Tuba City Unified School DistrictGoverning Board School & Finance Work StudySaturday, December 10, 2011

Agenda• AIMS Performance & Navajo Nation Demographics• Impact Aid – Beyond General Budget Limit

• About Impact Aid• History of Impact Aid – Indian Oasis v Warner• AZ Legislature Impact Aid Sweeps and New Accounting Rules• AZ Legislature – Future Impact Aid Funds

• Auditor General Reports – Dollars Spent in the Classroom• Annual Financial Report Historical Review• FY 2012 District Budget Revisions• FY 2011 and FY 2012 Staffing Costs• K-8 Construction Bonding Update

AIMS Performance

AIMS Performance

The Outcomes of Cultural Edification• The Navajo Nation has 255,543 tribal members of which

nearly 170,254 reside within the Nation (66.6%)• The median age of Navajo tribal members is 22 years of age• The Navajo Nation’s per capita income is $6,804• The estimated Navajo Nation unemployment rate is nearly 58

percent• According to the 2000 Census, 31.9 percent of tribal housing

lack complete plumbing, 28.1 percent lack complete kitchen facilities, and 60.1 percent lack telephone service

Cultural Edification & Public Health for American Indians and Alaskan Natives• The highest suicide rate found American Indians (AI) and

Alaskan Natives (AN) is between ages 15-34, approximately 2.4 times the national rate for this group

• The overall rate of suicide for AI and AN is 20.2/100,000 which is approximately two times the rate for all other racial groups in the US

• Rates of violence for AI and AN youth ages 12-17 is 65 percent greater than the national rate for youth

• Homicide mortality rate for AI and AN females ages 25-34 years is about 1.5 times that for the general population of females in this age group

Cultural Edification & Public Health for American Indians and Alaskan Natives• 25.9 percent of AI and AN families are at or below the poverty

level which is significantly higher than the general population• Indian Health Services is funded at $1,900/capita which is one-

half the amount federal prisoners are funded on a per/capita basis

Source: Walker, R.D. (2005) Oversight Hearing on Indian Health Before the United States Senate Committee on Indian Affairs, Washington DC

School District Budget Overview

Impact Aid Overview• Title VIII of the Elementary and Secondary Education Act• Established in 1950 to provide financial assistance to local

school districts that include parcels of land that are owned by the Federal Government or been removed from the local tax rolls by the Federal Government, including Indian lands

• Assists local school districts that have lost property tax revenue due to the presence of tax exempt Federal property

• Provides assistance to school districts with concentrations of children residing on Indian lands, military bases, low rent housing or other Federal properties

• Generally supports the overall operating budget and capital needs

Indian Oasis v Warner• 1982 – Eleven school districts filed suit filed against State

Board of Education indicating Districts could not include federal impact aid funds under state-imposed spending limits

• 1983 – Administrative appeal with the US Department of Education

• 1984 – Legislation passed in AZ returning access to some of their federal impact aid funds

• House Bill 2013 redefined impact aid and excluded it form the category of federal assistance

• Fast forward…HB 2029 in May 2009

Cash Sweeps• HB 2029, May 2009• Cash balance sweeps• Any school district that showed surplus balance in their

account• Provision of the law exempted impact aid districts, however

the federal dollars were swept anyways• The federal dollars were comingled with state dollars and had

lost their identity

Impact Aid Today• HB 2725 from the 2010 legislative session made a significant

impact for impact aid funding beginning in 2010-11• Impact aid funds can no longer be used to fund overrides• Impact aid funds are to be transferred into the General Fund

to balance the fund and keep property taxes down• Expenditures beyond the budget capacity (GBL) should be

moved to the specific Impact Aid Fund• Only transfer enough to cover the property tax short fall• If too much is transferred, you will end up with cash you

cannot spent• If too little is transferred, you will end up with cash flow issues

Budget Worksheet L

Impact Aid Expenses• Avoid coding the following to Impact Aid to protect your

indirect cost rate: • Communications• Tuition• Central Services (function 2500)• Maintenance of Plant (function 2600)

Impact Aid Today• Funds must be kept in a separate account and can no longer

comingle with other revenue sources• Must follow the Uniform System of Financial Records• Expenditures must be in accordance with federal law

BREAK

Auditor General Report – Classroom Spending Report• Result of Prop 301 Legislation• Classroom Spending vs. Non-Classroom• Report elements

• Expenses Categories• Student Achievement• Staffing Patterns• Prop 301 Plan Results

• Timeline for issuance – typically February of the following year

Report Elements

Report Heading

Operational Efficiency

Cost Measure Comparisons

Historical Review of TCUSD

FY06-07 FY07-08 FY08-09 FY09-10Peer

Average

Classroom Dollars 44.8% 43.7% 44.5% 43.3% 50.9%

Non-Classroom Dollars

Administration 10.9% 11.6% 12.1% 12.0% 12.1%

Facilities 16.0% 16.2% 17.4% 18.6% 14.4%

Food Services 4.2% 4.6% 4.6% 3.9% 4.5%

Transportation 6.7% 7.4% 6.8% 6.4% 5.8%

Student Support 11.1% 10.1% 10.0% 10.8% 7.5%

Instructional Support 6.3% 6.4% 4.6% 4.9% 4.8%

Student Achievement

Student and Teacher Elements

Prop 301 Plan

Elements of a Performance Pay Plan (ARS 15-977)1. School district performance and school performance.2. Measures of academic progress toward the academic standards adopted by the state board of education.3. Other measures of academic progress.4. Dropout or graduation rates.5. Attendance rates.6. Ratings of school quality by parents.7. Ratings of school quality by students.8. The input of teachers and administrators.9. Approval of the performance based compensation system based on an affirmative vote of at least seventy per cent of the teachers eligible to participate in the performance based compensation system.10. An appeals process for teachers who have been denied performance based compensation.11. Regular evaluation for effectiveness.

Annual Financial Report

• The Annual Financial Report (AFR) is a report filed each year with the Arizona Department of Education. The report is filed by October 15 for the expenses of the prior year. The AFR reports the expenditures compared to budgeted amount for the fiscal year.

• The AFR summary report is published in the via the Arizona Department of Education website as well as the local newspaper.

2010-11 M&O Expenses

M&O Expense History2010-11 2009-10 2008-09 2007-08 2006-07

Classroom Dollars 53.7% 43.9% 45.3% 44.5% 45.1%

Student Support 6.7% 11.1% 11.6% 13.9% 12.0%

Instructional Support 0.8% 1.5% 1.9% 2.0% 1.8%

Administration 0.0% 5.5% 6.1% 5.3% 4.4%

Business Central 0.6% 9.2% 7.0% 7.3% 8.8%

Operations & Maint. 26.6% 20.3% 18.3% 15.8% 18.6%

Transportation 11.6% 8.4% 9.8% 11.2% 9.4%

State Funding History2011-12 2010-11 2009-10 2008-09

M&O (001) $10,851,320 $10,751,606 $11,575,191 $11,945,720

CORL (610) $251,189 $473,865 $513,257 $539,098

SCA (625) $9,567 $58,555 $416,917 $442,670

Total $11,112,076 $11,284,026 $12,505,365 $12,927,488

ADM 1,734 (est) 1,734 1,853 1,967

2012 Budget RevisionF u n c t i o n M & O Im p a c t A id

1 0 0 0 7 ,7 6 1 ,8 4 6 .4 0$ 1 ,4 0 5 ,4 2 2 .0 0$ 2 1 0 0 5 2 2 ,0 6 2 .1 5$ 1 ,1 4 1 ,8 2 5 .0 0$ 2 2 0 0 9 3 ,4 2 3 .4 9$ 7 0 ,8 4 3 .0 0$ 2 3 0 0 3 0 ,8 0 0 .0 0$ 4 6 6 ,5 4 0 .0 0$ 2 4 0 0 -$ 7 9 0 ,5 1 0 .0 0$ 2 5 0 0 6 7 ,4 8 8 .1 0$ 1 ,5 6 7 ,1 8 0 .0 0$ 2 6 0 0 1 ,9 3 7 ,5 2 0 .9 8$ 2 ,4 9 5 ,5 2 0 .0 0$ 2 7 0 0 -$ 1 ,7 4 1 ,0 3 5 .0 0$ 3 1 0 0 1 5 1 ,2 1 7 .8 8$ -$

T o ta l 1 0 ,5 6 4 ,3 5 9 .0 0$ 9 ,6 7 8 ,8 7 5 .0 0$

G r a n d T o ta l 2 0 ,2 4 3 ,2 3 4 .0 0$

1 ,2 5 0 ,0 0 0 .0 0$ 1 ,8 4 4 ,2 5 8 .7 4$

4 0 5 ,5 4 8 .0 0$

4 ,0 5 6 ,2 8 1 .5 3$

B u d g e t C a p a c ity 1 0 ,5 6 4 ,3 5 9 .0 0$ 1 7 ,2 3 4 ,9 6 3 .2 7$

C o n s tru c tio n C o n t in g e n c y ( in c lu d e s b o n d p a ym e n t )

T ra n s f e r to T e a ch e ra g eT ra n s f e r to M & O to co ve r t a x /b u d g e t sh o r ta g eT ra n s f e r to M & O to co ve r p r io r ye a r sh o r ta g e

2012 Budget Revision

LUNCH

Staffing Cost Comparison2010-11 FTE 2010-11 Cost 2011-12 FTE 2011-12 Cost

Teachers 114 $5,895,029 151 $7,677,966

Support Staff 163.5 $5,097,956 171 $4,873,162

Administrators 11 $787,004 14 $709,025

Total 288.5 $11,779,989 336 $13,260,153

**Costs do not include benefits

K-8 Construction BondingCategory Amount

Beginning Balance 7.1.2011 17,234,963.27$ FY 2011 transfer for cash shortage (400,000.00)$ Transfer to M&O in lieu taxes (392,331.74)$ Transfer to M&O for TRCL limit (1,451,927.00)$ Transfer to Teacherage (1,250,000.00)$ FY 2012 Bond Payment (688,100.00)$ FY 2013-2015 Bond Payments (1,369,809.00)$ FY 2012 Impact Aid Expenses - YTD + Encumbered (6,000,000.00)$ FY 2012 Capital Expenses - District anticipated (2,000,000.00)$

3,682,795.53$

Recurring Costs (9,844,258.74)$ Annual Allocation Estimate 10,500,000.00$ Amount available for Bond 655,741.26$

CLOSING