finance 2022 2023 Audited Financial Report
FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS' REPORT SCHOOL DISTRICT OF CLAYTON June 30, 2023 SCHOOL DISTRICT OF CLAYTON TABLE OF CONTENTS Page Independent Auditors' Report 4 Management's Discussion and Analysis - Unaudited 7 Basic Financial Statements District-wide Financial Statements Statement of Net Position 19 Statement of Activities 20 Fund Financial Statements Balance Sheet - Governmental Funds 21 Reconciliation of the Governmental Funds Balance Sheet with the District-wide Statement of Net Position 22 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 23 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances with the District-Wide Statement of Activities 24 Statement of Net Position - Proprietary Funds 25 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 26 Statement of Cash Flows - Proprietary Funds 27 Notes to the Financial Statements 28 Required Supplementary Information - Unaudited Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Cash Basis General Fund 64 Special Revenue Fund 65 Notes to Required Supplementary Information 66 SCHOOL DISTRICT OF CLAYTON TABLE OF CONTENTS Page Net Pension Liability 68 Schedule of Changes in Total OPEB Liability and Related Ratios 70 Supplementary Information Schedule of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - Cash Basis Debt Service Fund 72 Capital Projects Fund 73 Annual Financial Information and Operating Data - Unaudited 75 Independent Auditors’ Report Board of Education School District of Clayton Report on the Audit of the Financial Statements Opinions We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of School District of Clayton (the “District”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. In our opinion, the accompanying financial statements present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the District, as of June 30, 2023, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements The District’s management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control–related matters that we identified during the audit. Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and other required supplementary information as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the District’s basic financial statements. The schedule of revenues, expenditures and changes in fund balances – budget and actual – cash basis for the debt service fund and capital projects fund are presented for purposes of additional analysis and are not a required part of the basic financial statements. The supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of revenues, expenditures and changes in fund balances – budget and actual – cash basis for the debt service fund and capital projects fund is fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information. The other information comprises the annual financial information and operating data but does not include the financial statements and our auditors’ report thereon. Our opinions on the financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 4, 2023 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. St. Louis, Missouri December 4, 2023 SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 The Management’s Discussion and Analysis (MD&A) of the School District of Clayton’s (District) financial performance provides a narrative overview of the District’s financial activities for the fiscal year ended June 30, 2023. The MD&A should not be taken as a replacement for the financial statements and other supplemental information but should be read in conjunction with them to enhance the reader’s understanding of the District’s financial performance. Financial Highlights Key financial highlights for the fiscal year ended June 30, 2023 are as follows: The total assets and deferred outflows of the District exceeded its liabilities and deferred inflows at the end of the 2023 fiscal year by $63.7 million (net position). Net position increased approximately $14.3 million or 28.8% from the prior year. Major increases in assets were due to an increase in cash of approximately $5.3 million, an increase in property tax receivable of $2.3 million and an increase in capital assets of approximately $1.5 million. Current liabilities had an increase of approximately $4.6 million primarily due to a change in debt payments within one year. Noncurrent liabilities had an increase of approximately $23.3 million as debt due in more than one year decreased by $10.3 million and the net pension liability had an increase of approximately $33.5 million as discussed below. Recording the District's proportionate share of total net PSRS/PEERS pension liability per GASB 68, has a significant impact on the Statement of Net Position and the Statement of Activities. Updated actuarial assumptions in the retirement program's most recent valuation as of June 30, 2022 resulted in large fluctuations from the prior year. On the Statement of Net Position, total net pension liability increased by $33.5 million from the prior year and deferred inflows for pension deferrals decreased by $33.7 million from the prior year. On the Statement of Activities, the expenditures increased by $9.8 primarily due to the prior year's recording of a decrease in net pension liability which lowered the prior year's expenditures. On a cash basis, the expenditures increased by $2.6 million. General revenues totaled $69.1 million or 84.4% of all revenues. Program revenues in the form of charges for services and operating grants and contributions accounted for $12.8 million or 15.6% of all revenues. Total expenses for the year were $67.6 million of which $54.8 million were funded by general revenues. The General Fund had $23.0 million in revenues and $20.4 million in expenditures. The General Fund’s balance increased $2.6 million before transfers. The Special Revenue Fund had $36.6 million in revenues and $35.5 million in expenditures. The Special Revenue Fund’s balance increased $1.1 million before transfers. The Debt Service Fund had $9.0 million in revenues and $6.5 million in expenditures. The Debt Service Fund’s balance increased $2.5 million. The Capital Projects Fund had $6.2 million in revenues and $7.0 million in expenditures. The Capital Projects Fund’s balance decreased $0.8 million before transfers. - 7 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Using this Annual Report The District’s annual report consists of a series of financial statements that show information about the District as a whole, including its significant funds. The Statement of Net Position and the Statement of Activities (pages 19 and 20) provide information about the activities of the District as a whole and present a longer-term view of the District’s finances. Fund financial statements provide the next level of detail. For governmental funds, these statements tell how services were financed in the short-term as well as what remains for future spending. Fund statements may also provide insight into the District’s overall financial health. Fund financial statements report the District’s operations in more detail than the government-wide financial statements by providing information about the District’s most significant funds. The notes to the basic financial statements provide further explanation of some of the information in the statements and provide additional disclosures and more detailed data. This will allow statement readers to have a more complete description and understanding of the District’s financial activities and position. The District prepares its annual budget on the cash basis of accounting, meaning that revenues are recognized when the District receives the money and the expenditures are recognized when money is disbursed. To meet Governmental Accounting Standards Board (GASB) Statement No. 34, the District’s annual report uses both the modified accrual and accrual methods of accounting. Because of this difference, budget schedules will differ from the basic financial statements. The District’s auditor has provided assurance in the Independent Auditors’ Report, located immediately preceding this MD&A, that the basic financial statements are presented fairly in all material respects. Varying degrees of assurance are provided by the auditor regarding supplemental information. A user of this report should read the Independent Auditors’ Report carefully to ascertain the level of assurance being provided for each of the other parts in the financial section. - 8 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Reporting the District as a Whole Statement of Net Position and the Statement of Activities The analysis of the District as a whole begins on page 19. This analysis provides answers to whether the District is financially stronger or weaker as a result of the year’s activities. The Statement of Net Position and the Statement of Activities, which appear first in the District’s financial statements, report information on the District as a whole and its activities in a way that helps answer this question. These statements include all assets and liabilities, using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. This basis of accounting takes into account all of the current year’s revenues and expenses regardless of when cash is received or paid. These two statements report the District’s net position – the difference between assets and deferred outflows compared to liabilities and deferred inflows, as reported in the Statement of Net Position. It is one way to measure the District’s financial health, or financial position. Over time, increases or decreases in the District’s net position – as reported in the Statement of Activities – is one indicator of whether its financial health is improving or deteriorating. The relationship between revenues and expenses indicates the District’s operating results. However, the District’s mission is to provide services to students, not to generate profits as commercial entities strive to do each year. Non-financial factors, such as the quality of the education provided, safety of the schools, facility conditions, the District’s property tax base and current state laws restricting revenue growth must also be considered to assess the overall health of the District. The Statement of Net Position and the Statement of Activities report the following activity for the District’s programs and services: Governmental Activities – Most of the District’s services, which includes instruction, support and plant services, are reported here. Property taxes, voluntary student transfer aid, state foundation and categorical grants, and state and federal grants finance most of these activities. Business-type Activities – The District’s business-type activities include 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. - 9 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Reporting the District’s Most Significant Funds Fund Financial Statements The analysis of the District’s major funds begins on page 21. Fund financial statements provide detailed information about the District’s major funds, not the District as a whole. The District utilizes several funds to account for a wide range of financial transactions. However, the fund financial statements focus on the District’s most significant funds, which are the General Fund, Special Revenue Fund, Debt Service Fund, and Capital Projects Fund. The District’s funds use the following accounting approach: Governmental Funds - Most of the District’s services are reported in governmental funds which focus on how money flows into and out of the funds, and the balances remaining at year-end which are available for spending for future years. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can be readily converted to cash. The governmental fund statements provide a detailed short-term view of the District’s operations and the services it provides. Governmental fund information helps determine whether there are more or fewer financial resources available in the near future to finance the District’s programs. Because this information does not encompass the additional long-term focus of the government-wide statements, the relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds is reconciled on pages 22 and 24. Proprietary Funds – Proprietary funds account for activities that involve business-like interactions using the accrual basis of accounting. The District has two types of proprietary funds which are the enterprise fund and the internal service fund. The enterprise fund is used to account for any activity for which external users are charged a fee for goods and services. The internal service fund is used to account for activities that benefit government activities. No reconciling items exist between the governmental-wide statements and the proprietary funds statements. The District as a Whole The District’s net position was $63.7 million at June 30, 2023. $53.6 million was net investment in capital assets and $27.9 million was restricted. Restricted net position is reported separately to show legal constraints from debt covenants and enabling legislation that limit the District’s ability to use those assets for day-to-day operations. The unrestricted net position shows a negative balance of $17.8 million after the District recognized the proportionate share of the total net pension liability of the Missouri retirement program for public school districts (PSRS/PEERS) in accordance with GASB Statement No. 68, as amended by GASB Statement No. 71, and the postemployment benefits other than pensions liability in accordance with GASB Statement No. 75. Note G contains additional information on GASB Statement No. 68 and Note I contains additional information on GASB Statement No. 75. The analysis below focuses on the net position (Table 1) and changes in net position (Table 2) of the District’s activities. - 10 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 The District as a Whole - Continued Table 1 Condensed Statements of Net Position June 30, 2023 2022 Governmental activities Business- type activities Total Governmental activities Business- type activities Total Current and other assets $ 108,787,464 $ 2,509,720 $ 111,297,184 $ 103,535,186 $ 8,854 $ 103,544,040 Capital assets 103,009,611 76,963 103,086,574 101,488,648 64,799 101,553,447 Total assets 211,797,075 2,586,683 214,383,758 205,023,834 73,653 205,097,487 Deferred pension and OPEB 16,763,341 - 16,763,341 15,908,984 - 15,908,984 Current and other liabilities 12,155,921 47,598 12,203,519 7,611,175 8,854 7,620,029 Noncurrent liabilities 90,903,804 - 90,903,804 67,631,689 - 67,631,689 Total liabilities 103,059,725 47,598 103,107,323 75,242,864 8,854 75,251,718 Deferred property taxes 60,413,054 - 60,413,054 58,312,033 - 58,312,033 Pension and OPEB deferrals 3,921,510 - 3,921,510 37,990,929 - 37,990,929 Total deferred inflows 64,334,564 - 64,334,564 96,302,962 - 96,302,962 Net position Net investment in capital assets 53,546,284 76,963 53,623,247 46,013,491 64,799 46,078,290 Restricted 27,862,186 - 27,862,186 24,683,383 - 24,683,383 Unrestricted (20,242,343) 2,462,122 (17,780,221) (21,309,882) - (21,309,882) Total net position $ 61,166,127 $ 2,539,085 $ 63,705,212 $ 49,386,992 $ 64,799 $ 49,451,791 The negative unrestricted net position of $17.8 million represents the accumulated results of all past years’ operations for unrestricted activities. Total net position increased $14.3 million as described above. The results of this year’s operations for the District as a whole are reported in the Statement of Activities on page 20. This information is summarized in Table 2 on the following page. - 11 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 The District as a Whole - Continued Table 2 Changes in Net Position from Operating Results Year Ended June 30, 2023 2022 Governmental activities Business- type activities Total Governmental activities Business- type activities Total Revenues Program revenues Charges for services $ 9,181,393 $ 895,690 $10,077,083 $ 7,648,372 $ 660,499 $ 8,308,871 Operating grants and contributions 2,693,290 - 2,693,290 3,049,495 - 3,049,495 General revenues Property taxes 59,061,373 - 59,061,373 58,232,548 - 58,232,548 Federal and State aid not restricted to specific purposes 1,346,735 - 1,346,735 1,346,610 - 1,346,610 Voluntary student transfer aid 1,060,130 - 1,060,130 1,177,664 - 1,177,664 Other taxes and interest 7,603,435 - 7,603,435 6,844,513 - 6,844,513 Total revenues 80,946,356 895,690 81,842,046 78,299,202 660,499 78,959,701 Expenses Instruction 30,871,858 - 30,871,858 25,539,386 - 25,539,386 Student services 3,092,182 - 3,092,182 2,751,484 - 2,751,484 Support services 2,673,725 - 2,673,725 2,347,136 - 2,347,136 Building administration 2,780,060 - 2,780,060 2,283,301 - 2,283,301 Executive administration 3,321,825 - 3,321,825 2,333,735 - 2,333,735 Business services 1,047,852 - 1,047,852 920,634 - 920,634 Central office support services 6,220,418 - 6,220,418 5,360,490 - 5,360,490 Operation of plant 12,507,097 - 12,507,097 11,780,755 - 11,780,755 Security services 271,247 - 271,247 228,377 - 228,377 Nonreimbursable transportation 317,422 - 317,422 160,672 - 160,672 Food services 1,075,550 - 1,075,550 1,064,557 - 1,064,557 Adult/community programs 1,174,870 - 1,174,870 1,215,032 - 1,215,032 Interest and other charges 1,624,525 - 1,624,525 1,847,829 - 1,847,829 Local district services - 609,994 609,994 - 513,699 513,699 Total expenses 66,978,631 609,994 67,588,625 57,833,388 513,699 58,347,087 Excess (deficiency) before other income and transfers 13,967,725 285,696 14,253,421 20,465,814 146,800 20,612,614 Other income Transfers (2,188,590) 2,188,590 - 157,755 (157,755) - Total other income (2,188,590) 2,188,590 - 157,755 (157,755) - Change in net position 11,779,135 2,474,286 14,253,421 20,623,569 (10,955) 20,612,614 Beginning net position 49,386,992 64,799 49,451,791 28,763,423 75,754 28,839,177 Ending net position $ 61,166,127 $ 2,539,085 $63,705,212 $ 49,386,992 $ 64,799 $49,451,791 - 12 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Governmental and Business-Type Activities As reported in the Statement of Activities, the cost of all governmental and business-type activities totaled $67.6 million in fiscal year 2023. However, the District’s local taxpayers ultimately funded $54.8 million or 82.3% of these costs because some of the costs were paid by those who benefited from the programs ($10.1 million), and by operating grants and contributions ($2.7 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, 2023 2022 Total cost of services Net cost of services Total cost of services Net cost of services Governmental activities Instruction $ 30,871,858 $ 28,747,102 $ 25,539,386 $ 23,843,893 Student services 3,092,182 2,947,668 2,751,484 2,609,139 Support services 2,673,725 1,959,580 2,347,136 1,791,889 Administration 7,149,737 6,960,557 5,537,670 5,566,154 Operation of plant 12,778,344 11,764,464 12,009,132 11,159,121 Other 8,788,260 1,100,052 7,800,751 317,496 Interest and other charges 1,624,525 1,624,525 1,847,829 1,847,829 66,978,631 55,103,948 57,833,388 47,135,521 Business-type activities Local district services 609,994 (285,696) 513,699 (146,800) Total $ 67,588,625 $ 54,818,252 $ 58,347,087 $ 46,988,721 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 the allocation of the net pension liability as the prior year had a much larger allocation. Instruction increased by $1.1 million on a cash basis approach. 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. - 13 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Governmental and Business-Type Activities - Continued Administration includes expenses associated with administrative and financial supervision of the District. The cost of administration is greater than the prior year primarily due to the allocation of the net pension liability as the prior year had a much larger allocation. Also, the District spent more on cyber security and administrative technology equipment. Operation of plant activities involves maintaining school grounds, buildings, and equipment in an effective working condition. 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. Over 93.1% of instruction activities are supported through taxes and other general revenues; for all governmental activities, general revenue support is 82.3%. The District’s Funds The District uses funds to control and manage money for particular purposes. A review of the funds provides some insight as to whether the District is being accountable for the resources taxpayers and others provide to it, and also provides insight into the District’s overall financial health. In total, governmental funds had a fund balance of $45.5 million at June 30, 2023. This represents an overall increase of $3.2 million. The General Fund had a slight decrease in overall revenue due to less federal, COVID-related grants in comparison to the prior year. The Special Revenue Fund had a slight decrease in local revenue while the Capital Projects fund had an increase in local revenue as the property tax levy was adjusted to increase revenue in the Capital Projects Fund for FY23. Expenditures for the Special Revenue Fund were similar to the prior year. The Debt Service Fund expenditures were in accordance with scheduled debt payments. The Capital Projects Fund had an increase in expenditures of approximately $2.3 million, from the prior year, in accordance with planned expenditures for the safety and security plan and for the renovation of the Clayton High School library. 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, 2023 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 78.1% 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 2022-2023 property tax revenues for all funds slightly decreased by $0.6 million or 1.02% from the 2021-2022 totals primarily because of a small increase in uncollected and protested property taxes. The District did not revise the original property tax budget and property tax revenues finished the year $1.3 million above the budget for all funds. For the year ended June 30, 2023, the General Fund cash basis actual expenditures were approximately $1.8 million less than final budgeted amounts. Instructional supplies and textbooks were lower than budget by $180,000 and student activities was lower by $74,000. Professional development travel was $101,000 lower due to the continued effects of COVID as well as the District conducted more on-site professional development. Additionally, the District's contribution to the Center of Clayton operations was approximately $310,000 less than budgeted partially due to a timing difference. Food Service was $212,000 less than budget based upon operations. Operation of Plant supplies and repairs were $94,000 less than budgeted as expenditures are based upon needs. Lastly, utilities were $79,000 less than budget. Missouri law prohibits the District from spending more than the budget per fund. The Special Revenue Fund budgetary basis actual expenditures were approximately $0.7 million less than the final budget primarily in the function of Instruction. Expenditures were lower than budget in salaries and benefits partially due to less substitute teacher expenditures and lower expenditures for extra pay stipends for student activities and athletics. For the year ended June 30, 2023, the combined General and Special Revenue change in fund balances were approximately $4.4 million greater than the 2022-2023 final budget. - 15 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Capital Assets, Right-to-use Assets and Debt Administration Capital Assets At June 30, 2023, the District had capital assets and right-to-use assets with a net book value of $103.1 million, which includes $62.6 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, 2023 2022 Governmental activities Business- type activities Total Governmental activities Business- type activities Total Land $ 714,536 $ - $ 714,536 $ 714,536 $ - $ 714,536 Buildings and improvements 97,173,959 - 97,173,959 96,247,346 - 96,247,346 Furniture and equipment 4,639,107 76,963 4,716,070 4,017,214 64,799 4,082,013 Right-to-use assets 482,009 - 482,009 509,552 - 509,552 Total $ 103,009,611 $ 76,963 $ 103,086,574 $ 101,488,648 $ 64,799 $ 101,553,447 The total additions for the year were $6.3 million which consisted of $4.5 million of building and improvements and $1.8 million in furniture and equipment purchases. Debt Administration At June 30, 2023, the District had $44.2 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 $171.1 million at June 30, 2023, far above the District’s current level of debt. The District’s Debt Service levy for 2022-2023 was $0.623 per $100 of assessed valuation. The Debt Service Fund balance at June 30, 2023 was $8.3 million and equal to nearly 84.0% of the fiscal year 2024 annual debt service payments. Starting in fiscal year 2022 the District was required to place funds into a sinking fund for the 2009A bond issue. At June 30, 2023 these funds total $3.0 million and are shown as restricted cash on the financial statements. These funds will be held in the sinking fund to be used towards the March 1, 2024 bond payment. 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 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Economic Factors and Fiscal Year 2023-2024 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 rates Rate of inflation and its effects on the cost of labor, employee benefits, services and supplies Interest rates and the effects on borrowing costs and rates of return on cash reserves - 17 - SCHOOL DISTRICT OF CLAYTON MANAGEMENT'S DISCUSSION AND ANALYSIS - UNAUDITED Year ended June 30, 2023 Despite the occasional economic challenge, the District seeks to grow educational opportunities for students. In turn, the benefits of education go beyond a paycheck. A solid K-12 education along with postsecondary credentials continue to be good for communities as a whole – contributing to better health, a more engaged citizenry, lower rates of incarceration, and in full circle, an improved economy. The revenue budget for 2023-2024 is forecast at $78.25M, while the expenditure budget is set at $75.39M, providing a balanced budget and yielding growth in fund balances. Property tax revenue is anticipated to grow due to reassessment and new construction. Outstanding bond debt will pay down and is scheduled to be paid off by March 1, 2029. Various capital improvement projects are programmed and do not require borrowing to reach completion. Overall, the budget continues to support the excellent staff, facilities and operations of the District at the level expected by students, parents and patrons. In accordance with goals set forth in the district’s strategic plan, expenditures are focused on instruction, human resources, capital improvement, programs and financial sustainability. The budget supports strategic plan Goal #1 by expanding funding for safety and security services, systems and supplies to help ensure all learners feel safe and valued. Strategic plan Goal #2 is represented by investments for curriculum and technology purchases to support the educational growth of our learners. Budget allocations for social and emotional staff and supports to enable the well-being of our learners connect to strategic plan Goal #3. Ultimately, the best evidence of fiscal responsibility and financial stability is the District is one of four Missouri school district maintaining a “AAA” bond rating by S&P. This rating is the result of ongoing prudent fiscal practices, including balanced budgets, proper financial policies/procedures, vigorous internal controls, sufficient fund balance reserves, upkeep of facilities, low levels of debt, and long-term perspectives. 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's finances and to demonstrate the District's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to John Brazeal, Chief Financial Officer, at School District of Clayton, #2 Mark Twain Circle, Clayton, Missouri 63105. - 18 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF NET POSITION June 30, 2023 Governmental activities Business-type activities Total ASSETS Cash and investments $ 44,118,826 $ 2,462,630 $ 46,581,456 Restricted cash and investments 3,034,275 - 3,034,275 Receivables: Property taxes, net of allowance for uncollectibles of $1,582,505 60,099,551 - 60,099,551 Sales taxes 569,219 - 569,219 Grants 359,098 - 359,098 Other 150,471 47,090 197,561 Inventories 117,404 - 117,404 Prepaid expenses 338,620 - 338,620 Capital assets not being depreciated: Land 714,536 - 714,536 Capital assets, net of accumulated depreciation: Buildings and improvements 97,173,959 - 97,173,959 Furniture and equipment 4,639,107 76,963 4,716,070 Right-to-use assets being amortized Buildings and improvements 482,009 - 482,009 Total assets 211,797,075 2,586,683 214,383,758 DEFERRED OUTFLOWS Deferred pension contributions 16,296,531 - 16,296,531 Deferred OPEB 466,810 - 466,810 Total deferred outflows 16,763,341 - 16,763,341 LIABILITIES Accounts payable 1,474,359 2,772 1,477,131 Accrued payroll and payroll taxes 113,643 13,711 127,354 Unearned revenue 165,112 31,115 196,227 Non-current liabilities: Due within one year 10,402,807 - 10,402,807 Due in more than one year 39,879,217 - 39,879,217 Net pension liability 46,284,893 - 46,284,893 OPEB liability 4,739,694 - 4,739,694 Total liabilities 103,059,725 47,598 103,107,323 DEFERRED INFLOWS Deferred property taxes 60,413,054 - 60,413,054 Pension deferrals 2,385,866 - 2,385,866 OPEB deferrals 1,535,644 - 1,535,644 Total deferred inflows of resources 64,334,564 - 64,334,564 NET POSITION Net investment in capital assets 53,546,284 76,963 53,623,247 Restricted for: Debt service 7,783,943 - 7,783,943 Capital projects 2,178,331 - 2,178,331 Teachers' salaries and benefits 16,486,482 - 16,486,482 Medical claims 1,413,430 - 1,413,430 Unrestricted (20,242,343) 2,462,122 (17,780,221) Total net position $ 61,166,127 $ 2,539,085 $ 63,705,212 The accompanying notes are an integral part of this statement. - 19 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF ACTIVITIES Year ended June 30, 2023 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 $ 30,871,858 $ 1,202,368 $ 922,388 $ (28,747,102) $ - $ (28,747,102) Attendance and guidance 2,167,440 - - (2,167,440) - (2,167,440) Health services 924,742 - 144,514 (780,228) - (780,228) Improvements of instruction and professional development 1,633,158 - 714,145 (919,013) - (919,013) Media services 1,040,567 - - (1,040,567) - (1,040,567) Board of Education services 251,382 - - (251,382) - (251,382) Executive administration 3,070,443 - 58,949 (3,011,494) - (3,011,494) Building level administration 2,780,060 - - (2,780,060) - (2,780,060) Operation of plant 12,507,097 981,571 32,309 (11,493,217) - (11,493,217) Security services 271,247 - - (271,247) - (271,247) Nonreimbursable transportation 317,422 46,201 6,952 (264,269) - (264,269) Food services 1,075,550 740,154 538,779 203,383 - 203,383 Business services 1,047,852 - 130,231 (917,621) - (917,621) Central office support services 6,220,418 5,460,033 - (760,385) - (760,385) Adult/community programs 1,174,870 751,066 145,023 (278,781) - (278,781) Interest and other charges 1,624,525 - - (1,624,525) - (1,624,525) Total governmental activities 66,978,631 9,181,393 2,693,290 (55,103,948) - (55,103,948) Business-type activities: Local district services 609,994 895,690 - - 285,696 285,696 Total business-type activities 609,994 895,690 - - 285,696 285,696 Total school district $ 67,588,625 $ 10,077,083 $ 2,693,290 $ (55,103,948) $ 285,696 $ (54,818,252) General Revenues: Taxes: Property taxes, levied for general purposes $ 14,967,488 $ - $ 14,967,488 Property taxes, levied for debt services 8,455,784 - 8,455,784 Property taxes, levied for capital projects 5,276,210 - 5,276,210 Property taxes, levied for teachers' salaries and benefits 30,361,891 - 30,361,891 Other taxes 5,462,721 - 5,462,721 Voluntary student transfer aid 1,060,130 - 1,060,130 Federal and State aid not restricted to specific purposes 1,346,735 - 1,346,735 Interest and investment earnings 1,972,386 - 1,972,386 Miscellaneous 168,328 - 168,328 Total general revenues 69,071,673 - 69,071,673 Revenues over expenses before transfers 13,967,725 285,696 14,253,421 Transfers (2,188,590) 2,188,590 - Change in net position 11,779,135 2,474,286 14,253,421 Net position at July 1, 2022 49,386,992 64,799 49,451,791 Net position at June 30, 2023 $ 61,166,127 $ 2,539,085 $ 63,705,212 The accompanying notes are an integral part of this statement. - 20 - SCHOOL DISTRICT OF CLAYTON BALANCE SHEET - GOVERNMENTAL FUNDS June 30, 2023 General Fund Special Revenue Fund Debt Service Fund Capital Projects Fund Total Governmental Funds ASSETS Cash and investments $ 16,683,415 $ 17,838,263 $ 5,272,251 $ 2,489,693 $ 42,283,622 Restricted cash and investments - - 3,034,275 - 3,034,275 Receivables Property taxes - net of allowance for uncollectibles of $1,582,505 21,808,322 26,666,706 7,325,553 4,298,970 60,099,551 Sales taxes 355,762 213,457 - - 569,219 Grants 152,573 206,525 - - 359,098 Other receivables 115,007 33,281 107 2,076 150,471 Due from other funds - - - 10,140 10,140 Inventories 117,404 - - - 117,404 Prepaid expenditures 338,620 - - - 338,620 Total assets $ 39,571,103 $ 44,958,232 $ 15,632,186 $ 6,800,879 $ 106,962,400 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES LIABILITIES Accounts payable $ 756,603 $ 500 $ - $ 295,482 $ 1,052,585 Due to other funds 10,140 - - - 10,140 Accrued payroll and payroll taxes 24,848 88,795 - - 113,643 Unearned revenue 146,112 19,000 - - 165,112 Total liabilities 937,703 108,295 - 295,482 1,341,480 DEFERRED INFLOWS OF RESOURCES Deferred property taxes 21,797,003 26,643,746 7,319,156 4,294,964 60,054,869 Deferred grants 1,132 75,207 - - 76,339 Deferred other 15,954 - - - 15,954 Total deferred inflows of resources 21,814,089 26,718,953 7,319,156 4,294,964 60,147,162 FUND BALANCES Nonspendable Inventories 117,404 - - - 117,404 Prepaid expenditures 338,620 - - - 338,620 Restricted Grants 152,573 206,525 - - 359,098 Teachers salaries and benefits - 17,924,459 - - 17,924,459 Debt service - - 8,313,030 - 8,313,030 Assigned Other capital projects - - - 2,210,433 2,210,433 Student activities 598,956 - - - 598,956 Unassigned 15,611,758 - - - 15,611,758 Total fund balances 16,819,311 18,130,984 8,313,030 2,210,433 45,473,758 Total liabilities, deferred inflows of resources and fund balances $ 39,571,103 $ 44,958,232 $ 15,632,186 $ 6,800,879 $ 106,962,400 The accompanying notes are an integral part of this statement. - 21 - SCHOOL DISTRICT OF CLAYTON RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET WITH THE DISTRICT-WIDE STATEMENT OF NET POSITION June 30, 2023 Amounts reported for governmental activities in the Statement of Net Position are different because: Total fund balance - governmental funds $ 45,473,758 Capital assets and right-to-use assets used in governmental activities are not financial resources and therefore are not reported as assets in the governmental funds. The cost of capital assets and right-to-use assets is 165,490,921 Accumulated depreciation/amortization is (62,481,310) 103,009,611 Certain property taxes, grants, and other receivables will be collected this year, but are not available soon enough to pay for the current period's expenditures, and therefore are deferred in the funds. (265,892) An internal service fund is used by management to charge the costs of insurance to individual funds. The assets and liabilities of the internal service fund are included in governmental activities in the statements of net position. 1,413,430 Deferred outflows of resources are not due and payable in the current period and therefore are not reported in the funds Deferred pension contributions 16,296,531 Deferred OPEB 466,810 16,763,341 Deferred inflows of resources related to pension deferrals are not reported in governmental funds. (2,385,866) Deferred inflows of resources related to OPEB deferrals are not reported in governmental funds. (1,535,644) Long-term liabilities, including bonds payable, are not due and not payable in the current period and therefore are not reported as liabilities in the funds. Long- term liabilities at year end consist of: Bonds payable 46,188,327 Leases, net 3,275,000 Accrued interest on the bonds 477,807 Compensated absences 340,890 Net pension liability 46,284,893 OPEB liability 4,739,694 (101,306,611) Net position of governmental activities $ 61,166,127 The accompanying notes are an integral part of this statement. - 22 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS Year ended June 30, 2023 General Fund Special Revenue Fund Debt Service Fund Capital Projects Fund Total Governmental Funds Revenues Local $ 21,409,679 $ 34,073,686 $ 8,635,557 $ 6,052,394 $ 70,171,316 County 116,542 292,308 181,809 117,957 708,616 State 426,308 1,937,623 - - 2,363,931 Federal 985,724 305,953 176,332 - 1,468,009 Other 32,225 - - 25,737 57,962 Total revenues 22,970,478 36,609,570 8,993,698 6,196,088 74,769,834 Expenditures Instruction 2,497,564 29,132,042 - 761,515 32,391,121 Attendance and guidance 840,799 1,372,781 - - 2,213,580 Health services 720,003 203,497 - - 923,500 Improvement of instruction and professional development 436,018 1,197,202 - - 1,633,220 Media services 480,380 560,187 - - 1,040,567 Board of Education services 251,438 - - 1,280 252,718 Executive administration 1,867,741 1,294,462 - 89,762 3,251,965 Building level administration 1,153,652 1,711,528 - 60,000 2,925,180 Operation of plant 7,731,392 - - 2,686,959 10,418,351 Security services 292,449 - - 2,782,421 3,074,870 Nonreimbursable transportation 317,486 - - - 317,486 Food services 1,075,550 - - 20,365 1,095,915 Business services 1,075,426 - - - 1,075,426 Central office support services 482,435 3,936 - 2,110 488,481 Adult/community programs 1,161,987 5,503 - 20,063 1,187,553 Debt service Principal retirements - - 4,920,000 500,000 5,420,000 Interest and other charges - - 1,595,483 91,093 1,686,576 Total expenditures 20,384,320 35,481,138 6,515,483 7,015,568 69,396,509 Revenues over (under) expenditures 2,586,158 1,128,432 2,478,215 (819,480) 5,373,325 Other financing sources (uses) Transfers (2,244,703) (602) - 56,715 (2,188,590) (2,244,703) (602) - 56,715 (2,188,590) Net Change in Fund Balances 341,455 1,127,830 2,478,215 (762,765) 3,184,735 Fund balances at July 1, 2022 16,477,856 17,003,154 5,834,815 2,973,198 42,289,023 Fund balances at June 30, 2023 $ 16,819,311 $ 18,130,984 $ 8,313,030 $ 2,210,433 $ 45,473,758 The accompanying notes are an integral part of this statement. - 23 - SCHOOL DISTRICT OF CLAYTON RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES WITH THE DISTRICT-WIDE STATEMENT OF ACTIVITIES Year ended June 30, 2023 Total net change in fund balance - governmental funds $ 3,184,735 Capital outlay to purchase or build capital assets and right-to-use leased assets are reported in governmental funds as expenditures. However, for governmental activities, those costs are shown in the Statement of Net Position and allocated over their estimated useful lives as annual depreciation and amortization expenses in the Statement of Activities. This is the amount by which capital outlay exceeds depreciation/amortization expense for the period. Depreciation/amortization expense 4,715,463 Capital outlay (6,263,673) 1,548,210 Because some property taxes, grants, and other inflows of resources will not be collected for several months after the District's fiscal year end, they are not considered as "available" revenues in the governmental funds, and are instead reported as deferred inflows of resources. They are, however, reported as revenues in the Statement of Activities. 151,969 In the Statement of Activities, the loss or gain on the sale or disposal of capital assets is recognized. The fund financial statements recognize only the proceeds from the assets. Loss on disposal of capital assets (27,247) In the Statement of Activities, certain operating expenses such as compensated absences (vacations) are measured by the amounts earned during the year. In the governmental funds, however, expenditures for these items are measured by the amount of financial resources used (essentially, the amounts actually paid). 42,927 The governmental funds report debt (e.g. bond) proceeds as an other financial source, while repayment of debt principal is reported as an expenditure. Also governmental funds report the effect of premiums when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. The net effect of these differences in the treatment of debt and related items are as follows: Bond issuance premium 591,830 Repayment of bond principal 4,920,000 Lease principal 500,000 6,011,830 Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds because interest is recorded as an expenditure in the funds when it is due, and thus requires the use of current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest accrues, regardless of when it is due. 62,051 The internal services fund used by management to charge the costs of the insurance to individual funds is not reported in the Statement of Activities. Governmental fund expenditures and the related internal service fund revenues are eliminated. The net revenue (expense) of the internal service fund is included in the governmental activities. (287,245) The fund financial statements do not recognize the liability related to postemployment benefits other than pensions. The decrease in this liability is recognized in the Statement of Activities. 45,135 The fund financial statements do not recognize the pension liability. The decrease is recognized in the Statement of Activities. 1,046,770 Change in net position of governmental activities $ 11,779,135 The accompanying notes are an integral part of this statement. - 24 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF NET POSITION - PROPRIETARY FUNDS June 30, 2023 Business-type activities - Enterprise fund Governmental activities - Internal service fund Total ASSETS Current assets Cash $ 2,462,630 $ 1,835,204 $ 4,297,834 Other receivables 47,090 - 47,090 Noncurrent assets Capital assets 76,963 - 76,963 Total assets 2,586,683 1,835,204 4,421,887 LIABILITIES Current liabilities Accounts payable 2,772 421,774 424,546 Accrued payroll and payroll taxes 13,711 - 13,711 Unearned revenue 31,115 - 31,115 Total current liabilities 47,598 421,774 469,372 NET POSITION Net investment in capital assets 76,963 - 76,963 Unrestricted 2,462,122 1,413,430 3,875,552 Total net position $ 2,539,085 $ 1,413,430 $ 3,952,515 The accompanying notes are an integral part of this statement. - 25 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION - PROPRIETARY FUNDS Year ended June 30, 2023 Business-type activities - Enterprise fund Governmental activities - Internal service fund Total Operating revenues Contributions $ - $ 5,412,272 $ 5,412,272 Rents 197,417 - 197,417 Tuition and fees 698,273 - 698,273 Other - 47,761 47,761 Total operating revenues 895,690 5,460,033 6,355,723 Operating expenses Salaries 417,743 - 417,743 Benefits 108,655 - 108,655 Purchased services 26,072 - 26,072 Supplies 45,414 - 45,414 Claims expenses & fees - 5,747,278 5,747,278 Depreciation 12,110 - 12,110 Total operating expenses 609,994 5,747,278 6,357,272 Operating income (loss) 285,696 (287,245) (1,549) Other Transfers from governmental funds 2,188,590 - 2,188,590 CHANGES IN NET POSITION 2,474,286 (287,245) 2,187,041 Net position at July 1, 2022 64,799 1,700,675 1,765,474 Net position at June 30, 2023 $ 2,539,085 $ 1,413,430 $ 3,952,515 The accompanying notes are an integral part of this statement. - 26 - SCHOOL DISTRICT OF CLAYTON STATEMENT OF CASH FLOWS - PROPRIETARY FUNDS Year ended June 30, 2023 Business Type Activities - Enterprise fund Governmental activities - Internal service fund Total Cash flows from operating activities: Cash received from employee/employer contributions $ - $ 5,460,033 $ 5,460,033 Cash received from user charges 880,337 - 880,337 Cash payments to employees for services (523,987) - (523,987) Cash payments for supplies and services (68,715) (5,728,227) (5,796,942) Net cash provided by (used in) operating activities 287,635 (268,194) 19,441 Cash flows from noncapital financing activities: Operating subsidies and transfers to other funds 2,174,995 - 2,174,995 Net increase (decrease) in cash 2,462,630 (268,194) 2,194,436 Cash at July 1, 2022 - 2,103,398 2,103,398 Cash at June 30, 2023 $ 2,462,630 $ 1,835,204 $ 4,297,834 Reconciliation of operating income to net cash provided by (used in) operating activities Operating income (loss) $ 285,696 $ (287,245) $ (1,549) Adjustments to reconcile operating income (loss) to net cash provided by operating activities: Depreciation 12,110 - 12,110 Increase in accounts receivable (38,235) - (38,235) Increase in accounts payable 2,771 19,051 21,822 Increase in accrued payroll and payroll taxes 2,411 - 2,411 Increase in deferred revenues 22,882 - 22,882 Net cash provided by (used in) operating activities: $ 287,635 $ (268,194) $ 19,441 The accompanying notes are an integral part of this statement. - 27 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The School District of Clayton (the District), established under the Statutes of the State of Missouri, is governed by an elected seven-member board as described in RSMo Chapter 162. The Board of Education (Board) is the basic level of government that has financial accountability and control over all activities related to public school education in the District. The District’s financial statements are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The more significant accounting policies used by the District are as follows. 1. Principles Determining the Scope of Reporting Entity GAAP requires the financial reporting entity include (1) the primary government, (2) organizations for which the primary government is financially accountable, and (3) other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. The criteria provided in the applicable GASB statements have been considered and there are no other agencies or entities, which should be presented with the District. 2. Basis of Presentation District-Wide Financial Statements The Statement of Net Position and Statement of Activities display information about the reporting government as a whole. They include all funds of the reporting entity. The statements distinguish between governmental and business-type activities. Governmental activities generally are financed through taxes, intergovernmental revenues, and other non-exchange revenues. Business-type activities are financed in whole or in part by fees charged to external parties for goods or services. The Statement of Activities presents a comparison between direct expenses and program revenues for business-type activities and for each function of the District’s governmental activities. Direct expenses are those that are specifically associated with and are clearly identifiable to a particular function. The District does not allocate indirect costs. Program revenues include charges paid by the recipients of goods and services offered by the programs and grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues not classified as program revenues, including all taxes, are presented as general revenues. - 28 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 2. Basis of Presentation - Continued Fund Financial Statements Fund financial statements of the reporting entity are organized into funds, each of which is considered to be separate accounting entities. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures/expenses. The emphasis is placed on major funds. Each major fund is presented in a separate column while non-major funds are aggregated and presented in a single column. The major funds of the financial reporting entity are described below: Governmental Funds General Fund The General Fund is the primary operating fund of the District and is used to account for all financial resources except those required to be accounted for in another fund. Special Revenue Fund The Special Revenue Fund is used to account for specific revenue sources that are restricted, committed, or assigned for the payment of salaries and certain employee benefits for certified personnel. Debt Service Fund The Debt Service Fund is used to account for the accumulation of resources that are restricted, committed, or assigned for the periodic payment of principal, interest, and fiscal charges on general long-term debt. Capital Projects Fund The Capital Projects Fund is used to account for resources that are restricted, committed, or assigned for the acquisition or construction of major capital assets. Proprietary Funds Enterprise Fund Enterprise funds are used to account for business-like activities financed primarily by user charges. The measurement of financial activity focuses on net income similar to the private sector. - 29 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 2. Basis of Presentation - Continued Proprietary Funds - Continued Internal Service Fund The Internal Service Fund accounts for the activities of the District’s medical self-insurance fund. This includes the collection of premiums from employees and the payment of claims, direct insurance payments, and administrative fees. A liability for estimated claims incurred is recorded in this fund. 3. Measurement Focus and Basis of Accounting Measurement focus is a term used to describe which transactions are recorded within the various financial statements. Basis of accounting refers to when transactions are recorded regardless of the measurement focus applied. Measurement Focus The District-wide financial statements are prepared using the economic resources measurement focus, as are the proprietary fund financial statements. The accounting objectives of this measurement focus are the determination of changes in net position, net position, and cash flows. All assets and liabilities, whether current or noncurrent, are reported. The governmental fund financial statements are prepared using the current financial resources measurement focus. Only current financial assets and liabilities are generally included in the balance sheets. The operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period. Basis of Accounting Basis of accounting refers to when revenues and expenditures are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of the measurements made, regardless of the measurement focus applied. The District-wide financial statements are prepared using the economic resources measurement focus and accrual basis of accounting, as are the proprietary fund financial statements. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recognized when the liability is incurred or economic assets used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place. - 30 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 3. Measurement Focus and Basis of Accounting - Continued Basis of Accounting - Continued The governmental fund financial statements are prepared using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when measurable and available. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or within sixty days after year end. Property and sales taxes, interest, and certain grants are susceptible to accrual. Miscellaneous revenue items, which are not susceptible to accrual, are recognized as revenues only as they are received in cash. Expenditures, including capital outlay, are recorded when the related fund liability is incurred, except for principal and interest on general obligation long-term debt which are reported when due. 4. Cash and Investments Cash resources from all funds, except the Debt Service Fund, are combined to form a pool of cash and short term investments. Earnings from investments are allocated to each fund on the basis of the applicable cash balance participation by each fund. A separate account is maintained for the Debt Service Fund and earnings for this fund are deposited directly into this account. 5. Restricted Cash and Investments Restricted cash and investments represent amounts whose use is limited by legal requirements and consist of amounts allocated to future debt service payments. 6. Interfund Receivables and Payables During the course of operations, numerous transactions occur between individual funds that may result in amounts owed between funds. Those related to goods and service type transactions are classified as “due to and from other funds.” Interfund receivables and payables between funds within governmental activities are eliminated in the Statement of Net Position. 7. Receivables Major receivables for the governmental activities include property and sales taxes, and state and federal grants. Business-type activities and proprietary funds report user charges as their major receivables. Allowances for uncollectible property taxes are based upon historical trends. - 31 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 8. Inventories Inventory of supplies is stated at cost, on the first-in, first-out basis. The costs of inventory items are recorded as expenditures when issued to requisitioning departments. Reported inventories at year end are offset by a nonspendable fund balance account since they do not represent expendable financial resources. 9. Prepaid Items Certain payments to vendors reflect costs applicable to future accounting periods and are reported as prepaid items using the consumption method. Reported prepaid items at year end are offset by a nonspendable fund balance account since they do not represent expendable financial resources. 10. Capital Assets and Depreciation and Right-to-use Assets and Amortization In the district-wide financial statements, capital assets purchased or acquired with an original cost of $1,000 or more are reported at historical cost or estimated historical cost if actual cost is unavailable. Contributed assets are reported at their fair market value as of the date received. Additions, improvements, and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation/amortization on assets is provided on the straight-line basis over the following estimated useful lives: Buildings and improvements 20 - 50 years Furniture and equipment 5 - 20 years Right-to-use building and improvements 10 years In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same as in the district-wide financial statements. 11. Deferred Outflows of Resources The District reports decreases in net position that relate to future periods as deferred outflows of resources in a separate section of its Balance Sheet - Governmental Funds and the Statement of Net Position - Proprietary Funds. Deferred outflows of resources reported in this year's financial statements are deferred outflows of resources related to the District's defined benefit pension plans as further disclosed in Note G and deferred outflows of resources related to other post- employment benefits (OPEB) as further discussed in Note I. No deferred outflows of resources affect the governmental funds financial statements in the current year. - 32 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 12. Compensated Absences The District’s policies regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these compensated absences is recorded in the District-wide statements. In the fund financial statements, governmental funds report only the compensated absence liability from expendable available financial resources, while the proprietary funds report the liability as it is incurred. 13. Long-Term Liabilities All long-term liabilities to be paid from governmental and business-type activities are reported as liabilities in the District-wide financial statements. Long-term liabilities primarily consist of bonds, pension liabilities, accrued compensated absences, and other post-employment benefit obligations. Long-term liabilities are not due and are not payable in the current period and, therefore, are not reported as liabilities in the governmental fund financial statements. 14. Leases At the commencement of a lease, the District initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to leases include how the District determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. The District uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the District generally uses its estimated incremental borrowing rate as the discount rate for leases. The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the District is reasonably certain to exercise. The District monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. - 33 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 14. Leases - Continued Lease assets are reported with other capital assets and lease liabilities are reported with non- current liabilities on the statement of net position. 15. Deferred Inflows of Resources The District's Statements of Net Position and its Balance Sheet - Governmental Funds report a separate section for deferred inflows of resources. This separate financial statement element reflects an increase in net position that applies to a future period(s). Deferred inflows of resources are reported in the District's Statement of Net Position for actual pension plan investment earnings in excess of the expected amounts included in determining pension expense. This deferred inflow of resources is attributed to pension expense over multiple years, including the current year. The District also reports deferred inflows in the Statement of Net Position for property taxes that there is an enforceable legal claim attached for which there has not yet been a tax levy set. Lastly, the District reports a deferred inflow related to OPEB for changes in assumptions to the pension plan. In its governmental funds, the only deferred inflow of resources is for revenues that are not considered available. The District will not recognize the related revenues until they are available (collected not later than 60 days after the end of the District's fiscal year) under the modified accrual basis of accounting. Accordingly, unavailable revenues from property taxes, grants, and other are reported in the Balance Sheet - Governmental Funds. 16. Equity Classifications In the District-wide financial statements, equity is classified as net position and displayed in three components. Net investment in capital assets consists of capital assets including restricted capital assets, net of accumulated depreciation, reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those net assets. Net position is reported as restricted when there are constraints imposed on their use either through enabling legislation adopted by the District, or through external restrictions imposed by creditors, grantors, contributors, or laws or regulations of other governments. The remaining net position that does not meet the definition of restricted or net investment in capital assets is reported as unrestricted. The District first utilizes restricted resources to finance qualifying activities. In the fund financial statements, governmental fund equity is classified as fund balance. Governmental funds report the following classifications of fund balance: Nonspendable – funds that cannot be spent due to their form (e.g., inventories and prepaid expenditures), or funds that legally or contractually must be maintained intact; - 34 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 16. Equity Classifications - Continued Restricted – funds that are mandated for a specific purpose by external parties, constitutional provisions, or enabling legislation; Committed – funds that are set aside for a specific purpose by the District’s highest level of decision making authority, the Board. The fund balance policy requires formal resolution to be taken prior to the end of the fiscal year. The same formal action must be taken to remove or change the limitations placed on the funds; Assigned – consists of funds that are set aside with the intent to be used for a specific purpose. Under the District’s adopted policy, amounts may be assigned by the Chief Financial Officer; and, Unassigned – excess funds that have not been classified in the previous categories. All funds in this category are considered spendable resources. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls. In other governmental funds, if expenditures incurred for specific purposes exceed the amounts restricted, committed, or assigned to those purposes, a negative unassigned fund balance may be reported. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the District considers restricted funds to have been spent first unless legal requirements disallow it. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the District considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds as needed, unless the Board has provided otherwise in its commitment or assignment actions. The details of the fund balances are included in the Balance Sheet - Governmental Funds. Proprietary funds equity is classified the same as in the District-wide financial statements. 17. Revenue Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied annually by November 1 and are due by December 31. In the District-wide financial statements, property tax revenues are recognized in the fiscal year levied. In the fund financial statements, property tax revenues are recognized in the fiscal year levied when they become measurable and available. Available property tax revenue includes those property tax receivables expected to be collected within 60 days of year end. Revenues not collected within 60 days of year end are reported as deferred inflows of resources. - 35 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE A – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED 17. Revenue - Continued Sales tax is collected by the State of Missouri and remitted to districts within the state based on eligible pupils. The State receives the sales tax approximately one month after collection by vendors. Sales taxes collected by the State in June and July, which represent sales for May and June, and received by the District in July and August have been accrued and reported as sales tax receivable. Entitlements and grants are recognized as revenue in the fiscal year in which all eligibility requirements have been satisfied. Grants and entitlements received before eligibility requirements are met are reported as unearned revenue. In the fund financial statements, entitlement and grant revenues not collected within 60 days of year end are reported as deferred inflows of resources. Operating revenues and expenses for proprietary funds are those that result from providing services and producing and delivering goods and services. It also includes all revenue and expenses not related to capital and related financing, noncapital financing, and investing activities. 18. Post-Employment Benefits Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), the District provides healthcare benefits to eligible former employees and eligible dependents that elect to participate. Certain requirements are outlined by the federal government for this coverage. The premium is paid in full by the insured on or before the 15th day of the month for the actual month covered. This program is offered for a duration of eighteen months after the termination date. The District enrolls electing, eligible participants with a third-party COBRA administrator. Participants make payments directly to the third-party administrator and these payments are then remitted to the District. There is no associated cost to the District under this program. In accordance with Chapter 169, RSMo, the District offers continued healthcare benefits to employees who are eligible for normal or early retirement under PSRS or PEERS. The retiree or eligible dependent pays the premium directly to the District. The District currently pays for the implicit rate subsidy associated with these postemployment health care benefits on a pay-as-you- go basis. 19. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. - 36 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE B – CASH AND INVESTMENTS The District maintains a cash and temporary cash investment pool that is available for use by all funds except the Debt Service Fund (Missouri law requires that all deposits of the Debt Service Fund be kept separate and apart from all other funds of the District). Each fund’s portion of this pool is displayed on the balance sheet as “cash and investments” under each fund’s caption. Deposits Missouri statutes require that all deposits with financial institutions be collateralized in an amount at least equal to uninsured deposits. At June 30, 2023, the carrying amount of the deposits under District control was $11,601,949 and the bank balance was $11,907,336. Of the bank balance, $250,000 was covered by Federal Deposit Insurance Corporation (FDIC) through the District's depository, and the remaining amount was covered by a $10 million surety bond from Travelers Casualty and Surety Company Company of American and by a $2 million Federal Home Loan Bank letter of credit. Investments The District may purchase any investments allowed by the Missouri State Treasurer. These include but are not limited to (1) obligations of the United States Government, or any agency or instrumentality thereof, maturing and becoming payable not more than three years from the date of purchase, (2) repurchase agreements maturing and becoming payable within 90 days secured by U.S. Treasury obligations or obligations of U.S. Government agencies or instrumentalities of any maturity, as provided by law, or (3) other short-term obligations of the United States and deposit accounts with insured financial institutions, provided the accounts are entirely insured by the FDIC or collateralized with government securities that have a fair value exceeding the deposit amount. The District has investments managed by the Missouri Securities Investment Program (MOSIP) and by the Missouri Capital Asset Advantage Treasury (MOCAAT). All funds in MOSIP are invested in accordance with Section 165.061 RSMo. In MOSIP, each school district owns a pro rata share of each investment, which is held in the name of the program. The investments are stated at amortized cost, which approximates fair value. The value of the investments in MOSIP was $30,677,548 at June 30, 2023. - 37 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE B – CASH AND INVESTMENTS - CONTINUED Investments - Continued For MOCAAT, the District has investments in the Liquid Series. An investment in the Liquid Series represents an undivided beneficial ownership interest in the assets of the Liquid Series and the securities and instruments in which the assets of the Liquid Series are invested. The Liquid Series seeks to maintain a constant net asset value per share of $1.00 and the investments are valued using the amortized cost method. In addition, the District has investments through MOCAAT's Fixed Rate Investment Program offered by PMA Financial Network, LLC and PMA Securities, LLC. The investments are stated at amortized cost, which approximates fair value. All funds invested in the Liquid Series and MOCAAT's Fixed Rate Investment Program are invested in accordance with Section 165.061 RSMo. The District's investments in MOCAAT's Fixed Rate Investment Program are secured by the actual security purchased (Treasury notes). The value of investments in MOCAAT was $4,301,959 at June 30, 2023. Additionally, the District has $3,034,275 in restricted cash and investments that is held in a sinking fund for a future debt service principal payment per the 2009A bond issuance agreement. These funds are held by Bank of New York Mellon and invested in a US Treasury money market fund. Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. The District’s investment policy does not limit investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. However, one of the ways the District manages its exposure to interest rate risk is by purchasing a combination of short-term and long-term investments and by timing cash flows from maturities so a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Credit Risk Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligation to the holder of the investment. State law limits investments that can be held by government agencies to safe, high-quality securities. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The District’s regular investments in the Missouri Securities Investment Program and the Missouri Capital Asset Advantage Treasury are rated AA+ by Standard and Poor’s. - 38 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE B – CASH AND INVESTMENTS - CONTINUED Concentration of Credit Risk The investment policy of the District contains no limitations on the amount that can be invested in any one issuer beyond what is provided by law. The District did not have any investments (excluding investments issued or explicitly guaranteed by the U.S. Government, external investment pools, or investments in mutual funds) in any one issuer representing 5% or more of total investments. Custodial Credit Risk For an investment, custodial credit risk is the risk that in the event of the failure of the counterparty, the District will not be able to recover its deposits, the value of its investments, or be able to recover collateral securities that are in the possession of an outside party. The District does not have a formal policy regarding the custody of its investments. All investment activities are conducted through the depository bank and the District’s financial advisor or through MOSIP and MOCAAT. As of June 30, 2023, the District’s investments were held by the investment’s counterparty. Summary The cash deposits and investments are summarized and presented in the financial statements as follows as of June 30, 2023: Carrying amount of deposits $ 11,601,949 Investments 38,013,782 $ 49,615,731 NOTE C – TAXES Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied by November 1 and payable by December 31. All unpaid taxes become delinquent January 1 of the following year. St. Louis County collects the property taxes and remits them to the District. The District also receives sales tax collected by the state and remitted based on eligible pupils. The District is required to reduce its property tax levy by one-half the amount of sales tax estimated to be received in the subsequent calendar year. The District's taxpayers have voted to permanently waive this property tax rollback. - 39 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE C – TAXES - CONTINUED The assessed valuation of the tangible taxable property for the calendar year 2022 for purposes of local taxation was: Real estate: Residential $ 750,954,670 Commercial 505,326,520 Personal property 123,553,920 $ 1,379,835,110 The tax levy per $100 of the assessed valuation of tangible taxable property for the calendar year 2022 for purposes of local taxation was as follows: Adjusted General Fund $ 1.1024 Special Revenue Fund 2.2362 Debt Service Fund 0.6230 Capital Projects Fund 0.3900 $ 4.3516 The receipts of current property taxes during the fiscal year ended June 30, 2023 aggregated approximately 98.0% of the 2022 assessment computed on the basis of the levy as shown above. - 40 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE D – CAPITAL ASSETS Capital asset activity for the year ended June 30, 2023, was as follows: Balance at July 1, 2022 Transfers Additions Disposals Balance at June 30, 2023 Governmental activities Capital assets not being depreciated Land $ 714,536 $ - $ - $ - $ 714,536 Capital assets that are depreciated Buildings and improvements 137,469,645 - 4,519,452 - 141,989,097 Furniture and equipment 21,749,930 - 1,744,221 (1,257,730) 22,236,421 Right-to-use assets being amortized Buildings and improvements 550,867 - - - 550,867 Totals at historical cost 160,484,978 - 6,263,673 (1,257,730) 165,490,921 Less: accumulated depreciation Buildings and improvements (41,222,299) - (3,592,839) - (44,815,138) Furniture and equipment (17,732,716) - (1,095,081) 1,230,483 (17,597,314) Less: accumulated amortization Buildings and improvements (41,315) - (27,543) - (68,858) Total accumulated depreciation and amortization (58,996,330) - (4,715,463) 1,230,483 (62,481,310) $ 101,488,648 $ - $ 1,548,210 $ (27,247) $ 103,009,611 Business-type activities Capital assets that are depreciated Furniture and equipment $ 165,939 $ - $ 24,274 $ - $ 190,213 Less accumulated depreciation Furniture and equipment (101,140) - (12,110) - (113,250) $ 64,799 $ - $ 12,164 $ - $ 76,963 Depreciation and amortization expense for governmental activities is reported in the Statement of Activities and was allocated to operation of plant. - 41 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE E – LONG-TERM LIABILITIES The following is a summary of the changes in long-term liabilities for the year ended June 30, 2023: Balance as of July 1, 2022 Additions Reductions Balance, as of June 30, 2023 Amount due within one year General obligation bonds $ 49,082,000 $ - $ 4,920,000 $ 44,162,000 $ 9,410,000 Deferred amounts for issuance premium 2,618,157 - 591,830 2,026,327 - Total bonds payable, net 51,700,157 - 5,511,830 46,188,327 9,410,000 Interest 539,858 477,807 539,858 477,807 477,807 Lease payable 3,775,000 - 500,000 3,275,000 515,000 Compensated absences 383,817 - 42,927 340,890 - $ 56,398,832 $ 477,807 $ 6,594,615 $ 50,282,024 $ 10,402,807 Principal and interest on general obligation bonds are paid through the Debt Service Fund. Principal and interest on leases are paid through the Capital Projects Fund. Compensated absences are paid through the General Fund and Special Revenue Fund. Bonds Payable General obligation bonds outstanding at June 30, 2023 were as follows: Date issued Maturity date Rate of interest Original issue amount Balance at June 30, 2023 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 13,800,000 12/05/19 03/01/29 2.00%-3.00% 31,075,000 17,190,000 $ 44,162,000 - 42 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE E – LONG-TERM LIABILITIES - CONTINUED The annual requirements to amortize the general obligation bonds as of June 30, 2023, including interest payments, are as follows: Year ending June 30, Principal Interest Total 2024 $ 9,410,000 $ 1,409,924 $ 10,819,924 2025 6,110,000 1,277,339 7,387,339 2026 6,565,000 1,050,939 7,615,939 2027 6,947,000 803,389 7,750,389 2028 7,345,000 472,900 7,817,900 2029 7,785,000 221,400 8,006,400 $ 44,162,000 $ 5,235,891 $ 49,397,891 Legal Debt Margin Article VI, Section 26(b) of the Constitution of Missouri limits the amount of General Obligation Bonds which can be authorized and outstanding by a school district to 15% of the assessed valuation of taxable tangible property within the District. The legal debt margin of the District at June 30, 2023 was: Constitutional debt limit $ 206,975,267 General obligation bonds payable (44,162,000) Amount available in Debt Service Fund 8,313,030 Legal debt margin $ 171,126,297 - 43 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE E – LONG-TERM LIABILITIES - CONTINUED Lease On June 1, 2019, the District entered into a $5,065,000 lease agreement. The proceeds of the lease were used as follows: $550,867 of capital improvements to Meramec Elementary with $68,858 of related accumulated amortization $4,514,133 of capital contributions to the joint venture, Clayton Recreation, Sports and Wellness Commission. See Note K for more information on the joint venture. Since this represents a capital contribution, there is not an asset or related accumulated depreciation. The District is only obligated to pay such payments under the lease as may lawfully be made from funds budgeted and appropriated for that purpose. Should the District fail to budget, appropriate or otherwise make available funds sufficient to pay the payments, the lease would be deemed terminated at the end of the current term and the collateral would transfer to the possession of the lessor. Meramec Elementary School is pledged as collateral. The District has the option to purchase the lessor's interest in the project through prepayment. If the prepayment is paid with internally generated funds (i.e. not in connection with refinancing or grant), there would be no prepayment premium. Otherwise, the prepayment premium would be 3% of the remaining principal portion if on or before the first anniversary of the commencement date; 2% of the remaining principal portion if after the first anniversary but on or before the second anniversary of the commencement date; 1% of the remaining principal portion if after the second anniversary of the commencement date. - 44 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE E – LONG-TERM LIABILITIES - CONTINUED Lease - Continued The following is a schedule of future minimum lease payments under the capital lease together with the present value of the net minimum lease payments as of June 30, 2023: Year ended June 30, 2024 $ 594,244 2025 591,600 2026 593,932 2027 590,901 2028 592,705 2029 593,996 Total minimum lease payments 3,557,378 Less amount representing interest (282,378) Present value of minimum lease payments $ 3,275,000 NOTE F – TAX ABATEMENTS The District is subject to tax abatement agreements granted by St. Louis County, the City of Clayton, and the City of Richmond Heights. Abatements under Chapter 100 and Chapter 353 of RSMo exist within the District. During the term of the agreements, a certain percentage of the property tax amount for the assessed value of the eligible property is abated. For fiscal year 2023, the total amount of tax abated was approximately $2.0 million in real estate and personal property tax. NOTE G – RETIREMENT PLANS The District contributes to the Public School Retirement System of Missouri and the Public Education Retirement System of Missouri (PSRS and PEERS respectively, also referred to as the Systems), a cost-sharing multiple-employer defined benefit pension plan. - 45 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Plan Description PSRS is a mandatory cost-sharing multiple-employer retirement system for all full-time certificated employees and certain part-time certificated employees of all public school districts in Missouri (except the school districts of St. Louis and Kansas City) and all public community colleges. PSRS also includes certificated employees of the Systems, Missouri State Teachers' Association, Missouri State High School Activities Association, and certain employees of the State of Missouri who elected to remain covered by PSRS under legislation enacted in 1986, 1987 and 1989. The majority of PSRS members are exempt from Social Security contributions. In some instances, positions may be determined not to be exempt from Social Security contributions. Any PSRS member who is required to contribute to Social Security comes under the requirements of Section 169.070 (9) RSMo, known as the "two-third’s statute." PSRS members required to contribute to Social Security are required to contribute two-thirds of the approved PSRS contribution rate and their employer is required to match the contribution. The members' benefits are further calculated at two-thirds the normal benefit amount. PEERS is a mandatory cost-sharing multiple employer retirement system for all non-certificated public school district employees (except the school districts of St. Louis and Kansas City), employees of the Missouri Association of School Administrators, and community college employees (except the Community College of St. Louis). Employees of covered districts who work 20 or more hours per week on a regular basis and who are not contributing members of PSRS must contribute to PEERS. Employees of the Systems who do not hold Missouri educator certificates also contribute to PEERS. PEERS was established as a trust fund by an Act of the Missouri General Assembly effective October 13, 1965. Statutes governing the System are found in Sections 169.600 - 169.715 and Sections 169.560-169.595 RSMo. The statutes place responsibility for the operation of PEERS on the Board of Trustees of PSRS. - 46 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Benefits Provided PSRS is a defined benefit plan providing retirement, disability, and death/survivor benefits. Members are vested for service retirement benefits after accruing five years of service. Individuals who (a) are at least age 60 and have a minimum of five years of service, (b) have 30 years of service, or (c) qualify for benefits under the "Rule of 80" (service and age total at least 80) are entitled to a monthly benefit for life, which is calculated using a 2.5% benefit factor. Actuarially age-reduced benefits are available for members with five to 24.9 years of service at age 55. Members who are younger than age 55 and who do not qualify under the “Rule of 80" but have between 25 and 29.9 years of service may retire with a lesser benefit factor. Members that are three years beyond normal retirement can elect to have their lifetime monthly benefits actuarially reduced in exchange for the right to also receive a one-time partial lump sum (PLSO) payment at retirement equal to 12, 24, or 36 times the Single Life benefit amount. PEERS is a defined benefit plan providing retirement, disability, and death benefits to its members. Members are vested for service retirement benefits after accruing five years of service. Individuals who (a) are at least age 60 and have a minimum of five years of service, (b) have 30 years of service, or (c) qualify for benefits under the “Rule of 80” (service and age total at least 80) are entitled to a monthly benefit for life, which is calculated using a 1.61% benefit factor. Members qualifying for "Rule of 80" or "30-and-out" are entitled to an additional temporary benefit until reaching minimum Social Security age (currently age 62), which is calculated using a 0.8% benefit factor. Actuarially age-reduced retirement benefits are available with five to 24.9 years of service at age 55. Members who are younger than age 55 and who do not qualify under the “Rule of 80” but have between 25 and 29.9 years of service may retire with a lesser benefit factor. Members that are three years beyond normal retirement can elect to have their lifetime monthly benefits actuarially reduced in exchange for the right to also receive a PLSO payment at retirement equal to 12, 24, or 36 times the Single Life benefit amount. Summary Plan Descriptions detailing the provisions of the plans can be found on the Systems' website at www.psrs-peers.org. - 47 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Cost-of-Living Adjustments (“COLA”) The Board of Trustees has established a policy of providing COLAs to both PSRS and PEERS members as follows: If the June to June change in the Consumer Price Index for All Urban Consumers (CPI-U) is less than 2% for one or more consecutive one-year periods, a COLA increase of 2% will be granted when the cumulative increase is equal to or greater than 2%, at which point the cumulative increase in the CPI-U will be reset to zero. For the following year, the starting CPI-U will be based on the June value immediately preceding the January 1 at which the 2% COLA increase is granted. If the June to June change in the CPI-U is greater than or equal to 2%, but less than 5%, a COLA increase of 2% will be granted. If the June to June change in the CPI-U is greater than or equal to 5%, a COLA increase of 5% will be granted. If the CPI decreases, no COLA is provided. For any PSRS member retiring on or after July 1, 2001, such adjustments commence on the second January after commencement of benefits and occur annually thereafter. For PEERS members, such adjustments commence on the fourth January after commencement of benefits and occur annually thereafter. The total of such increases may not exceed 80% of the original benefit for any member. Contributions PSRS members were required to contribute 14.5% of their annual covered salary during fiscal years 2021, 2022 and 2023. Employers were required to match the contributions made by employees. The contribution rate is set each year by the PSRS Board of Trustees upon the recommendation of the independent actuary within the contribution restrictions set in Section 169.030 RSMo. The annual statutory increase in the total contribution rate may not exceed l% of pay. PEERS members were required to contribute 6.86% of their annual covered salary during fiscal years 2021, 2022 and 2023. Employers were required to match the contributions made by employees. The contribution rate is set each year by the PSRS Board of Trustees upon the recommendation of the independent actuary within the contribution restrictions set in Section 169.030 RSMo. The annual statutory increase in the total contribution rate may not exceed 0.5% of pay. - 48 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Contributions - Continued The District's contributions to PSRS and PEERS were $4,292,939 and $642,436, respectively, for the year ended June 30, 2023. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2023, the District recorded a liability of $42,406,647 for its proportionate share of the PSRS net pension liability and $3,878,246 for its proportionate share of the PEERS net pension liability. In total the District recorded net pension liabilities of $46,284,893. The net pension liability for the plans in total was measured as of June 30, 2022, and determined by an actuarial valuation as of that date. The District's proportionate share of the total net pension liability was based on the ratio of its actual contributions paid to PSRS and PEERS of $4,187,826 and $614,532, respectively, for the year ended June 30, 2022 relative to the total contributions of $763,765,597 for PSRS and $133,912,935 for PEERS from all participating employers. At June 30, 2022, the District's proportionate share was 0.5483% for PSRS and 0.4589% for PEERS. For the year ended June 30, 2023, the District recognized a pension expense of $3,404,257 for PSRS and $469,480 for PEERS, its proportionate share of the total pension expense. Pension expense is the change in the net pension liability from the previous reporting period to the current reporting period, less adjustments. This may be a negative expense (pension income). - 49 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - Continued At June 30, 2023, the District reported deferred outflows of resources from the following sources related to PSRS and PEERS pension benefits: Deferred outflows of resources PSRS PEERS District Total Balance of deferred outflows due to: Differences between expected and actual experience $ 7,596,899 $ 618,760 $ 8,215,659 Changes in assumptions 2,767,419 144,975 2,912,394 Changes in proportion and differences between Employer contributions and proportionate share of contributions 233,103 - 233,103 Employer contributions subsequent to the measurement date 4,292,939 642,436 4,935,375 Total $ 14,890,360 $ 1,406,171 $ 16,296,531 At June 30, 2023 the District reported deferred inflows of resources from the following sources related to PSRS and PEERS pension benefits: Deferred inflows of resources PSRS PEERS District Total Balance of deferred inflows due to: Differences between expected and actual experience $ 624,226 $ 4,115 $ 628,341 Net difference between projected and actual earnings on pension plan investments 1,222,824 96,517 1,319,341 Changes in proportion and differences between Employer contributions and proportionate share of contributions 343,529 94,655 438,184 Total $ 2,190,579 $ 195,287 $ 2,385,866 - 50 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions - Continued Amounts reported as deferred outflows of resources resulting from contributions subsequent to the measurement date of June 30, 2022, will be recognized as a reduction to the net pension liability in the year ended June 30, 2024. Other amounts reported as collective deferred (inflows)/outflows of resources are to be recognized in pension expense as follows: Year ending June 30, PSRS PEERS District Total 2024 $ 1,308,742 $ 255,254 $ 1,563,996 2025 276,131 57,954 334,085 2026 (1,144,497) (347,482) (1,491,979) 2027 7,486,135 602,722 8,088,857 2028 480,331 - 480,331 $ 8,406,842 $ 568,448 $ 8,975,290 Actuarial Assumptions Actuarial valuations of the Systems involve assumptions about probability of occurrence of events far into the future in order to estimate the reported amounts. Examples include assumptions about future employment, salary increases, and mortality. Amounts determined regarding the net pension liability are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Board of Trustees adopts actuarial assumptions, each of which individually represents a reasonable long-term estimate of anticipated experience for the Systems, derived from experience studies conducted every fifth year and from Board policies concerning investments and COLAs. The most recent comprehensive experience studies were completed in May 2021. All economic and demographic assumptions were reviewed and and certain assumptions were updated, where appropriate, based on the results of the studies and effective with the June 30, 2021 valuation. Significant actuarial assumption and methods are detailed below. For additional information please refer to the Systems’ Annual Comprehensive Financial Report (ACFR). The next experience studies are scheduled for 2026. - 51 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Significant actuarial assumptions and other inputs used to measure the total pension liability: Measurement Date: June 30, 2022 Valuation Date: June 30, 2022 Expected Return on Investments: 7.30%, net of investment expenses and including 2.00% inflation Inflation: 2.00% Total Payroll Growth PSRS: 2.25% per annum, consisting of 2.00% inflation, 0.125% real wage growth due to the inclusion of active health care costs in pensionable earnings, and 0.125% of real wage growth due to productivity. Total Payroll Growth PEERS: 2.50% per annum, consisting of 2.00% inflation, 0.25% real wage growth due to the inclusion of active health care costs in pensionable earnings, and 0.25% of real wage growth due to productivity. Future Salary Increases PSRS: 2.625% - 8.875%, depending on service and including 2.00% inflation, 0.125% real wage growth due to the inclusion of active health care costs in pensionable earnings, and 0.125% of real wage growth due to productivity, and real wage growth for merit. Future Salary Increases PEERS: 3.25% - 9.75%, depending on service and including 2.00% inflation, 0.25% real wage growth due to the inclusion of active health care costs in pensionable earnings, and 0.25% of real wage growth due to productivity. and real wage growth for merit. Cost of Living Increases PSRS & PEERS: Given that the actual increase in the CPI-U index from June 2021 to June 2022 was 9.06%, the Board approved an actual COLA as of January 1, 2023 of 5.00%, in accordance with the Board's funding policy and Missouri statutes, compared to an assumed COLA of 2.00%. Future COLAs assumed in the valuation are 2.00% as of January 1, 2024 and 1.35% each January 1 thereafter. This COLA assumption is based on the 20-year stochastic analysis of inflation performed in the 2021 experience study, the application of the Board's COLA policy, and the short-term expectations of COLA due to recent CPI activity. It is also based on the current policy of the Board to grant a COLA on each January 1 as follows: - 52 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued If the June to June change in the CPI-U is less than 2% for one or more consecutive one-year periods, a COLA increase of 2% will be granted when the cumulative increase is equal to or greater than 2%, at which point the cumulative increase in the CPI-U will be reset to zero. For the following year, the starting CPI-U will be based on the June value immediately preceding the January 1 at which the 2% cost-of-living increase is granted. If the June to June change in the CPI-U is greater than or equal to 2%, but less than 5%, a COLA increase of 2% will be granted. If the June to June change in the CPI-U is greater than or equal to 5%, a COLA increase of 5% will be granted. If the CPI decreases, no COLA is provided. The COLA applies to service retirements and beneficiary annuities. The COLA does not apply to the benefits for in-service death payable to spouses (where the spouse is over age 60), and does not apply to the spouse with children pre-retirement death benefit, the dependent children pre- retirement death benefit, or the dependent parent death benefit. The total lifetime COLA cannot exceed 80% of the original benefit. PSRS members receive a COLA on the second January after retirement, while PEERS members receive a COLA on the fourth January after retirement. Mortality Assumptions Actives PSRS: Experience-adjusted Pub-2010 Teachers Mortality Table for Employees with generational projection using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females. Actives PEERS: Experience-adjusted Pub-2010 General (Below-Median Income) Mortality Table for Employees with generational projection using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience- based adjustment factors at all ages for both males and females. - 53 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Non-Disabled Retirees PSRS: Mortality rates for non-disabled retirees and beneficiaries are based on the Pub-2010 Teachers Mortality Table for Healthy Retirees and the Pub-2010 Teachers Mortality Table for Contingent Survivors, respectively. The tables are projected generationally using the MP-2020 improvement scale and multiplied by the experience-based adjustment factors shown below at all ages for both males and females. The non-disabled factor is 1.10 for males and 1.04 for females. The contingent survivor factor is 1.18 for males and 1.07 for females. Non-Disabled Retirees PEERS: Mortality rates for non-disabled retirees and beneficiaries are based on the Pub-2010 General (Below-Median Income) Mortality Table for Healthy Retirees and the Pub-2010 General (Below-Median Income) Mortality Table for Contingent Survivors, respectively. The tables are projected generationally using the MP-2020 improvement scale and multiplied by the experience- based adjustment factors shown below at all ages for both males and females. The non- disabled factor is 1.13 for males and 0.94 for females. The contingent survivor factor is 1.01 for males and 1.07 for females. Disabled Retirees PSRS: Experience-adjusted Pub-2010 Teacher Disability Mortality Table, projected generationally using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females. Disabled Retirees PEERS: Experience-adjusted Pub-2010 Generational Disability Mortality Table, projected generationally using the MP-2020 improvement scale. Experience adjustments are equal to the healthy retiree experience-based adjustment factors at all ages for both males and females. Changes in Actuarial Assumptions and Methods An experience study was completed in May 2021 resulting in updates to the actuarial assumptions for the June 30, 2021 valuation. There were no further updates to the actuarial assumptions and methods for the June 30, 2022 valuation. Fiduciary Net Position: The Systems issue a publicly available financial report (ACFR) that can be obtained at www.psrs-peers.org. - 54 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Expected Rate of Return The long-term expected rate of return on investments was determined in accordance with Actuarial Standard of Practice (ASOP) No. 27, Selection of Economic Assumptions for Measuring Pension Obligations. ASOP No. 27 provides guidance on the selection of an appropriate assumed rate of return. The long-term expected rate of return on the Systems’ investments was determined using a building-block method in which best-estimate ranges of expected future real rates of returns (expected returns, net of investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Systems’ target allocation as of June 30, 2022 are summarized below. Asset class Target asset allocation Long-term expected real return arithmetic basis U.S. Public Equity % 23.00 % 4.81 Public Credit - 0.80 Hedged Assets 6.00 2.39 Global Equity 16.00 6.88 U.S. Treasuries 15.00 (0.02) U.S. TIPS - 0.29 Private Credit 8.00 5.61 Private Equity 21.00 10.90 Private Real Estate 11.00 7.47 Total % 100.00 - 55 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE G – RETIREMENT PLANS - CONTINUED Actuarial Assumptions - Continued Discount Rate The long-term expected rate of return used to measure the total pension liability was 7.30% as of June 30, 2022, and is consistent with the long-term expected geometric return on plan investments. The actuarial assumed rate of return of 7.30% is consistent with the June 30, 2021 valuations based on the actuarial experience studies conducted during the 2021 fiscal year. The projection of cash flows used to determine the discount rate assumed that employer contributions would be made at the actuarially calculated rate computed in accordance with assumptions and methods stated in the funding policy adopted by the Board of Trustees, which requires payment of the normal cost and amortization of the unfunded actuarially accrued liability in level percent of employee payroll installments over 30 years utilizing a closed period, layered approach. Based on this assumption, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Discount Rate Sensitivity The sensitivity of the District's net pension liabilities to changes in the discount rate is presented below. The District's net pension liabilities calculated using the discount rate of 7.30% is presented as well as the net pension liabilities (assets) using a discount rate that is 1.0% lower (6.30%) or 1.0% higher (8.30%) than the current rate. 1% decrease (6.30%) Current rate (7.30%) 1% increase (8.30%) PSRS Proportionate share of the net pension liability / (asset) $ 80,575,081 $ 42,406,647 $ 10,790,504 PEERS Proportionate share of the net pension liability / (asset) 7,777,735 3,878,246 623,542 NOTE H – DEFERRED COMPENSATION PLANS The District offers its employees a choice of deferred compensation plans created in accordance with Internal Revenue Code Sections 403(b) or 457. These plans, available to all District employees, permit them to defer a portion of their salary until future years. The District makes these plans available to its employees as an accommodation only. The District’s role in connection with the plans is generally limited to processing the paperwork necessary to remit the participant’s salary withholdings (deferrals) to the unrelated financial institution. - 56 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE I – OTHER POSTEMPLOYMENT BENEFITS (OPEB) Plan Description and Benefits Provided In addition to providing the pension benefits described above, the District provides continuation of medical, dental, and vision insurance coverage, including prescription drugs, to employees who are eligible for normal or early retirement under PSRS or PEERS. Retirees and their dependents that elect to participate must pay the premium in effect for the current plan year or any subsequent year at the premium rates in effect at that time. Since retirees pay the premium for each year, the District's share of any premium cost is determined on the basis of a blended rate or implicit rate subsidy calculation. The plan is not accounted for as a trust fund since an irrevocable trust has not been established. A stand-alone financial report is not available for the plan. No assets are accumulated in a trust that meets all of the criteria in GASB Statement No. 75, paragraph 4. Actuarial analysis completed on employees covered by benefit terms at June 30, 2023: Number Average Age Actives 453 46.4 Retired and beneficiaries 207 71.4 Total 660 Contributions The District currently pays for the implicit rate subsidy associated with these postemployment health care benefits on a pay-as-you-go basis. The District determines contribution requirements and they may be amended by the District. - 57 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE I – OTHER POSTEMPLOYMENT BENEFITS (OPEB) - CONTINUED Total OPEB Liability The District’s total OPEB liability of $4,739,694 was measured as of June 30, 2023, and the total liability used to calculate the total OPEB was determined by an actuarial valuation as of June 30, 2022. Actuarial Cost Method: Entry age normal Inflation: 2.40% Salary Increases: 3.00% Discount Rate: 3.65% based on the 20 year Bond GO Index at June 30, 2023. The rate for the prior year was 3.54%. Healthcare Cost Trend Rates: 5.80% for 2022, gradually decreasing to an ultimate rate of 3.70% for 2073 and beyond. Participation: It is assumed that 40% of employees who retire prior to age 65 will elect medical and dental coverage upon retirement. Healthy Mortality Rate: Pub-2010 Teachers Mortality for Employees and Healthy Annuitants, with generational projection per Scale MP-2021. Changes in Total OPEB Liability The components of the total OPEB liability of the District at June 30, 2023 are as follows: Total OPEB Liability Balances as of June 30, 2022 $ 4,439,943 Service cost 223,268 Interest on total OPEB liability 162,045 Changes in assumptions 87,285 Benefit payments (172,847) Balances as of June 30, 2023 $ 4,739,694 - 58 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE I – OTHER POSTEMPLOYMENT BENEFITS (OPEB) - CONTINUED Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the District, as well as what the District’s total OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower and 1 percentage point higher than the current discount rate. 1% decrease (2.65%) Discount rate (3.65%) 1% increase (4.65%) Total OPEB liability $ 5,244,871 $ 4,739,694 $ 4,303,482 Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trends The following presents the total OPEB liability of the District, calculated using the current healthcare cost trend rates as well as what the District’s total OPEB liability would be if it were calculated using trend rates that are 1 percentage point lower or 1 percentage point higher than the current trend rates. 1% decrease Current Trend Rate 1% increase Total OPEB liability $ 4,180,293 $ 4,739,694 $ 5,413,411 - 59 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE I – OTHER POSTEMPLOYMENT BENEFITS (OPEB) - CONTINUED OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the year ended June 30, 2023, the District recognized OPEB expense of $127,712 and deferred inflows of $1,535,644 related to the changes in assumptions and differences between expected and actual experience. The District recognized deferred outflows of $466,810 related to changes in assumptions. Amounts currently reported as deferred outflows and inflows of resources related to other postemployment benefits will be recognized in OPEB expense as follows: Year ending June 30 Net Inflows of Resources 2024 $ (257,601) 2025 (248,232) 2026 (248,644) 2027 (196,128) 2028 (129,392) Thereafter * 11,163 Total $ (1,068,834) * Note that additional future deferred inflows and outflows of resources may impact these numbers. NOTE J – COMMITMENTS AND CONTINGENCIES Grant Audits The District receives federal grants and state funding for specific purposes that are subject to review and audit. These reviews and audits could lead to requests for reimbursement or to withholding of future funding for expenditures disallowed under, or other noncompliance with, the terms of the grants and funding. The District is not aware of any noncompliance with federal or state provisions that might require the District to provide reimbursement. - 60 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE J – COMMITMENTS AND CONTINGENCIES - CONTINUED Protested Taxes Each year St. Louis County remits certain unresolved protested tax payments to the District. When St. Louis County refunds tax payments to those who are successful in their protests, it withholds the refunded amount from future distributions to taxing districts. Future withholdings by St. Louis County are not expected to be material in relation to the District’s financial position and results of operations. NOTE K – JOINT VENTURE The Clayton Recreation, Sports and Wellness Commission, Inc. (the Commission) is a not-for- profit organization which provides a shared use facility to address the athletic and educational needs of the community. The Commission is comprised of two trustees appointed by the District, two trustees appointed by the City of Clayton, and two at-large representatives. The original construction of the project was funded by $5,500,000 of general obligation bonds issued by the District and $11,500,000 of bonds issued by the City of Clayton In 2020, the Commission completed a $10.0 million renovation and improvement project that was funded equally by the District and the City of Clayton. The District entered into a 10-year lease on June 1, 2019, to fund approximately $4.5 million of the project. The remaining $500,000 of the District's portion of the project was funded from the capital project fund. The District and the City of Clayton are each responsible for funding one-half of any operational short-fall of the Commission. The Board must approve the Commission's budget. As of June 30, 2023 the Commission owed the District $61,926 for miscellaneous purchases, shared utilities, and maintenance salaries. Complete financial statements for the Commission can be obtained from the Commission’s administrative office. NOTE L – RISK MANAGEMENT 1. District's Health Insurance Plan The District utilizes an internal service fund to account for the risks associated with the employees’ health insurance plan. A premium is charged to each fund that accounts for employees’ salaries based upon past trends in claims experience. Provisions are also made for unexpected and unusual claims. - 61 - SCHOOL DISTRICT OF CLAYTON NOTES TO THE FINANCIAL STATEMENTS June 30, 2023 NOTE L – RISK MANAGEMENT - CONTINUED 1. District's Health Insurance Plan - Continued Liabilities of the fund are recorded when it is probable that a loss has occurred and the amount of the loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. The District incurred claims of $4,981,321 of which $4,559,547 was paid and $421,774 was unpaid. The District purchases reinsurance to limit exposure to catastrophic claims. Specific stop loss limit insurance restricted the District’s 2022 and 2023 calendar years exposure to $150,000 per member. 2. District's Other Risk The District is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees and natural disasters. To mitigate these risks, the District is a participant in the Missouri United School Insurance Council (MUSIC) which is a Protected Self-Insurance Program of Missouri Public School Districts with over 475 members. The District pays an assessment to MUSIC to cover estimated claims payable and reserves for claims for each entity. Part of the assessment then goes to purchase excess insurance contracts for the group as a whole. Should the contributions received by MUSIC not be sufficient, special assessments can be made to the member districts. There have been no significant changes in insurance coverage from the prior year. - 62 - SCHOOL DISTRICT OF CLAYTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - CASH BASIS - GENERAL FUND - UNAUDITED Year ended June 30, 2023 Budgeted amounts Variances - positive (negative) Original Final Actual (budgetary basis) Original to final Final to actual Revenues Local $ 21,582,080 $ 21,582,080 $ 21,494,287 $ - $ (87,793) County 125,280 125,280 116,473 - (8,807) State 377,030 388,930 401,475 11,900 12,545 Federal 565,420 575,970 826,250 10,550 250,280 Other 2,000 2,000 26,742 - 24,742 Total revenues 22,651,810 22,674,260 22,865,227 22,450 190,967 Expenditures Instruction 3,003,270 3,068,480 2,459,487 (65,210) 608,993 Attendance and guidance 927,120 873,250 831,601 53,870 41,649 Health services 766,320 760,640 720,619 5,680 40,021 Improvement of instruction and professional development 558,940 558,540 418,003 400 140,537 Media services 461,670 466,890 467,508 (5,220) (618) Board of Education services 286,020 286,020 250,739 - 35,281 Executive administration 1,863,850 1,899,590 1,843,733 (35,740) 55,857 Building level administration 1,122,300 1,129,800 1,152,090 (7,500) (22,290) Operation of plant 8,111,630 8,340,870 7,690,782 (229,240) 650,088 Security services 266,760 268,830 291,096 (2,070) (22,266) Nonallowable transportation 230,510 288,210 314,099 (57,700) (25,889) Food services 1,225,180 1,227,340 1,014,924 (2,160) 212,416 Business services 1,095,670 1,046,480 1,070,494 49,190 (24,014) Central office support services 538,520 560,830 487,604 (22,310) 73,226 Adult/community programs 1,226,260 1,212,240 1,151,940 14,020 60,300 Total expenditures 21,684,020 21,988,010 20,164,719 (303,990) 1,823,291 Revenues over (under) expenditures $ 967,790 $ 686,250 $ 2,700,508 $ (281,540) $ 2,014,258 The accompanying notes are an integral part of this statement. - 64 - SCHOOL DISTRICT OF CLAYTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - CASH BASIS - SPECIAL REVENUE FUND - UNAUDITED Year ended June 30, 2023 Budgeted amounts Variances - positive (negative) Original Final Actual (budgetary basis) Original to final Final to actual Revenues Local $32,351,780 $32,351,780 $34,112,980 $ - $ 1,761,200 County 254,600 254,600 260,134 - 5,534 State 1,868,190 1,868,190 1,962,457 - 94,267 Federal 157,330 298,580 149,801 141,250 (148,779) Other 2,000 2,000 - - (2,000) Total revenues 34,633,900 34,775,150 36,485,372 141,250 1,710,222 Expenditures Instruction Instruction 29,753,650 29,879,290 29,155,150 (125,640) 724,140 Attendance and guidance 1,485,810 1,485,810 1,372,781 - 113,029 Health services 133,890 133,890 203,497 - (69,607) Improvement of instruction and professional development 1,185,950 1,191,700 1,222,753 (5,750) (31,053) Media services 554,920 554,920 560,187 - (5,267) Executive administration 1,271,300 1,271,300 1,294,462 - (23,162) Building level administration 1,646,060 1,646,060 1,711,528 - (65,468) Business services 111,040 54,210 - 56,830 54,210 Central office support services 580 3,940 3,936 (3,360) 4 Adult/community programs 3,480 3,480 3,528 - (48) Total expenditures 36,146,680 36,224,600 35,527,822 (77,920) 696,778 Revenues over (under) expenditures $(1,512,780)$(1,449,450)$ 957,550 $ 63,330 $ 2,407,000 The accompanying notes are an integral part of this statement. - 65 - SCHOOL DISTRICT OF CLAYTON NOTES TO REQUIRED SUPPLEMENTARY INFORMATION June 30, 2023 NOTE A – BUDGETS AND BUDGETARY ACCOUNTING The District follows these procedures in establishing the budgetary data reflected in the financial statements: In accordance with Chapter 67, RSMo, the District adopts a budget for each fund. Prior to July, the Superintendent, who serves as the budget officer, submits to the Board a proposed budget for the fiscal year beginning on the following July 1. The proposed budget includes estimated revenues and proposed expenditures for all District funds. Budgeted expenditures cannot exceed beginning available monies plus estimated revenues for the year. A public hearing is conducted to obtain taxpayer comments. Prior to its approval by the Board, the budget document is available for public inspection. Prior to July 1, the budget is legally enacted by a vote of the Board. Subsequent to its formal approval of the budget, the Board has the authority to make necessary adjustments to the budget by formal vote of the Board. For each fund, total fund expenditures may not legally exceed final amended budgeted expenditures. Expenditure appropriations lapse at the end of the fiscal year. Budgeted amounts are as originally adopted on June 1, 2022, or as amended by the Board at various times during the year. Budgets are adopted on the cash basis of accounting for all governmental funds. The cash basis is used to enable the District to more accurately budget revenue and expenses as the resources are expended or received. - 66 - SCHOOL DISTRICT OF CLAYTON NOTES TO REQUIRED SUPPLEMENTARY INFORMATION June 30, 2023 NOTE A – BUDGETS AND BUDGETARY ACCOUNTING - CONTINUED The following schedule reconciles the revenue and expenditures on the budgetary basis of accounting (cash basis) with the amounts presented under the modified accrual basis of accounting: General Fund Special Revenue Fund Revenues Revenues - cash basis $ 22,865,227 $ 36,485,372 Current year revenue accruals (391,343) 381,515 Prior year revenue accruals 496,594 (257,317) Revenues - modified accrual basis $ 22,970,478 $ 36,609,570 Expenditures Expenditures - cash basis $ 20,164,719 $ 35,527,822 Current year expenditure accruals 230,661 88,794 Prior year expenditure accruals (11,060) (135,478) Expenditures - modified accrual basis $ 20,384,320 $ 35,481,138 - 67 - SCHOOL DISTRICT OF CLAYTON NET PENSION LIABILITY - UNAUDITED Year ended June 30, 2023 Schedule of Proportionate Share of the Net Pension Liability and Related Ratios – PSRS Year ended* Proportion of the Net Pension Liability (Asset) Proportionate share of the Net Pension Liability (Asset) Actual member payroll Net Pension Liability (Asset) as a percentage of covered payroll Fiduciary Net Position as a percentage of total pension liability 6/30/2014 % 0.5208 $ 21,366,213 $ 23,616,628 % 90.47 % 89.34 6/30/2015 % 0.5256 30,342,153 24,305,850 % 124.83 % 85.78 6/30/2016 % 0.5421 40,335,757 25,587,013 % 157.64 % 82.18 6/30/2017 % 0.5510 39,790,604 26,583,036 % 149.68 % 83.77 6/30/2018 % 0.5512 41,022,820 27,049,379 % 151.00 % 84.06 6/30/2019 % 0.5515 40,701,088 27,606,008 % 147.44 % 84.62 6/30/2020 % 0.5488 49,011,771 27,895,612 % 175.70 % 82.01 6/30/2021 % 0.5532 12,246,618 29,001,748 % 42.23 % 95.81 6/30/2022 % 0.5483 42,406,647 29,420,226 % 144.14 % 86.04 Schedule of Proportionate Share of the Net Pension Liability and Related Ratios – PEERS Year ended* Proportion of the Net Pension Liability (Asset) Proportionate share of the Net Pension Liability (Asset) Actual member payroll Net Pension Liability (Asset) as a percentage of covered payroll Fiduciary Net Position as a percentage of total pension liability 6/30/2014 % 0.5233 $ 1,910,913 $ 7,630,413 % 25.04 % 91.33 6/30/2015 % 0.5044 2,667,803 7,563,393 % 35.27 % 88.28 6/30/2016 % 0.5122 4,109,561 7,908,987 % 51.96 % 83.32 6/30/2017 % 0.5064 3,863,583 8,137,380 % 47.48 % 85.35 6/30/2018 % 0.4976 3,845,017 8,279,018 % 46.44 % 86.06 6/30/2019 % 0.4942 3,908,930 8,571,837 % 45.60 % 86.38 6/30/2020 % 0.4788 4,647,029 8,615,269 % 53.94 % 84.06 6/30/2021 % 0.4700 506,154 8,612,957 % 5.88 % 98.36 6/30/2022 % 0.4589 3,878,246 8,957,602 % 43.30 % 87.92 - 68 - SCHOOL DISTRICT OF CLAYTON NET PENSION LIABILITY - UNAUDITED Year ended June 30, 2023 Schedule of Employer Contributions - PSRS Year ended Contractually required contribution Actual employer contributions Contributions excess / (deficiency) Covered payroll Contributions as a percentage of covered payroll 6/30/2014 3,353,834 3,353,834 - 23,616,628 % 14.20 6/30/2015 3,450,675 3,450,675 - 24,305,850 % 14.20 6/30/2016 3,631,138 3,631,138 - 25,587,013 % 14.19 6/30/2017 3,768,984 3,768,984 - 26,583,036 % 14.18 6/30/2018 3,843,008 3,843,008 - 27,049,379 % 14.21 6/30/2019 3,925,649 3,925,649 - 27,606,008 % 14.22 6/30/2020 3,972,917 3,972,917 - 27,895,612 % 14.24 6/30/2021 4,119,889 4,119,889 - 29,001,748 % 14.21 6/30/2022 4,187,826 4,187,826 - 29,420,226 % 14.23 6/30/2023 4,292,939 4,292,939 - 30,231,965 % 14.20 Schedule of Employer Contributions - PEERS Year ended Contractually required contribution Actual employer contributions Contributions excess / (deficiency) Covered payroll Contributions as a percentage of covered payroll 6/30/2014 523,447 523,447 - 7,630,413 % 6.86 6/30/2015 518,849 518,849 - 7,563,393 % 6.86 6/30/2016 542,557 542,557 - 7,908,987 % 6.86 6/30/2017 558,224 558,224 - 8,137,380 % 6.86 6/30/2018 567,941 567,941 - 8,279,018 % 6.86 6/30/2019 588,545 588,545 - 8,571,837 % 6.87 6/30/2020 591,055 591,055 - 8,615,269 % 6.86 6/30/2021 590,848 590,848 - 8,612,957 % 6.86 6/30/2022 614,532 614,532 - 8,951,574 % 6.87 6/30/2023 642,436 642,436 - 9,364,956 % 6.86 Note: These schedules are intended to show information for ten years. Additional years will be displayed as they become available. *The data provided in the schedules is based as of the measurement date of the System's net pension liability, which is as of the beginning of the District's fiscal year. - 69 - SCHOOL DISTRICT OF CLAYTON SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS Year ended June 30, 2023 2023 2022 2021 2020 2019 2018 Total OPEB liability Service Cost $ 223,268 $ 279,827 $ 289,758 $ 216,081 $ 264,514 $ 270,318 Interest on total OPEB liability 162,045 119,350 116,915 205,795 213,641 199,304 Effect of economic / demographic gains or losses - (467,164) - (1,530,458) - - Changes in assumptions 87,285 (656,501) 29,005 657,732 211,954 (160,959) Benefit payments (172,847) (161,586) (219,114) (205,185) (357,661) (341,928) Net change in total OPEB liability 299,751 (886,074) 216,564 (656,035) 332,448 (33,265) Total OPEB liability at beginning of year 4,439,943 5,326,017 5,109,453 5,765,488 5,433,040 5,466,305 Total OPEB liability at end of year $ 4,739,694 $ 4,439,943 $ 5,326,017 $ 5,109,453 $ 5,765,488 $ 5,433,040 - Covered Payroll $ 34,870,296 $ 34,016,844 $ 33,349,789 $ 32,481,736 $ 32,341,024 $ 31,688,037 Total OPEB liability as a percentage of covered payroll % 13.59 % 13.05 % 15.97 % 15.73 % 17.83 % 17.15 Note: This schedule is to present information for 10 years. Additional years will be presented as they become available. Plan Assets No assets are accumulated in a trust that meets all of the following criteria of GASB Statement No. 75, paragraph 4, to pay benefits: Contributions from the employer and any nonemployer contributing entities, and earnings thereon, must be irrevocable. Plan assets must be dedicated to providing OPEB to plan members in accordance with the benefit terms. Plan assets must be legally protected from the creditors of the employer, nonemployer contributing entities, the plan administrator, and plan members. - 70 - SCHOOL DISTRICT OF CLAYTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - CASH BASIS - DEBT SERVICE FUND Year ended June 30, 2023 Budgeted amounts Variances - positive (negative) Original Final Actual (budgetary basis) Original to final Final to actual Revenues Local $ 8,211,460 $ 8,211,460 $ 8,640,587 $ - $ 429,127 County 180,000 180,000 181,701 - 1,701 Federal 176,330 176,330 176,332 - 2 Total revenues 8,567,790 8,567,790 8,998,620 - 430,830 Expenditures Debt service: Principal retirements 4,920,000 4,920,000 4,920,000 - - Interest and other charges 1,600,030 1,600,030 1,595,483 - 4,547 Total expenditures 6,520,030 6,520,030 6,515,483 - 4,547 Revenues over expenditures $ 2,047,760 $ 2,047,760 $ 2,483,137 $ - $ 435,377 Reconciliation of budgetary (cash) basis of accounting to modified accrual basis of accounting Revenues per above - cash basis $ 8,998,620 Current year revenue accruals 6,505 Prior year revenue accruals (11,427) Revenues - modified accrual basis $ 8,993,698 Expenditures per above - cash basis $ 6,515,483 Expenditures - modified accrual basis $ 6,515,483 - 72 - SCHOOL DISTRICT OF CLAYTON SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - CASH BASIS - CAPITAL PROJECTS FUND Year ended June 30, 2023 Budgeted amounts Variances - positive (negative) Original Final Actual (budgetary basis) Original to final Final to actual Revenues Local $ 5,180,210 $ 5,180,210 $ 6,050,969 $ - $ 870,759 County 35,940 35,940 117,887 - 81,947 Other 30,000 30,000 25,757 - (4,243) Total revenues 5,246,150 5,246,150 6,194,613 - 948,463 Expenditures Instruction 614,040 1,021,970 841,224 407,930 180,746 Board of Education services - 3,350 1,280 3,350 2,070 Executive administration 347,230 217,180 92,846 (130,050) 124,334 Building level administration 50,000 60,030 60,000 10,030 30 Operation of plant 1,001,860 3,765,150 2,545,256 2,763,290 1,219,894 Security services 10,000 2,865,630 2,811,464 2,855,630 54,166 Food services 10,000 26,380 20,365 16,380 6,015 Business services 182,500 170,270 - (12,230) 170,270 Central office support services - 2,200 2,110 2,200 90 Adult/community programs 13,730 43,020 36,351 29,290 6,669 Facilities acquisition and construction 54,380 54,380 54,380 - - Debt service: Principal retirements 445,620 445,620 445,620 - - Interest and other charges 91,100 91,100 91,093 - 7 Total expenditures 2,820,460 8,766,280 7,001,989 5,945,820 1,764,291 Revenues over (under) expenditures $ 2,425,690 $ (3,520,130) $ (807,376) $ 5,945,820 $ (2,712,754) Reconciliation of budgetary (cash) basis to modified accrual basis of accounting Revenues per above - cash basis $ 6,194,613 Current year revenue accruals 62,795 Prior year revenue accruals (4,605) Revenues - modified accrual basis $ 6,252,803 Expenditures per above - cash basis $ 7,001,989 Current year expenditure accruals 295,481 Prior year expenditure accruals (281,902) Expenditures - modified accrual basis $ 7,015,568 - 73 - ANNUAL FINANCIAL INFORMATION AND OPERATING DATA – Unaudited SCHOOL DISTRICT OF CLAYTON ANNUAL FINANCIAL INFORMATION AND OPERATING DATA - UNAUDITED Year ended June 30, 2023 The following information is included to meet certain disclosure compliance requirements related to bonds issued by the District. Bond Issuance Information Name of Issuer: School District of Clayton, St. Louis County, Missouri Dates of Issuance: Oct. 14, 2009; Sept. 08, 2010; Dec. 27, 2017; Dec. 5, 2019 Relating to CUSIP Nos.: Series 2009A Series 2010A Series 2017 Series 2019 FG6 GC4 GY6 184270 JM9 184270 KP0 184270 KY1 FH4 GD2 GZ3 184270 KQ8 184270 KZ8 FJ0 GE0 HA7 184270 KR6 184270 LA2 FK7 GF7 HB5 184270 KS4 184270 LB0 FL5 GG5 HC3 184270 KT2 184270 LC8 FM3 GH3 HD1 184270 KU9 184270 LD6 FN1 GJ9 HE9 184270 KV7 184270 LE4 FP6 GK6 HF6 184270 KW5 184270 LF1 FQ4 GL4 HG4 184270 KX3 184270 LG9 FR2 GM2 HH2 FS0 GN0 HJ8 FT8 GP5 HK5 FU5 GQ3 HL3 FV3 GR1 HM1 FW1 GS9 HN9 FX9 GT7 HP4 FY7 GU4 HQ2 FZ4 GV2 HR0 GA8 GW0 HS8 GB6 GX8 HT6 - 75 - SCHOOL DISTRICT OF CLAYTON ANNUAL FINANCIAL INFORMATION AND OPERATING DATA - UNAUDITED Year ended June 30, 2023 History of Enrollment Listed below are the District's Fall enrollment figures for the last four and current school years: Grade 18-19 19-20 20-21 21-22 22-23 K 153 139 143 146 130 1st 164 160 143 150 153 2nd 190 167 157 159 162 3rd 192 201 167 160 166 4th 188 177 196 163 165 5th 194 192 174 188 170 6th 219 200 205 171 200 7th 242 226 202 206 170 8th 210 251 221 188 208 9th 226 214 248 215 185 10th 237 223 212 242 216 11th 227 240 220 207 243 12th 210 229 236 217 200 Total 2,652 2,619 2,524 2,412 2,368 Sources of Revenue The following table shows the allocation of the District's revenue from the various sources for the fiscal year ended June 30, 2023: Revenue Source % of Total Local Revenue % 93.85 County Revenue 0.95 State Revenue 3.16 Federal Revenue 1.96 Other Revenue 0.08 Total % 100.00 - 76 - SCHOOL DISTRICT OF CLAYTON ANNUAL FINANCIAL INFORMATION AND OPERATING DATA - UNAUDITED Year ended June 30, 2023 Sources of Revenue by Fiscal Year The following table shows the District's sources of revenues for the fiscal years shown below: Fiscal Year Ended June 30 Local Revenue County Revenue State Revenue Federal Revenue Other Revenue Total Revenue 2019 $ 53,169,996 $ 525,825 $ 1,742,804 $ 1,635,582 $ 357,047 $ 57,431,254 2020 70,058,342 610,998 1,716,291 1,237,578 32,968,655 a 106,591,864 2021 61,835,038 613,816 1,710,141 1,826,198 116,958 66,102,151 2022 69,305,093 633,758 2,198,582 2,144,249 71,050 74,352,732 2023 70,171,316 708,616 2,363,931 1,468,009 57,962 74,769,834 a Includes proceeds from the sale of refunded bonds. Property Tax Information The following table provides the history of total assessed valuation of all taxable tangible property situated in the District, according to the assessments of January 1, in the calendar years shown below: Calendar Year Assessed Valuation % Change 2018 1,136,240,380 N/A 2019 1,309,893,760 % 15.28 2020 1,316,001,870 % 0.47 2021 1,349,562,370 % 2.55 2022 1,379,835,110 % 2.24 - 77 - SCHOOL DISTRICT OF CLAYTON ANNUAL FINANCIAL INFORMATION AND OPERATING DATA - UNAUDITED Year ended June 30, 2023 Tax Rates The following table shows the adjusted tax rates (per $100 of assessed valuation) levied against each subclass of property for the current fiscal year and the last three fiscal years for the District: Fiscal Year Ended June 30 Real Estate Residential Real Estate Commercial Real Estate Agricultural Personal Property 2020 $ 4.1553 $ 4.9562 $ - $ 4.5567 2021 4.1527 4.7354 - 4.5567 2022 4.0373 4.7658 - 4.5567 2023 4.0326 4.7645 - 4.5567 Tax Rates – Allocation by Fund The following table shows the District’s adjusted tax levies (per $100 of assessed valuation) for each of the following fiscal years: Fiscal Year Ended June 30 General (Incidental) Fund Special Revenue (Teachers') Fund Capital Projects (Building) Fund Debt Service Fund Total Levy - Blended Rate 2019 $ 1.0555 $ 2.0770 $ 0.1100 $ 0.6230 $ 3.8655 2020 1.2732 2.5030 0.1000 0.6230 4.4992 2021 1.2499 2.3530 0.1875 0.6230 4.4134 2022 1.1483 2.3321 0.2500 0.6230 4.3534 2023 1.1024 2.2362 0.3900 0.6230 4.3516 - 78 - SCHOOL DISTRICT OF CLAYTON ANNUAL FINANCIAL INFORMATION AND OPERATING DATA - UNAUDITED Year ended June 30, 2023 Tax Collection Record The following table sets forth tax collection information for the District for the last five fiscal years: Total Levy Current Taxes Collected Current and Delinquent Taxes Collected Fiscal Year (per $100 of Assessed Value) Assessed Valuation Total Taxes Levied Amount % Amount % 2018-19 3.8655 $ 1,136,240,380 $ 43,262,551 $ 43,046,572 % 99.50 $ 42,500,328 % 98.24 2019-20 4.4992 1,309,893,760 58,050,719 57,882,064 % 99.71 58,517,417 % 100.80 2020-21 4.4134 1,316,001,870 57,209,220 56,469,791 % 98.71 56,209,478 % 98.25 2021-22 4.3534 1,349,562,370 57,870,570 59,245,361 % 102.38 57,931,114 % 100.10 2022-23 4.3516 1,379,835,110 59,144,231 58,641,604 % 99.15 58,850,880 % 99.50 Major Property Taxpayers The ten largest real property taxpayers in the District according to their 2022 assessed valuations are listed below: Taxpayer Assessed Valuation % of District's 2022 Total Assessed Valuation 1. City of Clayton $ 48,398,840 % 3.51 2. LCP Forsyth Blvd Property Owner LLC 30,400,000 % 2.20 3. Clayton Franklin Clayton Plaza LLC 23,914,880 % 1.73 4. Prime US 101 South Hanley LLC 22,176,670 % 1.61 5. Clayton Corporate Park Management Co 19,460,580 % 1.41 6. Clayton Central Owner LLC 16,571,200 % 1.20 7. BLR Properties LLC 15,950,710 % 1.16 8. Shaw Park Plaza LLC 15,126,950 % 1.10 9. St. Louis Galleria LLC 14,978,390 % 1.09 10. 8182 Maryland Associates 13,108,830 % 0.95 220,087,050 % 15.96 - 79 -