TSD Budget Committee February 16, 2017

Budget Planning History Previous Committee Meetings Prior Years Budget Process

Required/Negotiated Expenditures Utilities / Fuel Contract Negotiations Additional Days Benefits Salary Increases Restricted Programs Title 1, LAP, Institution Funding

2016-17 Budget Review Budget Hearing July 22,2016

General Fund Revenue 2015-16 to 2016-17 Category 2015-16 2016-17 +/- Local Levy $14,185,460 $14,730,237 $544,777 Fees, Grants, Etc. $2,334,858 $2,250,713 ($84,145) State Enr. / K-3 / Full Day K / CTE / ALE $43,581,560 $45,173,179 $1,591,619 Special Ed / LAP / Bilingual / Hi Cap / Transportation $9,014,829 $9,311,564 $296,735 Federal Title 1 / Special Ed / Title 2 / Food Service $4,384,394 $3,601,607 ($782,787) Net Revenue Change: $1,566,199

Certificated Salaries Expenditures 2015-16 to 2016-17 Category 2015-16 2016-17 + / - Certificated Salaries $31,052,641 $32,406,792 $1,354,151 Classified Salaries $11,902,037 $12,336,365 $434,328 Benefits $16,672,050 $16,822,383 $150,333 Supplies & Materials $4,685,010 $5,175,471 $490,461 Purchased Services $9,054,364 $8,416,644 ($637,720) Travel $168,440 $156,100 ($12,340) Capital Outlay $91,559 $123,445 $31,986 TOTALS  $73,626,101 $75,437,200 $1,811,199

Revenue /Expenditure Changes 2015-16 to 2016-17 Total Budgeted Revenue Difference = $1,566,199 Total Budgeted Expenditures = $1,811,199 Difference = <$245,000> Why? New Market: Planned Fund Balance Exp. – Maintenance ($165,000) TSD Middle School Transition: 1.0 FTE Counselor to support middle school transition ($80,000)

2016-17 Beginning Fund Balance MS Technology: $200,000 MS Transition Costs: $600,000 Track Replace: $300,000 Curr. Reserve: $550,000 2015-16 Projected FB: $7,953,221

2016-17 Ending Fund Balance 2015-16 Projected FB: $7,708,221 MS Technology: $200,000 MS Transition Costs: $520,000 Track Replace: $350,000 Curr. Reserve: $500,000 2015-16 Projected FB: $7,708,221

Stakeholder Budget Survey

Budget Reductions & Enhancements 2016-17 Employee Salaries/Benefits School Resource Officer #2 MS Counselor – Transition Elementary TOGETHER Support Athletic Trainers for THS/BHHS GRuB Staffing Custodial time at PGS and New Market Preschool Grad. Coach at BHHS .2 FTE music staff for Hi-Cap and Elem. Additional Para Support Special Education Budget Capacity Surplus Special Education Staff Department Budget Reductions (Stud. Learning, Maintenance, Transportation) 1.0 FTE Reduction in Student Learning Elections Budget Reduced

Revenues vs. Expenditures TSD Basic Ed. Only 2016-17 Difference Basic Education Programs 01 Basic Education* 54,657,152 $42,227,221 02 Alt Learning Experience (Included in 01) 459,988 03 Dropout Reengagement 166,263 31-34 Career & Technical Ed 1,920,552 1,910,316 Basic Ed Contribution TWEST 61,087 73 Summer School 25,000 86 Community Services 545,015 97 Districtwide Support 175,000 9,571,923 Subtotal $ 56,752,704 $ 54,967,534 $ 1,785,890 * All local levy and levy equalization revenue is included in Basic Education revenue in this display.

Revenues vs. Expenditures TSD Categorical Pgms. Only 2016-17 Other Categorical Programs Revenue Expenditures Difference 21 State Special Education 5,937,927 7,165,566 (1,227,639) 22 State Birth to Three Prog 219,777 189,608 30,169 24 Federal Special Education 1,207,410 558,863 648,547 38 Federal Career & Tech Ed 21,000 20,309 691 51 Title I Disadvantaged 726,900 702,844 24,056 52 Title II Prof Devel 170,000 117,703 52,297 55 Learning Assistance 1,074,350 1,169,360 (95,010) 58 Special & Pilot Prog 249,112 232,963 16,149 64 Federal English Language 65 Bilingual 112,472 241,384 (128,913) 71 Traffic Safety Education 500 (500) 74 Highly Capable 69,709 339,207 (269,498) 79 Other Instructional Prog 89 Community Services 35,000 62,080 (27,080) 98 Food Service 1,895,182 1,994,020 (98,838) 99 Pupil Transportation 2,538,117 3,328,438 (790,322) Total Other Categorical Prgms $ 14,256,955 $ 16,122,846 $(1,865,891) Total Tumwater Schools $ 71,009,659 $ 71,090,380 ($80,001)

Revenues vs. Expenditures All Schools/Programs 2016-17 Difference Total Tumwater Schools Only* $71,009,659 $71,028,573 ($80,001) New Market Skills Center Loc 650 Skills Center Basic $2,844,606 $3,023,212 (178,606) Loc 653 New Market High School 312,727 283,346 29,381 Loc 655 Summer School Program 733,094 748,869 (15,775) 3,890,427 4,055,427 (165,000) Tumwater West Detention Center 56 State Institutions $237,917 $300,799 (62,882) 51 Title I Neg & Delinquent 54,297 52,502 1,795 Basic Education Contribution 61,807 353,301 Total All Schools/Programs * $75,192,300 $75,437,300 ($245,000)

General Fund MSOC Disclosure MSOC = “Materials, Supplies, Operating Costs” Required Presentation: State Budget (2ESHB-2376) Section 502(8)(a)(ii) Combined Budgeted MSOC Revenue Regular Instruction (Column A) $ 6,951,425 Grades 7-8 CTE $ 17,441 Grades 9-12 CTE $ 412,508 Skills Center $ 605,324 Grades 9-12 Additional (Column I) $ 409,147 Total MSOC Allocation $ 8,395,846

General Fund MSOC Disclosure Objects of MSOC Expenditure Supplies $ 5,175,471 Purchased Services* $ 8,416,644 Travel $ 156,100 Capital Outlay $ 123,545 Total Budgeted MSOC Expenditures $ 13,871,760 Difference $ (5,475,914) * Purchased services examples: Utilities, contractors, professional development, subscriptions, ESD Fees, Etc.

General Fund MSOC Disclosure Supplies Purchased Services Travel Capital Outlay Prg 01 $ 2,401,354 $ 2,019,512 $ 89,133 $ 13,545 Prg 02 $ 1,500 $ 4,000 $ 1,000 $ 12,184 Prg 03 $ - $ 166,263 $ - $ - Prg 31 $ 55,509 $ 88,017 Prg 34 $ 15,000 $ - Prg 45 $ 288,062 $ 2,025,059 $ 16,000 $ 53,816 Prg 97 $ 511,616 $ 3,684,036 $ 30,117 $ 32,000 All Other Programs $ 1,902,430 $ 429,757 $ 19,850 $ 12,000 Totals $ 5,175,471 $ 8,416,644 $ 156,100 $ 123,545

Capital Projects Fund Revenues 2015-16* 2016-17 $ Change Beginning Fund Balance $24,665,000 $33,888,011 $ 9,223,011 Revenues/Other Fin. Sources Local Impact Fees $550,000 $500,000 (50,000) Investment Earnings 150,000 100,000 Rental & Leases 20,000 (20,000) State Assistance 35,000 3,400,000 3,365,000 New Market State 40,000 50,000 10,000 Bond Sales 30,065,000 36,000,000 5,935,000 Transfer from Debt Service Transfer from Gen Fund Total Revenues $30,960,000 $40,150,000 $9,190,000

Capital Projects Fund Net Resources 2015-16* 2016-17 $ Change Total Revenues $30,960,000 $40,150,000 $ 9,190,000 Expenditures Buildings $550,000 $49,485,000 48,935,000 Sites 26,317,000 2,260,000 (24,057,000) Equipment 2,020,000 1,080,000 (940,000) Instructional Technology 623,000 Bond-Related and Other 75,000 - Total Expenditures $28,962,000 $53,523,000 $ 24,561,000 Transfer to Gen Fund (Tech.) 100,000 Ending Fund Balance $ 26,563,000 $ 20,415,011 $ (6,147,989)

Debt Service Fund 2015-16 2016-17 Difference Beginning Fund Balance $9,412,295 $8,592,929 $ (819,366.00) Reserve for Nonvoted Debt - Revenues/Other Fin. Sources Local Taxes $11,059,640 $10,879,381 (180,259) Investment Earnings 50,000 State Forest Revenue 120,000 250,000 130,000 Total Revenues $11,229,640 $11,179,381 $ (869,625.00) Expenditures Voted Debt Bond Principal $9,485,000 $9,920,000 435,000 Bond Interest 3,596,719 4,365,588 768,869 Bond Fees & Misc. 100,000 Nonvoted Debt Total Expenditures $13,181,719 $14,385,588 $ 1,203,869.00 Transfer to Capital Projects $100,000 Ending Fund Balance $7,360,216 $5,286,722 $ (2,073,494.00)

Transportation Vehicle Fund State bus depreciation funding is expected to be around $471,275 which provides enough revenue for at least four new school buses consistent with our acquisition practices.

Transportation Vehicle Fund 2015-16* 2016-17 $ Change Beginning Fund Balance $139,666 $33,186 $(106,480) Revenues/Other Fin. Sources State Depreciation $445,277 $471,275 25,998 Interest Earnings 1,295 300 (995) Insurance Recoveries 10,686 (10,686) Sale of Equipment 10,000 - Total Revenues $467,258 $481,575 $14,317 Expenditures Bus Purchase (5 busses 2015-16; 4 Busses 2016-17) $600,000 $500,000 (100,000) Total Expenditures $(100,000) Ending Fund Balance $6,924 $14,761 $ 7,837

Associated Student Body Fund 2015-16* 2016-17 $ Change Beginning Fund Balance $446,504 $432,270 $(14,234) Revenues/Other Fin. Sources General Student Body $666,200 $712,025 45,825 Athletics 433,985 497,250 63,265 Classes 260,900 246,780 (14,120) Clubs 472,107 502,910 30,803 Private Moneys 46,800 37,375 (9,425) Total Revenues $1,879,992 $1,996,340 $116,348 Expenditures $595,670 $757,325 161,655 509,558 $568,125 58,567 221,880 $211,480 (10,400) 470,335 $523,760 53,425 45,800 $28,375 (17,425) Total Expenditures $1,843,243 $2,089,065 $245,822 Ending Fund Balance $483,253 $339,545 $(143,708)

Fund Balance 101 – (revised) Reserved Inventory – Maintenance / Custodial, Transportation, Food Service These are non-cash items such as tires, brakes, food, cleaning supplies, etc… Pre-Paid Expenditures Bills which are due currently but are for the following school year such as Insurance, curriculum, etc… Skills Center Tumwater West LAP / Special Ed / Other Specific Programs Imprest Accounts Checking accounts at THS, BHHS and the District Office

Fund Balance 101 – (revised) Unassigned Minimum FB Board Policy 5.5% of budgeted expenditures excluding New Market, Tumwater West and contingencies. Program/Facility Reserve – MS Transition, Track Replacement, Curriculum The amount left over after all other Reserved (previous slide), Minimum Fund Balance and Program/Facility Reserves

McCleary 2014-15 School District DATA Per the state, the full funding level in the 2018-19 SY is at least $18,030 per student AAFTE (statewide average) Current year shows an estimated shortfall of $5,169 per student AAFTE (again statewide average) November 2016 AAFTE 6,667.19 x $5,169 = $34,462,705

Levy Cliff $3,161,989 Reduction in CY 2018, $2,715,155 Reduction in CY 2019 Fiscal Year 2017-18 Fiscal Year 2018-19 Levy Lost $ 1,456,676.79 $ 1,456,676.79 $ 1,204,697.73 $ 2,464,156.94 LEA Lost $ 321,014.16 $ 321,014.16 $ 337,580.64 $ 462,419.48 Total Annual Loss $ (1,777,690.95) $ (2,926,576.42)

2017-18 Retirement Rates – (revised) TRS from 13.13% to 15.2% SERS from 11.58% to 13.48% Using this year’s budget as a base increases would be: TRS - $642,989 SERS - $307,063 Programs not funded based on staffing take a direct hit Special Ed, Federal Programs, Transportation, Food Service Estimated District Cost: $ 216,126, plus Estimated Lost Program dollars due to increase: $ 237,942.83

2017-18 Levy Cliff/Pension Rate Impact – (new) Levy Cliff Impact $ (1,777,691) Pension Rate Impact $ (454,069) Combined Impact $ (2,231,760)

6-8 Transition Additional Positions 2 Counselors (one each middle school) 2 PE/Health (one each middle school) 1 Art at BMS Using the average salary the cost estimate is: Base Salary $57,052 + Benefits $23,423 = $80,475 Addt’l Days (27.5) $8,716 + Benefits $2,044 = $ 10,760 Total = $91,235 times 5 new teachers = $456,175 (new costs)

Legislative Update SB 5607 – Education Funding Passed Senate 25-24, House Appropriations Meeting February 6, 2017 HB 1843 / SB 5623 – Basic Education Program (Funding) Passed House Appropriations 18-15 SHB 1059 / SB 5023 – Levy Lid Revisions Delay Passed House 62-35, Senate Ways & Means Committee January 30,2017 HB 1067 / SB 5048 – 2017-2019 Operating Budget House Appropriations Meeting February 9, 2017

Draft Planning Process & Input – (revised) What is the role of the committee? Board of Directors makes the final budget decisions Budget Survey Your thoughts – bring back for next meeting What budget planning process suggestions, if any, do you have for district officials to consider? Other thoughts? The district plans to administer another stakeholder budget survey. What suggestions do you have for the categories in the survey? What ideas or suggestions do you have to increase participation in the survey? In light of legislative uncertainty and the potential adverse impacts of this on district funding for next year, what feedback do you have for the district regarding how to go about determining reductions and/or what reductions you believe the district should consider if reductions become necessary? We are also interested in your input on this question: How can/should the district best communicate about budget planning and related issues to its stakeholders?

Contact Information Mitch Thompson – Director of Financial Services Mitch.Thompson@tumwater.k12.wa.us 360.709.7011 Rick Bonner – Accounting Supervisor Rick.bonner@tumwater.k12.wa.us 360.709.7015 John Bash John.bash@tumwater.k12.wa.us 360.709.7000

Thank You Questions?