GUIDE TO UNDERSTANDING THE BUDGET

FISCAL YEAR

2015-16

• A special thank you to members of the legislature and Governor for their efforts in providing a significant increase in funding this year. Gratitude is also given to the Finance Department and all others who assist in providing an education to the students of Nebo School District.

• Our utmost appreciation is extended to the members of the Board of Education for the many hours contributed in providing direction to the Nebo School District and to the community for their continued support.

ACKNOWLEDGMENTS

THE ANNUAL BUDGET This guide is designed to help you understand the Nebo School District budget and will provide information about the budget’s main components: revenue and expenditures. You will learn about the District’s funding sources, see how resources are used to fund educational success for our students.

The budget is a financial plan for the successful attainment of the District’s strategic mission. Elementary and Secondary Directors develop staffing plans considering the FTEs available based on projected enrollment and as allocated by the Superintendent. The Nebo School District’s (NSD) annual budget allocates resources for the purpose of teaching students, transporting them to and from school, feeding them breakfast and lunch, and maintaining school buildings and grounds. These funds provide salary, benefits, and professional development training for teachers and support staff, as well as necessary services, supplies, and equipment to enhance our student’s educational experience. It also provides funding for special education, career and technical education (CTE), and other programs. Bond funds, which voters approved in local elections in 2009 , pay for building new schools (currently finishing Maple Ridge Elementary and starting Meadow Brook, renovating and modernizing existing facilities and upgrading the schools’ technology infrastructure.

BUDGET APPROVAL

The District must adopt its annual budget by June 22nd for the following school year. The administrative staff of the District works together to recommend a budget to the Board of Education that considers the needs and values of students, parents, employees, and taxpayers. Board members are the fiscal stewards for the community who manage our educational resources in an effective and prudent manner consistent with District values.

• Considerations during the budget process include: v Level of state funding authorized by the State Legislature v Projected student enrollment for the coming year v Staffing needs v Compensation agreements with instructional and support staff groups v Capital outlay expenditures for schools and support facilities v Additional operations and maintenance costs for new schools and facilities

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

GENERAL FUND BUDGETED REVENUES

S.B. 97 SUMMARY

[VALUE]

$3.7 $3.6

$7.3

$-

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

$7.00

$8.00

Cost to Nebo Patrons M&O Benefit Capital Benefit Total Benefit

In m

illio

ns

$-

$0.50

$1.00

$1.50

$2.00

$2.50

In m

illio

ns

33 New Teachers

2.2 Million

2.25 New Counselors .15 Million

Health Insurance

Improvements .95 Million

Classified Salary Schedule Adjustments

.3 Million

S.B. 97 Capital uses to be determined

Total Spent = $3.6

S.B. 97 M&O USES

Uses in Millions v 33 additional teachers $2.20 v 2.25 additional counselors $0.15 v Health insurance plan improvements $0.95 v Classified salary schedule adjustments $0.30

Total $3.60

S.B. 97 Capital uses to be determined

S.B. 97 M&O USES

HIGHLIGHTS OF GROUPS AGREEMENTS

Certified Classified Administrative

Cost-of-living increase 3.5% 3.5% 3.5%

Steps and lanes Yes Yes Yes

Additional 1% on step 30 Yes Yes Yes

Additional day Yes No Yes

Salary schedule adjustments No Yes No

Health insurance contribution increase No No No

HSA contribution decrease No No No

ENROLLMENT Enrollment is an important component of the budget process. State funding is based on the District’s weighted pupil unit (WPU) student enrollment. The Nebo School District has shown a steady growth of 1.87% over the past 5 years, however, enrollment growth slowed to .79% this past year and is estimated to be 1.14% for the upcoming year. The average daily membership (ADM) of students attending in the District during the previous year becomes the base used for determining the amount of funding for the following year. The official state count of enrollment is conducted on October1st of each school year, and then a growth percentage from year to year is applied to the prior year ADM to get the WPUs for the upcoming year. For the 2015-16 school year, the funding formula provides for $3,092 per WPU, a 4.04% increase from the $2,972 WPU amount for the 2014-15 school year. In addition to the Basic WPU funding for K-12 students, the state provides add-on funding in the following areas: special education, career and technical education (CTE), class size reduction, pupil transportation, at-risk students, adult education, concurrent enrollment, school land trust, educator salary adjustment, teacher supply money, voted and board leeway and several other small programs.

ENROLLMENT GROWTH

27,000

29,000

31,000

33,000

35,000

37,000

39,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Bond Projection 2009 Actuals Projections

RESIDENTIAL PROPERTY TAXES

To estimate how much the school district portion of your property tax bill is, use the following formula:

Assessed Value X Homeowner Exemption = Taxable Value X Tax Rate = District Tax Revenue

Example $244,800 X .55 = $134,640 X .009183 = $1,236 2014-15

Example $246,900 X .55 = $137,795 X .009528 = $1,294 2015-16

$209,593 $211,937

$250,000

$269,600

$251,700

$241,114

$222,400

$210,100 $214,800

$244,800 $246,900

$916

$904

$932

$1,078

$1,073

$1,196

$1,121

$1,208

$1,205

$1,216

$1,146

$1,111

$1,125

$1,236

$1,294

$850

$950

$1,050

$1,150

$1,250

$1,350

$1,450

$1,550

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Property Tax Prop

erty

Val

ue

Residential Property Value & Tax History (Home in East Sp. Fork)

Property Value Property Tax

Increase due to S.B. 97

The Nebo School District budget reflects the educational costs for a projected 31,858 students in 42 schools and 3 programs. The following describes each District fund: v General Fund pays for day-to-day expenses of running the school system and includes

salaries, benefits, supplies, purchased services, transportation, maintenance, and utilities. v Capital Projects Fund accounts for costs incurred in acquiring and improving sites,

constructing and remodeling facilities, and purchasing equipment, textbooks, and supplies necessary for providing educational programs.

v Debt Service Fund is use to account for property tax revenue to repay the annual principal and interest on outstanding bonds.

v Food Services Fund is used to account for the state, local and federal funds used to provide students with low-cost, nutritionally balanced meals.

v School Activity Fund accounts for financial transactions related to school-sponsored student activities.

v Non K-12 Fund accounts for activities outside the K-12 basic program, such as Special-Ed Preschool, Adult Ed, Drivers Ed and providing community and recreational programs.

v Nebo Education Foundation is used to account for donations received and expenditures made on behalf of NSD students. The foundation is an independent nonprofit corporation exclusively formed to benefit NSD students.

BUDGETED EXPENDITURES GOVERNMENTAL

FUNDS

GENERAL FUND $196,532,310

LOCAL $35,758,536

18.19%

STATE $149,960,218

76.30%

FEDERAL $11,502,542

5.85%

+ FUND BALANCE $688,986

STUDENT ACTIVITIES

$10,000,000

LOCAL $10,000,000

100.00%

NON K-12 PROG $5,258,856

LOCAL $2,183,225 41.52%

STATE $2,443,617 46.47%

FEDERAL $717,500 13.64%

+ FUND BALANCE $85,486

DEBT SERVICE $28,086,579

LOCAL $27,949,079

99.51%

FEDERAL $137,500 .49%

CAPTIAL OUTLAY $26,335,376

SALE OF BONDS $10,000,000

37.97%

LOCAL $4,175,216 15.85%

STATE $8,903,109 33.82%

- FUND BALACE 3,332,051 12.65%

ENTERPRISE FUND

FOOD SERVICES $12,342,244

LOCAL $3,715,000

30.10%

STATE $1,750,000

14.18%

FEDERAL $6,250,000

50.64%

- FUND BALANCE $627,244

.0508%

DESCRIPTION OF EXPENDITURES BY OBJECT SALARIES in the General Fund alone make up 59.7% of the operating fund budget. BENEFITS constitute an additional 24.89% of the General Fund budget and consist of District Utah Retirement System (URS) contributions, Medicare, health and life insurance, as well as long term disability payments. Great news on the URS employer contribution front, the rate didn’t increase for next year, but the rate has almost doubled over the previous five years and will be set at 23.69%. Health insurance costs also have increased substantially over the past five years and are expected to continue the upward trend. Through negotiations the District committed to keep the employee contribution the same for the upcoming year and absorb the nearly $1.0 million increase for health insurance costs. PURCHASED SERVICES comprise contracted outside services, utilities, transportation costs, printing expenses, and payments for professional services provided by outside companies or individuals. SUPPLIES AND MATERIALS expenditures include textbooks and library books as well as other classroom and building supplies.

EQUIPMENT expenditures include equipment, property purchases, and construction and remodeling costs.

GENERAL FUND BUDGETED EXPENDITURES

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE]

[CATEGORY NAME] [VALUE]

[PERCENTAGE] [CATEGORY NAME]

[VALUE] [PERCENTAGE]

Total Salaries and Benefits – 85.32%

GENERAL FUND BUDGET EXPENDITURES BY ACTIVITY The largest share of the General Fund, 82 cents out of every dollar, is allocated to direct and indirect instruction. This includes salaries and benefits paid to teachers, para-educators, school-level administration, and learning support provided by counselors, librarians, nurses, and other professional personnel.

INSTRUCTIONAL SERVICES

DIRECT INSTRUCTION Costs associated with the delivery of

instructional services to students, which include teachers, supplies, & equipment

for regular & special education programs

INDIRECT INSTRUCTION Student support services, instructional

staff services, curriculum, staff development, and school-level

administration

64 cents 18 cents

82 cents

OPERATIONS & SUPPORT SERVICES

OPERATIONS & MAINTENANCE Facility maintenance, operations, utilities, &

custodial services

TRANSPORTATION Bus transportation for students & vehicle

GENERAL ADMINISTRATION Board of Education, executive administration,

& instructional administration

10 cents

4 cents

4 cents

18 cents

BONDED GENERAL OBLIGATION DEBT FOR SCHOOL FACILITIES

Funds for building, renovation, and expansion of schools are provided through the issuance of bonded debt. These bonds are authorized by voter approval only, and the debt repayment costs are managed in the Debt Service Fund.

Utah State Law limits the District general obligation indebtedness to 4% of the fair market value of taxable property in the District.

•  Under the 4% of fair market value limit, the District debt is approximately 62.22% of the legal debt limit. •  The following graph represents the legal limitations versus the current long-term debt of the District.

$-

$100

$200

$300

$400

4% Limitation District Debt Obligation

[VALUE]

[VALUE]

Debt Limitation versus District Debt

Mill

ions

Current additional bonding capacity = $131.26 million

Completed Remaining TotalNew  ConstructionSierra  Bonita  Elementary 13,150,634               13,150,634              Salem  Junior  High 25,051,677               25,051,677              Springville  Junior  High 26,355,775               26,355,775              Maple  Ridge  Elementary 16,500,000               16,500,000              Meadow  Brook  Elementary 6,007,124                   12,392,876               18,400,000              Black  Hawk  Elementary 17,500,000               17,500,000              

Additions -­‐                                            Taylor  and  Performing  Arts 6,173,981                   6,173,981                  

Improvements -­‐                                            HVAC 9,792,684                   9,792,684                  Junior  High  Schools 10,386,370               10,386,370              Other 7,376,169                   7,376,169                  

Property 11,494,289               1,005,711                   12,500,000              Other 1,280,014                   3,503,012                   4,783,026                  

Total 133,568,717$     34,401,599$         167,970,316$     *

*  Includes  bond  premiums  and  interest  earnings

2009 BOND PROJECTS

ACCOUNTABILITY FOR PUBLIC EDUCATION RESOURCES

The Nebo School District Board of Education is accountable to the community (the taxpayers) for wisely and efficiently using public funds to support District schools. As per state law, each year the Superintendent submits to the Board a proposed District Budget for the upcoming year. The State of Utah also monitors District spending to a certain degree. Federal grants are regulated at the national and state level. Independent auditors, who report their findings to the Board of Education and the public, audit the District’s budget and financial condition annually. The District Audit Committee also reviews District financial data. To obtain more information about the Nebo School District’s budget attend the District’s Budget Hearing on June 10, 2015 at 6:00 pm at the Nebo District Offices at 350 South Main Street, Spanish Fork, Utah or call 801-354-7412, or access the District’s web site at www.nebo.edu, look under departments then Board of Education then Agenda & Minutes. Enter the public site and click on the June 10 meeting agenda.