1. 2015 MASBO Budget Workshops Denise Williams, MASBO Executive Director dwilliams@masbo.com; 406-442-5599dwilliams@masbo.com Mike Waterman, Director of Business Services – Bozeman Public Schools mike.waterman@bsd7.org 406-522-6097 or 406-589-4027mike.waterman@bsd7.org

2. Agenda 1.General Fund – Overview – Use of OPI spreadsheet 2.Scattergrams 3.Lunch 4.Discussion Questions 5.Taxation 6.Getting to a Balanced Budget

3. GENERAL FUND General Fund – Expenditure Budget Limits – Funding Sources Funding the BASE budget Funding the over-BASE budget

4. GENERAL FUND USE THESE RESOURCES FROM OPI! OPI 2015-16 Preliminary General Fund Budget Data Sheet http://opi.mt.gov/pub/index.php?dir=School%20Finance/PreliminaryBudgetD ataSheets/FY2016/ OPI 2015-16 General Fund Budget Overview and Worksheets http://www.opi.mt.gov/pdf/SchoolFinance/Budget/FY15_16GenFundBudget OverviewWorksheets.pdf OPI 2015-16 General Fund Budget Excel Spreadsheet http://opi.mt.gov/pub/index.php?dir=School%20Finance/PreliminaryBudgetD ataSheets/PBDSSupport/BudgetSpreadsheet/&file=GFbudget_FY16_PRESESSI ON_F2.xlsx

5. General Fund - ANB WINTER ENROLLMENT (1 ST Monday in December) Part-time Students = ¼, ½, or ¾ FALL ENROLLMENT (1 ST Monday in October) Part-time Students = ¼, ½, or ¾ SPRING ENROLLMENT (1 st Monday in February) Part-time Students = ¼, ½, or ¾ Total of 3 counts divided by 3 180 + PIR Days* 180 = ANB *PIR Days are “pupil instruction related” days for teacher in- service training and recordkeeping AVERAGE NUMBER BELONGING (ANB) X Items in red are SB175 and HB2 changes (2013 Legislative session)

6. General Fund - ANB Use the ANB that generates the greatest maximum general fund budget : – Current Year ANB (CY ANB) ANB for the budget unit for the ensuing school year (FY2016 ANB is based on FY2015 enrollment counts) – 3-Year Average ANB Add current year ANB to the current ANB for the previous two school fiscal years and divide by 3 (FY2016 ANB is the average of FY2016, FY2015 and FY2014)

7. MY K-12 School – FY2015 FY2014 ANB FY2015 ANB FY2016 ANB 3-Year Avg ANB Elementary156174169167 Middle School 32 29 31 High School 53 55 53 54 The Basic and per-ANB entitlements, Indian Education for All and Data for Achievement components are all calculated using ANB. Using Current Year ANB Using 3-Year Average ANB Elementary/Middle School1,248,744.301,238,211.10 High School656,790.70663,522.60

8. General Fund - Budget Elements Basic Entitlement Per-ANB Entitlement Special Education Allowable Cost Payment Quality Educator Payment At-Risk Student Payment Indian Education for All Payment American Indian Achievement Gap Pmt Data for Achievement Payment

9. General Fund Budget Limits BASE Budget‘Maximum’ Budget* Basic Entitlement80%100% Per-ANB Entitlement80%100% Special Ed Allowable Cost Payment140%175 – 200% Quality Educator Payment100% At-Risk Student Payment100% Indian Education for All Payment100% Amer. Indian Achievement Gap Pymnt100% Data For Achievement Payment100% * ‘Maximum’ budget is just a term – not necessarily the most you can spend

10. General Fund Budget Limits BASE Budget‘Maximum’ Budget* Basic Entitlement80%100% Per-ANB Entitlement80%100% Special Ed Allowable Cost Payment140%175 – 200% Quality Educator Payment100% At-Risk Student Payment100% Indian Education for All Payment100% Amer. Indian Achievement Gap Pymnt100% Data For Achievement Payment100% * ‘Maximum’ budget is just a term – not necessarily the most you can spend

11. Basic Entitlement Rates EntitlementsFY2014FY2015 FY2016 (HB27) FY2017 (HB27) Elementary Basic $ 40,000 $ 50,000$50,895 For every 25 Elem ANB over 250 N/A$ 2,000$ 2,500$ 2,545 Middle School Basic $ 80,000 $100,000$101,790 For every 45 MS ANB over 450 N/A$ 4,000$ 5,000$ 5,090 High School Basic $290,000 $300,000$305,370 For every 80 HS ANB over 800 N/A$ 12,000$ 15,000$ 15,269 *HB27 proposes to retain the increase in the basic entitlement rates for FY2016 as provided in SB175 (2013 session) and increase FY2017 by inflation of 1.79%

12. Basic Entitlement Rates FY16 Example (assumes passage of HB27): Elementary Budget Unit 1 (E1)366 ANB Basic Entitlement 250 ANB$ 50,000 Additional basic entitlement 366 – 250 = 116 116/25 = 4.64 ~ 4.0 4.0 X $2,500$ 10,000 Total Basic Entitlement $60,000

13. Per-ANB Entitlement Rates EntitlementsFY2014FY2015 FY2016 (HB27) FY2017 (HB27) *Elementary per-ANB $ 5,120$ 5,226$5,348$ 5,444 *High School per-ANB $ 6,555$ 6,691$ 6,847$ 6,970 *HB27 proposes to increase per-ANB entitlements by 2.33% in FY2016 and 1.79% in FY2017, in accordance with SB175 (2013 session)

14. General Fund Budget Limits BASE Budget‘Maximum’ Budget* Basic Entitlement80%100% Per-ANB Entitlement80%100% Special Ed Allowable Cost Payment140%175 – 200% Quality Educator Payment100% At-Risk Student Payment100% Indian Education for All Payment100% Amer. Indian Achievement Gap Pymnt100% Data For Achievement Payment100% * ‘Maximum’ budget is just a term – not necessarily the most you can spend

15. Special Education Allowable Costs FY2013FY2014**FY2015 HB 2 Appropriation$ 41.6 million $ 42.018 million $ 42.892 million % increase1%2% **HB2 provides FY2016 and FY2017 appropriations at FY2015 level Special Education Allocation 20-9-321(4)(a), MCA: 52.5% through instructional block grants (ISB) 17.5% through related services block grants (RSBG) 25% to reimbursement of local districts (disproportionate costs) 5% to special education cooperatives and joint boards for admin and travel

16. General Fund Budget Limits BASE Budget‘Maximum’ Budget* Basic Entitlement80%100% Per-ANB Entitlement80%100% Special Ed Allowable Cost Payment140%175 – 200% Quality Educator Payment100% At-Risk Student Payment100% Indian Education for All Payment100% Amer. Indian Achievement Gap Pymnt 100% Data For Achievement Payment100% * ‘Maximum’ budget is just a term – not necessarily the most you can spend

17. Funding Components Quality Educator (QEC) – OPI pays to school districts and special education cooperatives – Paid for each full-time equivalent (FTE) licensed educator and for other licensed professionals employed by the district or cooperative At-Risk Student (ARC) – Annual appropriation is distributed school districts based on Title I allocations

18. Funding Components (continued) Indian Education for All (IEA) – Paid per ANB ($100 minimum) – For providing curriculum for the recognition of American Indian cultural heritage American Indian Student Achievement Gap (SAG) – Paid per each American Indian student enrolled as reported on the October enrollment count – For closing the educational achievement gap that exists between American Indian students and non-Indian students Data for Achievement (D4A) – Paid per ANB – For access fees or other costs for statewide data system, including data entry and staff training

19. Funding Components FY2015FY2016 (HB27) FY2017 (HB27) Quality Educator$3,042$3,113$3,169 At-Risk Student$5,149,426$5,269,408$5,363,730 Indian Education for All$20.40 ($100 min.) $20.88 ($100 min.) $21.25 ($100 min.) Am Indian Student Achievement Gap $200$205$209 Data for Achievement$15$20$20.36 *HB27 proposes to increase these payments by 2.33% in FY2016 and 1.79% in FY2017, in accordance with SB175 (2013 session)

20. General Fund Budget Limits BASE Budget‘Maximum’ Budget* Basic Entitlement80%100% Per-ANB Entitlement80%100% Special Ed Allowable Cost Payment140%175 – 200% Quality Educator Payment100% At-Risk Student Payment100% Indian Education for All Payment100% Amer. Indian Achievement Gap Pymnt100% Data For Achievement Payment100% * ‘Maximum’ budget is just a term – not necessarily the most you can spend

21. BASE Budget ~80% General Fund Budget Limits Trustees must adopt a budget that is at least equal to the BASE Budget. Minimum Budget Allowed

22. General Fund Budget Limits Districts may permissively adopt an over- BASE levy that is equal to the higher of: – the highest over-BASE amount imposed (actually levied) in any of the previous 5 years, OR – The highest over-BASE amount authorized by voters, up to the highest budget allowed, in any of the previous 5 years

23. BASE Over-BASE portion Without a vote: Prior Yr Over-BASE Tax Levy Amt + Prior Yr Excess Reserves Used to Fund Over-BASE + Estimated Tuition Revenue + Oil & Gas Revenue Highest Budget Without a Vote General Fund Budget Limits Highest amount imposed or authorized in any of the previous 5 years (Example: For FY2016, use FY2011 - FY2015)

24. BASE Budget ~80% General Fund Budget Limits Permissive Over-BASE Budget Without seeking additional voter approval, trustees may adopt a General Fund budget that equals their current year BASE budget plus highest over-BASE levy approved by voters or levied in past five years. Highest Budget Without a Vote

25. Highest Budget With a Vote* BASE Over-BASE portion Without a vote: Prior Yr Over-BASE Tax Levy Amt + Prior Yr Excess Reserves Used to Fund Over-BASE + Estimated Tuition Revenue + Oil & Gas Revenue Vote Required for Increase in Over-BASE Tax Levy * Cannot exceed the Highest Budget Allowed

26. BASE Budget ~80% General Fund Budget Limits Highest Budget Allowed Districts may adopt a budget that is the higher of:  Current Year Maximum, -OR-  Prior Year adopted budget plus any increases DSA (Basic and per-ANB entitlements) and any increases in the Quality Educator, At-Risk, Indian Education for All, Student Achievement Gap and Data for Achievement payments Highest Budget Allowed Permissive Over-BASE Budget Highest Budget Without a Vote

27. BASE Budget ~80% General Fund Budget Limits Highest Budget Allowed Districts may adopt a budget that is the higher of:  Current Year Maximum, -OR-  Prior Year adopted budget plus any increases DSA (Basic and per-ANB entitlements) and any increases in the Quality Educator, At-Risk, Indian Education for All, Student Achievement Gap and Data for Achievement payments Highest Budget Allowed Permissive Over-BASE Budget Highest Budget Without a Vote Highest Vote Amount

28. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components Guaranteed Tax Base Aid (GTB) Guaranteed Tax Base Aid (GTB) BASE Levy BASE Levy Revenues from State Local Revenues Adopted Budget BASE Budget GTB Budget Area Funding the BASE Budget

29. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components Guaranteed Tax Base Aid (GTB) Guaranteed Tax Base Aid (GTB) BASE Levy BASE Levy Adopted Budget BASE Budget Funding the BASE Budget Direct State Aid (DSA) (44.7% Basic & per-ANB) 100% QEC100% ARC 100% IEA100% SAG 100% D4A140% SPED

30. Funding the BASE Budget State funding for: – Direct State Aid 44.7% of the Basic Entitlement 44.7% of the per-ANB Entitlement – Special Education Allowable Costs (140%) – Funding Components (100%) Quality Educator At-Risk Student Indian Education for All American Indian Achievement Gap Data for Achievement Payment schedule: 10% in Aug–Oct and Dec–Apr; 20% in June

31. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components Guaranteed Tax Base Aid (GTB) Guaranteed Tax Base Aid (GTB) BASE Levy BASE Levy Adopted Budget BASE Budget GTB Budget Area: 35.3% Basic Entitlement + 35.3% Per-ANB Entitlement + 40% SPED Payment Funded with local permissive (non-voted) levy, other non- levy revenue and state GTB aid, if a district is eligible Funding the BASE Budget

32. GTB Budget Area - Fund Balance Reappropriated - Oil and Natural Gas Production Taxes - State School Block Grant - Local revenue required to be anticipated - Other non-levy revenue - Natural Resource Development Payment = BASE Budget Levy

33. Funding the BASE Budget Oil and Natural Gas Production Taxes – Must anticipate as revenue the lesser of: at least 25% of oil and gas revenue received in the prior year, OR the net levy requirement – One-half must be used to reduce the BASE levy – Remaining may be used to fund the over- BASE levy

34. Funding the BASE Budget Oil and Natural Gas Production Taxes (continued) Exceptions: – Maximum GF Budget < $1 million – Adopted GF budget + oil and gas revenue = 105% or less of the Maximum GF budget – Maximum GF Budget > $1 million AND have an approved anticipated unusual enrollment increase – Outstanding oil and gas revenue bonds

35. Funding the BASE Budget Local revenue required to be anticipated – Based on amounts reported on prior year TFS – 1510 Interest earnings – 19XX Other revenue Other non-levy revenue – School block grant (General Fund) – Combined school block grant (optional) – Coal gross proceeds

36. Funding the BASE Budget Natural Resource Development K-12 Funding Payment – A variable % of the Basic and per-ANB entitlements above the Direct State Aid (DSA) – Distributed to each school district based on the ratio of that district’s DSA to statewide DSA – Considered non-levy revenue that is used to reduce the BASE levy – If a district is eligible for GTB, offsets a portion of the amount of GTB received

37. Funding the BASE Budget Natural Resource Development K-12 Funding Payment (continued) – $3 million appropriated for FY2015 budgets – In subsequent years, minimum payment is the amount needed to prevent a statewide increase in BASE budget levies associated with inflationary increases in the Basic and per-ANB entitlements, plus any excess interest and income revenue appropriated by the legislature pursuant to 20-9-622(3)(a), MCA

38. Funding the BASE Budget Natural Resource Development K-12 Funding Payment (continued) – FY2016 appropriation = $4.9 million – FY2017 appropriation = $8.1 million The distribution of the NRD K-12 Funding payment will decrease the state GTB payment, in those districts that qualify for GTB.

39. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components GTB BASE Levy BASE Levy Adopted Budget BASE Budget Funding the BASE Budget Revenue that reduces BASE levy requirement FB Reappropriated Oil and gas revenue School Block Grant Local revenue required to be anticipated Other non-levy revenue K-12 Funding Payment FB Reappropriated Oil and gas revenue School Block Grant Local revenue required to be anticipated Other non-levy revenue K-12 Funding Payment FY2015

40. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components GTB BASE Levy BASE Levy Adopted Budget BASE Budget Revenue that reduces BASE levy requirement FY2016 Over-BASE Levy BASE Levy BASE Levy GTB Revenue that reduces BASE levy requirement DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components Increased DSA, etc. K-12 Funding Payment At minimum, prevents an increase in the BASE levy from year to year

41. Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components GTB BASE Levy BASE Levy Adopted Budget BASE Budget Funding the BASE Budget Revenue that reduces BASE levy requirement Guaranteed Tax Base Aid (GTB) Subsidizes the BASE Levy Requirement

42. Funding the BASE Budget State Guaranteed Tax Base Aid (GTB) State subsidy for BASE mills Eligibility is based on the ratio between the district’s taxable value and the district’s GTB Budget Area as compared to the statewide taxable value X 193% and the GTB Budget Areas of all districts statewide. Districts with a ratio lower than the statewide ratio qualify for GTB aid OPI pays General Fund GTB to districts in November and May

43. Funding the BASE Budget State Guaranteed Tax Base Aid (GTB) Statewide Taxable Valuation X 193% Total of all District GTB Budget Area = State GTB Ratio Statewide GTB RatiosElementaryHigh School Taxable valuation (tax year 2014)2,474,873,911.00 GTB Budget Area (FY2015)226,267,684.70121,936,088.51 TV divided by GTB Budget Area X 193% = Statewide GTB Ratio for FY2015 budgets 21.1139.17

44. Funding the BASE Budget State Guaranteed Tax Base Aid (GTB) District Taxable Valuation District GTB Budget Area = District GTB Ratio Example District GTB RatiosElementary Taxable valuation (tax year 2014)5,605,331.00 Divided by GTB Budget Area (FY2015)475,196.48 District GTB ratio11.80 State GTB ratio21.11 Qualifies for GTB?Yes

45. Funding the BASE Budget State Guaranteed Tax Base Aid (GTB) Example District GTB subsidy per millElementary State GTB ratio21.11 Times District GTB Budget Area (FY2015)475,196.48 District Guaranteed tax base for FY2016 budget10,031,397.00 Less District taxable value (estimated using tax year 2014)5,605,331.00 FY2016 GTB subsidy per BASE mill (x.001)4,426.07 This district will receive $4,426.07 for each BASE mill it levies to support the General Fund From state GTB$ 4,426.07 (44%) From district local taxpayers$ 5,605.33 (56%)

46. Funded with voter approved levies and non-levy revenue Over-BASE Levy DSA/SPED/ 5 Funding Components DSA/SPED/ 5 Funding Components Guaranteed Tax Base Aid (GTB) Guaranteed Tax Base Aid (GTB) BASE Levy BASE Levy Revenues from State Local Revenues Adopted Budget BASE Budget Funding the over-BASE Budget

47. Generally, non-levy revenue must be used first to reduce the BASE Budget Levy Exceptions: – Estimated Tuition revenue – Excess Reserves held for more than one year – Oil and natural gas production tax revenue after the amount required to fund the BASE budget levy is met When BASE Budget Levy = zero, available non-levy revenue may be used to fund the over-BASE Budget

48. Funding the over-BASE Budget Over-BASE Levy – Voter approved initially; permissive in subsequent years – Flexible Non-Voted Levy Authority 20-9-308(2)(b), MCA May swap out permissive levy authority from other budgeted funds and apply to GF over-BASE levy authority Must return permissive levy authority from GF if an increase in property taxes is needed in the other budgeted funds in future years

49. Funding the over-BASE Budget Which “budgeted funds” are we talking about? Transportation (10) Bus Depreciation (11) Tuition (13) Adult Education (17)

50. OPI Budget Spreadsheet Overview Projecting budget limits/evaluating legislative proposals – cells to evaluate: – PAR Tab: H3 – Inputs Tab: ANB cells (B9 – D23), Q/S/U8 - 27 – Gen Fund Budget Tab: E/G/I 109, 113, 117, 121, 125, 129, 133 (for projecting FY17 budget) Estimating tax impact of ballot issues

51. Uses of Funds: 2012 Montana Statewide General Fund Expenditures by Function

52. Uses of Funds: 2012 Montana Statewide General Fund Expenditures by Object

53. Uses of Funds: 2012 Montana Statewide General Fund Expenditures by Function and Object

54. Uses of Funds Building Blocks of an Expenditure Budget (Objects): Salary & Benefits Utilities Insurance Contracts Building/Department Budgets Contingency

55. Uses of Funds Scattergram

56. Uses of Funds Scattergram Salary ScheduleBAMA Step 1 Current Year Salary$25,000$35,000 Step 2 Current Year Salary$30,000$40,000 FTE Count (Scattergram)BAMA Step 1 FTE22 Step 2 FTE15 Total CostBAMA Step 1$50,000$70,000 Step 2$30,000$200,000 Total Cost: $350,000 Cost of Steps: $30,000 Total FTE: 10

57. School Taxation Plan your tax structure! Understand how property taxes work

58. School Taxation Market Value (MT Dept of Revenue) Less: Exemptions (Legislature) Taxable Market Value x Tax Rate (Legislature) Taxable Value (certified by DOR) x Mills (local governments) Taxes due (billed, collected, and distributed by county treasurer)

59. Market Value (MT Dept of Revenue) Less: Exemptions (Legislature) Taxable Market Value x Tax Rate (Legislature) Taxable Value (certified by DOR) x Mills (local governments) Taxes due (billed, collected, and distributed by county treasurer) School Taxation

60. Taxable Value

61. (Market value - Exemptions) x tax rate = taxable value

62. Taxable Value Total taxable value – TIFD increment = taxable value for budget

63. Taxable Value for budget

64. Taxable Value Elementary High School

65. Taxable Value Current reappraisal system: 6-year cycle – Previous cycle: Jan 1, 2009 – Dec 31, 2014; Jan 1, 2008 base valuation date – Current cycle: Jan 1, 2015 – Dec 31, 2020; Jan 1, 2014 base valuation date – Property value decreases effective in whole first year – Property tax increases phased in over 6-year cycle Proposed reappraisal system: 2-year cycle (SB157)

66. Taxable Value Taxable values for FY16 – Department of Revenue map: http://revenue.mt.gov/Portals/9/property/reappr aisal- roadshow/Map%20and%20Tables%28with%20Citi es%29_1.pdf Department of Revenue map – Does NOT include newly taxable property

67. Source: Gallatin Association of Realtors Median Price: Single Family Residences Bozeman and Surrounding Area

68. Market Value (MT Dept of Revenue) Less: Exemptions (Legislature) Taxable Market Value x Tax Rate (Legislature) Taxable Value (certified by DOR) x Mills (local governments) Taxes due (billed, collected, and distributed by county treasurer) School Taxation

69. Tax Revenue Required District Taxable Value School Taxation What is a mill anyway?!? Simple! One mill = 1/1,000 of your taxable value x 1,000 = Levied Mills

70. School Taxation School taxes generally driven and limited by dollars Mills are computed after dollars and taxable values are known Examples: Revenue Needed$5,000 Taxable Value$10,000 Value of 1 Mill (TV x 0.001)$10 Mills Levied (Revenue / Mill Value)500

71. School Taxation School taxes generally driven and limited by dollars Mills are computed after dollars and taxable values are known Examples: Revenue Needed$5,000 Taxable Value$10,000 Value of 1 Mill (TV x 0.001)$10 Mills Levied (Revenue / Mill Value)500 Determined by Board Certified by MT Dept of Revenue

72. School Taxation Generally driven and limited by dollars Mills are computed after dollars and taxable values are known Examples: Revenue Needed$5,000 Taxable Value$10,000 Value of 1 Mill (TV x 0.001)$10 Mills Levied (Revenue / Mill Value)500

73. School Taxation Generally driven and limited by dollars Mills are computed after dollars and taxable values are known Examples: Revenue Needed$5,000 Taxable Value$10,000 Value of 1 Mill (TV x 0.001)$10 Mills Levied (Revenue / Mill Value)500

74. School Taxation Generally driven and limited by dollars Mills are computed after dollars and taxable values are known Examples: Revenue Needed$5,000 Taxable Value$10,000 Value of 1 Mill (TV x 0.001)$10 Mills Levied (Revenue / Mill Value)500

75. School Taxation Plan your tax structure! Understand how property taxes work Develop comprehensive tax projections before presenting budgets and/or recommending elections. Consider levied dollars AND mills

76. Bozeman Public Schools Levied Dollars History (K-12) $30.8M $25.3M $25.9M $26.3M $27.5M $30.3M

77. Taxable Value Elementary High School

78. Bozeman Public Schools Levied Mills History (K-12) 216.67 199.54 196.89196.86 203.26 218.41

79. School Taxation Plan your tax structure! Understand how property taxes work Develop comprehensive tax projections before presenting budgets and/or recommending elections. Consider levied dollars AND mills Keep big picture in mind Compare to similar sized, neighboring districts Remember how your district fits in the overall tax picture

80. Montana AA School Districts 2014-15 K-12 Levied Mills

81. Gallatin County K-12 School Districts 2014-15 Levied Mills

82. Bozeman (Proper) Mill History 603.46 599.90 604.77 632.05 647.37

83. School Taxation Plan your tax structure! Understand how property taxes work Develop comprehensive tax projections before presenting budgets and/or recommending elections. Consider levied dollars AND mills Keep big picture in mind Compare to similar sized, neighboring districts Remember how your district fits in the overall tax picture UNDER PROMISE; OVER DELIVER

84. Where the Rubber Meets the Road: Getting to a Balanced Budget What IS a Balanced Budget? Funding source for all anticipated expenditures – Includes contingency – Structurally balanced: duration of costs matches duration of funding sources

85. Quick aside on structural balance… Would you consider these items ongoing or one- time-only? – Increase in district contribution to employee health insurance – Construction of two additional classrooms on high school building – Special training event for certified staff – Purchase of science curriculum – New anti-bullying program funded entirely by a grant

86. Where the Rubber Meets the Road: Getting to a Balanced Budget What IS a Balanced Budget? Funding source for all anticipated expenditures – Includes contingency – Structurally balanced: duration of costs matches duration of funding sources Supportable by Board, community, staff Represents best value for the taxpayers

87. Where the Rubber Meets the Road: Getting to a Balanced Budget Tools in your toolbox: Planning

88. Budget Planning Roles in the Budget Process What is the role of: Community Board Supt Administrators Clerk Staff

89. Budget Planning Roles in the Budget Process 20-3-324. Powers and duties. As prescribed elsewhere in this title, the trustees of each district shall: (1) employ or dismiss a teacher, principal, or other assistant… ; (2) employ and dismiss administrative personnel, clerks, secretaries, teacher's aides, custodians, maintenance personnel, school bus drivers, food service personnel, nurses, and any other personnel considered necessary to carry out the various services of the district;

90. Budget Planning Roles in the Budget Process 20-3-324. Powers and duties. As prescribed elsewhere in this title, the trustees of each district shall: (8) adopt and administer the annual budget or a budget amendment of the district in accordance with the provisions of the school budget system part of this title; (9) conduct the fiscal business of the district in accordance with the provisions of the school financial administration part of this title;

91. Budget Planning Budget Timeline Critical to have a plan! Plan should include: – Legal deadlines – Internal timelines Example

92. Where the Rubber Meets the Road: Getting to a Balanced Budget Tools in your toolbox: Planning New flexibility options – Increasing General Fund Highest Budget Without a Vote by decreasing other levies – Accessing Tuition Fund for special ed costs – Safety and security transfers – Interlocal/multidistrict agreements

93. Where the Rubber Meets the Road: Getting to a Balanced Budget Increasing General Fund Highest Budget Without a Vote by decreasing other levies: Requirements: permissive levies in the prior fiscal year Mechanics: increase General Fund highest budget without a vote by the amount other permissive levies are reduced Benefits: Drawbacks:

94. Where the Rubber Meets the Road: Getting to a Balanced Budget Accessing Tuition Fund for special ed costs: Requirements: open Tuition Fund Mechanics: levy local taxpayers for the cost of special needs students, reduced by amounts already funded by other mechanisms. Use the levy proceeds to pay these costs Benefits: Drawbacks:

95. Where the Rubber Meets the Road: Getting to a Balanced Budget Safety and Security Transfers: Requirements: open Building Reserve Fund Mechanics: transfer funds form any fund except Retirement and Debt Service to Building Reserve Fund, use proceeds for school safety improvements. Funds not encumbered by 6/30/15 must be transferred back to originating fund. Benefits: Drawbacks:

96. Where the Rubber Meets the Road: Getting to a Balanced Budget Interlocal/Multidistrict agreements: Requirements: two districts with an agreement Mechanics: move money from any fund except Retirement & Debt Service, use money as allowed by agreement Benefits: Drawbacks:

97. Where the Rubber Meets the Road: Getting to a Balanced Budget Tools in your toolbox: Planning New flexibility options – Increasing General Fund Highest Budget Without a Vote by decreasing other levies – Accessing Tuition Fund for special ed costs – Safety and security transfers – Interlocal/multidistrict agreements Permissive Levies

98. Where the Rubber Meets the Road: Using Permissive Levies to Balance Mills Funds with permissive levies: – General – Transportation – Bus Depreciation – Tuition – Retirement – Adult Ed

99. Where the Rubber Meets the Road: Using Permissive Levies to Balance Mills Funds with permissive levies: – General – Transportation – Bus Depreciation – Tuition – Retirement – Adult Ed

100. Where the Rubber Meets the Road: Using Permissive Levies to Balance Mills Funds with permissive levies Maximizing flexibility – Keep full reserves in funds with permissive levies – Understand funding needs, especially long term Spending/costs Tax perspective – is this need temporary or permanent?

101. Thanks for coming! Drive safe! Denise Williams, MASBO Executive Director dwilliams@masbo.com; 406-442-5599dwilliams@masbo.com Mike Waterman, Director of Business Services – Bozeman Public Schools mike.waterman@bsd7.org 406-522-6097 or 406-589-4027mike.waterman@bsd7.org