1. WELCOME TO THE 2008-09 BUDGET HEARING AND ANNUAL MEETING OF THE SCHOOL DISTRICT OF SOUTH MILWAUKEE

3. THE 2008-09 SCHOOL YEAR  Continue work to improve academic achievement through high standards and rigorous curriculum.  $713,277 in reductions - the gap between revenues and expenditures.  Estimated mill rate of $9.47 using an estimated equalized valuation increase of 6%. The average over the last three years has been 8%. The final valuation will be received in October and the mill rate will be finalized at that time.  If the equalized values come in above the 6% estimate, the mill rate will decrease.  If the equalized values come in below the 6% estimate, the mill rate will increase.

4. WHY $713,277 IN REDUCTIONS? (The Gap Between Revenues & Expenditures)  Revenue limits control the total amount of taxes and general state aid a school district can collect.  State mandates and guidelines often limit the District’s ability to balance the budget.

5. FUTURE BUDGETS  As long as revenue limits are in place and expenses increase at a greater rate than revenues, the district will be facing a budget gap.  We expect to see continued reductions for the 2009-10 school year.  Continue review of long-term financial and budget planning.

6. 2008-09 REDUCTION SUMMARY  The $713,277 gap between revenue and expenditures was addressed as follows:  Staff reductions and department restructuring.  Grant funding changes.  Utility and custodial overtime transfers to Fund 80.  Retirement and resignation savings.  Budget reductions in supplies, equipment and travel for all schools and departments.  Use of 2007-08 declining enrollment exemption change.

7. DescriptionAmountTotals Initial Revenue Assumptions: Revenue Cap Increase522,552 Special Education Aid Increase29,420 Total Revenue Increase 551,972 Initial Expenditure Assumptions: Salary/Benefits/Lane Movement/Retiree Health(1,205,916) Utilities(43,590) District Insurance(15,743) Total Expenditure Increase (1,265,249) Total Budget Adjustment (713,277) 2008-09 Budget Assumptions February 27, 2008 - APPROVED

8. 2008-09 Budget Assumptions February 27, 2008 – APPROVED (continued) DescriptionAmountTotals Proposed Expenditure Reductions: 1.0 FTE HS Family & Consumer Ed Position62,600 1.0 FTE HS Art Position66,650 1.0 FTE HS Business Education Position52,490.33 FTE HS English Position28,880 1.0 FTE Band Teacher Position64,620 1.0 Elementary Teacher Position62,600.80 FTE Speech & Language Teacher Position (no $ impact)0 Eliminate Additional Days for Technology Integration5,665 Revise Title 1 Funding and Duties10,250 Reduce two 2.5 Hour/Day MS Classroom Aide Positions14,280 Reduce one 6 Hour/Day High School PASS Aide Position18,250 Remove Additional Staff from HS Swim Unit5,075 Reduce/Restructure Business Office Staff27,950 Reduce one 6 Hour/Day MS At-Risk Aide Position (no $ impact)0 Reduce Secretarial Overtime Budget12,000 Reduce Various Fund 10 Budgets60,247 Transfer Custodial/Supply/Utility Costs to Fund 80 10,995 Reduce Staffing Costs due to Retirements/Resignations 110,000 Reduce IMC Equipment Budget3,000 Potential Savings from Dental/Life/LTD Employee Ins Change25,000 Total Budget Reductions 640,552

9. 2008-09 Budget Assumptions February 27, 2008 – APPROVED (continued) DescriptionAmountTotals Total Budget Adjustment (from prior slide) (713,277) Total Budget Reductions (from prior slide) 640,552 Prior Year Revenue not Expended: Use of 2007-08 Declining Enrollment Exemption 93,300 Total Use of Fund Balance93,300 Budget Additions: Increase Substitute Rate of Pay(25,000) Increase Substitute Paraprofessional Aide Rate of Pay(5,000) Revise Luther Faculty Secretary 1 Hour and Remove Cashier Duties(4,380) Total Budget Additions(34,380) Variance(13,805)

10. DescriptionAmountTotals February 27, 2008 - Approved Variance (13,805) Per Pupil Increase from $270 to $274.6814,649 Transfer of Service37,022 Special Education Aid(13,338) Potential Savings from Dental/Life/LTD Employee Insurance Change(25,000) Interest Revenue(15,000) Open Enrollment Net In/Out Net Regular126,147 Open Enrollment Net In/Out SPED(56,608) Teacher.10 FTE Increase (Spanish)(7,252) Teacher.33 FTE Increase (Math/Science Overloads)(13,000) Aide 12 hours/week Increase (Blakewood EC)(7,382) Teacher.33 FTE Increase (High School Spanish Overload)(13,000) Teacher.17 FTE Increase (High School Science Overload)(6,500) Aide 3 hours/week Increase (Blakewood 5 th Grade) (1,827) Total Adjustments 18,910 Adjusted Variance 5,105 Continue to Monitor: Staffing Costs due to Retirements/Resignations Blakewood 5th Grade Class (transfer current aide and inc hrs from 17 to 20) Lakeview 5k and 1st Grade Occupational Therapy FTE 2008-09 Budget Assumptions September 3, 2008 - RECONCILIATION

11. THE BIG PICTURE 1. TOTAL FUND 10 & 27 NET BUDGET 2007-082008-09 $ Inc/(Dec)% Inc/(Dec) $ 34,763,264 $ 35,690,855 $ 927,5912.7% 2. THE TOTAL TAX LEVY FUND EXPENDITURE BUDGETS ARE INCREASING 2.9 % 2007-08 2008-09 $ Inc/(Dec)% Inc/(Dec) GENERAL FUND $ 32,807,152 $ 33,695,709 $ 888,5572.71% DEBT SERVICE $ 4,590,335 $ 4,656,417 $ 66,0821.44% COMMUNITY SERVICE $ 878,521 $ 1,039,717 $ 161,19618.35% TOTAL $ 38,276,008 $ 39,391,843 $ 1,115,8352.9% 3. THE TOTAL PROPERTY TAX LEVY IS INCREASING BY 6.6% 2007-08 2008-09 $ Inc/(Dec)% Inc/(Dec) GENERAL FUND $ 7,702,460 $ 8,433,495 $ 731,0359.49% DEBT SERVICE $ 4,191,582 $ 4,242,032 $ 50,4501.20% COMMUNITY SERVICE $ 525,420 $ 561,768 $ 36,3486.92% TOTAL $ 12,419,462 $ 13,237,295 $ 817,8336.6%

12. 1. Salaries $773,731 2. Benefits $423,183 3. Purchased Services $45,851 4. Supplies ($58,855) 5. Capital Objects ($302,612) 6. District Insurance $21,780 7. Interfund Transfers $13,954 8. Debt Retirement & Other $10,559 TOTAL EXPENDITURE INCREASE $927,591 TOTAL Costs $34,763,264 $35,690,855 + $927,591 (Fund 10 & 27) 2.7% 2007-08 Unaudited 2008-09 Proposed Inc/(Dec) 2008-09 Budget Increase Summary

13. Mill Rate Comparison 2007-08

14. Mill Rate History

15. Tax Levy History All Funds

16. 2008-09 REVENUE SOURCES State$23,372,429 Property Taxes$8,969,485 Open Enroll/Tuition$1,672,633 Other$168,500 Federal$1,414,508 $35,597,555 Revenue Budget Summary Fund 10 & 27

17. 2008-09 Expenses by Object Salaries$21,000,526 Benefits$9,402,145 Purchased Svcs.$2,760,241 Supplies$1,223,988 Capital Objects$299,303 District Insurance$322,325 Interfund Transfers$348,925 Debt Retirement/Other$333,402 Total $35,690,855 85.1% Expenditure Budget Summary Fund 10 & 27

18. Staffing Summary 2007-08 Total FTE 2008-09 Reduced 2008-09 Increased Approved 2008-09 FTE's Teachers237.92(6.63)1.93233.22 Admin17.000.00 17.00 Support14.40(0.50)0.2014.10 Aides30.21(2.43)1.8629.64 Clerical23.000.00 23.00 Custodial19.000.00 19.00 BSH16.190.00 16.19 Total357.72(9.56)3.99352.15

19. SUMMARY  Staff and expenditure reductions made primarily due to revenue limits and declining enrollments.  Projected mill rate of $9.47 – final adjustment in October after 3 rd Friday enrollment count, final certification of state aid and property valuation.  Rising costs of insurance and utility costs will continue even with controls.  Future state legislation uncertain.  2009-10 will likely see another year of reductions.

20. Questions & Answers