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Section IIntroduction

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October 13, 2010 To the School Board, citizens, and employees of Independent School District No. 834: INTRODUCTION The comprehensive annual financial report (CAFR) of Independent School District No. 834, Stillwater Area Public Schools (the District) presents the financial position of the District at June 30, 2010, and the results of operations for fiscal year 2010. This report was prepared in accordance with accounting principles generally accepted in the United States of America. The district administration accepts total responsibility for the accuracy, completeness, and fairness in presentation. An independent firm of certified public accountants audits this report. Since the implementation of Governmental Accounting Standards Board (GASB) Statement No. 34, the reader of this financial report will notice that the two main financial statements created by this standard, the Statement of Net Assets and Statement of Activities, do not contain numerous columns for various funds that have been included in past governmental financial statements. These two statements consolidate much of the information contained in fund-based financial statements of the past into statements which answer the question: “Is the District better or worse off financially than it was in the previous year?” A comparison of net assets should help the reader in answering that question. As a part of required supplementary information by GASB Statement No. 34, the Management’s Discussion and Analysis (MD&A) allows the District to review, in general terms, its financial position and results of operations of the past fiscal year. REPORT FORMAT The CAFR is presented in three sections: introductory, financial, and statistical. The introductory section includes this transmittal letter, an organizational chart, a list of the School Board and administration, the Certificate of Excellence in Financial Reporting, and a map of the District. The financial section includes the independent auditor’s report, MD&A, basic financial statements, required supplementary information, and the combining and individual fund statements and schedules. The statistical section includes selected financial and demographic information, generally presented on a multi-year basis. Accounting principles generally accepted in the United States of America require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of MD&A. This letter of transmittal is designed to complement the MD&A and to be read in conjunction with it. The MD&A of the District can be found immediately following the report of the independent auditors.

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FEDERAL SINGLE AUDIT AND STATE COMPLIANCE AUDIT The District is required to undergo an annual single audit in conformity with the provisions of the Federal Single Audit Act Amendments of 1996 and the U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Nonprofit Organizations. The District is also required to undergo an annual Minnesota State legal compliance audit under Statute Section 6.65. Independent auditor reports and a Schedule of Expenditures of Federal Awards are presented in a separately issued document. REPORTING ENTITY AND ITS SERVICES The financial reporting entity includes all the funds of the District (primary government). Component units are legally separate entities for which the District is financially accountable. There are no organizations considered to be component units of the District. The District provides a full range of public education services appropriate to grade levels ranging from pre-kindergarten through Grade 12. These include regular and enriched academic programs, special education programs, and career/vocational education. Food service and transportation are provided as supporting programs. The community education program in the District includes early childhood and family education programs, an adult basic education program, and a variety of classes for lifelong learning experiences for children and adults. Minnesota’s first schoolhouse was built in Stillwater in 1848, a year before Minnesota became a territory. Located on Olive Street between Second and Third Streets, the schoolhouse was a one-room building with cracks in the walls. Stillwater became the state’s first school district just two years later, a full four years before the City of Stillwater was incorporated. This district, now known as Independent School District No. 834, Stillwater Area Public Schools, has a long tradition of high expectations, high standards, and great achievement. It is also a system dedicated to continuous improvement. From the first one-room schoolhouse, the District has grown to serve more than 8,800 students in 10 elementary schools (K–6), two junior high schools (grades 7–9), one high school (grades 10–12) and an alternative learning center for secondary students. An early childhood family center serves families with young children, from birth to age five. The District stretches 30 miles along the scenic St. Croix River from Marine on St. Croix south to Afton, and covers approximately 150 square miles. The District encompasses 18 communities, including: Afton, Bayport, Baytown Township, Grant, a portion of Hugo, Lake Elmo, Lakeland, Lakeland Shores, Lake St. Croix Beach, Marine on St. Croix, May Township, Oak Park Heights, St. Mary’s Point, Stillwater, Stillwater Township, West Lakeland Township, Withrow, and a portion of Woodbury. The total district population is approximately 61,033. The District is well known for providing a solid and rigorous curriculum that focuses on the expanded basics of reading, writing, math, logic, and speaking. Student achievement on state and national tests ranks among the best. The District strives to develop learners who are innovative, creative, and prepared for a rapidly changing world. Expectations are high and students of all abilities are challenged, supported, and motivated at every level—from early childhood through high school. Students regularly earn top awards and recognitions in academics, and performing and visual arts programs. Student athletes also consistently appear in state, national, and international competitions.

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ECONOMIC CONDITION AND OUTLOOK OF THE LOCAL ECONOMY According to census information from the Washington County website, the county was one of the fastest growing counties in Minnesota, increasing 16.5 percent since 2000. The Washington County population in 2008 was 234,348, making it the fifth largest county in the state of Minnesota, housing approximately 4.4 percent of the state’s population and 8 percent of the Twin Cities metropolitan area’s population. According to the Metropolitan Council, as reported on the County website, Washington County’s population is expected to continue to grow. By the year 2030, the county’s population is projected to increase to 363,190. The District’s population has grown from 41,958 in 1996 to 61,033 in 2010. This represents a 45 percent increase. Source data from the U.S. Bureau of Economic Analysis, shows that the per capita income in 2007 for Washington County was $47,351 as compared to $41,693 for the state of Minnesota and $39,392 for the United States. Source data from the USDA Economic Research Service shows that the median household income in 2008 for Washington County was $79,670 as compared to $57,318 for the state of Minnesota. The poverty rate of Washington County continues to be low. Source data from the 2008 American Community Survey, as reported on the County website, shows that 4.3 percent of Washington County’s population was below the poverty level and that 2.9 percent of the county’s families were below the poverty level in the same year. MISSION – Our Core Purpose As Minnesota’s first public school district and the premier educational choice in the St. Croix Valley, the District ensures a rigorous and relevant education where all learners are valued, positive relationships are developed, and students are prepared for lifelong learning in a global society. VISION 2014 – What We Commit to Create In partnership with families and community, the District will provide all students with individualized and comprehensive learning experiences, preparing them for post-secondary education, fulfilling careers, and positive contributions in the global society through:

• Safe and personal learning environments • Excellence in teaching and learning • A rigorous and relevant curriculum with high expectations • Effective and efficient use of the District’s resources of time, talent, and finances

STUDENT ASSESSMENT AND TESTING Each year, information and data are collected on students through a variety of assessments to determine the academic achievement and progress toward the District’s goals in reading, writing, mathematics, and higher-order thinking skills. Staff, parents, and students are becoming skilled at using the multiple data sources to improve instructional programs to meet the needs of each child.

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PERFORMANCE SERIES While Performance Series is used in the District to measure student academic growth from fall to spring, there is also national comparison data. The District’s students continue to score above the typical national grade level scores in reading, math, and language usage and show outstanding growth rates. The Performance Series reading and math data have also provided the information necessary to identify students needing additional instruction through these programs: Title I, Read with Me, Read 180, Math Cognitive Tutor, targeted services, and special education. In addition to these special programs, the data is used on a daily/weekly basis by elementary teachers during regular reading and math instruction by helping teachers identify students who need grade level or above grade level challenge books and materials. MINNESOTA COMPREHENSIVE ASSESSMENTS – II (MCA-IIS) In 2005, the state introduced a new state-wide assessment, Minnesota Comprehensive Assessments – II (MCA-IIs). The MCA-IIs are the state reading and math tests that meet the requirements of No Child Left Behind. Science was added to the MCA-IIs in 2007–2008. The tests are used to determine whether schools and districts have made adequate yearly progress toward all students being proficient in reading and math by 2014. Results from 2009–2010 are published on the District’s website at www.stillwater.k12.mn.us and at the Minnesota Department of Education website at http://education.state.mn.us/ReportCard2005/. GRADUATION REQUIRED ASSESSMENT FOR DIPLOMA (GRAD) In April 2007, Minnesota introduced the Graduation Required Assessments for Diploma (GRAD) tests. The GRAD Test of Written Composition is administered to all ninth graders, the GRAD Reading Test for all students in Grade 10, and the GRAD Mathematics test is administered to all 11th graders. Students must pass all three GRAD tests before being eligible for a diploma from a Minnesota public high school. ACT, SAT, AND ADVANCED PLACEMENT TESTS The District’s high school students continued to achieve high scores on the ACT, SAT, and Advanced Placement Tests in the 2009–2010 school year. In fact, the District’s students had higher scores on the ACT than the state averages, which were the highest in the nation. Students in Grade 8 also take the EXPLORE test, and students in Grade 10 take the PLAN test from the ACT corporation to aid in educational planning. FOCUS OF WORK By focusing the District’s resources, time, talent, and funding, each division within the District is contributing to the academic success of district students. This clear focus of work will help the District to be recognized as one of the top public school districts nation-wide.

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AWARDS AND RECOGNITION This summer the District received the Certificate of Excellence in Financial Reporting from the Association of School Business Officials International for excellence in the preparation and issuance of the District’s CAFR for fiscal year 2008–2009. This certificate is awarded to fewer than 5 percent of all school districts in the state. FINANCIAL AND BUDGETARY CONTROL The management of the District is responsible for establishing and maintaining internal controls designed to ensure that the assets of the District are protected from theft, misuse, or losses and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with accounting principles generally accepted in the United States of America and Minnesota Uniform Financial Accounting and Reporting Standards. The internal control system is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: 1) the cost of a control should not exceed the benefits likely to be derived, and 2) the valuation of the costs and benefits requires estimates and judgments by management. The budget process includes estimates of revenues and expenditures based upon agreed assumptions. The staff allocation formulas are determined based on need and available resources to accomplish the District’s goals. The budget is adopted in June of each year and revised at least once during the fiscal year of its implementation. As demonstrated by the statements and schedules included in the financial section of this report, the District continues to meet its responsibility for sound financial management. CASH MANAGEMENT The Finance Department maintains daily the cash balances for the District, ensuring resources are available to meet district obligations. Un-obligated cash is invested in approved investment instruments, including U.S. government securities with the highest ratings. The Finance Department also maintains and implements policies and procedures for all staff in making deposits and withdrawals of district funds. These procedures are reviewed, revised, and discussed annually with staff as appropriate, ensuring compliance with district finance procedures. RISK MANAGEMENT The District maintains a comprehensive risk management program. Inclusive in the risk management program is property, liability, errors and omissions, Internet liability, and workers’ compensation insurance. The District also has safety committees in each of the buildings responsible for identification and elimination of potential risks. The Assistant Superintendent of Business and Administrative Services is responsible for the District’s risk management program. FINANCIAL PROSPECTS FOR FUTURE YEARS With the exception of the voter-approved operating referendum, the District is dependent on the state of Minnesota for its revenue authority. Recent experience demonstrates that legislated revenue increases are unpredictable and have not been sufficient to meet instructional program needs and increased costs due to inflation. The District will continue to monitor its operations to ensure that revenues are sufficient to meet expenditures and to maintain a reasonable amount in reserve to cover any unforeseen expenditures.

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SIGNIFICANT EVENTS The District is continuing a futures discussion process of major issues to address from 2010–2014. Inclusive in these topics are boundaries, facilities, and educational programs. Specific issue discussions will begin in the fall of 2010 with final decision in winter/spring 2011. The District is also implementing a new Strategic Roadmap with a revised Mission and Vision (see page iii) as well as the following Strategic Directions: STRATEGIC DIRECTIONS – Allocating Our Resources to Encourage Creativity and Innovation

A. Increase learning expectations and academic achievement for ALL students B. Deliver personalized learning opportunities within the E–12 educational program C. Provide a safe, respectful, caring environment to facilitate learning D. Hire quality employees and invest in their development to enhance student learning E. Provide technologically-advanced, high quality educational facilities and equipment that promote

effective student learning and opportunities F. Engage our community in partnership to live our Mission and achieve our Vision G. Operate with excellence in governance and management

ACKNOWLEDGMENTS Preparation of this CAFR requires a significant amount of work by many people. I wish to acknowledge the efforts of the entire Business and Administrative Services Department staff in providing complete and accurate data for this report. Sincerely, Raymond C. Queener Assistant Superintendent of Business and Administrative Services

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Stillwater Area Public SchoolsStillwater, Minnesota 55082

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Section IIFinancial

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INDEPENDENT AUDITOR’S REPORT To the School Board of Independent School District No. 834 Stillwater, Minnesota We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of Independent School District No. 834, Stillwater, Minnesota (the District) as of and for the year ended June 30, 2010, which collectively comprise the District’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the District’s management. Our responsibility is to express opinions on these financial statements based on our audit. The prior year partial comparative information presented has been derived from the District’s financial statements for the year ended June 30, 2009, and in our report dated September 28, 2009, we expressed unqualified opinions on the respective financial statements of the governmental activities, each major fund, and the aggregate remaining fund information. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes consideration of internal control over financial reporting as a basis for designing 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 over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the District as of June 30, 2010, and the respective changes in financial position and the budgetary comparison for the General Fund for the year then ended, in conformity with accounting principles generally accepted in the United States of America. The financial statements include partial prior year comparative information. Such information does not include all of the information required in a presentation in conformity with accounting principles generally accepted in the United States of America. Accordingly, such information should be read in conjunction with the District’s financial statements for the year ended June 30, 2009, from which such partial information was derived.

(continued)

INDEPENDENT SCHOOL DISTRICT NO. 834

Management’s Discussion and Analysis Fiscal Year Ended June 30, 2010

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This section of Independent School District No. 834, Stillwater, Minnesota’s (the District) comprehensive annual financial report (CAFR) presents management’s narrative overview and analysis of the District’s financial performance during the fiscal year ended June 30, 2010. Please read it in conjunction with the other components of the District’s CAFR. FINANCIAL HIGHLIGHTS

• The District’s assets exceeded its liabilities at June 30, 2010 by $48.8 million (net assets). The District’s total net assets increased by $7.6 million during the fiscal year ended June 30, 2010.

• Government-wide revenues totaled $102.4 million and were $7.6 million more than expenses of

$94.8 million.

• The General Fund’s total fund balance (under the governmental fund presentation) increased $0.8 million from the prior year.

OVERVIEW OF THE FINANCIAL STATEMENTS The financial section of the CAFR consists of the following parts:

• Independent Auditor’s Report; • Management’s Discussion and Analysis;

• Basic financial statements, including the government-wide financial statements, fund financial

statements, and the notes to basic statements;

• Required supplementary information; and

• Combining and individual fund statements and schedules. The following explains the two types of statements included in the basic financial statements: Government-Wide Statements The government-wide statements (Statement of Net Assets and Statement of Activities) report information about the District as a whole using accounting methods similar to those used by private sector companies. The Statement of Net Assets includes all of the District’s assets and liabilities. All of the current year’s revenues and expenses are accounted for in the Statement of Activities regardless of when cash is received or paid.

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The two government-wide statements report the District’s net assets and how they have changed. Net assets—the difference between the District’s assets and liabilities—is one way to measure the District’s financial health or position.

− Over time, increases or decreases in the District’s net assets are indicators of whether its financial position is improving or deteriorating, respectively.

− To assess the overall health of the District requires consideration of additional non-financial

factors such as changes in the District’s property tax base and the condition of school buildings and other facilities.

In the government-wide financial statements the District’s activities are all shown in one category titled “governmental activities.” These activities, including regular and special education, transportation, administration, food services, and community education, are primarily financed with state aids and property taxes. Fund Financial Statements The fund financial statements provide more detailed information about the District’s funds, focusing on its most significant or major funds, rather than the District as a whole. Funds (Food Service Special Revenue and Community Service Special Revenue) that do not meet the threshold to be classified as major funds are called nonmajor funds. Detailed financial information for nonmajor funds can be found in the combining and individual fund statements and schedules section. Funds are accounting devices the District uses to keep track of specific sources of funding and spending on particular programs. For Minnesota schools, funds are established in accordance with Uniform Financial Accounting and Reporting Standards in accordance with statutory requirements and accounting principles generally accepted in the United States of America. The District maintains the following kinds of funds:

Governmental Funds – The District’s basic services are included in governmental funds which generally focus on: 1) how cash and other financial assets that can readily be converted to cash flow in and out, and 2) the balances left at year-end that are available for spending. Consequently, the governmental funds statements provide a detailed short-term view that helps to determine whether there are more or less financial resources that can be spent 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, we provide additional information (reconciliation schedules) immediately following the governmental funds statements that explain the relationship (or differences) between these two types of financial statement presentations. Fiduciary Funds – The District is the trustee, or fiduciary, for assets that belong to other organizations. The District is responsible for ensuring that the assets reported in these funds are used only for their intended purposes and by those to whom the assets belong. All of the District’s fiduciary activities are reported in a separate Statement of Fiduciary Net Assets and a Statement of Changes in Fiduciary Net Assets. We exclude these activities from the government-wide financial statements because the District cannot use these assets to finance its operations.

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FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE Table 1 is a summarized view of the District’s Statement of Net Assets:

2010 2009

AssetsCurrent and other assets 81,434,389$ 81,448,218$ Capital assets, net of depreciation 74,304,347 74,693,160

Total assets 155,738,736$ 156,141,378$

LiabilitiesCurrent and other liabilities 38,387,415$ 38,996,836$ Long-term liabilities, including due within one year 68,541,527 75,945,720

Total liabilities 106,928,942$ 114,942,556$

Net assetsInvested in capital assets, net of related debt 26,912,181$ 21,089,341$ Restricted 5,836,072 7,703,046 Unrestricted 16,061,541 12,406,435

Total net assets 48,809,794$ 41,198,822$

Table 1Summary Statement of Net Assets

as of June 30, 2010 and 2009

The District’s financial position is the product of many factors. For example, the determination of the District’s investment in capital assets, net of related debt involves many assumptions and estimates, such as current and accumulated depreciation amounts. A conservative versus liberal approach to depreciation estimates, as well as capitalization policies, will produce a significant difference in the calculated amounts. Total net assets increased by $7,610,972, which reflects the current year operating results. As presented in the table above, invested in capital assets, net of related debt and the unrestricted portion of net assets experienced an increase over the prior year, while restricted net assets decreased.

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Table 2 presents a summarized version of the District’s Statement of Activities:

2010 2009

Revenues Program revenues

Charges for services 7,001,451$ 6,933,698$ Operating grants and contributions 11,394,973 10,954,652

General revenuesProperty taxes 28,521,377 26,424,844 General grants and aids 54,202,772 54,764,777 Other 1,277,866 2,005,172

Total revenues 102,398,439 101,083,143

ExpensesAdministration 3,041,640 2,865,116 District support services 2,782,680 3,038,488 Elementary and secondary regular instruction 41,922,830 41,493,803 Vocational education instruction 766,080 745,556 Special education instruction 13,505,129 13,206,499 Instructional support services 4,792,991 4,890,063 Pupil support services 8,386,277 7,872,315 Sites and buildings 9,039,507 8,733,192 Fiscal and other fixed cost programs 189,764 226,975 Food service 3,866,922 4,118,584 Community service 3,780,587 3,910,085 Interest and fiscal charges on debt 2,713,060 2,819,105

Total expenses 94,787,467 93,919,781

Change in net assets 7,610,972 7,163,362

Net assets – beginning 41,198,822 34,035,460

Net assets – ending 48,809,794$ 41,198,822$

Table 2Summary Statement of Activities

for the Years Ended June 30, 2010 and 2009

This table is presented on an accrual basis of accounting, and it includes all of the governmental activities of the District. This statement includes depreciation expense; but excludes capital asset purchase costs, debt proceeds, and the repayment of debt principal. As seen above, total revenues for fiscal year 2010 experienced an increase of $1,315,296 from the prior year. This increase was largely due to an increase in the “property taxes” category as a result of the increased tax levy in the current year. Expenses increased by $867,686 compared to fiscal year 2009 levels. This change is largely due to inflationary increases spread across several functions as presented in the table above.

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Figure A shows further analysis of these revenue sources.

Figure A – Sources of Revenues for Fiscal Years 2010 and 2009

Charges for Services

6.8%

Operating Grants and

Contributions11.1%

Property Taxes27.9%

General Grants and Aids

52.9%

Other1.3%

2010

Charges for Services

6.9%Operating Grants and

Contributions10.8%

Property Taxes26.1%

General Grants and Aids

54.2%

Other2.0%

2009

The largest share of the District’s revenue is received from the state, including most of the general and operating grants. Consequently, the District’s funding depends significantly on the state’s financial fluctuations. Property taxes are generally the next largest source of funding. The level of funding property tax sources provide is not only dependent on taxpayers of the District by way of operating and building referenda, but also by decisions made by the Legislature in the mix of state aid and local effort in a variety of funding formulas.

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Figure B shows further analysis of these expense functions.

Figure B – Expenses for Fiscal Years 2010 and 2009

Administration3.2%

District Support Services

2.9%

Elementary and Secondary Regular

Instruction44.2%Vocational

Education Instruction

0.8%

Special Education Instruction

14.3%

Instructional Support Services

5.1%

Pupil Support Services

8.8%

Sites and Buildings9.5%

Fiscal and Other Fixed Cost Programs

0.2%

Food Service4.1%

Community Service4.0%

Interest and Fiscal Charges

on Debt2.9%

2010

Administration3.1%

District Support Services

3.2%

Elementary and Secondary Regular

Instruction44.2%

Vocational Education Instruction

0.8%

Special Education Instruction

14.0%

Instructional Support Services

5.2%

Pupil Support Services

8.4%

Sites and Buildings9.3%

Fiscal and Other Fixed Cost Programs

0.2%

Food Service4.4%

Community Service4.2%

Interest and Fiscal Charges on Debt

3.0%

2009

The District’s expenses are predominately related to educating students. Using classifications from Uniform Financial Accounting and Reporting Standards, the above graphs show approximately 76.1 percent of the expenses of the District are related to classroom instruction. These expenses are for elementary and secondary regular instruction, vocational education, special education, instructional support services, pupil support services, and district support services. The remaining 23.9 percent covers the activities supporting the classroom, including sites and buildings, food services, community services, fixed costs, and interest and fiscal charges on debt and administration.

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FINANCIAL ANALYSIS OF THE DISTRICT’S FUNDS The financial performance of the District as a whole is also reflected in its governmental funds. Table 3 shows the change in total fund balances of each of the District’s governmental funds:

Increase

2010 2009 (Decrease)

Major fundsGeneral 22,566,289$ 21,764,177$ 802,112$ Capital Projects –

Building Construction 1,399,993 1,723,393 (323,400) Debt Service 1,938,911 2,341,801 (402,890)

Nonmajor fundsFood Service 513,355 223,473 289,882 Community Service 386,926 463,795 (76,869)

Total governmental funds 26,805,474$ 26,516,639$ 288,835$

Table 3Governmental Fund Balancesas of June 30, 2010 and 2009

Reserved fund balances of the General Fund decreased $1,589,852, designated fund balances increased $179,045, and the District’s unreserved – undesignated portion of fund balance increased $2,212,919 during the year. The reduction in the Capital Projects – Building Construction Fund was due to planned spending for various capital projects completed during the year. The reduction in the Debt Service Fund was a result of the operations as budgeted with each individual debt obligation’s financing plan.

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Analysis of the General Fund Table 4 summarizes the amendments to the General Fund budget:

IncreaseOriginal Budget Final Budget (Decrease) Percent Change

Revenue and other financing sources 79,385,880$ 81,983,639$ 2,597,759$ 3.3%

Expenditures and other financing uses 82,550,446$ 84,695,147$ 2,144,701$ 2.6%

Table 4General Fund

Budget

The District is required to adopt an operating budget prior to the beginning of its fiscal year, referred to above as the original budget. The District amended the budget two times for known changes in circumstances such as enrollment levels, legislative funding, and employee contract settlements. Table 5 summarizes the operating results of the General Fund:

2010 Actual Amount Percent Amount Percent

Revenue 82,182,503$ 198,864$ 0.2% (369,002)$ (0.4%)

Expenditures 81,380,391 (3,314,756)$ (3.9%) (15,985,290)$ (16.4%)

Other financing sources (uses) – –$ – (18,921,117)$ (100.0%)

Net change in fund balances 802,112$

Final Budget Over (Under) Prior Year

Table 5General Fund

Operating Results

Over (Under)

Actual revenue for fiscal year 2010 was 0.2 percent more than budgeted, while actual expenditures were 3.9 percent under budget. The largest revenue variances occurred in state sources exceeding budget by $582,811 and federal sources that were below anticipated amounts by $384,434. The expenditure variance in 2010 was spread across several programs, with the largest under-spending occurring in district support services, elementary and secondary regular instruction, instructional support services, and sites and buildings.

-11-

The revenue decrease presented on the previous page was due to a decline in investment earnings and other local revenue sources in the current year. The expenditures and other financing sources (uses) decreased as presented on the previous page due to the $19 million of contributions made to the other post-employment benefits trust financed with bond proceeds in the prior year. This expenditure decrease of $19 million was offset by inflationary increases in the current year. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets Table 6 shows the District’s capital assets, together with the changes from the previous year. The table also shows the total depreciation expense for fiscal years ending June 30, 2010 and 2009:

Increase


Land 3,734,902$ 3,734,902$ –$ Construction in progress 629,252 858,485 (229,233) Land improvements 8,106,530 7,016,719 1,089,811 Buildings 100,454,716 99,314,007 1,140,709 Furniture and equipment 8,861,413 8,859,774 1,639 Less accumulated depreciation (47,482,466) (45,090,727) (2,391,739)

Total 74,304,347$ 74,693,160$ (388,813)$

Depreciation expense 3,490,444$ 3,210,275$ 280,169$

Table 6Capital Assets

The changes presented in the table above reflect the ongoing activity and completion of several construction projects at district sites during fiscal year 2010. The District only capitalizes furniture and equipment valued at $3,000 or more.

-12-

Long-Term Liabilities Table 7 illustrates the components of the District’s long-term liabilities, together with the change from the prior year:

Increase


General obligation bonds payable 65,005,000$ 71,755,000$ (6,750,000)$ Severance benefits payable 3,390,007 4,047,901 (657,894) Compensated absences payable 146,520 142,819 3,701

Total 68,541,527$ 75,945,720$ (7,404,193)$

Table 7Outstanding Long-Term Liabilities

Bonds payable decreased by $6.75 million due to the planned repayment schedule reflecting principal payments during fiscal year 2010. The state limits the amount of general obligation debt the District can issue to 15 percent of the market value of all taxable property within the District’s corporate limits (see Table 8):

District’s market value 8,085,484,800$ Limit rate 15.0%

Legal debt limit 1,212,822,720$

Table 8Limitations on Debt

Additional details of the District’s capital assets and long-term debt activity can be found in the notes to basic financial statements.

-13-

FACTORS BEARING ON THE DISTRICT’S FUTURE With the exception of the voter-approved operating referendum, the District is dependent on the state of Minnesota for a majority of its revenue authority. Recent experience demonstrates that legislated revenue increases have not been sufficient to meet instructional program needs and increased costs due to inflation. The general education program is the method by which school districts receive the majority of their financial support. This source of funding is primarily state aid and, as such, school districts rely heavily on the state of Minnesota for educational resources. The basic general education formula amount for all Minnesota school districts remained stable in fiscal year 2010 at $5,124 and will remain at this level for fiscal year 2011. A weakened economy and growing demand on limited resources have created challenges in funding education for Minnesota schools in recent years. CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance Department, Independent School District No. 834, 1875 South Greeley Street, Stillwater, Minnesota 55082.

Capital Projects –

BuildingGeneral Fund Construction Fund Debt Service Fund Nonmajor Funds 2010 2009

Assets Cash and temporary investments 18,283,907$ 1,968,350$ 6,202,900$ 1,460,890$ 27,916,047$ 39,662,250$ Receivables

Current taxes 9,637,109 – 5,517,423 489,666 15,644,198 14,159,547 Delinquent taxes 651,342 – 363,651 33,241 1,048,234 811,500 Accounts and interest 153,562 – – 5,397 158,959 1,614,686 Due from other governmental units 18,469,414 – 64,108 288,536 18,822,058 7,093,179

Inventory – – – 63,343 63,343 42,868 Prepaid items 276,168 – – 13,628 289,796 350,660

Total assets 47,471,502$ 1,968,350$ 12,148,082$ 2,354,701$ 63,942,635$ 63,734,690$

Liabilities and Fund Balances

LiabilitiesSalaries payable 3,868,581$ –$ –$ 111,720$ 3,980,301$ 3,863,580$ Accounts and contracts payable 2,402,101 568,357 – 84,946 3,055,404 3,574,732 Due to other governmental units 728,651 – – 23,291 751,942 732,945 Property taxes levied for subsequent year 15,528,640 – 9,975,186 885,299 26,389,125 26,583,628 Unearned revenue 1,949,631 – – 327,502 2,277,133 1,952,857 Deferred revenue 427,609 – 233,985 21,662 683,256 510,309

Total liabilities 24,905,213 568,357 10,209,171 1,454,420 37,137,161 37,218,051

Fund balancesReserved 2,416,646 1,399,993 – 302,537 4,119,176 6,110,721 Unreserved – designated 3,430,517 – – – 3,430,517 3,251,472 Unreserved – undesignated, reported in

General Fund 16,719,126 – – – 16,719,126 14,506,207 Debt Service Fund – – 1,938,911 – 1,938,911 2,341,801 Special revenue funds – – – 597,744 597,744 306,438

Total fund balances 22,566,289 1,399,993 1,938,911 900,281 26,805,474 26,516,639

Total liabilities and fund balances 47,471,502$ 1,968,350$ 12,148,082$ 2,354,701$ 63,942,635$ 63,734,690$

See notes to basic financial statements


Balance SheetGovernmental Fundsas of June 30, 2010

(With Partial Comparative Information as of June 30, 2009)

Total Governmental Funds

Pages 16 and 17

Capital Projects –Building

General Fund Construction Fund Debt Service Fund Nonmajor Funds 2010 2009

Revenue Local sources

Property taxes 15,350,371$ 2,399,459$ 9,729,165$ 869,435$ 28,348,430$ 26,291,089$ Investment earnings 66,021 2,552 15,239 4,764 88,576 486,284 Other 3,166,881 – – 5,023,860 8,190,741 8,452,586

State sources 55,916,529 – 237,434 659,577 56,813,540 62,692,999 Federal sources 7,682,701 – – 1,101,504 8,784,205 3,026,430

Total revenue 82,182,503 2,402,011 9,981,838 7,659,140 102,225,492 100,949,388

ExpendituresCurrent

Administration 2,955,484 – – – 2,955,484 3,626,450 District support services 3,475,331 – – – 3,475,331 3,639,254 Elementary and secondary regular instruction 40,640,979 – – – 40,640,979 50,701,768 Vocational education instruction 728,145 – – – 728,145 861,269 Special education instruction 13,182,892 – – – 13,182,892 16,162,412 Instructional support services 4,699,181 – – – 4,699,181 5,611,563 Pupil support services 8,103,691 – – – 8,103,691 8,281,049 Sites and buildings 7,395,211 – – – 7,395,211 8,140,132 Fiscal and other fixed cost programs 189,764 – – – 189,764 226,975 Food service – – – 3,758,718 3,758,718 3,637,043 Community service – – – 3,635,911 3,635,911 3,748,303

Capital outlay – 2,725,411 599,005 51,498 3,375,914 4,959,922 Debt service

Principal – – 6,750,000 – 6,750,000 5,693,750 Interest and fiscal charges 9,713 – 3,035,723 – 3,045,436 2,873,186

Total expenditures 81,380,391 2,725,411 10,384,728 7,446,127 101,936,657 118,163,076

Excess (deficiency) of revenue over expenditures 802,112 (323,400) (402,890) 213,013 288,835 (17,213,688)

Other financing sources (uses)Debt issued – – – – – 37,960,000 Premium on debt issued – – – – – 691,627 (Discount) on debt issued – – – – – (191,550) Payment on refunded bonds – – – – – (19,405,000)

Total other financing sources (uses) – – – – – 19,055,077

Net change in fund balances 802,112 (323,400) (402,890) 213,013 288,835 1,841,389

Fund balancesBeginning of year 21,764,177 1,723,393 2,341,801 687,268 26,516,639 24,675,250

End of year 22,566,289$ 1,399,993$ 1,938,911$ 900,281$ 26,805,474$ 26,516,639$

See notes to basic financial statements

Year Ended June 30, 2010(With Partial Comparative Information for the Year Ended June 30, 2009)

Total Governmental Funds


Statement of Revenue, Expenditures, and Changes in Fund BalancesGovernmental Funds

Pages 19 and 20

2009

Regular OPEBDebt Service Debt Service Over (Under)

Budget Account Account Total Budget Actual

RevenueLocal sources

Property taxes 10,058,403$ 8,051,943$ 1,677,222$ 9,729,165$ (329,238)$ 8,468,090$ Investment earnings – 15,239 – 15,239 15,239 73,449

State sources – 196,224 41,210 237,434 237,434 207,555 Total revenue 10,058,403 8,263,406 1,718,432 9,981,838 (76,565) 8,749,094

ExpendituresCapital outlay – joint elementary school 608,050 599,005 – 599,005 (9,045) 610,991 Debt service

Principal retirement 6,750,000 6,020,000 730,000 6,750,000 – 5,585,000 Interest payments 3,071,081 2,174,227 860,061 3,034,288 (36,793) 2,748,141 Fiscal and other charges – 1,435 – 1,435 1,435 118,986

Total expenditures 10,429,131 8,794,667 1,590,061 10,384,728 (44,403) 9,063,118

Excess (deficiency) of revenue over expenditures (370,728) (531,261) 128,371 (402,890) (32,162) (314,024)

Other financing sources (uses)Debt issued – – – – – 18,847,333 Premium on debt issued – – – – – 691,627 Payment on refunded bonds – – – – – (19,405,000)

Total other financing sources (uses) – – – – – 133,960

Net change in fund balances (370,728)$ (531,261) 128,371 (402,890) (32,162)$ (180,064)

Fund balancesBeginning of year 2,330,023 11,778 2,341,801 2,521,865

End of year 1,798,762$ 140,149$ 1,938,911$ 2,341,801$


Debt Service FundSchedule of Revenue, Expenditures, and Changes in Fund Balances – by Account

Budget and ActualYear Ended June 30, 2010

(With Comparative Actual Amounts for the Year Ended June 30, 2009)

Actual2010

Pages 59 and 60

Section IIIStatistical

2003 2004 2005 2006 2007 2008 2009 2010

Governmental activitiesInvested in capital assets, net of related debt 3,356,313$ 5,751,001$ 4,091,555$ 10,924,190$ 14,756,992$ 14,881,633$ 21,089,341$ 26,912,181$ Restricted 3,387,947 4,636,152 8,312,680 4,759,061 5,946,352 10,392,587 7,703,046 5,836,072 Unrestricted (14,194,651) (19,198,442) (17,457,520) (14,649,617) (14,137,585) (7,509,256) 12,406,435 16,061,541

Total governmental activities net assets (7,450,391)$ (8,811,289)$ (5,053,285)$ 1,033,634$ 6,565,759$ 17,764,964$ 41,198,822$ 48,809,794$

Note 1:

Note 2:

Last Eight Fiscal Years(Accrual Basis of Accounting)

Fiscal Year

The District implemented GASB Statement No. 45 in fiscal 2009. The District reported a change inaccounting principle as a result of implementing this standard that increased unrestricted net assets byapproximately $16.3 million.

The District implemented GASB Statement No. 34 in fiscal 2003. This information is not available forprevious fiscal years.


Net Assets by Component

Pages 61 and 62

2003 2004 2005 2006 2007 2008 2009 2010

Governmental activitiesExpenses

Administration 2,610,353$ 2,785,565$ 2,468,454$ 2,534,955$ 2,992,735$ 2,865,280$ 2,865,116$ 3,041,640$ District support services 1,608,144 1,961,731 2,145,689 2,521,529 2,310,618 2,154,748 3,038,488 2,782,680 Elementary and secondary regular instruction 40,845,171 42,884,367 38,203,887 40,451,076 43,428,075 39,725,125 41,493,803 41,922,830 Vocational education instruction 1,028,832 969,816 1,003,022 722,509 692,393 654,272 745,556 766,080 Special education instruction 10,236,615 10,761,050 12,000,594 12,194,026 12,144,868 12,099,216 13,206,499 13,505,129 Instructional support services 3,879,445 6,445,570 5,496,537 4,722,705 4,815,785 4,548,287 4,890,063 4,792,991 Pupil support services 7,168,313 7,633,483 6,675,032 6,988,750 7,153,644 7,568,484 7,872,315 8,386,277 Sites and buildings 7,586,561 10,082,274 8,116,687 9,768,147 9,051,494 9,583,240 8,733,192 9,039,507 Fiscal and other fixed cost programs 333,564 413,012 373,295 340,866 254,468 223,936 226,975 189,764 Food service 2,605,488 2,737,346 3,242,678 3,439,193 3,645,992 3,774,872 4,118,584 3,866,922 Community service 3,319,493 3,409,652 3,604,700 3,797,040 3,812,371 3,869,376 3,910,085 3,780,587 Interest and fiscal charges on debt 4,237,835 4,074,149 3,618,711 2,658,109 3,402,874 3,073,076 2,819,105 2,713,060

Total governmental activities expenses 85,459,814 94,158,015 86,949,286 90,138,905 93,705,317 90,139,912 93,919,781 94,787,467

Program revenuesCharges for services

District support services – – – – – – – 17,655 Elementary and secondary regular instruction 388,553 402,675 428,392 539,588 958,096 1,658,560 1,522,339 1,446,214 Vocational education instruction – – – – – 1,637 1,840 480 Special education instruction 639,204 828,054 665,289 624,760 387,092 – 236,083 368,106 Instructional support services – 4,950 8,169 4,187 902 4,675 7,603 34,899 Pupil support services – – – 76,274 52,937 43,026 75,713 50,240 Sites and buildings 35,000 35,000 35,000 35,000 35,000 38,050 35,000 59,997 Food service 1,994,735 2,046,612 2,593,420 2,557,654 2,697,742 2,794,304 2,910,136 2,878,510 Community service 2,149,148 2,208,853 2,230,555 2,384,354 2,282,961 2,374,120 2,144,984 2,145,350

Operating grants and contributions 10,410,140 9,552,808 10,009,309 10,601,156 9,868,159 10,572,728 10,954,652 11,394,973 Capital grants and contributions – – – 305,144 – – – –

Total governmental activities program revenues 15,616,780 15,078,952 15,970,134 17,128,117 16,282,889 17,487,100 17,888,350 18,396,424

Net (expense) revenue (69,843,034) (79,079,063) (70,979,152) (73,010,788) (77,422,428) (72,652,812) (76,031,431) (76,391,043)

General revenues and other changes in net assetsTaxes

Property taxes, levied for general purposes 5,398,759 15,824,495 11,303,258 7,775,808 13,887,581 14,598,532 14,824,812 15,447,040 Property taxes, levied for community service 725,962 1,149,793 818,564 421,036 825,007 847,325 767,959 875,488 Property taxes, levied for building construction 1,996,980 2,000,000 2,000,000 1,500,000 1,500,000 2,500,000 2,325,124 2,399,459 Property taxes, levied for debt service 6,474,935 7,327,505 6,240,529 7,432,543 8,158,898 8,093,169 8,506,949 9,799,390

Unrestricted grants and contributions 53,718,279 49,244,244 51,132,241 57,583,915 53,693,705 54,913,196 54,764,777 54,202,772 Other general revenues 2,360,557 2,288,879 2,317,453 3,472,771 2,792,303 1,520,230 1,518,888 1,189,290 Investment earnings 1,204,483 1,126,266 925,111 911,634 2,097,059 1,379,565 486,284 88,576

Total general revenues and other changes in net assets 71,879,955 78,961,182 74,737,156 79,097,707 82,954,553 83,852,017 83,194,793 84,002,015

Change in net assets 2,036,921$ (117,881)$ 3,758,004$ 6,086,919$ 5,532,125$ 11,199,205$ 7,163,362$ 7,610,972$

Note:

(Accrual Basis of Accounting)

The District implemented GASB Statement No. 34 in fiscal 2003. This information is not available for previous fiscal years.

Fiscal Year


Changes in Net AssetsLast Eight Fiscal Years

Pages 63 and 64

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

General FundReserved 1,938,332$ 2,124,323$ 3,663,898$ 4,267,048$ 3,653,920$ 5,095,674$ 6,559,427$ 6,972,794$ 4,006,498$ 2,416,646$ Unreserved 3,379,288 1,791,587 1,405,027 1,891,388 2,221,092 3,779,837 5,583,084 10,684,442 17,757,679 20,149,643

Total General Fund 5,317,620$ 3,915,910$ 5,068,925$ 6,158,436$ 5,875,012$ 8,875,511$ 12,142,511$ 17,657,236$ 21,764,177$ 22,566,289$

All other governmental fundsReserved 29,593,683$ 28,750,053$ 25,746,954$ 25,774,651$ 5,596,079$ 27,742,108$ 17,151,453$ 4,280,876$ 2,104,223$ 1,702,530$ Unreserved, reported in

Special revenue funds 221,952 190,688 384,901 367,226 339,368 314,536 212,429 215,273 306,438 597,744 Debt service funds 2,683,739 3,134,826 1,411,657 1,811,209 940,333 1,960,846 2,389,018 2,521,865 2,341,801 1,938,911

Total all other governmental funds 32,499,374$ 32,075,567$ 27,543,512$ 27,953,086$ 6,875,780$ 30,017,490$ 19,752,900$ 7,018,014$ 4,752,462$ 4,239,185$

Fund Balances of Governmental FundsLast Ten Fiscal Years

(Modified Accrual Basis of Accounting)

Fiscal Year


Pages 66 and 67

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

RevenuesLocal sources

Taxes 25,939,450$ 28,942,325$ 14,663,081$ 26,259,335$ 20,373,493$ 17,123,071$ 24,266,449$ 25,952,333$ 26,291,089$ 28,348,430$ Investment earnings 2,701,964 1,628,785 1,204,483 1,126,266 925,111 911,634 2,097,059 1,379,565 486,284 88,576 Other 6,302,756 6,994,741 7,567,197 7,815,023 8,278,278 9,519,588 9,207,033 8,434,602 8,452,586 8,190,741

State sources 42,528,036 42,964,780 61,773,479 56,175,490 58,602,464 65,669,102 60,653,946 62,371,846 62,692,999 56,813,540 Federal sources 1,819,286 2,132,024 2,354,940 2,621,562 2,539,086 2,821,113 2,907,918 3,114,078 3,026,430 8,784,205

Total revenues 79,291,492 82,662,655 87,563,180 93,997,676 90,718,432 96,044,508 99,132,405 101,252,424 100,949,388 102,225,492

ExpendituresCurrent

Administration 3,236,060 2,491,593 2,530,311 2,714,591 2,609,326 2,636,354 2,921,259 2,777,585 3,626,450 2,955,484 District support services 1,778,880 1,935,471 1,565,961 1,918,231 2,162,740 2,346,334 2,399,421 2,490,086 3,639,254 3,475,331 Elementary and secondary regular instruction 34,410,164 36,394,603 37,419,277 38,817,658 37,987,089 39,047,858 40,343,122 39,145,244 50,701,768 40,640,979 Vocational education instruction 825,743 708,899 1,004,021 942,342 975,680 694,089 664,725 620,325 861,269 728,145 Special education instruction 7,981,267 9,092,125 9,704,950 9,908,430 11,447,889 11,927,646 11,936,615 11,560,959 16,162,412 13,182,892 Instructional support services 2,195,895 3,963,664 3,687,566 6,122,035 5,475,518 4,633,748 4,722,263 4,459,325 5,611,563 4,699,181 Pupil support services 8,790,067 7,636,476 6,887,500 7,244,506 6,481,360 6,787,445 6,956,508 7,970,717 8,281,049 8,103,691 Sites and buildings 7,138,364 7,499,833 6,889,196 7,182,321 6,708,224 7,170,459 6,639,559 7,022,603 8,140,132 7,395,211 Fiscal and other fixed cost programs 232,362 268,315 333,564 413,012 373,295 340,866 254,468 223,936 226,975 189,764 Food service 2,159,329 2,370,161 2,463,249 2,631,610 3,270,619 3,353,800 3,567,834 3,685,740 3,637,043 3,758,718 Community service 2,980,446 3,370,171 3,210,644 3,279,397 3,422,509 3,667,256 3,679,937 3,735,258 3,748,303 3,635,911

Capital outlay 6,063,455 9,448,994 5,891,418 5,032,784 2,793,459 7,805,154 13,600,945 9,192,094 4,959,922 3,375,914 Debt service

Principal 2,745,000 3,045,000 4,614,281 4,174,318 4,472,675 4,655,075 5,198,646 5,286,004 5,693,750 6,750,000 Interest and fiscal charges 4,277,280 4,261,234 4,740,282 4,159,929 4,058,779 2,732,052 3,244,693 3,402,709 2,873,186 3,045,436

Total expenditures 84,814,312 92,486,539 90,942,220 94,541,164 92,239,162 97,798,136 106,129,995 101,572,585 118,163,076 101,936,657

Excess of revenues over (under) expenditures (5,522,820) (9,823,884) (3,379,040) (543,488) (1,520,730) (1,753,628) (6,997,590) (320,161) (17,213,688) 288,835

Other financing sources (uses)Refunding bonds issued – 24,236,798 – – – 6,883,000 – – 18,805,000 – Bonds issued – 7,868,469 – – – 20,497,000 – – 19,155,000 – Premium on bonds issued – – – – – 515,837 – – 691,627 – Discount on bonds issued – – – – – – – – (191,550) – Payments to refunded bond escrow agent – (24,335,000) – – (19,840,000) – – (6,900,000) (19,405,000) – Capital leases – 228,100 – 2,042,573 – – – – – –

Total other financing sources (uses) – 7,998,367 – 2,042,573 (19,840,000) 27,895,837 – (6,900,000) 19,055,077 –

Net change in fund balances (5,522,820)$ (1,825,517)$ (3,379,040)$ 1,499,085$ (21,360,730)$ 26,142,209$ (6,997,590)$ (7,220,161)$ 1,841,389$ 288,835$

Debt service as a percentage of noncapital expenditures 8.9% 8.8% 11.0% 9.3% 9.5% 8.2% 9.1% 9.4% 7.6% 9.9%


Changes in Fund Balances of Governmental FundsLast Ten Fiscal Years

(Modified Accrual Basis of Accounting)

Fiscal Year

Pages 68 and 69

TaxableAgricultural Non-Agricultural Contribution Distribution Tax Increment Total Taxable Market Value

1,995,063$ 57,335,750$ (3,870,109)$ 4,932,877$ (2,327,306)$ 58,066,275$ 50.37 % 3,643,857,809$ 1.59 %

1,744,800 44,727,264 (2,527,628) 3,152,507 (1,758,565) 45,338,378 28.41 4,002,875,250 1.13

1,973,789 51,218,736 (3,180,596) 3,447,037 (1,783,739) 51,675,227 26.57 4,597,728,700 1.12

2,236,729 58,229,860 (3,659,747) 3,760,900 (1,922,712) 58,645,030 18.75 5,245,041,750 1.12

2,477,325 66,784,978 (4,154,423) 3,999,669 (2,085,834) 67,021,715 19.39 6,039,718,800 1.11

2,825,460 75,290,397 (4,468,236) 4,317,581 (2,331,954) 75,633,248 19.41 6,838,847,950 1.11

2,950,664 86,115,249 (4,811,721) 4,806,471 (3,186,422) 85,874,241 19.00 7,715,239,550 1.11

3,141,858 92,927,086 (6,204,294) 5,663,595 (3,429,244) 92,099,001 17.40 8,211,679,350 1.12

3,203,160 95,201,054 (7,342,426) 6,607,347 (3,446,962) 94,222,173 17.71 8,352,967,100 1.13

2,182,525 93,477,345 (7,901,616) 6,797,234 (3,344,406) 91,211,082 19.73 8,085,484,800 1.13

Source: State of Minnesota School Tax Report

Tax Capacities and Market ValuesLast Ten Fiscal Years

2010

2008

2005

2003

2009

2001

2006

2007

2004

TotalDirect Tax Rate

Tax Capacity Valuation


Tax Capacity

2002

Collectible of Market Valueas a PercentageFiscal DisparitiesFor Taxes

Pages 71 and 72

TaxCollection TotalCalendar Oak Park Washington Miscellaneous Stillwater

Year ISD No. 834 Stillwater Heights Bayport Marine Afton Lake Elmo Lakeland Woodbury County Other (2) Resident

2001 50.373% 35.697% 23.692% 40.701% 26.057% 18.001% 18.479% 22.744% 21.981% 25.007% 22.739% 133.816% 2001 0.13321% – – – – – – – 0.04024% – – 0.13321%

2002 28.407% 53.417% 41.741% 71.294% 42.731% 28.316% 25.665% 33.971% 34.304% 33.076% 25.675% 140.575% 2002 0.04741% – – – – – – – 0.04024% – – 0.04741%

2003 26.566% 52.761% 35.799% 48.251% 43.487% 27.075% 22.815% 33.333% 33.414% 31.800% 23.514% 134.641% 2003 0.18034% – – – – – – – 0.04024% – – 0.18034%

2004 18.746% 51.951% 34.382% 47.538% 41.837% 25.011% 19.315% 32.459% 31.013% 29.897% 19.627% 120.221% 2004 0.15329% – – – – – – – 0.04024% – – 0.15329%

2005 19.393% 51.629% 36.488% 41.257% 37.258% 26.646% 19.375% 32.467% 30.124% 27.461% 17.564% 116.047% 2005 0.14719% – – – – – – – 0.04024% – – 0.14719%

2006 19.405% 49.246% 36.136% 34.524% 35.005% 26.571% 19.351% 34.410% 29.018% 25.869% 16.052% 110.572% 2006 0.13216% – – – – – – – 0.01943% – – 0.13216%

2007 19.004% 46.498% 35.733% 31.014% 32.147% 22.349% 19.274% 34.312% 28.122% 24.604% 15.309% 105.415% 2007 0.11527% – – – – – – – 0.02450% – – 0.11527%

2008 17.404% 48.186% 36.343% 30.206% 35.519% 22.510% 20.553% 32.522% 28.169% 24.822% 15.283% 105.695% 2008 0.12544% – – – – – – – 0.02318% – – 0.12544%

2009 17.714% 47.930% 38.732% 30.488% 34.407% 24.037% 19.878% 35.125% 28.474% 25.242% 14.399% 105.285% 2009 0.12623% – – – – – – – 0.02249% – – 0.12623%

2010 19.734% 49.493% 43.845% 32.359% 35.478% 25.357% 20.479% 38.420% 31.033% 26.670% 14.769% 110.666% 2010 0.12033% – – – – – – – 0.02361% – – 0.12033%

(1) Municipalities listed includes those with district learning sites.

(2)

Source: Washington County


Overlapping RatesMunicipalities (1)

Property Tax Rates – Direct and Overlapping GovernmentsLast Ten Fiscal Years

The miscellaneous other levy includes Special Intermediate School District No. 916, Washington County HRA,Metropolitan Council, Metropolitan Mosquito, Transit District, Valley Branch WS, Rice Creek WS,Carnelian-Marine WS, South Washington WS, Browns Creek WS, Woodbury HRA, and Regional Rail

Rate

Tax capacity rateMarket value rate










Pages 73 and 74

Property Received inLocal Spread Fiscal Disparities Tax Credits Total Spread Amount Subsequent Years Amount Amount Amount

25,606,152$ 2,923,575$ 5,999,328$ 34,529,055$ N/A N/A 34,529,055$ 34,529,055$ 100.0 % –$ – % –$ – %

13,039,689 1,112,298 857,699 15,009,686 N/A N/A 15,009,686 15,009,686 100.0 – – – –

20,338,505 1,134,282 798,107 22,270,894 N/A N/A 22,270,894 22,270,894 100.0 – – – –

17,782,274 1,645,695 567,709 19,995,678 N/A N/A 19,974,619 19,974,619 99.9 21,059 0.1 – –

20,622,345 1,335,691 517,613 22,475,649 22,189,114$ 98.7 % 281,338 22,470,452 100.0 5,197 – – –

22,443,970 1,446,347 467,468 24,357,785 23,981,922 98.5 344,486 24,326,408 99.9 31,377 0.1 – –

23,898,040 1,544,990 426,488 25,869,518 25,362,791 98.0 453,726 25,816,517 99.8 53,001 0.2 – –

24,983,142 1,697,782 378,620 27,059,544 26,477,924 97.9 407,246 26,885,170 99.4 174,374 0.6 – –

25,686,833 1,937,342 389,065 28,013,240 27,250,014 97.3 – 27,250,014 97.3 763,226 2.7 – –

25,962,783 2,022,039 446,618 28,431,440 12,787,242 45.0 – 12,787,242 45.0 – – 15,644,198 55.0

1,048,234$ 15,644,198$

Note 1:

Note 2:


of Levy Percent

Uncollected Taxes Receivable as of June 30, 2010Delinquent Current

Percent

Total to DatePercentage

Collections

Percentageof Levy

First Year Levy Recognized


Property Tax Levies, Collections, and ReceivablesLast Ten Fiscal Years

2007

For TaxesCollectible

2003

2004

2002

2010

N/A – Not Available (first year collections were not readily available for years collectible prior to 2005).

2008

2009

Original Levy

A portion of the total spread levy is paid through various property tax credits which are paid through state aidsand have been included in collections.

Delinquent taxes receivable are written off after seven years. The amount of collections has been adjusted toreflect the write off of delinquent taxes receivable.

2001

2005

2006

Pages 76 and 77

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

546,578,671$ 600,431,288$ 689,659,305$ 786,756,263$ 905,957,820$ 1,025,827,193$ 1,157,285,933$ 1,231,751,903$ 1,252,945,065$ 1,212,822,720$

56,388,240 60,034,930 57,360,875 53,354,100 50,779,667 66,059,504 60,938,464 56,263,135 69,413,199 63,066,089

490,190,431$ 540,396,358$ 632,298,430$ 733,402,163$ 855,178,153$ 959,767,689$ 1,096,347,469$ 1,175,488,768$ 1,183,531,866$ 1,149,756,631$

Total net debt applicable to the limit10.32% 10.00% 8.32% 6.78% 5.61% 6.44% 5.27% 4.57% 5.54% 5.20%

Market value 8,085,484,800$

Debt limit (15% of market value) 1,212,822,720

Debt applicable to limitGeneral obligation bonds 65,005,000 Less amount set aside for repayment of general obligation debt (1,938,911)

Total net debt applicable to limit 63,066,089

Legal debt margin 1,149,756,631$

Note:


Last Ten Fiscal Years

Legal Debt Margin Calculation for Fiscal Year 2010

Total net debt applicable to limit

as a percentage of debt limit

Fiscal Year

Under state finance law, the District’s outstanding general obligation debt should not exceed 15 percent of total marketproperty value. By law, the general obligation debt subject to the limitation may be offset by amounts set aside forrepaying general obligation bonds.

Legal debt margin

Debt limit


Legal Debt Margin Information

Pages 81 and 82

2002 2003 2004 2005 2006 2007 2008 2009 2010

7 7 7 8 8 7 7 9 9 17 17 17 18 18 18 17 18 18

544 528 549 525 514 517 522 516 510

93 93 87 114 89 95 93 102 103 207 201 189 191 170 178 200 198 197

63 64 65 85 79 78 78 78 89 65 70 74 67 65 61 55 62 60 22 28 36 46 60 50 62 35 62

Total 1,018 1,008 1,024 1,054 1,003 1,004 1,034 1,018 1,048

(1)

Note:

Source: The District’s Human Resources Department


Employees by ClassificationLast Nine Fiscal Years

Employees for Fiscal Year Ended

Information prior to 2002 is not readily available.

This schedule is a headcount based on contract group; if an employee has multiple contract groups, they arereflected multiple times. Full-time and part-time employees count the same.

CustodiansCommunity education leads and assistants

Teachers

Employees (1)

Coordinators, supervisors, specialists, and technical support

Food serviceParaprofessionals

District directors/superintendentPrincipals

Pages 85 and 86

BA BA + 15 BA + 30 BA + 45 BA + 60 MA MA + 15 MA + 30 MA + 45 MA + 60 Total

34,567$ 35,707$ 36,862$ 38,031$ 39,210$ 39,210$ 39,822$ 40,433$ 41,049$ 41,668$ N/A56,350$ 58,686$ 63,420$ 66,137$ 72,310$ 72,310$ 73,943$ 75,248$ 76,576$ 77,909$ N/A

37 14 17 16 65 119 51 53 31 107 510

57,955$ MA476

N/A – Not Applicable

Source: The District’s Human Resources Department

Low rangeHigh rangeNumber of teachers

Number of full-time equivalents


Teacher Data

Average educationAverage salary

Year Ended June 30, 2010

Salary Schedule

Pages 87 and 88

Standardized tests

84 % 84 % 87 % 89 % 87 % 91 % 89 % 87 %84 86 89 83 85 85 78 85

Grade 7 80 87 83 82 79 81 80 Grade 10 91 90 90 74 74 83 90 88

MCA Math (1)80 79 89 87 87 89 89 91 84 84 87 68 66 72 68 76

Grade 7 77 85 72 75 78 79 77 Grade 11 83 83 83 43 48 51 56 62

22.8 23.1 23.2 23.2 23.4 23.6 23.3 23.9

Graduation dataISD No. 834’s graduation rate 98 97 98 98 97 97 96 98 State graduation rate 88 89 90 91 91 92 N/A N/A

Post-graduation student surveyFour-year college/university 58 63 63 71 67 60 55 63 Two-year college 13 16 15 17 23 20 19 12 Vocational/technical college 2 4 6 2 1 3 2 1 Employment 3 4 5 7 4 2 2 – Military 1 3 1 2 2 – 1 – No response/undecided 23 10 10 1 3 15 21 24

100 % 100 % 100 % 100 % 100 % 100 % 100 % 100 %

(1)

(2) Test first administered in fiscal year 2003–2004.

Note 1:

Note 2: Information prior to 2003 is not readily available. N/A – Not Available

Source:


Operating Indicators by FunctionStandardized Testing and Graduation Rates

Last Eight Fiscal Years

Minnesota Department of Education, the District’s Testing Department, and the District’s Registrar and ACT Corporation

In fiscal year 2005–2006 the Minnesota Comprehensive Assessment Test switched to the Minnesota Comprehensive Assessment Test II.

2010

Percent of students scoring at or above proficiency on the Minnesota Comprehensive Assessment Test (II).

N/A (2)

N/A (2)

Average composite score

MCA Reading (1)

Grade 5

2003

ACT

Grade 5

Grade 3

Grade 3

2005 2008 20092004Fiscal Year

20072006

Pages 90 and 91

Average Daily Total Average DailyAttendance (1) Lunches Served Days Participation Number Served Number Served

8,472 766,201 175 4,378 51.68 % 49,985 6.52 % 28,401 3.71 %

8,405 865,320 175 4,945 58.83 62,835 7.26 32,757 3.79

8,204 880,504 174 5,060 61.68 71,287 8.10 28,816 3.27

8,027 895,408 175 5,117 63.74 75,386 8.42 33,086 3.70

8,057 924,186 174 5,311 65.92 89,264 9.66 32,795 3.55

8,181 953,575 173 5,512 67.38 95,287 9.99 35,816 3.76

8,147 960,944 175 5,491 67.40 98,481 10.25 39,578 4.12

7,935 921,516 173 5,327 67.13 105,169 11.41 37,328 4.05

7,972 929,732 175 5,313 66.64 122,991 13.23 45,011 4.84

(1)

Note: Information prior to 2002 is not readily available.

Source: The District’s Food Service Department

2004

2002

as a Percentage ofParticipation

Percent of TotalPercent of TotalReduced Lunch

AttendanceAverage Daily


Food ServiceSchool Lunch Program Data

Last Nine Fiscal Years

2010

2005

Based on State Food and Nutrition Department guidelines; attendance is deemed to be 94 percent of enrollment.

Free Lunch

2006

2007

Fiscal Year

2003

2008

2009

Pages 93 and 94

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