Another reason school districts may revise the tax rate ceiling to compensate for reductions in assessed value is because of decisions made by the local Board of Equalization or the State Tax Commission. The District may be permitted to levy an additional tax for up to three years to recoup the revenues it was entitled to receive for the preceding one to three year period affected by the decisions. 22 22 Fund 2018-2019 Revised Budget 2019-2020 Proposed Revenue Variance General $17,966,130 $21,017,950 $3,051,820 Special Revenue $27,188,980 $36,170,940 $8,981,960 Capital Projects $1,437,290 $2,612,120 $1,174,830 Debt Service $8,090,030 $9,355,540 $1,265,510 Total $54,682,430 $69,156,550 $14,474,120 The primary increase in all funds is due to approximately $3.8 million of uncollected local taxes for 2018-2019 combined with the 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. All other categories of revenue have minimal increases or decreases that do not have an impact on the overall budget as can be seen on the following page. 23

Fund 2018-2019 Revised Budget 2019-2020 Proposed Revenue Variance General $17,966,130 $21,017,950 $3,051,820 Special Revenue $27,188,980 $36,170,940 $8,981,960 Capital Projects $1,437,290 $2,612,120 $1,174,830 Debt Service $8,090,030 $9,355,540 $1,265,510 Total $54,682,430 $69,156,550 $14,474,120 The primary increase in all funds is due to approximately $3.8 million of uncollected local taxes for 2018-2019 combined with the 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. All other categories of revenue have minimal increases or decreases that do not have an impact on the overall budget as can be seen on the following page. 23 2018-2019 Revised 2019-2020 Proposed Variance Variance Budget Revenue $ % Property Taxes $33,011,830 $46,468,680 $13,456,850 40.76% Tuition – Personal $489,500 $464,850 ($24,650) -5.04% Tuition – Other Districts $320,000 $165,620 ($154,380) -48.24% VICC $1,495,570 $1,386,920 ($108,650) -7.26% County $370,700 $382,000 $11,300 3.05% State $1,634,050 $1,634,050 $0 0.00% Federal $468,210 $462,210 ($6,000) -0.01% Other $7,681,270 $7,680,680 ($590) -0.01% Total Operating $45,471,130 $58,645,010 $13,173,880 28.97% As previously stated, the primary change in operating revenue is due to additional property taxes due to the successful passing of Proposition E. Reduction of Other is primarily due to the loss of Financial Institution Taxes. 24

2018-2019 Revised 2019-2020 Proposed Variance Variance Budget Revenue $ % Property Taxes $33,011,830 $46,468,680 $13,456,850 40.76% Tuition – Personal $489,500 $464,850 ($24,650) -5.04% Tuition – Other Districts $320,000 $165,620 ($154,380) -48.24% VICC $1,495,570 $1,386,920 ($108,650) -7.26% County $370,700 $382,000 $11,300 3.05% State $1,634,050 $1,634,050 $0 0.00% Federal $468,210 $462,210 ($6,000) -0.01% Other $7,681,270 $7,680,680 ($590) -0.01% Total Operating $45,471,130 $58,645,010 $13,173,880 28.97% As previously stated, the primary change in operating revenue is due to additional property taxes due to the successful passing of Proposition E. Reduction of Other is primarily due to the loss of Financial Institution Taxes. 24 Expenditures by Function The expenditure function code describes the action, purpose, or program for which activities are performed. DESE requires the District to report by functions based on five main categories: Instruction, Support Services, Community Services, Facilities Acquisition and Construction, and Debt. These functions are further classified into sub-functions based on schools, programs, services, and areas of responsibilities. 1000-1999 Instruction – Activities dealing directly with the teaching of pupils, or the interaction between teachers and pupils. Teaching may be provided for pupils in a school classroom, in another location such as a home or hospital, or in another learning situation. Activities of aides or assistants are included in this function when they assist in the instructional process. 2000-2999 Support Services – Services that provide administrative, guidance, health, and logistical support to facilitate and enhance instruction. Supporting services exist as adjuncts for the fulfillment of the objectives of instruction. 3000-3999 Community Services – Activities that do not directly relate to providing education of pupils in the District. These include services provided by the District for the whole or segments of the community. 4000-4999 Facilities Acquisition and Construction Services – Activities concerned with the acquisition of land and buildings, remodeling buildings, the construction of buildings, additions to buildings, the initial installation of service systems, the extension of service systems, and any other project meant to improve a site. 5000-5999 Short and Long-Term Debt – Activities servicing the debt of the District. Expenditures by Object The expenditure object code identifies the service or commodity obtained. The major expenditure object categories are: 6100-6199 Salaries – Amounts paid to employees of the District who are considered to be in a position of permanent or temporary employment, including personnel substituting for those in permanent positions. This includes gross salary for services rendered while on the payroll of the District. 6200-6200 Benefits – Amounts paid by the District for benefits on behalf of the employee. These amounts are not included in the gross salary. Such expenditures include fringe benefits. While these payments are not paid directly to the employee, they are considered part of the cost of employment. 6300-6399 Purchased Services – Amounts paid for services rendered by personnel who are not on the payroll of the District and for other services which the District may purchase. While a product may or may not result from the transaction, the primary reason for the purchase is the service provided. 6400-6499 Supplies – Amounts paid for material items of an expendable nature that are consumed, deteriorate in use, or lose separate identity through fabrication or incorporation into different or more complex units or substances. 25

While these payments are not paid directly to the employee, they are considered part of the cost of employment. 6300-6399 Purchased Services – Amounts paid for services rendered by personnel who are not on the payroll of the District and for other services which the District may purchase. While a product may or may not result from the transaction, the primary reason for the purchase is the service provided. 6400-6499 Supplies – Amounts paid for material items of an expendable nature that are consumed, deteriorate in use, or lose separate identity through fabrication or incorporation into different or more complex units or substances. 25 6500-6599 Capital Outlay – Expenditures for the acquisition of fixed assets or additions to fixed assets. Examples include expenditures for land or existing buildings, improvements of grounds, construction of buildings, additions to buildings, remodeling of buildings, and equipment. 6600-6699 Short and Long-Term Debt – Expenditures for the retirement of debt, the payment of interest on debt, and the payment fees. Fund 2018-2019 Original Budget 2019-2020 Proposed Expenses Variance General $20,362,750 $20,937,820 $575,070 Special Revenue $33,092,460 $33,679,700 $587,240 Capital Projects $1,517,880 $2,154,820 $636,940 Debt Service $8,804,540 $7,829,650 ($974,890) Total $63,777,630 $64,601,990 $824,360 The increase in General and Special Revenue funds is due to salary (one percent for certified and two percent for classified) and benefit (10 percent) increases, as well as minimal increases in utilities and liability insurance. The increase in Capital Projects funds is due to the successful passing of Proposition E which allows for an additional $100,000 toward capital projects and $575,000 toward the payment of the debt on the improvements to the Center of Clayton (see Capital Expenditures section). 26

Fund 2018-2019 Original Budget 2019-2020 Proposed Expenses Variance General $20,362,750 $20,937,820 $575,070 Special Revenue $33,092,460 $33,679,700 $587,240 Capital Projects $1,517,880 $2,154,820 $636,940 Debt Service $8,804,540 $7,829,650 ($974,890) Total $63,777,630 $64,601,990 $824,360 The increase in General and Special Revenue funds is due to salary (one percent for certified and two percent for classified) and benefit (10 percent) increases, as well as minimal increases in utilities and liability insurance. The increase in Capital Projects funds is due to the successful passing of Proposition E which allows for an additional $100,000 toward capital projects and $575,000 toward the payment of the debt on the improvements to the Center of Clayton (see Capital Expenditures section). 26 2018-2019 2019-2020 Variance Variance Budget Proposed Exp $ % Certified Salaries $25,886,150 $26,379,910 $493,760 1.91% Classified Salaries $7,683,300 $7,849,640 $166,340 2.16% Board Paid Health Benefits $4,055,000 $4,169,190 $114,190 2.82% Employee Benefits $5,623,320 $5,928,880 $305,560 5.43% Purchased Services $4,653,840 $4,932,800 $278,960 5.99% Supplies $4,557,260 $4,352,180 ($205,080) -4.50% Equipment/Capital $1,515,080 $2,153,320 $638,240 42.13% Total Operating $53,973,950 $55,765,920 $1,791,970 3.32% Explanations of the fluctuations in the various categories are described in more detail on the following pages. 27