Budget Challenges

R-7 budget cuts continue with emphasis on protecting
students, classrooms and adequate cash flow balances
Cost containment to top $22 million for 2011-12

The following summary includes information about cost containment enacted by the R-7 School District from 2008-09 through 2011-12. These cuts are necessary to make up for losses in state and local revenue.

Job Category	Reductions as Percent of Job Category
"Other Certified" (Counselors, Librarians, Instructional Support, Parent Educators)	17 percent
Administrative	12.2 percent
Classroom Teachers	7.6 percent
Support Staff	4.5 percent

In summary, budget cuts have included reductions in staffing positions in administrative, instruction and support staff positions; a district-wide salary freeze; implementation of combination classrooms at the elementary schools; reductions to the elementary and secondary summer school program; a teaching schedule change requiring high-school and middle-school instructors to teach an additional course each day; deferring of textbook purchases; ongoing reductions to school and department budgets; deferring of maintenance; implementation of middle and high school activity fees for sports, music and other activities; a 20-percent cut to extra-duty salaries and operating expenses impacting extra-curricular activities; and increases to the community-use fees for district facilities and grounds.

The budget cuts being enacted for 2011-12 were recommended by a community and staff team, which met throughout fall 2010.

How were the cost-containment recommendations currently being implemented developed for 2011-12 and 2012-13?
The R-7 Citizens' Advisory Committee (CAC) worked throughout fall 2010 to study both the expenditure and revenue sides of the R-7 School District's ongoing budget challenges. This group presented a levy issue recommendation in November which was placed on the Feb. 8, 2011, ballot by the Board of Education. CAC members, working with PTA leaders, also developed a recommendation for additional budget cuts as part of this two-pronged effort. This recommendation went to the Board of Education as an information item on Dec. 9, 2010. The recommendation was also presented at a Dec. 15 community meeting and at numerous presentations during the 2010-11 winter. The vast majority of recommended budget cuts would have been avoided by approval of the levy issue, which was defeated by voters on Feb. 8, 2011.

During the Citizens' Advisory Committee fall 2010 study, citizens examined the R-7 School District's long-term financial planning and significant cost containment measures enacted 2008-2011, the increasingly deep projected losses in funding, rising enrollments and increasing expenditures (such as utilities, transportation and employee benefits, including state-mandated retirement payments). The CAC also conducted a community-wide survey.

What cost-containment measures were already in place before the fall 2010 study in Lee's Summit R-7?
Beginning in 2008, the R-7 School District began extensive cost-containment efforts.

Like school districts nationwide, the R-7 School District is seeing reductions in both state and local funding. The financial crisis is compounded by growing enrollments and rising costs in areas such as fuel, utilities and benefits, including state-mandated retirement contributions. Cost-containment measures enacted for 2010-11 included:

How is the additional $3 million in budget cuts impact R-7 schools and students during 2011-12?
These additional budget cuts have a more negative impact on students and have result in:

A list of the recommended budget cuts for 2011-12 and 2012-13 follow.

Extra-curricular activities/athletics/other
staffing and program reductions and participation fees

*NOTE: R-7 programs included in the 20-percent cut (Extra-curricular #1, #2 and #3)
Elementary: after-/before-school choir, district-wide honors orchestra, environmental club, lead elementary librarian, science fair, student council, remedial reading coordinator, safety patrol, yearbook, Crossroads Learning Center and other activities/programs specific to individual schools.
Middle-school athletics: intramurals (football, basketball, track, volleyball), basketball, cross country, football, track, volleyball, wrestling.
Middle-school extra-curricular music/theatre: band, choir, orchestra, school play, talent show, awards assembly.
Middle-school other extra-curricular activities: cheerleading, homeroom/club program, lip sync club, Math Counts, National Junior Honor Society, National Junior Art Honor Society, newspaper, robotics, alcohol/tobacco/other drugs prevention clubs such as SMART groups, Scholar Bowl, science fair, student council, yearbook.
High-school athletics (girls): basketball, cross country, golf, gymnastics, soccer, softball, swimming/diving, tennis, track, volleyball, athletic conditioning.
High-school athletics (boys): baseball, basketball, cross country, football, golf, soccer, swimming/diving, tennis, track, wrestling, athletic conditioning.
High-school extra-curricular music/theatre: choir, marching band, symphonic band, orchestra, drumline, jazz group/clubs, talent show, theatre, musical (including accompanist, box office, choreographer, costumer, lighting and sound, music director) improvisational groups, International Thespian Society.
High-school other extra-curricular activities: Air Force Junior ROTC; alcohol/tobacco/other drug prevention programs such as SMART groups; book club; broadcast journalism; candlelighting ceremony; cheerleading; chess club; community-service club; dance team; debate/forensics; dance team; DECA; dual-credit coordinator; environmental club; Family, Career and Community Leaders of America; Fine Arts Academy; flag team; fitness club; foreign exchange club; foreign language club and honor society (French, German, Spanish); Future Business Leaders of America; Future Educators of America; strategic gaming club; gate supervisor; graduation; Hall of Fame Committee (LSHS); Harmony Council; International Baccalaureate CAS and extended essay coordinator; International Club; junior and senior class sponsor; math club; National Art Honor Society; National Honor Society; national teacher certification; Missouri Scholars Academy; newspaper; Operation Impact; photography club; Project Graduation; prom; robotics; Students Against Destructive Decisions; science club; Skills USA; Special Olympics; Scholar Bowl; school fair coordinator; science club; Student Activity Advisory Council; student mentoring program; student senate; theatre; Trapmasters; yearbook; Youth in Government.
Other: Cafeteria supervisor, department chair, lead teacher, lead counselor, literacy leader, Powergrade representative, school webmaster.

How are activity fees being implemented at the middle schools and high schools? When do they begin?
The recommendation from the community team included the assessment of an activity fee for all middle-school and high-school music classes which participate in Missouri State High School Activities Association (MSHSAA) sanctioned events as well as an activity fee for participation in middle-school and high-school athletics and activities. This change was effective July 1, 2011.

The fee structure is $50 per student with a $100 maximum per family for high-school students and $25 per student with a $50 maximum per family for middle-school students.

Students involved in both music and athletics/activities will pay one fee to participate in music and another fee to participate in athletics/activities. For a family with one child who participates in both music and athletics/activities or a family with several children participating in both, the maximum fee per family would be $100 at the middle-school level and $200 per family at the high-school level.

More specific guidelines appear in the student handbooks for 2011-12.

What extra-curricular programs are being eliminated for 2011-12 due to budget cuts?
Extra-curricular programs and extra-duty staff contracts have been reduced for 2011-12 throughout the district with some programs being eliminated as part of these reductions. Programs eliminated at all three high schools included the weights and conditioning programs during the school year and interscholastic gymnastics. (The district had offered one gymnastics team to serve all three schools.) Lee's Summit High School also eliminated Science Bowl, Chess Club and After Prom. Programs eliminated at all three middle schools for next year include seventh-grade intramurals, Math Counts and National Junior Honor Society (which had been offered at Pleasant Lea and Summit Lakes Middle Schools only).

Will families qualifying for the federal free/reduced lunch program receive assistance with the activity fees?
Families who qualify for the federal free or reduced lunch program may apply to have the participation fees waived or reduced for their child(ren). If a family qualified for free or reduced lunch during the 2010-11 school year, parents may contact the principal's office at their child's school prior to the August registration to request to have the fee waived (free lunch status) or reduced by 50 percent (reduced lunch status). The request will be processed confidentially and taken care of prior to the August registration, scheduled for Aug. 3 and 4, 2011.

How do budget cuts impact R-7 jobs in the future? How many positions have already been eliminated?

The additional cuts resulted in the loss of approximately 76 R-7 staff positions, including the teaching positions being eliminated at the middle and high schools by a change from a five of seven to a six of seven teaching day. Whenever possible, the school district has eliminated jobs by not replacing employees who retire or resign or through transfers into these open positions.

From 2008 through the 2011-12 year, the R-7 School District will have reduced its employees by close to 180 full-time staff members.

How do R-7 teacher salaries compare with similar districts in the metro area?
Through the R-7 School District's TEAM Lee's Summit, the district's salaries are compared with 14 other districts – Park Hill, North Kansas City, Fort Osage, Raytown, Independence, Belton, Grandview, Hickman Mills, Blue Springs, Liberty and Center on the Missouri side and Shawnee Mission, Blue Valley and Olathe in Kansas. For the 2010-11 school year, R-7 starting teaching salaries were lower than all comparison districts. In addition, the R-7 starting teacher salary was approximately $6,000 lower than the school district with the highest starting salary in this comparison.

During this year, teachers in the "middle" of the salary schedule (a master's degree with 10 years of experience) ranked sixth. Of the districts paying less than R-7 in the middle range, three offer a career ladder which is paid in addition to the listed salary for qualifying teachers. R-7 teachers near the top of the salary schedule (master's degree plus 45 additional graduate hours or specialist degree) ranked 11th in this comparison with the R-7 salary in this range $8,000 below the district with the highest salary in this category.

How will the 20-percent reduction in extra-duty salaries, benefits and operating expenses impact programs?
This will include reductions in salary and benefits for staff members, a reduction in the number of extra-duty positions, reductions in other non-salary operating expenses related to the programs and/or

elimination of some programs.

Of the staff positions already eliminated by summer 2011, what percentage are administration, classroom teachers, other certified and support?
Of the approximately 180 positions being eliminated during the 2008-09, 2009-10, 2010-11 and 2011-12 school years, totals by category include:

How many "central-office" positions have already been eliminated and how many are included in the 2011-12 and 2012-13 recommendations?
From summer 2008 through summer 2010, six "central-office" positions were eliminated at the Stansberry Leadership Center (SLC). They include two director-level positions, one coordinator position, two secretarial positions and one instructional technology specialist.

Additional central-office positions being eliminated by this summer include director of student services, coordinator of career and technical education, two secretarial positions, one district-wide curriculum specialist, one district technology specialist, an additional instructional technology specialist and one custodian.

So far, the central-office positions eliminated 2008 through summer 2011 total 14. Out of the Stansberry Leadership Center's approximately 100 employees, this is close to one out of every seven staff members.

How does Lee's Summit R-7 rank in comparisons of the percent of total school district budget spent on administration among Kansas City metro-area districts?
In a comparison of 28 Kansas City metropolitan area school districts, Lee's Summit R-7 was significantly below the average when comparing the percent of money spent on administrative costs during 2009-10, according to the Missouri Department of Elementary and Secondary Education. Our district spent 5.33 percent of its budget on administration, compared to 7.69 percent for the average for all 28 districts. Only one Kansas City metropolitan area district spent a smaller percent on administration than Lee's Summit R-7.

What is the district's current and projected enrollment growth?
Although Lee's Summit R-7 School District growth has slowed recently due to declines in housing sales, the district continues to gain students. Current enrollment is 17,617, up 117 students over the previous school year. Enrollment projections indicate that the rate of enrollment growth will increase in the next few years. Since 1990, R-7 School District enrollment counts have increased by more than 8,575 students or 93 percent. In the past 20 years, the school district has opened a total of 18 schools, including 10 elementary schools, two middle schools and two high schools as well as Great Beginnings Early Education Center, Miller Park Center, Summit Technology Academy and Summit Ridge Academy, the district's secondary alternative school. Enrollment projections for 2014-15 are 18,641 students, up almost 1,030 over this year's enrollment, as the growth rate begins to climb upward again.

What is the R-7 School District's annual budget? What's the breakdown for revenue sources and expenditures?
The R-7 School District budget for 2010-11 is $173,623,946 (excluding debt service and bond funds). Close to two-thirds of the district's revenue comes from local property taxes with the remainder from state funding and a small amount from the federal government. Education is known as a "people business," and approximately 74 percent of district expenditures are in its quality staff members' salaries and benefits.
In 2010-11, 68 percent of the district's funds are from local property taxes, 28 percent from state funding and 4 percent from federal funding. On the expenditure side, 74 percent is salaries and benefits, 15 percent goes to supplies, utilities and equipment and 11 percent is for bond and lease payments.

http://www.leesummit.k12.mo.us/images/clip_image004_0000.gif

Is the R-7 School District audited by outside agencies and how does the district fare in these audits?
Lee's Summit R-7 continues to earn outstanding evaluations from annual audits performed by an outside auditing firm and conducted in accordance with state and federal regulations. An outside firm conducts a thorough on-site audit of the district's financial operations, examining all aspects of the school district's business operations. The most recent audit was conducted for the 2009-10 school year by Marr and Company, P.C., certified public accountants. The extensive audit included endorsement for the district's financial procedures, including its compliance with state and federal laws and regulations and its maintenance of financial records. In addition, an R-7 Audit Review Committee, consisting of staff and community members, reviews this comprehensive document, which is also filed with state and federal education agencies.

What is the R-7 School District's cost per pupil? How does this compare to area and similar districts in the state?
Although considered one of the metro area's and the state's highest-achieving school districts, Lee's

http://www.leesummit.k12.mo.us/images/clip_image006_0000.gif

Summit R-7 operates at a cost per pupil which is below the average for area districts and very near the average for similar-sized suburban districts state-wide. Among the 12 Jackson County school districts, R-7's cost per pupil ranked seventh highest and was below average for all county districts. In a comparison among nine similar, suburban school districts across the state, Lee's Summit ranked sixth highest and was barely above the average for all nine. R-7 cost per pupil for 2008-09 was $9,444, compared to a $9,426 average for large suburban districts state-wide and a $10,535 average for Jackson County school districts. (Based on most recent comparison information from the state.)

Why is Lee's Summit R-7 referred to as a bedroom community? What challenges does this create for a school district?
The term bedroom community refers to an area that has a much higher percentage of homes in comparison to business and industry. Lee's Summit R-7 has been a bedroom community for many years, growing rapidly as new families move into our school district. Of all property in Lee's Summit R-7, a total of 82 percent is residential, which is considered high and definitely well within the bedroom-community range. This creates a challenge because residential property is taxed at a lower rate than commercial. Residential property is taxed at 19 percent of its value, commercial at 32 percent and agricultural property at 12 percent. Communities with higher percentages of business and industry are able to provide greater funding for school districts with a lower overall tax rate.

School districts must rely heavily on property tax since they do not receive sales tax or other local revenue. In addition, a significant portion of the newer commercial development in Lee's Summit R-7 is tax-abated. Tax abatements, sometimes also called tax increment financing or TIF, allow developers of new commercial or industrial property to ask city governments to abate their property taxes for a set number of years. During this time period, the school district receives the property taxes generated by the development's vacant land and is sometimes able to receive negotiated payments in lieu of taxes (known as PILOTs). TIFs and other tax abatements are determined by the city government. Although the R-7 School District has no authority over these decisions, the City of Lee's Summit has allowed R-7 to provide input to city government decision-makers in this area.

How does the R-7 School District compare in terms of tax base and assessed value with other similar and area districts?
Many large suburban school districts throughout Missouri and districts in Jackson County have stronger tax bases (which can be measured through assessed values per student) than Lee's Summit R-7 due to this bedroom community aspect. In comparisons of assessed values per student, Lee's Summit R-7 is $105,064, compared to $105,813 for the average of Jackson County school districts and $153,172 for the average of large Missouri suburban districts. Districts with higher assessed valuations as well as a higher percentage of commercial property will generate more revenue for their schools with a lower tax levy than a so-called bedroom community.

In addition to the cost-containment measures enacted within the district's operating budget, what efforts have been made by the R-7 School District to find alternative methods to provide facilities for growth needs?
The R-7 School District has been a leader in seeking innovative and creative methods to finance new schools by using alternative funding methods from the private sector. In recent years, the school district has saved taxpayers close to $34 million through performance contracts, alternative resources, partnerships and the Missouri Department of Natural Resources low-interest energy-saving loans program. Examples of major school projects that resulted in millions of dollars in savings are Summit Technology Academy, R-7 Transportation and Facilities Offices, Great Beginnings Early Education Center and Longview Farm Elementary.

What is the difference between a bond issue and a levy issue?
Money from voter-approved bond issues may be spent only on specified capital projects, such as new schools or renovations to existing schools. Bond money cannot be part of the operational budget. A school district’s operational budget pays for the day-to-day operation of the school district, including staff compensation and benefits, programs, textbooks and almost everything that affects a student’s daily experience. Levy funds are considered part of the operational budget and may be spent on re-occurring costs such as the hiring of additional teachers, employee compensation and benefits or the purchase of instructional supplies. By law, bond and levy funds cannot be co-mingled.

A bond issue can be a no-tax-increase question or it can increase the district’s debt service fund – which is part of the overall property-tax levy. The April 2010 bond issue did NOT increase taxes.

Can the money in the bond issue be used to make up for revenue lost recently through state budget cuts?
No. Money in a voter-approved bond issue may only be used for the designated projects within the bond issue. Bond funds are restricted to capital improvements, such as new schools, school renovations, technology purchases and school buses, for example.

Approximately how much money is being saved annually through installation of artificial turf at the three high-school stadiums due to elimination of mowing, watering, fertilizing, striping and other maintenance related to grass turf?
Savings generated from all three fields are estimated at approximately $50,000 to $75,000 annually by eliminating these expenses. In addition to the cost savings, artificial turf has some environmental advantages due to the elimination of the mowing, watering and lawn chemicals. (Artificial turf was included in the April 2010 no-tax-increase bond issue.)