Board of Education May 23, 2017 Nicole L. Thorn, Chief Financial Officer Pat Chamberlin Executive Director of Budget
Purpose: To present the proposed Fiscal Year (FY) 18 Budget for discussion and feedback from the community and Board members and to ensure the proposed FY 18 Budget aligns with the District’s Strategic Plan to Collaboratively engage all students in a world class education , and Goal 5 of the Strategic Plan, Fiscal and Operational Stewardship , to demonstrate effective and efficient business operations and ensure excellent stewardship of public monies. 2
BUDGET PREPARATION PROCESS 1) Each Department Head received a budget template that included FY 15 actuals, FY 16 actuals, FY 17 Budget, and FY 17 actuals through December. This template was sent out in early January. 2) Met with Department Heads to review the budget process and to discuss the challenges and priorities in their respective areas. 3) School budgets were distributed the middle of January. 4) The budget information returned from the departments and schools was consolidated and presented in draft form to the Finance Committee in February and March 2017. 5) The Financial Services Leadership collaborated with Cabinet members on several occasions and successfully reduced a $9.2 million deficit. Through those discussions, we were able to obtain a balanced budget. 3
FY 18 BUDGET OVERVIEW • Uncertainty of State funding levels • Limited ability to increase revenue streams • Fixed costs of labor contracts • FY 18 Operating Budget is BALANCED • In FY 17, there were $3.3 million in accelerated purchases, thus positively impacting the FY 18 budget 4
FY 18 OPERATING FUNDS REVENUE ASSUMPTIONS PROPERTY TAXES 2016 Tax Levy • 50% of the 2016 tax levy property tax revenue is for the FY 18 Property Tax Revenue Budget • 0.7% Consumer Price Index (CPI) was not budgeted and reduced the tax rate to taxpayers by $.1348 (saving taxpayers approximately $2.6 million) • Equalized Assessed Value (EAV) is expected to increase by 2% • In an effort to continue property tax relief to Rockford taxpayers, an estimated $5,046,031 in new property was not included in the property tax levy in 2016 • 99% collection rate 5
FY 18 OPERATING FUNDS REVENUE ASSUMPTIONS PROPERTY TAXES (Cont’d) 2017 Levy to be filed in December 2017 • 50% of the 2017 tax levy property tax revenue is for the FY 18 Property Tax Revenue Budget • CPI for the 2017 levy is estimated at 2.1% • If the District incorporates a CPI of .5% and EAV increases 2% (levy year 2017), the tax rate is anticipated to be 7.7679%. This is lower than the tax rate of 7.8031% proposed in the tax levy year of 2016. • In tax levy year 2018, the assumption is that the EAV will increase by 2%, 1% of the CPI is incorporated in the budget, and the tax rate will be 7.6632%. • $6 million of estimated new property will not be taken 6 • 99% collection rate
PROPERTY TAX INFORMATION PROPERTY TAXES Levy New Tax Tax Rate Tax Tax Levy Year EAV CPI Property Rate Difference Levy $ $ Difference 2015 $1,960,780,052 0.80% $6,363,125 7.9379 $155,644,760 2016 1,980,725,577 0.70% 5,046,031 7.8031 -0.1348 154,559,970 ($1,084,790) 2017* 2,000,532,833 2.10% 6,000,000 7.7679 -0.0352 155,266,801 706,831 *All levy year 2017 information is an estimate In levy year 2016, the decision was made to not take the CPI increase or the new property for the tax levy. By not taking the new property of $5,046,031, the savings to the taxpayer is approximately $130,000.00 In levy year 2017, the recommendation is to take .5% of the 2.1% CPI and to also not take the new property in calculating the tax levy. This final decision will occur in October of 2017. 7
10 YEAR COMPARISON – EAV AND TAX LEVY Tax Levy Dollars in Millions $3,000 $175 $170 $170 $165 $2,500 $165 $158 EAV in Millions $157 $2,000 $157 $156 $160 $155 $154 $155 $155 $1,500 $150 $147 $1,000 $145 $500 $140 $0 $135 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 8 EAV Tax Levy $
FY 18 BUDGET OVERVIEW REVENUE EXPENDITURES NET SURPLUS/(DEFICIT) Fund Fund Description FY 17 BUDGET FY 18 BUDGET FY 17 VS FY 18 % CHG FY 17 BUDGET FY 18 BUDGET FY 17 VS FY 18 % CHG FY 17 BUDGET FY 18 BUDGET OPERATING FUNDS BEGINNING FUND BALANCE $111,267,662 $111,267,662 10, 11 &17 Educational/Special Education $235,739,959 $243,716,772 $7,976,813 3.4% $246,316,335 $248,545,664 $2,229,329 0.9% ($10,576,376) ($4,828,892) 18 Grants $41,937,870 $41,368,278 ($569,592) -1.4% $41,882,115 $41,131,759 ($750,356) -1.8% $55,755 $236,519 19 Food Service $13,195,388 $18,410,000 $5,214,612 39.5% $12,957,925 $17,910,071 $4,952,146 38.2% $237,463 $499,929 20 Operations and Maintenance $24,533,563 $22,318,953 ($2,214,610) -9.0% $26,377,631 $27,863,365 $1,485,734 5.6% ($1,844,068) ($5,544,412) 40 Transportation $31,443,660 $29,912,298 ($1,531,362) -4.9% $19,701,651 $20,274,824 $573,173 2.9% $11,742,009 $9,637,474 50/51 IMRF/FICA $7,656,363 $7,289,058 ($367,305) -4.8% $7,295,339 $7,448,915 $153,576 2.1% $361,024 ($159,857) 70 Working Cash $1,102,053 $981,319 ($120,734) -11.0% $0 $0 $0 0.0% $1,102,053 $981,319 80 Tort Immunity $6,289,759 $5,970,753 ($319,006) -5.1% $7,367,619 $6,792,832 ($574,787) -7.8% ($1,077,860) ($822,079) TOTAL OPERATING FUNDS $361,898,615 $369,967,431 $8,068,816 2.2% $361,898,615 $369,967,431 $8,068,816 2.2% $0 ($0) ENDING FUND BALANCE $111,267,662 $111,267,662 CAPITAL FUNDS BEGINNING FUND BALANCE $107,897,936 $70,211,445 30 Debt Service $15,954,220 $15,741,781 ($212,439) -1.3% $16,209,125 $16,536,339 $327,214 2.0% ($254,905) ($794,558) 60 Capital $175,000 $175,000 $0 0.0% $28,528,266 $40,441,847 $11,913,581 41.8% ($28,353,266) ($40,266,847) 90 Life Safety $2,039,106 $1,962,556 ($76,550) -3.8% $11,117,426 $9,341,180 ($1,776,246) -16.0% ($9,078,320) ($7,378,624) TOTAL CAPITAL FUNDS $18,168,326 $17,879,338 ($288,988) -1.6% $55,854,817 $66,319,366 $10,464,549 18.7% ($37,686,491) ($48,440,028) ENDING FUND BALANCE $70,211,445 $21,771,417 9 TOTAL - ALL FUNDS $380,066,941 $387,846,769 $7,779,828 2.0% $417,753,432 $436,286,797 $18,533,365 4.4% ($37,686,491) ($48,440,028)
FY 18 OPERATING FUNDS BUDGET REVENUE BY SOURCE $369,581,802 $49,443,957 $163,141,244 14% FY 18 Local Revenue: $163,141,244 44% * Property Taxes $142,031,826 41 Local * CPPRT: $19,600,000 FY 18 State Revenue: $156,980,627 * GSA: $117,004,185 * Special Ed: $14,442,710 42 Flow-Through/Other * Transportation: $12,484,385 * Early Childhood: $9,824,953 FY 18 Federal Revenue: $49,443,957 * Title I: $13,700,000 43 State * Food Service: $17,241,000 *Major funding sources within revenue $15,974 $156,980,627 category 42% 0% 10 44 Federal
FY 18 OPERATING FUNDS BUDGET EXPENDITURES BY OBJECT $369,581,802 Salaries $79,323,714 21% $43,109,105 12% Employee Benefits $35,313,430 10% Purchased Services $4,997,863 1% Supplies & Materials Capital Outlay $23,173,697 6% Other Miscellaneous $183,663,993 11 50%
FY 18 BUDGET ASSUMPTIONS OPERATING FUNDS ENROLLMENT • District enrollment was budgeted flat per enrollment trends LOCAL REVENUE • Property Taxes – CPI is expected to be 2.1% in tax levy year 2017 • CPPRT – Estimated to be $4.7 million lower than the FY 17 budget ($24,300,000) Replacement Tax FY 13 22,037,762 FY 14 22,762,158 FY 15 23,824,790 FY 16 19,141,723 FY 17 estimate 19,877,461 12 FY 18 budget 19,600,000
FY 18 BUDGET ASSUMPTIONS OPERATING FUNDS STATE REVENUE • General State Aid (GSA) with no proration, expect to receive full funding amount • 4 Categorical Aid payments (expected to mirror FY 17 funding) • Adjusted FY 18 Budget to reflect ALL grants awarded • State revenue is expected to increase by $9.4 million and local revenue is expected to decrease from the prior year by $5.2 million for a net increase of $4.2 million. FEDERAL REVENUE • Federal funding is expected to mirror FY 17 except for the decrease in Title II funding of $1.3 million and an increase in reimbursement for the National Free Lunch/Breakfast program of $4.5 million. 13 • Adjusted FY 18 Budget to reflect ALL grants awarded
FY 18 BUDGET ASSUMPTIONS OPERATING FUNDS SALARIES • Contractual increases are budgeted EMPLOYEE BENEFITS • Health care costs increased by $1.7 million • Commensurate pension increases with contractual salary increases are budgeted PURCHASED SERVICES • Rentals/Leases of laptops and I-pads - $2.5 million (FY 17 expense was $2.5 million and was the first year for the lease of laptops and I-pads) • Professional development - $3.3 million (FY 17 expense of $2.9 million). There is an increase in this line item because these expenses were charged to a number of different accounts in the past. 14
FY 18 BUDGET ASSUMPTIONS OPERATING FUNDS SUPPLIES & MATERIALS • With the increase in participation in the school lunch program, expenses have increased $5.0 million and will be offset by additional revenue of $5.2 million. CAPITAL/EQUIPMENT • Investment in technology - $3.6 million (see following slides for details) • Furniture for the schools as it relates to the Facilities Master Plan - $1.3 million 15
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