Parents as Teachers (PAT) – Revenue received for early childhood screening. 5400 - Federal Revenue School Lunch Program – Revenue received directly through DESE for the National School Lunch Program. School Breakfast Program – Revenue received directly through DESE for the National School Breakfast Program. 22 Title I – Revenue received to help educationally disadvantaged students meet high academic standards. These revenues are appropriated from the U.S. Congress for Elementary and Secondary Education Amendments of 1965 for special programs. A portion of the VTS revenue is received through the Federal Title I program as a pass through. Interest Subsidy – The majority of federal revenue is derived from subsidized interest on tax credit bonds issued through the American Recovery and Reinvestment Act of 2009. Estimating Revenue How much revenue is likely to be generated from local, county, state, and federal sources? As indicated earlier, 79 percent of the District’s revenue is collected through local property taxes. Therefore, in preparing the District budget, careful estimates of local tax revenue must be made. As the Board works on a budget for the following school year, its estimates of revenue are based upon the actual amount of assessed valuation upon which taxes were paid for December 31st of the preceding year (e.g. December 31, 2019 figures are used for the 2020-2021 budget). These figures are received from the County Assessor’s Office and are utilized by District administrators as information becomes available. Estimated increases or decreases in the current year’s assessed valuation are based upon such facts as protested properties, the number of local building permits issued or the projected completion dates of new commercial buildings. Although December 31st figures are used as basic data in estimating the District’s annual revenue, the District’s budget is based upon the June 30 assessed valuation. This poses difficulties for several reasons: (1) June 30 assessed valuation figures are not received until September 15, by which time major budget decisions for the following year have already been made by the Board. For example, teachers’ contracts are issued in May as required by state law. (2) The June 30 figures are usually not completely accurate because they reflect assessed valuation amounts that may be challenged by property owners and later adjusted by the Board of Equalization. Further, these figures cannot predict delinquent tax payments or property that will be removed from the tax rolls for various reasons. For example, an old building may be torn down to make way for a new structure. The old building is removed from the tax rolls, but the new building is not normally added until its completion. (3) Other factors that significantly challenge the ability to accurately project revenues are property tax abatement programs including Chapter 100, Chapter 353 or Tax Increments Finance Districts (TIFs), new construction estimates, and inflation. Property tax abatements may be granted through special state laws that allow for the development or redevelopment of an otherwise undevelopable property. Recent history has allowed this funding mechanism to relieve developers of infrastructure costs of developing properties such as shopping malls and office buildings, as well as residential developments. If a property is abated, the value of the property is fixed at that time. Any revenues generated from the increased property value due to the new development are used to pay off a part of the debt issued to build the project. Once the abatement expires, the revenues then go to the school district. Terms of abatements vary anywhere from 20 to 23 years. Predicting the nature and timing of new construction coming in to the tax rolls is also difficult. Delays in construction schedules, the timing of occupancy, and 23

Predicting the nature and timing of new construction coming in to the tax rolls is also difficult. Delays in construction schedules, the timing of occupancy, and 23 determination of the exact value all are constraints to consider. For these reasons, many adjustments must be considered in projecting local tax revenues. Estimates of revenue from other sources must also be made. Some local revenue is fairly predictable, such as rental fees paid by outside agencies for the use of District facilities. Less predictable are the revenues derived from Proposition C State sales tax. Thus, in creating a budget for the following year, the Board must estimate expenditures and necessary revenues for each of the required funds; general, special revenue, capital and debt. It must also plan for contingencies. A real challenge in planning District expenditures 12 months in advance is projecting what the District’s revenue will be. Establishing a Tax Rate By September 30th each year, the Board must establish a tax rate within a framework of state law and Board Policies DEA and DC-1. The Board may set an operating tax levy (a levy excluding the Debt Service Fund) to provide revenue to each fund. An operating tax levy beyond the authorized ceiling requires a majority vote on a tax levy ballot issue. The Board may reduce the tax rate without voter approval. School districts may revise the tax rate ceiling to compensate for reductions in assessed value that occurred after the prior year levy had been calculated. One reason this can occur is as a result of general reassessment. Because of this reason, the Board waits to establish the annual levy until the County Board of Equalization completes its work and the St. Louis County Assessor produces assessed valuation figures that include adjustments. 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. 24

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. 24 Fund 2019-2020 Revised Budget 2020-2021 Proposed Revenue Variance General $23,020,210 $23,309,730 $289,060 Special Revenue $37,979,710 $36,424,990 ($1,554,720) Capital Projects $2,638,610 $1,430,850 ($1,207,760) Debt Service $9,238,630 $8,371,730 ($866,900) Total $72,877,080 $69,537,300 ($3,339,780) The decrease is due to several factors. In 2019-2020 the District was able to recoup the payback of approximately $1.2 million of protested taxes from the prior year. Additionally, there have been no settlements of major protests during 2019-2020 resulting in an additional $600,000 of tax revenue that is not projected for 2020-2021. This will result in no recoupment of protested taxes. Further, financial institution taxes (FIT) were $1.0 million higher in 2019-2020 than 2018-2019. Projections do not include this level of FIT revenue. Finally, 2019-2020 included a $1.2 million donation from the Clayton Education Foundation for the construction of Adzick Field. 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. 25

Finally, 2019-2020 included a $1.2 million donation from the Clayton Education Foundation for the construction of Adzick Field. 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. 25 2019-2020 Revised 2020-2021 Proposed Variance Variance Budget Revenue $ % Property Taxes $48,823,800 $47,333,010 ($1,490,790) -3.05% Tuition – Personal $400,150 $402,130 $1,980 0.49% Tuition – Other Districts $140,140 $95,550 ($44,590) -31.82% VICC $1,344,350 $1,227,140 ($117,210) -8.72% County $428,730 $402,070 ($26,660) -6.22% State $1,676,050 $1,792,470 $116,420 6.95% Federal $560,800 $449,050 ($111,750) -19.93% Other $9,325,170 $8,333,900 ($991,270) -10.63% Total Operating $62,699,190 $60,035,320 ($2,663,870) -4.25% As previously stated, the primary change in operating revenue is due to the fluctuation of protested taxes. Reduction of Other is primarily due to the loss of financial institution taxes. 26

2019-2020 Revised 2020-2021 Proposed Variance Variance Budget Revenue $ % Property Taxes $48,823,800 $47,333,010 ($1,490,790) -3.05% Tuition – Personal $400,150 $402,130 $1,980 0.49% Tuition – Other Districts $140,140 $95,550 ($44,590) -31.82% VICC $1,344,350 $1,227,140 ($117,210) -8.72% County $428,730 $402,070 ($26,660) -6.22% State $1,676,050 $1,792,470 $116,420 6.95% Federal $560,800 $449,050 ($111,750) -19.93% Other $9,325,170 $8,333,900 ($991,270) -10.63% Total Operating $62,699,190 $60,035,320 ($2,663,870) -4.25% As previously stated, the primary change in operating revenue is due to the fluctuation of protested taxes. Reduction of Other is primarily due to the loss of financial institution taxes. 26 EXPENDITURES 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 expenditures by 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. 27