2020-21 ANNUAL BUDGET January 6, 2020 2020-21 ADMINISTRATIVE BUDGET - - PowerPoint PPT Presentation

NORRISTOWN AREA SCHOOL DISTRICT 2020-21 ANNUAL BUDGET

January 6, 2020

GOAL #1

DEVELOP BUDGET THAT DOES NOT REQUIRE A TAX INCREASE BEYOND OUR ACT 1 INDEX.

GOAL #2

DEVELOP BUDGET THAT DOES NOT REQUIRE STAFF FURLOUGHS OR PROGRAM REDUCTIONS.

GOAL #3

DEVELOP BUDGET THAT DOES NOT RELY ON FUND BALANCE AS REVENUE SOURCE

2020-21 ADMINISTRATIVE BUDGET GOALS

Act 1 (Taxpayer Relief Act of 2006) Budget Implications

• Limits taxing authority of School Boards:

– Important - Prior law granted School Boards unlimited power to tax – Act 1 relies on inflationary based system; Index calculation impacted by Statewide Average Weekly Wage (SAWW ) And Education Cost Index (ECI) – Base Index

• 2.60% for 2020-21

– Adjusted Index (for economically challenged Districts)

• 3.30% for 2020-21 (NASD)

– Exception Index

• If applicable - will be determined by exceptions submitted to PDE
• Special Education / PSERS

– Voter Referendum

• Prescriptive timeline for budget actions: (see next slide)

January 21, 2020 Act 1 Deadline to approve 2020-21 Preliminary Budget (not applicable if ”Opt-Out” Resolution is approved) first

point.

January 9, 2020 Act 1 Deadline to make 2020-21 Preliminary Budget available for public inspection OR adopt “Opt-Out” Resolution December 11, 2019 Facilities-Finance Committee Mtg February 13, 2020 Act 1 Deadline to file for exceptions to PDE (not applicable if “Opt-Out” Resolution is approved May 31, 2020 Act 1 Deadline to approve 2020-21 Proposed Final Budget June 30, 2020 Act 1 Deadline to approve 2020-21 Final Budget

2020-21 Act 1 Budget Timeline

(Presidential Election Year)

January 9, 2020 Act 1 Deadline to make 2020-21 Preliminary Budget available for public inspection OR adopt “Opt-Out” Resolution December 11, 2019 Facilities-Finance Committee Mtg

2020-21 Act 1 Budget Timeline

(Presidential Election Year)

Facilities-Finance Committee supports recommendation to “Opt-Out”

Act 1 (Taxpayer Relief Act of 2006) Budget Implications

• “Opt-Out” Resolution:

– Section 311(d) allows Boards to “Opt-Out” of many of the complex steps of Act 1 by adopting a resolution certifying that their Final Budget will not include a tax increase greater than their Act 1 Index – For NASD – tax increase will be limited to 3.30%

• Generates @ $3,130,000 in new revenue

– Deadline – January 9, 2020

Act 1 (Taxpayer Relief Act of 2006) Budget Implications

• “Opt-Out” Resolution:

– Section 311(d) allows Boards to “Opt-Out” of many of the complex steps of Act 1 by adopting a resolution certifying that their Final Budget will not include a tax increase greater than their Act 1 Index – For NASD – tax increase will be limited to 3.30%

• Generates @ $3,130,000 in new revenue

– Deadline – January 9, 2020

Is this enough new revenue to support our budget goals?

2020-21 Financial Snapshot Snapshot Revenue Overview

2020-21 Financial Snapshot Snapshot

2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) REVENUES: RE TAX GENERATED BY 3.30% TAX INCREASE $ 3,130,000 TAX LOSS – EST IMPACT OF WALMART CLOSURE ($ 175,000) ASSESSMENT INCREASE – BENTWOOD (EN TWP) – GRAND OPENING DEC 2019! ? EARNED INCOME TAX ? BASIC EDUCATION FUNDING / SPECIAL EDUCATION FUNDING ? SCHOOL RESOURCE OFFICER FUNDING (COMBO LOST REV & INCREASED EXP) ($ 120,000) FICA (SOCIAL SECURIIY)/ PSERS SUBSIDY $ 217,000 FEDERAL SUBSIDY – 21ST CENTURY PROGRAM CONCLUSION ($ 399,000) OTHER FEDERAL REVENUES ? TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000

2020-21 Financial Snapshot Snapshot Expense Overview

2020-21 Financial Snapshot Snapshot

2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1ST LOOK $ 680,000 PSERS / FICA $ 434,000 21ST CENTURY PROGRAM CONCLUSION ($ 399,000) DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602,000

2020-21 Financial Snapshot Snapshot

2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1ST LOOK $ 680,000 PSERS / FICA $ 434,000 21ST CENTURY PROGRAM CONCLUSION ($ 399,000) DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000

Can we close this gap over the next 6 months without sacrificing our goals ?

2020-21 Financial Snapshot Snapshot

2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1ST LOOK $ 680,000 PSERS / FICA $ 434,000 21ST CENTURY PROGRAM CONCLUSION ($ 399,000) DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000

Can we close this gap over the next 6 months without sacrificing our goals ? Yes! We expect to be able to address through a combination of increased revenue and reduced costs.

2020-21 Financial Snapshot Snapshot

2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1ST LOOK $ 680,000 PSERS / FICA $ 434,000 21ST CENTURY PROGRAM CONCLUSION ($ 399,000) DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000

Can we close this gap over the next 6 months without sacrificing our goals ? Recommendation – Approve the “Opt-Out” Resolution limiting

• ur 2020-21 tax increase to 3.30% by January 9, 2020

• Budget Concerns:

– Charter Enrollment / Charter Reform – Tech School Tuition / Program Expansion – ELD (English Language Development) Program

• Staffing levels to be revisited in Spring

– Enrollment Projections

• Updated study will be available after New Year
• More concerned about future years than about 2020-21

– General concern about economy; trade wars, recession ?

2020-21 Financial Snapshot Snapshot

• January 6, 2020

– Adopt needed “Opt-Out” resolution at Special Board Mtg

• January – May 2020

– Refining 2020-21 staffing levels

• No furloughs, but expect transfers to be needed
• Examine every resignation/retirement closely

– Finalizing department /program budgets – Working with local tax collectors and municipalities on tax assessment and collection projections – Monitoring activity in Harrisburg & Washington

• May 2020

– Present 2020-21 Proposed Final Budget

2020-21 Budget Next Steps

QUESTIONS ?