Board of Education Budget Workshop March 23, 2017 Frequently, presenters must deliver material of a technical nature to an audience unfamiliar with the topic or vocabulary. The material may be complex or heavy with detail. To present technical material effectively, use the following guidelines from Dale Carnegie Training®.   Consider the amount of time available and prepare to organize your material. Narrow your topic. Divide your presentation into clear segments. Follow a logical progression. Maintain your focus throughout. Close the presentation with a summary, repetition of the key steps, or a logical conclusion. Keep your audience in mind at all times. For example, be sure data is clear and information is relevant. Keep the level of detail and vocabulary appropriate for the audience. Use visuals to support key points or steps. Keep alert to the needs of your listeners, and you will have a more receptive audience.

Agenda State Budget Information (January Consensus Revenue Estimating Conference) Governor’s Executive Budget Proposal Troy School District Current Budget Information Historical Information and 2017-18 Budget Assumptions Millage Rate Review and Discussion Budget Schedule Site Sinking Fund Discussion

Purpose

Objectives Understand State Budget and provide information to reference Review Governor’s Budget Proposal and Current Year Budget Information Establish 2017-18 Budget Assumptions Foundation Allowance / Categorical Funding Pupil Count Millage Rate Review Sinking Fund Information and Discussion

State Budget Information Governor Snyder’s Executive Budget Presentation http://www.msbo.org/sites/default/files/budget_pres2018.pdf House Fiscal Agency: Budget Briefing: School Aid http://house.michigan.gov/hfa/PDF/Briefings/School_Aid_BudgetBriefing_fy16-17.pdf

MPSERS Employer Contribution Rates History And Future Projections The state portion of the MPSERS contribution rate is approximately $982.2 million in FY 2016-17 and will be over $1 billion in FY 2017-18. Note: Future projected rates are from Office of Retirement Services based on current actuarial valuation House Fiscal Agency: January 2014

Governor’s Executive Budget Highlights Foundation Allowance, $128M ($50-$100/pupil increase) At-Risk funding increase, $150M ($778/pupil) Additional resources for high school operations, $22M ($50/pupil increase) Career and technical education equipment upgrades, $20M, one-time Financial support for declining districts, $7M, one-time MiSTEM Network, $8.8M Total MPSERS support

Troy School District Current Budget Information

2016-17 GF Budget Amendment #2

Historical Information and 2017-18 Budget Assumptions

* $248.18 20J reduction occurred in the 2009-10 fiscal year

Understanding School Funding 18 Mills 6 Mills Fixed Other Revenue Sources: Sales, Income, Use, Liquor, Excise Taxes, Cigarette, Lottery, etc Foundation Allowance 6 Mills Fixed 5.6320 Mills

2016-17 Foundation Allowance Breakdown Total Foundation Allowance = $9,015 11.5% 19.9% Amount dependent upon voter approval = $2,696 68.6%

2017-18 Budget Assumption Summary Foundation Allowance, $128M ($50-$100/pupil increase) Pupil increase to 12,900 (increase of 12 students) At-Risk funding increase, $150M ($778/pupil) Additional resources for high school operations, $22M ($50/pupil increase) Career and technical education equipment upgrades, $20M, one-time Financial support for declining districts, $7M, one-time MiSTEM Network, $8.8M Total MPSERS support

Budget Schedule March – June: Develop 2017-18 Budgets and 2016-17 Final Amendments May/June Board Meeting: Public Hearing and Millage Rate Adoption June Board Meeting: Budget Adoption

Millage Rate Review and Discussion

Homestead Millage (Hold-Harmless Levy) Current Homestead Taxable Value is $2.4 billion Millage levied on all qualified Commercial, Industrial, Residential Real Property and Commercial and Industrial Personal Property. Levy can not be greater than the amount needed to generate $1034.18 per pupil Millage Rate = $1034.18 x Pupil Count / Homestead Taxable Value X 1,000

Non-Homestead Millage Current Non-Homestead Taxable Value is $1.1 billion Millage levied on qualified Commercial, Industrial, Residential Real Property and Utility Personal Property. 18.0000 mill non-homestead renewal was approved by voters in November of 2015.

Debt Millage Current taxable value on all properties is $3.6 billion. Millage levied on all qualified property for the purposes of paying off the bond debt that was approved by voters. Currently levy 4.7 mills to pay the approximately $16 million in bond principle and interest that is due this fiscal year.

Sinking Fund

What is a Sinking Fund? MCL 380.1212 amended (91 days after adjournment of the 2016 regular session) A sinking fund millage is a limited tax that may be used for the purchase of real estate for sites for, and the construction or repair of, school buildings, school security improvements, or for the acquisition or upgrading of technology. The tax is levied each year and the revenue generated is used to address the most urgent building improvements identified and prioritized by a school district.

What is a Sinking Fund? Differs from bond issues as it is a pay as you go strategy and is limited in its use. Shall not exceed 3 mills and may be levied for a period not to exceed 10 years. A 1 mill sinking fund given the current taxable value of $3.6 billion would generate $3.6 million per year for prioritized projects.

Sinking Fund - Categories of Potential Projects Flooring Doors Windows Concrete Paving / Hard Surface Play Area Building Security Systems Technology Play Grounds / Soft Surface Areas Ceilings Lighting Mechanical and Plumbing Early Childhood Debt Payment