2018-19 Proposed Expenditure Budget June 26, 2018

Budget Process Input Board Study/Executive Sessions District Budget Committee Negotiation Solution Team (NST) Meetings Proposed Budget approval provides the limit – or framework - for the Adopted Budget Scheduled to be considered June 26, 2018 Adopted Budget is the official budget Scheduled to be considered July 10, 2018 (must be approved by July 15th each year) Note – the State forms are the official adopted budget and the Gold Book represents our Working Budget Net Result is the State Forms General Budget Limit from $200 million in FY17 to over $199 M in FY18 (ADM decreases offset by inflationary increases– still have $13.44M in DAA State-imposed cuts)

DVUSD Financial Priorities Salary Increase for All Employees Maintain Limited Capital Funding Manage the Structural Deficit

Summary of Proposed Gold Book Highlights of Proposed Budget Factors Base Support Level M&O Override continues at 15% 1.8% Inflationary increase added to M&O Current Year funding provision included (projecting 0.5% reduction) The Teacher Experience Index (TEI) is increased from 1.0128 to 1.0129 Includes ongoing Proposition 123 funding M&O carryforward projected to be $1,007,000

Summary of Proposed Gold Book Highlights of Proposed Budget Factors (con’t) Staffing is based on a projected student enrollment decrease of 0.5%, using current staffing standards The class size standards that are used are KDG (26), 1st (28), 2nd-3rd (29), 4th (33), 5th-6th (34), 7th-8th at K-8 schools (27), 7th-8th at middle schools (28), high schools (27.5) District Additional Assistance (capital) cut at least $10 million - or 65% Continued use cash accounts included in budget at an amount of $2,500,000 (includes: half of 5-Cash Accounts, $2.1 M; Athletic Participation Fees, $300K; Parking Fee Increase $100K ) Includes a projection of $400,000 for Adjacent Ways projects Net Result is the General Budget Limit increases from $199.8 million in FY18 to $213.7 million in FY19 Staffing is at “+1”

FY19 Proposed Budget Summary Note – the State forms (GBL) are the official adopted budget and this represents our Gold Book, or Working Budget

Summary of Adjustments to 2018-19 Budget Staffing Salary increases provided for all employees: $13 million in M&O assigned to salary increases Certified Increase 12% (10% plus 2% in Classroom Site Fund) Other Professional Staff 10% Average Classified Increase 7% Average Admin/Exempt Increase 4% Decrease of 3.3 FTE Teachers (due to student decline) Increase of 1.8 FTE Classified Staff (due to Special Education para professionals) Classified Salary Increase for January 1, 2018 Proposition 206 Minimum Wage Full-Time District Athletic Director Reestablished Additional School-Based Administrative Support Included Added Nursing as Hard-To-Fill Positions Increased Substitute Teacher Pay by $5/Day

Summary of Adjustments to 2018-19 Budget (con’t) Non-Staffing Health Insurance rates increased 8.06% - or $1.896 million - with 100% of the increase funded from VSEBG reserves, as well as small plan design changes State Retirement increased from 11.5% to 11.8% Utilities were not increased (due to APS rate changes related to Federal Tax Reform) Special Education Tuition increased $150,000 Capital Budget established at $4.88 million in FY19 from $4.4 million in FY18

Summary of FY19 State-Imposed Budget Reductions District Additional Assistance (capital) Reduction of at least $10,169,000 (65% of $15.6 M total)

Projected Tax Rate Implications of 2018-19 Budget Proposition 117 (2012) Made Changes to Assessed Valuations Primary and Secondary Assessed Valuation combined in to one Net Assessed Valuation Existing Assessed Valuation growth limited to 5% annually Implemented for Tax Year 2015 (2015-16 School Year) DVUSD Net Assessed Valuation increased 5.5% to $2.575 Billion Projected Tax Rate Changes Primary Rate decreasing 1.0%, or ($0.10412), to $4.240 Secondary Rate increasing 5.2%, or $0.1278, to $2.600 Net impact on the average assessed value residential parcel of $202,776 is an annual increase of $66, or 7.2% Combined Rate of $6.7123 a 6.1% - or $0.3883 – increase over FY16 combined amount of $6.324

Factors Impacting Tax Changes Primary Tax Assessed Valuation Change & Qualifying Tax Rate (QTR) DVUSD Net Assessed Valuation increased 6.1% QTR decreased (2.8%) from $ 4.0468 in 2017-18 to $3.9358 in 2018-19 State Equalization Assistance Property Tax Rate (SETR) Homeowner’s Rebate Cash no longer being considered in tax rate calculation Secondary Tax Assessed Valuation Change Fixed payment schedules for bonds and overrides being paid for by an increasing assessed valuation Due to budgeting for Adjacent Ways, we will be required to publish a Truth and Taxation Notice

NOTE – includes an estimate of Homeowner’s Rebate

Deer Valley Unified School District Sample Parcel Tax Comparison 2017 to Projected 2018 NOTE – includes an estimate of Homeowner’s Rebate

Notes: FY18 amounts were $400,000 with an annual property tax of $1.6391 for a $100,000 residence. FY18 Adjacent Ways planned to be used for next modernization project and/or traffic signal on 51st Ave.

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