Tentative Budget Review 2017-2018 Morton CUSD 709 Tentative Budget Review 2017-2018

2016-17 Year End Summary Preliminary estimates (before final reconciliations and audit adjustments) show Education Fund revenue $194,700 greater than budgeted and Education Fund expenditures $1,173,300 less than budgeted. Preliminary estimates show an increase in the Education Fund Balance of $1,384,500 as of 6/30/17. The Education Fund revenues were over budget primarily due to higher than budgeted Federal IDEA revenue. We received an additional $112,000 in Special Education IDEA Room and Board revenue in FY 17 that we had not previously received. In addition, the IDEA Flow Through revenue was higher than budgeted.

2016-17 Year End Summary The Education Fund expenditures were less than budget primarily due to lower than expected self funded health insurance costs. The FY17 costs were lower than FY16 by $631,000. The FY17 claims were higher than FY15 by $128,000. Excluding the impact of the self funded health insurance costs, all other Education Fund expenditures were very close to the budgeted level. Total Education Fund expenditures, excluding the impact of the self funded health insurance costs, were .45% less than budgeted. This equates to $116,000 less than the budget of $26,099,800.

2016-17 Year End Summary In the Operations and Maintenance Fund (O&M), revenue was higher than budget by $286,000 and expenditures were less than budget by $1.3 million. Preliminary estimates show a decease in the Operations and Maintenance Fund Balance of $358,800 as of 6/31/17. The FY17 budget was predicting a $1,978,400 decline in the O&M Funds balance. The main reason expenditures were less than budget in the O&M Fund was a result of life safety capital projects not being completed in the FY17 year and the inclusion of some project components into the Fund 60 – Site Construction work.

2017-18 Timeline August 1, 2017 – Board approves tentative budget August 2, 2017 – publicize display of tentative budget and place on display in District Office September 5, 2017 – Board discuss final budget September 19, 2017 – Public hearing for final budget September 19, 2017 – Board approves final budget September 20, 2017 – Deliver final budget to ROE and County Clerk, upload file to ISBE and post on District website

Major Revenue Sources – 2018 Budget Property Tax Revenue across all funds account for 81.5% of combined budgeted revenue. General State Aid revenue is 3.8% of combined budgeted revenue and is budgeted 100% in the Education Fund. GSA is budgeted at the same level as FY17. Corporate Personal Property Replacement Tax (CPPRT) is 3.7% of combined budgeted revenue and is split between the Education Fund ($550,000), O&M Fund ($450,000) and the IMRF Fund ($300,000). Other State Revenue (Special Education, Transportation) is 2.3% of combined budgeted revenue. At this point, the FY18 budget assumes receipt of only two payments from the State for mandated categoricals. Federal sources are 2.8% of combined budgeted revenue. Other local revenue (interest earnings, school fees, lunch receipts, building rentals) are 5.9% of combined budgeted revenue.

Expenditures – 2018 Budget Salaries and benefits account for 70.0% of combined expenditures and 82.8% of Education Fund expenditures. Actual health insurance claims and expenses totaled $3,200,000 for 2016-17 and decreased $631,000 from 2015-16. The 2018 budgeted health insurance expenditures are $3,800,000 which is an 18.7% increase from 2016-17 and a 4.2% increase from 2015-16. The Operations and Maintenance Fund contains $1,450,000 for capital projects and design fees. The specific projects are shown on Page 15 of this presentation.

Assumptions Revenues Real Estate Tax Collections will be at 99.0% of extension. Property Tax Revenue in 2017-18 is budgeted to increase by $460,400 in the Education Fund and $181,700 in the Operations and Maintenance Fund over 2016-17 levels.

Assumptions Revenues Corporate Personal Property Taxes are budgeted at $1,300,000, a decrease of $100,000 from the 2016-17 actuals . In FY 16, all CPPRT was placed in the O&M Fund except for the required $111,000 in the IMRF Fund. In FY17, $150,000 of CPPRT revenue was placed in the Education Fund, and an additional $89,000 was placed in the IMRF Fund. In FY18, $550,000 of CPPRT revenue is budgeted in the Education Fund, $450,000 in the O&M Fund and $300,000 in the IMRF Fund. The O&M Fund has a CPPRT budget of $450,000 compared to FY17 actual revenue of $1,057,000.

Assumptions Revenues GSA is budgeted to be $1,316,400 and is budgeted in the Education Fund only. Federal revenue is budgeted at the same level as the 2016-17 actuals. Three State categorical payments were received in 2016-17 and only 2 payments are budgeted in 2017-18 at this time.

Assumptions Revenues State Revenue as a % of Total Revenue in combined funds is budgeted at 6.1%. A 3rd State payment would increase the budgeted revenue by $287,000 in the Education Fund and $65,000 in the Transportation Fund At the end of 2016-17, the State of Illinois was behind two categorical payments from the FY17 year totaling $726,000.

Assumptions Expenditures Total salary cost in Combined Education, Operations & Maintenance and Transportation Funds increased by $892,000 or 5.0%. New positions budgeted include 2 new teachers at Lincoln School (6th grade and PIP), 1 new teacher at MJHS (STEM classroom), .6 FTE at MHS, a school psychologist and social worker. In addition 1.5 positions that were being paid through consulting contracts in FY17 were added back as salary in FY18 (RtI Coordinator and ELL Coordinator).

Assumptions Tuition expenditures paid by the District are budgeted to decrease by $28,000 or 2.5%. FY17 Tuition expenditures increased over FY16 levels by $317,000 or 38%.

Assumptions Expenditures IMRF employer contribution decreased slightly from 10.34% to 10.13%. We will enter into a new 5 year lease for buses in FY18 for $100,000. A new van for the transportation department will be purchased in FY18.

Assumptions Capital Projects Life Safety projects and architect fees - $385,000 Asphalt and roofing work - $290,000 Door hardware and frame replacement - $141,500 Floor tile abatement and replacement - $71,100 Lincoln School window replacement - $70,250 MHS elevator replacement - $68,150 MHS masonry work - $53,000 MHS Coaches Office - $25,000 Bertha Frank LED lighting - $25,000 Design and architect fees - $107,000

Assumptions All capital expenditures to complete the referendum construction are budgeted in Fund 60. Total expenditures in FY18 budget are $3,200,000.

MORTON COMMUNITY UNIT SCHOOL DISTRICT 709 TENTATIVE BUDGET 2017-2018 SCHOOL YEAR BUDGET REV OVER (UNDER) REVENUE EXPENDITURES EXP & TRANSFER FUND DESCRIPTION FOR 2017-2018 TRANSFERS EDUCATION $ 26,733,900 $ 26,689,934 $ 43,966 $ 43,966 OPERATIONS & MAINTENANCE 4,424,050 4,415,318 8,732 BOND & INTEREST 1,271,100 1,270,577 523 TRANSPORTATION 860,800 1,084,995 (224,195) MUNICIPAL RETIREMENT / SS 1,065,300 1,040,542 24,758 FUND 60 10,000 3,199,995 (3,189,995) WORKING CASH 301,250 - TORT FUND 411,500 398,335 13,165 FIRE PREVENTION - LIFE SAFETY 100 55,800 (55,700) $ 35,078,000 $ 38,155,496 $ (3,077,496) $ (3,077,496)

Morton Unit School District 709 FY 2018 TENTATIVE BUDGET Fund No. 1. Education Fund Fund Balance 7-1-17 $17,374,969 Anticipated R & R $26,733,900 Anticipated Expenditures $26,689,934 Excess-Rev. / Expenses $43,966 Balance 6-30-18 $17,418,935 Fund No. 2. Operation, Building, $6,180,096 Maintenance fund $4,424,050 $4,415,318 $8,732 $6,188,828 Fund No. 3. Bond & Interest Fund $100,677 $1,271,100 $1,270,577 $523 $101,200 Fund No. 4. Transportation Fund $1,321,616 $860,800 $1,084,995 -$224,195 $1,097,421 Fund No. 5. Municipal Retirement $506,575 Fund $1,065,300 $1,040,542 $24,758 $531,333 Fund No. 6. Capital Projects $3,542,319 $10,000 $3,199,995 -$3,189,995 $352,324 Fund No. 7. Working Cash Fund $2,227,275 $301,250 $0 $2,528,525 Fund No. 8. Tort Cash Fund $125,575 $411,500 $398,335 $13,165 $138,740 Fund No. 9. Fire Prevention and $55,799 Safety Fund $100 $55,800 -$55,700 $99

2018 Fund Balance Exp Ed Fund $17,418,935 $26,689,934 O&M Fund $6,188,828 $4,415,318 Trans Fund $1,097,421 $1,084,995 WC Fund $2,528,525 $ - $27,233,709 $32,190,247 combined days in reserve 305 combined months in reserve 10.2 2017 $17,374,969 $24,926,426 $6,180,096 $3,889,007 excl land $1,321,616 $1,089,340 $2,227,275 $27,103,956 $29,904,772 326 10.9 2016 $15,990,428 $25,160,428 $6,538,878 $8,015,694 $1,401,756 $1,023,180 $3,445,025 $27,376,087 $34,199,302 288 9.6

BUDGET SUMMARY WORKSHEET EDUCATION FUND – EXPENDITURES ** 2016-17 Estimate 2015-16 2016-17 2017-18 ACTUAL ACTUAL** BUDGET TOTAL SALARIES $ 15,260,900 $ 15,967,600 $ 16,785,400   TOTAL EMPLOYEE BENEFITS $ 5,227,900 $ 4,572,500 $ 5,316,500 TOTAL PURCHASED SERVICES $ 1,586,100 $ 1,616,700 $ 1,805,200 TOTAL SUPPLIES $ 852,300 $ 926,700 $ 892,000 TOTAL EQUIPMENT $ 1,339,700 $ 641,200 $ 701,300 TOTAL OTHER OBJECTS $ 893,500 $ 1,201,700 $ 1,189,500 TOTAL EDUCATION FUND EXPENDITURES $ 26,160,400 $ 24,926,400 $ 26,689,900 NEED TO UPDATE

BUDGET SUMMARY WORKSHEET OPERATION & MAINTENANCE FUND – EXPENDITURES ** 2016-17 Estimate 2015-16 2016-17 2017-18 ACTUAL ACTUAL** BUDGET TOTAL SALARIES $ 1,492,300 $ 1,406,100 $ 1,465,900   TOTAL EMPLOYEE BENEFITS $ 403,600 $ 348,500 $ 415,900 TOTAL PURCHASED SERVICES $ 332,200 $ 317,900 $ 488,700 TOTAL SUPPLIES $ 690,700 $ 669,400 $ 775,900 TOTAL EQUIPMENT/CAPITAL $ 5,096,900 $ 1,147,100 $ 1,268,900 TOTAL LAND ADDITIONS $ 1,858,300 $ 1,507,300 $ 0 TOTAL OPERATION & MAINTENANCE FUND EXPENDITURES $ 9,874,000 $ 5,396,300 $ 4,415,300 NEED TO UPDATE

Future Considerations State Budget Property Tax Freeze Pension Reform Local Economic Growth 5 Year Maintenance Plan Facilities Plan