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Agar-Blunt-Onida School District 58-3

Community Meeting

District Budget & Finance

“present and future”

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Funding

• School districts receive revenue in five operating Funds:

• General• Special Education

• Capital Outlay

• Pension• Bond redemption (if applicable)

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General FundSources of Revenue

• Local: Primarily property taxes plus other miscellaneous revenue: (ie gross receipt taxes, interest from investments, gate receipts)

• State: State Aid, state apportionment, bank franchise taxes.

• County: County Apportionment (state fines)

• Federal: Title program grants

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General Fund Expenditures

• General operating expenses: salaries and benefits, health insurance, workers compensation.

• Other operational expenses: fuel, utilities, building maintenance and

repairs, classroom supplies, workbooks, busing/transportation, property insurance, custodial, and extra-curricular activities.

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General Fund ExpendituresFiscal Year 2009-10

• Personnel 82%• Operation & Maintenance 11%• Co-Curricular Activities 6%• Transportation 1%

Staff (salaries/benefits) = 82% GF expenditures;

(classified, certified, admin., board, coaches/advisors)

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General Fund• State Aid Formula:

2009-2010

PSA (established $ amount/student)

Students X *$4,804.60 = NEED295 X $4,804.60 = $1,417,357.00

+ 295 (SSA formula) X $646.25 = $190,643.00

‘State defined’ District Need = $1,608,000.00

• (Per Student Allocation annual increase = lesser of 3% or CPI) • – set annually by Legislature

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General Fund State Aid calculation

District Need - Local Tax Effort = State Aid (minus)

Local Tax Effort: (property taxes) received in Nov. & May

= District Property Valuations multiplied by set GF tax rates (levy) in each property category. (AG, OO & OTHER)

The State determines the General Fund tax rates and assessed property valuations.

‘District Need’ is based on student enrollment and the ‘per student allocation (PSA), which is determined annually by the legislature. (3% or CPI – whichever is less)

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General Fund Revenue Calculation

Our District’s ‘past unique’ funding formula! REORGANIZATION INCENTIVESDCL 13-13-6.1 & 13-13-7.1= (8 year formula)

Calculate need as if “two separate districts” (Agar & Sully Buttes)

(year 1) - example2002-03 ADM X PSA = District Need (-) Local Effort = State AidAgar 29 $3,889.00 $112,781.00 $568,442.00 = $ 0

S Buttes 328 $3,889.00 $1,275,592.00 $803,403.00 = $472,189.00 $1,388,373.00 $1,371,845.00

Local Effort + State Aid = $1,844,034.00 (otherwise only $16,528.00 state aid)

(additional State Aid)Years 1 – 4 100% of ‘incentive funds’Years 5 – 8 80% – 60% – 40% – 20%

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‘Additional’ State Aid revenue(Reorganization Incentive)

SDCL 13-13-1.6 & 1.7 Fiscal Year State Aid % of Benefit

Year 1 FY2003 $472,189 100%

Year 2 FY2004 $457,651 100%

Year 3 FY2005 $438,659 100%

Year 4 FY2006 $458,596 100%

Year 5 FY2007 $382,961 80%

Year 6 FY2008 $308,715 60%

Year 7 FY2009 $203,126 40%

Year 8 FY2010 $105,000 20%

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State Aid (ABO history)

• Over the past eight years, the district has been receiving this ‘supplemental’ state aid in addition to the state funding formula.

For year eight of the 13-13-1.7 reorganization ‘incentive’ statute, the ‘additional’ state aid generated by this formula (at 20%) will be around $100,000.00

The decision to reorganize districts resulted in this additional funding from state to provide opportunities for our students.

In fiscal year 2010-11, we move to the ‘regular’ state aid formula where because of our district’s total property valuation and student enrollment, we will receive a very small amount of state aid. The District could become ‘self-funded’, which means all state formula revenue will be through local dollars with no state aid.

(depends upon student #s, PSA, & total district valuation)

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Other District Funds

For taxes payable 2010:

• Capital Outlay ($1.60)

• Special Education ($0.50)

• Pension ($0.20)

Total = $2.30 (schools can levy up to $4.70)

(Payable 2009 was $1.45)

*This amount for every $1,000.00 valuation

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Capital Outlay

Revenue: Local Property Taxes Schools can tax @ $3.00/$1,000.00 (1.60)

Expenditures: Equipment, vehicles, buses, computers,

printers, buildings, land, major remodeling/renovation and construction, textbooks, instructional software.

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Pension Fund

Revenue:

Local Property Taxes Schools can tax @ 0.30/$1000 (0.20)

Expenditures: Mandatory district match (6% total salaries) of South

Dakota Retirement System (SDRS) for all employees.

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Special Education

Revenues:

Local Property Taxes Schools can tax @ $1.40/$1000 (0.50)

Federal Allocations

Expenditures: Special Education staff salaries, benefits, supplies,

travel, contracted or related services (speech, O.T., P.T.), and out-of-district placements.

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Levy History (ABO)Tax amount / $1000.00 of property values

2003 2004 2005 2006 2007 2008 2009 2010

General Fund (set by state)

Agriculture $3.74 $3.49 $3.32 $3.19 $3.03 $2.71

$2.61 $2.57

Owner Occupied $6.02 $5.62 $5.34 $5.13 $4.76 $4.26 $4.10 $4.04

Businesses/Utilities $12.90 $12.04 $11.45 $11.00 $10.19 $9.11 $8.78 $8.66

(set Locally)

$3.00/$1000 Capital Outlay $0.62 $0.62 $0.75 $0.85 $0.85 $0.95 $1.20 $1.60

$0.30/$1000 Pension $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.20

$1.40/$1000

Special Education $0.72 $0.72 $0.60 $0.60 $0.60 $0.50 $0.25 $0.50

$4.70/$1000 (Total Levy) $1.34 $1.34 $1.35 $1.45 $1.45 $1.45 $1.45 $2.30

Levy increases from payable 2009 to 2010

Capital Outlay: $1.20 to $1.60 (^.40)

Using state flexibility option (certain GF expenses)

can only use for 3 years ($140,000 for FY 2009-10)

Special Education: $0.25 to $0.50 (^.25)

Fund Balance must be at sufficient operational level, including the potential for elevated yearly expenditures.

Pension: $0 to $0.20 (^.20)

Have been paying this expenditure out of General Fund for past eight years.

* Total school increase of 0.85/$1000 ($85.00/$100,000.00)17

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GENERAL FUND Capital Special

Payable 2010 AG NA-Z OO OTHER Outlay Pension Education

(Levy Limits / $1000 property value) $2.57 $3.57 $4.04 $8.65 $3.00 $0.30 $1.40

SCHOOL DISTRICTAgriculture Non -Ag Homes Businesses Bond (TOTALS)

(TOTALS)

AGAR - BLUNT - ONIDA 2.57 3.57 4.04 8.65 18.83 1.60 0.20 0.50 $2.30

PIERRE 2.57 3.57 4.04 8.65 1.28 20.11 3.00 0.30 1.40 $4.70

HIGHMORE-HARROLD 2.57 3.57 4.04 8.65 18.83 1.60 0.30 1.00 $2.90

GETTYSBURG 2.57 3.57 4.04 8.65 18.83 2.20 0.30 0.15 $2.65

HOVEN * 3.21 4.46 4.46 10.80 22.93 0.55 0.30 0.50 $1.35

MILLER AREA 2.57 3.57 4.04 8.65 18.83 1.51 0.30 1.01 $2.82

STANLEY COUNTY 2.57 3.57 4.04 8.65 18.83 1.67 0.30 0.58 $2.55

LYMAN 2.57 3.57 4.04 8.65 18.83 2.00 0.30 1.00 $3.30

SELBY AREA * 2.57 3.57 4.04 8.65 18.83 0.62 0.05 1.40 $2.07

HERRIED * 5.03 6.98 7.90 16.91 36.82 0.50 0.00 1.40 $1.90

FAULKTON AREA 2.57 3.57 4.04 8.65 18.83 1.04 0.26 0.55 $1.85

MOBRIDGE-POLLOCK * 3.51 4.88 5.52 11.82 4.66 30.39 3.00 0.30 1.40 $4.70

BOWDLE * 4.52 6.27 7.09 15.20 33.08 1.22 0.30 1.40 $2.92

EUREKA * 3.42 4.75 5.37 11.49 25.03 2.00 0.30 0.70 $3.00

HITCHCOCK-TULARE * 3.68 5.11 5.78 12.38 26.95 0.37 0.30 0.67 $1.34

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Student Enrollment

ENROLLMENT (K – 12)• 2002-03 303• 2003-04 297• 2004-05 284• 2005-06 295• 2006-07 293• 2007-08 292• 2008-09 295

Blunt Elem Onida Elem JH-HS Total K-12

2009-10 48 105 122 275

(projected)2010-11 44 98 124 266 2011-12 43 92 127 262 2012-13 41 91 118 250 2013-14 37 93 123 253

(Projections based upon ‘verified’ preschool-age children)

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Cost per Student(General Fund only)

2006-07 $8,257.00

2007-08 $9,160.00

2008-09 $9,385.00

2009-10 $7,930.00 (projected)

Higher than state average because of our district’s operating structure and large geographical size.

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Fiscal Challenge

• Our District Structure & Revenue Sources (schools/staffing, program needs, operational costs, geographics)

• Student numbers and revenues may decline, but fixed costs do not.

• Maintaining facilities/fleet/other needs.• Providing a quality curriculum and effective

programs for all students.• Personnel – retaining highly qualified

teachers and other employees.

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School Budgets

• Developed with a vision of the future for our students• Focus on priorities of District and Communities

What is important? What are our needs and desires?• Highly qualified teachers, support staff and providing

essential curricular/program offerings. • Comply with State & Federal regulations/requirements• Strive to ‘balance’ revenues & expenditures• Efficient & responsive to taxpayers – good stewardship

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Balancing General Fund Budget

Options:

1. Reduce expenditures to meet revenues, which means ‘further’ cuts/reductions of personnel and programs.

2. Raise revenue, which means an opt-out of the tax limitations to maintain current programs/staffing

3. Combination (if possible)

For school year 2009-10; 64 of 156 districts (41%) have opted-out of General Fund Levy limitations.

Not just a small school problem; every district has unique structure/characteristics, revenue sources & operational costs.

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Budget cuts/reductions from 2003 to 2009

Certified Staff FTE:37.5 to 27.0 Classified Staff FTE: 22.0 to 15.3

2009-10 Reductions/cuts made FTE (positions)• Certified: 4.75 • Administration: 1.0• Classified: 1.25

• Salaries/Benefits/hours Frozen or Reduced• Medical Insurance Frozen or Reduced• Other areas & programs Reduced

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What has been done• 2009-2010 GENERAL FUND • District implemented major reductions in all areas at approximately

$400,000.00 (17 % of prior year’s budget)• Personnel costs are 75-85% of a General Fund Budget

2009-2010 ‘Projections’

Revenues = * $2,275,000.00Expenditures = $2,200,000.00

* Includes special/other GF revenues that will be unavailable in 2010-11 or near future: $315,000.00 (reorganization incentive funds, ARRA stimulus grant, and Cap Outlay flex option

General Fund Balance ‘estimate’ on 6/30/2010: $900,000.00District requires minimum $200,000/month for ‘cash flow’ purposes in GF, therefore must maintain ‘healthy’ fund balance/reserve in between tax receipt months (Nov. & May) in order to operate - pay monthly expenses/billsWe receive minimal amounts in ‘monthly’ state aid payments

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Our Financial Concerns1. Our past funding formula (reorganization incentive) and the cessation of current

or future revenue sources ($315,000) 2. Declining student enrollment (30+ next 3-4 years = $190,000)3. District’s operational structure (large geographic area)

What are the Options?1. Make further/deeper Budget cuts:Close one elementary school/staff ($300,000) Reduce additional secondary staff ($100,000)Reduce additional classified staff ($50,000)Reduce extra-curricular/academic programs ($50,000)

2. Opt-Out of GF tax limitations (local decision)If a school district cannot operate on that revenue generated by local effortfor general fund and revenue from state aid, the district may “opt out” of general fund levy limitations. Opting out is additional funds generated by increasing the local effort over and above state-set tax limitations.

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General Opt-Out information.Funding/Calendar/Taxes Payable

o Taxes based on a ‘calendar’ year: Jan 1st to Dec 31sto School district ‘fiscal’ calendar year: July 1 to June 30

o 2010-2011 School Year is funded by 2nd half 2009-10 taxes and 1st half 2010-11 taxes.

o Opt-out amount is for a year ‘forward’ (2011)

o If applied, would receive one-half of an opt-out total amount during the 2010-2011 School Year (May/2011)@ $500,000.00, the District would receive only $250,000 for the

2010-11 fiscal School Year

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Additional Opt-Out information

• District does not need to request that maximum amount each year. Depends upon annual need of budget

• Opt-out funds are ‘locally generated’ and the state cannot penalize/take these dollars for excess fund balance purposes (^25%).

• School Board determines the amount and length of years (1-10).

Option: balancing effect with capital outlay by reducing this tax levy.

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General Fund opt-out calculations @ payable 2010 valuations & levies

@ $500,000.00 Additional Tax for

$100,000 Property Values    

   

Ag land 79.00  

Houses 124.11  

Businesses 265.00  

Do not yet know 2011 property valuations – receive notice in October of each year.

School Board/District option

• Lower Capital Outlay Levy ($1.60 to $1.00) to somewhat ‘balance’ the levy increase for General Fund Opt-Out.

Additional tax increase from

2010 to 2011 for $100,000 property @ $500,000

(IF C.O. reduced by 0.60)

Ag Land $19.00

Homes $64.11 Businesses $205.00

* cannot guarantee this will remain constant over time as future facilities and other major Capital Outlay needs will be necessary.

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If no opt-out

If we close one elementary school, could we still see a significant loss in our total student numbers?* Keep in mind, schools are funded (through state formula) by the total student population. If district were to lose more kids, we would then be required to make further staff and program reductions. (revenue = expenditures)

A majority of the General Fund budget are ‘people costs’.

Schools are the largest employers within our communities (economic effects).

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Our product

• The Agar-Blunt-Onida school district has received ‘Distinguished District’ recognition for the past five consecutive years based upon student achievement in annual state assessments of NCLB.

• Significantly score above state averages on Dakota STEP scores. ACT scores at or above state averages.

Blue Ribbon school recipient at Blunt Elementary

Successful extra-curricular programs (sports and fine arts)

Have achieved Adequate Yearly Progress since implementation of NCLB requirements.

Have achieved both state and national accreditation status

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Our purpose

The Children!

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Conclusion

• In order to maintain present educational standards and programs, an Opt-Out is necessary.

• Board’s options (resolution) & levy balancing effect.• The district is committed to keeping operational costs

minimal and effective. We strive to provide the best education for students at the lowest reasonable costs. Each year, the district would re-assess how much of the opt-out total would be necessary for annual and future fiscal stability.

• What is our most important resource – the kids!

Appendix

• Other data & Information

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District2009-10

Fall Enrollment

Payable 2010 Total Property

Valuations

Valuation / Student

Agar-Blunt-Onida 58-3 275 523,200,000 $1,902,545.00

Hoven 53-2 115 232,700,000 $2,023,478.00

Miller 29-4 451 556,600,000 $1,234,146.00

Highmore-Harrold 34-2 295 345,300,000 $1,170,508.00

Faulkton Area Schools 24-4 319 331,000,000 $1,037,618.00

Selby 62-5 199 198,000,000 $994,975.00

Bowdle 22-1 130 98,000,000 $753,846.00

Stanley County 57-1 486 346,200,000 $712,346.00

Gettysburg 53-1 242 125,500,000 $518,595.00

Pierre 32-2 2,537 895,690,000 $353,050.00

Mobridge-Pollock 62-6 662 144,900,000 $218,882.00

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District Pay 2010 Opt Out Amount District Pay 2010 Opt Out Amount

Sioux Falls 49-5 $3,200,000.00 Lake Preston 38-3 $210,000.00Lead-Deadwood 40-1 $828,000.00 Bison 52-1 $200,000.00Vermillion 13-1 $800,000.00 De Smet 38-2 $200,000.00Brookings 05-1 $750,000.00 Emery 30-2 $200,000.00Harrisburg 41-2 $700,000.00 Grant-Deuel 25-3 $200,000.00Mitchell 17-2 $700,000.00 Mount Vernon 17-3 $200,000.00Dakota Valley 61-8 $600,000.00 Oldham-Ramona 39-5 $200,000.00Armour 21-1 $490,000.00 Waverly 14-5 $200,000.00

Iroquois 02-3 $450,000.00Wessington Springs 36-2 $200,000.00

Alcester-Hudson 61-1 $400,000.00 White Lake 01-3 $200,000.00Bon Homme 04-2 $400,000.00 Willow Lake 12-3 $200,000.00Mobridge-Pollock 62-6 $400,000.00 Centerville 60-1 $195,000.00Eureka 44-1 $390,000.00 Timber Lake 20-3 $195,000.00Selby 62-5 $390,000.00 Plankinton 01-1 $175,000.00Redfield 56-4 $350,000.00 Hoven 53-2 $168,000.00Burke 26-2 $300,000.00 Edgemont 23-1 $150,000.00Hitchcock-Tulare 56-6 $300,000.00 Frederick Area 06-2 $150,000.00Sioux Valley 05-5 $300,000.00 Hurley 60-2 $150,000.00Tripp-Delmont 33-5 $300,000.00 Irene - Wakonda 13-3 $150,000.00McCook Central 43-7 $295,000.00 Marion 60-3 $150,000.00Big Stone City 25-1 $250,000.00 Rosholt 54-4 $150,000.00Freeman 33-1 $250,000.00 Stickney 01-2 $150,000.00Madison Central 39-2 $250,000.00 Summit 54-6 $150,000.00Menno 33-2 $250,000.00 Woonsocket 55-4 $150,000.00Arlington 38-1 $245,000.00 Estelline 28-2 $145,000.00Bowdle 22-1 $230,000.00 Deubrook 05-6 $140,000.00

Scotland 04-3 $230,000.00Colome Consolidated 59-3 $100,000.00

Doland 56-2 $227,000.00 Corsica 21-2 $100,000.00Herreid 10-1 $225,000.00 Ethan 17-1 $100,000.00Howard 48-3 $225,000.00 Lemmon 52-4 $100,000.00Rutland 39-4 $220,000.00 McIntosh 15-1 $100,000.00Castlewood 28-1 $210,000.00  

 

State Aid to DistrictsBoth districts have 300 students

= same operational $ Need based upon state formula

• District A

Low property valuation= low ‘local effort’ from local

property taxes.

The revenue that cannot be raised locally for district ‘Need’

= remainder is State Aid

(sent to schools on a monthly proportioned basis)

• District B (ABO)

High property valuation= high ‘local effort’ from

local property taxes.

The district receives small amount of State Aid.

*This district would receive a majority of operating revenue (local tax effort) only twice per year (May & Nov.)

(Cash-Flow concerns)38

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2001 2002 2003 2004 2005 2006 2007 2008 2009

(SULLY BUTTES) ABO ABO ABO ABO ABO ABO ABO

TOTAL REVENUE $ 1,599,504 $ 1,694,471 $ 2,345,506 $ 2,435,667 $ 2,452,535 $ 2,352,234 $ 2,483,662 $ 2,379,119 $ 2,304,899

TOTAL EXPENDITURES $ 1,682,657 $ 1,796,582 $ 2,399,168 $ 2,359,179 $ 2,416,366 $ 2,894,736 $ 2,436,290 $ 2,676,657 $ 2,631,817

$ (83,153) $ (102,111) $ (53,662) $ 76,488 $ 36,169 $ (542,502) $ 47,372 $ (297,538) $ (334,724)

($400,000)

Bldgs renov pjct

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Average Property Values (acre) 1/4 section (acre) 1/4 section Homes

Sully County $680.00 $108,800.00 $229.00 $36,640.00 $40,000.00

Hughes County $445.00 $71,200.00 $194.00 $31,040.00 $43,500.00

(source: County Assessor offices)

Payable 2011 "Valuation ESTIMATES" *(new Productivity model)

AG Land Crop Land Pasture

Hughes increase 10% increase 10%

Sully decrease 3% decrease 10%

(source: SD Dept. of Revenue)