Finances / Budget May 18, 2020 Overview COVID-19 required all NASD - - PowerPoint PPT Presentation

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Finances / Budget May 18, 2020 Overview COVID-19 required all NASD - - PowerPoint PPT Presentation

Dec 19, 2022 338 likes •610 views

NORRISTOWN AREA SCHOOL DISTRICT Impact of COVID-19 Closure on Finances / Budget May 18, 2020 Overview COVID-19 required all NASD Schools & Buildings to close on March 13, 2020 Education provided to students through Districts

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NORRISTOWN AREA SCHOOL DISTRICT Impact of COVID-19 Closure on Finances / Budget

May 18, 2020

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Overview

– COVID-19 required all NASD Schools & Buildings to close

  • n March 13, 2020

– Education provided to students through Districts’ “Continuity of Education” Plan

  • Remote learning through digital and non-digital

educational materials – Student meals provided through bi-weekly meal distribution events at 2 District sites

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NASD COVID-19 Closure

– Not only did our schools closed, but also many local businesses were required to close – Impact to NASD local revenues was immediate – 2019-20 local revenues projected to be down by over $ 2.6 million

  • Earned Income Tax Down - Filing Deadline Extended / Rising Unemployment
  • Transfer Tax Down - Property Sales Impacted
  • Interest Income Down - Market Conditions

– Several other non-local revenue sources also impacted by closure – Total projected revenue impact to 2019-20 school year – loss of $ 2.9 million

UC Claims - For Montgomery County

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NASD COVID-19 Closure

– Act 13, Pa’s Emergency School Code Bill, was approved in Harrisburg on March 27, 2020 – Required all NASD employees, and some contractors, to be paid in full – even though our schools were closed – District has been able to realize some incidental savings that through closure (utilities, substitutes, etc.), but these are not contributing to a significant savings or windfall.

  • And have been somewhat offset by spending for cleaning

supplies, PPE, etc.

  • General Fund likely will need to provide funding to Food

Service Program as all staff continue to get paid even though our traditional meal program is not operating – 2019-20 Projected Savings From Closure = $ 1.1 million

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2019-20 (Current Year)

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID Fund Balance 7/1/19 $ 7,136,618 $ 7,136,618 $ 7,136,618 2019-20 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 2019-20 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 Fund Balance 6/30/20 $ 7,136,618 $ 9,582,648 $ 7,755,587

Financial Overview Revenue Variance = ($2.9.Million)

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2019-20 (Current Year)

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID Fund Balance 7/1/19 $ 7,136,618 $ 7,136,618 $ 7,136,618 2019-20 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 2019-20 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 Fund Balance 6/30/20 $ 7,136,618 $ 9,582,648 $ 7,755,587

Financial Overview Expense Variance = $ 1.1 Million

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2019-20 (Current Year)

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID Fund Balance 7/1/19 $ 7,136,618 $ 7,136,618 $ 7,136,618 2019-20 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 2019-20 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 Fund Balance 6/30/20 $ 7,136,618 $ 9,582,648 $ 7,755,587

Financial Overview NASD Fund Balance (Reserve Funds) Projected to Increase By $ 600k

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NASD 2020-21 Proposed Final Budget

– NASD is still required to adopt the ”2020-21 Proposed Final Budget” by May 31, 2020 AND the “2020-21 Final Budget” by June 30, 2020 – Challenging Factors – Budget Development

  • Timing of County Reopening

– Impact to 2020-21 Student Programming – CDC Guidance / PPE Spending – Impact to Local Economy & NASD Local Revenues

  • State Funding for 2020-21 – TBD

– Charter School Reform ?

  • CARES (Federal Stimulus Funding) – Both allocation and

guidelines – TBD

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2020-21 Proposed Final Budget

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID 2020-21 Proposed Final Budget Beginning Fund Balance $ 7,136,618 $ 7,136,618 $ 7,136,618 $ 7,755,587 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 $ 159,981,945 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 $ 163,589,295 Ending Fund Balance $ 7,136,618 $ 9,582,648 $ 7,755,587 $ 4,148,237

Financial Overview

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2020-21 Proposed Final Budget

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID 2020-21 Proposed Final Budget Beginning Fund Balance $ 7,136,618 $ 7,136,618 $ 7,136,618 $ 7,755,587 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 $ 159,981,945 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 $ 163,589,295 Ending Fund Balance $ 7,136,618 $ 9,582,648 $ 7,755,587 $ 4,148,237

Financial Overview 2020-21 Proposed Final Budget Includes 3.3% Tax Increase (NASD Index) Revenues Still Below 2019-20 levels Significant revenue lags projected for EIT, Transfer Tax, Delinquent RE Tax, and Interest Income

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2020-21 Proposed Final Budget

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID 2020-21 Proposed Final Budget Beginning Fund Balance $ 7,136,618 $ 7,136,618 $ 7,136,618 $ 7,755,587 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 $ 159,981,945 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 $ 163,589,295 Ending Fund Balance $ 7,136,618 $ 9,582,648 $ 7,755,587 $ 4,148,237

Financial Overview 2020-21 Proposed Spending Only Increasing by 1.88% (Compared to 2019-20 Budget) Generating Adequate Revenue To Support Spending Plan Is Challenge

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2020-21 Proposed Final Budget

Budgeted 2019-20 (ADJUSTED) Projected 2019-20 PRE-COVID Projected 2019-20 POST-COVID 2020-21 Proposed Final Budget Beginning Fund Balance $ 7,136,618 $ 7,136,618 $ 7,136,618 $ 7,755,587 Revenues $ 160,592,050 $ 161,815,075 $ 158,889,875 $ 159,981,945 Expenses $ 160,592,050 $ 159,369,045 $ 158,270,906 $ 163,589,295 Ending Fund Balance $ 7,136,618 $ 9,582,648 $ 7,755,587 $ 4,148,237

Financial Overview Revenue Shortfall Will Require Use of Fund Balance And/Or Program Cuts 2020-21 Proposed Final Budget Includes Using $ 3.6 Million of Fund Balance As Revenue (Almost 50%) TOO MUCH! LOTS OF WORK TO BE DONE BEFORE FINAL ADOPTION IN JUNE

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Property Tax Freeze Proposals (Impact to NASD)

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NASD 2020-21 Proposed Final Budget

– Property Tax Freeze for 2020-21 – HOT TOPIC IN HARRISBURG – House Bill 1776 & 2431

  • Would limit authority of locally elected School Board
  • NASD would not be able to increase tax rate for 2020-21
  • Short term & long term effects could be devastating for NASD

2019-20 2020-21 NO TAX INCREASE 2021-22 2022-23 2023-24 Revenues $ 158,889,875 $ 156,981,945 $ 159,500,000 $ 162,800,000 $ 166,500,000 Expenses $ 158,270,906 $ 163,589,295 $ 166,800,000 $ 169,700,000 $ 172,800,000 Surplus / Deficit $ 618,969 ( $ 6,607,350) ( $ 7,300,000) ( $ 6,900,000) ( $ 6,300,000) Begin Fund Balance $ 7,136,618 $ 7,755,587 $ 1,148,237 ( $ 6,151,763) ($ 13,051,763) Ending Fund Balance $ 7,755,587 $ 1,148,237 ( $ 6,151,763) ( $ 13,051,763) ($ 19,351,763) Fund Balance (% of Expenses) 4.90% 0.70%

  • Act I Index Expected

Low For Next Few Yrs (Based on Pa Economy)

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NASD 2020-21 Proposed Final Budget

– Property Tax Freeze for 2020-21 – HOT TOPIC IN HARRISBURG – House Bill 1776 & 2431

  • Would limit authority of locally elected School Board
  • NASD would not be able to increase tax rate for 2020-21
  • Short term & long term effects could be devastating for NASD

2019-20 2020-21 NO TAX INCREASE 2021-22 2022-23 2023-24 Revenues $ 158,889,875 $ 156,981,945 $ 159,500,000 $ 162,800,000 $ 166,500,000 Expenses $ 158,270,906 $ 163,589,295 $ 166,800,000 $ 169,700,000 $ 172,800,000 Surplus / Deficit $ 618,969 ( $ 6,607,350) ( $ 7,300,000) ( $ 6,900,000) ( $ 6,300,000) Begin Fund Balance $ 7,136,618 $ 7,755,587 $ 1,148,237 ( $ 6,151,763) ($ 13,051,763) Ending Fund Balance $ 7,755,587 $ 1,148,237 ( $ 6,151,763) ( $ 13,051,763) ($ 19,351,763)

Act I Index Expected Low For Next Few Yrs (Based on Pa Economy)

Fund Balance Depleted During 2021-22; Recovery Will Be Challenging / Impacted By Length of Recession

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Taxpayer Impact Tax Payment Flexibility

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Rebate

North Penn SD Rebate Program

  • Modeled After PA Property Tax/Rent Rebate Program
  • Rebate Started at 25% of State Amount – Increased to 30% in 2019-20
  • Max Rebate = $ 162.50 @ 25% & $195 @ 30%
  • Program Eligibility:
  • Age 65 or older
  • Widow / Widower Age 50 or older
  • Age 18 or older and permanently disabled
  • NASD exposure = $ 309k at 25% & $ 371k at 30%

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

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Rebate Volunteer

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

Owen J Roberts Senior Service Work Program

  • Senior workers work up to 62.5 hours per year

for maximum compensation @ $500

  • Program Eligibility:
  • Age 60 or older
  • NASD exposure = Difficult to calculate; could

be significant

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Rebate Volunteer Installments

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

  • NASD currently offers 4 installments
  • Aug 3, Sept 3, Oct 3, Nov 3
  • Act 1 allows up to 6 monthly payments
  • Needs Board resolution
  • Will require tax collector to

implement process changes

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Rebate Volunteer Installments

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

Deadline Extensions

  • NASD cannot extend the

discount period

  • House Bill 2460
  • Would extend the

property tax discount period by 30 days would also eliminate the penalty through December 31, 2020

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Rebate Volunteer Installments

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

Deadline Extensions

Will Further Stress Fund Balance Vulnerable Population Safety Concerns May Impact Cash Flow Recommend Moving to 6 Monitor Legislative Activity Support Action

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Rebate Installments

2020-21 Proposed Final Budget

Taxpayer Relief / Tax Payment Flexibility (Options)

Rebate

FF Committee Recommends Implementation at 20% Rebate (Max = $ 130) FF Committee Recommends Implementation at 6 equal payments

Resolutions for both are

  • n the agenda this

month for full Board consideration

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Next Steps

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  • Act 1 Requires Adoption of “Proposed” Final Budget

by 5/31

  • Recommended Action Items For May:

– Approve 2020-21 Proposed Final Budget – Approve expanding installment options from four (4) payments to six (6) monthly payments

  • Early notice to tax collectors needed

– Approve implementation of rebate program for our senior citizens, widows/widowers, and disabled persons with fixed or limited incomes be approved – Approve Cabinet/AAS proposals for voluntary wage concessions

Next Steps

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  • Using $ 3.6 Million in Fund Balance in 2020-21 is

simply too much

  • 2020-21 Revenue Projections Will Be Refined

– Focusing on:

  • Earned Income Tax
  • CARES Stimulus Funding
  • 2020-21 Spending Plans Will Be Revisited

– Staffing / Department Budgets / Building Budgets

  • Two FF Committee meetings scheduled for June

– June 10 – Finance / Budget – June 11 – Facilities / Transportation / Food Service

  • 2020-21 Final Budget must be adopted by 6/30/20

Next Steps

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Questions