Understanding and Communicating Key Budget Variables · Understanding and Communicating Key Budget Variables ... ‐$500 ‐$400 ‐$300 ‐$200 ‐$100 $0 $100 $200 $300 $400 $7,500

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Understanding and Communicating Key Budget Variables

WASBO Accounting Conference March 12, 201512:45PM – 1:45PM

Robert W. Baird & Co. Incorporated is providing this information to you for discussion purposes. The materials do not contemplate or relate to a future issuance of municipal securities. Baird is not recommending that you take any action, and this information is not intended to be regarded as “advice”’ within the meaning of Section 15B of the Securities Exchange Act of 1934 or the rules thereunder.

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Presenters

• 608‐562‐3700 (office)

• [email protected]

New Lisbon School DistrictDennis Birr

Superintendent

• 608‐886‐8572 (cell)


Robert W. Baird & Co.Public FinanceDiane Pertzborn

School Business Specialist

• 715‐552‐3567 (office)


Robert W. Baird & Co.Public Finance

Debby SchufletowskiSchool Business Specialist

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How to Communicate Key Variables

Know your material

Lay the foundation

Educate throughout the year

Adjust content and level of

detail to target audience

Flight Tower Passengers

Ground Control

Airplane Pilot

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Focus on Three Key Elements

Community Member

• What is the issue?

• Why it is important?

• How does it impact me?

Board Member


• Why is it important?

• How does it impact the district?

Administrative Team


• Why is it important?

• How does it impact the district and the district stakeholders?

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Revenue Limit

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Revenue Limit—Why is it Important?

80.0%

20.0%

General Fund Operating Revenue

Revenue Limit Revenue All other operating revenue

The hypothetical example is for illustrative purposes only.

The revenue limit is important as it generally comprises 85% ‐ 95% of a district’s general fund operating revenue.

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Revenue Limit

• Identifies how much revenue a district can generate through the sources of state equalization aid and the local tax levy for funds:

• Fund 10 (General Fund)

• Fund 38 (Non‐Referendum Debt)

• Fund 41 (Capital Expansion)

District Membership

Per Pupil $ (set in state

budget)Exemptions

Revenue Limit

Authority

Note: Fund 46 is funded through a transfer from the General Fund. Therefore, it is under the revenue limit, but, since it is not funded through a levy, it is not included in the list above.

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Revenue Limit Per Member

$293$257

$297 $281

$213 $203

‐$544

$50$75 $75

$0 $0

‐$600

‐$500

‐$400

‐$300

‐$200

‐$100

$0

$100

$200

$300

$400

$7,500

$8,000

$8,500

$9,000

$9,500

$10,000

$10,500

2004‐05 2006‐07 2008‐09 2010‐11 2012‐13 2014‐15 2016‐17

Annual In

crease / Decrease

Maxim

um reven

ue / pupil


Current revenue limit per pupil increases are much lower than historical trends. For many districts, per‐pupil authority in 2014‐15 is below the 2010‐11 level. The final state biennial budget will determine the actual increase/decrease in 2015‐16 and 2016‐17.

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2014-15 Revenue Limit Max Revenue / Member

$9,262

$9,498

$9,797

$9,277

$9,712

$9,533

$9,228

$9,879

$9,227

$8,800 $9,000 $9,200 $9,400 $9,600 $9,800 $10,000

Baraboo

Reedsburg

Wisconsin Dells

Portage Community

Sauk Prairie

Lodi

Poynette

Mauston

Tomah Area

Max Revenue / Member

Each district has a unique maximum revenue / member amount based. Spending in 1993 and annual recurring exemptions impact districts’ maximum revenue/member figure.

Baird Budget Model GraphSource: Department of Public Instruction

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Non-Revenue Limit Revenue

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Non-Revenue Limit Revenue

• Non‐Revenue Limit Revenue

• Open Enrollment

• Grant Revenue

• Categorical Aids

• Common School Fund Aid (Library Aid)

• SAGE (Student Achievement Guarantee in Education)

• Transportation Aid

• High Cost Transportation

• Sparsity Aid

• Other

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Equalization Aid

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Revenue Limit Composition

56% 56%

5%

53%

45%

36%

53%

62% 61%

$0

$5

$10

$15

$20

$25

$30

0%

10%

20%

30%

40%

50%

60%

70%

Baraboo Reedsburg Wisconsin Dells PortageCommunity

Sauk Prairie Lodi Poynette Mauston Tomah Area

Millions

Revenue Limit Composition/ Aid as a % of Revenue Limit $

Equalization Aid Allowable Limited Revenue (Levy) Aid as a % of Rev. Limit Authority


District’s property wealth and shared costs per member will determine the % of revenue limit authority funded through state equalization aid.

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Equalization Aid Components Local Variables

Property Wealth / FTE = Wealth per Member

Shared Costs / FTE = Shared Costs per Member

More Aid

• Property Poorer

Less Aid

• Property Richer

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Communicating Equalization Aid Local Variables

• Ongoing throughout the year

• Example:

• Decrease in Membership

• Decrease in Property Value

• Increase in Spending

• Positively Aided

• Negatively Aided

• Very high level for non‐board/admin

• State allocation will affect dollars available for all districts

• Other districts’ position in the aid formula can impact your district

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Tax Levy

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Calculating the Revenue Limit Tax Levy

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Total School Tax Levy

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Calculating the Tax Levy

The hypothetical example is for illustrative purposes only.Baird Budget Model Output

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Communicating the Tax Levy

• Know the composition of your levy

• Research which fund is causing a change in the levy over the previous year

• Anticipate fluctuations, communicate and strategize

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Property Value

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Importance and Interrelatedness Equalized Property Value

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Fluctuations in Valuations

Equalized Property Value

Municipality '12-'13 '13-'14 % change '14-'15 % change

T. Caledonia $1,104,114 $1,034,980 -6.26% $1,080,680 4.42%

% of district 0.07% 0.07% 0.07%

C. Baraboo $721,175,200 $716,398,200 -0.66% $722,958,100 0.92%

% of district 47.66% 47.60% 48.02%

T. Baraboo $186,939,800 $183,680,600 -1.74% $181,392,100 -1.25%

% of district 12.35% 12.21% 12.05%

T. Delton $198,192,288 $199,865,328 0.84% $198,078,982 -0.89%

% of district 13.10% 13.28% 13.16%

T. Excelsior $33,848,269 $31,497,859 -6.94% $31,469,213 -0.09%

% of district 2.24% 2.09% 2.09%

T. Fairfield $100,162,300 $101,183,700 1.02% $97,438,500 -3.70%

% of district 6.62% 6.72% 6.47%

T. Freedom $21,421,624 $21,310,053 -0.52% $21,097,231 -1.00%

% of district 1.42% 1.42% 1.40%

T. Greenfield $102,196,582 $103,137,588 0.92% $99,292,500 -3.73%

% of district 6.75% 6.85% 6.60%

T. Merrimac $26,379,351 $24,823,024 -5.90% $27,736,471 11.74%

% of district 1.74% 1.65% 1.84%

T. Sumpter $3,129,038 $2,851,301 -8.88% $2,794,120 -2.01%

% of district 0.21% 0.19% 0.19%

V. Lake Delton $1,545,829 $1,507,092 -2.51% $1,478,444 -1.90%

% of district 0.10% 0.10% 0.10%

V. North Freedom $22,018,300 $22,631,600 2.79% $22,037,800 -2.62%

% of district 1.46% 1.50% 1.46%

V. West Baraboo $95,117,400 $95,012,600 -0.11% $98,634,300 3.81%

% of district 6.29% 6.31% 6.55%

Total EQ Property Value $1,513,230,095 $1,504,933,925 -0.55% $1,505,488,441 0.04%

Baird Budget Model Output


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Mill Rate

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What is the Mill Rate?

Total School‐Based Tax Levy

Equalized Property Value

(TIF OUT)1,000 Mill Rate

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Communicating the Mill Rate

• Equalized Property Value not

Assessed Value

• Calculate district‐specific home

value ranges

• Changes in the Tax Levy and

Equalized Value will impact the

Mill Rate

$10.22 M

ill Rate

$10.22 M

ill Rate

$1,022$100,000 Home

$1,022$100,000 Home

$1,533

$150,000 Home

$1,533

$150,000 Home

$2,044

$200,000 Home

$2,044

$200,000 Home

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Mill Rate Comparison

$8.92

$10.29

$8.28

$9.98$10.49

$11.95

$9.39

$12.15

$8.51

$0.00

$2.00

$4.00

$6.00

$8.00

$10.00

$12.00

$14.00

Baraboo Reedsburg WisconsinDells

PortageCommunity

Sauk Prairie Lodi Poynette Mauston Tomah Area

Mill Rate


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Property Values, Taxes and Mill Rate Trends


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Expenditure budgets

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Why are Salary and Fringe Benefits Important?

71.4%

28.6%

General Fund Operating Expenditures

Salary/Fringe Benefit Budget All other operating expenditures


Salary and Fringe budgets are important as they typically comprise 70% ‐ 85% of a district’s general fund operating expenditures.

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Know your Data


Visual from Baird COMP Module

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Non-Salary/Fringe Expenditures

• Non‐Salary/Fringe Expenditures

• Open Enrollment

• Utilities

• District Insurance

• Transfer to Fund 27 (which includes reimbursement for S/F benefits)

• Technology

• Curriculum

• Other

71.4%

28.6%

General Fund Operating Expenditures

Salary/Fringe Benefit Budget

All other operating expenditures

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Debt Service

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Referendum vs. Non-Referendum Debt

• Fund 38• Inside Revenue Limit calculation• Debt issued without referendum approval• $1,000,000 maximum; additional borrowing authority possible

through petition process

Non-Referendum Debt

• Fund 39• Outside Revenue Limit Calculation• Debt issued with referendum approval

Referendum Approved Debt

• 10% of TID-IN Equalized Property Value for aided K-12 districts; 5% of TID-IN EQ Value for K-8, UHS and non-aided districts

Maximum Authority for Total District Debt

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• Included in

Equalization Aid

shared cost calculation

• Fund 38 and 39

impact the total

district tax levy

differently

• Provide opportunities

to manage the levy

• Energy

efficiency

exemption

Communicating Debt Service


Baird Budget Model Graph

'12‐ '13 '13‐ '14 '14‐ '15 '15‐ '16 '16‐ '17 '17‐ '18 '18‐ '19 '19‐ '20

NEW FUND 39 LEVY $0 $0 $0 $0 $0 $0 $0 $0

FUND 39 LEVY $0 $0 $672,430 $671,975 $674,075 $671,025 $672,825 $354,256

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Fund 39 CY Levy

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Fund Balance

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Fund Balance

Liabilities Equity

PayablesST

Borrowing

Cash

Receivables

Fund Balance

Assets

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Fund Balance ≠ Cash


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Questions?

Documents

Understanding and Communicating Key Budget Variables · Understanding and Communicating Key Budget Variables ... ‐$500 ‐$400 ‐$300 ‐$200 ‐$100 $0 $100 $200 $300 $400 $7,500