general fund, special revenue funds (unless specifically exempted by statute) and debt service funds. The General Fund and Supplemental General Fund are subject to budgetary limitation by state statute. Other funds are not subject to statutory limitation. The statutes provide for the following sequence and timetable in the adoption of the legal annual operating budget: 1. Preparation of the budget for the succeeding year on or before August 1st. 2. Publication in local newspaper of the proposed budget and notice of public hearing on the budget on or before August 5th. 35

50 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) 3. Public hearing on or before August 15th, but at least ten days after publication of notice of hearing. 4. Adoption of the final budget on or before August 25th. Management may not amend the budget without the approval of the board of education. However, state statutes permit management to transfer budgeted amounts between line items within an individual fund without this approval. In addition, the District has policies that require that department heads obtain business office approval prior to making any such transfers. The legal level of budgetary control is at the fund level. If the board of education elects to amend the budget, it must publish a notice of public hearing in the local newspaper. At least ten days after publication the hearing may be held and the budget may be amended at that time. The budget for the June 30, 2017 school year was not amended. All legal annual operating budgets are prepared using the statutory basis of accounting, in which revenues are recognized when cash is received and expenditures include disbursements, accounts payable, and encumbrances. Encumbrances are commitments by the District for future payments and are supported by a document evidencing the commitment, such as a purchase order or contract. All unencumbered appropriations lapse at year end, except for capital project funds which are carried forward until such time as the project is completed or terminated. Encumbered appropriations (encumbrances) are reported as expenditures in the current year s budgetary presentation and as reservations of fund balances in the governmental fund financial statements prepared in conformity with accounting principles generally accepted in the United States of America. Accordingly, the actual expenditure data presented in the budgetary comparison statements differ from the data presented in the governmental fund financial statements prepared in conformity with accounting principles generally accepted in the United States of America. A legal operating budget is not required for capital projects funds, agency funds, and certain special revenue funds. Legal operating budgets are required for the following funds: General, Supplemental General, Bilingual Education, Virtual Education, Capital Outlay, Driver Training, Food Service, Professional Development, Parent Education Program, Summer School, Special Education, Extraordinary School Program, Vocational Education, Special Assessment, Federal Funds, Gifts and Grants Funds, Special Liability, At Risk (K-12), KPERS and the Debt Service Fund. Actual exceeded budgeted expenditures in the Driver Training Fund, which is a violation of K.S.A Spending in funds which are not subject to the legal annual operating budget requirements are controlled by federal regulations, other statutes, or by the use of internal spending limits established by the board of education. The actual data presented in the budgetary comparison statements differs from the data presented in accordance with accounting principles generally accepted in the United States of America (GAAP). The following is a summary of the effects on the ending fund balances caused by the difference in accounting between the budgetary basis and GAAP. 36

51 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 2. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY (Continued) A. Budgetary Information (Continued) Major Governmental Funds Other Total Supplemental Special Capital Debt Capital Capital Nonmajor Budgeted General General Education KPERS Outlay Service Projects Projects Governmental Governmental Fund Fund Fund Fund Fund Fund Fund Fund Funds Funds GAAP FUND BALANCE June 30, 2017 $ 819,277 $ 3,748,516 $ 6,690,864 $ - $ 63,959,089 $ 56,343,026 $ 2,094,035 $ 17,160,607 $ 41,146,842 $ 191,962,256 Adjustments: Unreserved fund balances not subject to the Kansas Budget Law: Capital Projects [1,356,183] [5,373,267] - [6,729,450] Contingency Reserve [11,179,726] [11,179,726] Instructional Materials [2,286,634] [2,286,634] Gate Receipts [278,105] [278,105] Student Projects [277,531] [277,531] Special Reserve [3,048,739] [3,048,739] Special Healthcare Reserve [16,731,819] [16,731,819] Gifts Fund ,032,018 1,032,018 Current year encumbrances [579,863] - [95,085] - [3,257,636] - [737,852] [11,787,340] [1,903,477] [18,361,253] Reserve for material and supplies inventory [239,414] [151,192] [390,606] Total deductions [819,277] - [95,085] - [3,257,636] - [2,094,035] [17,160,607] [34,825,205] [58,251,845] BUDGETARY FUND BALANCE June 30, 2017 $ - $ 3,748,516 $ 6,595,779 $ - $ 60,701,453 $ 56,343,026 $ - $ - $ 6,321,637 $ 133,710,411 B. Property Taxes The tax levy per $1,000 of the assessed valuation of tangible taxable property was as follows: Fund Levy ($ per thousand) General $ Special revenue: Supplemental General Capital Outlay Special Assessment Cost of Living Extraordinary Growth Facilities Special Liability Bond and Interest Total tax levy $ Taxes are assessed on a calendar year basis, and are levied and become a lien on the property on November 1st in the year of assessment. The taxes are due upon receipt of the billing, although taxpayers may elect to pay installments on December 20 and May 10. Taxes are distributed to the District as collected by the County Treasurer five times per year. 37

52 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 3. RESTATEMENT OF EQUITY The beginning governmental activities net position was restated as follows: Note 4. DETAILED NOTES ON ALL FUNDS A. Investments Total Governmental Funds Net Assets - Beginning $ 141,208,952 Prior Period Adjustments: Assets miscoded previously as capital outlay expense 248,600 Net Assets - Beginning, Restated $ 141,457,552 The District s cash is considered to be active funds by management and is invested according to District policy and K.S.A The statute requires that banks eligible to hold active funds have a main or branch bank in the County in which the District is located or an adjacent county and that the bank provide an acceptable rate for active funds. The District s investments are considered to be idle funds by management and are invested according to District policy and K.S.A The statute requires that the District invest its idle funds in only temporary notes of the District, bank certificates of deposit, repurchase agreements, and if eligible banks do not offer an acceptable rate for the funds: U.S. Treasury Bills or Notes and the Municipal Investment Pool (KMIP). Maturities of the above investments may not exceed two years by statute. Some of the District s investments are of bond proceeds invested pursuant to K.S.A This statute allows additional investment authority beyond that of K.S.A Investments of bond proceeds may follow K.S.A or include other investments such as the obligations of the Federal National Mortgage Association, federal home loan banks or the Federal Home Loan Mortgage Corporation, repurchase agreements collateralized by direct obligations of the United States government or any agency thereof, investment agreements with a financial institution, which at the time of investment are rated in either of the three highest rating categories by Moody s Investors Service or Standard and Poor s Corporation, investments in shares or units of a money market fund or trust, the portfolio of which is comprised entirely of securities in direct obligations of the United States government or any agency thereof or obligations of the Federal National Mortgage Association, federal home loan banks or Federal Home Loan Mortgage Corporation, receipts evidencing ownership interests in securities or portions thereof in direct obligations of the United States government or any agency thereof of obligations of the Federal National Mortgage Association, federal home loan banks or the Federal Home Loan Mortgage Corporation, and municipal bonds or other obligations issued by a municipality of the State of Kansas. K.S.A prohibits investment in derivatives. 38

53 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A. Investments (Continued) The District categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. At June 30, 2017, the District had the following investments: Weighted Average Investment Type Level 1 Rating Maturity Money Market: Goldman Sachs Financial Square Government Fund $ 11,866,317 S&P AAAm 28 Days Fidelity Government Money Market Fund 205,182 NA 26 Days Kansas Municipal Investment Pool 37,492,766 S&P AAAf/S1+ 1 Day Total fair value $ 49,564,265 The above investments are measured at the net asset value, have an ongoing redemption frequency and liquidity fees or redemption gates are not imposed on any of the investments. The money market investments are composed of U.S. Government securities that are fully collateralized. At June 30, 2017, the District had certificates of deposit in the amount of $160,000,000. The District s investment policy provides direction on concentration risk. The District policy states that adequate diversification of investments shall be met by security type and institution wherever possible in order to eliminate the risk of loss resulting from the over concentration of assets in a specific maturity, issuer or class of securities. In establishing specific diversification strategies the following guidelines will apply; portfolio maturities shall be staggered in a way that avoids undue concentration of assets in a specific maturity sector. Maturities shall be selected which provide stability of income and reasonable liquidity. Liquidity practices shall be used at all times to ensure that the next disbursement date and payroll date are covered through maturing investments, marketable United States treasuries or cash on hand. The District s formal investment policy does not provide limits on interest rate risks. Custodial credit risk is the risk that in the event of a bank failure, the District s deposits may not be returned to it. All District deposits shall be held in third party safekeeping. The District shall maintain a listing of the specific instruments, rates, maturities and other pertinent information. In terms of collateralization, the following must apply: 1. Securities pledged to secure the deposits of the District must be deposited with a bank, trust company, or national bank authorized to do business in Kansas, the Federal Reserve Bank of Kansas City, the Federal Home Loan Bank of Topeka or the State Treasurer. Such securities must be deposited under a joint custody receipt and must equal at least 105% of the market value of the secured deposits. 39

54 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) A.Investments (Continued) No securities pledged may be left for safekeeping in any bank, trust company or national bank which is owned directly or indirectly by any parent corporation of the depository bank, or with any bank, trust company or national bank having common controlling shareholders, having a common majority of the board of directors or having common directors with the ability to control or influence directly or indirectly the acts or policies of the bank, state or federally chartered savings and loan association, or federally chartered savings bank securing public deposits. 2. Certificates of deposit shall be collateralized as required by Kansas statutes for any amount exceeding FDIC coverage. 3. Collateral underlying repurchase agreements is limited to United States government and agency obligations which are eligible for wire transfer to the District s safekeeping agent through the Federal Reserve System. 4. Collateral is valued at current market plus interest accrued through the date of valuation. Repurchase agreement collateral must be maintained at the following level, with respect to repurchase agreement par value plus accrued interest: United States treasury securities, with maturities of one year or less at 101% and United States treasury securities with maturities of one to five years at 102%. At year end, the Blue Valley Recreation Commission's investment balances, at fair value, were as follows: Measurement Using Quoted Prices in Active Markets for Weighted Identical Assets Average 6/30/2017 (Level 1) Rating Maturity Investments by fair value level U.S. Treasury Securities $ 347,297 $ 347,297 NA 1 Day Total investments measured at fair value level 347,297 $ 347,297 Investments measured at the net asset value (NAV) Kansas Municipal Investment Pool 8,032 S&P AAAf/S1+ 1 Day Total investments measured at NAV 8,032 Total investments measured at fair value $ 355,329 B. Receivables Receivables as of June 30, 2017 are as follows: 2012 Special Capital Other General Education KPERS Projects Governmental Total District governmental activities: Receivables: Accounts $ 9,541,307 $ 948 $ 4,144,844 $ - $ 115,264 $ 13,802,363 Interest 307, , ,940 Total $ 9,848,794 $ 948 $ 4,144,844 $ 22,453 $ 115,264 $ 14,132,303 40

55 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) C. Capital Assets Capital asset activity for the year ended June 30, 2017, was as follows: Balance, Balance Prior Period Restated Balance July 1, 2016 Adjustment July 1, 2016 Additions Retirements June 30, 2017 District governmental activities: Nondepreciable assets: Land $ 32,244,520 $ - $ 32,244,520 $ 310,364 $ - $ 32,554,884 Construction in progress 30,433,333-30,433,333 19,115,401 [13,115,666] 36,433,068 Depreciable assets: Buildings and improvements 622,491, ,491,181 14,778, ,269,432 Site improvements 75,199,365-75,199, ,703-75,578,068 Infrastructure 18,452,496-18,452, ,452,496 Furniture 2,807,634-2,807,634 53,858 [8,321] 2,853,171 Technology 17,043,250 21,538 17,064,788 3,906,814 [596,641] 20,374,961 Vehicles 4,001,144-4,001, ,753 [240,762] 3,959,135 Food service equipment 5,383, ,524 5,607, ,042 [477,712] 5,255,106 Equipment 23,387,786-23,387,786 1,838,774 [908,761] 24,317,799 Totals at historical cost 831,443, , ,690,023 40,705,960 [15,347,863] 857,048,120 Less accumulated depreciation for: Buildings and improvements 182,089, ,089,297 13,952, ,041,739 Site improvements 29,205,309-29,205,309 3,410,963-32,616,272 Infrastructure 4,851,678-4,851, ,939-5,609,617 Furniture 2,285,217-2,285,217 81,869 [901] 2,366,185 Technology 8,635, ,636,114 2,460,086 [539,871] 10,556,329 Vehicles 1,792,708-1,792, ,304 [190,160] 1,861,852 Food service equipment 4,648,344 [2,789] 4,645, ,422 [461,081] 4,604,896 Equipment 21,001,664 [134] 21,001,530 1,012,221 [862,720] 21,151,031 Total accumulated depreciation 254,509,946 [2,538] 254,507,408 22,355,246 [2,054,733] 274,807,921 Governmental activities capital assets, net $ 576,934,015 $ 248,600 $ 577,182,615 $ 18,350,714 $ [13,293,130] $ 582,240,199 41

56 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) C. Capital Assets (Continued) Balance, Balance Prior Period Restated Balance July 1, 2016 Adjustment July 1, 2016 Additions Retirements June 30, 2017 Component unit governmental activities: Nondepreciable assets: Construction in progress $ 11,836,584 $ - $ 11,836,584 $ 9,187,528 $ [20,967,587] $ 56,525 Depreciable assets: Buildings and improvements 32,321,840-32,321,840 20,967,587-53,289,427 Equipment 2,555,645-2,555, ,114-2,706,759 Totals at historical cost 46,714,069-46,714,069 30,306,229 [20,967,587] 56,052,711 Less accumulated depreciation for: Buildings and improvements 8,336,291-8,336, ,930-9,294,221 Equipment 2,456,713-2,456, ,383-2,590,096 Total accumulated depreciation 10,793,004-10,793,004 1,091,313-11,884,317 Governmental activities capital assets, net $ 35,921,065 $ - $ 35,921,065 $ 29,214,916 $ [20,967,587] $ 44,168,394 The District's depreciation expense was charged to governmental functions as follows: Instruction $ 17,556,859 Student support 117,410 Instructional support 36,123 General administration 397,976 School administration 50,986 Operations and maintenance 1,896,482 Central services 1,879,081 Other support services 420,329 Total depreciation $ 22,355,246 The Recreation Commission component unit's depreciation expense was charged to governmental functions as follows: Culture and recreation $ 1,091,313 Total depreciation $ 1,091,313 42

57 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Long - Term Liabilities The changes in the District's long-term obligations during the year consist of the following: District Governmental Activities Restated Amounts Balance Balance Due Within June 30, 2016 Additions Reductions June 30, 2017 One Year General Obligation Bonds $ 409,068,692 $ - $ [42,593,447] $ 366,475,245 $ 39,647,354 Net Other Post Employment Benefit Obligation 15,968,808 1,277,305-17,246,113 - Compensated Absences 1,683, ,024 [401,098] 1,778, ,098 Total governmental activities Long-term liabilities $ 426,720,863 $ 1,773,329 $ [42,994,545] $ 385,499,647 $ 40,048,452 Component Unit Governmental Activities Certificates of Participation $ 30,900,774 $ - $ [1,544,846] $ 29,355,928 $ 1,779,846 Total governmental activities Long-term liabilities $ 30,900,774 $ - $ [1,544,846] $ 29,355,928 $ 1,779,846 Long-term obligations of the District consists of the following: General Obligation Date Maturity Interest Original Outstanding Bonds Issued Date Rate Amount June 30, A 06/01/09 10/01/ % to 5.75% $ 73,011,532 $ 48,426, A 09/15/10 10/01/21 2.0% to 4.0% 23,109,417 13,114, A 03/15/11 10/01/30 2.0% to 4.125% 33,038,066 16,037, B 09/26/11 10/01/18 2.0% to 4.0% 42,759,274 8,301, A 04/19/12 10/01/31 2.0% to 5.0% 51,324,904 41,839, A 01/15/14 10/01/33 3.0% to 5.0% 63,933,704 52,243, B 07/02/14 10/01/25 3.0% to 5.0% 32,607,328 30,470, A 10/01/15 10/01/35 3.0% to 5.0% 98,713,702 87,238, B 10/01/15 10/01/27 2.0% to 5.0% 74,560,040 68,802,536 Total general obligation bonds payable $ 493,057,967 $ 366,475,245 43

58 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Long - Term Liabilities (Continued) Long-term obligations of the Recreation Commission consists of the following: Issued Rate Amount June 30, 2017 Certificates of Participation 2014A 12/18/14 2.0% to 5.0% $ 8,819,719 $ 7,366, B 12/18/14 2.0% to 5.0% 4,606,041 3,839, /16/15 3.0% to 4.0% 18,614,628 18,149,396 Total certificates of participation payable $ 32,040,388 $ 29,355,928 The annual debt service requirements to maturity for the District general obligation bonds, including interest, are as follows: Year Ended December 31, Principal Interest Total 2018 $ 39,647,354 $ 13,521,988 $ 53,169, ,077,354 12,005,544 45,082, ,533,886 10,675,594 38,209, ,908,886 9,663,825 28,572, ,073,886 8,891,988 27,965, ,122,490 30,312, ,434, ,190,277 10,418,159 85,608, ,921,112 1,686,286 29,607,398 Total $ 366,475,245 $ 97,175,578 $ 463,650,823 The annual debt service requirements to maturity for the Commission s certificates of participation, including interest, are as follows: Year Ended June 30, Principal Interest Totals 2017 $ 1,779,846 $ 1,011,875 $ 2,791, ,839, ,575 2,800, ,879, ,775 2,787, ,934, ,000 2,784, ,004, ,650 2,791, ,729,615 2,729,050 12,458, ,241,157 1,449,950 6,691, ,945, ,700 5,341,626 Total $ 29,355,928 $ 9,091,575 $ 38,447,503 44

59 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 4. DETAILED NOTES ON ALL FUNDS (Continued) D. Long - Term Liabilities (Continued) Long-term liabilities on the Statement of Net Position are reported net of the applicable bond premium and discount. The District is subject to Kansas statutes and may issue general obligation bonds for capital improvements upon the approval of a majority of the voters. Remaining debt service requirements for general obligation bonds will be repaid from the Debt Service Fund. Such general obligation indebtedness may not exceed the amount allowed for the District under K.S.A The District s statutory limit for such bonded indebtedness is about $398 million at June 30, The District has received authorization from the State of Kansas to exceed this limit. E. Operating Leases The District leases copiers under an operating lease. Total costs for this lease was $680,139 for the year ended June 30, The future minimum lease payments for the lease are $689,263 for the next fiscal year. The District leases busses under an operating lease. Total costs for this lease was $553,116 for the year ended June 30, The future minimum lease payments for the lease are $607,810 for the next fiscal year. 45

60 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION A. Defined Benefit Pension Plan Description of Pension Plan. The District participates in a cost-sharing multiple-employer pension plan (Pension Plan), as defined in Governmental Accounting Standards Board Statement No. 67, Financial Reporting for Pension Plans. The Pension Plan is administered by the Kansas Public Employees Retirement System (KPERS), a body corporate and an instrumentality of the State of Kansas. KPERS provides benefit provisions to the following statewide pension groups under one plan, as provided by K.S.A. 74, article 49: Public employees, which includes: State/School employees Local employees Police and Firemen Judges Substantially all public employees in Kansas are covered by the Pension Plan. Participation by local political subdivisions is optional, but irrevocable once elected. Those employees participating in the Pension Plan for the School District are included in the State/School employee group. KPERS issues a stand-alone comprehensive annual financial report, which is available on the KPERS website at Benefits. Benefits are established by statute and may only be changed by the State Legislature. Members with ten or more years of credited service, may retire as early as age 55, with an actuarially reduced monthly benefit. Normal retirement is at age 65, age 62 with ten years of credited service, or whenever a member s combined age and years of service equal 85. Monthly retirement benefits are based on a statutory formula that includes final average salary and years of service. When ending employment, members may withdraw their contributions from their individual accounts, including interest. Members who withdraw their accumulated contributions lose all rights and privileges of membership. For all pension coverage groups, the accumulated contributions and interest are deposited into and disbursed from the membership accumulated reserve fund as established by K.S.A Members choose one of seven payment options for their monthly retirement benefits. At retirement a member may receive a lump-sum payment of up to 50% of the actuarial present value of the member s lifetime benefit. His or her monthly retirement benefit is then permanently reduced based on the amount of the lump sum. Benefit increases, including ad hoc post-retirement benefit increases, must be passed into law by the Kansas Legislature. Benefit increases are under the authority of the Legislature and the Governor of the State of Kansas. For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund as established by K.S.A The 2012 Legislature made changes affecting new hires, current members and employers. A new KPERS 3 cash balance retirement plan for new hires starting January 1, 2015, was created. Normal retirement age for KPERS 3 is 65 with five years of service or 60 with 30 years of service. Early retirement is available at age 55 with 10 years of service, with a reduced benefit. Monthly benefit options are an annuity benefit based on the account balance at retirement. For all pension coverage groups, the retirement benefits are disbursed from the retirement benefit payment reserve fund and established by K.S.A

61 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Contributions. Member contributions are established by state law, and are paid by the employee according to the provisions of Section 414(h) of the Internal Revenue Code. State law provides that the employer contribution rates are determined based on the results of an annual actuarial valuation. The contributions and assets of all groups are deposited in the Kansas Public Employees Retirement Fund established by K.S.A All of the retirement systems are funded on an actuarial reserve basis. For fiscal years beginning in 1995, Kansas legislation established statutory limits on increases in contribution rates for KPERS employers. Annual increases in the employer contribution rates related to subsequent benefit enhancements are not subject to these limitations. The statutory cap increase over the prior year contribution rate is 1.1% of total payroll for the fiscal year ended June 30, The actuarially determined employer contribution rate for school employees are 16.00%. The statutory contribution rate for school employees was 10.91%. Member contribution rates as a percentage of eligible compensation for the fiscal year ended June 30, 2016 are 6.00% for State/School employees. Legislature in the 2015 session authorized issuance of $1.0 billion in net bond proceeds to improve the funding of the State/School group. The bonds were issued in August 2015 and deposited in the trust fund on August 20, The portion of this nonemployer contribution allocated to the District is $31,747,150. Employer Allocations. Although KPERS administers one cost-sharing multiple-employer defined benefit pension plan, separate (sub) actuarial valuations are prepared to determine the actuarial determined contribution rate by group. Following this method, the measurement of the collective net pension liability, deferred outflows of resources, deferred inflows of resources, and pension expense are determined separately for each of the following groups of the plan: State/School Local Police and Firemen Judges To facilitate the separate (sub) actuarial valuations, KPERS maintains separate accounts to identify additions, deductions, and fiduciary net position applicable to each group. The allocation percentages presented for each group in the schedule of employer and nonemployer allocations are applied to amounts presented in the schedules of pension amounts by employer and nonemployer. The allocation percentages for the District s share of the collective pension amounts as of June 30, 2016, was based on the ratio of its contributions to the total of the employer and nonemployer contributions of the group for the fiscal years ended June 30, The contributions used exclude contributions made for prior service, excess benefits and irregular payments. At June 30, 2016, the District s proportion was 3.17%, which was an increase of.1% from its proportion measured at June 30, Net Pension Liability. At June 30, 2017 and 2016, the School District reported a liability of $213,374,529 and $212,823,063, respectively, for its proportionate share of the net pension liability. 47

62 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Actuarial Assumptions. The total pension liability was determined by an actuarial valuation as of December 31, 2015, which was rolled forward to June 30, 2016, using the following actuarial assumptions: Assumption Rate Price inflation 3.00% Wage inflation 4.00% Salary increases, including wage increases 4.00 to 16.00%, including inflation Long-term rate of return, net of investment expense, and including price inflation 8.00% Mortality rates were based on the RP-2000 Healthy Annuitant Mortality Table for Males or Females, as appropriate, with adjustments for mortality improvements based on Scale AA. The actuarial assumptions used in the December 31, 2015 valuation were based on the results of an actuarial experience study conducted for three years ending December 31, The long-term expected rate of return of pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the pension plan s target asset allocation as of June 30, 2016 are summarized in the following table: Asset Long-Term Target Allocation Long-Term Expected Real Rate of Return Global equity 47.00% 6.80% Fixed income 13.00% 1.25% Yield return 8.00% 6.55% Real return 11.00% 1.71% Real estate 11.00% 5.05% Alternatives 8.00% 9.85% Short-term investments 2.00% -0.25% Total % Discount Rate. The discount rate used to measure the total pension liability was 8.00%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the contractually required rate. The State, School and Local employers do not necessarily contribute the full actuarial determined rate. Based on legislation passed in 1993, the employer contribution rates certified by the System s Board of Trustees for these groups may not increase by more than the statutory cap. The expected KPERS employer statutory contribution was modeled for future years, assuming all actuarial assumptions are met in future years. Employers contribute the full actuarially determined rate for Police & Firemen, and Judges. Future employer contribution rates were also modeled for Police & Firemen and Judges, assuming all actuarial assumptions are met in future years. Based on those assumptions, the pension plan s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 48

63 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) A. Defined Benefit Pension Plan (Continued) Sensitivity of the School District s proportionate share of the net pension liability to changes in the discount rate. The following presents the School District s proportionate share of the net pension liability calculated using the discount rate of 8.00%, as well as what the School District s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (7.00%) or 1-percentage point higher (9.00%) than the current rate: 1% Decrease (7.00%) Discount rate (8.00%) 1% Increase (9.00%) $277,454,012 $213,374,529 $158,943,287 Pension Expense. For the year ended June 30, 2017, the School District recognized pension expense of $19,452,704, which includes the changes in the collective net pension liability, projected earnings on pension plan investments, and the amortization of deferred outflows of resources and deferred inflows of resources for the current period. Deferred Outflows of Resources and Deferred Inflows of Resources. At June 30, 2017, the School District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred outflows Deferred inflows of resources of resources Differences between actual and expected experience $ - $ 10,073,725 Net differences between projected and actual earnings on investments 19,272,126 - Changes of assumptions 385,806 Pension contributions subsequent to the measurement date 12,276,064 - Changes in proportion 14,638,693 12,907,879 Total $ 46,186,883 $ 23,367,410 $12,276,064 reported as deferred outflows of resources related to pensions resulting from District contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Deferred Year ended [Inflows] Outflows June 30, Amount 2016 $ 681, , ,352, ,705, ,610 Total $ 10,543,409 During the last quarter of the 2017 fiscal year, the governor, using the budgetary allotment process, reduced one of the quarterly payments in the amount of $2,964,609, due to budgetary constraint. When the payment is made, it will be paid directly from the State of Kansas to KPERS and not recorded by the District. 49

64 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) B. Interfund Transfers and Due To/From Other Funds K.S.A allows the transfer of monies between funds. Interfund transfers occurred during the year and were made between the funds identified in the following table to provide sufficient resources to pay the expenditures in the funds receiving the transfer. The due to and due from between funds were recorded to eliminate negative cash in any individual funds. Major: Due From Other Due To Other Transfers In Transfers Out Funds Funds General $ 174,427 $ 2,938 $ 89,178 $ - Nonmajor: Special Revenue 2, ,427-89,178 Total $ 177,365 $ 177,365 $ 89,178 $ 89,178 C. Contingent Liabilities The District receives significant financial assistance from numerous federal and state governmental agencies in the form of grants and state pass-through aid. The disbursement of funds received under these programs generally requires compliance with terms and conditions specified in the grant agreements and is subject to audit. Any disallowed claims resulting from such audits could become a liability of the General Fund or other applicable funds. However, in the opinion of management, any such disallowed claims will not have a material effect on the financial statements of the District at June 30, The District s general obligation bond issues are subject to the arbitrage provisions of Section 148 of the Internal Revenue Code. These provisions include the potential for rebates to the Federal Government of the earnings on the bond proceeds in excess of the yield on the bonds. The amounts of any future rebates due on other bonds have not been determined. The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. There has been no significant change in insurance coverage from the previous fiscal year. During the past three fiscal years, settlements have not exceeded insurance coverage. The District is also a party in a number of lawsuits as a result of the ordinary course of school activities. District management and legal counsel anticipate that the potential claims against the District not covered by insurance, if any, resulting from such matters would not materially affect the financial position of the District. The District provides self-funded health insurance through a cost plus arrangement with Blue Cross Blue Shield of Kansas City. Under the contract, the District pays the lower amount between actual monthly claims plus any carryforward deficit or a monthly premium plus any carryforward surplus. A carryforward surplus represents an unused maximum claims liability, while a carryforward deficit represents a funding shortage. The amount of carryforward surplus at June 30, 2017, was $2,135,

65 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) D. Capital Project Funds Expenditures - Budget and Actual (Budgetary Basis) The District prepares annual operating budgets for the majority of the governmental funds; however, for the capital projects funds, project-length budgets are prepared. The projects budgeted, approved budgets, and cumulative expenditures, as of June 30, 2017, are as follows: E. Postemployment Healthcare Plan Cumulative expenditures Project through Project Name Budget June 30, 2017 Construction Projects 2005 $ 295,609,488 $ 291,361,075 Construction Projects 2012 $ 276,732,627 $ 174,681,076 Plan Description. The District operates a single employer defined benefit healthcare plan administered by the District. The Employee Benefit Plan (the Plan) provides medical, dental and vision insurance benefits to eligible early retirees and their spouses. K.S.A requires all local governmental entities in the state that provide a group health care plan to make participation available to all retirees and dependents until the retiree reaches the age of 65 years. No separate financial report is issued for the Plan. Employees covered by benefit terms. benefit terms: At June 30, 2017, the following employees were covered by the Active employees 2,792 Retirees and covered spouses 81 Total 2,873 Total OPEB Liability. The District s total OPEB liability of $17,246,113 was measured as of July 1, 2015, and was determined by an actuarial valuation as of that date. Actuarial assumptions and other inputs. The total OPEB liability in the July 1, 2015 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Valuation date July 1, 2015 Actuarial cost method Entry age normal as a level percentage of payroll Inflation 2.50% Salary increases 3.00% Discount rate 3.75% Healthcare cost trend rates Retiree's share of benefit related costs 8.00% for 2016, decreasing 0.50% per year to an ultimate rate of 5.00% for 2022 and later years 100% of projected health insurance premiums for retirees The discount rate was based on the municipal bond index rate provided by Bloomberg. 51

66 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) E. Postemployment Healthcare Plan (Continued) Mortality rates were based on the SOA RPH-2014 White Collar Headcount-Weighted Mortality Margin for mortality improvements: Scale MP The changes in the total OPEB liability are as follows: Total OPEB Liability Balance 7/01/2016 $ 15,968,808 Service cost 1,388,005 Interest 585,771 Benefit paid [696,471] Balance 6/30/2017 $ 17,246,113 Sensitivity of the total OPEB liability to changes in the discount rate. The following presented the total OPEB liability of the District, as well as what the District s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.75%) or 1-percentage-point higher (4.75) than the current discount rate: 1% Decrease Discount Rate 1% increase (2.75%) (3.75%) (4.75%) Total OPEB Liability $ 18,446,113 $ 17,246,113 $ 16,155,113 Sensitivity of the total OPEB liability to changes in the healthcare cost trend rates. The following presents the total OPEB liability of the District, as well as what the District s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7% decreasing to 4%) or 1- percentage-point higher (9% decreasing to 6%) than the current healthcare cost trend rates: Healthcare Cost 1% Decrease Trend Rates 1% increase (7% decreasing to 4%) (8% decreasing to 5%) (9% decreasing to 6%) Total OPEB Liability $ 15,810,113 $ 17,246,113 $ 18,908,113 For the year ended June 30, 2017, the District recognized OPEB expense of $1,973,776. At June 30, 2017, the District did not report any deferred outflows of resources or deferred inflows of resources related to OPEB. F. Reclassifications Certain amounts presented in the prior year data have been reclassified in order to be consistent with the current year s presentation. 52

67 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NOTES TO THE BASIC FINANCIAL STATEMENTS June 30, 2017 Note 5. OTHER INFORMATION (Continued) G. Tax Abatements Tax Increment Financing Tax revenues for the District are impacted by property tax abatements authorized by outside governmental entities. Specifically, the City of Overland Park has authorized the property tax abatements listed below that effect the District s tax revenue for the fiscal year ending June 30, Property tax abatements reduce ad valorem property taxes by reducing the assessed value of the property. The District has elected to disclose all tax abatement agreements. Outside Governmental Entity Property Description Type & % Abatement in FY2017 City of Overland Park U.S. Bank, Foster St Real Property Taxes, 50% Tax Revenue Reduction for the Fiscal Year $ 219,619 City of Overland Park Teva Pharmaceuticals, Nall Ave Real Property Taxes, 50% $ 170,524 City of Overland Park Black & Veatch, 5885 W 112 th St Real Property Taxes, 25% $ 7,571 City of Overland Park Black & Veatch, Lamar Ave Real Property Taxes, 25% $ 850,814 City of Overland Park 6860 W 115 th St Real Property Taxes, 85% $ 53,889 City of Overland Park Quintiles, 6700 W 115 th St Real Property Taxes, $ 335,459 50% Total $1,637,875 53

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69 REQUIRED SUPPLEMENTARY INFORMATION

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71 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 OTHER POST-EMPLOYMENT BENEFITS REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) June 30, 2017 Schedule of Changes in the District s Total OPEB Liability and Related Ratios Last Ten Fiscal Years* Total OPEB liability Service cost $ 1,347,578 $ 1,388,005 Interest 537, ,771 Benefit paid [519,655] [696,471] Net change in total OPEB liability 1,365,793 1,277,305 Total OPEB liability - beginning 14,603,015 15,968,808 Total OPEB liability - ending $ 15,968,808 $ 17,246,113 Covered-employee payroll $ 127,139,073 $ 127,139,073 Total OPEB liability as a percentage of covered-employee payroll 12.56% 13.56% Actuarially determined contribution $ 519,655 $ 696,471 Actual contribution $ 519,655 $ 696,471 Contributions as a percentage of covered payroll 0.41% 0.55% * - Data became available with the inception of GASB 75 during fiscal year 2016, therefore 10 years of data is unavailable. 54

72 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 KPERS PENSION PLAN REQUIRED SUPPLEMENTARY INFORMATION (CONTINUED) June 30, 2017 Schedule of the District s Proportionate Share of the Net Pension Liability Last Ten Fiscal Years* 06/30/17 06/30/16 06/30/15 District's proportion of the net pension liability 3.175% 3.074% 3.345% District's proportionate share of the net pension liability $ 213,374,529 $ 212,823,063 $ 213,745,582 District's covered employee payroll $ 134,026,134 $ 135,921,572 $ 134,039,068 District's proportionate share of the net pension liability as a percentage of its covered employee payroll % % % Plan fiduciary net position as a percentage of the total pension liability 65.10% 64.95% 63.30% * - The amounts presented for each fiscal year were determined as of 12/31. Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. Schedule of the District s Contributions Last Ten Fiscal Years* 06/30/17 06/30/16 06/30/15 Contractually required contribution $ 12,276,064 $ 10,799,867 $ 12,977,983 Contributions in relation to the contractually required contribution 12,276,064 10,799,867 12,977,983 Contribution deficiency [excess] $ - $ - $ - District's covered employee payroll $ 136,288,913 $ 133,997,294 $ 130,615,478 Contributions as a percentage of covered employee payroll 9.01% 8.06% 9.94% * - Data became available with the inception of GASB 68 during fiscal year 2015, therefore 10 years of data is unavailable. 55

73 COMBINING STATEMENTS AND INDIVIDUAL FUND SCHEDULES

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75 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING STATEMENTS - NONMAJOR FUNDS NONMAJOR SPECIAL REVENUE FUNDS The special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. BUDGETED FUNDS: Vocational Education Fund: This fund is used to account for revenues received and expenditures incurred for state and federal vocational education programs, administered in accordance with established guidelines and statutes. At Risk (K-12) Fund: This fund is used to account for the expenditures associated with at-risk students to provide them with additional educational opportunities and instructional services to assist in closing the achievement gap. Driver Training Fund: This fund is used to account for state aid and user revenues used to provide driver's education training to students. Professional Development Fund: This fund is used to account for state aid revenues that are provided for teacher inservice training programs. Special Assessment Fund: This fund is used to account for tax monies collected and expended to other taxing municipalities to pay the District s portion of special assessment taxes on District owned property. The fund is established and maintained in accordance with applicable state statutes. Food Service Fund: This fund is established pursuant to state law to account for all monies received and expended attributable to the food service program. This program is administered according to the state plan of child nutrition operations under which federal funds are received pursuant to federal acts relating to child nutrition. The programs are administered and meals are served on a nonprofit basis. Bilingual Education Fund: This fund is used to account for monies received and expended to operate an English as a Second Language (ESL) program. Virtual Education Fund: This fund is used to account for monies received and expended for virtual, online courses. Summer School Fund: This fund is used to account for user fees derived from summer school education programs and the expenditures necessary to carry out these programs. Parent Education Program Fund: This fund is used to account for state aid revenues which are used to provide educational training and assistance programs to parents in the District regarding pre-school and selected educational problems of students. Extraordinary School Program Fund: This fund is used to account for revenues and expenditures relating to a contract for credit program, a PSAT program, and an all day multi-age kindergarten program. Federal Funds: A number of grant funds including; Title I, Title II-A, Title III Grant and the Other Federal Grants Funds, have been established to account for the revenues and expenditures associated with Federal grants that have been awarded to the District for specific purposes. Grant Funds: A number of grant funds including; DAC Grant, Blue Valley Foundation Grant, Community Grants, and the Kauffman CAPS Networking Grant have been established to account for the revenues and expenditures associated with State and local grants that have been awarded to the District for specific purposes. 56

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77 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 NONMAJOR SPECIAL REVENUE FUNDS (CONTINUED) BUDGETED FUNDS (Continued): Special Liability Fund: This fund is used to account for property tax revenues used to pay the cost of providing for the school district s defense and the defense of employees pursuant to the Kansas tort claims act for payment of claims and other direct and indirect costs resulting from such act and to pay judgments rendered against the school district. NON - BUDGETED FUNDS: Gate Receipts Fund: Unexpended gate receipts from athletic and performing arts events at the schools are recorded in the District Gate Receipts Fund at year end. Student Projects Fund: Unexpended funds collected for schools are recorded in the District Students Projects Fund at year-end. Instructional Materials Fund: This fund is used to account for monies collected for student instructional materials, supplies and to purchase and maintain textbooks. Contingency Reserve Fund: This fund is used to account for monies transferred from the General Fund in accordance with Kansas statutes and expended for contingency purposes. Special Workers Comp Reserve Fund: This fund is used to account for monies transferred from the General Fund in accordance with Kansas statutes and expended to cover the cost of insurable losses not otherwise insured. Special Healthcare Reserve Fund: This fund is used to account for monies transferred from the General Fund and premiums collected from District employees in accordance with Kansas statutes and expended to cover the cost of healthcare for the District employees. College Now Fund: This fund is used to account for personnel expense reimbursement from Johnson County Community College for high school certified instructors of courses for college credit. 57

78 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING BALANCE SHEET - NONMAJOR SPECIAL REVENUE FUNDS (Continued) June 30, 2017 Vocational At Driver Professional Special Food DAC Bilingual Education Risk Training Development Assessment Service Grant Education ASSETS Cash and investments $ 30,540 $ 8,363 $ - $ 21,453 $ 331,755 $ 2,847,800 $ 21,288 $ 25,705 Other receivable Materials and supplies inventory , Total assets $ 30,540 $ 8,363 $ - $ 21,453 $ 331,755 $ 2,998,992 $ 21,288 $ 25,705 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ 9,159 $ 1,300 $ - $ 496 $ - $ - $ - $ 25,705 Due to other funds Unearned revenue , Total liabilities 9,159 1, ,542-25,705 Fund balances: Nonspendable , Restricted ,755 2,429,258 21,288 - Assigned 21,381 7,063-20, Total fund balances 21,381 7,063-20, ,755 2,580,450 21,288 - Total liabilities and fund balances $ 30,540 $ 8,363 $ - $ 21,453 $ 331,755 $ 2,998,992 $ 21,288 $ 25,705 See independent auditor's report on the financial statements. 58

79 Parent Extraordinary Virtual Summer Education School Gate Student Instructional Contingency Education School Program Program Receipts Projects Materials Reserve Title I $ 372,037 $ 149,337 $ 9,754 $ 1,408,804 $ 278,105 $ 277,531 $ 5,712,281 $ 11,179,726 $ , , $ 372,037 $ 149,337 $ 35,578 $ 1,408,804 $ 278,105 $ 277,531 $ 5,712,281 $ 11,179,726 $ 46,062 $ - $ 247 $ - $ 22,851 $ - $ - $ 408,036 $ - $ , , ,270, , ,679,025-46, , ,580 35,578 1,040, ,286, , , ,531 1,746,622 11,179, , ,090 35,578 1,144, , ,531 4,033,256 11,179,726 - $ 372,037 $ 149,337 $ 35,578 $ 1,408,804 $ 278,105 $ 277,531 $ 5,712,281 $ 11,179,726 $ 46,062 See independent auditor's report on the financial statements. 59

80 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING BALANCE SHEET - NONMAJOR SPECIAL REVENUE FUNDS (Continued) June 30, 2017 Kauffman Blue Valley CAPS Special Special Foundation Community Networking Workers Comp Healthcare Grant Grants Grant Reserve Reserve ASSETS Cash and investments $ 229,844 $ 40,224 $ 182,730 $ 3,048,739 $ 16,731,819 Other receivable Materials and supplies inventory Total assets $ 229,844 $ 40,224 $ 182,730 $ 3,048,739 $ 16,731,819 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable $ - $ - $ 4,743 $ - $ - Due to other funds Unearned revenue Total liabilities - - 4, Fund balances: Nonspendable Restricted 228,400 39, ,124 3,048,739 16,731,819 Assigned 1, Total fund balances 229,844 40, ,987 3,048,739 16,731,819 Total liabilities and fund balances $ 229,844 $ 40,224 $ 182,730 $ 3,048,739 $ 16,731,819 See independent auditor's report on the financial statements. 60

81 Total Other Nonmajor Special Federal Special Revenue Title II-A Title III Liability Grant College Now Funds $ - $ - $ 465,426 $ - $ - $ 43,373,261 4, , , ,192 $ 4,606 $ 958 $ 465,426 $ 37,814 $ - $ 43,639,717 $ 262 $ - $ - $ - $ - $ 472,799 4, ,814-89, ,930,898 4, ,814-2,492, , , ,356, ,638, , ,146,842 $ 4,606 $ 958 $ 465,426 $ 37,814 $ - $ 43,639,717 See independent auditor's report on the financial statements. 61

82 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended June 30, 2017 Vocational At Driver Professional Special Food DAC Bilingual Education Risk Training Development Assessment Service Grant Education REVENUES: Taxes $ 4,636,032 $ 3,134,002 $ - $ 965,280 $ 71,671 $ - $ - $ 1,559,388 Intergovernmental 88, ,692, Charges for services , ,187, Use of money and property Other local sources 136, ,256 - Total revenues 4,861,452 3,134,002 34, ,280 71,671 8,880,202 23,256 1,559,388 EXPENDITURES: Current Instruction 4,641,323 2,794, ,471,383 Student support services - 96, Instructional support staff 174,611 58, , ,671 73,375 General administration School administration 37, , Student transportation services ,630 Operations and maintenance , Other support services , Food service operations ,191, Capital outlay Facility acquisition and construction , Total expenditures 4,853,453 3,129,020 10, , ,507 9,191,395 35,671 1,559,388 Excess [deficiency] of revenues over [under] expenditures 7,999 4,982 23,106 20,957 [421,836] [311,193] [12,415] - OTHER FINANCING SOURCES [USES]: Transfers in , Transfers [out] - - [174,427] Total other financing sources [uses] - - [174,427] - - 2, Net change in fund balances 7,999 4,982 [151,321] 20,957 [421,836] [308,255] [12,415] - Fund balance - Beginning of year 13,382 2, , ,591 2,888,705 33,703 - Fund balance - End of year $ 21,381 $ 7,063 $ - $ 20,957 $ 331,755 $ 2,580,450 $ 21,288 $ - See independent auditor's report on the financial statements. 62

83 Parent Extraordinary Virtual Summer Education School Gate Student Instructional Contingency Education School Program Program Receipts Projects Materials Reserve Title I $ 130,106 $ - $ 282,921 $ - $ - $ - $ 500,000 $ - $ , , , ,509-2,630, ,586-2,057, ,295, , , ,184 2,630, ,586 1,295,514 2,557, , , , ,299 2,233, ,997 1,306,390 3,257, , ,382 5,239 29, , , , , , , , , , ,184 2,687, ,997 1,306,390 3,257, ,663 [7,738] 26,031 - [57,693] 15,589 [10,876] [700,468] [7,738] 26,031 - [57,693] 15,589 [10,876] [700,468] , ,059 35,578 1,202, , ,407 4,733,724 11,179,726 - $ 372,037 $ 149,090 $ 35,578 $ 1,144,586 $ 278,105 $ 277,531 $ 4,033,256 $ 11,179,726 $ - See independent auditor's report on the financial statements. 63

84 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - NONMAJOR SPECIAL REVENUE FUNDS (Continued) For the Year Ended June 30, 2017 Kauffman Blue Valley CAPS Special Special Foundation Community Networking Workers Comp Healthcare Grant Grants Grant Reserve Reserve REVENUES: Taxes $ - $ - $ - $ 500,000 $ - Intergovernmental Charges for services Use of money and property ,691 84,856 Other local sources 42,251 2,335 80,600-1,029,382 Total revenues 42,251 2,335 80, ,691 1,114,238 EXPENDITURES: Current Instruction ,682 - Student support services ,099 - Instructional support staff 1, ,229 - General administration School administration , Student transportation services Operations and maintenance ,773 - Other support services ,365 - Food service operations Capital outlay Facility acquisition and construction Total expenditures 1,813-38, ,079 - Excess [deficiency] of revenues over [under] expenditures 40,438 2,335 41,685 20,612 1,114,238 OTHER FINANCING SOURCES [USES]: Transfers in Transfers [out] Total other financing sources [uses] Net change in fund balances 40,438 2,335 41,685 20,612 1,114,238 Fund balance - Beginning of year 189,406 37, ,302 3,028,127 15,617,581 Fund balance - End of year $ 229,844 $ 40,224 $ 177,987 $ 3,048,739 $ 16,731,819 See independent auditor's report on the financial statements. 64

85 Total Other Nonmajor Special Special Federal Revenue Title II-A Title III Liability Grant College Now Funds $ - $ - $ 91,948 $ - $ - $ 11,871, ,490 37,928-59,923-3,084, ,093, , , ,925 2,781, ,490 37,928 95,050 59, ,925 30,936,064-28, ,925 18,447, , ,490 9,911-59,923-2,022, , , , , , ,191, , ,490 37, ,906 59, ,925 31,499, [358,856] - - [563,103] , [174,427] [171,489] - - [358,856] - - [734,592] , ,881,434 $ - $ - $ 465,426 $ - $ - $ 41,146,842 See independent auditor's report on the financial statements. 65

86 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) VOCATIONAL EDUCATION FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes Current $ 4,636,032 $ [4,636,032] $ - $ - $ - $ - Total taxes 4,636,032 [4,636,032] Intergovernmental: Federal 88,834-88,834 88,834 88,834 - Total intergovernmental 88,834-88,834 88,834 88,834 - Miscellaneous 136, , , ,000 [113,414] Total revenues 4,861,452 [4,636,032] 225, , ,834 [113,414] EXPENDITURES: Instruction 4,641,323 2,059 4,643,382 4,635,350 4,635,350 [8,032] Instructional support staff 174,611 5, , , ,057 7,506 School administration 37,519-37,519 38,430 38, Total expenditures 4,853,453 7,999 4,861,452 4,861,837 4,861, Excess [deficiency] of revenues over [under] expenditures 7,999 [4,644,031] [4,636,032] [4,523,003] [4,523,003] [113,029] OTHER FINANCING SOURCES [USES]: Transfers in - 4,636,032 4,636,032 4,523,003 4,523, ,029 Total other financing sources [uses] - 4,636,032 4,636,032 4,523,003 4,523, ,029 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 7,999 [7,999] - $ - $ - $ - FUND BALANCE - Beginning of year 13,382 [13,382] - FUND BALANCE - End of year $ 21,381 $ [21,381] $ - See independent auditor's report on the financial statements. 66

87 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) AT RISK (K-12) FUND For the Year Ended June 30, 2017 REVENUES: Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] Taxes Current $ 3,134,002 $ [3,134,002] $ - $ - $ - $ - Total taxes 3,134,002 [3,134,002] Miscellaneous , ,000 [100,000] Total revenues 3,134,002 [3,134,002] - 100, ,000 [100,000] EXPENDITURES: Instruction 2,794,000 4,982 2,798,982 2,982,950 2,982, ,968 Student support services 96,307-96,307 90,075 90,075 [6,232] Instructional support staff 58,670-58,670 59,756 59,756 1,086 School administration 180, , , , Total expenditures 3,129,020 4,982 3,134,002 3,313,754 3,313, ,752 Excess [deficiency] of revenues over [under] expenditures 4,982 [3,138,984] [3,134,002] [3,213,754] [3,213,754] 79,752 OTHER FINANCING SOURCES [USES]: Transfers in - 3,134,002 3,134,002 3,213,754 3,213,754 [79,752] Total other financing sources [uses] - 3,134,002 3,134,002 3,213,754 3,213,754 [79,752] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 4,982 [4,982] - $ - $ - $ - FUND BALANCE - Beginning of year 2,081 [2,081] - FUND BALANCE - End of year $ 7,063 $ [7,063] $ - See independent auditor's report on the financial statements. 67

88 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) DRIVER TRAINING FUND For the Year Ended June 30, 2017 Variance with Adjustment Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Charges for services $ 34,047 $ - $ 34,047 $ - $ - $ 34,047 Total revenues 34,047-34, ,047 EXPENDITURES: Operations and maintenance 10,941-10, [10,941] Total expenditures 10,941-10, [10,941] Excess [deficiency] of revenues over [under] expenditures 23,106-23, ,106 OTHER FINANCING SOURCES [USES]: Transfers [out] [174,427] - [174,427] [151,321] [151,321] [23,106] Total other financing sources [uses] [174,427] - [174,427] [151,321] [151,321] [23,106] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [151,321] - [151,321] $ [151,321] $ [151,321] - FUND BALANCE - Beginning of year 151, ,321 FUND BALANCE - End of year $ - $ - $ - See independent auditor's report on the financial statements. 68

89 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) PROFESSIONAL DEVELOPMENT FUND For the Year Ended June 30, 2017 REVENUES: Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] Taxes Current $ 965,280 $ [965,280] $ - $ - $ - $ - Total taxes 965,280 [965,280] Intergovernmental: State and local ,000 50,000 [50,000] Total revenues 965,280 [965,280] - 50,000 50,000 [50,000] EXPENDITURES: Instructional support staff 926,968 20, ,925 1,141,113 1,141, ,188 Central services 17,355-17,355 18,484 18,484 1,129 Total expenditures 944,323 20, ,280 1,159,597 1,159, ,317 Excess [deficiency] of revenues over [under] expenditures 20,957 [986,237] [965,280] [1,109,597] [1,109,597] 144,317 OTHER FINANCING SOURCES [USES]: Transfers in - 965, ,280 1,109,597 1,110,229 [144,949] Total other financing sources [uses] - 965, ,280 1,109,597 1,110,229 [144,949] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] 20,957 [20,957] - $ - $ 632 $ [632] FUND BALANCE - Beginning of year FUND BALANCE - End of year $ 20,957 $ [20,957] $ - See independent auditor's report on the financial statements. 69

90 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL ASSESSMENT FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes: In process $ 1,325 $ - $ 1,325 $ 1,250 $ 1,250 $ 75 Current 6,050-6,050 5,193 5, Delinquent 10,300-10, ,108 Motor vehicle 53,323-53,323 52,257 52,257 1,066 Rental excise Total revenues 71,671-71,671 59,295 59,295 12,376 EXPENDITURES: Capital outlay 493, , , ,507 1,000 Total expenditures 493, , , ,507 1,000 Excess [deficiency] of revenues over [under] expenditures [421,836] - [421,836] $ [435,212] $ [435,212] $ 13,376 FUND BALANCE - Beginning of year 753, ,591 FUND BALANCE - End of year $ 331,755 $ - $ 331,755 See independent auditor's report on the financial statements. 70

91 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) FOOD SERVICE FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Intergovernmental: Federal $ 1,612,965 $ - $ 1,612,965 $ 1,638,075 $ 1,638,075 $ [25,110] State and local 79,159-79,159 68,692 68,692 10,467 Total intergovernmental 1,692,124-1,692,124 1,706,767 1,706,767 [14,643] Charges for services 7,187,588-7,187,588 7,333,816 7,333,816 [146,228] Investment revenue Miscellaneous ,280 48,280 [48,280] Total revenues 8,880,202-8,880,202 9,088,863 9,088,863 [208,661] EXPENDITURES: Operations and maintenance , , ,025 Food service operations 9,191,395 [81,065] 9,110,330 9,511,182 9,511, ,852 Total expenditures 9,191,395 [81,065] 9,110,330 9,983,207 9,983, ,877 Excess [deficiency] of revenues over [under] expenditures [311,193] 81,065 [230,128] [894,344] [894,344] 664,216 OTHER FINANCING SOURCES [USES]: Transfers in 2,938-2, ,938 Total other financing sources [uses] 2,938-2, ,938 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [308,255] 81,065 [227,190] $ [894,344] $ [894,344] $ 667,154 FUND BALANCE - Beginning of year 2,888,705 [232,257] 2,656,448 FUND BALANCE - End of year $ 2,580,450 $ [151,192] $ 2,429,258 See independent auditor's report on the financial statements. 71

92 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) BILINGUAL EDUCATION FUND For the Year Ended June 30, 2017 REVENUES: Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] Taxes Current $ 1,559,388 $ [1,559,388] $ - $ - $ - $ - Total taxes 1,559,388 [1,559,388] Other revenue from local source ,000 55,000 [55,000] Total revenues 1,559,388 [1,559,388] - 55,000 55,000 [55,000] EXPENDITURES: Instruction 1,471,383-1,471,383 1,526,580 1,526,580 55,197 Instructional support staff 73,375-73,375 75,438 75,438 2,063 Student transportation services 14,630-14,630 67,665 67,665 53,035 Total expenditures 1,559,388-1,559,388 1,669,683 1,669, ,295 Excess [deficiency] of revenues over [under] expenditures - [1,559,388] [1,559,388] [1,614,683] [1,614,683] 55,295 OTHER FINANCING SOURCES [USES]: Transfers in - 1,559,388 1,559,388 1,614,683 1,614,683 [55,295] Total other financing sources [uses] - 1,559,388 1,559,388 1,614,683 1,614,683 [55,295] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] $ - $ - $ - FUND BALANCE - Beginning of year FUND BALANCE - End of year $ - $ - $ - See independent auditor's report on the financial statements. 72

93 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) VIRTUAL EDUCATION FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes Current $ 130,106 $ [130,106] $ - $ - $ - $ - Total taxes 130,106 [130,106] Charges for services 323, , , ,250 34,800 Interest on idle funds ,000 25,000 [25,000] Total revenues 453,156 [130,106] 323, , ,250 9,800 EXPENDITURES: Instruction 362, , , ,577 [13,654] Instructional support staff 91,382-91, , ,028 29,646 School administration 7,281-7,281 5,388 5,388 [1,893] Total expenditures 460, , , ,993 14,099 Excess [deficiency] of revenues over [under] expenditures [7,738] [130,106] [137,844] [161,743] [161,743] 23,899 OTHER FINANCING SOURCES [USES]: Transfers in - 130, , , ,909 [2,803] Total other financing sources [uses] - 130, , , ,909 [2,803] Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] [7,738] - [7,738] $ [28,834] $ [28,834] $ 21,096 FUND BALANCE - Beginning of year 379, ,775 FUND BALANCE - End of year $ 372,037 $ - $ 372,037 See independent auditor's report on the financial statements. 73

94 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SUMMER SCHOOL FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Charges for services $ 134,509 $ - $ 134,509 $ 101,610 $ 101,610 $ 32,899 Total revenues 134, , , ,610 32,899 EXPENDITURES: Instruction 103, , , ,846 37,097 Instructional support staff 5,239-5,239 4,546 4,546 [693] Total expenditures 108, , , ,392 36,404 Excess [deficiency] of revenues over [under] expenditures 26,031 [510] 25,521 $ [43,782] $ [43,782] $ 69,303 FUND BALANCE - Beginning of year 123, ,059 FUND BALANCE - End of year $ 149,090 $ [510] $ 148,580 See independent auditor's report on the financial statements. 74

95 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) PARENT EDUCATION PROGRAM FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes Current $ 282,921 $ [282,921] $ - $ - $ - $ - Total taxes 282,921 [282,921] Intergovernmental: State and local 435, , , ,108 20,155 Total intergovernmental 435, , , ,108 20,155 Other local sources ,000 50,000 [50,000] Total revenues 718,184 [282,921] 435, , ,108 [29,845] EXPENDITURES: Instruction 688, , [688,299] Student support services , , ,145 Instructional support staff 29,885-29,885 31,860 31,860 1,975 Total expenditures 718, , , ,005 15,821 Excess [deficiency] of revenues over [under] expenditures - [282,921] [282,921] [268,897] [268,897] [14,024] OTHER FINANCING SOURCES [USES]: Transfers in - 282, , , ,209 20,712 Total other financing sources [uses] - 282, , , ,209 20,712 Excess [deficiency] of revenues and other sources over [under] expenditures and other [uses] $ [6,688] $ [6,688] $ 6,688 FUND BALANCE - Beginning of year 35,578-35,578 FUND BALANCE - End of year $ 35,578 $ - $ 35,578 See independent auditor's report on the financial statements. 75

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97 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) EXTRAORDINARY SCHOOL PROGRAM FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Charges for services $ 2,630,203 $ - $ 2,630,203 $ 2,541,760 $ 2,541,760 $ 88,443 Other local sources , ,000 [100,000] Total revenues 2,630,203-2,630,203 2,641,760 2,641,760 [11,557] EXPENDITURES: Instruction 2,233, ,496 2,336,122 2,430,487 2,430,487 94,365 Student support services , , ,340 Instructional support staff 269, , , ,375 [168,039] School administration 90,732-90, [90,732] Other support services ,633 81,633 81,633 Transportation 1,310-1, [1,310] Operations and maintenance 92,872-92, , ,768 12,896 Total expenditures 2,687, ,554 2,790,450 2,917,603 2,917, ,153 Excess [deficiency] of revenues over [under] expenditures [57,693] [102,554] [160,247] $ [275,843] $ [275,843] $ 115,596 FUND BALANCE - Beginning of year 1,202,279 [1,311] 1,200,968 FUND BALANCE - End of year $ 1,144,586 $ [103,865] $ 1,040,721 See independent auditor's report on the financial statements. 76

98 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) FEDERAL FUNDS For the Year Ended June 30, 2017 Other Federal Title I Title II-A Grants Title III REVENUES: Intergovernmental: Federal $ 553,663 $ 216,490 $ 59,923 $ 37,928 Total revenues 553, ,490 59,923 37,928 EXPENDITURES: Instruction 473, ,017 Instructional support staff 67, ,490 59,923 9,911 Student transportation services 12, Total expenditures 553, ,490 59,923 37,928 Excess [deficiency] of revenues over [under] expenditures FUND BALANCE - Beginning of year FUND BALANCE - End of year $ - $ - $ - $ - See independent auditor's report on the financial statements. 77

99 Variance with Total Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] $ 868,004 $ - $ 868,004 $ 938,489 $ 938,489 $ [70,485] 868, , , ,489 [70,485] 501, , , ,875 [70,526] 354, , , , ,889 12,577-12,577 7,500 7,500 [5,077] 868, , , ,290 89, $ [18,801] $ [18,801] $ 18, $ - $ - $ - See independent auditor's report on the financial statements. 78

100 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) GIFTS AND GRANTS FUNDS For the Year Ended June 30, 2017 Kauffman Blue Valley CAPS DAC Foundation Community Networking Grant Grant Grants Grant Gift REVENUES: Other local sources $ 23,256 $ 42,251 $ 2,335 $ 80,600 $ 955,089 Total revenues 23,256 42,251 2,335 80, ,089 EXPENDITURES: Instruction ,267 Student support services General administration School administration ,915 - Transportation Other support services Instructional support staff 35,671 1, Capital outlay Total expenditures 35,671 1,813-38, ,267 Excess [deficiency] of revenues over [under] expenditures [12,415] 40,438 2,335 41, ,822 FUND BALANCE - Beginning of year 33, ,406 37, ,302 1,012,826 FUND BALANCE - End of year $ 21,288 $ 229,844 $ 40,224 $ 177,987 $ 1,161,648 See independent auditor's report on the financial statements. 79

101 Variance with Total Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] $ 1,103,531 $ - $ 1,103,531 $ - $ - $ 1,103,531 1,103,531-1,103, ,103, , , ,287 1,109,291 1,109, , ,161 2,161 2, ,351 18,351 18,351 38, , , , , ,736 24,736 24, ,866 6,866 6,866 37,484 [197] 37,287 78,245 78,245 40, ,638 5,638 5, , , ,352 1,385,723 1,385, , ,865 [107,686] 113,179 $ [1,385,723] $ [1,385,723] $ 1,498,902 1,410,126 [25,023] 1,385,103 $ 1,630,991 $ [132,709] $ 1,498,282 See independent auditor's report on the financial statements. 80

102 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) SPECIAL LIABILITY FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes: In process $ 2,114 $ - $ 2,114 $ 1,989 $ 915 $ 1,199 Current 70,320-70,320 67, ,646 [38,326] Delinquent 7,107-7, ,683 Motor vehicle 12,407-12,407 12,782 28,984 [16,577] Total taxes 91,948-91,948 82, ,969 [47,021] Use of money and property 3,102-3, ,102 Total revenues 95,050-95,050 82, ,969 [43,919] EXPENDITURES: General administration , , ,187 Other support services 453, , [453,906] Total expenditures 453, , , , ,281 Excess [deficiency] of revenues over [under] expenditures [358,856] - [358,856] $ [508,567] $ [723,218] $ 364,362 FUND BALANCE - Beginning of year 824, ,282 FUND BALANCE - End of year $ 465,426 $ - $ 465,426 See independent auditor's report on the financial statements. 81

103 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL (NON - GAAP BASIS) DEBT SERVICE FUND For the Year Ended June 30, 2017 Variance with Adjustments Final Budget GAAP to Budgetary Budgetary Budgeted Amounts Positive Basis Basis Basis Original Final [Negative] REVENUES: Taxes: In process $ 884,266 $ - $ 884,266 $ 833,988 $ 833,988 $ 50,278 Current 49,286,234-49,286,234 47,107,649 47,107,649 2,178,585 Delinquent 1,093,987-1,093, , , ,695 Motor vehicle 4,612,325-4,612,325 4,555,792 4,555,792 56,533 Rental excise 40,247-40,247 35,106 35,106 5,141 Total taxes 55,917,059-55,917,059 52,659,827 52,659,827 3,257,232 Intergovernmental 860, , , , Total revenues 56,777,155-56,777,155 53,519,472 53,519,472 3,257,683 EXPENDITURES: Debt Service Principal 39,990,000-39,990,000 39,990,000 39,990,000 - Interest and other charges 15,126,479-15,126,479 15,126,480 15,126,480 1 Total expenditures 55,116,479-55,116,479 55,116,480 55,116,480 1 Excess [deficiency] of revenues over [under] expenditures 1,660,676-1,660,676 $ [1,597,008] $ [1,597,008] $ 3,257,684 FUND BALANCE - Beginning of year 54,682,350-54,682,350 FUND BALANCE - End of year $ 56,343,026 $ - $ 56,343,026 See independent auditor's report on the financial statements. 82

104 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 COMBINING STATEMENT OF NET POSITION AGENCY FUNDS June 30, 2017 Student Organization Extraordinary Cost of Gift Funds Growth Living Fund Totals ASSETS: Cash and investments $ 1,401,850 $ 583,026 $ 548,393 $ 1,196,204 $ 3,729,473 Total assets $ 1,401,850 $ 583,026 $ 548,393 $ 1,196,204 $ 3,729,473 LIABILITIES: Liabilities: Other liabilities $ - $ 583,026 $ 548,393 $ 1,196,204 $ 2,327,623 Due to student organizations 1,401, ,401,850 Total liabilities $ 1,401,850 $ 583,026 $ 548,393 $ 1,196,204 $ 3,729,473 See independent auditor's report on the financial statements. 83

105 BLUE VALLEY UNIFIED SCHOOL DISTRICT NO. 229 STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS For the Year Ended June 30, 2017 Balance Balance June 30, June 30, 2016 Additions Deductions 2017 Gift Fund $ 1,032,963 $ 955,089 $ 791,848 $ 1,196,204 Extraordinary Growth Fund 884,708 10,265,988 10,567, ,026 Cost of Living Fund 454,913 6,930,165 6,836, ,393 Student Organization Funds 1,269,476 3,160,148 3,027,774 1,401,850 Assets - cash and investments $ 3,642,060 $ 21,311,390 $ 21,223,977 $ 3,729,473 Gift Fund $ 1,032,963 $ 955,089 $ 791,848 $ 1,196,204 Extraordinary Growth Fund 884,708 10,265,988 10,567, ,026 Cost of Living Fund 454,913 6,930,165 6,836, ,393 Due to student organizations 1,269,476 3,160,148 3,027,774 1,401,850 Total liabilities $ 3,642,060 $ 21,311,390 $ 21,223,977 $ 3,729,473 See independent auditor's report on the financial statements. 84

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108

109 STATISTICAL SECTION The Statistical Section is intended to provide a broader and more complete understanding of the physical, economic, social and political characteristics of the District than is possible from the financial statemen ts, notes and supporting schedules presented in the Financial Sec tion. In addition, this section is used, in part, to comply with the continuing disclosure requirements of SEC Rule 15c2-12. The information presented in this section does not provide full and adequate disclosure of financial information in accordance with accounting principles generally accepted in the United States of Amer ica, but is designed to be useful in identifying trends and evaluating the credit worthiness of the District. Contents Page Financial Trends These schedules contain information to help the reader understand how the government's financial performance and well-being have changed over time Revenue Capacity These schedules contain information to help the reader assess the government's most significant local revenue source, the property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the government's current levels of outstanding debt and the government's ability to issue additional debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place. Operating Information These schedules contain service and infrastructure data to help the reader understand how the information in the government's financial report relates to the services the government provides and the activities it performs. 85

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111 TABLE 1 (UNAUDITED) Governmental Activities Invested in capital assets, net of related debt $ 142,672,774 $ 168,334,843 $ 191,485,019 $ 194,989,639 $ 169,026,822 $ 186,154,342 $ 169,588,323 $ 215,195,903 $ 181,586,706 $ 217,858,989 Restricted 37,572,833 39,786,787 40,353,000 37,513,762 40,085,152 44,860,853 45,395,801 46,733,305 54,682,350 56,343,026 Unrestricted 73,930,967 68,840,923 48,440,714 68,354, ,589, ,947,168 (95,904,984) (140,784,864) (94,811,504) (79,635,355) Total Net Position $ 254,176,574 $ 276,962,553 $ 280,278,733 $ 300,857,869 $ 327,701,054 $ 334,962,363 $ 119,079,140 $ 121,144,344 $ 141,457,552 $ 194,566,660 (1) 2009 to 2016 Net Position was restated as a result of prior period adjustments to Capital Assets. BLUE VALLEY USD #229, KANSAS NET POSITION BY COMPONENT LAST TEN FISCAL YEARS (Accrual Basis of Accounting) (1) (1) (1) (1) (1) (1) (1) (1) (2) (2) The increase of $53.1 million in total net position is due to several factors. It includes a decrease in current assets of $32.1 million and an increase in capital assets of $5.1 million. It also includes a decrease in current liabilities of $13.3 million and a decrease in non-current liabilities of $37.6 million. In addition, deferred outflows increased $23.8 million and deferred inflows decreased $5.4 million. Net position includes $217.9 million invested in capital assets, $56.3 million restricted for debt service and $(79.6) million unrestricted. Source: Blue Valley USD #229 Basic Financial Statements 86

112 Total Primary Government Program Revenues 49,282,811 52,517,630 48,063,278 49,250,806 55,048,889 53,289,969 54,578,364 56,868,855 57,259,206 85,378,629 Total Primary Government Net [Expense] $ [201,502,553] $ [191,461,483] $ [208,077,629] $ [204,485,378] $ [202,979,747] $ [220,416,631] $ [232,147,598] $ [227,419,611] $ [219,313,147] $ [193,168,748] TABLE 2 (UNAUDITED) 87 BLUE VALLEY USD #229, KANSAS EXPENSE, PROGRAM REVENUES, AND NET [EXPENSE]/REVENUE LAST TEN FISCAL YEARS (Accrual Basis of Accounting) 2008 $ $ Expenses Governmental Activities: Instruction $ 136,331,621 $ 143,503,301 $ 145,340,192 $ 146,336,760 $ 151,436,812 $ 163,196,073 $ 168,366,225 $ 166,954,866 $ 161,285, ,626,889 Student Support Services 11,012,546 11,336,565 11,624,541 10,596,654 11,066,793 11,432,163 12,819,743 13,547,226 14,709,111 15,129,219 Instructional Support Staff 13,873,761 14,048,127 12,722,771 11,843,024 12,197,173 12,408,782 11,646,757 11,405,475 11,272,178 11,388,524 General Administration 1,908,155 2,238,099 2,386,972 2,196,359 2,758,962 2,714,161 2,486,372 2,783,983 3,106,735 2,219,429 School Administration 9,435,950 10,029,431 10,580,576 11,038,138 11,105,859 11,118,089 11,393,045 11,962,590 11,972,795 12,099,831 Central Services ,138 2,224, ,584 2,504,859 7,787,145 4,422,267 2,449,271 2,581,667 Operations and Maintenance 41,842,939 23,961,722 34,042,696 29,164,842 26,665,460 29,111,567 26,521,120 28,382,155 26,538,313 44,242,526 Student Transportation Services 6,039,966 5,567,436 5,985,823 5,866,237 6,752,897 7,177,185 7,666,999 7,850,303 7,997,570 8,071,060 Food Service Operations 8,232,432 9,072,073 8,806,818 8,925,894 9,546,090 9,739,952 9,800,996 9,577,973 9,413,722 9,528,742 Other Support Services 9,110,570 10,561,416 9,431,428 10,173,702 11,278,685 10,869,380 15,498,093 14,345,947 13,907,122 7,537,513 Interest on Long-Term Debt 12,997,424 13,660,943 15,083,952 15,369,690 14,412,321 13,434,389 12,739,467 13,055,681 13,920,302 12,121,977 Total Primary Government 250,785, ,979, ,140, ,736, ,028, ,706, ,725, ,288, ,572,353 $ 278,547,377 Program Revenues Governmental Activities: Charges for Services Instruction 4,636,633 4,835,732 5,596,875 6,180,130 5,297,180 5,585,856 5,542,342 5,589,658 6,010,192 5,985,359 Student Support Services Instructional Support Staff General Administration School Administration Operations and Maintenance Food Service Operations 7,102,181 7,127,826 6,983,221 7,431,833 7,666,353 7,390,603 7,619,914 7,504,937 7,414,711 7,187,588 Student Activities Other Support Services Total Charges for Services 11,738,814 11,963,558 12,580,096 13,611,963 12,963,533 12,976,459 13,162,256 13,094,595 13,424,903 13,172,947 Operating Grants and Contributions Instruction 27,786,773 31,942,871 29,107,225 29,569,669 33,966,393 32,598,685 33,058,013 35,882, Student Support Services 557, , , ,663 1,072, ,109 1,098,385 1,023, ,033 3,609,112 Instructional Support Staff 3,581,338 3,239,965 3,279,092 1,184,071 1,635,646 1,624,289 1,740,554 1,509, ,717 2,583,821 General Administration 63,958 74,996 87,828 60, , , , , , ,099 School Administration 457, , , , , , , , ,289 2,467,921 Operations and Maintenance 506, ,504 1,542,326 1,582,018 1,888,711 1,759,419 1,747,280 1,678,950 1,834,597 3,325,682 Student Transportation Services ,820 12,577 Food Service Operations 1,285,607 1,415,357 1,514,335 1,653,390 1,823,416 1,900,846 2,055,844 2,076,446 1,958,877 2,522,800 Other Support Services 3,304,414 1,991,480 (1,257,368) 504, , , , , ,205 2,062,805 Total Operating Grants and Contributions 37,543,997 40,554,072 35,483,182 35,638,843 42,085,356 40,313,510 41,416,108 43,774,260 43,834,303 72,205,682 Source: Blue Valley USD #229 Basic Financial Statements

113 Total Primary Government Net (Expense) $ [201,502,553] $ [191,461,483] $ [208,077,629] $ [204,485,378] $ [202,979,747] $ [220,416,631] $ [232,147,598] $ [227,419,611] $ [219,313,147] $ [193,168,748] General Revenues and Other Changes in Net Position: Property Taxes 141,289, ,156, ,885, ,710, ,886, ,979, ,602, ,510, ,540, ,142,773 Grants and Entitlements not Restricted to Specific Programs 55,784,405 57,024,720 56,397,711 67,143,265 65,866,301 65,496,968 66,417, ,004, ,054, ,644,305 Investments Earnings 7,464,683 4,290, , , , , , , ,257 1,471,266 Miscellaneous 4,614,888 4,226,305 6,104,594 10,939,034 7,562,562 3,383,056 2,685,681 2,827,806 5,100,245 5,019,512 Total Primary Government 209,153, ,697, ,217, ,231, ,575, ,975, ,826, ,484, ,403, ,277,856 Total Primary Government Change in Net Position $ 7,651,114 $ 20,235,739 $ 2,140,313 $ 19,745,683 $ 25,595,467 $ 8,558,464 $ [5,321,028] $ 2,065,204 $ 20,090,543 $ 53,109,108 TABLE 3 (UNAUDITED) BLUE VALLEY USD #229, KANSAS GENERAL SCHOOL SYSTEM REVENUES AND TOTAL CHANGE IN NET POSITION LAST TEN FISCAL YEARS (Accrual Basis of Accounting) Source: Blue Valley USD #229 Basic Financial Statements 88

114 TABLE 4 (UNAUDITED) BLUE VALLEY USD #229, KANSAS FUND BALANCES, GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) General Fund Reserved (for years ending 6/30/2010 and prior only) $ 667,812 $ 607,384 $ 216,355 $ - $ - $ - $ - $ - $ - $ - Nonspendable , , , , , , ,414 Assigned , , , , , , ,863 Unassigned Total General Fund $ 667,812 $ 607,384 $ 216,355 $ 792,768 $ 680,903 $ 904,359 $ 549,573 $ 481,245 $ 500,804 $ 819,277 (1) (1) (1) (1) (1) (1) (1) All Other Governmental Funds Reserved (for years ending 6/30/2010 and prior only) $ 137,538,270 $ 96,217,177 $ 63,499,991 $ - $ - $ - $ - $ - $ - $ - Unreserved, reported in: Special revenue funds (for years ending 6/30/2010 and prior only) 68,965,486 58,206,067 55,278, Capital project funds (for years ending 6/30/2010 and prior only) [22,000,133] 19,140,045 [12,350,289] Nonspendable , , , , , , ,192 Restricted ,316, ,544, ,319, ,317, ,046, ,972, ,726,520 Assigned ,786,420 28,361,274 48,411,437 32,765,650 43,847,951 32,860,407 29,516,751 Unassigned ,047,195 3,421,242 [441,689] 22,748,946 [27,056,215] 3,683,125 3,748,516 Total All Other Governmental Funds $ 184,503,623 $ 173,563,289 $ 106,428,029 $ 135,240,924 $ 182,454,908 $ 170,416,999 $ 180,934,040 $ 142,978,661 $ 213,671,720 $ 191,142,979 (1) (1) (1) (1) (1) (1) (1) (1) In accordance with GASB Statement No. 54 Fund Balance Reporting and Governmental Fund Type Definitions, the District has reclassified the governmental fund balances. The new classifications comprise a hierarchy based primarily on the extent to which the District is bound to observe constraints imposed upon the use of the resources reported in the governmental funds. This change was effective for fiscal years ending June 30, 2011 and after. Source: Blue Valley USD #229 Basic Financial Statements 89

115 Taxes, Net $ 141,289,691 $ 146,156,146 $ 146,885,998 $ 145,710,691 $ 154,886,147 $ 159,979,222 $ 157,602,853 $ 115,510,068 $ 124,540,935 $ 131,142,773 Intergovernmental 93,328,402 97,578,792 91,880, ,782, ,951, ,810, ,833, ,778, ,888, ,102,837 Charges for Services 11,738,814 11,963,558 12,580,096 13,611,963 12,963,533 12,976,459 13,162,256 13,094,595 13,424,903 13,172,947 Investment Revenue 7,147,028 3,953, , , , , , , ,257 1,471,266 Other 4,932,543 4,563,008 6,438,649 11,189,103 7,562,562 3,383,056 2,685,681 2,827,806 5,100,246 5,019,513 Total Revenues $ 258,436,478 $ 264,214,852 $ 258,281,220 $ 273,481,867 $ 283,624,103 $ 282,265,064 $ 281,404,934 $ 286,353,670 $ 296,662,897 $ 299,909,336 TABLE 5 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS GOVERNMENTAL FUNDS REVENUES LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) 90 Source: Blue Valley USD #229 Basic Financial Statements

116 Other Investment Revenue Charges for Services Intergovernmental Taxes, Net TABLE 5 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Governmental Funds Revenues Last Ten Fiscal Years 91 $300,000,000 $290,000,000 $280,000,000 $270,000,000 $260,000,000 $250,000,000 $240,000,000 $230,000,000 $220,000,000 $210,000,000 $200,000,000 $190,000,000 $180,000,000 $170,000,000 $160,000,000 $150,000,000 $140,000,000 $130,000,000 $120,000,000 $110,000,000 $100,000,000 $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $

117 TABLE 6 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS GOVERNMENTAL FUNDS EXPENDITURES AND DEBT SERVICE RATIO LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) Instruction $ 121,486,276 $ 127,957,829 $ 128,086,595 $ 127,791,098 $ 131,666,878 $ 136,116,810 $ 140,975,173 $ 139,835,919 $ 137,237,466 $ 135,372,445 Student Support Services 10,904,833 11,240,043 11,484,658 10,441,927 10,962,299 11,177,484 12,525,113 12,872,360 14,252,444 14,671,814 Instructional Support Staff 13,723,597 13,925,853 12,588,627 11,710,131 11,999,340 12,283,830 11,511,832 10,846,162 10,988,731 11,142,160 General Administration 1,847,360 1,995,149 1,963,157 1,787,641 2,350,324 2,308,589 2,082,890 2,283,986 2,380,237 2,077,097 School Administration 9,303,560 9,914,121 10,453,774 10,917,862 11,019,315 11,031,367 11,309,038 11,518,478 11,703,748 11,806,387 Central Services ,813 1,377, ,840 1,613,130 7,004,825 2,852,312 1,053, ,658 Operations and Maintenance 17,906,087 17,945,586 18,338,965 18,529,508 20,655,359 21,295,929 21,956,175 21,968,110 22,400,226 23,407,800 Student Transportation Services 5,985,926 5,523,230 5,927,096 5,807,307 6,704,864 7,124,296 7,612,871 7,714,254 7,926,230 8,025,949 Food Service Operations 8,158,776 9,000,040 8,720,414 8,836,228 9,478,190 9,668,178 9,589,525 9,416,410 9,283,294 9,416,542 Other Support Services 8,405,030 9,844,545 8,547,102 9,838,185 10,165,661 10,622,676 11,193,608 10,885,487 10,361,464 10,613,636 Capital Outlay 60,280, ,990,171 78,324,715 28,747,587 31,211,718 28,159,518 55,169,308 47,361,725 50,601,492 39,749,637 Debt Service Principal Retirement 25,955,000 23,860,000 25,515,000 48,355,000 68,955,000 28,050,000 30,280,000 32,105,000 31,540,000 39,990,000 Interest and Other Charges 12,671,226 14,030,579 15,723,593 16,099,775 14,635,373 14,627,710 13,966,025 13,976,299 14,792,681 15,126,479 Total Expenditures (1) $ 296,627,712 $ 348,227,146 $ 325,807,509 $ 300,240,042 $ 330,606,161 $ 294,079,517 $ 335,176,383 $ 323,636,502 $ 324,521,072 $ 322,119,604 Debt service as a percentage of noncapital expenditures 15.00% 15.17% 15.74% 23.04% 27.56% 15.38% 14.90% 15.98% 16.36% 18.71% (1) Expenditures include General, Special Revenue, Debt Service and Capital Project Funds. Source: Blue Valley USD #229 Basic Financial Statements

118 Interest and Other Charges Principal Retirement Capital Outlay Other Support Services Food Service Operations Student Transportation Services Operations and Maintenance Central Services School Administration General Administration Instructional Support Staff Student Support Services Instruction TABLE 6 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Governmental Funds Expenditures Last Ten Fiscal Years $360,000,000 $330,000,000 $300,000,000 $270,000,000 $240,000, $210,000,000 $180,000,000 $150,000,000 $120,000,000 $90,000,000 $60,000,000 $30,000,000 $

119 Net Change in Fund Balances $ 63,110,611 $ [11,000,762] $ [67,526,289] $ 29,389,308 $ 47,102,120 $ [11,814,453] $ 10,162,255 $ [38,023,707] $ 70,712,618 $ [22,210,268] TABLE 7 (UNAUDITED) BLUE VALLEY USD #229, KANSAS OTHER FINANCING SOURCES AND USES AND NET CHANGE IN FUND BALANCES LAST TEN FISCAL YEARS (Modified Accrual Basis of Accounting) Excess of Revenues Over [Under] Expenditures $ [38,191,234] $ [84,012,294] $ [67,526,289] $ [26,758,175] $ [46,982,058] $ [11,814,453] $ [53,771,449] $ [37,282,832] $ [27,858,175] $ [22,210,268] Other Financing Sources [Uses] Sale of bonds 98,780,000 73,000,000-53,870,000 85,850,000-61,000,000 28,835, ,810,000 - Bond premium 2,521,845 11,532-2,277,483 8,234,178-2,933,704 3,772,328 14,463,742 - Bond redemption [33,140,088] [74,346,112] - Bond issuance costs [208,115] [356,837] Transfers in 38,975,070 41,142,537 37,763,594 10,597,827 7,801,987 1,768 2,300,000 2,905, , ,365 Transfers [out] [38,975,070] [41,142,537] [37,763,594] [10,597,827] [7,801,987] [1,768] [2,300,000] [2,905,195] [752,000] [177,365] Total Other Financing Sources [Uses] 101,301,845 73,011,532-56,147,483 94,084,178-63,933,704 [740,875] 98,570, Source: Blue Valley USD #229 Basic Financial Statements

120 TABLE 8 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS ASSESSED AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN TAX YEARS Real Property Personal Property Utilities Total Motor and Recreational Vehicle Total Equalized Real Property Estimated Personal Property Estimated Utilities Estimated Total Estimated Increase/ (Decrease) in Ratio of Total Assessed to Total Total Tax Assessed Assessed Assessed Assessed Assessed Assessed Actual Actual Actual Actual Total Estimated Estimated Direct Year Value Value Value Value Value Value Value Value Value Value Actual Value Act. Value Rate 2008 (1) $ 2,269,087,214 $ 75,143,203 $ 48,829,704 $ 2,393,060,121 $ 214,145,732 $ 2,607,205,853 $ 16,047,278,270 $ 295,563,265 $ 152,017,026 $ 16,494,858, % 14.51% ,239,687,543 57,223,630 45,513,707 2,342,424, ,894,290 2,554,319,170 15,854,551, ,079, ,219,287 16,221,850,128 (1.66%) 14.44% ,132,028,853 46,629,160 43,877,131 2,222,535, ,727,417 2,428,262,561 15,279,918, ,507, ,228,868 15,602,655,150 (3.82%) 14.24% ,175,051,947 43,691,330 43,807,794 2,262,551, ,855,654 2,469,406,725 15,473,664, ,068, ,470,721 15,781,204, % 14.34% ,213,584,870 38,789,715 43,170,916 2,295,545, ,991,336 2,503,536,837 15,690,320, ,843, ,947,517 15,981,111, % 14.36% ,250,395,761 31,888,705 42,749,488 2,325,033, ,600,219 2,539,634,173 15,918,913, ,016, ,764,899 16,181,694, % 14.37% ,418,503,381 27,747,927 40,894,936 2,487,146, ,456,182 2,713,602,426 17,051,645, ,505, ,891,256 17,333,041, % 14.35% ,577,368,002 23,744,299 40,801,919 2,641,914, ,107,143 2,880,021,363 18,246,546, ,865, ,162,810 18,518,575, % 14.27% ,780,058,671 21,818,266 41,642,471 2,843,519, ,545,320 3,094,064,728 19,530,238, ,478, ,938,614 19,795,655, % 14.36% ,941,061,594 20,666,495 42,754,154 3,004,482, ,594,687 3,265,076,930 20,793,991, ,453, ,126,148 21,054,571, % 14.27% (1) Per $1,000 of Assessed Valuation Source: Johnson County Department of Records and Tax Administration, Johnson County Appraiser and Blue Valley USD #229 records 95

121 Motor & Recreational Vehicle Utilities Personal Property Real Property TABLE 8 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Assessed Value of Taxable Property Last Ten Tax Years $3,500,000,000 $3,000,000,000 $2,500,000, $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,

122 Blue Valley USD #229 General Supplemental General Extraordinary Growth Capital Outlay Cost of Living Bond & Interest Special Assessment Special Liability Total - Direct TABLE 9 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS PROPERTY TAX RATES (PER $1,000 OF ASSESSED VALUATION) DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN TAX YEARS 97 State of Kansas Johnson County City of Overland Park Johnson County Library Johnson County Parks Community College Blue Valley Recreation Commission Total - Overlapping Governments ` Source: Johnson County Department of Records and Tax Administration

123 General Supplemental General Extraordinary Growth Cost of Living Special Assessment Capital Outlay Special Liability Bond & Interest TABLE 9 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas District Mill Levy Rates Last Ten Tax Years Per $1,000 of Assessed Valuation

124 Percent of Total Assessed Valuation TABLE 10 (UNAUDITED) BLUE VALLEY USD #229, KANSAS PRINCIPAL TAXPAYERS JUNE 30, 2017 and Nine Years Ago Name Industry 2016 Assessed Valuation Rank Percent of Total Assessed Valuation 2007 Assessed Valuation Rank 99 Sprint Campus Office Complex $ 104,467, % UCM/SREP - Corporate Woods, L.L.C. (formerly Knickerbocker Properpties, Inc.) Real Estate 61,711, % $ 63,623, % Leawood TCP, LLC (formerly Town Center Plaza, L.L.C.) Retail Shopping Center 29,643, % 26,033, % Kansas City Power & Light Electric Utility 24,538, % 18,151, % Park Place Village LLC Real Estate 21,902, % CBPK5 Office Buildings 21,118, % MEPT Lighton Plaza, LLC Office Buildings 16,022, % 119 Street Development Retail Shopping Center 14,427, % Aspen Square LLC Retail Shopping Center 14,045, % Central Tennessee Hospital (Menorah) Hospital 13,367, % 15,384, % Privitera Realty Holdings (formerly Privatera, Carl J.) Real Estate 15,282, % Southwestern Bell Telephone Telecommunications 12,672, % Riggs Bank N.A. Trustee Office Buildings 16,059, % Rubicon Investments II, L.L.C. Real Estate 11,625, % CRP-2 Holdings DD L.L.C. Real Estate 10,269, % EHD Holdings L.L.C Real Estate 10,081, % $ 321,243, % $ 199,183, % Source: Johnson County Department of Records and Tax Administration, Johnson County Appraiser and Blue Valley USD #229 records

125 Ratio of Outstanding Delinquent Taxes to Total Tax Levy TABLE 11 1 of 2 (UNAUDITE BLUE VALLEY USD #229, KANSAS PROPERTY TAX LEVIES AND COLLECTIONS LAST TEN YEARS Tax Year/ Collection Year Tax Levy Current Tax Collections Percent of Current Taxes Collected Delinquent Tax Collections Total Tax Collections (Current & Delinquent) Ratio of Total Tax Collections to Total Tax Levy Outstanding Delinquent Taxes /08 $ 142,489,917 $ 140,715, % $ 1,537,660 $ 142,253, % $ 1,773, % 2008/09 145,020, ,760, % 2,642, ,403, % 2,260, % 2009/10 150,696, ,596, % 1,669, ,265, % 3,100, % 2010/11 158,090, ,143, % 2,584, ,727, % 4,947, % 2011/12 162,604, ,711, % 5,627, ,338, % 1,892, % 2012/13 163,867, ,507, % 4,104, ,612, % 1,359, % 2013/14 161,833, ,685, % 989, ,675, % 1,147, % 2014/15 166,700, ,811, % 2,364, ,175, % 889, % 2015/16 178,250, ,114, % 4,807, ,922, % 1,135, % 2016/17 187,005, ,222, % 2,684, ,906, % 1,783, % (1) (2) (2) (2) (2) (1) Tax year balances. (2) Collection year balances. Note: Current & Delinquent Tax Collections reflect collections as of September Source: Johnson County Treasurer's Office

126 Taxes Uncollected Taxes Collected TABLE 11 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Property Tax Levies and Collections Last Ten Years $200,000,000 $180,000,000 $160,000,000 $140,000, $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 2007/ / / / / / / / / /17

127 Percentage of Personal Income (1) The 2008 and 2009 personal income information is from the 2005 Census American Community Survey, the 2010 to 2014 information is from the 2009 Census American Community Survey, and the 2015 to 2017 information is from the 2015 and 2016 Census American Community Surveys 1 year estimates based on all of Johnson County. Source: Johnson County Department of Records and Tax Administration, Blue Valley #229 records and Census American Community Surveys. TABLE 12 (UNAUDITED) BLUE VALLEY USD #229, KANSAS OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Fiscal Year Capital Leases General Obligation Bonds Total District Population Personal Income Per Capita $ - $ 320,810,695 $ 320,810, ,256 $ 4,433,181,800 $ 2, % ,947, ,947, ,687 4,433,181,800 3, % ,416, ,416, ,914 5,658,666,600 2, % ,193, ,193, ,021 5,658,666,600 3, % ,960, ,960, ,393 5,658,666,600 3, % ,675, ,675, ,197 5,658,666,600 2, % ,865, ,865, ,897 5,658,666,600 3, % , ,478, ,561, ,937 5,000,238,265 2, % ,068, ,068, ,772 5,736,678,448 3, % ,475, ,475, ,882 5,370,788,178 2, % (1)

128 Bonded Debt Per Capita Bonded Debt Per Pupil TABLE 13 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS Fiscal Year District Population District Enrollment Total Equalized Assessed Value Total Estimated Actual Value Bonded Debt Ratio of Bonded Debt to Equalized Assessed Value Ratio of Bonded Debt to Estimated Actual Value ,256 20,364 $ 2,580,548,757 $ 16,199,937,238 $ 320,810, % 1.98% $ 2,668 $ 15, ,687 20,477 2,607,205,853 16,494,858, ,947, % 2.24% 3,109 18, ,914 20,815 2,554,319,170 16,221,850, ,416, % 2.11% 2,929 16, ,021 21,036 2,428,262,561 15,602,655, ,193, % 2.24% 3,063 16, ,393 21,330 2,469,406,725 15,781,204, ,960, % 2.37% 3,269 17, ,197 21,587 2,503,536,837 15,981,111, ,675, % 2.16% 2,941 15, ,897 21,768 2,539,634,173 16,181,694, ,865, % 2.33% 3,280 17, ,937 21,778 2,713,602,426 17,333,041, ,478, % 1.98% 2,771 15, ,772 22,023 2,880,021,363 18,518,575, ,068, % 2.21% 3,058 18, ,882 22,078 3,094,064,728 19,795,655, ,475, % 1.85% 2,888 16,599 Source: Johnson County Department of Records and Tax Administration and Blue Valley USD #229 records 103

129 2017 TABLE 13 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Ratio of District Net Bonded Debt Per Capita and Per Pupil Last Ten Fiscal Years $19,000 $18,000 $17,000 $16,000 $15,000 $14,000 $13,000 $12, $11,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $ Per Pupil Per Capita

130 BLUE VALLEY USD #229, KANSAS COMPUTATION OF DIRECT AND OVERLAPPING DEBT JUNE 30, 2017 TABLE 14 (UNAUDITED) Principal Amount of Outstanding Debt Percent Applicable to School District Amount Applicable to School District Direct Blue Valley USD #229 $ 366,475, % $ 366,475,245 Overlapping Johnson County (1) 311,570, % 95,184,635 Johnson County Parks & Recreation 825, % 252,038 City of Olathe (2) 192,800, % 8,733,840 City of Leawood 58,550, % 39,415,860 City of Overland Park 99,380, % 47,364,508 Johnson County Fire District #2 3,320, % 1,534,836 Miami County (3) 1,290, % 2,064 Total Overlapping Debt 192,487,781 Total Direct and Overlapping Debt $ 558,963,026 (1) As of May 2017 (2) As of July 20, 2017 (3) As of December 31, 2016 Source: Johnson County Department of Records and Tax Administration, Miami County Clerk's Office and Blue Valley USD #229 records 105

131 Total Assessed Valuation of Taxable Property $ 2,369,204,487 $ 2,393,060,121 $ 2,342,424,880 $ 2,222,535,144 $ 2,262,551,071 $ 2,295,545,501 $ 2,325,033,954 $ 2,487,146,244 $ 2,641,914,220 $ 2,843,519,408 Debt Limit Percent of Assessed Value 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% 14.00% Debt Limit 331,688, ,028, ,939, ,154, ,757, ,376, ,504, ,200, ,867, ,092,717 Total net debt applicable to limit 320,810, ,947, ,416, ,193, ,960, ,675, ,865, ,478, ,068, ,475,245 Legal Debt Margin $ 10,877,933 $ [33,918,701] $ [14,476,949] $ [38,038,310] $ [57,203,135] $ [23,298,636] $ [51,361,051] $ 4,722,243 $ [39,200,701] $ 31,617,472 (1) (1) (1) (1) (1) (1) (1) Total Net Debt Applicable To The Limit As A Percentage of Debt Limit 96.72% % % % % % % 98.64% % 92.06% TABLE 15 (UNAUDITED) BLUE VALLEY USD #229, KANSAS COMPUTATION OF LEGAL DEBT MARGIN LAST TEN FISCAL YEARS (1) Per order of the Kansas State Board of Education, Blue Valley USD #229 was authorized to exceed the general bond debt limitation prescribed in K.S.A , and to call an election for voting additional bonds pursuant to the provisions of K.S.A Source: Assessed valuation from Johnson County Department of Records and Tax Administration Statutory limits per K.S.A

132 (3) The 2009 personal income information is from the 2005 Census American Community Survey, the 2010 to 2014 information is from the 2009 Census American Community Survey, and the 2015 to 2017 information is from the 2015 and 2016 Census American Community Surveys 1 year estimates based on all of Johnson County. Source: 2015 Johnson County CAFR, Kansas State Department of Education, Blue Valley USD #229 records and Census American Community Surveys. TABLE 16 1 of 2 (UNAUDITED) BLUE VALLEY USD #229, KANSAS DEMOGRAPHIC STATISTICS LAST TEN FISCAL YEARS 107 Enrollment Per Capita Personal Income $ 4.1% Fiscal Year Elementary School Middle School High School Total Student Enrollment increase/ (decrease) from Prior Year Average Daily Attendance Total District Population Personal Income (1) (3) (2) ,433 4,864 6,067 20, % 120,256 $ 4,433,181,800 36,865 Unemployment Rate ,474 4,838 6,165 20, % 118,687 4,433,181,800 37, % ,515 4,929 6,371 20, % 116,914 5,658,666,600 48, % ,491 4,946 6,599 21, % 114,021 5,658,666,600 49, % ,484 5,152 6,694 21, % 114,393 5,658,666,600 49, % ,415 5,280 6,892 21, % 117,197 5,658,666,600 48, % ,431 5,372 6,965 21, % 114,897 5,658,666,600 49, % ,352 5,361 7,065 21, % 123,937 5,000,238,265 40, % ,350 5,348 7,325 22, % 133,772 5,736,678,448 42, % ,391 5,276 7,411 22, % 126,882 5,370,788,178 42, % (1) Enrollment counts as of September 20th count date. (2) Unemployment rates are for all of Johnson County and each are based on the prior fiscal year Johnson County CAFR.

133 TABLE 16 2 of 2 (UNAUDITED) Blue Valley USD #229, Kansas Demographic Statistics Enrollment - Last Ten Fiscal Years 24,000 22,000 20,000 18,000 High School 16, S t u d e n t s 14,000 12,000 10,000 8,000 Middle School 6,000 Elementary School 4,000 2,