Kaukauna area school district

KAUKAUNA AREA SCHOOL DISTRICT 2013-2014 BUDGET PRESENTATION

Monday, October 28, 2013 5:30 pm Bob Schafer Financial Officer, KASD

2013-2014 BUDGET HEARING OVERVIEW • The procedures which common, union high, and unified school districts should follow in formulating a budget, holding a public hearing, and adopting a budget are set forth in s. 65.90, Wis. Stats. The steps involved in these required procedures are summarized as follows. •

•

• •

The staff and school board create a proposed budget that identifies expected revenues, expenditures, and fund balances for the budgeted year in addition to the two fiscal years preceding the budgeted fiscal year. Budget detail is based upon the Wisconsin Uniform Financial Reporting Requirements (WUFAR) hierarchy of accounts. A class 1 notice (one publication) is published which contains a summary of the proposed budget described above, notice of where the detailed budget may be examined, and notice of the time and place of the public hearing. Common and union high school districts must hold the budget hearing at the time and place of the annual meeting. The public hearing is held, at which time, residents of the district have an opportunity to comment on the proposed budget. The school board shall adopt an original budget at a school board meeting scheduled after the public hearing and no later than the meeting in which the school board sets the annual tax levy amount.

• For KASD the official 2013-2014 budget hearing and tax levy will be set at the October 28, 2013, Board of Education meeting.

FUND 10 – GENERAL OPERATING FUND BUDGET BASICS • Fund 10 • Fund 10 encompasses all general education expenditures for a Wisconsin public school district. Per DPI, the general fund is used to account for all financial transactions relating to the district’s current operations, except for those required to be accounted for in other funds. • Fund 10 will, in the end, cover any budget shortfalls that may develop in other funds such as special education (Fund 27) or food service (fund 50). • Fund 10 will make up the District’s Fund Balance at the end of each fiscal year. Other funds may or may not carry a fund balance but the focus of a district’s carryover money is based in Fund 10.

FUND 10 – GENERAL OPERATING FUND REVENUE HISTORY AND PROJECTION • Fund 10 Revenue • Below is summary of District revenues in Fund 10 over the past six years and the expected revenue for 2013-2014 • Figures for the 2013-14 budget shown include over expending the revenue limit by $520,000 through the use of prior year tax levy carryover funds KASD Fund 10 Revenue History $43,000,000 $42,000,000

$42,305,862

$40,658,986

$39,826,311

$41,230,689

$38,000,000

$41,236,862

$39,000,000

$39,895,159

$40,000,000

$39,191,759

$41,000,000

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

$37,000,000

FUND 10 – GENERAL OPERATING FUND 2013-2014 PROJECTED REVENUE • General operating revenue by source • DPI utilizes source codes to standardize among school districts where funds are received from. Minimum source codes are as follows: • • • • • • •

100 200 300 500 600 700 900

Operating transfer in (from one fund to another fund) Revenue from local sources (property tax) Revenue from interdistrict sources (other school districts) Revenue from intermediate sources (CESAs) Revenue from state sources (equalized aid, etc) Revenue from federal sources (Title funds, grants) Other revenues (prior year revenues, refunds, adjustments)

FUND 10 – GENERAL OPERATING FUND 2013-2014 PROJECTED REVENUE KASD - FUND 10 REVENUE BY SOURCE 2013-14

2012-13

2011-12

2010-11

Original Budget

FY Activity

FY Activity

FY Activity

100 Operating transfer in

$

34,628.00 0.08%

200 Local sources

$ 14,281,501.99 34.64%

$ 14,101,946.83 35.41%

$ 13,694,973.63 33.68%

$ 12,943,674.20 30.60%

300 Intermediate sources

$

517,791.40 1.26%

$

513,498.00 1.29%

$

377,008.16 0.93%

$

400 Other revenues

$

20,000.00 0.05%

$

25,511.90 0.06%

$

25,439.71 0.06%

600 State sources

$ 25,628,599.00 62.16%

$ 23,959,824.94 60.16%

$ 24,819,435.49 61.04%

$ 27,608,550.98 65.26%

700 Federal sources

$

669,190.73 1.62%

$

876,060.27 2.20%

$ 1,633,237.06 4.02%

$ 1,127,260.25 2.66%

0.00%

$

2,100.00 0.01%

$

92,996.30 0.22%

$

113,606.03 0.28%

$

349,469.44 0.88%

$

106,792.02 0.26%

$

78,299.94 0.19%

800 Other fed sources 900 Other revenues Total Revenue

0.00%

$ 41,230,689.15

2013-14 Fund 10 revenues are budgeted at $41.2 million or $1.4 million more than 2012-13 actuals. $520,000 of the $1.4 million is coming from tax levy carryover from previous years that was not used.

$ 39,826,311.38

$ 40,658,986.07

419,761.88 0.99% 0.00%

$ 42,305,171.55

2013-2014 General Fund Revenue By Source 1.62%

0.28%

0.00%

Operating transfer in Local sources Intermediate sources

34.64%

Other revenues 62.16%

State sources 1.26% 0.05%

Federal sources Other fed sources

FUND 10 – GENERAL OPERATING FUND 2013-2014 MAJOR REVENUE CHANGES • Significant changes in Fund 10 revenue from 2012-13 to 2013-14 include: • Property tax levy increase of $165,635 • State equalization aid increase of $1,677,885

• Recently passed tax relief bill increased this figure by $187,957 over the original estimate

• Charter school grant funding (and associated expenditures) has been removed from the operating budget ($400,000) • Workers’ compensation insurance dividend adjusted to new guarantees which cut the revenue by $30,000 • $275,000 booked into 2012-13 revenue from the closure of a Village of Little Chute TIF District – final check came in at $363,000 which pushed $88,000 in revenue to the 2013-14 operating budget

• Revenues in Fund 10 show an increase of 3.53% from 2012-13 to 2013-14

FUND 10 – GENERAL OPERATING FUND GENERAL OPERATING EXPENDITURES • Fund 10 Expenditures

• The 2013-14 general education operating expenditures for KASD are budgeted at $36,446,019, up from $36,340,003 of actual 2012-13 costs. The budget to actual difference is $106,016 or 0.29% increase.

• 2012-13 expenditures included $1.1 million for the renovation of Park School. Removing the Park School cost the 2012-13 general education expenditures would have been $35,240,003. • Eliminating the Park School capital cost the 2012-13 budget to 201314 actual difference is $1,206,016 or a 3.42% increase.

• The Fund 10 operating budget also includes a $4.78 million transfer to Fund 27, special education, to balance that account.

• The 2012-13 actual special education transfer from Fund 10 was $4,543,725. Given current revenue projections it will cost Fund 10 5.3% more for the transfer of funds to balance the special education account for 2013-14 compared to 2012-13.

FUND 10 – GENERAL OPERATING FUND EXPENDITURE HISTORY FUND 10 - GENERAL EDUCATION OPERATING EXPENDITURES Expense Object 100 SALARIES 200 EMPLOYEE BENEFITS 300 PURCHASED SERVICES 400 NON-CAPITAL OBJECTS 500 CAPITAL OBJECTS 600 DEBT RETIREMENT 700 INSURANCE & JUDGMENTS 900 OTHER OBJECTS GENERAL OPERATIONS 800 TRANSFER TO FUND 27 - SPEC ED

2013-14 Original Budget $ 17,577,039.34 $ 6,816,110.44 $ 9,956,006.54 $ 1,568,730.50 $ 198,111.93

2012-13 10 budget FY Activity 48.23% $ 16,612,066.56 18.70% $ 6,239,411.23 27.32% $ 9,964,232.87 4.30% $ 2,552,479.00 0.54% $ 688,681.78 0.00% $ 261,427.00 0.72% $ 221,893.69 $ 68,594.06 0.19% $ 61,238.33 $ 36,446,019.81 $ 36,340,003.46 4,784,669.34

% of Fund

4,543,725.18

2011-12 10 budget FY Activity 45.71% $ 16,208,675.51 17.17% $ 7,039,165.31 27.42% $ 7,792,146.50 7.02% $ 1,649,508.86 1.90% $ 293,532.60 0.00% $ 318,199.14 0.61% $ 322,541.90 0.17% $ 108,223.80 $ 33,731,993.62 % of Fund

4,357,633.77

2010-11 10 budget FY Activity 48.05% $ 17,346,129.18 20.87% $ 9,078,556.34 23.10% $ 8,176,160.02 4.89% $ 1,802,952.73 0.87% $ 295,504.95 0.94% $ 109,696.69 0.96% $ 281,927.20 0.32% $ 124,409.05 $ 37,215,336.16 % of Fund

4,378,446.13

2009-10 10 budget FY Activity 46.61% $ 17,606,901.57 24.39% $ 9,178,649.12 21.97% $ 7,755,663.92 4.84% $ 1,595,747.47 0.79% $ 708,809.76 0.29% $ 169,110.42 0.76% $ 316,359.59 0.33% $ 90,320.20 $ 37,421,562.05 % of Fund

3,805,957.82

2008-09 10 budget FY Activity 47.05% $ 18,274,180.08 24.53% $ 8,671,025.55 20.73% $ 6,240,927.32 4.26% $ 1,395,945.09 1.89% $ 531,896.41 0.45% $ 289,252.00 0.85% $ 267,502.08 0.24% $ 98,148.53 $ 35,768,877.06 % of Fund

% of Fund 10 budget

51.09% 24.24% 17.45% 3.90% 1.49% 0.81% 0.75% 0.27%

4,062,337.92

• The 2013-14 Fund 10 expenditure budget is up $106,016 over the 2012-13 costs. • Salary and benefit costs budgeted for 2013-14 account for 66.93% of the Fund 10 budget which is up from 62.88% in 2012-13. • The capital objects budget, by comparison, is down $455,000 from 2012-13 to 2013-14. This is a direct result of Park School’s renovation costs.

FUND 10 – GENERAL OPERATING FUND 2013-14 EXPENDITURE BY OBJECT (%) 2013-14 Fund 10 Expenditure by Object 0.00%

0.72%

0.54%

0.19%

4.30%

SALARIES EMPLOYEE BENEFITS 27.32%

PURCHASED SERVICES 48.23%

NON-CAPITAL OBJECTS CAPITAL OBJECTS DEBT RETIREMENT INSURANCE & JUDGMENTS OTHER OBJECTS

18.70%

FUND 10 – GENERAL OPERATING FUND 2013-2014 MAJOR EXPENDITURE CHANGES • Significant changes in Fund 10 expenditures from 2012-13 to 2013-14 include:

• Salaries have increased $965,000 from 2012-13 actual to 2013-14 budget (5.81%) • • • • • •

+$930,000 +$215,000 - $40,000 - $50,000 - $36,000 -$ 50,000

Additional teaching staff Additional administration Summer school teaching staff Maintenance department salary (due to substitute 2012-13) Projected substitute teacher cost (charter school grant) Extra time for certified staff (charter school grant)

• • • •

+$285,000 +$155,000 +$110,000 +$ 38,000

FICA/Medicare/Wisconsin Retirement System HRA payment projection versus first year cost Health insurance (3% increase for January – June) Health insurance cost increase due to higher participation

• • • • •

-$370,000 +$200,000 +$400,000 -$150,000 -$ 40,000

Personal services reduction due to charter school $, Park Sch Maintenance services due to Honeywell energy project Open enrollment out aid transfer Student transportation Payment to FVTC for services rendered

• Benefits associated with payroll have increased by $576,000 (9.24%)

• Purchased services have remained flat at $9.9 million

FUND 10 – GENERAL OPERATING FUND 2013-2014 MAJOR EXPENDITURE CHANGES • Significant changes in Fund 10 expenditures from 2012-13 to 2013-14 include: • Non-capital equipment budget has been reduced by $873,000 (-38%) • • • • •

-$803,000 +$ 8,000 +$10,000 - $225,000 +$ 66,000

General supplies (maintenance dept, charter school purchases) Copy paper projected increase Uniform purchases acceleration at River View Non-capital equipment reduction (Park School) Textbook adoption

• Capital equipment budget is down $490,000 from the 2012-13 expenses (-71%) • -$420,000 • -$ 72,000

Reduction in new equipment purchased Vehicle replacement

• Insurance and judgments show an increase of $40,000 (5.3%) • +$40,000

Work comp insurance cost up

• Special education transfer from Fund 10 to fund 27 has increased $240,000

FUND 27 – SPECIAL EDUCATION EXPENDITURE REVIEW

$7,069,968

$6,900,000.00

$6,962,229

$7,050,000.00

$7,128,350

$7,116,103

$7,200,000.00

$6,750,000.00

$6,600,000.00

$6,450,000.00

$6,644,046

• KASD spent $6,962,229 on special education in 2012-13 • The projected expenditure for 2013-14 in Fund 27 is $7,069,976 or $107,747 more than the actual 2012-13 figure (1.55% increase) • A historical perspective of special education funding is shown to the right:

SPECIAL EDUCATION EXPENDITURE HISTORY

$6,603,156

• Historical perspective

$6,300,000.00 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

FUND 27 – SPECIAL EDUCATION OPERATING REVENUE • Special education revenue • Special education revenue is from three main sources – state aid based on the previous year expenditures, federal aid, and a transfer from Fund 10 to cover costs • In general both external areas have flat-lined the amount of money school districts are receiving over the past decade • A summary of KASD’s special education revenues over the past three years are shown below plus the projected 2013-14 budget KASD - FUND 27 REVENUE BY SOURCE 2013-14

2012-13

Original Budget

2011-12

FY Activity

2010-11

FY Activity

FY Activity

100 Operating transfer in

$ 4,784,669.34 67.68%

$ 4,543,724.20 65.26%

$ 4,357,633.77 61.13%

$ 4,328,446.13 60.83%

200 Local sources

$

-

0.00%

$

0.00%

$

0.00%

$

300 Interdistrict sources

$

-

0.00%

$

17,713.28 0.25%

$

92,383.93 1.30%

$

62,374.88 0.88%

500 Intermediate sources

$

-

0.00%

$

39,258.12 0.56%

$

$

8,634.23 0.12%

600 State sources

$ 1,380,899.44 19.53%

$ 1,357,642.00 19.50%

$ 1,454,235.00 20.40%

$ 1,447,929.00 20.35%

700 Federal sources

$

$ 1,003,891.74 14.42%

904,398.98 12.79%

800 Other fed sources 900 Other revenues Total Revenue

-

0.00%

$

-

$ 7,069,967.76

0.00%

$

-

$ 6,962,229.34

-

0.00%

-

0.00%

$ 1,185,334.46 16.63%

$ 1,268,718.63 17.83%

0.00%

$

0.00%

$

-

0.00%

0.00%

$

38,762.74 0.54%

$

-

0.00%

-

$ 7,128,349.90

$ 7,116,102.87

FUND 27 – SPECIAL EDUCATION 2013-2014 OPERATING REVENUE • Revenue summary

2013-2014 Special Education Revenue By Source

• KASD will fund 67% of total special education costs for 2013-14 from the Fund 10 budget

0.00% 0.00%

• The transfer amount has grown dramatically in the past five year – nearly 7% over that time

• State sources will pay 19.5% of the special education costs for 201314, federal revenues will be 12.8% of the total budget • Both areas have decreased steadily which forces the higher transfer into Fund 27 from Fund 10

12.79% Operating transfer in Local sources Interdistrict sources 19.53%

Intermediate sources State sources Federal sources

0.00% 0.00% 0.00%

67.68%

Other fed sources Other revenues

FUND 27 – SPECIAL EDUCATION OPERATING EXPENSES FUND 27 - SPECIAL EDUCATION OPERATING EXPENDITURES Expense Object 100 SALARIES 200 EMPLOYEE BENEFITS 300 PURCHASED SERVICES 400 NON-CAPITAL OBJECTS 500 CAPITAL OBJECTS 900 OTHER OBJECTS GENERAL OPERATIONS

2013-14 Original Budget $ 3,927,648.36 $ 1,464,059.21 $ 1,532,035.32 $ 113,224.87 $ 15,000.00 $ 18,000.00 $ 7,069,967.76

% of Fund 27 budget

55.55% 20.71% 21.67% 1.60% 0.21% 0.25%

2012-13 FY Activity $ 3,551,829.38 $ 1,355,174.02 $ 1,502,402.47 $ 423,847.79 $ 90,845.42 $ 38,130.26 $ 6,962,229.34

% of Fund 27 budget

51.02% 19.46% 21.58% 6.09% 1.30% 0.55%

2011-12 FY Activity $ 3,576,944.96 $ 1,394,053.26 $ 1,787,763.98 $ 249,093.41 $ 77,661.44 $ 42,832.85 $ 7,128,349.90

• Special education expenditures budgeted at $7.069 million for 2013-14 • • •

76% of Fund 27 costs are for salaries and benefits Purchased services include CESA contracted costs Just 2% of the total operating budget in special education is used for supplies and materials

% of Fund 27 budget

50.18% 19.56% 25.08% 3.49% 1.09% 0.60%

2010-11 FY Activity $ 3,827,414.05 $ 1,764,589.27 $ 1,161,199.66 $ 161,407.51 $ 156,609.16 $ 44,883.22 $ 7,116,102.87

% of Fund 27 budget

53.79% 24.80% 16.32% 2.27% 2.20% 0.63%

2009-10 FY Activity $ 3,736,641.53 $ 1,525,775.81 $ 1,093,189.97 $ 94,232.44 $ 101,071.36 $ 93,135.18 $ 6,644,046.29

% of Fund 27 budget

56.24% 22.96% 16.45% 1.42% 1.52% 1.40%

2008-09 FY Activity $ 3,825,309.30 $ 1,481,343.05 $ 1,005,553.24 $ 122,693.22 $ 49,133.45 $ 119,123.74 $ 6,603,156.00

% of Fund 27 budget

57.93% 22.43% 15.23% 1.86% 0.74% 1.80%

2013-14 SPECIAL EDUCATION EXPENDITURE % BY OBJECT 1.60%

0.21%

0.25%

SALARIES EMPLOYEE BENEFITS

PURCHASED SERVICES

21.67% 20.71%

55.55%

NON-CAPITAL OBJECTS CAPITAL OBJECTS OTHER OBJECTS

FUND 38 – NON-REFERENDUM APPROVED DEBT SERVICE • Fund 38 Debt Service • Non-referendum debt service is generated by Board of Education action and accounted for in Fund 38 • Fund 38 debt service payments are part of the District’s revenue limit calculation and directly affect the operating budget • Any reduction in Fund 38 debt service will immediately impact the funds available to spend on general operations

• A historical perspective of Fund 38 debt service is shown below

$378,023.83

2009-2010

$351,191.50

2008-2009

$345,021.23

$405,687.77

L $200,000.00 e $150,000.00 v $100,000.00 y $50,000.00

$397,283.00

T $350,000.00 a x $300,000.00 $250,000.00

$316,572.50

$400,000.00

$332,876.00

Fund 38 Tax Levy History

$450,000.00

2010-2011

2011-2012

2012-2013

2013-2014

$2007-2008

FUND 38 – NON-REFERENDUM APPROVED DEBT SERVICE • Summary of Fund 38 Debt Service • Wisconsin Retirement System • Issued May 1, 2007, to payoff debt owed to WRS – $2,740,000 • Maturity date is March, 2020 • Principal owed $1,890,000, principal and interest owed $2,323,943

• Qualified School Construction Bond • Issued December 9, 2009, to pay for energy efficiency projects in the District - $500,000 • Maturity date is March, 2020 • Principal owed is $350,000 – no interest bond from federal gov

• Energy Efficiency Exemption • Issued July 1, 2013, to pay for energy efficiency projects through Honeywell ESG - $2,000,000 • Maturity date is March, 2018 • Principal owed is $2,000,000, principal and interest owed is $2,106,798

FUND 38 – DEBT SERVICE BUDGET • Fund 38 Budget • Expenditures • 2013-2014 expenditures in Fund 38, will be $378,024 • Payment is a combination of the three debt service issues • Payment is set by the debt service schedules for each issue

• 2013-2014 revenues for Fund 38, which cover payments made in March, 2014, as well as September, 2014, will be $514,973 • The increase in revenue is due to the addition of the energy efficiency project bond issue that begins its repayment schedule • Energy cost savings are scheduled to offset the additional debt service fees incurred • A carry-over of $237,709 will be on the books as of June 30, 2014. Those dollars will be used to make the debt payment in September, 2014

FUND 38 – NON-REFERENDUM APPROVED DEBT SERVICE PAYMENT SCHEDULE

FUND 39 – REFERENDUM APPROVED DEBT SERVICE • Kaukauna High School Debt Service • Total debt service outstanding (principal plus interest) on Kaukauna High School, which is the only referendum approved debt on the books for the District, $10,467,350 • Principal only debt service is $9,560,000 • The final debt service payment will take place in March, 2017 • The final year in which the referendum approved debt service will have an impact on the tax levy is 2016-2017 • $1.6 million of the energy efficiency project borrowing will be due during the 2017-2018 fiscal year. This figure, combined with the retirement of KHS debt, will produce a $1.0 million tax levy savings in 2017-2018 or a drop of $0.56 per $1,000 of value on the mill rate • Without major change and debt retirement KASD will see a drop in its mill rate from $9.41 per $1,000 value to $7.90 per $1,000 value in the next five years • A property paying $1,872 in school tax presently ($200,000 value) would then pay $1,580

FUND 39 – REFERENDUM APPROVED DEBT SERVICE PAYMENT SCHEDULE

FUND 49 – CAPITAL PROJECTS • Energy Efficiency Project

• The funds borrowed and subsequently spent on the Honeywell ESG energy efficiency project are accounted for using Fund 49, Capital Projects. Per DPI, school districts must utilize Fund 49 for any major project offset by borrowing. • KASD included $1.0 million in its 2013-2014 operating budget to cover a portion of the $3.7 million Honeywell project. Approximately $700,000 was spent from District funds during the 2012-2013 fiscal year. The $2.0 million borrowing was received 7/1/13 and used to repay the District for invoices paid to Honeywell in June, 2013.

• The June 30, 2014, ending balance in Fund 49 will be $0.00. The $19,984 left in Fund 49 will be used to pay a portion of the next invoice received from Honeywell. • The District will see an immediate surplus in capital improvement funds for 2014-2015 as the $1.0 million earmarked for Honeywell in 2013-2014 will be completely spent. $500,000 has been set aside in future year budgets for capital projects.

FUND 50 – FOOD SERVICE • Fund Balance Perspective • Food Service fought through a trying 2012-2013 fiscal year • Mandated changes to products that could be used were implemented by the Federal Government at the start of the 2012-2013 school year. Mandates were modified in January to allow for more “user-friendly” products to return to the menu which created more sales • Food service costs spiked in 2012-2013 along with a large jump in the cost of transportation of products to the District forced an uptick in overall program cost • The fund balance in food service was set-up to be “bought down” during the 2012-2013 fiscal year in an attempt to have the District further enhance equipment in the program

FUND 50 – FOOD SERVICE • Fund Balance Perspective • Fund 50 can carry a fund balance at the end of each fiscal year but a school district must have a plan for use of the fund balance in the following year • KASD has made large gains in the past six years on equipment purchased from the food service fund balance • • • • • • •

Replaced lunch tables at ALL elementary school sites New walk-in cooler at River View New dishwasher at River View New oven at KHS, Park School (2013) New mixer and stand at KHS Upgraded small equipment/cooking utensils/trays at various sites Upgraded computers and technology at various sites

FUND 50 – FOOD SERVICE • Fund Balance History • The fund balance in food service has been strong over the past four years which has allowed the District to increase spending on needed equipment • • • • •

2008-2009 2009-2010 2010-2011 2011-2012 2012-2013

$4,513 $52,174 $129,783 $61,614 $16,792

• The trend over the past two years was anticipated based on purchases but the 2012-2013 ending figure was less than desired due to decreased sales and increased costs

FUND 50 – FOOD SERVICE • 2013-2014 Budget • Balanced budget is in place for 2013-2014 • Expenditures, revenues set at $1,274,448 • Maintenance department salaries and benefits account for $65,002 of the total food service expenditures. The figure is based on 10% of the salary and benefit costs of each individual employed by the District in the maintenance department • The reasoning behind this is to move the amount out from under the revenue limit formula and “free” up funds in the general operating budget • Building Services accounts for $33,500 of the total food service expense budget. This figure is based on actual hours billed by BSG for work done in the kitchen/cafeteria of each building

• Fund balance projected to remain flat at $16,000 on June 30, 2014

FUND 72 - SCHOLARSHIPS • Fund 72 • KASD holds approximately $170,000 in Fund 72 from which scholarships are awarded on an annual basis • $4,568 was earned in interest during the 2012-2013 school year in Fund 72 • $3,800 was paid out to scholarship recipients at the conclusion of the 2012-2013 school year • 13 separate scholarship accounts make up Fund 72 • $138,000 of the $170,000 is located in three of the 13 accounts

• Fund 72 does not account for all scholarship funds that are paid out on an annual basis only for those that have had money turned over to KASD to be managed

FUND 73 – EMPLOYEE BENEFIT TRUST FUND (OPEB) • Wisconsin Act 99 • Wisconsin State Statute enacted in 2006 allows school districts to invest funds for the sake of offsetting costs for future post employment benefits (health insurance, dental insurance, and other contractual agreements) • Legislation requires reporting, on an annual basis, the following information: • • • •

Amount held in the trust account or accounts Investment return earned during the last fiscal year Total disbursements made during the previous fiscal year Name of the investment manager if applicable

FUND 73 - REVIEW OF 2012-2013 • Trust balance • KASD held $1,971,987 in its Fund 73 Trust Account as of June 30, 2013 • The projected post employment benefit liability of the Kaukauna Area School District is $14,943,000 based on the latest actuarial study • KASD has 13.2% of the unfunded liability covered

• KASD earned $15,151.66 in interest on investments held in Fund 73 during the 2012-2013 fiscal year • KASD paid $1,035,576 for post employment health, dental, life, and other retiree benefits during 2012-2013 • Basically this figure is the pay-as-you-go amount for retired employees and benefits owed to them based on past contracts • The amount listed comes directly out of the District’s operating budget and is under the umbrella of the revenue limit • KASD transferred $114,424 more to Fund 73 from Fund 10 which essentially was available due to unspent Fund 10 dollars • Earnings in Fund 73 will offset the cost of the post employment benefit in the future thus freeing revenue limit funds to be used in other areas

FUND 73 – EMPLOYEE BENEFIT TRUST FUND 2013-2014 • Trust Fund Advisor • The Kaukauna Area School District will continue to utilize the services of CESA 6 and their affiliates for its Fund 73 Employee Benefit Trust investments • KASD employees and former employees with a vested interest in its Employee Benefit Trust Fund program can, at any time, request documentation on the partnership between KASD and CESA 6 as well as any other pertinent information regarding investment accounts

• Budget • KASD expenditures for post retirement benefits is budgeted at $1.14 million for 2013-2014 • A transfer from Fund 10, General Operations, and Fund 27, Special Education, to Fund 73 will take place cover OPEB costs

• KASD revenues for investment income purposes has been set at $20,000 for 2013-2014 • Post retirement benefit costs directly affect the Fund 10 operating budget of a school district

FUND 80 – COMMUNITY SERVICE FUND • Wisconsin Act 20 • Does not change the authority of school boards to establish a Community Service Fund but it does limit the levy to an amount less than or equal to the amount levied for the 2012-2013 school year in Fund 80 • KASD levied $79,373 in Fund 80 last year • KASD utilized the levied funds to pay for police liaison services at both River View School and Kaukauna High School as well as 50% of the administrative assistant salary and benefit cost in the District Activities Department

• Other rule changes with Wisconsin Act 20 include: • Districts have to report to DPI on how funds will be spent • DPI has to publish all Fund 80 levy information on their website and also send the information to the Joint Committee on Finance

• Districts must also report how funds will be spent on their website

FUND 80 - PROPOSED BUDGET • 2013-2014 Revenue

• $79,373.11 tax levy requested to offset Fund 80 expenses

• Approximate mill rate impact is $0.05 per $1,000 of property value • •

A $150,000 property would pay an extra $7.50 due to Fund 80 A $300,000 property would pay an extra $15.00 due to Fund 80

• 2013-2014 Expenditures

• $25,996 toward the cost of the River View police liaison officer • This is roughly 45% of the annual cost

• $25,996 toward the cost of the Kaukauna High School police liaison officer • This is roughly 45% of the annual cost

• $27,925 to cover 50% of the administrative assistant cost in the District Activities Office

• KASD, at one time, earmarked $15,000 to be levied in Fund 80 and donated those funds to 1000 Islands for services provided. KASD now pays 1000 Islands directly out of Fund 10 as the donation for services does not meet Fund 80 criteria.

• Fund balance

• The 2012-2013 ending fund balance of $544.82 will be used to offset 20132014 costs

KASD – OVERALL OPERATING BUDGET 2013-2014 • Revenues vs. Expenditures • Projected 2013-2014 revenues for KASD total $55,862,026 • Projected 2013-2014 expenditures are $53,870,477 • The surplus of $1,991,549 is due to the receipt of revenues for the Energy Efficiency Project on 7/1/2013 while the expenditures tied to those funds took place during the previous fiscal year • The surplus will offset the Fund 49 over expenditure amount of 20122013 and balance Fund 49 • The District is operating with a balanced 2013-2014 budget should the Board of Education decide to use $520,000 of the tax levy carryover amount from 2012-2013

2013-2014 PROPERTY TAX LEVY KAUKAUNA AREA SCHOOL DISTRICT • The Board of Education must set the FY 2013-2014 tax levy no later than November 6, 2013 • The tax levy must be delivered to the clerk of each municipality no later than November 10, 2013

• School district’s levy taxes for general operations, debt service, capital expansion, and community service • KASD will levy 2013-2014 taxes for all of the above less capital expansion

• Property values are equalized to reflect market value rather than local assessed value

2013-2014 PROPERTY TAX LEVY KAUKAUNA AREA SCHOOL DISTRICT • All Wisconsin public school districts use the same formulas in the development of the tax levy • Laws regarding maximum taxation by school districts were set in 1993

• Key components to the tax levy • • • • • •

Pupil count Equalized aid Property valuation Debt service State imposed revenue limit Prior year carryover of revenue limit funds

2013-2014 PROPERTY TAX LEVY PUPIL COUNT • Pupil count

KASD Enrollment History Year 1992-93 1993-94 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

% Chg 3.71% 1.01% 3.92% 1.50% 1.62% 0.49% -0.09% 1.88% 3.35% 2.28% 2.25% 0.79%

0.78% 5.04% 1.43% 0.34% 0.94% 1.05% 0.69% 1.46% 0.44%

FTE 3069 3183 3215 3341 3391 3446 3463 3460 3525 3643 3726 3810 3840 3870 4065 4123 4137 4176 4220 4249 4311 4386

• FTE is shown and includes school year and summer school combined • District has shown a slow but steady increase over the past decade in FTE • FTE does not dictate the number of students being educated by KASD due to open enrollment • FTE does include students being educated by other districts but counted by KASD for aid purposes

2013-2014 PROPERTY TAX LEVY EQUALIZATION AID Equalization Aid History Fiscal Year Equalization Aid +/- $ % Chg 2002-2003 $ 20,339,750.00 2003-2004 $ 20,970,103.00 $ 630,353.00 3.10% 2004-2005 $ 21,314,517.00 $ 344,414.00 1.64% 2005-2006 $ 22,731,637.00 $ 1,417,120.00 6.65% 2006-2007 $ 24,831,069.00 $ 2,099,432.00 9.24% 2007-2008 $ 25,783,964.00 $ 952,895.00 3.84% 2008-2009 $ 23,918,199.00 $ (1,865,765.00) -7.24% 2009-2010 $ 25,290,346.00 $ 1,372,147.00 5.74% 2010-2011 $ 27,220,836.00 $ 1,930,490.00 7.63% 2011-2012 $ 24,503,894.00 $ (2,716,942.00) -9.98% 2012-2013 $ 23,650,940.00 $ (852,954.00) -3.48% 2013-2014 $ 25,328,795.00 $ 1,677,855.00 7.09%

• Why the increase? • Operating expenditures outweighed operating revenues by $700,000 for 2012-13 which produces an increase in state aid • KASD will qualify for tertiary (third level) aid for the first time in a few years given the overspending in 2012-13 • The State of Wisconsin has given more funds to schools compared to the 2012-2013 school year • As noted in the chart, major changes in equalization aid take place annually

2013-2014 PROPERTY TAX LEVY PROPERTY VALUATION • Equalized valuation is a factor in the tax levy in the following ways: • Equalized property value sets the final primary, secondary, and tertiary equalization aid number • Equalized property value is the denominator in figuring out mill rate (amount taxed per $1,000 of equalized valuation) • For example, KASD taxed $16,690,493 in FY 2012-2013 with and equalized value of $1,788,398,439 • $16,690,493/$1,788,398,439 = 0.00933 per $1.00 of property value or $9.33 per $1,000 • A 1% increase in property valuation ($1,806,282,423) with the same tax would yield a mill rate of $9.24 per $1,000

2013-2014 PROPERTY TAX LEVY PROPERTY VALUATION Kaukauna Area School District - Equalized Valuation 2013-2014 County

Taxation District

Equalized Value

Brown

T. Holland

$

Calumet

C. Kaukauna

Calumet

T. Harrison

Calumet

% of District

64,360,647.00

3.60%

$

46,500.00

0.00%

$

70,568,519.00

3.95%

T. Woodville

$

30,958,530.00

1.73%

Calumet

V. Harrison

$

73,959,046.00

4.14%

Calumet

V. Sherwood

$

212,808,455.00

11.90%

Outagamie C. Kaukauna

$

873,869,600.00

48.86%

Outagamie T. Buchanan

$

108,236,129.00

6.05%

Outagamie T. Kaukauna

$

46,951,709.00

2.63%

Outagamie T. Vandenbroek

$

134,212,600.00

7.50%

Outagamie V. Combined Locks

$

74,720,900.00

4.18%

Outagamie V. Little Chute

$

145,978,751.00

8.16%

Total Value

$ 1,836,671,386.00

Kaukauna Area School District Equalized Valuation by % 0.00% 3.50% 4.07%

3.84% 1.69% 4.03%

7.95%

T. Holland C. Kaukauna T. Harrison

2.56%

T. Woodville

7.31% 11.59%

V. Harrison V. Sherwood

5.89%

C. Kaukauna T. Buchanan T. Kaukauna 47.58%

T. Vandenbroek

V. Combined Locks V. Little Chute

2013-2014 PROPERTY TAX LEVY DEBT SERVICE • Fund 38 (non-referendum debt) • 2013-2014 tax levy is $514,973

• Wisconsin Retirement System = $306,092 (2020) • Energy efficiency project = $158,881 (2018) • Qualified school construction bond = $50,000 (2020)

• When debt service is paid off funds will be shifted to the general operating budget for use as debt is part of the revenue limit

• Fund 39 (referendum debt)

• 2013-2014 tax levy is $2,547,975 or 15.14% of the total levy

• Tax levy is for Kaukauna High School; payoff of $9,560,000 principal is slated for 2017 • Fund 39 debt service is a direct tax; upon final payment and without another referendum KASD will reduce the tax levy by approximately $2.5 million per year • With the end in site regarding Fund 39 debt service the Board of Education and District leadership will have to be mindful that a drop in the mill rate of approximately $2.50/$1,000 will take place after KHS is paid for and the energy efficiency project leaves the books (2018)

2013-2014 PROPERTY TAX LEVY REVENUE LIMIT • History

• Wisconsin Act 16 implemented revenue limits beginning with the 1993-94 school year. A district's revenue limit is the maximum amount of revenue that may be raised through state general aid and property tax for the General, NonReferendum Debt (authorized after August 12, 1993), and Capital Expansion Funds, also referred to as Funds 10, 38, and 41 respectively

• Key components to the revenue limit

• Prior year equalized aid, computer aid, and debt service build a “base” • Three year rolling pupil average • Current year equalized property value • Allowable per pupil increase •

KASD utilizing the “floor” amount of $9,100 per student for 2013-2014 • This is an increase to KASD per pupil value of $238.00 over 2012-2013 and is a result of KASD being an under spending district in the eyes of DPI

• Prior year carryover (non-taxed amount from previous year) •

One year limitation on taxes but the carryover will continue to the next fiscal year based on the new carryover amount

• Equalization aid

2013-2014 PROPERTY TAX LEVY REVENUE LIMIT Revenue Limit History Fiscal Year Revenue Limit +/- $ % Chg 2002-2003 $ 28,187,010.00 2003-2004 $ 29,617,905.00 $ 1,430,895.00 5.08% 2004-2005 $ 30,939,704.00 $ 1,321,799.00 4.46% 2005-2006 $ 32,598,213.00 $ 1,658,509.00 5.36% 2006-2007 $ 34,496,728.00 $ 1,898,515.00 5.82% 2007-2008 $ 36,529,634.00 $ 2,032,906.00 5.89% 2008-2009 $ 38,126,348.00 $ 1,596,714.00 4.37% 2009-2010 $ 39,398,745.00 $ 1,272,397.00 3.34% 2010-2011 $ 40,087,672.00 $ 688,927.00 1.75% 2011-2012 $ 38,236,467.00 $ (1,851,205.00) -4.62% 2012-2013 $ 37,782,752.00 $ (453,715.00) -1.19% 2013-2014 $ 39,266,500.00 $ 1,483,748.00 3.93%

• Major 2013-2014 revenue limit changes

• KASD utilizing the “floor” amount set at $9,100 by DPI to calculate the District’s revenue limit • Projected a 26 student increase – turned out to be 75 overall • Property value has been increased by $24 million over the previous year based on Department of Revenue figures •

Final property values will be set in early October and released by DPI

• Figure shown does not include untaxed dollars from 2012-2013 • •

District has $1.4 million “on the table” that could be levied over and above the revenue limit Every $0.05 increase in the tax levy will generate an additional $100,000 of revenue limit funds to spend

2013-2014 Revenue Limit Worksheet

DISTRICT:

DATA AS OF 7/1/2013

1. 2. Line 1 Amount May Not Exceed Line 9 minus Line 7B of Final 12-13 Revenue Limit 2012-13 General Aid Certification (12-13 Line 12A, src 621) 23,650,910 3. + 2012-13 Computer Aid Received (12-13 Line 17, Src 691) 39,221 4. + 2012-13 Hi Pov Aid (12-13 Line 12B, src 628) 0 + 2012-13 Fnd 10 Levy Cert (12-13 Line 18, Src 211) 13,746,309 + 2012-13 Fnd 38 Levy Cert (12-13 Line 14B, Src 210) 346,312 + 2012-13 Fnd 41 Levy Cert (12-13 Line 14C, Src 210) 0 5. + 2012-13 Aid Penalty for Over Levy (12-13 FINAL Rev Limit Worksheet) 0 6. 2012-13 Penalty for Unspent Energy Exemption (12-13 FINAL Rev Limit Worksheet) 0 7. 2012-13 Total Levy for All Levied Non-Recurring Exemptions* 0 A. NET 2012-13 Base Revenue (LINE 1) 37,782,752 B. = 8. A. *Fo r 12-13 No n-Recurring Exemptio ns Levy A mo unt, enter actual amo unt f o r whic h dis t ric t le v ie d ; (7B Ho ld Harmless, No n-Recurring Referenda, Declining Enro llment, Energy Efficiency Exemptio n, Refunded/Rescinded Taxes) B. C.

September & Summer FTE Membership Averages Count Ch. 220 Inter-District Resident Transfer Pupils @ 75%.

Line 2: Base Avg:(10+.4ss)+(11+.4ss)+(12+.4ss) / 3 = 2010 2011 Summer fte: 95 66 38 26 % (40,40,40) Sept fte: 4,182 4,223 Total fte 4,220 4,249

2012 81 32 4,278 4,310

Line 6: Curr Avg:(11+.4ss)+(12+.4ss)+(13+.4ss) / 3 = 2011 2012 Summer fte: 66 81 26 32 % (40,40,40) Sept fte: 4,223 4,278 Total fte 4,249 4,310

2013 83 33 4,353 4,386

D. E. 4,260 9. 10. A. B. C. D. E. 4,315 11. 12. A. B.

2012-13 Base Revenue (Funds 10, 38, 41) Base Sept Membership Avg (10+.4ss, 11+.4ss, 12+.4ss/3) 2012-13 Base Revenue Per Member (Ln 1 / Ln2) 2013-14 Per Member Change (A+B) A. Allowed Per Pupil Change (+$0.00/Member) B. Low Rev Incr ((9,100 - (3 + 4A))-4C) Not < 0 C. Low Rev Dist in CCDEB (Enter DPI Adjustment) 2013-14 Maximum Revenue / Memb (Ln 3 + Ln 4) Current Membership Avg (11+.4ss, 12+.4ss, 13+.4ss/3) 2013-14 Rev Limit, No Exemptions (Ln7A + Ln 7B) Max Rev/Memb x Cur Memb Avg (Ln 5 x Ln 6) Hold Harm Non-Recurr Exemption Total Recurring Exemptions (A+B+C+D+E+F) Prior Year Carryover Transfer of Service (if negative, include sign) Transfer of Territory (if negative, include sign) Federal Impact Aid Loss (2011-12 to 2012-13) Recurring Referenda to Exceed (If 2013-14 is first year) 2013-14 Limit with Recurring Exemptions (Ln 7 + Ln 8) Total 2013-14 Non-Recurring Exemptions (A+B+C+D) Non-Recurring Referenda to Exceed 2013-14 Limit Declining Enrollment Exemption for 2013-14 (from left) Energy Efficiency Exemption for 2013-14 Adjustment for Refunded or Rescinded Taxes for 2013-14 Prior Year Open Enrollment (uncounted pupils) 2013-14 Revenue Limit With All Exemptions (Ln 9 + Ln 10) Total Aid to be Used in Computation (12A + 12B) 2013-14 - July 1st Estimate of General Aid State Aid to High Poverty Districts (not all dists)

37,782,752 4,260 8,869.19 230.81

(from left) (from left) (w ith cents)

75.00 155.81 0.00 9,100.00 4,315 39,266,500

(from left) (rounded)

39,266,500 0 1,416,334

(rounded)

1,416,334 0 0 0 0