Lathrop R-II State of the School

1. Lathrop R-II State of the School A Report on District Finances: Past, Current and Future.

2. Financial Past • Passed Bond Issue in 2006 to continue with the current levy to build new high school. • Increased construction costs meant we had to also do a lease-purchase agreement for part of the facility. • The recent recession has taken it’s toll • We reduced the tax levy for debt service, to be able to increase the operating levy, to not raise the overall levy, hoping the economy would rebound.

3. Financial Past • We have been incrementally increasing our tax levy over the last few years. Currently .8725, about 16% of your recent bill. Planning to add another10 cents next year. • Despite falling revenues, we have kept our reserves high (32-35%). • We were able to give all staff members an increase of around 2.5% last year. Teachers had received a minimal take home salary increase of about a half of one percent in prior two years.

4. Our Current Operating Budget is about 3% higher than recent years, and that includes partial payment on the high school parking lot, and new water heaters at middle school. Current Finances

5. 2013-2014 Fund Balances YTD

6. Our Assessed Valuation of the district increased about 2.6% in 2013-2014, still lower than it was in 2008-2009, and 2% lower than the all time high. I’m projecting only a 1% increase for 2014-2015. Current Finances

7. We increased our debt service levy by 20 cents to .8725, due to increasing payments. We could have legally raised it to $1.11. • We are projecting a carryover figure of about 28%. That means we’re spending about 7% more than we’re expecting to receive this year. • After increasing about 50 kids last year, we are a down a few this year, with an enrollment of 887 as of Friday. Current Finances

8. We get about 45% of our revenue from the state. • It sounds like the legislature is serious about increasing funding to education, so we may see a bit of an increase in state funds. Financial Future

9. We receive about 5% of our funds from the federal government. Sequestration has cost us between $10,000 and $20,000. Right now we don’t know what to expect for next year. • We receive the remaining 45% from our local taxes. Financial Future

10. Our assessed valuation did go up about 2.65 percent over last year, I don’t think it will increase that much for next year. • We did not plan for the recession, so we planned for the payments on the high school to steadily increase, keeping pace with the economy. Financial Future

11. Last year our payments on the high school were about $681,000. This year they will be about $725,000. Next year we will pay $972,900. • We were able to refinance both the bonds and lease purchase within the last year. These two moves will save us over $500,000 in interest over next 13 years and be able to level out those payments. Financial Future - Debt

12. What is the difference between operating and debt service? Operating is staff and supplies and maintenance. Debt Service is just for paying off bonds. • Current debt service levy is .8725. Planning to increase once more this year to .9725 Financial Future

13. Current and Past Levies • Year Operating Debt Total • 2014 $4.39 $ 0.8725 $ 5.2625 • 2013 $ 4.39 $ 0.6725 $ 5.0625 • 2012 $ 4.39 $ 0.4725 $ 4.8625 • 2011 $ 4.3175 $ $ 0.4225 $ 4.7400 • 2010 $ 4.2102 $ - $ 0.5209 $ - $ 4.7400 2009 $ 4.2414 $ - $ 0.4486 $ - $ 4.6900 2008 $ 4.2414 $ - $ 0.4486 $ - $ 4.6900 2007 $ 3.8400 $ - $ 0.8500 $ - $ 4.6900 2006 $ 4.3900 $ - $ 0.3000 $ - $ 4.6900

14. Area Comparisons • Among schools in our County, there are two higher and six lower. • Kearney is highest at $5.35 • Cameron is lowest at $4.19

15. Looking at Possible Funding Needs Facilities Programs See the two related documents. Financial Future

16. I’ll try to answer any questions. If I don’t know, I’ll get back to you. If you have any questions, please feel free to contact me: Chris Fine 816-528-7500 chris.fine@lathropschools.com Questions