Community Unit School District 308 Fiscal State of the District

FY2017 - Revenue Sources for Schools – Operating

49%

39%

4%

7% 1%

Property Taxes State Federal Other Local CPPRT

SD308 Operating Budget: $191,000,000

Local Revenue

• Real Estate Taxes • Corporate Replacement Taxes

• Interest Income

• Food Service Sales

• Student Fees

• Rental Fees

State Revenue

• General State Aid

• Special Education Aid

• Early Childhood

• Bilingual

• Drivers Education

• School Breakfast

• Library

• Transportation

General State Aid

• Based on average daily attendance of the school district

• Foundation level set by the state at $6,119 (proration is applied after)

• Higher the average daily attendance, more state aid we collect

• Attendance is a key factor

• Other variables are property values and low income ratios

Federal Revenue

• Title I – Improving Achievement The purpose of this grant is to ensure that all children have a fair, equal, and significant opportunity to obtain a high-quality education and reach, at a minimum, proficiency on challenging State academic achievement standards and state academic assessments • Title II – The purpose of the program is to increase academic achievement

by improving teacher and principal quality • Title III – Title III is designed to improve the education of Limited English

Proficient (LEP) students by helping them learn English and meet challenging state academic content and student academic achievement standards. - See more at:

• Food Subsidies – National School Lunch Program • Medicaid – Physical Therapy, Occupational Therapy, Nursing Services • IDEA – Special ED Grant

2017 – Expenditures - Operating

EXPENDITURES DOESN’T INCLUDE DEBT SERVICE OR CAPITAL PROJECTS

69%

15%

9%

5% 2%

Salaries

Employee Benefits

Purchased Services

Supplies & Materials

Other

SD308 Operating Budget: $191,000,000

2017 – Expenditures - Operating

• 84% of all expenses can be tied to salaries & benefits.

• Remaining 16% ($30 million) is spent on technology, buses, food service, utilities, phones, building maintenance, curriculum, supplies, tuition, etc.

Recent Financial History

9

$31.3 $32.9 $33.0 $33.6 $33.0

$25.8

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

2011 2012 2013 2014 2015 2016

Audited Year-End Balances – in millions (Education, Operations and Maintenance, Transportation, IMRF and Working Cash Funds)

Recent Financial History

10

FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016

Revenues $142,483,276 $146,269,520 $151,843,553 $161,599,518 $166,319,267 $173,700,141

Expenditures $135,863,940 $144,168,444 $151,403,236 $160,630,184 $167,406,753 $180,202,204

$0

$20,000,000

$40,000,000

$60,000,000

$80,000,000

$100,000,000

$120,000,000

$140,000,000

$160,000,000

$180,000,000

$200,000,000

Revenue vs Expenditures

History & FY16 Deficit

• In FY2016 District 308 spent 6.5 million more than what was brought in due to:

i) 4th quarter state categorical revenues were deferred into FY2017

ii) Unfunded mandates (1:1 TAs, 70/30 rule etc.)

• Expenditure increase since FY11 to FY16 is primarily due to

staffing as the student enrollment kept increasing. Other factors include benefits, textbook adoptions, increased cost in utilities, busing, building maintenance etc.

Recent Financial History

12

Projections

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

Revenues $190,755,862 $189,233,132 $190,135,291 $191,644,733 $193,237,267 $194,301,638

Expenditures $190,572,685 $196,625,188 $203,141,254 $209,917,294 $216,905,084 $224,141,306

$170,000,000

$180,000,000

$190,000,000

$200,000,000

$210,000,000

$220,000,000

$230,000,000

Revenue vs Expenditures

This assumes the funding formula stays status quo and no changes to our expenditures

Projections

FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022

FY End Balances $25.9 $18.5 $5.5 ($12.8) ($36.4) ($66.3)

$25.9

$18.5

$5.5

($12.8)

($36.4)

($66.3)

($80.0)

($60.0)

($40.0)

($20.0)

$0.0

$20.0

$40.0

Operating Funds - Projection Summary

Consumer Price Index (CPI) History

2.5%

4.1%

0.1%

2.7%

1.5%

3.0%

1.7%

1.5%

0.8% 0.7%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Percentage

State Aid – Cost of proration

Total dollars lost: $ 21.5 million 4th categorical payment was not received in FY16: $3 million.

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

2012 2013 2014 2015 2016

Full

Pro-rated

State Funds Impact

• $49 MILLION DOLLARS IN UNPAID CAPITAL DEVELOPMENT GRANT

• $21.5 MILLION DOLLARS IN UNPAID GENERAL STATE AID

• $6.4 MILLION IN DELAYED STATE CATEGORICAL PAYMENTS

• $76 MILLION DOLLARS COULD HAVE BEEN UTLIZED TOWARDS:

I. Deficit reduction

II. No reason to issue Tax Anticipation Warrants

III. Capital Improvement Plan

IV. Technology Improvement Plan

V. No need to issue non-referendum bonds

VI. Providing relief to current property tax payers by abating outstanding bonds

Future Revenues not keeping up with Expenditures

• State funding formula

• Declining Enrollment

• Increased property values

• Consumer Price Index is at historic lows

• 88% of the EAV is residential

• Prorated Categoricals

• Delayed categorical grants by the state (As of January 11th, 2017, we are still awaiting 1st quarter and 2nd quarter payments from the state which is around 6.4 million dollars)

Why are projected expenditures going up?

• Union Contracts

• Health insurance cost will continue to rise

• Unfunded mandates

• Increased purchased services (third party contracts, utilities, building repairs/maintenance)

• Equipment needs

• Technology

Expenditure reductions for 2016-2017

school year

• Departmental Budget Reductions: $1.2 million

• District Administration/Staff restructuring/Admin salary freeze: $561,000

• Restructuring workers comp and property insurance: $600,000

• Health insurance restructuring: $300,000

• Custodial Restructuring (Attrition): $240,000

• Reduced contractual services: $280,000

TOTAL: $3.2 MILLION

Students

Reduction/

Elimination of

Programs

Staff

Employee Workload

Course Limits

Alternative deliveries of selected services

Renegotiation of third-party contracts

Paperless Solutions

Energy Conservation

Competitive bidding/purchasing

Insurance Savings

Debt Restructuring

Operational Services

Expenditure Reduction Impact

$14,684

$12,993 $12,813 $12,742 $12,507 $11,835

$11,151 $10,931 $10,704 $10,621

$9,442

$8,702

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

NapervilleCUSD 203

GenevaCUSD 304

BataviaUSD 101

St CharlesCY+USD

303

ValleyView CUSD

365U

CUSD 200 AuroraWest USD

129

AuroraEast USD

131

IndianPrarie

CUSD 204

YorkvilleCUSD 115

CUSD 308 PlainfieldSD 202

Operating Expenditure Per Pupil Total Operating Expense from funds 10,20,40,50,70 & 80

Source: 5 Year Budget & AFR

State Average $11,594

FY15 Operating Fund Revenues by Source

$268,335,416

$237,434,082 $232,847,308 $228,552,918

$199,753,094

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

Naperville Geneva St Charles Valley View Aurora East

What would District 308 budget look like:

Note: SD308 Operating budget is $191 million

0

2

4

6

8

10

12

Plano Dist88

YorkvilleCUSD 115

CUSD 308 Valley ViewCUSD 365U

Aurora EastUSD 131

Aurora WestUSD 129

GenevaCUSD 304

Batavia USD101

Plainfield SD202

St CharlesCUSD 303

IndianPrairie CUSD

204

NapervilleCUSD 203

CUSD 200

Levy Year 2015 Tax Rates

Other Lease Special Education Tort

Fire Life Safety Working Cash Social Security IMRF

Transportation Bond and Interest Operations and Maintenance Education

Deficit Reduction

Legislative Action: The Governor appointed a commission to revise the school code. One of the approaches they have studied is the evidence based model. The Governor’s commission’s report is due in a few weeks. After the report is complete a bill must be drafted and passed in Springfield as well as approved by the Governor before any school aid formula it recommends can become law. How the report will read is currently unclear. Expenditure Reduction: Reduce staff which accounts for 84% of District 308’s operating budget. Tax Referendum: Plan for an operating tax rate referendum.

QUESTIONS??