MESSAGE FROM THE SUPERINTENDENT December 12, 2014

Transcription

1 New Lenox School District South Cedar Road, New Lenox, Illinois Phone Fax MESSAGE FROM THE SUPERINTENDENT December 12, 2014 Dear New Lenox School District 122 Families: As we enter the holiday season, I want to thank you for your support in my first year as your superintendent. It is a privilege to serve in this role for our community. Each day our team strives to meet your expectations by providing your children with effective programs in a nurturing environment. In this effort, there are some important topics I wish to address in this message: School Funding Since my last communication, there has been new information regarding school funding. Below is a synopsis of the most current school financial issues. Annual Tax Levy At the December 17 th Board of Education Meeting, the Board will be voting on the annual tax levy. Our new business manager, Bob Groos, provided an outstanding presentation to the Board on the tentative levy in November. I am attaching the presentation to this message so that you can take some time and gain a better understanding of the District s process. Unfortunately, Illinois public schools are funded primarily by property taxes. It is up to the District to ensure that we levy appropriately so that we are funded properly. I, as you, do not like to pay taxes; however, I am a firm believer that if the community is provided all the information, the logic and need for the levy will make sense. Some key points to consider are: The District will ask each homeowner to pay an additional $26 a year (based upon an average home of $250,000). That is a year not a month. If we did not levy for the new property and inflation, the District would lose approximately $650,000 this year, and $1,300,000 next year. Mr. Groos provides examples at the end of the presentation depicting the impact of a yes vote and a no vote from the Board of Education on the levy. SB16 Fortunately for the District Senate Bill 16 has been placed on the back burner by the legislators. It is important to note that there is still great momentum for some type of bill that still utilizes portions of the formula that negatively impacts our District. I will continue to closely monitor this Bill or a similar bill and provide information as it becomes available. In the meantime, continue to watch for statements from our legislators. Reduction of Personal State Income Tax Rate While we have dodged a bullet with the delay of SB16, we are not going to be so lucky with the January 1 st reduction of the current rate of the Illinois Personal State Income Tax. The rate will drop from 5.00% to 3.75% with the new year. It is critical that our community understands the impact of this change to our schools. Last year, we received all our payments from the State. In addition, the State provided the District with an owed payment from the previous year, helping us end the year with a surplus of $560,000. With the new rate going into effect in January, we anticipate that our District will lose approximately $2,000,000 in revenue for this school year. I have already begun working on a plan to literally reduce our budget by that amount. My goal is to reduce services and items that are as far away from the classroom as possible. Currently, I have met with the administration and a group of teachers, including union representation. Working together, we have developed a tentative plan that I will share with the Board. Since these measures will need to be voted on in February, I want to use the month of January to convene a parent-advisory panel to review our recommendations and help us refine our plan. I am actively recruiting one parent from each building to meet at least once, if not twice prior to the February Board of Education Meeting. If interested, please fill out the attached form and return it to your building principal. If there is great interest, we will pull names out of a hat for each building. Again, the more knowledge I can provide to our school community, the easier it will be for all of us to work together to maintain the quality of our programs.

2 School Security Over the past three months we have successfully implemented our new security features, including our double buzzer system and electronic crisis plan. I thank all of you for your patience with the installation and training of the new outside and foyer security for all our buildings. Please be advised that if you press the outside buzzer after hours, you will hear our universal after hour auto attendant message. This indicates that the building is closed and no one is available to provide entry into the building. Website As you recall, we introduced our new District website this fall. We have received an extremely positive response regarding the content available for our parents and community. It was our hope to provide a tool that assists parents in finding all relevant student and program information. In the future, we will be putting convenience icons or headers on the front page. In the meantime, I encourage everyone to keep exploring the site to discover the multitude of information at your fingertips. As a reminder, there is a training video on the use of the website for your convenience. As for our new calendar, I encourage everyone to explore and use the calendar. As with any new software, we continue to refine issues based upon user feedback. Over the holiday break, we plan on unveiling the mobile version. Although you can access the website from a mobile device, we had not yet configured the mobile features, so you may find some difficulty with some of the features. I thank you in advance for your patience in this area. PARCC Test Yes, we are actually ready for the PARCC test. While I have no doubt that our students will do well on all tests, I am keeping my fingers crossed that the ISBE/Pearson site is able to handle all the students of Illinois logging in and participating in the testing program. Our curriculum and technology staff has been working tirelessly to prepare for all of our students to take the online version. I am grateful that we have so many talented people working in our district. I cannot imagine the problems that districts with poor equipment, connectivity, and infrastructure will face in the next coming months. As a point of perspective as professionals we respect and abide by mandated testing. But, I will continue to share with all my belief that our students are prepared for any test since our teachers continue to follow the standards and utilize our excellent curriculum. Our priority is teaching, not testing. As we get closer to the testing time in March, we will be providing you additional information. AND FINALLY--Dr. Sass Retirement On December 19 th, Dr. Sass will officially retire from our school district. I want to take this opportunity to celebrate all his accomplishments and thank him for his dedication to our school community. Under Dr. Sass s dynamic leadership, the District has purchased land, built buildings, established an early childhood center, improved technology access at the classroom level, created our own special education entity, settled four teacher contracts, created numerous additional extracurricular activities for children, and increased the number of health and social professionals for students. The list of his achievements is endless. He has also been a man of vision who took the necessary steps to leave our district in excellent financial condition, while also mentoring and preparing the District s future leaders to deal with the unexpected at all times (i.e. the State of Illinois). His knowledge, expertise, and wisdom in all areas of school operations have created an exemplary school district and have set the stage for our continued success. But most importantly, Dr. Sass has been a service-oriented leader. He has cared for all of us as individuals, always supporting the needs of his students, families, and staff. He has held the firm belief that the only way the District students will be successful is if the needs of the students, parents, and teachers were met. Happy and healthy teachers translate into productive and creative teaching for the District s most precious commodity the students. He treasured the families of our district and all his decisions were based upon their needs and expectations. Of course Dr. Sass did not want a lot of attention as he retires. However, I have been successful in getting him to agree to a retirement reception prior to the upcoming December 17 th Board Meeting. I invite all of you to stop by at 6:00 to say good-bye to Dr. Sass. Sincerely, Peggy Manville, Ed.D.

3 New Lenox School District South Cedar Road, New Lenox, Illinois Phone Fax OFFICE OF THE SUPERINTENDENT TO: FROM: Parents Dr. Peggy Manville DATE: December 12, 2014 RE: Parent-Advisory Committee As we begin preparing for the school year, there are a number of important recommendations that the Administration will be proposing to the Board of Education. In an effort to get additional input from our parent community, I am seeking one parent from each school to become a member of a Parent-Advisory Committee. This committee will serve as a mini-task force. If interested, please fill out the form below and return to your building principal. If there are many parents interested, we will pull names out of a hat to determine membership. Name School(s) Phone Number

4 2014 Tax Levy Presentation Dr. Manville, Superintendent Robert Groos, Business Manager/CSBO Presented November 19, 2014

5 Property Tax Levy Considerations Discussed at each 5-Year Financial Forecast, but.. Important for Public to gain a greater understanding Not required by law to publish the notice to Levy-Under 5%-Still publish in paper Presentation on the website and ed home to parents Budgeted for passing the Levy -Levy not passed- loss of $1,309,742+ annual loss Reality of the Levy Show our efficient spending Show how Levy is calculated Show what would happen if the CPI was not levied for (Household Savings/District Loss) Show what would happen if the new property increase was not levied for (Household Savings/District Loss) Show what would happen if he the property tax levy was held flat with no increase for 2014 (Household Savings/District Loss) Abating What if NLSD122 abated $1,000,000 of debt service back to the taxpayers for 2014? (Household Savings/District Loss)

6 Other Levy Considerations If the Levy is not passed Board would be required to establish cost savings measures (Cuts) Timeline for discussion of budget cutting (Handout) Other Potential Revenue Loss Issues Not passing the Levy ($654,871 for FY15 and $1,309,742+ every year after) SB16 ($2,261,235 million annually) Repeal of Illinois Income Tax Increase ($2,000,000 for FY15) (Future years unknown) Pension Shift

7 Calendar Year Month Approximate Day Fiscal Year Planning Description 2011 November 20 FY13/FY14 Board reviews, discusses, and approves 5 Year Forecast assumptions 2012 January 8 FY13/FY14 Presentation and discussion of 5 Year Forecast at special Board meeting 2012 Feb-March FY13/FY14 Opportunity to discuss needed changes to the District's long term budgeting plans 2012 March - July FY13/FY14 Business Manager prepares the budget based on finalized decisions and input 2012 June 11 FY13/FY14 Presentation and discussion of 5 Year Forecast at special Board meeting 2012 July - Aug FY13/FY14 Final changes made to the legal budget based on known information 2012 August 14 FY13 Public Notice published regarding Tentative Budget being on display and the public hearing date 2012 August 15 FY13 Board receives Tentative Budget information packet / Tentative Budget put on public display 2012 August 20 FY13 Tentative Budget presentation, discussion, vote 2012 August FY13 Board reviews Tentative Budget information and sends questions to Business Manager 2012 September 1-16 FY13 Board reviews Tentative Budget information and sends questions to Business Manager 2012 September 17 FY13 Public Hearing regarding the FY15 Legal Budget. Board votes to approve levy 2012 November 14 FY13/FY14 Board receives Tentative Levy information packet 2012 November 19 FY13/FY14 Tentative Levy presentation, discussion, vote 2012 November FY13/FY14 Board reviews Tentative Levy information and sends questions to Business Manager 2012 December 1-16 FY13/FY14 Board reviews Tentative Levy information and send questions to Business Manager 2012 December 8 FY13/FY14 Truth in Taxation Notice published in newspaper regarding public hearing 2012 December 17 FY13/FY14 Public Hearing regarding the 2014 Tax Levy. Board votes to approve levy 2012 November 20 FY14/FY15 Board reviews, discusses, and approves 5 Year Forecast assumptions 2013 January 8 FY14/FY15 Presentation and discussion of 5 Year Forecast at special Board meeting 2013 Feb-March FY14/FY15 Opportunity to discuss needed changes to the District's long term budgeting plans 2013 March - July FY14/FY15 Business Manager prepares the budget based on finalized decisions and input 2013 June 11 FY14/FY15 Presentation and discussion of 5 Year Forecast at special Board meeting 2013 July - Aug FY14/FY15 Final changes made to the legal budget based on known information 2013 August 14 FY14 Public Notice published regarding Tentative Budget being on display and the public hearing date 2013 August 15 FY14 Board receives Tentative Budget information packet / Tentative Budget put on public display 2013 August 20 FY14 Tentative Budget presentation, discussion, vote 2013 August FY14 Board reviews Tentative Budget information and sends questions to Business Manager 2013 September 1-16 FY14 Board reviews Tentative Budget information and sends questions to Business Manager 2013 September 17 FY14 Public Hearing regarding the FY15 Legal Budget. Board votes to approve levy 2013 November 14 FY14/FY15 Board receives Tentative Levy information packet 2013 November 19 FY14/FY15 Tentative Levy presentation, discussion, vote 2013 November FY14/FY15 Board reviews Tentative Levy information and sends questions to Business Manager 2013 December 1-16 FY14/FY15 Board reviews Tentative Levy information and send questions to Business Manager 2013 December 8 FY14/FY15 Truth in Taxation Notice published in newspaper regarding public hearing 2013 December 17 FY14/FY15 Public Hearing regarding the 2014 Tax Levy. Board votes to approve levy 2013 November 20 FY15/FY16 Board reviews, discusses, and approves 5 Year Forecast assumptions 2014 January 8 FY15/FY16 Presentation and discussion of 5 Year Forecast at special Board meeting 2014 Feb-March FY15/FY16 Opportunity to discuss needed changes to the District's long term budgeting plans 2014 March - July FY15/FY16 Business Manager prepares the budget based on finalized decisions and input 2014 June 11 FY15/FY16 Presentation and discussion of 5 Year Forecast at special Board meeting 2014 July - Aug FY15/FY16 Final changes made to the legal budget based on known information 2014 August 14 FY15 Public Notice published regarding Tentative Budget being on display and the public hearing date 2014 August 15 FY15 Board receives Tentative Budget information packet / Tentative Budget put on public display 2014 August 20 FY15 Tentative Budget presentation, discussion, vote 2014 August FY15 Board reviews Tentative Budget information and sends questions to Business Manager 2014 September 1-16 FY15 Board reviews Tentative Budget information and sends questions to Business Manager 2014 September 17 FY15 Public Hearing regarding the FY15 Legal Budget. Board votes to approve levy 2014 November 14 FY15/FY16 Board receives Tentative Levy information packet 2014 November 19 FY15/FY16 Tentative Levy presentation, discussion, vote 2014 November FY15/FY16 Board reviews Tentative Levy information and sends questions to Business Manager 2014 December 1-16 FY15/FY16 Board reviews Tentative Levy information and send questions to Business Manager 2014 December 8 FY15/FY16 Truth in Taxation Notice published in newspaper regarding public hearing 2014 December 17 FY15/FY16 Public Hearing regarding the 2014 Tax Levy. Board votes to approve levy 2014 November 20 FY16/FY17 Board reviews, discusses, and approves 5 Year Forecast assumptions 2015 January 28 FY16/FY17 Presentation and discussion of 5 Year Forecast at special Board meeting 2015 Feb-March FY16/FY17 Opportunity to discuss needed changes to the District's long term budgeting plans 2015 March - July FY16/FY17 Business Manager prepares the budget based on finalized decisions and input 2015 June 11 FY16/FY17 Presentation and discussion of 5 Year Forecast at special Board meeting 2015 July - Aug FY16/FY17 Final changes made to the legal budget based on known information 2015 August 14 FY16 Public Notice published regarding Tentative Budget being on display and the public hearing date 2015 August 15 FY16 Board receives Tentative Budget information packet / Tentative Budget put on public display 2015 August 20 FY16 Tentative Budget presentation, discussion, vote 2015 August FY16 Board reviews Tentative Budget information and sends questions to Business Manager 2015 September 1-16 FY16 Board reviews Tentative Budget information and sends questions to Business Manager 2015 September 17 FY16 Public Hearing regarding the FY15 Legal Budget. Board votes to approve levy 2015 November 14 FY16/FY17 Board receives Tentative Levy information packet 2015 November 19 FY16/FY17 Tentative Levy presentation, discussion, vote 2015 November FY16/FY17 Board reviews Tentative Levy information and sends questions to Business Manager 2015 December 1-16 FY16/FY17 Board reviews Tentative Levy information and send questions to Business Manager 2015 December 8 FY16/FY17 Truth in Taxation Notice published in newspaper regarding public hearing 2015 December 17 FY16/FY17 Public Hearing regarding the 2014 Tax Levy. Board votes to approve levy

8 The Annual Property Tax Levy Approving the levy is the most important financial action of the year 79% of the District s operating budget is funded by Property Taxes

9 Illinois Property Tax Law Property Tax Extension Limitation Law (PTELL) Enacted in Will County in 1991 Regulates and limits the growth of property taxes Since 1991, PTELL has blocked more than $26M of NLSD122 property tax revenue Currently reduces NLSD122 s annual levy by $2M+ per year The State decreases General State Aid to a district when a district s property values increase. $32M of GSA cuts since Currently a $6.5M annual cut.

10 Illinois Property Tax Law & Inflation IL Property Tax law does allow for an inflation increase in the levy Inflation increases cost over time $1.00 in 1950 is worth $0.12 today Average home in the 1980 s was $100K. Today, $250K+. Average car in the 1980 s was $6K. Today, $20K+. Average salary in the 1980 s was $16K. Today, $50K+. Each year, a district can levy the same amount as last year plus increase the levy by whatever inflation is for the year. After the new tax rate is calculated for the year, any new property is then taxed for the first time, generating new revenue as well.

11 Recent History of Inflation A school district s levy will change each year based on 3 variables: 1) CPI: Increase to keep pace with inflation 2) New Property: Increase to fund education and offset State reductions in General State Aid (due to higher EAV) 3) Any change in the district s annual debt schedule

12 Property Tax Levy Calculation 2013 EAV = $1,185,453,224 (EAV = Equalized Assessed Valuation; about 1/3 of market value) 2014 Change in existing EAV = -1.43% (Estimate per Will County) $1,185,453,224 x -1.43% = $1,168,558,345 (2014 Adjusted Valuation Base) 2014 New Property Developed = $21,945,033 (Estimate per County) $21,945,033 + $1,168,558,345 = $1,190,503,378 (2014 Expected Net EAV) 2013 Levy = $38,452,546 Inflation (CPI) = 1.5% $38,452,546 x 1.5% = $576,788 (Revenue increase for inflation) $38,452,546 + $576,788 = $39,029,334 (New 2014 extension base) $39,029,334 / $1,168,558,345 = $ New Tax Rate for 2014 $ x $21,945,033 = $732,954 (Revenue increase for New Property) 2013 Levy ($38,452,546) + New Revenue ($576,788 + $732,954) = 2014 Levy ($39,762,288)

13 Property Tax Levy Calculation 2013 Levy ($38,452,546) + New Revenue ($576,788 + $732,954) = 2014 Levy ($39,762,288) Annual Debt Service = $8,118, Operating Levy ($39,762,288) Debt Service ($8,118,230) = Total Levy ($47,880,518) Certificate of Levy to be submitted to the County before the last Tuesday in December $39,762,288: Expected levy based on EAV and New Property estimates provided by Will County in September 2014 (EAV down 1.43% and New Property of $21,945,033) $40,363,480: Amount to request on the certificate of tax levy. Since the District may never receive more revenue than it requests in December, it is best practice to request more than is expected just in case the new property for the year comes in higher than estimated. Once the final new property values are reported by the County in April, then the final levy amount is calculated for each district. Any extra amount requested in December is eliminated by the County. This strategy secures the district for up to $39.9M of new property for 2014.

14 2014 Tax Bills: Increases under 1% NLSD Tax Levy Estimate: Projected Tax Bills Market Value 100, , , , , , , , ,000 1/3 Assessment 33,333 50,000 66,667 83, , , , , ,667 Exemptions 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Total Net Value 27,333 44,000 60,667 77,333 94, , , , ,667 Tax Rate $ 3.93 $ 3.93 $ 3.93 $ 3.93 $ 3.93 $ 3.93 $ 3.93 $ 3.93 $ 3.93 Tax Due 1,073 1,727 2,382 3,036 3,690 4,345 4,999 5,653 6,308 The expected average overall Equalized Assessed Value (EAV) for property in New Lenox decreased 1.43% for The change in your individual tax bill will be dependent upon how much your assessment changed in The below tables provide estimated changes in tax bills based on various values and assessment changes. Homes w/ 2014 Assessment Change of: 2014 Market Value 98, , , , , , , , , % 1/3 Assessment 32,858 49,287 65,717 82,146 98, , , , ,291 Exemptions 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 Total Net Value 26,858 43,287 59,717 76,146 92, , , , ,291 Tax Rate $ 4.02 $ 4.02 $ 4.02 $ 4.02 $ 4.02 $ 4.02 $ 4.02 $ 4.02 $ 4.02 Tax Due 1,080 1,741 2,402 3,062 3,723 4,384 5,045 5,706 6,366 $ Increase $ 7 $ 14 $ 20 $ 26 $ 33 $ 39 $ 46 $ 52 $ 58 % Increase 0.7% 0.8% 0.8% 0.9% 0.9% 0.9% 0.9% 0.9% 0.9%

15 Assessment Appeal Process You must review, understand, and agree with your assessed value each year. If you disagree, you must take timely action. Assessor sends out notice each August.

16 Property Values in New Lenox New Lenox relies primarily on residential property owners (86%) Future commercial and industrial growth will help decrease the overall tax rates.

17 Tax Levy Summary This presentation illustrated that: 1) Will County estimates that existing property values declined 1.43% overall in New Lenox for ) Will County estimates that there will be about $21.9M of new property for ) Inflation for 2014 was 1.5% (Consumer Price Index) 4) Per IL Tax law, NLSD122 can increase the levy for inflation (CPI) and new property 5) The increase generated by the 1.5% inflation is $576,788 6) The increase generated by the expected $21.9M of new property is $732,954 7) Last year s 2013 tax levy was $38,452,546 8) $38,452,546 + $576,788 + $732,954 = $39,762,288 (2014 expected operating levy) 9) NLSD122 has $8,118,230 of Debt to pay in 2014, therefore the total expected levy will be $47,880,518 10) The operating levy is going from $38.5M to $39.8M. This is a 3.41% increase. 11) The total levy is going from $46.5M to $47.9M. This is a 2.88% increase. 12) Individual tax bills are expected to increase less than 1% or about $26 for the year Assumed an assessment change of 1.43% with a market value of about $250K Individual assessments may vary and have the most significant impact on one s individual tax bill

18 Tax Levy Scenarios 1) What if the inflation rate increase (CPI) was not levied for? NLSD122 loses $577,000+ annually. Cost over 10 years = $6,300,000 Average Homeowner saves $37 a year 2) What if the new property increase was not levied for? NLSD122 loses $733,000+ annually. Cost over 10 years = $8,000,000 Average Homeowner saves $47 a year 3) What if the property tax levy was held flat with no increase for 2014? NLSD122 loses $1,300,000+ annually. Cost over 10 years = $14,300,000 Average Homeowner saves $84 a year 4) What if NLSD122 abated $1,000,000 of debt service back to the taxpayers for 2014? NLSD122 would lose $1,000,000 of reserves (primarily earmarked for maintaining the district facilities) Average Homeowner gets a one time savings of $64

19 Tax Levy Scenarios FY15 Legal Budget approved in September 2014 and most recent 5 Year Projection presented in June 2014 both assumed that the 2014 Levy would receive the 1.5% CPI increase, would receive an increase for new property and would not abate any debt service. Due to the recent election results at the State level, it may be likely that the State income tax rate will decrease down to 3.75% in This would reduce State revenue by billions of dollars. As a result, NLSD122 may face significant reductions and delays in State funding. May not receive the FY15 3 rd and 4 th quarterly payments Potential loss of $2,000,000+ in revenue for FY15.

20 Efficiency NLSD122 provides a high quality education for a very efficient cost FY13 state average elementary cost per pupil was $11,585 per student FY13 NLSD122 cost per pupil was only $10,252 per student FY14 NLSD122 cost per pupil was only $10,257 per student ($5 increase) NLSD122 provides tax payer relief every year by keeping operating expenses significantly below the State average. If NLSD122 spent the State average of $11,585 per student, the annual budget would be increased $6,500,000. This would represent an increase of $419 to the average annual tax bill (estimate $250K home). Although NLSD122 operates a very efficient budget, revenue sources still do not cover the annual expenditures. The FY15 operating budget forecasts an approximate $1.1M annual deficit. Note that 79% of the operating revenues come from property taxes. The annual cost of living adjustment (CPI/Inflation) and new property levy increases are necessary to promote the financial stability of the district into the future.

21 Efficiency Sustaining High Quality and Low Costs Year Annual Operating Expenditures $ 44.2 $ 46.0 $ 47.3 $ 47.3 $ 47.6 $ 47.8 $ 48.0 Percentage Increase 4.1% 2.8% 0.0% 0.6% 0.4% 0.4% $60.0 $50.0 $40.0 NLSD 122 Annual Operating Expenditures (stated in Millions of $'s) $47.3 $47.3 $47.6 $47.8 $48.0 $44.2 $46.0 $30.0 $20.0 $10.0 $

22 Please contact me anytime: Questions? Robert Groos NLSD122 Business Manager/CSBO (815)