2017-2018 BUDGET PRESENTATION April 4, 2017 Boyertown Area School - - PowerPoint PPT Presentation

2017-2018 BUDGET PRESENTATION

April 4, 2017 Boyertown Area School District Board of Education

2016 Berks County Schools Real Estate Tax Rate

ANTIETAM 37.79

• B. HEIGHTS

32.30 EXETER 32.21 FLEETWOOD 31.81 WYOMISSING 30.07 KUTZTOWN 29.95 DANIEL BOONE 29.70 MUHLENBERG 28.56 TULPEHOCKEN 27.70

• C. WEISER

27.14

• GOV. MIFFLIN

27.10

• SCH. VALLEY

27.07 TWIN VALLEY 26.77 HAMBURG 26.71 OLEY VALLEY 26.33 WILSON 24.95 BOYERTOWN 24.27 READING* 17.93

* Reading SD taxpayers voted to exchange HIGHER INCOME tax FOR LOWER PROPERTY tax. Compare Reading SD EIT of 1.5% to Boyertown .5%

2016 Montgomery County Schools Real Estate Tax Rate

CHELTENHAM 45.09 POTTSTOWN 39.25 JENKINTOWN 38.98 POTTSGROVE 37.72 NORRISTOWN 34.39 LWR MORELAND 33.32 UPPER DUBLIN 32.29 SPRINGFIELD 31.66 PERK VALLEY 31.60 ABINGTON 30.83 UPR MORELAND 29.40 SOUDERTON 28.78 METHACTON 28.74 HATBORO-HORS 27.49 LOWER MERION 27.40 SPRING FORD 26.24

BOYERTOWN 24.27

NORTH PENN 24.19 UPPER PERK 23.64 COLONIAL 20.96 UPPER MERION 18.96 WISSAHICKON 18.79

Act 1 & Budgeting

Below is the BASD 10-year historical Act 1 data: Base BASD BASD Difference FY Index Index % Tax Incr** Base vs. Tax Incr 07-08 3.4% 4.1% 2.2%

• 1.2%

08-09 4.4% 5.3% 2.6%

• 1.8%

09-10 4.1% 4.9% 0.0%

• 4.1%

10-11 2.9% 3.5% 3.7% +0.8% 11-12 1.4% 1.7% 5.5% +2.9% 12-13 1.7% 2.1% 2.3% +0.6% 13-14 1.7% 2.1% 2.5% +0.8% 14-15 2.1% 2.6% 2.6% +0.5% 15-16 1.9% 2.3% 2.5% +0.6% 16-17 2.4% 2.9% 1.5%

• 0.9%

** Average Tax Increase subject to tax equalization calculation

Act 1 Index

Index Calculation for 2017-2018: ECI Index equals 2.5% times: Aid Ratio Allow (.75 + .479) x 1.2229 BASD Index (from PDE) 3.1% County Millage Index Increase Berks 24.27 3.1% .75 Mont. 24.27 3.1% .75

1 Mill = $2.3 Million times .75 = $1,725,000

Expenditure Per Student Berks County

Expenditure Per Student Montgomery County

Expenditures Well Invested Academic Results

2016 SAT Results

Statewide - 118th out of 646 (Top 18% in Pennsylvania)

Berks County Only - 4th out of 18 Montgomery County Only - 17th out of 22 Berks and Montgomery County – 21st out of 40

• Per pupil instructional expenditure in Berks County

16th lowest of 18 School Districts

• Per pupil instructional expenditure in Montgomery

County 22nd out of 22 School Districts

Budget Deficit Update

February 7 March 14 Projected Revenue $105,347,105 $105,367,201 Projected Expenditures $111,345,876 $111,017,918 Projected Deficit $ (5,998,771) $ (5,650,717) Use of $2M Committed One-Time Funds PSERS $ 2,000,000 $ 2,000,000 Net Deficit $ (3,998,771) $ (3,650,717) Current Budget does not include any revenue increase as proposed in Governor Wolf’s budget proposal.

Budget Deficit Reduction

• Three Ways to Decrease a Budget Deficit:
• 1. Decrease Expenditures
• 2. Increase Revenue
• 3. Use of Fund Balance

Prior Budget to Actual Review

• Review of Revenue Budget History
• Conservative Projections allowed for Positive

Variances

• More Optimistic Revenue Projections will

minimize Positive Variances

• Review of Expenditure Budget History
• Expenditure Negative Variances increasing as

Optimistic Expense Items are overspent

State Budget Trouble

State Budget Woes

The Independent Fiscal Office, a non-partisan state agency, confirmed an anticipated shortfall of at least $2.5 billion by July 1, 2018, reflective of sluggish economic growth, rising health care and pension costs, and an aging workforce. That shortfall can be reduced by substantive changes in public policy.

Deficit Reduction Expenditures

PSERS Mandated Contribution Rate

PSERS EXPENSE

2 Major Expenditure Factors (a.k.a. State Mandates)

• Pennsylvania School Employers Retirement System (PSERS)

State Mandated Pension Establishes Annual Contribution Rate for All School Districts

11-12 PSERS rate at 8.65% (+ 5.2%) ↑ $1.28 Million 12-13 PSERS rate at 12.36% (+42.9%) ↑ $1.59 Million 13-14 PSERS rate at 16.93% (+37.0%) ↑ $2.25 Million 14-15 PSERS rate at 21.40% (+26.4%) ↑ $2.58 Million 15-16 PSERS rate at 25.84% (+20.7%) ↑ $2.39 Million 16-17 PSERS rate at 30.03% (+16.2%) ↑ $1.99 Million 17-18 PSERS rate at 32.57% (+ 8.5%) ↑ $1.6 Million (est.)

• Special Education Expenditures

Approximately 20% of BASD Students Special Ed expenditures average ↑ 11% over 7 years 2016-17 2017-18 Increase Special Ed Expense $19.541 M $20.847 M $1.306 M Special Ed % of Budget 17.5% 18.1%

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations/ Professional

• 1. Reduce from 2.0 FTE to 1.0 FTE middle school

librarians ○ JHE and JHW will each have a teacher who is .5 librarian and .5 ELA teacher ○ Library clerk covers library, reduced

• pportunity for library instruction

○ One open ELA teacher position would not be filled for 2017-18 Reduction = $80,000 (Salary, PSERS, Benefits)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations/ Professional

• 2. Reduce 1.0 FTE School Counselor
• Transfer 1 counselor from elementary to

middle school open position

• Elementary reduces by one grade level
• No increase to counseling services for

students at elementary level

• WES, BES, GES, NHUF have 1.0 FTE

Counselor, CES, PFES, EES have .5 FTE Counselor Reduction = $98,000 (Salary, PSERS, Benefits)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations/Professional

• 3. Close Planetarium

○ No Planetarium sessions for BASD students/Community ○ Reduced community opportunity ○ Teacher retires June 2017 Reduction = $30,000

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Professional

• 4. Reduce 2.5 special area teachers at elementary

level ○ Students continue current amount of special area instruction ○ No opportunity to expand health instruction ○ Continued large class sizes/bubble classes combined ○ Art vacancy not filled, PE to open BASH position, .5 music teacher reassigned to middle school position Reduction = $200,000 (Salary, PSERS, Benefits)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Professional

• 5. Reduce .5 BASH Chemistry/Biology

○ Increase class size from 21 to 23 (average/estimated) Reduction = $50,000 (Salary, PSERS, Benefits)

• 6. Eliminate Elementary Band/Orchestra

○ No opportunity for band/orchestra until middle school ○ Decreased learning/opportunity for 508 students (some students counted twice) ○ Teacher furloughs in music department Reduction = $350,000 (Salary, PSERS, Benefits)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Administration

• 1. Reduce Administration

○ Reallocation of administrative assignments ○ Administrative staff increases additional areas of responsibility Reduction = $175,000 (Salary, PSERS, Benefits)

• 2. Reduce Administrative support

○ Reallocation of office support staff ○ Current support staff increases additional responsibilities Reduction = $25,000 (Salary, PSERS)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Support

• 1. Reduce custodial staff

○ Reallocation of staff assignments ○ Redistribution/prioritization of duties Reduction = $130,000 (Salary, PSERS)

• 2. Reduce recess aide hours across district

○ 6th grade students moving to middle school ○ Some elementary schools will condense lunch/recess periods Reduction = $17,000 (Salary, PSERS)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Support

• 3. Reduce paraprofessional hours at elementary

level ○ Evaluate support needs due to attrition and replacement Reduction = $22,000 (Salary, PSERS)

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Operations

• 1. Reduce school and department budgets 5%

○ Less supplies, equipment, needs reprioritzed Reduction = $150,000

• 2. Reduce three bus runs

○ Redesign district runs ○ Possible longer bus rides, increased students per bus Reduction = $117,000

Program Reduction Considerations

• 70% of BASD Budget is Personnel Wages & Benefits

Reduction Considerations / Operations

• 3. Elimination of middle school sports programs

○ Eliminates 26 teams involving 828 students (based on last season, some students counted twice) ○ Reduced opportunity for students to prepare for BASH programs through BASD programs Reduction = $200,000 (stipends, equipment, fees, etc.)

Reduction Considerations Summary

JH Librarian $ 80,000 Counselor $ 98,000 Planetarium $ 30,000 Elementary Special Areas $ 200,000 BASH Chem/Bio $ 50,000 Elementary Band/Orchestra $ 350,000 Administration $ 175,000 Administrative Support $ 25,000 Custodial Support $ 130,000 Recess Aides $ 17,000 Paraprofessional $ 22,000 Budgets Reduction $ 150,000 Bus Runs $ 117,000 Middle School Sports $ 200,000 Total $1,644,000

Deficit Reduction Increase Revenue

Revenue Increases

Limited Options Student Activity Fees - $100 student total $120,000 BASH Parking Fees - $50 permit total $20,000 Facility Rental Increase – total $160,000 Assessment Increase Projected at 1% increase adding $200,000 results from March to May County Reports Tax Increase up to Act 1 Limit of 3.1% would generate $1.75 Million Current Deficit $5,650,717 Use of one-time $ $2,000,000 Less: 3.1% Tax increase $1,725,000 Remaining Deficit $1,925,717

Use of Fund Balance

Fund Balance Usage

➢$2 million in Committed fund balance for PSERS included in budget ▪ Projected Balance of PSERS Fund on 6/30/18 is $2.8 million ▪ Plan to utilize remaining balance over 3 years with proposed replacement of one-time funds with tax increases or further expenditure or program reductions

• Capital Projects Fund Transfer @ $500,000 for 2017-18
• Internal Service Fund Balance Reduction Plan - Premium Holiday

Fund Balance Usage

• Caution must be used when considering further use of fund

balance considering plan to deplete the PSERS funds

• Additional use of fund balances will create larger deficits in the

next 1-2 years; larger deficits than tax increases could fund

Budget Deficit Reduction

• Ways to Decrease a Budget Deficit:

Decrease Expenditure Which programs to cut? How many employees to furlough? Which services are reduced? Reduction in BASD activities

Budget Deficit Reduction

• Ways to Decrease a Budget Deficit:

Increase Revenue Raise tax revenue Raise activity fees Raise parking fees Raise facility rental fees

Budget Deficit Reduction

• Ways to Decrease a Budget Deficit:

Use of Fund Balance How much one-time funds to use? PSERS Committed Fund Internal Service - Healthy Holiday Capital Projects Transfer How do we replace in the future?

Looking to the Future

• How will this year impact the next 5 years?
• The use of one-time fund balance must be replaced
• Health Care is cyclical - 0% increases are not projected.
• Special Education costs will continue to rise.
• PSERS increasing but at slower rate
• Building operations and maintenance evaluation
• Future Tax Increases
• 2018-2019 and 2019-2020 will require tax increases and possible

use of exceptions (No Act 1 Resolution).

• Without additional revenue, programs and services will continue

to be reduced or eliminated.

Future Meetings

• April 18, 2017 Budget Work Session –

Junior High East – 6:30 pm

• April 25, 2017 School Board Meeting – Education Center - 6:30 pm
• May 9, 2017

School Board Meeting – Education Center – 6:30 pm

• (Adoption of Final Proposed Budget)
• May 30, 2017 Budget Work Session –

Education Center – 6:30 pm

• June 13, 2017 School Board Meeting – Education Center – 6:30 pm
• (Adoption of Final Budget)

Questions & Discussion