Recommended Tax Rate Fiscal Year 2017 Red Clay Consolidated School District Jill M. Floore, Chief Financial Officer July 13, 2016 1
Rate development considerations Four rate categories: • Current Expense – local operating funds set by voters – last operating referendum 2015 for $0.20/.10/.05; FY17 second year of three year phase-in • Minor Capital Improvement/Match Tax – Local share based state authority to match existing or prior appropriations – Includes Minor Capital Improvements, Technology Maintenance, Resource Teachers, and Extra Time Match. 2
Rate development considerations • Tuition Local funds for special schools and tuition eligible programs including Meadowood, Richardson Park ILC, ELL, First State School, private placement and consortium, and Basic, Intense and Complex students in Red Clay schools or at schools outside Red Clay (i.e. Delaware Autistic Program and Delaware School for the Deaf). Services driven by student needs and required services. • Debt Service Local share of principal and interest payments for capital improvement bonds authorized by voters in capital referenda. FY16 was fourth and final year of phasing for 2012 major capital improvement program. 3
Rate development assumptions • 14 Del. C. § 1916(d) requires Tax Warrant be submitted to New Castle County by July 14, 2016 • Red Clay’s assessed property $ 5,289,173,202 • Net value of assessment increase by $46.5M or .89% (slight increase from .66% in FY16) • Red Clay loss to tax pool $2.0M, an increase from $1.9M in FY16. • Tax pool allocation factor frozen for fourth year - unresolved issue with calculation of tuition funded students. Holds rate artificially lower than it would be for Red Clay. • Equalization formula frozen again in FY17. Formula close to where it would be without freezing. 4
FY16 Year-End and FY17 State Budget • FY16 local operating funds balance ended at $9,010,437 vs $8,944,499 in FY16. • Operating Referendum eliminated deficit spending for current year. Previous year was $5.3M. • State Budget left districts relatively untouched. Teacher steps were funded. A general state salary increase was funded for 1.5% effective October 1, 2016. OEC rate increased by 1.01% which also directly impacts local salaries. • WEIC as well as funding for ELL, High Poverty and Basic K-3 special education students unaddressed in FY17 state budget. • State budget issues continue in FY18 5
Recommended Tax Rates FY2017 Tax Category 2015- 2016- Difference Local Tax 2016 2017 Rate Dollar Value Current Expense $1.426 $1.526 $0.100 $78,669,301 Tuition $0.362 $0.382 $0.020 $20,002,595 Debt Service $0.146 $0.216 $0.070 $11,424,614 Match Tax $0.050 $0.050 $0.000 $2,644,587 TOTAL $1.984 $2.174 $0.190 $112,741,097 Includes both residential and non-residential Per $100 of assessed value Assumes 99% collection rate Amount per average household $1,741.37, an increase of $152.19 6
Current Expense 1.526/100 (+$.10) Tax Category 2015- 2016- Difference Local Tax 2016 2017 Rate Dollar Value Current Expense $1.426 $1.526 $0.100 $78,669,301 Funds operating budget. Last operating referendum 2015. FY17 second of three year phase-in plan of $.20/.10/.05. 7
MCI and Match Tax .05/100 (no change) Tax Category 2015- 2016- Difference Local Tax 2016 2017 Rate Dollar Value Match Tax $0.050 $0.050 $0.000 $2,644,587 Technology Match - $645,279 Minor Capital Improvement - $764,048 RTI/Resource Teachers - $744,641 Extra Time Match - $432,977 8
Debt Service $.216/100 (+$.07) Tax Category 2015- 2016- Difference Local Tax 2016 2017 Rate Dollar Value Debt Service $0.146 $0.216 $0.070 $11,424,614 Bond repayment schedules for 30 year Debt Service. FY17 first significant year of impact from 2012 $117M Capital Improvement Program. Reductions in previous debt offset increases in first four years. FY17 highest year and rate will begin to decrease again within 2 years. 9
Tuition $0.382/100 (+$.02) FY17 Difference FY16 Final Preliminary from FY16 Budget FY16 Actual Budget Actual % Change REVENUE: Opening Balance -Tuition Funds 2,158,067 2,158,067 2,145,299 (12,768) -0.6% Tuition Tax 18,788,543 18,653,969 20,204,642 1,550,673 8.3% Tuition billing 1,433,574 1,889,740 1,927,535 37,795 2.0% State Revenue (1st State, Unique Alt) 1,185,871 1,226,077 1,250,599 24,522 2.0% Total Tuition Revenue 23,566,055 23,927,853 25,528,074 1,600,221 6.7% . EXPENDITURES: Tuition Payments to Other Agencies 2,925,099 2,610,140 2,687,024 76,884 2.9% Unique Alternatives/Private Placement 1,784,679 1,022,331 1,073,448 51,117 5.0% Consortium 311,740 316,375 325,866 9,491 3.0% Meadowood Program 3,450,350 4,150,350 4,850,000 699,650 16.9% Intensive Learning Centers 4,044,000 4,344,000 4,544,000 200,000 4.6% ELL/LEP 3,400,000 3,000,000 3,700,000 700,000 23.3% First State School 1,150,000 1,150,000 1,150,000 0 0.0% Needs-Based Special Education Funding 5,566,000 4,500,000 4,750,000 250,000 5.6% Tuition Contingency 469,714 0 404,093 404,093 Total Expenditures 23,101,582 21,093,196 23,484,431 2,391,235 11.3% Current Year Revenues over Expenses (1,693,594) 676,590 (101,655) (778,246) -115.0% 0 Estimated June 30 Balance 464,473 2,134,657 2,043,644 (91,013) -4.3% 10
5 Year Tax Rates History Year Current Tuition Debt Match TOTAL Percent Expense Service Tax Increase 2012-2013 $1.226 $0.242 $0.136 $0.028 $1.632 -1.81% 2013-2014 $1.226 $0.327 $0.136 $0.052 $1.741 6.68% 2014-2015 $1.226 $0.352 $0.141 $0.052 $1.771 1.72% 2015-2016 $1.426 $0.362 $0.146 $0.050 $1.984 12.03% 2016-2017 $1.526 $0.382 $0.216 $0.050 $2.174 9.58% Includes both residential and non-residential Per $100 of assessed value 11
All Rates by Percentage All rates – Breakdown by Percentage Match Tax, $0.050 , 2% Debt Service, $0.216 , 10% Tuition, $0.382 , 18% Current Expense, $1.526 , 70% 12
Next Steps • Tax rate was reviewed and recommended by CFRC at July 12, 2016 meeting. • Tax Warrant Delivered to New Castle County July 14, 2016 for tax bills • Majority of tax bills paid in Sept/Oct • August, 2016 Board approval of FY17 Preliminary Budget • Continued monthly Community Financial Review Committee meetings 13
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