December 10, 2018 Butler School District 53 1
Key Terms Aggregate Levy annual corporate levy other than debt service Debt Service Levy made to retire the principal or pay interest on bonds Property Tax Extension Limitation Law PTELL or Tax Caps, Public Act 87-17 (October 1991) enacted to control property tax growth Consumer Price Index (CPI) Limiting Rate Tax Cap Rate (Total allowable: CPI + New Construction, excluding bond & interest) Butler School District 53 2
Consumer Price Index Computed on a monthly basis by Federal Bureau of Labor Statistics Measures changes in prices over time for goods and services Not always a good measure of the cost to run a school district Butler School District 53 3
Value Ten Year CPI History Dec 31st CPI-U Index Values with Annual % Change Last Ten Years 260.0 250.0 240.0 230.0 220.0 0.1% 2.7% 1.5% 3.0% 1.7% 1.5% 0.8% 0.7% 2.1% 2.1% 210.0 200.0 190.0 180.0 170.0 160.0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Butler School District 53 4
CPI History Percent of Change in December CPI-U for the Last 10 Years 3.5% 3.0% 2.7% Last 10 yr Average CPI-U for this period is 1.6% 3.0% 2.5% Last 5 yr average CPI-U is 1.4% 2.0% 1.5% 1.7% 1.5% 2.1% 2.1% 1.5% 1.0% 0.8% 0.7% 0.5% 0.1% 0.0% Butler School District 53 5
Tax Levy Chronology 2017 Inflation Rate (CPI set in January of 2018) 2018 Tax Levy (BOE Action in December, 2018) 2019 Tax Extension (Spring, 2019) 2019-2020 School Year (July 1, 2019-June 30, 2020) Butler School District 53 6
254.0 252.0 250.0 248.0 2.1% Actual Monthly CPI-U Index Values for 2017 and 2018 thru OCT with "Rolled Forward" Values through the End of the Calendar Year 2.2% 2.5% 2.4% 2.8% 2.9% 2.9%2.7% 2.3% 2.5% 2.6% 2.1% 246.0 244.0 2017 2018 242.0 THE DECEMBER 2018 CPI-U INCREASE WILL LIMIT THE 2019 TAX LEVY 240.0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Butler School District 53 7
Tax Rate History Tax Rate History with Bond & Interest 0.92 1.01 1.15 1.25 1.29 1.24 1.15 1.14 2010 2011 2012 2013 2014 2015 2016 2017 Tax Rate Butler School District 53 8
New Construction History New Consrruction History Projected Actual 2017 $6,722,500 $6,277,540 2016 $7,180,737 $7,480,790 2015 $5,500,000 $5,869,510 2014 $5,500,000 $7,168,390 2013 $7,858,513 $7,234,340 2012 $3,265,090 $3,209,390 AVERAGE $6,004,473 $6,206,660 2017 New Construction generated $70,421 Butler School District 53 9
CPI + New Property 5 CPI + New Property 4.5 4 0.56 3.5 0.91 1.01 3 2.5 2 1.5 1.12 0.61 1.06 0.42 0.99 0.97 0.70 New Construction CPI 1 0.74 0.88 0.5 0 0.68 3.3 3.4 2.5 4.1 0.1 2.7 1.5 3 1.7 1.5 0.8 0.7 2.1 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Butler School District 53 10
Projected Needs Capital Projects Revenues Expenditures $2,000,000 $1,800,000 $1,850,000 $1,600,000 $1,400,000 $1,300,000 $1,200,000 $1,000,000 $800,000 $700,000 $600,000 $500,000 $400,000 $200,000 $173,000 $300,000 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Butler School District 53 11
Revenue to Fund Cap Projects Other Financing Sources & Uses $1,800,000 $1,600,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $1,000,000 $1,000,000 $1,000,000 $200,000 $0 $0 $0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Butler School District 53 12
Projected Capital Improvements Summer 2019 Life safety items include correcting door issues, stair hand railings, food service shutter (BJH), heat detectors and pull stations Butler School District 53 13
Summer 2020 Life safety work includes: fire prevention (walls/penetrations), ducted relief air systems, fire separation, venting Butler School District 53 14
Summers 2021-23 Butler School District 53 15
With Capital Projects to Begin in FY20 (Summer 2019) Butler School District 53 16
Our 2018 Property Tax Levy Request Ed Fund $8,731,138 O & M Fund 1,240,000 Transp. Fund 450,000 IMRF 87,500 Social Sec./Medicare 87,500 Total Request: $10,596,138 4.95% Request Butler School District 53 17
How much do we expect to receive? 2017 Extension Base $10,096,147 X 2017 CPI 2.1% 206,200 Plus Estimated New Property 50,000 Tax Cap Total Levy $10,358,392 Estimated increase: 2.85% Total Estimated New Revenue: $262,024 Butler School District 53 18
Why are we asking for more than we expect? % Growth in Existing EAV The higher the growth, the lower our rate EAV of New Construction in District 53 The higher the EAV of new construction, the higher our tax total revenue Limiting Tax Rate for 2018 Levy The higher the tax rate, the greater access to EAV 19
The unknown In order to gain access to the tax revenue generated by new construction, we must levy (request) it. Our problem? Our inability to know the value of new construction on all property throughout the district. Therefore, we ask for more than we expect to receive (inflated levy) so that we can access every possible dollar generated by new construction. Butler School District 53 20
Please remember No matter how much we levy, we will only receive what the caps will allow us to receive. Butler School District 53 21
Finances in Butler District 53 Consistently receives highest Financial Profile Score (4.0) from the Illinois State Board of Education for financial management Consistently rated AAA by Standard & Poor s Has successfully internally funded $8M in facility improvements over the last four years without a special referendum or tax increase Utilizes a zero-based budgeting process that allocates resources based on the specific needs in a given year. Requires purchase orders for spending that require three levels of approval Maintains a low debt service extension base with current bonds retiring in 2021 Butler School District 53 22
Challenges moving forward New State of Illinois education funding model Evidence-based Funding for Student Success Act Property tax freeze Pension cost shift Tax levy objections High cost of student transportation Butler School District 53 23
Budgeted Revenue Allocation by Source Evidence Based Funding 3% Other Local Revenue 8% Other State Revenue Federal Revenue 1% 0% Flow-Through Revenue 0% Property Taxes 88% Butler School District 53 24
Budgeted Expenditure Allocation by Object Other Objects 5% Provision for Contingencies 3% Capital Outlay 2% Supplies And Materials 5% Purchased Services 17% Salaries 57% Benefits 11% Butler School District 53 25
Salaries 4 yr. history + current $6,400,000.00 Salaries $6,200,000.00 $6,186,155.00 $6,000,000.00 $5,993,242.00 $5,800,000.00 $5,721,244.00 $5,771,112.00 $5,600,000.00 $5,400,000.00 $5,200,000.00 $5,288,445.00 $5,000,000.00 $4,800,000.00 2014 2015 2016 2017 2018 Source: Annual Financial Report Butler School District 53 26
Benefits 4 yr. history + current $1,200,000.00 Benefits $1,150,000.00 $1,146,971.00 $1,100,000.00 $1,104,363.00 $1,050,000.00 $1,039,814.00 $1,000,000.00 $977,169.00 $979,477.00 $950,000.00 $900,000.00 $850,000.00 2014 2015 2016 2017 2018 Source: Annual Financial Report Butler School District 53 27
Fund as a Percent to Total Aggregate Fund (Excludes Transfers & Capital Projects) Revenue Allocation by Fund Transportation 4% Debt Service 1% O & M 9% IMRF / SS 1% Capital Projects 0% Working Cash 0% Tort 0% Fire Prevention & Safety 0% Educational 85% Butler School District 53 28
Expenditure by Fund Expenditure Allocation by Fund Operations & Maintenance 11% Debt Service 2% Transportation 4% IMRF / SS 2% Educational 75% Capital Projects 6% Working Cash 0% Tort 0% Fire Prevention & Safety 0% Butler School District 53 29
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What s next Priorities as of January 1, 2019 Payroll Benefits and Deductions Vendor Payment Butler School District 53 31
December 10, 2018 Butler School District 53 32