1. 1 KG:jd 8/06/2013

2. Soft Capital Textbooks, Technology, Vehicles State Funds & Local Primary Tax - 70% legislative cut FY11, 100% cut FY12, 58% cuts in FY13 and FY14 Flagstaff Unified School District FY 2013 Budget Sources $85M Voter Approved Override (M&O ) Approved Mar 2010. Full Funding: SY10-11 through SY14-15 Renewal Date - Nov. 2014 Local Secondary Tax M&O uses CAVIAT Voter approved CTE programs M&O uses Maintenance and Operations Includes Career Ladder & Desegregation State Funds + Local Primary Tax Unrestricted Capital State Funds + Local Primary Tax 58% reduced in FY13 & FY14 M&O uses Some M&O uses possible Building Renewal Used for building maintenance, repair, & upkeep (Removed from Statutes in 2013) State Funds (legislative cut - no funds for 4 years) Voter Approved Capital Override $2.2M per year for five years: SY08-09 through SY12-13 Override not renewed Local Secondary Tax Restricted Other Local Tax Funding Adjacent Ways Voter Approved Bonds (Capital) Bond Revenue & Debt Service Nov. 2012 - $20.79M approved Local Secondary Tax Restricted Miscellaneous Grants, Tax Credits Includes district, school, program, classroom level grants State Projects A variety of projects Restricted Other Special Cash Accounts- Indirect, Civic Center, etc. Used for General Operations - M&O Support M&O uses Targeted Federal Projects Various Title Funds, IDEA Restricted One-time Federal Funds Educational Jobs Fund - FY11 & FY12 (Retained M&O positions for two years) Restricted 2

3. 3 Flagstaff Unified School District #1 Comparison of Overall Budgets FY 2011, FY 2012, FY 2013 & FY 2014 Budget Area FY 2011 Amt.FY 2012 Amt. FY 2013 Amt. FY 2014 (Est.) I. Total M&O Budget$67,800,000$63,600,000$61,200,000$61,300,000 II. Vocational JTED Fund (596-Tchr cost only)400,000500,000700,000 III. Prop 301 Funds1,200,0001,400,0001,600,0002,000,000 IV. Instructional Improvement Fund400,000 450,000 V. Major Federal Grants7,000,0004,750,0004,500,0004,000,000 VI. Capital Outlay Budgets A. Unrestricted Capital Outlay (610)3,800,0003,500,0002,900,0001,400,000 B. Capital Outlay Override (611)2,700,0002,200,000900,000840,000 C. Soft Capital (625)800,000200,000350,0000 VII. Adjacent Ways900,000790,000750,000 Sub Total for General & Capital Outlay$85,000,000$77,340,000$73,300,000$71,440,000 VIII. Debt Service4,300,0005,200,0005,100,0005,700,000 Grand Totals $89,300,000 $82,540,000 $78,400,000 $77,140,000

4. 4 Flagstaff Unified School District #1 History of State Equalization Aid to FUSD Fiscal YearAmount of Aid% of Rev. Control Limit 2014 (not final) $ 7,600,00015.8% 2013 $ 6,794,96714.3% 2012 $ 9,992,79520.1% 2011 $ 14,078,32827.5% 2010 $ 22,637,09840.6% 2009 $ 25,014,48243.9% 2008 $ 27,790,67748.3% 2007 $ 25,400,09646.8% 2006 $ 23,375,38246.1%

5. 5 Flagstaff Unified School District #1 History of State Equalization Aid to FUSD Note: The % figure = State Equalization Aid ÷ Revenue Control Limit (RCL)

6. 6 Flagstaff Unified School District # 1 State Qualifying Tax Rate (QTR) History for 10 Fiscal Years Fiscal Year (FY)Qualifying Tax Rate (QTR)*Tax Rate Change% of Change 2014$4.3339$0.31637.9% 2013$4.0176$0.34529.4% 2012$3.6724$0.513016.2% 2011$3.1594$0.21427.3% 2010$2.9452-$0.1984-6.3% 2009$3.1436-$0.2804-8.2% 2008$3.4240-$0.3348-8.9% 2007$3.7588-$0.0792-2.1% 2006$3.8380-$0.1564-3.9% 2005$3.9944 *The QTR's are for FUSD and include Career Ladder, which ranges from $ 0.24 to $ 0.08 (2014) additional per year.

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8. 8 Flagstaff Unified School District #1 District Property Tax Rates 2003-2014 for 12 Fiscal Years Fiscal Year Primary TaxSecondary TaxTotal 2014-Est. $3.99$1.20$5.19 2013 $3.66$1.21$4.87 2012 $3.73$1.21$4.94 2011 $3.63$1.05$4.68 2010 $3.14$0.74$3.88 2009 $3.61$1.22$4.83 2008 $3.48$1.29$4.77 2007 $4.40$1.50$5.90 2006 $4.30$1.78$6.08 2005 $3.98$1.74$5.72 2004 $4.85$1.52$6.37 2003 $5.98$1.44$7.42

9. 9 Flagstaff Unified School District #1 District Property Taxes 2003 - 2014

10. 10 Flagstaff Unified School District #1 Assessed Valuations Last 10 Fiscal Years Fiscal Year Primary Assessed Valuation % of Change Secondary Assessed Valuation % of Change 2014$1,035,897,607-13.7%$1,034,382,290-13.8% 2013$1,200,840,727-2.8%$1,200,403,857-4.1% 2012$1,234,921,625-6.7%$1,251,920,817-10.8% 2011$1,324,013,7124.7%$1,403,781,932-5.0% 2010$1,264,349,89310.0%$1,478,020,7014.5% 2009$1,149,388,30012.3%$1,414,083,72819.7% 2008$1,023,399,94311.2%$1,181,358,09419.3% 2007$920,184,2298.9%$989,865,17912.3% 2006$845,202,7558.5%$881,539,4568.3% 2005$779,039,895 $813,853,273

11. 11 Flagstaff Unified School District #1 Tax Rate Projections - Primary & Secondary - for August 2013 Levy (FY 2014) Tax Rate Categories FY 2013 Tax Rates FY 2014-Projected Tax Rates Projected Differences Primary Tax Rates: Maintenance & Operation$3.6182$3.9803+$0.3621 Unrestricted C.O.$0.0000 +$0.0000 Soft Capital$0.0000 Adjacent Ways$0.0459$0.0096-($0.0363) Total Primary Tax Rate3.6641*$3.9899+$0.3258 Secondary Tax Rates: Overrides$0.7959$0.7061-($0.0898) Debt Service$0.4112$0.4979+$0.0867 Total Secondary Tax Rate$1.2071$1.2040 -$0.0031 Totals for FUSD Primary & Secondary Tax Rates$4.8712$5.1939+$0.3227 *Homeowners who have a primary residence elsewhere in Arizona lost the homeowner's rebate for taxes in FY 2013. The affidavit sent out to second homeowners required that they select a primary residence, so many of these owners may have seen an increase in their property taxes of up to $600.

12. 12 Comparison of FUSD TAXES for FY 2012, FY 2013 and FY 2014 Projected Taxes $200,000 House FY 2012 $200,000 House FY 2013 $200,000 House FY 2014 FUSD Tax Type Tax Rate Taxes Tax Rate Taxes Tax RateTaxes FUSD Primary Tax$3.73$746.00 $3.66$732.00 $3.99$798.00 FUSD Secondary Tax$1.21$242.00 $1.21$242.00 $1.20$240.00 Total Rates and Taxes$4.94$988.00 $4.87$974.00 $5.19$1,038.00 If House Decreased in Value:From FY 2012 to FY 2013 From FY 2013 to FY 2014 If House Decreased in Value… 5% 2013 Taxes for FUSD$925 2014 Taxes for FUSD$986 If House Decreased in Value… 10% 2013 Taxes for FUSD$877 2014 Taxes for FUSD$934 If House Decreased in Value… 15% 2013 Taxes for FUSD$828 2014 Taxes for FUSD$882 *School Districts are limited by State government to a regulated budget capacity/spending authority. Budget capacity is supported by cash from State aid and property taxes. Cash balances are important in setting each year's levy.