District 7 Stakeholders’ School Finance Presentation February 7, 2012.

District 7 Stakeholders’ School Finance Presentation

February 7, 2012

Who is a Stakeholder?

•Parents and Families•Community Members•Tax Payers•All District 7 Employees

Importance of Effective Schools

Macro Reasons• Investment in the Future• Global Competitiveness

Local Reasons• Provides Resources, Financial and Human, to

meet Challenges• Enhanced Value of Local Real Estate

Topics of Conversation

• Where and how resources are derived• Where we spend our funds• Recent losses of revenue• Added revenues and cost cutting• Treasury balances• How much does it take to run District 7• Property taxes and home values• Who pays the taxes in our district

Sources of Revenue

81%

12%7%

LocalState Federal

Expenses

60%15%

9%

4%3%

9%SalariesBenefitsPurchased ServicesSuppliesCapital OutlayOther

Local Funds• Collected by the county• Received mostly in June and September• Paid by property owners within district• Industrial• Residential• Commercial

• Increase determined by CPI• Consumer Price Index release in January

CPI History

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

3.4%

1.6%

2.4%

1.9%

3.3% 3.4%

2.5%

4.1%

0.1%

2.7%

1.5%

2.9%

Added Revenues from CPI

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

State Funding• General State Aid

• Based on low income formula

• Categoricals• Early Childhood• Apply every year, need to work for funds • Not every district has an EC Program

• English Language Learning• Special Education• Transportation

• Corporate Personal Property Replacement Tax (CPPRT)

State Delinquency to WDSD7

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000

$492,784

$796,183

$300,774

$76,646

$569,185

Federal Funding

• Reliable funding relative to the state• Programs include:• Title I (Reading) • Title III (Bilingual)• National School Lunch

ARRA Funding

• Received in FY10 & FY11 only• Program funding ended on June 30, 2011• Programs funded:• Title I $69,975 (FY10)• Special Education $321,697 (FY10 & FY11)• Education Jobs Program $63,320 (FY11)

Revenue Lost

Cost Cutting

New Revenue & Total Enhancements

Treasury Balances

• In balance with last year• District 7 in Financial Recognition Status

• $9,000,000 average balance• $13,184,908 high balance Sept. 2010• $7,265,312 low balance May 2011

Treasury Balances

July

August

Septem

ber

October

November

Decem

ber

January

February

March

AprilMay

June$0

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

$18,000,000

FY2005FY2010Min.($3.75M)

Monthly Expenses

Minimum Balance

• Need to maintain at least 25% of annual expenses on hand at all times– About $3,750,000– Below this amount is financially perilous

• Like your checkbook, manage to low balance

Property Taxes

• Local Taxes Account for 81% of Revenue• Affect of Declining Home Values• Relationship between EAV and Taxes• How CPI Affects Revenue to District

CPI CPI CPI

Existing EAV Tax Rate

EAV, CPI and Tax Rate

Existing EAV

Tax Rate Existing EAV

Tax Rate

Tax Rates by District

Property Taxes

• Property values are falling– Measured in Equalized Assessed Value (EAV)

• CY2009 $693,271,696• CY2010 $602,076,737• 13.2% Decrease in Assessed Value

• School districts and other taxing bodies– Local revenues increase by rate of CPI

• District 7 revenue increases independent of home values

District 7 EAV 2009

Residential $292,495,6

7143%

Commercial $62,254,846

9%

Industrial $327,266,6

2048%

District 7 EAV Change 2009-10

ResidentialCommercial

Industrial

43.2%

8.7%

48.1%45.2%

9.1%

45.7%

% of Total 2009 % of Total 2010

Please Remember

• Issues District 7 faces in managing funds• Understanding as to what it takes to

financially fund our district• Property tax funding

Questions and Comments