School district's presentation on the 2011-12 budget, with proposed reductions, delivered Jan 12 at Blaine High School and Jan 20 at Champlin Park High School.

1. Budget Hearings Fiscal year & school year 2011-12 John Hoffman, School Board Vice Chair January 12, 2011

2. Tonight Introduction and overview Review of financial details and proposed reductions Opportunity for public input Thank you for joining us

3. Effect of the economy on A-H 0% change in education funding for 3 years Total money received from state this year is less than last year Federal stimulus provided Minnesota $166 million $7.2 million for A-H, one-time money Combination of flat funding & declining enrollment

4. Local effects Unemployment and foreclosures are high Local economy is among hardest hit in 7-county metro area Counties are cutting programs and services Cities are raising fees, cutting police and fire personnel, and reducing support to other governmental units Anoka-Hennepin cut $25 million the last two years What our community experiences

5. Delivering what you expect Graduation rate remains high Test scores continue to improve and remain above state average Broad curriculum, many options Workforce-ready College-ready (technical/2-year & 4-year schools) Maintain academic focus through school closingsand transitions Program evaluation and use of data criticalto ensure effectiveness

7. Reused/repurposed 5 buildingsFuture: Consolidate administration Worked with employee groups to negotiate1-year wage/salary freezes Collaborative Preserved jobs School Board makes tough choices

8. Putting resources in the classroom Low central administration costs < 3%

9. Voter-approved levy $ for students & what it costs taxpayers

10. Other levies – carefully monitored Alternative facility levy (for maintenance) Prioritize repairs and preventative maintenance Long-term planning, some projects delayed Lease levy School closings reduced leases Debt service Refinanced to save taxpayer $ Health and safety As needed to maintain/improve student safety Non-voter approved levies kept low

11. Planning for the 2011-12 school year State faces a $6 billion deficit K-12 education is 37% of the state’s budget (down from 40%) So far, K-12 state revenue has not been cut, but$1.9 billion in K-12 funding has been delayed Results in borrowing Our budget is based on 0% change in state revenue Legislative session could alter that – up or down! What’s the environment like?

12. Michelle Vargas Chief Financial Officer

13. Current reality Static state revenue stream Declining enrollment 500 students/year State aid and local referendum revenue loss totaling $3.5-$4.5 million each year Declining enrollment requires reducing20-25 teaching positions each year Fiscal year 2011-12

14. General Fund Budget Process Project enrollment Calculate state aid formulas Certify property tax levy Estimate federal funding Estimate other local revenue – fees, admissions, rentals and miscellaneous sales How we project revenue

15. General Fund 2011-12 Declining enrollment of 715 pupil units General Education Revenue remains at the rate of $5,124 per pupil unit Other state funding at same level as this year Federal revenue at same level as this year Property tax revenue will decline slightly Fees, donations, and other local revenue will remain constant Revenue Assumptions

16. 2011-12 Projected Revenue

17. Revenue Sources

18. General Fund Budget Process Use enrollment projections and staffing ratios for each building/program Consider program additions or reductions Review negotiated employee contracts Calculate changes to contracts with vendors Include state and federal mandates Estimate medical and other insurance trends Account for other inflationary increases How we estimate expenditures

19. General Fund 2011-12 2.5% increase on salaries and corresponding benefits 10% increase on health insurance 5% increase on dental, life and disability insurance 2-3% increase on all other services and supplies Reducing 20 instructional positions for declining enrollment Unfunded legislative increase of employer Teacher Retirement Association contribution of .5% or $1 million Overall expenditure increase of 2.8% Expenditure Assumptions

20. 2011-12 Projected Expenditures

21. Expenditure by Type

22. Expenditures by program Previous year

23. Expenditures Detail for instructional program

24. Budget projection Estimated deficit of $16 million

25. Budget summary Deficit is now $3.2 million

26. Revenue Adjustment – $7 million Federal ED Jobs revenue of $7.2 million available this year and next year $.2 million to reduce largest classes this year $7 million will be used to save 117 instructional positions in the 2011-2012 school year This one-time revenue pushes the funding gap out one year, adding to the deficit in 2012-13 Federal stimulus funding

27. General Fund 2011-12 Expenditure Adjustments: Salaries reduction of $3.55 million Reduction in substitute costs, severance and overall salary costs Benefits reduction of $1.25 million Reduced corresponding benefits on salaries including FICA, TRA/PERA Reduced tax sheltered annuity match, and health care savings severance Purchased Services reduction of $400,000 in utilities efficiencies Debt payment reduction of $445,000 Savings this year

28. Reduction recommendations Instructional Reductions: $240,000 – reallocation of elementary talent development teachers to K-12 Gifted and Talented categorical revenue

29. Reduction recommendations Non-instructional Reductions: $75,000 Business Services reduction of postage, check printing, supplies, and outsourced physical inventory $41,000 Employee Services reduction of postage, printing, supplies and professional development $75,000 Labor Relations reduction of outside legal services $300,000 expense offset with increase in third party billing revenue $700,000 reduction in transportation costs

30. Reduction recommendations Non-instructional Reductions continued: $300,000 reduction non-salary budget freeze $1.5 million reduction in projected increase in Health Insurance contributions Contribution increase assumption reduced from 10% to 5%

31. General Fund Budget Legislative funding session for the 2012-2013 biennium began in January 4, 2011 Budget deficit of $22 million for 2012-13 ($15 million + $7 million) Expiring $48 million operating referendum Requires voter approved renewal to continue funding into 2013-14 If levy is not approved, A-H will be one of the lowest funded districts in metro area 2013-14 projected deficit of $15 million This is 2 years out – manyvariables in play Future Considerations

32. Budget Reduction Recommendation Total: $3,211,916

33. Public Input John Hoffman, Board Vice Chair

34. Public comment Fill out comment card If we need to get back to you Keep comments to 5 minutes Provide new information If you agree with prior comments, you can indicate that Tonight’s focus is the $3.2 million in proposed reductions

35. Budget Reduction Recommendation Total: $3,211,916