Recommended Tax Rate Fiscal Year 2019 Red Clay Consolidated School - PowerPoint PPT Presentation

Recommended Tax Rate Fiscal Year 2019 Red Clay Consolidated School District Jill M. Floore, Chief Financial Officer July 11, 2018 1

Local tax rate development Four rate categories: • Current Expense – local operating funds set by voters – last operating referendum 2015 for $.20/.10/.05; FY18 last year of three year phase-in • Minor Capital Improvement/Match Tax – Local share based state authority to match existing or prior appropriations – Includes Minor Capital Improvements, Technology Maintenance, former Minner Resource Teachers, and Extra Time Match. – FY19 includes additional match tax provision for local share of new state funding for K-3 Basic Special Education and K-4 Reading Specialists 2

Rate development considerations • Tuition Local funds for special schools and tuition eligible programs including Meadowood, Richardson Park ILC, ELL, First State School, private placement and consortium, and Basic, Intense and Complex students in Red Clay schools or at schools outside Red Clay (i.e. Delaware Autistic Program and Delaware School for the Deaf). Services driven by student needs and required services. • Debt Service Local share of 20 year principal and interest payments for capital improvement bonds authorized by voters in prior capital referenda. FY16 was fourth and final year of phasing for most recent 2012 major capital improvement program. 3

Rate development assumptions • 14 Del. C. § 1916(d) requires Tax Warrant be submitted to New Castle County by July 12, 2018 • Red Clay’s assessed property $5,291,741,108. THIS IS A DECREASE DUE TO SIGNIFACANT APPEALS • Net value of assessment decreased by $5.2M or -.1% (from positive .58% in FY18 and .89% in FY17). • Red Clay loss to tax pool $1.4M (from $2.0M in FY18) • Tax pool allocation factor frozen for fifth year - unresolved issue with calculation of Intense/Complex students. • Equalization formula frozen again in FY19. Without reassessment, formula no longer functions as intended and further skewed by assessment appeals by County. 4

FY19 – State Budget and legislation • No replacement of FY18 reductions; give-back plan will still apply • Additional targeted state funding for: – K-3 Basic Special Education – Representative Williams sponsor • Based on unit count enrollment • $337,681 • Includes local match capability for local share of salaries – K-4 Reading Intervention Support at High Needs Schools • Non competitive and calculated by school demographic data • $793,658 • Includes local match capability for local share of salaries – Middle School Math Coaches – Stanton and AIMS • Fully funded; no local match – Opportunity Grants targeted to ELL and High Poverty Schools • Non-competitive and calculated by school demographic data • $1,769,842 • Does not include local match capability 5

FY19 – State Budget and legislation (con’t) • State employee pay increase of 2% for state share of teacher and administrative salaries and $1000 for custodians, paraprofessionals, secretaries, bus drivers and school nutrition employees. Steps fully funded. Additional $500 one-time pay bonus for full-time and part-time employees. • OEC rate increased to 32.46 due to pension. • Paid family leave act for State employees- effective April 2019. Epilogue allows for $104 reimbursement to districts for substitutes. Districts responsible for difference and local cost of salaries. • Transportation formula adjusted $11.2M statewide for structural deficit, formula increases, and phase-in of Transportation Committee recommendations • Increase in Minor Capital Improvement funding • School security funded $5M; awaiting specifics • Senior property tax credit changed to reimbursement based on income level. Max allowed $400. • Required financial reporting to align with ESSA • Lawsuit outcome not determined 6

Recommended Tax Rates FY2019 Tax Category 2017- 2018- Difference Local Tax 2018 2019 Rate Dollar Value FY19 Current Expense $1.576 $1.576 $0.000 $81,435,785 Tuition $0.472 $0.482 $0.010 $25,251,130 Debt Service $0.216 $0.170 ($0.046) $8,995,960 Match Tax $0.050 $0.070 $0.020 $3,704,219 TOTAL $2.314 $2.298 $119,387,094 ($0.016) Includes both residential and non-residential Per $100 of assessed value Assumes 99% collection rate Amount per average household $1,841 a decrease of $13 7

Current Expense $1.576/100 (No Change) Tax Category 2017- 2018- Difference Local Tax 2018 2019 Rate Dollar Value FY19 Current Expense $1.576 $1.576 $0.000 $81,435,785 Funds operating budget. Voter approved; last operating referendum 2015. FY18 third of three year phase-in plan of $.20/.10/.05. No increase in FY19. 8

MCI and Match Tax $.07/100 (+.02 cents) Tax Category 2017- 2018- Difference Local Tax 2018 2019 Rate Dollar Value FY19 Match Tax $0.050 $0.070 $0.020 $3,704,219 Technology Match - $629,740 Minor Capital Improvement - $1,007,113 RTI/Resource Teachers - $774,725 Extra Time Match - $432,977 New K-3 Basic Special Ed/ K-4 Reading - $632,170 9

Debt Service $.17/100 (.046 cent reduction) Tax Category 2017- 2018- Difference Local Tax 2018 2019 Rate Dollar Value FY19 Debt Service $0.216 $0.170 ($0.046) $8,995,960 Bond repayment schedules for 30 year Debt Service. Nearing completion of last phases of 2012 $117M Capital Improvement Program. Reductions in previous debt offset increases in first four years. Rate decrease will continue slowly over time. 10

Tuition $0.482/100 (+$.01) Difference Difference % Change FY18 Actual FY19 FY19 FY19 FY18 Final FY18 Actual to FY18 Preliminary Prelim to Prelim vs Budget FY18 FY18 Final Final Budget Final Budget Budget REVENUE: Opening Balance -Tuition Funds 765,049 765,049 0 1,293,874 528,825 69.1% Tuition Tax 24,751,647 24,738,109 (13,538) 25,251,130 499,483 2.0% Tuition billing 1,552,654 1,182,766 (369,888) 1,241,904 (310,750) -20.0% State Revenue (1st State, Unique Alt) 2,551,339 2,687,196 135,857 2,794,684 243,345 9.5% Total Tuition Revenue 29,620,689 29,373,120 (247,569) 30,581,592 960,903 3.2% EXPENDITURES: Tuition Payments to Other Agencies 2,847,328 2,705,848 (141,480) 2,976,433 129,105 4.5% Unique Alternatives/Private Placement 3,216,914 3,459,095 242,181 3,732,050 515,136 16.0% Consortium 338,075 340,503 2,428 350,718 12,643 3.7% Meadowood Program 4,850,000 4,850,000 0 4,350,000 (500,000) -10.3% Intensive Learning Centers 4,544,000 4,544,000 0 4,544,000 0 0.0% ELL/LEP 4,200,000 4,000,000 (200,000) 3,700,000 (500,000) -11.9% First State School 1,150,000 1,150,000 0 1,150,000 0 0.0% Needs-Based Special Education Funding 7,500,000 7,500,000 0 8,000,000 500,000 6.7% Tuition Contingency 495,033 0 (495,033) 505,023 9,990 2.0% Total Expenditures 29,141,350 28,549,446 (591,904) 29,308,223 166,873 1% Current Year Revenues over Expenses (285,710) 58,625 344,335 (20,505) 265,205 11

FY19 Tuition • Continue full time psychologists and EDs in all buildings. Very positive feedback from schools and staff. • Significant increase in Unique Alternative placements • Significant increase in Autism and PreK special education classrooms • Reduction in tuition billing receipts; fewer out of district tuition students • Increased funding for post September 30 students not included in unit count • No program cuts; decrease in tuition based on available balances 12

5 Year Tax Rates History Year Current Tuition Debt Match TOTAL Percent Expense Service Tax Incr/Decrease 2015-2016 $1.426 $0.362 $0.146 $0.050 $1.984 12.03% 2016-2017 $1.526 $0.382 $0.216 $0.050 $2.174 9.58% 2017-2018 $1.576 $0.472 $0.216 $0.050 $2.314 6.44% 2018-2019 $1.576 $0.482 $0.170 $0.070 $2.298 -0.69% Includes both residential and non-residential Per $100 of assessed value 13

All Tax Rates by Percentage Debt Service, $0.170 All rates – Breakdown by Percentage , 7% Tuition, $0.482 , 21% Match Tax, $0.070 , 3% Current Expense, $1.576 , 69% 14

Next Steps • Tax rate was reviewed and recommended by CFRC at July 10, 2018 meeting. • Upon approval, Tax Warrant Delivered to New Castle County July 12, 2018 for tax bills to be prepared and sent • Majority of tax revenues received in Sept/Oct. • Continue to monitor appeals and changes in assessment • August, 2018 Board approval of FY18 Preliminary Budget • August Board Workshop - 3 Year Financial Forecast • Continued monthly Community Financial Review Committee meetings • January, 2019 Governor’s Recommended Budget 15