Monica Hunsaker, Director of Finance, Business & Operations

Business Office 18360 Caldart Avenue NE Poulsbo, WA 98370 TO: FROM: Patty Page, Superintendent Monica Hunsaker, Director of Finance, Business & Operations DATE: June 19, 2014 SUBJECT: 2014-15 Preliminary Budget Review Enclosed are the preliminary budget documents for your review. The next month will be spent finalizing the budget. Expect only minor adjustments prior to the final budget being presented to the Board of Directors. The Board of Directors will be asked to approve the 2014-15 budget following the formal budget adoption hearing at the August 21, 2014 meeting. PRELIMINARY BUDGET OVERVIEW: GENERAL FUND Enrollment: Revenues: Expenditures: Enrollment has been declining. Estimated enrollment projection for 2014-15 is a 1.97% decline. The District is taking the mid range projection. Adjustments to coding will provide more realistic projections for revenue. Increase levy collection = $1.024M Increased State funding: MSOC, Transportation, Instructional Hours Decreased enrollment = less funding. Decreased District enrollment results in less special education funding (12.7% cap on sped enrollment) Increased Staffing costs. Increased Basic Education Staffing costs due to requirements in LAP grant. Increased All Day Kindergarten costs due to lower tuition rates. Increased budgets per Community Financial Advisory Committee recommendation: Music Equipment Safety Curriculum Intervention Support Technology

Page 2 of 3 Facilities Athletics Maintenance & Facility repair costs. Utility costs. Collective Bargaining Agreement costs. CAPITAL PROJECTS FUND Impact fee collection has increased due to an increase in building homes in the area. The funds are restrictive in nature in regards to expenditures. The other money inside this fund is a small balance to pay for repairs and a designated balance for the North Kitsap Regional Events Center. DEBT SERVICE FUND Inside this fund is non-voted and voted debt. The non-voted debt is paid for via a transfer of funds ($189,198) from the General Fund to the Debt Service Fund. The District will have voted debt paid in 2018. TRANSPORTATION VEHICLE FUND Money collected will be used to purchase buses (Approximately $465,000) ASSOCIATED STUDENT BODY FUND Estimate of 1.0M in revenue from donations, fundraisers and sales. LEGISLATIVE REVIEW The state continues to make progress to provide ample: support for basic education. During the 2014 legislative session as part of the 2013-15 biennium, the state provided additional funds to K-12 schools. Below is a summary of additional funding provided via the state: 2014-15 Legislative Review Instructional Hours HS Counselor $85,000 Lab Science $216,000 MSOC (Grades 9-12) $290,000 Transportation $155,790 MSOC $615,740 Total Estimated Increased State Revenue $1,362,530

Page 3 of 3 The Board was provided a budget update during a study session on April 10 th and financial recommendations were reviewed at the May 8 board meeting. The following expenditures were added to the preliminary budget (these expenditures do not include fixed cost increases, salary and benefit increases or increased negotiation costs): 2014-15 Budget Adjustments Increased Certificated Staffing $950,000 LAP Expenditures Moved to Basic Education $300,000 Technology Infrastructure $100,000 All Day Kindergarten $165,000 CFAC Recommended Budget Adjustments Music Equipment $5,000 Safety $5,000 Curriculum $100,000 Intervention Support $160,000 Technology $100,000 Facilities $50,000 Athletics $30,000 Total Estimated Budget Adjustments $1,965,000 Even though the District will continue to see an enrollment decline, the increased levy and state funding allows for adding expenditures. The preliminary budget shows a growth in fund balance at the end of the 2014-15 school year of approximately $8,673. The actual increase is likely to be higher since the budget assumes all carryover budget dollars will be expended. We will assess this projection after the 2014-15 actual enrollment is determined in September 2014.

North Kitsap School District SUMMARY OF 2014-15 BUDGETS FUND YEAR BEGINNING BALANCE REVENUES EXPENDITURES OPERATING TRANSFERS ENDING BALANCE GENERAL: 2014-15 6,049,965 65,915,332 65,717,461-189,198 6,058,638 2013-14 3,746,756 64,185,466 63,940,009-189,198 3,803,015 CAPITAL PROJECTS 2014-15 945,000 185,600 860,000 0 270,600 2013-14 941,350 185,600 900,000 0 226,950 DEBT SERVICE: 2014-15 1,811,000 8,947,968 9,211,882 189,198 1,736,284 2013-14 887,583 8,646,306 8,148,449 189,198 1,574,638 ASB: 2014-15 375,674 1,053,401 1,038,436 0 390,639 2013-14 452,128 1,229,983 1,162,998 0 519,113 TRANSP VEHICLE: 2014-15 1,621,304 472,700 890,000 0 1,204,004 2013-14 2,016,417 473,071 949,860 0 1,539,628

North Kitsap School District 2013-14 GENERAL FUND BUDGET SUMMARY Actual Budget 2012-13 2013-14 BEG: Committed Minimum Fund Balance 1,678,478 1,863,743 Nonspendable FB-Inventory/Prepaid 986,682 330,255 Restricted for Self Insurance 24,000 24,000 Restricted for Debt Service 189,198 189,198 Assigned to Other Purposes 682,596 1,339,560 Beginning Fund Balance 3,560,954 3,746,756 ADD: Revenues 1000 Local Taxes 13,979,395 14,671,106 2000 Local Non-Tax 2,467,293 2,357,102 3000 State, General Purpose 31,544,927 32,327,779 4000 State, Special Purpose 7,573,131 8,899,652 5000 Federal, General Purpose 1,181,744 989,269 6000 Federal, Special Purpose 4,294,621 4,885,558 7000 Revenues from Other Districts 51,337 55,000 8000 Revenues From Other Agencies 0 0 9000 Other Financing* 0 0 Total Revenues 61,092,448 64,185,466 TOTAL: Funds Available 64,653,402 67,932,222 LESS: Expenditures 00 Regular Instruction 31,250,543 34,051,483 20 Special Education Instruction 8,330,024 8,588,981 30 Vocational Instruction 2,679,368 2,537,109 50&60 Compensatory Education 2,316,949 2,706,199 70 Other Instructional Programs 549,335 1,177,982 80 Community Services 403,987 541,935 90 Support Services 13,964,264 14,336,320 Total Expenditures 59,494,470 63,940,009 OTHER FIN. USES TRANS. OUT (GL 536) (189,228) (189,198) Ending Fund Balance 4,969,704 3,803,015 14-15 Budget Summaries/GF Summary6/18/2014 mph

North Kitsap School District 2013-14 Revenue Projections Actual 2010-11 Actual 2011-12 Budget 2012-13 Budget 2013-14 Increase (Decrease) 1100 Local Property Tax 13,260,612 13,427,400 13,867,125 14,658,408 791,283 1500 Timber Excise Tax 6,526 7,528 7,909 12,698 4,789 Total Tax 13,267,138 13,434,928 13,875,034 14,671,106 796,072 2100 Tuition and Fees 197,326 229,023 248,300 215,699 (32,601) 2131 Teen Parenting 0 7,613 0 6,852 6,852 2171 Traffic Safety 115,075 113,145 123,000 0 (123,000) 2179 Tuition and Fees - Kindergarten 290,051 221,035 230,222 264,215 33,993 2186 Facilities 49,976 39,043 30,000 35,000 5,000 2189 Preschool Tuition 44,498 33,336 46,000 37,000 (9,000) 2231 Sec., Voc. Ed. Sale of Goods 47,084 49,578 36,000 47,500 11,500 2289 Community Services - Pool 197,052 191,208 248,500 193,250 (55,250) 2298 Food Services 809,341 753,231 858,127 862,500 4,373 2299/89 School Bus Revenue 957 7,473 0 0 0 2300 Investment Earnings 56,352 32,634 130,000 27,500 (102,500) 2500 Gifts and Donations 341,009 465,440 605,000 355,197 (249,803) 2600 Fines and Damages 11,551 13,675 0 13,941 13,941 2700 Rentals 98,118 96,471 189,869 106,441 (83,428) 2800 Insurance Recoveries 16,336 23,120 100,000 17,007 (82,993) 2900 Local Support Non-Tax 127,738 145,932 10,000 81,550 71,550 2910 E-Rate 187,644 67,429 84,000 93,450 9,450 Total Local Non-Tax 2,590,108 2,489,386 2,939,018 2,357,102 (581,916) 3100 State Apportionment 30,259,775 31,077,601 30,560,749 31,325,015 764,266 3121 State Special Ed Apportionment 929,607 958,444 973,258 1,002,764 29,506 3600 State Forest 0 522 0 0 0 Total State, General Purpose 31,189,382 32,036,567 31,534,007 32,327,779 793,772 4100 State Special Purpose - Capacity 3,084 1,747 500 500,000 499,500 4121 4,554,281 4,649,733 4,330,105 4,465,616 135,511 4122 Special Education - Infants & Toddlers 0 0 0 423,803 423,803 4134 Middle School Voc 39,563 0 0 0 0 4155 Learning Assistance Program 499,281 583,279 594,384 985,025 390,641 4158 Special Pilot Programs 151,811 157,918 589,098 158,741 (430,357) 4165 Transitional Bilingual 164,779 159,302 160,533 160,759 226 4174 Highly Capable 58,413 60,588 59,321 58,827 (494) 4197 Energy Improvement Grant 350,000 0 0 0 0 4198 School Food Service 36,207 39,315 38,970 33,945 (5,025) 4199 Transportation 1,763,690 1,815,271 1,804,693 2,112,937 308,244 Total State, Special Purpose 7,621,109 7,467,153 7,577,604 8,899,652 1,322,048 5200 Department of Defense Impact Aid 116,135 110,591 80,000 75,000 (5,000) 5300 Federal Impact Aid 1,157,288 985,130 917,557 778,493 (139,064) 5329 Federal Impact Aid - Special Education 121,251 119,540 107,953 135,776 27,823 5500 Federal Forests 0 2,969 0 0 0 Total Federal, General Purpose 1,394,674 1,218,230 1,105,510 989,269 (116,241) 6100 Other Federal Funds - Capacity 0 0 850,000 850,000 0 6111 Federal Stimulus - Title I 204,209 0 0 0 0 6113 Federal Stimulus -SFSF 1,374,866 20,919 0 0 0 6118 Federal Stimulus-Comp Grants 4,923 0 0 0 0 6119 Federal Stimulus-Other Grants 12,151 402 0 0 0 6124 Federal Special Ed. Grants 1,475,774 1,352,924 1,445,135 1,339,818 (105,317) 6138 Federal Vocational Education 36,023 38,522 25,783 35,000 9,217 6151 Disadvantaged, Title 1 Part A 517,970 588,270 579,372 535,850 (43,522) 6152 School Improvement 222,317 229,545 179,917 183,000 3,083 6164 Title III LEP and Immigrant 23,707 50,644 33,802 55,928 22,126 6198 School Food Service 904,080 965,408 976,461 983,000 6,539 6200 DODEA Science Grant 0 217,493 269,660 252,109 (17,551) 6268 Indian Education 101,489 107,462 105,299 101,442 (3,857) 6269 DODEA Dual Language 0 0 172,178 166,911 (5,267) 6310 Medicaid Outreach Program 348,655 225,199 250,000 225,000 (25,000) 6321 Special Ed Medicaid Reimbursement 14,594 24,615 25,000 17,500 (7,500) 6352 Title II OESD 0 454 0 0 0 6998 USDA Commodities 133,557 136,185 120,000 140,000 20,000 Total Federal, Special Purpose 5,374,315 3,958,041 5,032,607 4,885,558 (147,049) 7121 Special Education from Other Districts 82,439 20,425 61,000 50,000 (11,000) 7179 Doing What Works Grant 27,851 702 0 0 0 7199 Transportation from Other Districts 10,712 5,799 0 5,000 5,000 8100 Agencies and Assoc. Grants 1,743 0 0 0 0 8500 OESD Grants 400 10,904 0 0 0 GRAND TOTAL 61,559,871 60,642,135 62,124,780 64,185,466 2,060,686 6/18/2014

NORTH KITSAP SCHOOL DISTRICT 2014-15 FINAL ENROLLMENT PROJECTION K2 1 2 3 4 5 HDCT FTE Poulsbo 79 80 100 77 80 106 522 483 Suquamish 64 64 53 77 70 79 407 375 Wolfle 60 60 62 52 46 48 328 298 Pearson 52 56 50 70 54 54 336 310 Vinland 95 95 92 98 116 80 576 529 Gordon 52 48 71 62 61 58 352 326 Gordon Options 6 12 12 12 12 12 66 63 PAL K-5 4 4 4 1 2 5 20 18 Special Programs 0 0 TOTAL K-5 412 419 444 449 441 442 2,607 2,401.0 HEADCOUNT by grade FTE by grade 6 7 8 6 7 8 HDCT FTE PMS 258 256 275 258 256 275 789 789 KMS 180 164 195 180 164 195 539 539 MSOP 10 16 13 10 16 13 39 39 PAL 6-8 5 3 3 5 3 3 11 11 CKA 6 9 3 6 9 3 18 18 TOTAL 6-8 459 448 489 459 448 489 1,396 1,396 HEADCOUNT by grade FTE by grade 9 10 11 12 9 10 11 12 HDCT FTE NKHS 273 277 255 259 272.3 277.0 252.9 245.6 1,064 1,047.8 KHS 199 196 185 201 195.0 197.5 184.5 175.0 781 752.0 PAL 9-12 2 3 4 6 2 3 4 10 15 19.0 Special Programs 0 0 CKA 2 5 6 13 2 3 6 12 26 23 TOTAL 9-12 476 481 450 479 471.3 480.5 447.4 442.3 1,886 1,841.5 SUBTOTAL ENROLLMENT 5,889 5,638.5 RUNNING START 125 TOTAL 14-15 PROJECTED ENROLLMENT 5,763 2013-14 PROJECTED ENROLLMENT 5,875 PERCENT OF CHANGE -1.906%

North Kitsap School District 2014-15 Capital Projects Fund Balance Actual Budget Budget 2012-13 2013-14 2014-15 Beginning Fund Balance 351,798 941,350 945,000 ADD: Revenues 1000 Local Taxes 0 0 0 2000 Local Non-Tax 4,223 185,600 185,600 3000 State, General Purpose 0 0 0 4000 State, Special Purpose 0 0 0 5000 Federal, General Purpose 0 0 0 6000 Federal, Special Purpose 0 0 0 7000 Revenue from Other Districts 0 0 0 8000 Revenue from Other Agencies 0 0 0 9000 Other Financing Sources 0 0 0 9200 Sales of Surplus Property 0 0 0 9500 Long-Term Financing 0 0 0 Total Revenues 4,223 0 185,600 0 185,600 TOTAL:Funds Available 356,021 0 1,126,950 0 1,130,600 LESS: Expenditures 10 Sites 15,018 15,000 15,000 20 Buildings 30,866 800,000 800,000 30 Equipment 151,843 45,000 45,000 40 Energy 2,000 40,000 0 50 Sales and Lease Expenditures 11,001 0 0 60 Bond Issuance Expenditures 0 0 0 90 Debt 0 0 0 Total Expenditures 210,728 900,000 860,000 Ending Fund Balance 145,293 226,950 270,600

NORTH KITSAP SCHOOL DISTRICT 2014-15 ASSOCIATED STUDENT BODY FUND BUDGET Actual Budget Budget 2012-13 2013-14 2014-15 Beginning Fund Balance 495,488 452,128 375,674 ADD: Revenues 1000 General Student Body 299,964 497,220 378,900 2000 Athletics 178,575 242,800 188,010 3000 Classes 5,947 27,200 30,550 4000 Clubs 136,458 430,863 436,741 6000 Private Moneys 6,757 31,900 19,200 Total Revenues 627,701 1,229,983 1,053,401 TOTAL: Funds Available 1,123,189 1,682,111 1,429,075 LESS: Expenditures 1000 General Student Body 189,283 400,870 308,625 2000 Athletics 201,210 271,500 235,785 3000 Classes 5,618 19,590 21,005 4000 Clubs 121,097 442,538 452,121 6000 Private Moneys 8,021 28,500 20,900 Total Expenditures 525,229 1,162,998 1,038,436 Ending Fund Balance 597,960 519,113 390,639 C:\Users\tcaldwell\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\1CCAOIJS\14-15 Budget Summaries

North Kistap School District 2014-15 DEBT SERVICE FUND BALANCE Actual 2012-13 Budget 2013-14 Budget 2014-15 Beginning Fund Balance 2,614,182 887,583 1,811,000 ADD: Revenues 1000 Local Taxes 8,557,454 8,635,256 8,928,380 2000 Local Non-tax 12,755 11,050 19,588 3000 State, General Purpose 0 0 0 4000 State, Special Purpose 0 0 0 5000 Federal, General Purpose 0 0 0 6000 Federal, Special Purpose 0 0 0 9000 Other Financing Sources 0 0 0 9900 Operating Transfers 0 0 0 Total Revenues 8,570,209 8,646,306 8,947,968 Operating Transfer from GF 189,228 189,198 189,198 TOTAL: Funds Available 11,373,619 9,723,087 10,948,166 LESS: Expenditures 11 Matured Bonds 8,424,582 6,339,545 7,677,440 21 Interest on Bonds 1,983,083 1,633,904 1,359,442 31 Interfund Loan Fees 0 0 0 41 Bond Transfer Fees 0 0 0 61 Recording Fees (Capacity) 0 175,000 175,000 Total Expenditures 10,407,665 8,148,449 9,211,882 Ending Fund Balance 965,954 1,574,638 1,736,284 14-15 Budget Summaries1 6/18/2014 plm

NORTH KITSAP SCHOOL DISTRICT 2014-15 TRANSPORTATION VEHICLE FUND BUDGET Actual Budget 2012-13 2013-14 Beginning Fund Balance 1,914,046 2,016,417 ADD: Revenues 2300 Investment Earnings 10,082 8,071 2800 Insurance Recoveries 0 0 4000 State Grant Revenue 0 0 4499 Transportation Reimbursement 458,617 465,000 5300 Impact Aid 0 0 9000 Other Financing Sources 15,100 0 Total Revenues 483,799 473,071 TOTAL: Funds Available 2,397,845 2,489,488 LESS: Expenditures Act. 30 Equipment 581,723 949,860 Act. 60 Bond Levy Issuance 0 0 Act. 90 Debt 0 0 Total Expenditures 581,723 949,860 Ending Fund Balance 1,816,122 1,539,628