t uba c ity f und b alance a nalysis & e xpenditure r eview april 30, 2012 1

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TUBA CITY FUND BALANCE ANALYSIS & EXPENDITURE REVIEW

April 30, 2012

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CURRENT BUDGET AND PRACTICES

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FUND BALANCE AND EXPENSE TRENDWITHOUT STATE CASH FLOW COVERAGE

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5 YEAR FUND BALANCE SUMMARY

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ASSUMPTIONS INCLUDED IN PREVIOUS CHARTS

All revenue received is expended Impact Aid funded at 85% No State Aid Reductions No enrollment decline No additional expenses added No additional capital expenses added ($2M

continued) No reductions in expenses Successful Bond election in 2014 First sale of Bond proceeds and payment in 2015

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FY 2012 FUND BALANCE: $17,000,000

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FY 2013 FUND BALANCE: $9,014,576

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FUND BALANCE CHANGE 2008-09 THROUGH 2011-12

Increases in 2011-12 expenses include: Additional teachers Salary increases Additional maintenance support Teacherage capital improvements Includes capital and contingency expenses

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2011-12 M&O/IMPACT AID BUDGET BY FUNCTION

M&O Fund Impact Aid Fund

M&O Total: $10,563,000 Impact Aid Total: $11,200,000

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2011-12 COMBINED BUDGET BY FUNCTION

Grand Total: $21,763,000

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2011-12 COMBINED BUDGET BY FUNCTION

Grand Total: $21,763,000

GOAL: 50% Instruction

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2011-12 M&O/IMPACT AID BUDGET BY OBJECT

M&O Fund Impact Aid Fund

M&O Total: $10,563,000 Impact Aid Total: $11,200,000

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2011-12 COMBINED M&O AND IMPACT AID BUDGET BY OBJECT

Grand Total: $21,763,000

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REDUCTION STRATEGY BASED ON FUNCTION

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COMPARISON DISTRICT ANALYSIS

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COMPARISON DISTRICTS – % OF DOLLARS IN THE CLASSROOM

Auditor General Classroom Spending Report, 2012

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COMPARISON DISTRICTS

Function Tuba City

White-river

Kayenta Window Rock

State Average

Instruction 41.1% 48.3% 41.6% 47.4% 54.7%

Student Support

11.4% 11.9% 11.3% 9.6% 7.6%

Instructional Support

4.6% 7.5% 6.4% 8.2% 5.8%

Administration

12.2% 12.7% 10.5% 11.5% 9.7%

Plant Operations

19.2% 10.9% 17.4% 15.2% 12.4%

Transportation

6.9% 4.5% 8.6% 3.9% 4.7%

Food Service 4.7% 4.2% 4.1% 4.3% 5.0%

Auditor General Classroom Spending Report, 2012

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COMPARISON DISTRICTS

Auditor General Classroom Spending Report, 2012

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PLANT OPERATIONS AND ADMINISTRATION

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TUBA CITY SCHOOL DATA

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STUDENT ENROLLMENT HISTORY

23.7% Decline since 2006

Arizona Department of Education ADMS 46-1 Reports

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STUDENT ENROLLMENT GROWTH GOAL

Goal A – Grow Student Enrollment Goal B – Stabilize/Level Enrollment Goal C – Status Quo

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HISTORICAL REVIEW OF ENROLLMENT, EXPENSES AND STAFFING – 2007-08 THROUGH 2011-2012

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BUDGET PROCESS AND FUTURE PLANNING

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ACCOUNTABILITY BUDGET PROCESS APPROACHES

Incremental, Zero-Based, and Program Budgeting Incremental: compare previous year budget as a

basis for incremental amounts to be added or reduced to the new year’s budget

Zero-Based: each line item of the budget is built from zero and must be approved rather than only approving changes to the line items

Program: review individual programs or functional activities independently of the overall budget to determine its fiscal needs

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BUDGET GOALS

Return on Investment – ROI Marketing Schools Student Achievement Teacher/Staff Retention

Long Term vs. Short Term Funding Needs State Reductions Federal Reductions Building Needs

Avoiding the Funding Cliff Maintaining Fund Balance

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BUDGET ACCOUNTABILITY

Student Achievement Increase student achievement

Resources (financial, human and capital) Responsible budgeting

Effectiveness and Efficiencies Improve productivity

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5 YEAR FUND BALANCE SUMMARY – MAINTAINING $4M FUND BALANCE, BOND CONTINGENCY

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FUND BALANCE AND EXPENSE TRENDWITH STATE CASH FLOW COVERAGE

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2012-13 BUDGET VARIABLES

Cost Increases Compensation

Increases State Retirement Fuel Cost Enrollment Decline Federal Funding

Decline

Cost Decreases District Health Insurance Integrate Alternative School

with High School Consolidate Primary, ENIS,

JHS into K-8 One principal over Gap and

Cameron

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2012-13 COMPENSATION INCREASES

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FUTURE IMPACT AID SPENDING POLICY

M&O Transfer – determined by State Debt Service Payment Override authorization (conceptual) Reserves for future Bond – TBD Current year expenses – TBD

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FUTURE IMPACT AID SPENDING POLICY