INDEPENDENT SCHOOL DISTRICT NO. 719

BUDGET PLANNING

Presented on Monday, January 23, 2017

byJulie Cink, SFO

Executive Director of Business Services

Agenda

• Outcomes• Strategic Roadmap • Budget Calendar• Financial Data• Enrollment Projections• Revenue Assumptions• Expenditure Assumptions• Expenditure Considerations and Discussion

Outcomes

• Overview of the PLSAS District Finances

• Provide input on assumptions for enrollment and revenue

• Build a better understanding of financial impact of the assumptions on the budget

Strategic RoadmapOur mission is to educate all learners to reach their full potential as contributing and productive members of our ever-changing global community.

Budget CalendarJanuary 23, 2017 Board Work Session

• 2017-18 Budget Parameter Discussion o Enrollment Projections o Revenue assumptions o Expenditure assumptions o Staffing assumptions o Legislative assumptions

February 27, 2017 Board Work Session

• 2017-18 Enrollment Update o Preliminary Kindergarten Enrollment Numbers

• 2017-18 Preliminary Budget Update based on Budget Assumptions

2017-18 Program and Staffing Reductions/Additions Discussion

March 27, April 24 and May 22, 2017 Board Work Sessions

• 2017-18 Enrollment Update • 2017-18 Preliminary Budget Discussion • 2017-18 Staffing Update

Legislative Updates

June 5, 2017 Board Meeting

• 2017-18 Preliminary Budget Presentation/Approval

District Budget Overview2016-17 Approved Budget

District Budget OverviewCurrent Revenue

District Budget OverviewCurrent Expenditures

District Budget Overview District-Wide Levy

District Budget Overview Operating Referendum and Tech Levy

District Budget Overview Referendum and Tech Levy Comparisons

2016-17 General Education Revenue* Comparison

There are 331 School Districts in Minnesota. • Burnsville #71 $9,469• Bloomington #85 $9,287• Eden Prairie #96 $9,095• Eastern Carver County #154 $8,618• Rosemount AVE #164 $8,531• Lakeville #191 $8,342• Farmington #228 $8,104• PLSAS #260 $7,908• Shakopee** #292 $7,708

Source: Schools for Equity in Education

* General Education Revenue includes basic formula, declining pupil, gifted & talented, referendum, local option revenue, Qcomp, equity, compensatory, compensatory pilot, limited English profficiency, extended time, pension adjustment, operating capital, sparsity, transportation sparsity, school trust lands endowment, transition, small schools, optional charter transportation, and optional Faribault academies.

** Does not receive QComp funding

State Aid and Referendum

State Aid Formula

Tier 1: Referendum revenue up to $300 per pupil unit is equalized at $880,000 of market value.

Tier 2: Referendum revenue between $300 and $760 per pupil unit is equalized at $510,000 of market value.

Tier 3: Referendum revenue above $760, up to 25% of the basic formula allowance is equalized at $290,000.

Districts that qualify for sparsity revenue are eligible for equalization of $290,000 on the entire amount of referendum authority above $760. PLSAS: 2017 Equalizing Factor is $527,161

Referendum revenue allows districts to increase the revenue available in the district’s general fund with the approval of the voters in the district.

PLSAS Operating ReferendumExpires 2018-19

Maximum Referendum Levy: $1,936.70

Average MN School Referendum Amount: $805

Tier 2: The next $373.97 of referenda is local levy ($527,161/$510,000).

Tier 1: The remaining 60% is local levy ($527,161/$880,000).

Tier 1: Of the first $300 of referendum for PLSAS, 40% is paid via State Aid.

General Fund Revenue and Expenditure per Student

Source: 2015-16 PLSAS Audit

District Fund Balance Policy

• The school district will strive to maintain a minimum total unassigned and assigned general fund balance of eight (8) to twelve (12) percent of the annual budget (4-6 weeks of operating expenses). Deviation from the fund balance will be reviewed and addressed by the school board with recommendation from Administration/Finance Committee.

District Budget Overview Fund Balance

Historical Enrollment

Oct 1 Resident Enrollment Projections

At High Migration, the district would expect an average enrollment of 250 additional resident students over the next 5 years.

*Source: 2016 Hazel Reinhardt Demographic Study

Oct 1 Resident Enrollment Trends

Ten-year average

increases in resident

enrollment range from 151 to 231 students.

Source: 2016 Hazel Reinhardt Demographic Study

Open Enrollment – Fall Data

Open Enrollment Trends

NONRESIDENT ENROLLMENT PROJECTIONS Year K at 105 K at 90 K at 80 K at 65

2016-17 1,008 1,008 1,008 1,008 2017-18 1,013 998 988 973 2018-19 1,008 978 958 928 2019-20 1,001 957 927 884 2020-21 998 941 904 847 2021-22 996 927 881 813 2022-23 1,005 926 873 794 2023-24 1,011 920 860 769 2024-25 1,013 912 844 743 2025-26 1,009 899 826 716 2026-27 1,009 890 811 692

The following table illustrates the effect of reducing nonresident kindergarten combined with the net migration rates of the past year. (Three of the survival rates are positive and nine are negative.) Of course, if total net migration were not negative, nonresident enrollment projections would be different from those shown in the table below.

Source: 2016 Hazel Reinhardt Demographic Study

5 Year Enrollment Projections Assumptions

• Moderate to High Resident District Growth in Migration

• Open enrollment is closed to 1% at all grade levels for 2017-18

• Open enrollment is open for subsequent years

Enrollment Projections

2017 2018 2019 2020 2021 2022Kindergarten 606 535 620 630 635 640First 609 637 568 658 668 674Second 613 641 670 598 693 704Third 613 652 682 713 636 737Fourth 644 642 683 714 747 666Fifth 580 673 671 714 747 781Sixth 634 634 748 745 792 829Seventh 650 676 675 797 794 844Eighth 690 657 693 693 817 815Ninth 650 782 744 785 785 926Tenth 685 650 775 738 779 779Eleventh 661 660 631 753 717 756Twelfth 640 640 651 621 745 708

TOTAL 8,275 8,479 8,811 9,159 9,555 9,859

General Fund Revenue Assumptions

• 2% on Base Formula $121 PPU for FY18 ($1.1M) • Additional revenue due to student enrollment growth ($1.2M – $1.8M)• Compensatory funding unchanged• Operating referendum revenue at $674 PPU for FY 18 and FY 19

• Discussion of Affect of Increases/Decreases for FY20-FY22

• Changes in fees (activities, parking, etc.)

General Fund Expenditure Assumptions

• Current staff wages and benefits• Additional teaching staff to accommodate for enrollment

• $62,500 per teaching staff• $82,500 per Special Education teaching staff

• Other staffing needs (custodial, clerical, para, admin)• Additional bus @ $60,000• 1% increase in transportation $50,000• Actual salary and wages and/or 4-year average increase

calculation $2.25M• 2% increase in supplies/materials

Impact of Open Enrollment on District Finances

Legend Base Assumptions with OEBase Assumptions Minus OEBase Assumptions Minus OE FY18 Only

Other Potential Expenditures

• Add’l technology due to enrollment growth• Add’l technology needs due to reduction of

computer labs in elementary schools• Add’l furniture, fixtures and curriculum due

to enrollment growth• Expansion of MNCaps

Lease and Rental InformationLease Levy: • Bridges ALC and MNCAPS• PLHS Addition and Turf

Rent:• Co-curricular Activities:• Ice Time at Dakotah• Savage Dome - As needed due to inclement weather• Minneapolis Gun Club-trap shooting• Golf Course Rental• Alpine and Nordic Ski - Buck Hill and Highland Hills• McColl Pond ELC

Historical Enrollment & Building Capacity

Projected Enrollment & Building Capacity

*Enrollment totals are K-12 excluding ALC

2017-18 Kindergarten Enrollment

• To be updated after K registration

Questions and Comments