District fee-based programs, such as child nutrition, Kidzone and early childhood education, have been significantly impacted. The District has prepared the 2022-2023 budget based on the most current information available. 37 DEBT SERVICE As of June 30, 2022, the District has bonds outstanding of approximately $49.1 million. In 2022-2023, the District will pay $6.72 million in principal and interest payments and is budgeting the receipt of $176,330 in subsidy income direct from the federal government on federally subsidized debt for the Series 2010A Qualified School Construction Bonds that have a 96 percent interest rate subsidy. General Obligation Bonds Outstanding Issue Date Maturity Date Rate of Interest Original Issue Amount Balance as of June 30, 2022 10/14/09 03/01/24 1.37% $9,185,000 $9,185,000 09/08/10 03/01/27 4.70% 3,987,000 3,987,000 12/27/17 03/01/29 4.00%-5.00% 23,465,000 15,575,000 12/05/19 03/01/29 2.00%-3.00% 31,075,000 20,335,000 $49,082,000 Article VI, Section 26(b), of the Constitution of Missouri, limits the outstanding amount of authorized General Obligation Bonds of the District to 15 percent of the assessed valuation of a district. The approximate assessed value of taxable properties within the District boundaries is $1.349 billion. This results in the District’s constitutional debt limit being approximately $202 million. After deducting the amount of outstanding debt and adding back the cash available in the Debt Service Fund, this results in a $156 million legal debt margin. 38

This results in the District’s constitutional debt limit being approximately $202 million. After deducting the amount of outstanding debt and adding back the cash available in the Debt Service Fund, this results in a $156 million legal debt margin. 38 FUND BALANCE The fiscal year, as determined by Board Policy DBB, is inconsistent with the school year. Both are inconsistent with the tax year. Fiscal Year: July through June School Year: August through June Tax Year: January through December Essentially, the District receives one large paycheck per year. Although tax revenues in smaller amounts are received by the District throughout the year, the bulk of the revenue arrives in late December and early January. These revenues are generated by local property taxes, which are collected in the fall and distributed to school districts by the County Collector. The Board of Education must set aside money to pay District bills for the balance of the fiscal year (January-June) and for the first six months of the next fiscal year (July-December). As a budget for the following year is being created in the winter months, the Board must work with the actual amount of tax revenue received in January and estimate the amount that will be collected some 11-12 months later. The Board must, therefore, project its expenses far into the future. For example, when an official tax levy is established in September of one year, the taxes are not actually received by the District for six months, but must support the District until taxes are distributed again some 18 months later! Put graphically, here are the ABC’s of school taxes: A B C D July 2021 December 2021 January 2022 January 2022-December 2022 Begin Fiscal Year September 2021 tax levy set Taxes collected by County Collector District receives local taxes (81% of total income) District operates on taxes collected and fund balances 18 Months -----------------------------------------------------------------------------------------------------------→ If tax receipts in January are lower than estimated, it will be more difficult for the District to pay all of its operating expenses for the next 12 months. If new families move into Clayton over the summer months and additional children appear at school in September, additional faculty may have to be hired. If unexpected building repairs are needed, scheduled maintenance may have to be delayed. In setting a tax levy that will provide the money to support the budget, the District takes several steps. • First, financial planning is of prime importance. Annual costs for teachers’ salaries, building operations, and instructional materials are carefully analyzed. The District’s Chief Financial Officer carefully monitors projected increases in assessed valuation, the rate of tax collection, and political actions that may have an impact upon the District’s financial future. • Second, in building the budget, the Board sets aside contingency monies in each of the three operational funds: Special Revenue, General, and Capital Projects. (As stated earlier, the Debt Service Fund is predictable.) For example, the District could experience unpredicted increases in enrollment that would make it necessary to hire additional teaching staff and purchase additional instructional supplies. Contingency money could be used to meet these unanticipated expenditures. 39

The District’s Chief Financial Officer carefully monitors projected increases in assessed valuation, the rate of tax collection, and political actions that may have an impact upon the District’s financial future. • Second, in building the budget, the Board sets aside contingency monies in each of the three operational funds: Special Revenue, General, and Capital Projects. (As stated earlier, the Debt Service Fund is predictable.) For example, the District could experience unpredicted increases in enrollment that would make it necessary to hire additional teaching staff and purchase additional instructional supplies. Contingency money could be used to meet these unanticipated expenditures. 39 • Third, fund balances—money from each fund not spent during a budget year—is placed in a reserve fund. The Board may draw upon this fund—just as a citizen will draw upon a savings account—if the need arises. Because this revenue has been collected through a voter-approved tax levy or represents other revenue, such as interest income derived from invested tax revenue, no additional vote of the people need be taken in order to use it. For Clayton, fund balances serve another important purpose. Since the District receives most of its tax revenue in late December and early January, but the fiscal year ends June 30, money must be set aside in the reserve fund to meet District expenses—such as payroll—from July through December. Experience has shown that a minimum fund balance of 18 percent of the expenditure budget must be maintained to prevent the necessity of borrowing money to meet District expenses during the fall months. Historical revenues, expenses and fund balance from the last tax levy (2003) and projected for the next five years are presented below. 40

Experience has shown that a minimum fund balance of 18 percent of the expenditure budget must be maintained to prevent the necessity of borrowing money to meet District expenses during the fall months. Historical revenues, expenses and fund balance from the last tax levy (2003) and projected for the next five years are presented below. 40 REPORTING Every district within the state of Missouri is required to file a yearly financial summary report with DESE by August 15 of each year entitled the Annual Secretary of the Board Report (ASBR). The District submits this report for all governmental funds on the cash basis of accounting, which is a comprehensive basis of accounting other than generally accepted accounting principles (GAAP). The cash basis is used to enable the District to more accurately compare itself to other districts since the majority of the districts within the state of Missouri report on the cash basis of accounting. In accordance with RSMo 165.121 and Board Policy DIE, every district within the state of Missouri is required to file audited financial statements with DESE by December 31 of each year. The auditor’s management letter and a copy of the Board minutes indicating approval of the audit report must also be submitted to DESE. The District’s audited financial statements are prepared and audited in accordance with GAAP. 41 FINANCIAL SECTION 42 Actual Revenues, Expenditures and Balances 2020-2021 43

Actual Revenues, Expenditures and Balances 2020-2021 43 Special Capital Subtotal Debt Subtotal General Revenue Projects Operating Service District Business-Type Grand Fund Fund Fund Funds Fund Funds Activities Total Tax Rate 1.2499 $2.3530 $0.1875 $3.7904 $0.6230 $4.4134 $4.4134 Balance 7/01/20 $9,187,040 $13,697,302 $4,661,800 $27,546,142 $6,345,792 $33,891,934 - $33,891,934 Local Tax Revenues Delinquent Tax Collections ($73,723) ($138,786) ($11,058) ($223,567) ($36,746) ($260,313) ($260,313) Current Tax Collections $15,992,809 $30,106,869 $2,398,837 $48,498,515 $7,971,276 $56,469,791 $56,469,791 $15,919,086 $29,968,083 $2,387,779 $48,274,948 $7,934,530 $56,209,478 - $56,209,478 Other Sources $4,720,970 $4,346,430 $1,511,525 $10,578,925 $403,592 $10,982,517 $219,554 $11,202,071 Total Revenues $20,640,056 $34,314,513 $3,899,304 $58,853,873 $8,338,122 $67,191,995 $219,554 $67,411,549 Expenditures $16,598,988 $33,350,419 $3,302,169 $53,251,576 $8,973,611 $62,225,187 $387,564 $62,612,751 Excess (Deficit) Revenues Over Expenditures $4,041,068 $964,094 $597,135 $5,602,297 ($635,489) $4,966,808 ($168,010) $4,798,798 Other Financing Sources (Uses) COVID Grant Revenue $154,435 $280,172 $434,607 $434,607 $434,607 COVID Grant Expenditures ($603,827) ($425,106) ($282,547) ($1,311,480) ($1,311,480) ($1,311,480) Center of Clayton Operating Loss ($318,928) ($318,928) ($318,928) ($318,928) Capital Projects ($1,457,618) ($1,457,618) ($1,457,618) ($1,457,618) Transfers In $4,036 $4,036 $4,036 ($4,036) $0 Transfers Out ($160,891) ($11,155) ($172,046) ($172,046) $172,046 $0 Excess (Deficit) Revenues and Other Financing Sources over Expenditures and Other Financing (Uses) $3,111,857 $543,024 ($874,013) $2,780,868 ($635,489) $2,145,379 $0 $2,145,379 Actual Balance 6/30/21 $12,298,897 $14,240,326 $3,787,787 $30,327,010 $5,710,303 $36,037,313 - $36,037,313 SCHOOL DISTRICT OF CLAYTON ACTUAL REVENUES, EXPENDITURES AND BALANCES TO JUNE 30, 2021 44 Estimated Revenues, Expenditures and Balances 2021-2022 45