2016 MASBO Budget Workshops Mike Waterman Director of Business Services Bozeman Public Schools W: C: Denise Williams Executive Director MASBO W:

Agenda The Back End 8:30 – noonFinancing Sources for Budgeted Funds The Front End 1:15 – 2:30Show-and-Tell Budget Presentations 2:30 – 2:45Break 2:45 – 4:00Communicating with the Public 4:00Outta here!

Budgeted and Nonbudgeted Funds Budgeted Funds: Expenditures limited to adopted budget Often funded by tax levy Examples: – General (01) – Transportation (10) – Bus Depreciation (11) – Tuition (13) – Retirement (14) – Adult Ed (17) – Technology (28) – Flexibility (29) – Debt Service (50) – Building Reserve (61) Nonbudgeted Funds: Expenditures limited to cash on hand No levy funding Examples: – School Foods (12) – Miscellaneous Programs (15) – Lease Rental (20) – Compensated Absences (21) – Building (60) – Interlocal Agreement (82) – Student Activities (84)

Financing Sources for Budgeted Funds Basic equation: Funds left over from last year (fund balance reappropriated) + New money Total funds available (i.e., your adopted budget)

Financing Sources for Budgeted Funds Expenditure Budget = Funding Needs

Financing Sources for Budgeted Funds Fund balance reappropriated = $ district already has, limited to 15% of budget

Financing Sources for Budgeted Funds New revenue needed

Financing Sources for Budgeted Funds

Basic equation: Funds left over from last year (fund balance reappropriated) + New money Total funds available (i.e., your adopted budget)

Financing Sources for Budgeted Funds Fund Balance: Cash (mostly) in a fund at end of year (June 30) Beginning Fund Balance + Current Year Receipts - Current Year Expenditures Ending Fund Balance

Financing Sources for Budgeted Funds Beginning Fund Balance + Current Year Receipts - Current Year Expenditures Ending Fund Balance Return to stateReappropriate (reduces revenue requirement in next year’s budget) Reserves (keep)

Fund Balance Operating Reserve + Fund Balance Reappropriated

Financing Sources for Budgeted Funds Fund Balance Reappropriated: Year-end balances used in place of new revenue to fund ensuing year’s expenditure budget. Re-appropriated funds can be used to: 1.Reduce burden on: Local taxpayers State/county (some cases) 2.Increase budget in some funds 3.General Fund reappropriation limited to 15% Reappropriation is mandatory after reserves maximized!

Financing Sources for Budgeted Funds

Reappropriation reduces other revenue sources (usually taxes) needed to fund expenditure budget

Financing Sources for Budgeted Funds Methods for estimating Fund Balance Reappropriated: 1.Actual/calculated: Beginning Fund Balance + Current Year Receipts - Current Year Expenditures Ending Fund Balance - Reserves Fund Balance Reappropriated 2.Averaging/trend analysis 3.Recommend estimating low

Financing Sources for Budgeted Funds Basic equation: Funds left over from last year (fund balance reappropriated) + New money Total funds available (i.e., your adopted budget) 1.Non-levy revenue 2.Tax revenue

Financing Sources for Budgeted Funds Methods for estimating New Money: 1.General Fund: –Preliminary Budget Data Sheets –OPI’s General Fund Spreadsheet (best) 2.Transportation Fund: OPI Transportation Fund Worksheet 3.Tax levies –Voted levied: use voted amount –Permissive levies: start with prior year amounts, adjust levies and/or budgets as necessary to meet taxation goals 4.Non-levy revenue: –Internal: analyze actual trends –State payments: start with prior year amounts –Recommend estimating low

Financing Sources for Budgeted Funds Two types of budgeted funds: Funding Sources Determine Spending Authority (Budget) Spending Authority (Budget) Determines Funding Sources

Financing Sources for Budgeted Funds Two types of budgeted funds: Funding Sources Determine Spending Authority (Budget) Spending Authority (Budget) Determines Funding Sources General (01)Transportation (10) Bus Depreciation (11)Tuition (13) Technology (28)Retirement (14) Flexibility (29)Adult Ed (17) Building Reserve (61)Debt Service (50)

Financing Sources for Budgeted Funds Two types of budgeted funds: Funding Sources Determine Spending Authority (Budget) General (01) Bus Depreciation (11) Technology (28) Flexibility (29) Building Reserve (61) YOUR JOB: Determine how much money you have available and develop a spending plan to fit that amount.

Funds left over from last year (fund balance reappropriated) + New Money Total funds available (i.e., your adopted budget) Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Step 1 Step 2 Step 3

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Step 3 Step 1 Step 2

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 1: Building Reserve Fund: $125,000Fund Balance Reappropriated $ 1,500Budgeted Interest $ 75,000Voter approved local levy $ Total adopted budget

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 2: Technology Fund: Year 1Year 2Year 3 Year 4 (Budget Year) Fund Balance Reappropriated $10,500$11,000$8,500 Budgeted Interest $500 State Tech Payment $1,000 Local Levy$3,500 Total Budget$15,500$16,000$13,500

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 2: Technology Fund: $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Must convert dollars to mills

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 2: Technology Fund: $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Levied mills = Dollars levied x 1,000 Taxable value

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 2: Technology Fund: $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Levied mills = Dollars levied x 1,000 Taxable value _____________ $1,000,000 =

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Example 2: Technology Fund: $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Levied mills = Dollars levied x 1,000 Taxable value _____________ $1,000,000 = 3.50 mills =

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Where do we find these numbers? And when?? $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Possible Sources: Multi-year average Educated guess RECOMMEND ESTIMATING LOW! When? NOW! …and then update as needed

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Where do we find these numbers? And when?? $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Possible Sources: Educated guess RECOMMEND ESTIMATING LOW! When? NOW!

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Where do we find these numbers? And when?? $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Possible Sources: Last year’s budget When? NOW!

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Where do we find these numbers? And when?? $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget Possible Sources: Last year’s budget Election plans When? NOW!

Financing Sources for Budgeted Funds Funding Sources Determine Spending Authority (Budget) Where do we find these numbers? And when?? $10,000Fund Balance Reappropriated $ 500Budgeted Interest $ 1,000State Technology Payment $ 3,500Voter approved local levy $ 15,000Total adopted budget When? NOW!

Financing Sources for Budgeted Funds Assumptions: Use fund balance to increase budget, not decrease levies Funding Sources Determine Spending Authority (Budget) General (01) Bus Depreciation (11) Technology (28) Flexibility (29) Building Reserve (61) YOUR JOB: Determine how much money you have available and develop a spending plan to fit that amount.

Financing Sources for Budgeted Funds Two types of budgeted funds: Spending Authority (Budget) Determines Funding Sources Transportation (10) Tuition (13) Retirement (14) Adult Ed (17) Debt Service (50) YOUR JOB: Determine how much you need/want to spend and arrange funding sources to match.

Funds left over from last year (fund balance reappropriated) + New Money Total funds available (i.e., your adopted budget) - Funds left over from last year (fund balance reappropriated) New Money Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources

Funds left over from last year (fund balance reappropriated) + New Money Total funds available (i.e., your adopted budget) - Funds left over from last year (fund balance reappropriated) New Money Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources

Funds left over from last year (fund balance reappropriated) + New Money Total funds available (i.e., your adopted budget) - Funds left over from last year (fund balance reappropriated) New Money Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Step 1 Step 2 Step 3

Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Step 1 Step 2 Step 3

Example 1: Retirement Fund: $ 500,000Adopted budget (funds needed) $ 5,000Less: fund balance reappropriated $ 1,000Less: budgeted interest $ New money (county retirement distribution) Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources

Example 2: Adult Education Fund: $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 51,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Year 1Year 2Year 3 Year 4 (Budget Year) Fund Balance Reappropriated $1,500$2,500$2,000 Budgeted Interest $500 Course Fees$7,750$7,500$7,250 Local Levy$50,250$49,500$50,250 Total Budget$60,000

Where do we find these numbers? And when?? $ 60,000Adopted budget (funds needed) $ 2,000Less: fund balance reappropriated $ 58,000New money needed $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 51,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Possible Sources: Your expenditure needs When? NOW!

Where do we find these numbers? And when?? $ 60,000Adopted budget (funds needed) $ 2,000Less: fund balance reappropriated $ 58,000New money needed $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 51,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Possible Sources: Multi-year average Educated guess RECOMMEND ESTIMATING LOW! When? NOW! …and then update as needed

Where do we find these numbers? And when?? $ 60,000Adopted budget (funds needed) $ 2,000Less: fund balance reappropriated $ 58,000New money needed $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 51,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources

Where do we find these numbers? And when?? $ 60,000Adopted budget (funds needed) $ 2,000Less: fund balance reappropriated $ 58,000New money needed $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 51,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Possible Sources: Educated guess When? NOW!

Where do we find these numbers? And when?? $ 60,000Adopted budget (funds needed) $ 2,000Less: fund balance reappropriated $ 58,000New money needed $ 500Less: Budgeted interest $ 7,500Less: Budgeted course fees $ 50,000Permissive tax levy Financing Sources for Budgeted Funds Spending Authority (Budget) Determines Funding Sources Source: Calculated When? NOW!

Presenting the Budget to your Board

Presentation 1 Notes:

Presenting the Budget to your Board Presentation 2 Notes:

Communicating Budget Information with the Public

1.District’s responsibility to communicate 2.Rules of engagement 3.Tools in your toolbox

District’s Responsibility to Communicate Transparency Public ignorance and misperceptions Complexity of issues Ballot usually does not provide the full picture…

District’s Responsibility to Communicate – Example 1 An I recently received: Hi Mike, Could you confirm if this is right: we want to request $29,285.79, 9.51 mills for general fund overbase levy from the voters. If we reduced the tuition levy by 20K or 6.5 mills, can our ballot state the difference $9, general fund over base levy, 3.01 mills? Thanks as always for your help :)

District’s Responsibility to Communicate – Example Projected increase: mills (4.6%) Mills voted during : SMS/HAW expansion bonds HS Building Reserve General Funds 3.91 Total Voted Mills ???

District’s Responsibility to Communicate Transparency Public ignorance and misperceptions Complexity of issues Ballot usually does not provide the full picture… Build __________ and ____________

Rules of Engagement DO NOT: – Use public resources to advocate for a candidate or position – Underestimate the importance of perception DO: – Get information to constituents – Be objective – Scrutinize tone, intent of communications

Rules of Engagement OK or not OK? – Post factual material on your website? – Use work time to respond to an online newspaper comment and explain why people should support your levy? – Write a letter to the editor explaining why people should support the levy and sign with your official title? – Attend PTA meetings during work hours to explain the District’s budget – Participate in a calling tree campaign during your lunch hour

Tools in your Toolbox Word of mouth – Staff – Parents Media – TV – Newspaper Editorial Board Articles Comments Political Action Groups Community forums Direct voter contact