Anderson Community School Corporation Madison County, Indiana 2015 Proposed Budget Executive Summary and Supplemental Graphs Scheduled Hearing: August 12, 2014 Scheduled Adoption: September 9, 2014

Anderson Community School Corporation 2015 Budget Assumptions Continued weak enrollment. Net impact on revenue: slight reduction in the General Fund. Class sizes to remain within the unchanged contractual limitations. Assessed valuation expected to stabilize towards an increasing trend. (actual data for 2015 unavailable from Madison County). Tax collections rate same as recent historical collections. State support disbursements tied directly to student enrollment. Circuit Breaker losses as forecast by the legislative services agency, and continue to have an crippling effect on innovation and expansion of services. Pension Bond offset to continue to reduce revenue in Capital Projects Fund, Transportation and Bus Replacement Funds. Competitive environment expected to increase requiring aggressive responses to the educational needs of the community. 28/7/2015BUSINESS OFFICE- KEVIN J. BROWN

Anderson Community School Corporation 2015 Budget Expected Outcomes  Total tax rate to drop, primarily due to the impact of cash balances in debt funds and the State of Indiana control of maximum levies in most funds. (Rate expected to be below historical rates of 2010 through 2014).  Total revenue to be lower in 2015 as compared to 2014, and well below prior years as governed by enrollment.  General fund revenue to be nearly the same as 2014 primarily based on enrollment.  Circuit breaker losses to amount to approximately $6.5 million.  Required Pension Bond offset to reduce revenue in Capital Projects Fund, Transportation, and Bus Replacement Funds.  Tax collections estimated to be below 100% due to overall economic conditions.  Bargained and administratively driven cost reductions in Capital Projects Fund, Transportation, Bus Replacement and General Fund continue to hold the overall budget in balance for all funds.  Staffing for the school year reflects the re-opening of the Ebbertt Center for the reborn Career and Technical Education Program and the total is expected to be approximately full time employees.(Based on an expected regular education average class size of approximately 25; within the unchanged, bargained class size goals.)  Start up operations and capital costs are included for the introduction of the Career Center on 38 th Street.  Budget as advertised ensures the maximum revenue allowed by law to be secured by Anderson Community School Corporation.  All funds expected to be balanced in aggregate in 2014 with an ongoing, unchanged general fund cash balance. This should be considered the best case scenario as staffing is now locked in for the upcoming school year and enrollment remains uncertain. 3 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

CALENDAR YEAR FINANCIAL SCENARIO ANDERSON COMMUNITY SCHOOL CORPORATION 2015 BUDGET AND BEYOND REVENUE AND EXPENSE FORECAST – ALL FUNDS 2014 FORECAST2015 FORECAST2016 FORECAST2017 FORECAST REVENUE$73.3$68.8$72.0 EXPENSE$71.3$70.8$72.0 ALL FUNDS SURPLUS/SHORTFALL $2.0*($2.0)**$0 GENERAL FUND SURPLUS/SHORTFALL $0 GENERAL FUND CUMULATIVE SURPLUS/SHORTFALL (INCLUDES CARRYOVER FROM PRIOR YEARS) $11.0 NOTE: INCLUDES FULL IMPLEMENTATION OF TARGETED COSTS REDUCTIONS; ASSUMES STUDENT ENROLLMENT AS FORECAST; ASSUMES STABILIZING OF ASSESSED VALUE; ASSUMES STABLE STATE SUPPORT REVENUE PER STUDENT. *SURPLUS ACCRUES TO DEBT SERVICE AND PENSION DEBT FUNDS IN THE FORM OF A CASH BALANCE. GENERAL FUND CASH BALANCE IS FORECAST TO REMAIN CONSTANT. **LOSS IS OFFSET BY DEBT SERVICE CASH BALANCE. Millions of Dollars 48/7/2015BUSINESS OFFICE- KEVIN J. BROWN

5 CALENDAR YEARS * Forecast for Budget Purposes ANDERSON COMMUNITY SCHOOL CORPORATION Sept. Total Enrollment for “K” thru “12” THOUSANDS OF STUDENTS 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

6 YEAR 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

7 ANDERSON COMMUNITY SCHOOL CORPORATION Budget Order Assessed Valuation CALENDAR YEARS * In 2009, major increases in the homestead deduction resulted in a substantial drop in assessed valuation. “AN” - Anticipated 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

8 ANDERSON COMMUNITY SCHOOLS STAFFING SUMMARY FULL - TIME EMPLOYEES TOTAL: /7/2015BUSINESS OFFICE- KEVIN J. BROWN

9 ANDERSON COMMUNITY SCHOOLS STAFFING SUMMARY FORECAST FULL - TIME EMPLOYEES TOTAL: /7/2015BUSINESS OFFICE- KEVIN J. BROWN

Anderson Community School Corporation 2015 Budget Tax Rate Analysis * Based on an estimated assessed value of $1,600,000, FundActual Expected Actual Debt Service Fund Trans. Operating Fund Bus Replacement Fund Capital Projects Fund Debt Service Pension Fund TOTAL TAX RATE /7/2015BUSINESS OFFICE- KEVIN J. BROWN

11 ANDERSON COMMUNITY SCHOOL CORPORATION Tax Rates By Fund AN-ANTICIPATED 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

12 ANDERSON COMMUNITY SCHOOL CORPORATION 2014 County School Corporations Tax Rate Comparisons 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

13 TAX LEVY ACTUAL TAX COLLECTIONSHORTFALL DEBT SERVICE $14,772,543.00$10,374,780.00($4,397,763.00) PENSION DEBT SERVICE $5,164,337.00$3,626,921.00($1,537,416.00) CAPITAL PROJECT FUND $3,463,560.00$2,432,463.00($1,031,097.00) TRANSPORTATION $3,079,705.00$2,162,880.00($916,825.00) BUS REPLACEMENT $35,433.00$24,883.00($10,550.00) TOTAL LOCAL PROPERTY TAX SUPPORTED FUNDS * 70.2% COLLECTION RATE: $26,515,578.00$18,621,927.00*($7,893,651.00) ANDERSON COMMUNITY SCHOOL CORPORATION CIRCUIT BREAKER & TAX COLLECTION LOSSES PROPERTY TAX REVENUE ONLY 2012 BUDGET YEAR 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

14 ANDERSON COMMUNITY SCHOOL CORPORATION CIRCUIT BREAKER & TAX COLLECTION LOSSES PROPERTY TAX REVENUE ONLY 2013 BUDGET YEAR TAX LEVY ACTUAL TAX COLLECTIONSHORTFALL DEBT SERVICE $7,785,810.00$5,563,438.00($2,222,372.00) PENSION DEBT SERVICE $3,113,135.00$2,224,525.00($888,610.00) CAPITAL PROJECT FUND $5,859,056.00$4,186,654.00($1,672,402.00) TRANSPORTATION $5,300,060.00$3,787,218.00($1,512,842.00) BUS REPLACEMENT $368,700.00$263,459.00($105,241.00) TOTAL LOCAL PROPERTY TAX SUPPORTED FUNDS * 71.5% COLLECTION RATE: $22,426,761.00$16,025,294.00*($6,401,467.00) 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

15 ANDERSON COMMUNITY SCHOOL CORPORATION 2014 BUDGET YEAR FORECAST CIRCUIT BREAKER AND TAX COLLECTION SHORTFALL INCLUDING PROTECTED FUNDS. PROPERTY TAX REVENUE ONLY. TAX LEVY EXPECTED ACTUAL TAX COLLECTION EXPECTED SHORTFALL DEBT SERVICE $12,986,626.00$9,090,638.00($3,895,988.00) PENSION DEBT SERVICE $4,828,091.00$3,379,663.00($1,448,428.00) CAPITAL PROJECT FUND $5,075,810.00$3,553,067.00($1,522,743.00) TRANSPORTATION $4,627,325.00$3,239,128.00($1,388,197.00) BUS REPLACEMENT $189,432.00$132,602.00($56,830.00) TOTAL LOCAL PROPERTY TAX SUPPORTED FUNDS * $27,707,284.00$19,395,098.00*($8,312,186.00) NOTE: Including Protected Funds in Circuit Breaker calculation. * Assumes 70% overall collection rate. 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

16 ANDERSON COMMUNITY SCHOOL CORPORATION 2015 BUDGET YEAR FORECAST CIRCUIT BREAKER AND TAX COLLECTION SHORTFALL INCLUDING PROTECTED FUNDS. PROPERTY TAX REVENUE ONLY. TAX LEVY EXPECTED ACTUAL TAX COLLECTION EXPECTED SHORTFALL DEBT SERVICE $8,873,821.00$6,211,675.00($2,662,146.00) PENSION DEBT SERVICE $3,522,996.00$2,466,097.00($1,056,899.00) CAPITAL PROJECT FUND $4,600,000.00$3,220,000.00($1,380,000.00) TRANSPORTATION $4,200,000.00$2,940,000.00($1,260,000.00) BUS REPLACEMENT $200,000.00$140,000.00($60,000.00) TOTAL LOCAL PROPERTY TAX SUPPORTED FUNDS * $21,396,817.00$14,977,772.00*($6,419,045.00) NOTE: Including Protected Funds in Circuit Breaker calculation. * Assumes 70% overall collection rate. 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

17 ANDERSON COMMUNITY SCHOOL CORPORATION TRANSPORTATION FUND PROJECTED EXPENDITURES Actual anticipated expenditures$5,100, $4,500, Budgeted appropriations$3,711,808.00$3,700, Projected Revenue Property tax levy$4,627,325.00$4,200, Other revenue (EXCISE, CVET, FIT)$299,819.00$299,819.00____________ Total budgeted revenue$4,927,144.00$4,599, Expected actual property tax revenue$3,239,128.00*$2,940,000.00* Expected other revenue (EXCISE, CVET, FIT)$275,113.00$275,113.00____________ TOTAL ANTICIPATED ACTUAL REVENUE:$3,514,241.00$3,215, RESULT: EXPENDITURES EXCEED REVENUE BY $1.6 MILLION IN 2014 AND BY $1.3 MILLION IN * Shortfall due to Circuit Breaker and Collections Shortages. 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

PROJECTED EXPENDITURES: Utilities Cost$2,273,805.00$2,273, Maintenance Staff$1,152,000.00$1,152, Technology Staff$655,000.00$655,000.00____________ TOTAL COMMITTED COSTS$4,080,805.00$4,080, Remaining Budget (all other capital expense)$558,198.00($80,805.00) Total Budgeted Expenditures$4,639,003.00$4,000, PROJECTED REVENUE: Property Tax Levy$5,075, $4,600, Other revenue (EXCISE, CVET, FIT)$328,878.00$328, ________________________ Total Budgeted Revenue$5,404,688.00$4,928, Expected actual property tax revenue$3,553,067.00*$3,220,000.00* Expected other revenue (EXCISE, CVET, FIT)$358,227.00$358,227.00____________ TOTAL ANTICIPATED ACTUAL REVENUE:$3,911,294.00$3,578, RESULT: NO REVENUE AVAILABLE FOR CAPITAL IMPROVEMENTS. *Shortfall due to Circuit Breaker and Collections Shortages. 18 ANDERSON COMMUNITY SCHOOL CORPORATION CAPITAL PROJECTS FUND 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN

Anderson Community School Corporation 2015 Budget Conclusions REVENUE side of the budget in All Funds continues to be the major budget issue for 2015 and beyond. Enrollment losses moderating State support losses reversed based on stable enrollment Circuit breaker losses continue Tax collection losses continue Pension Bond tax rate offset continues to compromise revenue in Capital Projects Fund, Transportation and Bus Replacement Funds 2015 Budget as presented maximizes revenue available according to state law. EXPENSE side of the budget has been addressed within the constraints of administrative authority and collective bargaining, however cost pressures and delivery of services is placing pressure on our fiscal condition. Targeted class sizes will not exceed contractual guidelines which are unchanged Additional reductions should be targeted to offset any future enrollment losses Staffing in place is being maintained at near peak efficiency Buildings are being operated at near optimal occupancy and efficiency Budgets for 2014 and 2015 are balanced in aggregate with the challenge of continuing balanced budgets in the years ahead General fund cash balance has been established and efforts will be made to preserve it for future financial uncertainties The Ebbertt Education Center will be re-opened to provide space relief for the high school and to better accommodate Career and Technical Education programs and their future expansion. Since the completion of building and staff consolidation, we have been experiencing “staffing creep” upwards, despite continued falling enrollment. This increase in staffing serves to erode our financial condition, cannot be sustained at the current rate, and must be kept in check to avoid future financial problems which includes an erosion of our cash balance and potential annual deficits. 198/7/2015BUSINESS OFFICE- KEVIN J. BROWN

NEXT STEPS: Continue to promote a partnership with the all education stakeholders to collaborate on cost reduction and strategies as needed that may be necessary to maintain fiscal solvency. Continue similar collaboration through professional associations in Indianapolis to pursue additional revenue solutions with the state legislature. Intensify discussions with our local legislators in gaining their support for potential revenue generating solutions. Continue marketing of the school corporation to promote an increase in enrollment trends. Closely monitor staffing levels to ensure alignment with enrollment needs. Promote and expand efficiency gains in the areas of facilities utilization and operations. Continue to move in the direction of a marketplace responsive delivery of services and offerings, such as the planned career center on 38 th Street. In light of the reality of K-12 education being in transition from largely a monopoly to a competitive model, the administration, AFT and each employee individually must intensify their efforts to be customer oriented. 20 8/7/2015BUSINESS OFFICE- KEVIN J. BROWN