Taxes Payable 2016 Property Tax Levy & Budget. December 15, 2015 Regular School Board Meeting

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1 Taxes Payable 2016 Property Tax Levy & Budget December 15, 2015 Regular School Board Meeting

2 Truth in Taxation Law Property tax levies are highly regulated by the state State sets formulas which determine the level of funding for which districts can levy State sets the maximum property tax levy School districts are allowed to levy less than the maximum, often resulting in a corresponding loss of state aid Counties also play a part in how school district levies are spread by determining the value of each parcel in the district

3 Truth in Taxation Law State law requires that school districts present the following information and allow for public comments: Current year budget Proposed property tax levy, including: Percentage increase over the prior year Specific purposes and reasons for which taxes are being increased

4 Truth in Taxation Law The 2015 Legislature made several changes to the property tax levy system. While most of these were minor, the change in how districts fund Health & Safety and Deferred Maintenance projects was more significant. The change gave all districts access to funding previously only granted to the largest districts in the state. This change involved the following effective with taxes payable in 2016: Elimination of Health & Safety levy Elimination of Deferred Maintenance levy Addition of Long Term Facilities Maintenance levy

5 Budget

6 Budget Revenue Expenditure Budget Budget General Fund General Operations $ 57,294,236 $ 56,501,921 Capital Account 1,853,386 1,853,386 Health & Safety 191, ,029 General Fund $ 59,338,842 $ 58,504,336 Food Service Fund 2,600,000 2,600,000 Community Service Fund 2,800,000 2,800,000 Debt Service Fund 9,552,452 51,011,965 OPEB Debt Service Fund 687, ,270 Trust and Agency Fund 50,000 50,000 Total All Funds $ 75,029,208 $115,617,571

7 Revenues Community Service $2,800,000 4% Food Service $2,600,000 3% Debt Service Fund $9,552,452 13% OPEB Trust $687,914 1% Trust & Agency Fund $50,000 0% General Fund $59,338,842 79%

8 Expenditures Debt Service Fund $51,011,965 44% OPEB Trust $651,270 1% Trust & Agency Fund $50,000 0% Community Service $2,800,000 2% Food Service $2,600,000 2% General Fund $58,504,336 51%

9 General Fund Revenues Interest $10,000 Federal 0% $1,522,000 2% Other $525,000 1% Levy $9,446,833 16% State $47,835,009 81%

10 General Fund Expenditures Purchased Services $6,728,611 12% Supplies & Materials $1,372,786 2% Capital & Equipment $4,135,169 7% Fiscal & Other Costs $106,185 0% Compensation $46,161,585 79%

11 Budget The Spring Lake Park Schools budget is reviewed internally at various times during the school year Informal updates are given to the school board throughout the year Revisions for the current year, if necessary, will be brought to the school board for approval prior to June 2015

12 Property Taxes Payable 2016

13 Levy Calendar Data due to Department of Education Summer 2015 Preliminary levy approval by school board September 2015 Final levy approval by school board December 2015 Property taxes collected during the 2016 calendar year generate revenue for the district for the school year

14 Total Levy by Fund Proposed Final Percent Fund 2016 Levy 2015 Levy Change Change General $ 9,833,757 $ 9,721,833 $ 111, % Community Service $ 474,830 $ 381,983 $ 92, % Debt Service $ 8,954,833 $ 9,547,452 $ (592,619) (6.21) % OPEB Debt Service $ 969,113 $ 687,914 $ 281, % $ 20,232,533 $ 20,339,182 $ (106,649) (0.52) %

15 General Fund Levy Components Proposed Final Percent 2016 Levy 2015 Levy Change Change Referendum Authority * $ 1,977,001 $ 1,838,808 $ 138, % Local Option * 2,517,915 2,350,597 $ 167, % Transition * 282, ,888 18, % Equity * 935, ,169 74, % Student Achievement 116, ,459 7, % Capital Projects Referendum 1,061, , , % Operating Capital * 588, ,473 78, % Alternative Teacher Comp 515, ,491 38, % Safe Schools/Crime 298, ,031 12, % Health & Safety/Alt. Facilities - 228,037 (228,037) (100.00) % Integration 251, ,738 13, % Lease 516, ,434 6, % Career Technical 98,828 61,207 37, % Deferred Maintenance * - 344,087 (344,087) (100.00) % LT Facilities Maintenance * 600, ,000 n/a % Unemployment 100,000 75,000 25, % Adjustments (52,841) 480,153 (532,994) (111.01) % Abatements 25, ,006 (113,341) (81.54) % $ 9,833,757 $ 9,721,833 $ 111, % * Equalized

16 General Fund Levy Components Proposed Final Percent 2016 Levy 2015 Levy Change Change Referendum Authority $ 1,977,001 $ 1,838,808 $ 138, % Local Option 2,517,915 2,350,597 $ 167, % Transition 282, ,888 18, % Equity 935, ,169 74, % Student Achievement 116, ,459 7, % Capital Projects Referendum 1,061, , , % Operating Capital 588, ,473 78, % Alternative Teacher Comp 515, ,491 38, % Safe Schools/Crime 298, ,031 12, % Health & Safety/Alt. Facilities - 228,037 (228,037) (100.00) % Integration 251, ,738 13, % Lease 516, ,434 6, % Career Technical 98,828 61,207 37, % Deferred Maintenance - 344,087 (344,087) (100.00) % LT Facilities Maintenance * 600, ,000 n/a % Unemployment 100,000 75,000 25, % Adjustments (52,841) 480,153 (532,994) (111.01) % Abatements 25, ,006 (113,341) (81.54) % $ 9,833,757 $ 9,721,833 $ 111, % * Statute allows the district to levy this component at $1,052,637 (amount that can be levied for). Administration and the School Board have elected to underlevy by $452,637 and collect $600,000 instead. This is consistent with what has been collected in prior years and has allowed the district to lower property taxes for 2016 in doing so. Other existing revenue sources will be used to fund any necessary projects.

17 General Fund Levy Significant changes to General Fund levy: Increases in equalized levies (referendum, local option, transition, equity and operating capital) are due to an increase in property values over the equalizing formula denominator. The amount of revenue the state subsidizes tax levies decreases as the district s property values increase. There is no impact to the total revenue the district receives Health & Safety and Deferred Maintenance levies are replaced by the Long Term Facilities Maintenance levy. Net increase of $27,876 is mostly due to the equalizing factor as well.

18 Levy Adjustments Adjustments to the levy reflect a clean up to the previous year s levies. Levies are set seven months prior to the start of the school year for which funds are levied. Once actual data for that year is available, adjustments for student counts and actual expenditures are compared to the levy and adjustments are made accordingly. Student counts have become more accurate, and as a result, a smaller adjustment needed to be made for recent levies.

19 Community Service Levy Proposed Final Percent 2016 Levy 2015 Levy Change Change Basic Levy $ 243,675 $ 220,590 $ 23, % Early Childhood $ 132,290 $ 125,003 $ 7, % Home Visitation $ 2,952 $ 3,314 $ (362) (10.92) % School Age Care $ 90,000 $ 90,000 $ - - % Adjustments $ 5,466 $ (60,791) $ 66,257 (108.99) % Abatements $ 447 $ 3,867 $ (3,420) (88.44) % $ 474,830 $ 381,983 $ 92, %

20 Debt Service Levy Proposed Final Percent 2016 Levy 2015 Levy Change Change Required Levy of 105% of $ 9,505,331 $ 9,852,848 $ (347,517) (3.53) % Scheduled Principal & Interest Adjustments $ (579,220) $ (446,150) $ (133,070) % Abatements $ 28,722 $ 140,754 $ (112,032) (79.59) % $ 8,954,833 $ 9,547,452 $ (592,619) (6.21) %

21 OPEB Debt Service Levy Proposed Final Percent 2016 Levy 2015 Levy Change Change Required Levy of 105% of $ 968,573 $ 683,309 $ 285, % Scheduled Principal & Interest Adjustments $ (385) $ - $ (385) n/a % Abatements $ 925 $ 4,605 $ (3,680) (79.91) % $ 969,113 $ 687,914 $ 281, %

22 Debt Service Levies Debt Service levies are based on scheduled principal and interest payments on existing debt. When debt is issued, principal and interest payments are set up to best level out the payments to be consistent from year to year. The increase in OPEB levies and corresponding decrease in regular debt levies reflects an intentional effort to set the OPEB increase in principal in a year where other debt principal is scheduled to decrease so that property taxes are not going significantly up and down each year.

23 Market Value History $ in Billions Calendar Year

24 State Property Tax Refunds Minnesota has three property tax programs to assist residents with their property tax liability: Property Tax Circuit Breaker Refund Special Property Tax Refund Senior Citizen Property Tax Deferral Please contact your tax professional or the Minnesota Department of Revenue website for additional information or to learn if you qualify

25 Fiscal Responsibility The district is consistently reviewing ways in which it can keep property taxes down where possible. Under- levying, as explained earlier, is one way in which we are keeping property taxes down. Another example is the bond refunding presented for action later in this board meeting. This is the third time in five years in which the district has refunded (refinanced) debt at lower interest rates than original debt was issued at. The savings total $10,960,826 in future payments, saving the average homeowner in the district over $100 per year.