BUDGET - PDF document

¡ ¡ ¡ ¡ ¡ 2012 ¡– ¡2013 ¡ ¡ BUDGET ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ ¡ Board ¡of ¡Education ¡Approval ¡Requested ¡ ¡August ¡28, ¡2012 ¡ ¡ ¡ North ¡Kansas ¡City ¡Schools ¡ ¡ 2000 ¡NE ¡46 th ¡Street ¡ ¡ Kansas ¡City, ¡Missouri ¡64116 ¡ ¡ (816) ¡413-­‑5000 ¡ ¡ www.nkcschools.org ¡ ¡

North Kansas City Schools 2012 - 2013 Budget Introductory Section

Office of the Superintendent – Todd E. White, Ed.D. – Superintendent June 2012 District Patrons and Colleagues, On behalf of North Kansas City Schools, I submit for your review the district budget for the fiscal year ending June 30, 2013. The District Administration and Board of Education continue to manage your tax dollars. By implementing purposeful, cost effective strategies, we have been successful in maintaining quality educational programs and facilities for each and every student we serve. And we have done so in a fiscally challenging economic climate. Our total assessed valuation (the basis for determining local tax revenues), fell to levels not seen since 2004. At the same time, our resident student enrollment grew by 1,700 since 2004. Furthermore, the economy has been challenging for our patrons and families, as well. That is why the NKC Schools Board of Education chose to freeze the school tax rate last year, even though they had the legal authority to increase it. As a “service - based” organization, the largest single expense in our operating budget is salaries. That investment in people directly impacts the quality of services we provide. By striving to keep our salaries competitive, we are better able to attract and retain excellent educators, academic leaders and support staff. However, only once in five years have we been able to increase the base pay on our teachers’ salary schedule. We hope to be able to do so for a second time this coming year. NKC Schools will receive an increase in state funding for the 2012-13 school fiscal year. Much of the additional capital will be invested in the people who teach, feed, transport and nurture our students. Another critical component of quality education is the learning environment. Schools that are clean, safe, secure, climate-controlled and well-maintained enable student achievement. We are mindful that many of our schools are approaching or already at capacity. We have managed the population growth by adding classrooms to our most crowded schools the last three summers. We are monitoring the situation with the help of a community- based “Focus on Facilities” committee, and we will keep you informed as we determine future facility needs. Reflected in the pages of this annual budget are revenues and expenditures that maintain a fund balance within the parameters set by the Board of Education. In short, NKC Schools is healthy, but not wealthy. We are working to get the most out of your tax dollars to ensure extraordinary educational experiences for each and every student. Thank you for your support and your trust. Sincerely, Todd White, Ed. D. Superintendent Achieve excellence. Embrace change. Forge new traditions. 2000 NE 46 t h St. Kansas City, MO 64116-2042 816.413.5000 fax 816.413.5005 www.nkcschools.org Page 1 of 287 August 2012 Final Budget

North Kansas City Schools 2012-2013 Budget 2012-2013 Budget Proposal Executive Summary By Paul Harrell, Chief Financial Officer This budget represents the financial plan of North Kansas City Schools for the 2012-13 fiscal year. Our primary purpose is to provide timely and useful information concerning the past, present and projected financial status of the District as well as to facilitate financial discussions that support our strategic plan. The budget is designed to meet the expectations of the Board of Education and the strategic initiatives included in the Comprehensive School Improvement Plan (CSIP). It provides the funding to attract and retain an outstanding workforce; to maintain, expand and improve facilities; and to provide required operating funds to sustain our existing campuses. REVENUE PROJECTIONS: The d istrict’s largest sources of revenue are : Assessed Valuation (Local county property taxes based on assessed valuation and tax levy) State Aid (Missouri Education funding formula) Proposition “C” Sales Tax (Statewide) Sale of Bonds (NKC Schools bonds issued for capital improvements) Assessed Valuation: The di strict’s total assessed value as certified by Clay and Platte Counties in August 2012 is $1,871,506,546. This is 0.6 percent above the August 2011 value. Since 2007, our base values have declined by 10 percent, so any positive percentage increase is good news. The percentage declines in prior years are directly related to the overall slowdown in the national, state and local economies. The one-year change in the consumer price index for the period ending December 2011 was 3%. This index, in tandem with changes in assessed values are components of setting the district’s tax rate which must be filed with the Clay County Cle rk by September 1, 2012. The d istrict’s final tax rate will be set by the Board of Education at the August 28, 2012 meeting. The intent is to keep the tax rate constant at $5.8898 per $100 of assessed valuation. After the levy is set by the Board, the rate calculation is verified by the Missouri State Audit or’s office for compliance. Current Taxes: Current taxes are budgeted at $105,301,408 based on an estimated collection rate of 96 percent and total tax rate of $5.8898 per $100 of assessed valuation. State Aid: 2012-13 is the seventh and final year of implementation of the Missouri Foundation Formula known as SB 287. The formula has been phased in over time since 2005. As SB 287 becomes fully implemented, the District will see an increase in total State funding of $2.5 million. Page 2 of 287 August 2012 Final Budget

North Kansas City Schools 2012-2013 Budget The formula calculation calls for more state dollars than were appropriated by the Missouri legislature, leaving an estimated state funding shortfall of $251 million. Therefore, the Department of Elementary and Secondary Education (DESE) is going to modify components within the formula. The State Adequacy Target will be frozen at $6,131 per pupil until the funding shortfall is eliminated, and DESE will prorate the remaining shortfall equally at the bottom of the formula. DESE estimates the proration to be 92 percent for 2012-13. Proposition “C” Sales Tax: Sales tax allocation per eligible pupil is projected to increase by 1.8% or $294,044 due to an increase in the number of student contact hours generated in the 2011-12 school year. The prior year per pupil amount is $834 per hour of attendance and is expected to fall to $832 for 2012-13. Total sales tax revenues are budgeted at $16,035,968. Sale of Bonds: The District has fully issued all bonds approved by voters with the last bond sale in October 2008. Before any future bonds can be issued, patrons would need to give voter approval. We continue to watch the market for any possible debt refinancing to lower interest payments on outstanding bonds. The District refinanced a series of bonds in May 2012, and the interest savings was applied to the 2012-13 fiscal year. Therefore, the Debt Service Fund levy will remain at $1.02 per $100 of assessed valuation. EXPENDITURE PROJECTIONS: The district’s largest areas of expense are: Salaries Benefits Purchased Services Supplies Capital Outlay Salaries: Salaries and employee benefits make up approximately 80 percent of the operating budget and thus have a large impact when changes are made. For 2012-13, the base salary within the Teacher’s Salary Schedule was incr eased 1.5 percent. This is only the second time in five years the District has been able to add funding to the base. The beginning teacher salary is now $36,978. Classified and Administrator’s salaries also were increased proportionally. Benefits: Health insurance premiums are expected to increase 5.8 percent effective October 1, 2012. All employees who work 30 or more hours per week qualify to participate in the health insurance plan. The Public School Retirement System (PSRS) contribution rate for certified teachers will remain at 14.5 percent. For classified staff in the Public Education Employees Retirement System (PEERS), it will remain at 6.86 percent. This is the first time in six years that the contribution rate remains unchanged. Employees must work 17 or more hours per week on a regular basis to be members of PSRS and 20 hours or more to be members of PEERS. Page 3 of 287 August 2012 Final Budget