1. MSD of Mt. Vernon Referendum Recommendation

2. The Problem Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. 1. What is happening? 1. What is happening? 2. What does this mean for MSDMV? 2. What does this mean for MSDMV? 3. What do we do? 3. What do we do?

3. The Problem Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. 1. What is happening? 1. What is happening? 2. What does this mean for MSDMV? 2. What does this mean for MSDMV? 3. What do we do? 3. What do we do?

4. 1. What Is Happening? The financial problems facing MSDMV are in two parts. The financial problems facing MSDMV are in two parts. Caused by legislative changes in 2005 regarding the way money is distributed to schools. Caused by legislative changes in 2005 regarding the way money is distributed to schools. Change #1-Funding based on enrollment. Change #1-Funding based on enrollment. Change #2-Transition to base. Change #2-Transition to base.

5. 1. What Is Happening? Funding based on enrollment. Funding based on enrollment.  No more minimum guarantee. Money now follows the child. For every drop of one student, the district loses approx. $6,000.

7. 1. What Is Happening? Funding based on enrollment. Funding based on enrollment.  No more minimum guarantee. Money now follows the child. For every drop of one student, the district loses approx. $6,000. Transition to base. Transition to base.  Schools who spend under the approx. $5100 amount established by the state receive “extra” money. That money comes from schools who spend over that $ amount. (MSDMV) To get to “base,” MSDMV will need to lose an additional $3 million in revenue. What has been the impact of this revenue loss? What has been the impact of this revenue loss?

10. 1. What Is Happening? The two funding changes have caused an immediate problem and present us with a future problem. The two funding changes have caused an immediate problem and present us with a future problem. Immediate problem: Get cash balance stable. Immediate problem: Get cash balance stable. Future problem: How to handle an impending $3 million additional loss of revenue. Future problem: How to handle an impending $3 million additional loss of revenue. The $1 million in cuts made in December will help with the immediate problem. The $1 million in cuts made in December will help with the immediate problem. HOWEVER: State is cutting approx. $801,000 ADDITIONAL revenue for 2010, lowering the “Base” and causing the district’s $3 million problem to become a $3.8 million problem. (More cuts for this year are needed.) HOWEVER: State is cutting approx. $801,000 ADDITIONAL revenue for 2010, lowering the “Base” and causing the district’s $3 million problem to become a $3.8 million problem. (More cuts for this year are needed.)

11. 1. What Is Happening? The “Future Problem” is more difficult. Due to the “Transition To Base” in the current distribution formula, MSDMV is projected to lose an additional $3 million in revenue. The “Future Problem” is more difficult. Due to the “Transition To Base” in the current distribution formula, MSDMV is projected to lose an additional $3 million in revenue. Do not know how soon or how fast transition will occur. Do not know how soon or how fast transition will occur. DOE tells us to expect the funding base to again be lowered in 2011. DOE tells us to expect the funding base to again be lowered in 2011. Enrollment is projected to continue to drop. Enrollment is projected to continue to drop. Legislature will not review school funding until 2011. Any changes made will not occur until 2012. Legislature will not review school funding until 2011. Any changes made will not occur until 2012.

12. The Problem Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. 1. What is happening? 1. What is happening? 2. What does this mean for MSDMV? 2. What does this mean for MSDMV?

13. 2. What Does This Mean For MSDMV? For the “Immediate Problem” the District has been making cuts, such as… For the “Immediate Problem” the District has been making cuts, such as…

14. What Has The District Done So Far? In December School Board cut spending by $1 million. In December School Board cut spending by $1 million.

17. What Has The District Done So Far? In December School Board cut spending by $1 million. In December School Board cut spending by $1 million. Will soon reduce another $800,000 in spending. Will soon reduce another $800,000 in spending. Reduced Certified Staff. (15%) Reduced Certified Staff. (15%) Transferred allowable expenses to CPF and other funds, including grant funds. Transferred allowable expenses to CPF and other funds, including grant funds. Spent Cash Balance. ($3.5 million to $1.5 end of 2009) Spent Cash Balance. ($3.5 million to $1.5 end of 2009) Held Down Salary Increases. (0% for 2 yrs*) Held Down Salary Increases. (0% for 2 yrs*) Increased Cooperative Purchasing. Increased Cooperative Purchasing. Changed vendors for supplies and services. Changed vendors for supplies and services. Audited utility billings. Audited utility billings. Met with various individuals (state/local) to seek out possible solutions/suggestions. Met with various individuals (state/local) to seek out possible solutions/suggestions. DOE says MSDMV is “step and a half ahead of most schools.” DOE says MSDMV is “step and a half ahead of most schools.”

18. For the “Immediate Problem” the District has been making cuts, such as… For the “Immediate Problem” the District has been making cuts, such as… Now, we need to make plans to handle future cuts in revenue. ($3 million or more) Now, we need to make plans to handle future cuts in revenue. ($3 million or more) DOE agrees we have a $3 million “Future Problem.” DOE agrees we have a $3 million “Future Problem.” The plan must be flexible. The $3 million loss of revenue could be less, could be more, might not happen. The plan must be flexible. The $3 million loss of revenue could be less, could be more, might not happen. Must either decrease spending or raise revenue. Must either decrease spending or raise revenue. 2. What Does This Mean For MSDMV?

19. Either-Decrease Expenditures: Either-Decrease Expenditures:  Eliminate all assistant admin. ($321,000)  Eliminate/reduce the number of after school programs such as sports, music, etc. ($538,000)  Close another school. ($600,000 - $800,000)  Eliminate electives/remedial programs. ($570,000)  Reduce the number of school nurses. ($181,000)  Increase elem. class size to maximum of 36. ($240,000)  Total savings = $2,650,000 Or-Increase Revenue: Or-Increase Revenue:  Tax Referendum. 2. What Does This Mean For MSDMV?

20. Tax Referendum Referendum is good for 7 years. Referendum is good for 7 years. Caps the referendum tax rate. Caps the referendum tax rate. Only raise what is needed for each year. Only raise what is needed for each year. Allows for flexibility to match need. Allows for flexibility to match need. Approved once by vote of the public. Approved once by vote of the public. Allows the public the opportunity to decide the direction of its schools. Allows the public the opportunity to decide the direction of its schools. Soonest it could be voted on is May 2010. Soonest it could be voted on is May 2010.

21. Either-Decrease Expenditures: Either-Decrease Expenditures:  Eliminate all assistant admin. ($321,000)  Eliminate/reduce the number of after school programs such as sports, music, etc. ($538,000)  Close another school. ($600,000 - $800,000)  Eliminate electives/remedial programs. ($570,000)  Reduce the number of school nurses. ($181,000)  Increase elem. class size to maximum of 36. ($240,000)  Total savings = $2,650,000 Or-Increase Revenue: Or-Increase Revenue:  Tax Referendum. 2. What Does This Mean For MSDMV?

22. The Problem Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. Based on projected revenue decreases, the school district’s ability to carry out its public education duty will be in serious jeopardy. These funding decreases are due to two problems that will have a huge impact on education locally. 1. What is happening? 1. What is happening? 2. What does this mean for MSDMV? 2. What does this mean for MSDMV? 3. What do we do? 3. What do we do?

23. 3. What Do We Do? Recommendation: Recommendation:  Tax referendum. (DOE recommends referendum)  Let community decide the future direction of MSDMV.  Maximum Rate of 25.1 cents per $100 of A.V.  Future cuts of $3 million plus the $1.8 million we have (or soon will) cut will be devastating.  Program cuts will be extensive. (both ECA & Electives)  Class size will dramatically increase.  Another $ 3 million in cuts will drastically change MSDMV and have an overall negative effect on the local economy.

24. 3. What Do We Do? Financial Impact of Referendum on Local Taxpayer. Based on 2009 assessment: Maximum Rate of $.2510. Based on 2009 assessment: Maximum Rate of $.2510. $100,000 Home = $82.20 per year $1.58 per week $0.2252 per day 1 acre of land = $3.51 per year $0.07 per week $0.0096 per day 100 acres of land =$351.40 per year $6.76 per week $0.9627 per day

25. 3. What Do We Do? Financial Impact of Referendum on Local Taxpayer. Money stays local to use for the general fund of the school district. Money stays local to use for the general fund of the school district. Each year only raise what is needed to match cuts based on “transition to base” in order to maintain school district at current level. Each year only raise what is needed to match cuts based on “transition to base” in order to maintain school district at current level. Money would not be used to offset reductions due to declining enrollment or used for salary increases. Money would not be used to offset reductions due to declining enrollment or used for salary increases.

26. 3. What Do We Do? Questions Will passing the referendum guarantee that there will be no more cuts? Will passing the referendum guarantee that there will be no more cuts? Will defeating the referendum guarantee that there will be cuts? Will defeating the referendum guarantee that there will be cuts? How much will the rate be each year? How much will the rate be each year? Why not make more cuts first? Why not make more cuts first?

27. MSD of Mt. Vernon Referendum Recommendation