ROCKWOOD R-VI SCHOOL DISTRICT St. Louis County, Missouri 2013/14 Budget Dr. Terry Adams, Interim Superintendent of Schools Mr. Tim Rooney, CPA, Chief Financial and Legislative Officer Mr. Dan Steinbruegge, CPA, Director of Finance http://www.rockwood.k12.mo.us
Budget Overview and Highlights Missouri State statutes require school districts to prepare an annual budget to identify available resources and guide district spending for the ensuing school year. The statute requires the school district budget document to include five specific components. They are as follows: The 2013/14 Budget Message Estimated Revenues to be received from all sources, with comparison to estimated or actual revenues for the prior two years Estimated Expenditures to be paid by fund with comparison to estimated or actual expenditures for the prior two years A schedule detailing Debt Service interest, principal and charges on all debt of the district A general Fund Summary including information on assessed valuation, tax levies and fund balances. A school district s Board of Education is to formally adopt this budget in June prior to the beginning of the new school term on July 1. State statutes, in conjunction with generally accepted accounting principles (GAAP) and in accordance with the definitions of the Governmental Accounting Standards Board (GASB) statement of principles on fund accounting systems, have determined the funds appropriate for public school operations. Rockwood follows the legal requirements of the State of Missouri for fund accounting and constructs its budget utilizing the following approved funds: Fund Groups - Generally Accepted Accounting Principles General Fund: Incidental Child Nutrition Student Activities Community Education Other Activities Special Revenue: Teacher's State Definition Operating Funds: Incidental Teacher's Building Debt Service: Debt Service Capital Projects: Building Bond The District s budget for the 2013-14 fiscal year includes total revenues, expenditures and fund balances for the District as a whole. This document also presents total revenues, expenditures and fund balances for the District s operating funds, which are comprised of the Incidental Fund, Special Revenue (Teacher's) Fund and the Building Fund. Detailed fund schedules provide further information on the activities within each fund and include an analysis of the proposed budget for the 2013-14 fiscal year.
Detailed budget schedules are also included summarizing estimated revenues by objects and sources as defined by Missouri Department of Elementary and Secondary Education (DESE). Preparation of the budget also includes detailed schedules for estimated expenditures by object, department, program and function. This District, having governmental fund revenues in excess of $100 million, is obligated to implement the Government Accounting Standards Board Statement 34. This statement (GASB34) requires the District to change the method used for general-purpose financial statements at year-end. The changes include a reporting format for basic financial statements, fund financial statements and notes to the financial statements. In addition, required supplementary information has been improved and expanded to include budgetary comparison and management s discussion and analysis. The greatest areas of change for Rockwood under GASB34 are the full versus modified accrual of both revenues and expenditures plus the recognition of fixed assets and related depreciation expense. The District is also required to recognize certain liabilities not previously recorded in the general purpose financial statements, the largest of these being note interest payable and other post-employment benefit plan liabilities. The District has also implemented GASB 44 for reporting statistical data within the CAFR (Comprehensive Annual Financial Report). No changes to the budget or budget process were required for implementation of GASB 44. The District implemented GASB45 for post-retirement benefit reporting. Actuarial costs for this implementation are included in the budget and are minor. The District plans to continue to use the pay-as-you-go method. Background on the District The District began with the opening of Eureka High School in 1908. It was the first four-year high school in St. Louis County west of Kirkwood. The District, in its present form, was created on October 29, 1949 by a merger of 26 districts. The name was changed from Reorganized School District No. R-VI of St. Louis County, Missouri to Rockwood R-VI School District, St. Louis County, Missouri in April 1964. The District includes 150-square miles located in southwest St. Louis County and a small section of northern Jefferson County. Geographically, the District represents approximately 30% of St. Louis County. It encompasses all or parts of twenty communities including Ballwin, Chesterfield, Ellisville, Eureka, Fenton, Manchester and Wildwood. According to the 2010 Census, this represents approximately 115,931 residents in 41,913 households. The chart below summarizes the District s enrollment history over a 10 year period. Resident VICC Total 2003-04 19,672 2,240 21,912 2004-05 19,669 2,129 21,798 2005-06 20,050 1,882 21,932 2006-07 20,068 2,030 22,098 2007-08 20,258 2,010 22,268 2008-09 20,371 1,789 22,160 2009-10 20,504 1,750 22,254 2010-11 20,511 1,925 22,436 2011-12 20,313 1,844 22,157 2012-13 20,151 1,765 21,916
The District has experienced slight annual enrollment reductions over the last three years. The District is projecting total enrollment for 2013-14 to be 21,647 students, a decrease of 269 students. The District continues to be a leader in the field of public education. The U.S. Department of Education s Blue Ribbon List includes ten District schools and Missouri s Gold Star list includes fourteen District schools. The District is one of only seven school districts in the state accredited through AdvancED, the world s largest education community. The District has also received numerous awards for its work in the area of character education, including earning the distinction of a National District of Character. The following are some of the highlights of academic achievement by students of the District: On the ACT, Rockwood students average a composite score of 23.7, outperforming the state average of 21.6 and the national average of 21.1. Rockwood students are performing at high levels in the content areas of Reading, Language Arts, Mathematics, Science and Social Studies on state assessment tests. Missouri Assessment Program (MAP) results show 74.6 percent of all students scored proficient or higher in Communication Arts and 72.9 percent of all students scored proficient or higher in Math. There were 22 Rockwood students achieving finalist standing in the 2013 National Merit Scholarship Competition. The Duke Talent Identification Program recognized more than 180 seventh-grade students as state and national finalists in 2013. Out of 3 students in Missouri to earn the State AP Scholar Award in 2012, 2 students were from Rockwood. Rockwood provides information for interested parties, including the current state required Report Card, on the Internet at www.rockwood.k12.mo.us. Budget Message In preparation for the 2013-14 budget the District hosted a series of community engagement sessions. The sessions were led by four facilitating team members representing each of the four high school areas. These four leaders were assisted by sixteen other facilitating team members who planned the community sessions and evaluated the results. All members of the community were encouraged to participate in a series of meetings held from September through December. The meeting schedule provided day and night sessions to accommodate the public. An intensive communication plan was put in place to encourage participation and approximately 400 people attended the sessions. The key findings of the committee are shown below. Findings included in the 2013-14 budget: 1. Curriculum management plan 2. Increase salaries to St. Louis County median movement toward this goal 3. Maintain current class sizes 4. Provide professional development related to the district s key goals 5. Charge self-funded programs and grants for indirect costs 6. Reduce school/department supply budgets 7. Make reductions in district operating budget
Findings included in an April 2013 bond issue that failed: 1. Replace obsolete laptops and desktop computers/infrastructure upgrades for technology 2. Provide funds for ongoing facility maintenance and key facility improvements 3. Ask the community for more resources to address the needs of the district (capital only) Findings not yet addressed: 1. Increase academic interventions 2. Hire more teachers to reduce class size comparable to neighboring school districts 3. Tuition-free, full-day kindergarten 4. Perform background checks for school volunteers As the community engagement process proceeded, school and department levels began working on their 2013-14 budgets. Departments submitted their budgets in October 2012 and the Superintendents Cabinet reviewed and analyzed all aspects of the operating budget in November 2012. School building budgets were based on a per pupil calculation. The 2013-14 budget target was presented to the Board of Education in December 2012. Additional budget updates were presented to the Board through May 2013. Significant areas reviewed and discussed included the following: Staffing levels and compensation Reduction of school budgets with a target of 10% Facilities and Technology maintenance The total proposed budget for fiscal year 2013-14 includes budgeted revenue of $255.0 million and budgeted expenditures of $288.7 million, resulting in a decrease of fund balance of $33.7 million. The primary reason for this decrease is the Debt Service fund with budgeted expenditures in excess of budgeted revenue of $28.3 million. As you will note in the Debt Service section, the District is scheduled to pay $43.5 million in principal of which $28.9 million relates to the 2006 bond issue. For the operating funds, the budget includes revenues of $207.6 million, expenditures of $212.9 million and transfers of $0.7 million which results in a budgeted decrease of fund balance of $4.6 million. Further analysis on operating funds is provided. As summarized by the schedule below, the District is budgeting for total beginning fund balance of $120.9 million at July 1, 2013 and ending fund balance of $87.2 million at June 30, 2014. For District operating funds, beginning fund balance at July 1, 2013 is projected to be $57.6 million and ending fund balance at June 30, 2014 to be $53.0 million (24.9% of budgeted expenditures).
All Funds Operating Funds Beginning fund balance, July 1, 2013 $ 120,904,633 $ 57,654,447 Budgeted revenues 255,006,671 207,551,947 Budgeted expenditures (288,721,584) (212,890,225) Budgeted transfers - 729,815 Ending fund balance, June 30, 2014 $ 87,189,720 $ 53,045,984 Reserve balances as a % of budgeted expenditures 24.9% Operating Revenue The revenue budget for 2013-14 operations is expected to be $207.6 million. This is a $0.3 million increase above the 2012-13 revenue projection of $207.3 million. The principle differences for 2013-14 are: Local property taxes (+$2.1) o Based on preliminary information from St. Louis County, the assessed valuation is expected to decrease from $3.3 billion to $3.1 billion. If this reduction comes to pass, the tax rate is expected to increase about 19.7 cents to offset the lost assessed valuation. This would put the tax rate within 15.86 cents of the Maximum Authorized Levy. The FY14 budget includes a one-third recoupment ($673,333 each year) of the Chrysler protest that is expected to be refunded. The delinquent taxes are expected to increase by $2.5 million. Most of that is attributable to the one-time $2 million Chrysler refund the District expected to occur during this fiscal year. If the refund does not occur in June 2013, the FY13 taxes will be higher and the recoupment may not happen for another year. Sales Tax (+$0.3) o Information from DESE indicates the FY14 amount per weighted average daily attendee (WADA) will be $879 based on a revision to the Prop C Sales Tax payment estimate. This is an approximate increase of $25 per previous year WADA. Voluntary Interdistrict Choice Corporation (VICC) (-$0.6) o VICC reimbursement is projected to be $0.6 million less in FY14 due to an estimated decrease of approximately sixty students and other factors. State Formula including Classroom Trust (-$0.9) o The FY14 projection is based on a reduction in WADA and in the district s Dollar Value Modifier (DVM). Offsetting this will be an increase in Classroom Trust funding of approximately $77 per previous year ADA. Additionally, the statewide appropriation has been budgeted to increase $65.88 million, which would normally result in an increase in the appropriation by 2%. However, DESE recommends using caution since this revenue stream will come through the Classroom Trust Fund (gaming revenue). Therefore, the District will maintain the current forecasted proration of 92.5673897% in the State funding formula for FY14.
Title I (-$0.5) o Due to a reduction in Federal allocation of Title I revenue, it is estimated that Title I revenue will be approximately $1.5 million in FY14 The budget for 2013-14 includes a transfer into the operating funds from non-operating funds totaling $729,815 which includes $500,000 from the Child Nutrition Services fund and $229,815 related to indirect costs covered by the Community Education and Early Childhood Departments. Operating Expenditures The expenditure budget for 2013-14 operations is expected to be $212.9 million. This is an $8.7 million increase to our 2012-13 expenditure projection of $204.2 million. The principle differences are: Supplies and Services (+$1.7) o The budget for FY14 is estimated to be $17.1 million based on individual department requests and direct allocations made to the schools using a formula. Our 2012-13 expenditure projection for supplies and services is estimating that approximately $1.1 million will fall out from the budget. Below is a listing of significant increases in supplies and services for 2013-14. Student Transportation and Fuel (+$0.4) Services Professional development $ 500,000 Web applications 50,000 Superintendent search 45,000 Boundary/strategic planning $ 50,000 645,000 o The student transportation contract includes a CPI escalator of 3.1%. The non-route transportation is based on the amount each school allocates from their direct supply allocation which is reflected in the budget. A small decrease was made to the homeless transportation based on the anticipated number of eligible students and their pickup locations. Early Childhood Transportation budget is based on the anticipated number of students eligible at the beginning of the school year, but is monitored throughout the year. FY12 Actual FY13 Budget FY13 Proj FY14 Budget Residential Routes $ 5,479,834 $ 6,526,264 $ 5,640,791 $ 5,820,309 Non-route transp 574,407 630,718 630,718 667,799 Homeless 267,956 175,000 175,000 165,000 SSD 366,523 550,000 375,000 375,000 Early Childhood 1,127,681 1,800,000 1,275,000 1,500,000 Total excluding fuel $ 7,816,401 $ 9,681,982 $ 8,096,509 $ 8,528,108 Fuel object 64870 $ 1,019,827 $ 1,306,292 $ 1,233,980 $ 1,311,700
Salaries (+$2.1) and benefits (+2.4) o The following chart shows the significant changes to salaries and benefits including the anticipated increase for each employee group and other adjustments made to the salary and benefit budget. This budget increases compensation for all employee groups with the goal of bringing teacher, support staff and administrator salaries to the St. Louis County midpoint over the next two to three year period. Salary Increases: Salary Teachers $ 3,389,899 $ 542,384 Administrators 579,135 92,662 Custodial 159,404 25,505 Nurses 32,445 5,191 Other 945,862 151,338 Benefits 5,106,745 635,046 Budgeted recapture (3,000,000) - Less anticipated FY13 recapture from salaries 1,500,000 - Channel changes 340,000 61,030 Safety initiatives 240,000 39,624 Extra Curricular Activities 104,244 18,712 Retirement savings (1,000,000) (114,500) Reduction of 14.93 Points (821,150) (147,396) Family & Consumer Science - Additional days (52,453) (9,415) Administrative reoganization (162,608) (48,658) Health insurance - 8% increase - 1,226,337 Retirement increase on health insurance - 245,267 Health Reform Act - 170,000 Overtime (68,910) (11,377) Substitutes (136,426) (22,524) Unemployment insurance - 48,492 Total Significant Changes $ 2,049,442 $ 2,090,638
Capital Outlay (+$2.0) o The 2013-14 capital budget includes the following: Capital Projects Security Cameras $ 30,000 Various sites 745,500 HVAC 769,000 Ellisville Project 1,537,000 SubTotal $ 3,081,500 Furniture and Equipment Maintenance $ 263,764 Schools 174,329 SubTotal $ 438,093 Technology $ 2,500,000 Total $ 6,019,593 Our taxpayers and the local community continue to receive an excellent return on their investment in education as the District has been able to provide a quality education to our students while the per pupil allocation remains one of the lowest in the St. Louis County area. As noted below, Rockwood s expenditure per pupil ranks 20th of 22 as compared to other St. Louis County school districts. District Current Expenditure Per Pupil Clayton 18,372 Brentwood 17,188 M aplewood 15,088 Pattonville 14,369 University City 12,288 Normandy 12,276 Kirkwood 12,210 Parkway 12,121 Ladue 11,904 Webster Groves 11,356 Ferguson-Florissant 11,313 Hancock Place 11,302 Valley Park 11,158 Jennings 10,902 Affton 10,709 Hazelwood 10,493 Lindbergh 9,529 Riverview Gardens 9,471 Ritenour 9,402 Rockwood 9,364 M ehlville 8,351 Bayless 7,559 Source: DESE data 2011-12
This 2013-14 District budget continues to guide Rockwood in a fiscally sound and responsible direction. Throughout 2013-14 the District will continue to monitor the budget and prepare monthly financial projections beginning in November 2013. From the beginning of the budget process to the formal approval there have been many discussions and analysis performed to ensure the resources of the District are being budgeted for the purpose of providing outstanding instruction and support that will allow each student to achieve his/her highest potential. Rockwood continues to have a Standard & Poors bond rating of AAA and, for the 13 th consecutive year, our financial planning and management was recognized by the Association of School Business Officials and awarded the Meritorious Budget Award (MBA). For 2012-13 Rockwood was 1 of 110 school districts nationwide and 1 of 8 school districts in Missouri to receive this prestigious award. The 2013-14 proposed budget is prepared following the MBA requirements. We are thankful for the loyalty and support of our taxpayers, the vision of the Board of Education, the dedication and hard work of fellow employees and the success of our students. In return, we promise to thoughtfully and prudently spend the funds entrusted to our management and care. Tim Rooney, CPA Chief Financial and Legislative Officer Dan Steinbruegge, CPA Director of Finance