SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 The District as a Whole - Continued Table 2 Changes in Net Position from Operating Results Year Ended June 30, 2024 2023 Governmental activities Business- type activities Total Governmental activities Business- type activities Total Revenues Program revenues Charges for services $ 9,963,771 $ 1,026,565 $10,990,336 $ 9,181,393 $ 895,690 $10,077,083 Operating grants and contributions 1,906,634 - 1,906,634 2,693,290 - 2,693,290 General revenues Property taxes 59,493,185 - 59,493,185 59,061,373 - 59,061,373 Federal and State aid not restricted to specific purposes 1,347,519 - 1,347,519 1,346,735 - 1,346,735 Voluntary student transfer aid 1,037,090 - 1,037,090 1,060,130 - 1,060,130 Other taxes and interest 8,021,863 - 8,021,863 7,603,435 - 7,603,435 Total revenues 81,770,062 1,026,565 82,796,627 80,946,356 895,690 81,842,046 Expenses Instruction 34,378,715 - 34,378,715 30,871,858 - 30,871,858 Student services 3,315,417 - 3,315,417 3,092,182 - 3,092,182 Support services 2,990,346 - 2,990,346 2,673,725 - 2,673,725 Building administration 3,003,211 - 3,003,211 2,780,060 - 2,780,060 Executive administration 3,677,078 - 3,677,078 3,321,825 - 3,321,825 Business services 1,050,056 - 1,050,056 1,047,852 - 1,047,852 Central office support services 5,658,627 - 5,658,627 6,220,418 - 6,220,418 Operation of plant 13,383,987 - 13,383,987 12,507,097 - 12,507,097 Security services 496,305 - 496,305 271,247 - 271,247 Nonreimbursable transportation 306,615 - 306,615 317,422 - 317,422 Food services 1,151,905 - 1,151,905 1,075,550 - 1,075,550 Adult/community programs 1,325,773 - 1,325,773 1,174,870 - 1,174,870 Facilities acquisition and construction 121,586 - 121,586 - - - Interest and other charges 1,446,786 - 1,446,786 1,624,525 - 1,624,525 Local district services - 661,602 661,602 - 609,994 609,994 Total expenses 72,306,407 661,602 72,968,009 66,978,631 609,994 67,588,625 Excess before other income and transfers 9,463,655 364,963 9,828,618 13,967,725 285,696 14,253,421 Other income Transfers - - - (2,188,590) 2,188,590 - Total other income - - - (2,188,590) 2,188,590 - Change in net position 9,463,655 364,963 9,828,618 11,779,135 2,474,286 14,253,421 Beginning net position 61,166,127 2,539,085 63,705,212 49,386,992 64,799 49,451,791 Ending net position $ 70,629,782 $ 2,904,048 $73,533,830 $ 61,166,127 $ 2,539,085 $63,705,212 - 12 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 Governmental and Business-Type Activities As reported in the Statement of Activities, the cost of all governmental and business-type activities totaled $73.0 million in fiscal year 2024. However, the District’s local taxpayers ultimately funded $60.4 million or 83.6% of these costs because some of the costs were paid by those who benefited from the programs ($11.0 million), and by operating grants and contributions ($1.9 million). Table 3 shows the cost of each of the District’s largest functions, as well as each function’s net cost (total cost less revenue generated by the activities). The net cost shows the financial burden that was placed on the District’s taxpayers by each of the functions. Providing this information allows citizens to consider the cost of each function in comparison to the benefits they believe are provided by that function. Table 3 Net Cost of Governmental Activities Year ended June 30, 2024 2023 Total cost of services Net cost of services Total cost of services Net cost of services Governmental activities Instruction $ 34,378,715 $ 32,115,304 $ 30,871,858 $ 28,747,102 Student services 3,315,417 3,147,155 3,092,182 2,947,668 Support services 2,990,346 2,738,318 2,673,725 1,959,580 Administration 7,730,345 7,536,843 7,149,737 6,960,557 Operation of plant 13,880,292 12,758,515 12,778,344 11,764,464 Facilities acquisition and construction 121,586 121,586 - - Other 8,442,920 571,495 8,788,260 1,100,052 Interest and other charges 1,446,786 1,446,786 1,624,525 1,624,525 72,306,407 60,436,002 66,978,631 55,103,948 Business-type activities Local district services 661,602 (364,963) 609,994 (285,696) Total $ 72,968,009 $ 60,071,039 $ 67,588,625 $ 54,818,252 Instruction expenses include activities directly involved in the teaching of pupils, and the interaction between teacher and pupil. The cost of instruction is greater than the prior year primarily due to increased salary and benefit costs. Student services are those services which provide administrative, technical (such as guidance and health), and logistical support to facilitate and enhance instruction, and to a lesser degree, community services. Support services include the activities involved with assisting staff with the content and process of teaching to pupils as well as library services. Administration includes expenses associated with administrative and financial supervision of the District. Operation of plant activities involves maintaining school grounds, buildings, and equipment in an effective working condition. - 13 -

Administration includes expenses associated with administrative and financial supervision of the District. Operation of plant activities involves maintaining school grounds, buildings, and equipment in an effective working condition. - 13 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 Governmental and Business-Type Activities - Continued Other includes services for transportation, food, communications, human resources, and expenses for the District self funding its health insurance plan. Interest and other charges are transactions associated with the payment on debt of the District. Business-type activities are services provided to constituents of the District where all or most of the costs involved are recovered through services charged to the users of such services or from transfers from other funds. The dependence upon tax revenues is apparent. Similar to last year, over 93.4% of instruction activities are supported through taxes and other general revenues; for all governmental activities, general revenue support is 83.6%. The District’s Funds The District uses funds to control and manage money for particular purposes. A review of the funds provides some understanding as to whether the District is being accountable for the resources taxpayers and others provide, and also gives awareness into the District’s overall financial health. In total, governmental funds had a fund balance of $45.7 million at June 30, 2024. This represents an overall increase of $0.3 million. Revenue in the General Fund increased by $7.2 million from the prior year primarily due to a planned increase in the General Fund portion of the tax levy. Revenue in the Special Revenue Fund decreased $4.4 million and revenue in the Capital Projects Fund decreased by $1.2 million primarily due to a planned decrease in these funds' portions of the tax levy. Revenue in the Debt Service Fund decreased $1 million due to a reduction in the Debt Service Fund portion of the property tax levy. Combined expenditures for the General Fund and the Special Revenue Fund increased $4.3 million primarily due to increased salary and benefits. The Debt Service Fund expenditures were in accordance with scheduled debt payments. Expenditures in the Capital Projects Fund decreased by approximately $3.0 million in accordance with planned expenditures. The overall position of the District’s funds remains financially strong and the District is able to meet all of its ongoing operational expenditures without having to resort to short-term financing activities. - 14 -

Expenditures in the Capital Projects Fund decreased by approximately $3.0 million in accordance with planned expenditures. The overall position of the District’s funds remains financially strong and the District is able to meet all of its ongoing operational expenditures without having to resort to short-term financing activities. - 14 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 Operating Funds (General and Special Revenue Funds Combined) - Budgeting Highlights In accordance with Chapter 67, RSMo, the District adopts a budget for each fund. While the District uses its funding judiciously, there are a number of factors that affect the budget over which the District has little or no control. The District uses site-based budgeting which is designed to tightly control site budgets but provide flexibility for site management. During the year the District revises the budget to deal with unexpected changes in revenues and expenditures as additional information becomes available. Schedules showing the District’s original and final budget amounts compared with actual amounts paid and received for the General and Special Revenue Funds are provided later in this report as required supplementary information. The District’s financial strength is derived primarily from its strong local property values as over 77.8% of the District’s operating revenues are generated through local property taxes. Under Missouri Statutes, property tax rates fluctuate with changes in assessed values preventing windfall revenue increases during periods of growing property values. This mechanism also protects taxing entities during periods of falling property values and has minimized the impacts of recent property value declines. The 2023-2024 current property tax revenues for all funds increased by $2.8 million or 4.86% from the 2022-2023 totals primarily as this was a reassessment year. However, delinquent property tax collections decreased by $2.5 million due to the payback of prior year protested taxes by St. Louis County. The District did not revise the original property tax budget and property tax revenues finished the year $2.4 million below the current property tax budget for all funds and $1.7 below the delinquent property tax budget for all funds. For the year ended June 30, 2024, the General Fund cash basis actual expenditures were approximately $1.4 million less than final budgeted amounts. Instructional supplies and operation of plant expenditures were lower than budget. Missouri law prohibits the District from spending more than the budget per fund. The Special Revenue Fund budgetary basis actual expenditures were near the final budgeted amounts. For the year ended June 30, 2024, the combined General and Special Revenue change in fund balances were approximately $0.9 million greater than the 2023-2024 final budget. - 15 -

The Special Revenue Fund budgetary basis actual expenditures were near the final budgeted amounts. For the year ended June 30, 2024, the combined General and Special Revenue change in fund balances were approximately $0.9 million greater than the 2023-2024 final budget. - 15 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 Capital Assets, Right-to-use Assets and Debt Administration Capital Assets At June 30, 2024, the District had capital assets and right-to-use assets with a net book value of $101.6 million, which includes $67.2 million in accumulated depreciation/amortization. Table 4 shows a breakdown of capital assets, net of accumulated depreciation/amortization, at year end. Table 4 Capital Assets - Net June 30, 2024 2023 Governmental activities Business- type activities Total Governmental activities Business- type activities Total Land $ 714,536 $ - $ 714,536 $ 714,536 $ - $ 714,536 Buildings and improvements 95,474,595 - 95,474,595 97,173,959 - 97,173,959 Furniture and equipment 4,843,619 110,686 4,954,305 4,639,107 76,963 4,716,070 Right-to-use assets 454,466 - 454,466 482,009 - 482,009 Total $ 101,487,216 $ 110,686 $ 101,597,902 $ 103,009,611 $ 76,963 $ 103,086,574 The total additions for the year were $3.4 million which consisted of $2.0 million of building and improvements and $1.4 million in furniture and equipment purchases. Debt Administration At June 30, 2024, the District had $34.8 million in general obligation bonds outstanding. Missouri statute allows school districts to incur debt up to an amount equal to 15% of the most current assessed valuation. The District’s allowable debt margin was approximately $196.2 million at June 30, 2024, far above the District’s current level of debt. The District’s Debt Service levy for 2023-2024 was $0.511 per $100 of assessed valuation. This rate decreased by $0.112 from the prior year, but is sufficient to meet debt requirements. The Debt Service Fund balance at June 30, 2024 was $5.5 million and equal to nearly 83.3% of the fiscal year 2025 annual debt service payments. The District’s bond rating is AAA with Standard and Poor’s. Other long-term liabilities of the District include compensated absences and a capital lease for renovation and improvement projects. Additional information about debt is provided in Note E. - 16 -

Other long-term liabilities of the District include compensated absences and a capital lease for renovation and improvement projects. Additional information about debt is provided in Note E. - 16 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2024 Economic Factors and Fiscal Year 2024-2025 Budget The Board of Education, together with staff, parents and patrons of the District 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 Profile of the Clayton Graduate describes the attributes we hope for every Clayton graduate. The profile envisions graduates who are self-actualized, intellectually curious, culturally competent, empathetic, creative thinkers and collaborative. The profile influences our approach to learning. The spending plan set forth in the budget is designed to support the mission, strategic plan, goals and objectives of the District as adopted by the Board of Education while ensuring fiscal responsibility to the community. The District’s strategic plan is developed around three goals:  Goal #1 – A place for everyone… We will ensure all learners, regardless of their identity, feel safe and valued.  Goal #2 - …to grow as learners… We will commit to the educational growth of our learners through an equitable, personalized and individualized learning experience.  Goal #3 - …in head and heart. We will be dedicated to the personal growth of our learners in their social, emotional and physical well-being. Financial resources are allocated in accordance with the goals and objectives outlined within the strategic plan. Preparation of the budget involves input from staff, administrators and instructional leaders throughout the District. The School District of Clayton is located in the hub of the St. Louis metropolitan area. Through the decades, the area has experienced steady and prosperous growth. The central location, accessibility and convenience continue to draw business and residents to the area. The resulting vibrant business community and premier residential neighborhoods provide a solid economic base for the school district. Nevertheless, a variety of economic factors influence the financial condition and financial stability of the school district. These economic factors include:  Birth rates, school enrollment and student attendance  New and ongoing investment in the community producing growth in Assessed Valuation combined with property tax rate  Senior home owner property tax freeze that will slow revenue growth  Rate of inflation and its effects on the cost of labor, employee benefits, services and supplies - 17 -