We will have action steps that are aspirational, attainable, and aligned to our resources. The strategic plan’s data dashboard, which is an interactive tool on the District website, allows all District stakeholders to monitor our progress and hold us accountable to making growth in our goals and objectives.. - 17 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2021 The District optimizes and aligns resources to ensure we meet stated goals and objectives. To ensure we have both the fiscal and human capital needed, we use an organizational planning model that causes us to annually review our alignment of strategic goals and finances. We build our annual budget based on an organizational structure focused on instruction, human resources, capital improvement, programs and financial sustainability. We use our growth data to determine if the way we are allocating resources is having the impact we expect. The District’s instructional and departmental operating budgets are prepared through a Zero-Based Budgeting (ZBB) approach. 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 of the decisions for where the District spends. Proposed 2021-2022 total expenditures including normal debt service payments, business-type activities, and extraordinary items total $68.5 million. Projected total revenues, inclusive of business-type, debt service, and extraordinary items of $70.7 million will result in a surplus $2.2 million and grow the overall fund balance to $37.5 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 $1.7 million or 2.94% to a total of $61.1 million primarily due to the increase in local taxes receiving a 1.4% adjustment for CPI. In addition, other local income increased due to the significant reductions in student activities and Family Center revenue for the 2020-2021 school year and returning close to pre-pandemic levels for 2021-2022. Projected revenue is based upon the best information available at this time as well as historical trends. The operating expenditure budget is projected to increase by $1.5 million or 2.60% to a total of $58.6 million. The 2019-2020 was the final year of a two-year salary agreement. Administration and teacher representatives began having salary discussions in February 2021. The Board approved a two-year salary schedule at their April 14, 2021 meeting. A .92% budgetary increase for certified teaching staff has been included in the current projections per the salary agreement. The average salary increase for a teacher is 3.0% due to staff turnover. Administrative salaries, classified salaries, part-time temporary employment and substitute budgets will be increased by 3.0%. This represents an overall budgetary salary increase of 2.0%. 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. Total proposed maintenance Capital Improvement Plan (CIP) expenditures for 2021-2022 will have a total allocation of $940,250. An additional $592,930 will also be used to pay the annual financing payments for improvements at the Center of Clayton. - 18 -

Total proposed maintenance Capital Improvement Plan (CIP) expenditures for 2021-2022 will have a total allocation of $940,250. An additional $592,930 will also be used to pay the annual financing payments for improvements at the Center of Clayton. - 18 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2021 While there are many unknowns in the educational world concerning the COVID-19 pandemic, the District has been responsive to the needs of families to ensure every student receives an equitable education regardless of the learning environment. The District budgeted approximately $1.0 million in federal COVID relief funds because of numerous fiscal recovery acts passed by Congress that provide a substantial infusion of resources to help address the costs of operating during a pandemic, the resulting economic fallout, and lay the foundation for a strong and equitable recovery. The District utilized these funds to install a needlepoint bi-polar ionization system that is integrated into each building’s HVAC system to provide pathogen removal remediation. Further, a Contract Tracing Investigator position was added to assist in compliance with St. Louis County mandates related to the coronavirus pandemic. Personal protective equipment (PPE) including facemasks, face shields, hand sanitizer, touchless paper towel dispensers, spray bottles/microfiber towels, desk partitions/dividers, and signage were purchased to provide a safe environment. Technology enhancements were added to improve/assist with online learning. Finally, additional instructional support positions were added to assist in monitoring students’ progress. The 2021-2022 budget continues to be impacted by the effects of the COVID-19 closures that took place beginning in March of 2020. The economy saw many changes from businesses closing, rising unemployment, declines in the federal funds target rate, etc. The lasting effects of COVID-19 on the District revenues and expenditures remain undetermined. The District will continue to work to control costs and align resources with priorities while also looking at other strategies to maintain financial balance with minimal impact on students and classrooms. Operating revenues will exceed operating expenses, which will increase the operating fund balance by $2.5 million. The 2021-2022 year-end operating fund balances inclusive of business-type activities are projected at $31.8 million or 53%. However, $3.3 million has been formally committed by the Board for future capital expenditures. This leaves a net operating fund balance of $27.7 million or 47% of budgeted operating expenditures which exceeds the Board’s fund balance goal of 18%. 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 five developments where construction plans have been approved.  Resident Inn by Marriott – 8125 Forsyth Boulevard, Clayton  Clarendale of Clayton – 7651 & 7601 Clayton Road, Clayton  Forsyth Point – 8049 Forsyth Boulevard, Clayton  Bank of America – 8100 Forsyth Boulevard, Clayton  The Pearl Condominiums – 43-55 Topton Way, Clayton - 19 -

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 five developments where construction plans have been approved.  Resident Inn by Marriott – 8125 Forsyth Boulevard, Clayton  Clarendale of Clayton – 7651 & 7601 Clayton Road, Clayton  Forsyth Point – 8049 Forsyth Boulevard, Clayton  Bank of America – 8100 Forsyth Boulevard, Clayton  The Pearl Condominiums – 43-55 Topton Way, Clayton - 19 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2021 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 awaiting 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 2021-2022 budget began in December 2020. 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 on developing the budget was discussed with the Board as study items on January 22 and May 19, 2021. Contacting the School District’s Financial Management This MD&A is intended to provide taxpayers and other constituents with an overview of the financial condition of the District. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Mary Jo Gruber, Chief Financial Officer (CFO), at School District of Clayton, #2 Mark Twain Circle, Clayton, Missouri 63105. - 20 -

Contacting the School District’s Financial Management This MD&A is intended to provide taxpayers and other constituents with an overview of the financial condition of the District. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Mary Jo Gruber, Chief Financial Officer (CFO), at School District of Clayton, #2 Mark Twain Circle, Clayton, Missouri 63105. - 20 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF NET POSITION June 30, 2021 Governmental activities Business-type activities Total ASSETS Cash and investments $ 37,652,375 $ - $ 37,652,375 Receivables: Property taxes, net of allowance for uncollectibles of $917,660 57,731,597 - 57,731,597 Sales taxes 521,973 - 521,973 Grants 766,895 - 766,895 Other 225,798 5,140 230,938 Inventories 86,951 - 86,951 Prepaid expenses 334,897 - 334,897 Capital assets not being depreciated: Land 714,536 - 714,536 Capital assets, net of accumulated depreciation: Buildings and improvements 97,784,161 - 97,784,161 Furniture and equipment 3,448,299 75,754 3,524,053 Total assets 199,267,482 80,894 199,348,376 DEFERRED OUTFLOWS Deferred pension contributions 15,836,205 - 15,836,205 Deferred OPEB 633,388 - 633,388 Total deferred outflows 16,469,593 - 16,469,593 LIABILITIES Accounts payable 1,224,848 811 1,225,659 Accrued payroll and payroll taxes 127,994 3,570 131,564 Unearned revenue 166,745 14,185 180,930 Interfund loans 13,426 (13,426) - Non-current liabilities: Due within one year 7,826,447 - 7,826,447 Due in more than one year 56,557,393 - 56,557,393 Net pension liability 53,658,800 - 53,658,800 OPEB liability 5,326,017 - 5,326,017 Total liabilities 124,901,670 5,140 124,906,810 DEFERRED INFLOWS Deferred property taxes 58,545,404 - 58,545,404 Pension deferrals 2,332,847 - 2,332,847 OPEB deferrals 1,193,731 - 1,193,731 Total deferred inflows of resources 62,071,982 - 62,071,982 NET POSITION Net investment in capital assets 38,571,131 75,754 38,646,885 Restricted for: Debt service 4,977,336 - 4,977,336 Capital projects 3,329,463 - 3,329,463 Teachers' salaries and benefits 11,028,789 - 11,028,789 Medical claims 1,262,993 - 1,262,993 Unrestricted (30,406,289) - (30,406,289) Total net position $ 28,763,423 $ 75,754 $ 28,839,177 The accompanying notes are an integral part of this statement. - 21 -

SCHOOL DISTRICT OF CLAYTON STATEMENT OF NET POSITION June 30, 2021 Governmental activities Business-type activities Total ASSETS Cash and investments $ 37,652,375 $ - $ 37,652,375 Receivables: Property taxes, net of allowance for uncollectibles of $917,660 57,731,597 - 57,731,597 Sales taxes 521,973 - 521,973 Grants 766,895 - 766,895 Other 225,798 5,140 230,938 Inventories 86,951 - 86,951 Prepaid expenses 334,897 - 334,897 Capital assets not being depreciated: Land 714,536 - 714,536 Capital assets, net of accumulated depreciation: Buildings and improvements 97,784,161 - 97,784,161 Furniture and equipment 3,448,299 75,754 3,524,053 Total assets 199,267,482 80,894 199,348,376 DEFERRED OUTFLOWS Deferred pension contributions 15,836,205 - 15,836,205 Deferred OPEB 633,388 - 633,388 Total deferred outflows 16,469,593 - 16,469,593 LIABILITIES Accounts payable 1,224,848 811 1,225,659 Accrued payroll and payroll taxes 127,994 3,570 131,564 Unearned revenue 166,745 14,185 180,930 Interfund loans 13,426 (13,426) - Non-current liabilities: Due within one year 7,826,447 - 7,826,447 Due in more than one year 56,557,393 - 56,557,393 Net pension liability 53,658,800 - 53,658,800 OPEB liability 5,326,017 - 5,326,017 Total liabilities 124,901,670 5,140 124,906,810 DEFERRED INFLOWS Deferred property taxes 58,545,404 - 58,545,404 Pension deferrals 2,332,847 - 2,332,847 OPEB deferrals 1,193,731 - 1,193,731 Total deferred inflows of resources 62,071,982 - 62,071,982 NET POSITION Net investment in capital assets 38,571,131 75,754 38,646,885 Restricted for: Debt service 4,977,336 - 4,977,336 Capital projects 3,329,463 - 3,329,463 Teachers' salaries and benefits 11,028,789 - 11,028,789 Medical claims 1,262,993 - 1,262,993 Unrestricted (30,406,289) - (30,406,289) Total net position $ 28,763,423 $ 75,754 $ 28,839,177 The accompanying notes are an integral part of this statement. - 21 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF ACTIVITIES Year ended June 30, 2021 Program revenues Net (expense) revenue and changes in net position Function/Program Expenses Charges for services Operating grants and contributions Governmental activities Business-type activities Total Governmental activities: Instruction $ 33,095,847 $ 678,861 $ 1,355,414 $ (31,061,572) $ - $ (31,061,572) Attendance and guidance 2,334,904 - - (2,334,904) - (2,334,904) Health services 849,376 - 124,832 (724,544) - (724,544) Improvements of instruction and professional development 1,286,292 - 95,702 (1,190,590) - (1,190,590) Media services 966,679 - - (966,679) - (966,679) Board of Education services 193,566 - - (193,566) - (193,566) Executive administration 3,269,314 - 4,620 (3,264,694) - (3,264,694) Building level administration 2,914,602 - - (2,914,602) - (2,914,602) Operation of plant 11,648,079 810,685 286,617 (10,550,777) - (10,550,777) Security services 190,429 - - (190,429) - (190,429) Nonallowable transportation 110,803 (3,538) - (114,341) - (114,341) Food services 582,582 18,142 568,081 3,641 - 3,641 Business services 953,920 - 110,802 (843,118) - (843,118) Central office support services 5,210,439 5,162,811 - (47,628) - (47,628) Adult/community programs 1,100,991 415,252 119,039 (566,700) - (566,700) Facilities acquisition and construction 1,248,861 - - (1,248,861) - (1,248,861) Interest and other charges 2,092,471 - - (2,092,471) - (2,092,471) Total governmental activities 68,049,155 7,082,213 2,665,107 (58,301,835) - (58,301,835) Business-type activities: Local district services 379,656 214,498 - - (165,158) (165,158) Total business-type activities 379,656 214,498 - - (165,158) (165,158) Total school district $ 68,428,811 $ 7,296,711 $ 2,665,107 $ (58,301,835) $ (165,158) $ (58,466,993) General Revenues: Taxes: Property taxes, levied for general purposes $ 15,332,250 $ - $ 15,332,250 Property taxes, levied for debt services 7,645,248 - 7,645,248 Property taxes, levied for capital projects 2,324,980 - 2,324,980 Property taxes, levied for teachers' salaries and benefits 28,833,903 - 28,833,903 Other taxes 4,864,486 - 4,864,486 Voluntary student transfer aid 1,192,928 - 1,192,928 Federal and State aid not restricted to specific purposes 1,363,114 - 1,363,114 Interest and investment earnings 901,469 - 901,469 Miscellaneous 181,721 - 181,721 Total general revenues 62,640,099 - 62,640,099 Revenues over (under) expenses before transfers 4,338,264 (165,158) 4,173,106 Proceeds from capital lease 550,867 - 550,867 Transfers (153,145) 153,145 - Change in net position 4,735,986 (12,013) 4,723,973 Net position at July 1, 2020 24,027,437 87,767 24,115,204 Net position at June 30, 2021 $ 28,763,423 $ 75,754 $ 28,839,177 The accompanying notes are an integral part of this statement. - 22 -