KAUKAUNA AREA SCHOOL DISTRICT 2014-2015 BUDGET HEARING 2014-2015 TAX LEVY Monday, October 27, 2014 5:30 pm Bob Schafer Financial Officer, KASD 2014-2015 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 2014-2015 budget hearing and subsequent tax levy will be set at the October 27, 2014, Board of Education meeting. 2014-2015 REVENUE LIMIT • Finalized Values • DPI finalized the 2014-2015 public school revenue limit amounts on October 15, 2014 • KASD benchmarks • General state aid for 2014-2015 is $26,160,966, up from $25,328,795 in 2013-2014 ($832,171 increase or 3.2%) • Equalized property valuations are set at $1,884,371,513 which is up 2.5% over the previous amount used for the 2013-2014 levy • Student count decreased by 10 students in summer school but increased 57 on the third Friday count. This created an increase in the three year rolling average for pupils of 63 (4,315 to 4,378) • KASD has an $896,334 tax levy carryover that can be used at any time due to a prior year under-levy • KASD is allowed a $51,163 revenue limit increase due to prior year open enrollment students not counted on the Third Friday report due to the time of transfer • Recurring exemption will reduce the tax levy carryover amount from $896,334 to $845,171 DISTRICT: DATA AS OF 10/15/2014 1:30 PM Line 1 Amount May Not Exceed Line 11 minus Line 7B of Final 13-14 Revenue Limit 2013-14 General Aid Certification (13-14 Line 12A, src 621) 25,328,795 + 2013-14 Com puter Aid Received (13-14 Line 17, Src 691) 30,788 + 2013-14 Hi Pov Aid (13-14 Line 12B, src 628) 0 + 2013-14 Fnd 10 Levy Cert (13-14 Line 18, Src 211) 13,911,944 + 2013-14 Fnd 38 Levy Cert (13-14 Line 14B, Src 210) 514,973 + 2013-14 Fnd 41 Levy Cert (13-14 Line 14C, Src 210) 0 + 2013-14 Aid Penalty for Over Levy (13-14 FINAL Rev Lim it Worksheet) 0 2013-14 Penalty for Unspent Energy Exem ption 0 2013-14 Total Levy for All Levied Non-Recurring Exem ptions* 0 Line 1 NET 2013-14 Base Revenue 39,786,500 = 2014-2015 REVENUE LIMIT 2013-2014 base revenue $39,786,500 Membership average 4,378 Property valuation $1,884,317,513 *Fo r 2013-14 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, P rio r Year Unco unted Open-Enro ll. P upils) September & Summer FTE Membership Averages Count Ch. 220 Inter-District Resident Transf er Pupils @ 75%. Line 2: Base Avg:(11+.4ss)+(12+.4ss)+(13+.4ss) / 3 = 2011 2012 Sum m er 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 Line 6: Curr Avg:(12+.4ss)+(13+.4ss)+(14+.4ss) / 3 = 2012 2013 Sum m er fte: 81 83 32 33 % (40,40,40) Sept fte: 4,278 4,353 Total fte 4,310 4,386 2014 73 29 4,410 4,439 Line 10B: Declining Enrollment Exemption Average FTE Loss (Line 2 - Line 6, if > 0) X 1.00 4,315 4,378 = = X (Line 5, Maximum 2014-2015 Revenue per Memb) = Non-Recurring Exem ption Am ount: Line 17: State Aid for Exempt Computers Line 17 = A = 33,981 X (Line 16 / C) (to 8 decimals) (Rounds t o Dollar) 2014 Property Values (October 1, 2014 Values from DOR) A. 2014 Exem pt Com puter Property Valuation Re qui re d B. 2014 TIF-Out Tax Apportionm ent Equalized Valuation C. 2014 TIF-Out Value plus Exem pt Com puters (A + B) Computer aid replaces a portion of proposed Fund 10 Levy + + = 3,723,700 1,884,317,513 1,888,041,213 2014-2015 Revenue Limit Worksheet 2014-2015 REVENUE LIMIT 2014-15 maximum revenue $41,592,077 Prior year dollars $896,334, $51,163 Mill rate $9.13 per $1,000 39,786,500 4,315 9,220.51 75.00 (from left) 2013-14 Base Revenue (Funds 10, 38, 41) Base Sept Membership Avg (11+.4ss, 12+.4ss, 13+.4ss/3) 2013-14 Base Revenue Per Member (Ln 1 / Ln2) 2014-15 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) 2014-15 Maximum Revenue / Memb (Ln 3 + Ln 4) Current Membership Avg (12+.4ss, 13+.4ss, 14+.4ss/3) 2014-15 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) Prior Year Carryover Transfer of Service (if negative, include sign) Transfer of Territory (if negative, include sign) Federal Impact Aid Loss (2012-13 to 2013-14) Recurring Referenda to Exceed (If 2014-15 is first year) 2014-15 Limit with Recurring Exemptions (Ln 7 + Ln 8) Total 2014-15 Non-Recurring Exemptions (A+B+C+D+E) Non-Recurring Referenda to Exceed 2014-15 Limit Declining Enrollment Exemption for 2014-15 (from left) Energy Efficiency Exemption for 2014-15 Adjustment for Refunded or Rescinded Taxes for 2014-15 Prior Year Open Enrollment (uncounted pupils) 2014-15 Revenue Limit With All Exemptions (Ln 9 + Ln 10) Total Aid to be Used in Computation (12A + 12B) 2014-15 October 15 Certification of General Aid State Aid to High Poverty Districts (not all dists) (from left) (w ith cents) 75.00 0 0.00 9,295.51 4,378 40,695,743 (from left) (rounded) 40,695,743 0 896,334 (rounded) 896,334 0 0 0 0 <<Ent er if not pre-f illed 41,592,077 51,163 0 <<Ent er if not pre-f illed 0 0 51,163 <<Ent er if not pre-f illed 41,643,240 26,160,966 26,160,966 0 REMEMBER TO USE THE OCTOBER 15 AID CERTIFICATION WHEN SETTING THE LEVY. 15,482,274 Allowable Limited Revenue: (Line 11 - Line 12) (10, 38, 41 Levies + Src 691. Src 691 is DOR Computer Aid.) Total Limited Revenue To Be Used (A+B+C) Not >line 13 Entries Required Below: Amnts Needed by Purpose and Fund: Gen Operations: Fnd 10 including Src 211 & Src 691 14,102,955 Non-Referendum Debt (inside limit) Fnd 38 Src 210 482,985 Capital Exp, Annual Meeting Approved: Fnd 41 Src 210 Total Revenue from Other Levies (A+B+C+D): Referendum Apprvd Debt (Non Fund 38 Debt-Src 210) 2,564,350 Community Services (Fnd 80 Src 210) 79,373 Prior Year Levy Chargeback (Src 212) Other Levy Revenue - Milwaukee & Kenosha Only 14,551,959 Total Levy + Src 691, "Proposed Levy" (Ln 14 + Ln 15) (to B udget Rpt) Est Src 691 (Comp Aid) Based on Ln 16 & Values Entered Fnd 10 Src 211 (Ln 14A-Ln 17), 2014-15 Budget Line 18 ( not 14A) is the Fund 10 Levy certified by the Board. Total Fall, 2014 All Fund Tax Levy (14B + 14C + 15 + 18) Line 19 is the total levy to be apportioned in the PI-401. 14,585,940 (P ro po sed Fund 10) (to B udget Rpt) (to B udget Rpt) 2,643,723 (to B udget Rpt) (to B udget Rpt) (to B udget Rpt) 17,229,663 33,981 14,068,974 17,195,682 Levy Rate = 0.00912568 2014-2015 OPERATING BUDGET • Balanced operating budget • KASD 2014-2015 revenues and expenditures for Fund 10 and Fund 27 are set at $45,293,824 • The balanced operating budget is $1,730,913 higher than the 2013-2014 figures (3.9%) • Net cost on public school open enrollment increased by approximately $900,000 (24%) • Health insurance is projected to increase $325,000 (10%) • Final health insurance figures are expected in November • Salaries, and associated benefits, due to combination of hiring and pay increases are $1,250,000 higher than the previous year • Offsets to major budget increases include a reduced OPEB cost (no addition to the Fund 73 balance), Honeywell project paid for, and subsequent energy savings from Honeywell $8,000,000 $6,000,000 $4,000,000 $0 $10,000,000 $12,000,000 $14,000,000 $16,000,000 $17,195,682 $17,054,265 $16,690,494 $16,210,408 $15,524,222 $15,322,775 $13,912,548 $13,498,368 $12,322,395 $12,612,833 $12,380,236 $11,403,684 $10,595,734 $10,115,350 $10,147,210 $18,000,000 $10,057,678 $20,000,000 $9,805,537 $9,788,117 $8,197,384 $2,000,000 $10,386,064 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00 $9.13 $9.29 $9.33 $8.79 $8.91 $8.82 $8.10 $8.13 $7.68 $8.50 $9.13 $9.65 $9.81 $10.18 $11.20 $11.66 $11.94 $12.69 $11.11 $14.89 KASD TAX LEVY AND MILL RATE HISTORICAL PERSPECTIVE KASD Mill Rate History Kaukauna Area School District Tax Levy History 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 and futuristic perspective of Fund 38 debt service is shown below FUND 38 – DEBT SERVICE BUDGET • Fund 38 Budget • Expenditures • 2014-2015 expenditures in Fund 38, will be $529,768 • Payment is a combination of the three debt service issues • Payment is set by the debt service schedules for each issue • 2014-2015 revenues for Fund 38, which cover payments made in March, 2014, as well as September, 2014, will be $482,985 • A carry-over of $140,925.75 will be on the books as of June 30, 2015. Those dollars will be used to make the debt payment in September, 2015 FUND 38 – DEBT SERVICE BUDGET • Kaukauna High School Facility Project • Debt service • Should the Board of Education choose to move forward with any part or all of the proposed Kaukauna High School redesign project the debt service payments will be made out of Fund 38 • All debt incurred by the project would be under the revenue limit and not add any additional dollars to the tax levy • Same can be said for the Honeywell ESG energy project, borrowing to pay off the Wisconsin Retirement System debt, and the zero interest loan secured to pay for the Haen School windows • All principal and interest payments under Fund 38 have no direct effect on the tax levy – the only way the tax levy will be decreased should the project not be done would be to under levy and hold the potential under levy amount in abeyance for a future over levy and use of funds at that time 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, is $7,885,700 • Principal only debt service is $7,315,000 • 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 $0.60 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 $9.13 per $1,000 value to $8.10 per $1,000 value in the next five years • A property paying $1,826 in school tax presently ($200,000 value) would then pay $1,620 FUND 39 – REFERENDUM APPROVED DEBT SERVICE PAYMENT SCHEDULE FUND 50 – FOOD SERVICE • 2013-2014 Budget • Balanced budget is in place for 2014-2015 • Expenditures, revenues set at $1,409,530 • Maintenance department salaries and benefits account for $42,901of the total food service expenditures. The figure is based on 5% 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 $35,598 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 • Combined cost for maintenance and cleaning billed to Fund 50 $78,000 – does impact the fund balance directly as those costs must be covered by sales • Fund balance projected to remain flat at $3,950 on June 30, 2015 FUND 72 - SCHOLARSHIPS • Fund 72 • KASD holds approximately $170,000 in Fund 72 from which scholarships are awarded on an annual basis • $127 was earned in interest during the 2013-2014 school year in Fund 72 • $3,800 was paid out to scholarship recipients at the conclusion of the 2013-2014 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 2013-2014 • Trust balance • KASD held $2,758,316.16 in its Fund 73 Trust Account as of June 30, 2014 • The projected post employment benefit liability of the Kaukauna Area School District is $8,124,000 based on the latest actuarial study • KASD has 34.0% of the unfunded liability covered • KASD earned $14,351.92 in interest on investments held in Fund 73 during the 2013-2014 fiscal year • KASD earned $78,051 on investments in Fund 73 during fiscal 2013-2014 • KASD paid $815,715 for post employment health, dental, life, and other retiree benefits during 2013-2014 • 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 $40,785 more to Fund 73 from Fund 10 which essentially was available due to unspent Fund 10 dollars • The ultimate goal of Fund 73 will see investment earnings offset the cost of the post employment benefit 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 $841,000 for 2014-2015 • 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 $13,000 for 2014-2015; return on investment at $25,000 • 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 2013-2014 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 • 2014-2015 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 • 2014-2015 Expenditures • $24,843 toward the cost of the River View police liaison officer • This is roughly 45% of the annual cost • $17,644 toward the cost of the Kaukauna High School police liaison officer • This is roughly 45% of the annual cost • $36,886 to cover 50% of the administrative assistant cost in the District Activities Office and other associated costs • 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 2013-2014 ending fund balance was $0.00 in Fund 80 KASD – OVERALL OPERATING BUDGET 2014-2015 • Revenues vs. Expenditures • Projected 2014-2015 revenues for KASD total $50,724,964 • Projected 2014-2015 expenditures are $50,652,264 • The difference - $72,699 – is based on tax revenue being higher than expenditures in Fund 38 and Fund 39 • Fund 38 and Fund 39 must carry balances at the end of the fiscal year in order to cover the cost of debt service payments in September of the following year 2014-2015 PROPERTY TAX LEVY KAUKAUNA AREA SCHOOL DISTRICT • The Board of Education must set the FY 2014-2015 tax levy no later than November 1, 2014 • The tax levy must be delivered to the clerk of each municipality no later than November 10, 2014 • School district’s levy taxes for general operations, debt service, capital expansion, and community service • KASD will levy 2014-2015 taxes for all of the above less capital expansion • Property values are equalized to reflect market value rather than local assessed value 2014-2015 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 2014-2015 Budget Hearing Action Items The Board of Education for the Kaukauna Area School District must take action on the 2014-2015 budget and tax levy. Action Item #1 – The Kaukauna Area School District sets the 2014-2015 tax levy at $17,195,682. The levy includes $14,068,974 for general operations, $3,047,335 for debt service, and $79,373 for community service. The tax levy sets the mill rate at $9.13 per $1,000 of property value. Action Item # 2 – The Kaukauna Area School District sets the 2014-2015 operating revenue budget at $45,293,824 and the 2014-2015 operating expenditure budget at $45,293,824. The overall operating revenue budget for KASD will be $50,724,964 and expenditures will be $50,653,264.