St. Louis County 2019-2020 BUDGET June 5, 2019 Due to the complete reconfiguration of the Missouri Public School Accounting System mandated by the Missouri Department of Elementary and Secondary Education (DESE) and implemented by the District as of July 1, 2018, it is extremely difficult to create an account by account analysis by function and object of the prior year expense accounts for the purposes of this document. Accounts have been separated by DESE into multiple accounts, combined with portions of other accounts, new accounts have been added and some accounts have been deleted. A single report comparing prior year’s expenses will be reinstated when an account to account comparison is available.

Accounts have been separated by DESE into multiple accounts, combined with portions of other accounts, new accounts have been added and some accounts have been deleted. A single report comparing prior year’s expenses will be reinstated when an account to account comparison is available. TABLE OF CONTENTS BUDGET MESSAGE 1 INTRODUCTORY SECTION 5 District Entity 6 Governance 6 Board of Education 6 The Role of the Board 6 Decision Making 6 Executive Administration 7 District Organizational Chart 7 District Mission and Goals 8 Mission, Vision and Core Values 8 Strategic Planning 9 Our Schools 10 Enrollment 11 Resident 12 Non-Resident 12 Budgets and Budgetary Accounting 13 Budget Management 13 Budget Cycle 13 Budget Development Process 14 Summary of Significant Account Policies 16 Fund Accounting 16 Revenue 17 Sources of Revenue 17 Estimating Revenue 21 Establishing a Tax Rate 22 Total Revenue by Fund 23 Operating Revenue by Object 24 Expenditures 25 Expenditures by Function 25 Expenditures by Object 25 Total Expenditures by Fund 26 Operating Expenditures by Object 27 Salaries and Benefits 28 School Building & Dept Budgets 29 Capital Expenditures 29 Clayton Recreation Sports & Wellness 30 Family Center 31 Parents as Teachers 32 Early Childhood Special Education 33 Summer Programs 33 Debt Service 33 General Obligation Bonds Outstanding 33 Fund Balance 34 Reporting 37 FINANCIAL SECTION 38 Actual Revenues, Expenditures & Balances 39 Estimated Revenues, Expenditures & Balances 41 Budgeted Revenues Expenditures & Balances 43 Revenue Budget & Four-Year Comparison 45 Estimated Other Revenues by Fund 48 Revised Estimated Prior Year Other Revenues 51 Total Expenditures Function/Fund 54 Location/Fund 57 Function/Object 59 Location/Object 62 Operating Expenditures Function/Fund 64 Location/Fund 67 Function/Object 69 Location/Object 72 Capital Improvement Plan (CIP) Expenditures 74 Business-Type Activities 76 Prior-Year Total Expenditures 78 Four Year Comparison 79 Function/Fund 80 Function/Object 81 Prior-Year Operating Expenditures 82 Four Year Comparison 83 Function/Fund 84 Function/Object 85 GLOSSARY 86

TABLE OF CONTENTS BUDGET MESSAGE 1 INTRODUCTORY SECTION 5 District Entity 6 Governance 6 Board of Education 6 The Role of the Board 6 Decision Making 6 Executive Administration 7 District Organizational Chart 7 District Mission and Goals 8 Mission, Vision and Core Values 8 Strategic Planning 9 Our Schools 10 Enrollment 11 Resident 12 Non-Resident 12 Budgets and Budgetary Accounting 13 Budget Management 13 Budget Cycle 13 Budget Development Process 14 Summary of Significant Account Policies 16 Fund Accounting 16 Revenue 17 Sources of Revenue 17 Estimating Revenue 21 Establishing a Tax Rate 22 Total Revenue by Fund 23 Operating Revenue by Object 24 Expenditures 25 Expenditures by Function 25 Expenditures by Object 25 Total Expenditures by Fund 26 Operating Expenditures by Object 27 Salaries and Benefits 28 School Building & Dept Budgets 29 Capital Expenditures 29 Clayton Recreation Sports & Wellness 30 Family Center 31 Parents as Teachers 32 Early Childhood Special Education 33 Summer Programs 33 Debt Service 33 General Obligation Bonds Outstanding 33 Fund Balance 34 Reporting 37 FINANCIAL SECTION 38 Actual Revenues, Expenditures & Balances 39 Estimated Revenues, Expenditures & Balances 41 Budgeted Revenues Expenditures & Balances 43 Revenue Budget & Four-Year Comparison 45 Estimated Other Revenues by Fund 48 Revised Estimated Prior Year Other Revenues 51 Total Expenditures Function/Fund 54 Location/Fund 57 Function/Object 59 Location/Object 62 Operating Expenditures Function/Fund 64 Location/Fund 67 Function/Object 69 Location/Object 72 Capital Improvement Plan (CIP) Expenditures 74 Business-Type Activities 76 Prior-Year Total Expenditures 78 Four Year Comparison 79 Function/Fund 80 Function/Object 81 Prior-Year Operating Expenditures 82 Four Year Comparison 83 Function/Fund 84 Function/Object 85 GLOSSARY 86 BUDGET MESSAGE As a community, the students, staff, parents and patrons of the School District of Clayton are united in our commitment to student learning. Our mission, vision and core values embody why we are here, what we want our students to become, and the principles that guide our work. The District’s mission to inspire each student to love learning and embrace challenge within a rich and rigorous academic culture and the vision to develop leaders who shape the world through independence, creativity and critical thinking set the standard for the education we provide. The strategic planning process used the District’s mission, vision and core values as a guide to develop strategic themes, objectives and initiatives. The 2019-2020 budget continues to focus on our strategic themes of Academic Excellence, Teacher and Administrator Excellence, Growth and Development of the Whole Child, and Resource Management. An effective learning organization continually takes time to evaluate progress and respond to it. While our District’s strategic plan serves as a guide for where we are going, we also are purposeful about being reflective and making adjustments along the way. The District began working throughout the 2018-2019 school year to develop a new strategic plan, which will guide the District's work for the next three to five years. The first step in this process is starting with the end in mind: our students. We are working to develop a “Profile of a Graduate” that will prioritize the competencies we want for every Clayton graduate. We envision a plan that will influence our approach to learning and challenge the mental models of what our schools look like for our students. In the fall of 2018, we gathered input from the community through a platform called ThoughtExchange. The data collected from this input has been used as a launching point for developing our Profile of a Graduate. Once this work is finalized in the fall of 2019, a new strategic plan will be developed. On April 2, 2019, the Board of Education (Board) asked the community to vote on Proposition E, an operating levy increase of 56 cents per $100 of assessed valuation and an eight-cent waiver of Proposition C sales tax revenues. The voters approved the ballot measure with 64.2 percent of the votes. The net effect of both measures will provide the District with an additional 64 cents of operating revenue, or approximately $7.3 million. The additional revenue will be used to maintain and strengthen the District’s academic excellence and fiscal stability by eliminating the gap between revenues and expenses, addressing facility and maintenance needs and rebuilding reserves. The community's support of Proposition E will have a lasting impact on our schools and our students. Proposition E was placed on the ballot because the District was prudently spending down operating reserves of $175,217 in 2009-2010, $820,654 in 2010-2011 and $2.0 million in 2011-2012. During 2012-2013 and 2013-2014, budget reductions of $935,900 and $1.2 million, respectively, were made both to ensure the District’s resources were allocated to programs that support its mission, vision and core values as well as to secure the District’s ability to continue to provide our students with a rich and rigorous educational experience. The reductions were made with the goal of continuing to align District resources with our priorities but also protect what matters most: our instructional core. An academically-challenging curriculum, our students’ engagement in their learning, and teachers’ knowledge and skills are the three interdependent components of this District. While we reduced our expenditures and made permanent changes to staffing and programs, we did it in a way that protected our instructional core and prioritized organizational and operational impacts in order to minimize the direct impact on our students and their learning. As a result of these reductions and the ability to recoup approximately $5.0 million of protested taxes over three years, operating surpluses of $560,973 in 2012-2013, $1.6 million in 2013-2014, and $2.6 million in 2014-2015 were reported. During fiscal year 2015-2016 the District again began spending down reserves in the amount of $1.7 million due to the payback of over $2.0 million in protested taxes; and 2016-2017 and 2017-2018 continued the trend of spending down reserves with $2.4 million and $2.0 million respectively. The District is projected to continue to spend down reserves in 1

During fiscal year 2015-2016 the District again began spending down reserves in the amount of $1.7 million due to the payback of over $2.0 million in protested taxes; and 2016-2017 and 2017-2018 continued the trend of spending down reserves with $2.4 million and $2.0 million respectively. The District is projected to continue to spend down reserves in 1 2018-2019 at approximately $4.0 million. However, due to the successful passing of Proposition E, the District is projected to have approximately a $2.9 million operating surplus and grow the fund balance to approximately 20%, which is 2 percent above the 18 percent fund balance goal. Beginning in 2015-2016, instructional and departmental operating budgets were prepared through a Zero-Based Budgeting (ZBB) approach. This approach is one of the key initiatives used to implement the Resource Management theme in the District’s Strategic Plan. This approach helps ensure that the budget is developed to align with priorities for instructional practices and organizational needs. The ZBB approach is built on needs and priorities rather than on historical spending trends. The ZBB process is about creating accountability for what the District spends and transparency for the decisions for where the District spends. The 2019-2020 budget was prepared using a ZBB approach. Proposed 2019-2020 total expenditures including normal debt service payments and business-type activities total $64.6 million. Projected total revenues, inclusive of business-type and debt service, of $69.1 million will result in a surplus $4.5 million and grow the overall fund balance to $22.3 million. Because many of the revenues and expenditures included in the total budget are restricted for specific purposes, the operating budget more clearly reflects the District’s expected results of operations. The operating revenue budget is projected to increase by $12.0 million or 25.87 percent to a total of $58.6 million primarily because of $3.8 million of uncollected local taxes for 2018-2019 combined with successful passing of Proposition E, new developments, and the recoupment of the payback of approximately $1.2 million of protested taxes from the prior year. Protested assessed values continue to remain a challenge for all of St. Louis County. Numerous protested tax appeals crowd the State Tax Commissions dockets resulting in continuous fluctuations in assessed valuation data and tax payments that cause significant fluctuations in revenue trends. Further, other revenue categories such as non-resident tuition, tuition from other local education agencies (LEA’s), and VICC are projected to decrease due to an increase in resident enrollment resulting in less available space. Projected revenues are based upon the best information available at this time as well as historical trends. The operating expenditure budget is projected to increase by $1.8 million or 3.32 percent to a total of $55.6 million. 2018-2019 was the final year of a two-year salary agreement. Administration and teacher representatives began having salary discussions in March 2019. The Board approved a two-year salary schedule at their May 8, 2019 meeting. A 1.0 percent budgetary increase for certified teaching staff has been included in the current projections. The average salary increase for a teacher is 2.45 percent due to staff turnover. Administrative salaries, classified salaries, part-time temporary employment and substitute budgets will be increased by 2 percent. In addition, the operating budget supports the maintenance of our facilities and grounds, recommended technology improvements, textbook, musical instrument and athletic uniform replacement, and curriculum implementation plans. Due to the successful passing of Proposition E, an additional $675,000 a year in funding for facility and maintenance needs will be budgeted. Total proposed maintenance Capital Improvement Plan (CIP) expenditures for 2019-2020 will include funding at the same level as 2018-2019 of $625,280 with an additional $100,000 from Proposition E for a total allocation of $725,280. The remaining $575,000 of the additional $675,000 will be used to pay the annual financing payments improvements at the Center of Clayton. 2

Total proposed maintenance Capital Improvement Plan (CIP) expenditures for 2019-2020 will include funding at the same level as 2018-2019 of $625,280 with an additional $100,000 from Proposition E for a total allocation of $725,280. The remaining $575,000 of the additional $675,000 will be used to pay the annual financing payments improvements at the Center of Clayton. 2 In addition, requests to expend funds from the sale of the Maryland Building will be presented during the 2019-2020 school year. These funds are not part of operating funds and are not reflected in the operating budget. The Board has committed these funds for capital projects and must approve each expenditure from these funds. The first request will be to hire an architect to perform a safety audit of our buildings. Facility staff are currently prioritizing other capital maintenance projects to bring forward for approval. The District continues to work to control costs and align resources with priorities while also looking at other strategies to achieve financial balance with minimal impact on students and classrooms. Operating revenues will exceed operating expenses increasing the operating fund balance by $2.9 million. The District anticipates approximately $1.0 - $1.5 million of the budget to be unexpended each year. Including these anticipated unexpended budget funds, the operating fund balance is anticipated to increase approximately $4.4 million. The 2019-2020 year-end operating fund balances inclusive of business-type activities are projected at $16.3 million or 28.7 percent. However, $4.8 million has been formally committed by the Board for future capital expenditures. This leaves a net operating fund balance of $11.5 million or 20.7 percent of budgeted operating expenditures and which is slightly above the Board’s fund balance goal of 18 percent. As part of the normal budgeting process, long-range projections are developed and continually updated. This process allows the District to determine how much of available resources can be used for ongoing projects, such as new programs or initiatives, versus one-time projects, such as facility repairs. Current long-range projections include new revenue from seven developments where construction plans have been approved.  The Barton – 8400 Maryland Avenue, Clayton  Central Park Townhomes – 1107 East Linden Avenue, Richmond Heights  Centene II – Phase I – 7600, 7606, 7620 Forsyth Boulevard; 14 South Hanley Road, Clayton – 40% tax abated property  Centene University/Early Childhood Development Center – 7501 Maryland Avenue, Clayton  Allegro Senior Residential Community – 1055 Bellevue Avenue, Richmond Heights  Shaw Park Apartments – 8049 Forsyth Boulevard, Clayton  Clarendale of Clayton – 7651 & 7601 Clayton Road, Clayton Estimated new construction revenue from only these seven developments has been included in projections. There are several other potential new developments that are currently in the conceptual phase and have either not been submitted to the City for review or are waiting on approval. Estimated revenue from these developments will be included in projections when approved. This conservative and prudent approach to planning by Boards of Education has been a historical trademark of the District. Long-range financial planning will continue to be relied upon, with administration prepared to react to unanticipated changes to planned revenue and expenses. Preparation of the 2019-2020 budget began in December 2018. It is our deep commitment to all students’ education that drives our thoughtful conversations and guides our budgetary decisions. Input was sought from staff, administrators and instructional leaders throughout the District. Specific information from developing the budget was discussed with the Board as study items on April 24 and May 22, 2019. 3