Consolidation Study-Fiscal Analysis Merton & Hartland-Lakeside - - PowerPoint PPT Presentation

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Consolidation Study-Fiscal Analysis

Merton & Hartland-Lakeside School Districts October 2015

Robert W. Baird & Co. Incorporated is providing this information to you for discussion purposes only. The budget model does not contemplate or relate to a future issuance of municipal securities. Baird is not recommending that you take any action, and this information is not intended to be regarded as “advice”’ within the meaning of Section 15B of the Securities Exchange Act of 1934 or the rules thereunder. In providing this information, Baird is not acting as an advisor to you and does not owe you a fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934. You should discuss the information contained herein with any and all internal or external advisors and experts you deem appropriate before acting

• n the information.

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Robert W. Baird & Co. School Business Solutions Debby Schufletowski

• Sr. Vice President
• 715-552-3567 (office)
• 715-214-5149 (cell)
• dschufletowski@rwbaird.com

Presenter

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Background of Consolidation Studies

• Consolidation studies recently more prevalent
• Structural budget deficits
• State budget incentives
• Consolidation Study Financial Analysis
• How do individual district projections compare to the consolidated district projections?
• State formulas
• Local trends, etc.
• What consolidation aid may we be eligible for?
• What efficiencies may result?
• What is the taxpayer impact?
• Consolidation Studies identify trends – variables will change between the study and

potential consolidation which will affect actual figures.

• General mill rate trend: consolidated projections fall between individual district projections

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School Board Financial Decision-making

Educational Opportunities Levy/Mill Rate Budget

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• Limits and calculates
• perational revenue
• Comprised of State

aid and the local tax levy

• Generally comprises

85% - 95% of school districts’ operational (Fund 10) revenue

• Consolidation aid is
• utside of the

revenue limit

Revenue Limit Calculation

90% 10%

Hartland-Lakeside and Merton Operational Revenue

Revenue Limit Revenue Other Revenue

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• 90% of the district’s revenue is comprised of revenue

limit dollars

• $0 increases in revenue limit authority for 2015-16 and

2016-17; future budgets unknown

• Both districts experiencing and forecasting declining

enrollment

• Why is this important?

– 90% of the district’s revenue authority is driven by stable to declining variables

• Does this change with consolidation?

– No. But size and efficiencies may provide longer-term stability.

Resident Membership (FTE) Per-pupil amount Exemptions Total Revenue Limit Authority

Budget Overview

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Hartland- Lakeside Merton 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Individual Districts Consolidated Scenario

Resident Membership projected FTE

$9,000 $9,100 $9,200 $9,300 $9,400 $9,500 $9,600 $9,700 $9,800

Revenue Limit Per-Member sample $

• Our state formulas are driven by resident
• membership. Therefore, for most state formulas,

the consolidated district membership is the sum of the individual districts’ counts.

• The maximum revenue per member for the

consolidated district is recalculated based on the individual districts’ data the year prior to consolidation.

Resident Membership & Revenue Limit Per-Pupil

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Budget Summary – Individual Districts

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Budget Summary – Sample Consolidated District

• The consolidated model includes $500,000 of anticipated administrative cost savings.
• According to current state statutes, consolidation aid is available for five years and is outside of the revenue

limit.

• New in the 2015-17 biennial budget is an ongoing revenue limit exemption starting in year six of consolidation.

This analysis estimates the ongoing exemption amount at approximately $2.5M-$3.0M

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Potential Taxpayer Impact – Revenue Limit

20% 44% 30% 80% 56% 70% Hartland-Lakeside Merton Consolidated Scenario

Revenue Limit State Aid and Local Levy

State Aid Local Levy

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Potential Taxpayer Impact (cont.)

$5.40 $5.60 $5.80 $6.00 $6.20 $6.40 $6.60 2017-18 2018-19 2019-20 2020-21

Mill Rate Projections sample consolidation scenario

Hartland-Lakeside Merton Consolidated Scenario

• This output reflects mill rate trends. Changes in local and state variables will affect these trends.
• As in most studies, the initial mill rate of the consolidated district is projected to fall between the individual

districts’ mill rate projections.

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• In the first year,

the mill rate is projected to fall between the mill rates of the individual districts.

• An estimate of

2017-18 mill rate impact is shown.

In Summary – Projected Impact

Home Value Scenario Hartland- Lakeside Merton $100,000 Not consolidated $650 $616 Consolidated $627 $250,000 Not consolidated $1,625 $1,540 Consolidated $1,568 $500,000 Not consolidated $3,250 $3,080 Consolidated $3,135

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Questions?