Mission Statement The New Hope-Solebury School District takes pride - - PowerPoint PPT Presentation

Mission Statement

The New Hope-Solebury School District takes pride in its commitment to excellence. We strive to inspire and empower our students to become passionate, confident, life-long learners, with the skills and strength of character to contribute to a diverse and ever-changing world.

2017-2018 Proposed Preliminary Budget

 School District Budget Basics  Brief History of New Hope-Solebury budget and financial

trends

 2017-2018 Budget Process  2017-2018 Budget Highlights  Timeline

Act 1 of 2006

 Establishes a set index by which property taxes cannot be

raised beyond

 2017 – 2018 index is set at 2.5%

 Districts can apply for exceptions to increase property taxes

beyond the index

 Increases in Retirement, Special Education, Debt Service costs  Fund Balance below required threshold

 Budget approval can take 1 of these paths

 Adopt a resolution to remain within the Act 1 Index  Adopt a resolution authorizing proposed preliminary budget

display and advertising

Act 1 of 2006 - Recommendation

 Adopt a resolution authorizing proposed preliminary

budget display and advertising

 This is not a final budget – Review, Refine and Adjust until

final form in June

 This path does not set a final property tax rate – just the

basis for approval of exceptions

 Allows for the most flexibility and opportunity

 Opportunity to raise property taxes beyond index if needed

Fund Balance

 Fund Balance – Difference between assets and liabilities

 Equate it to your savings account  Unsustainable to pay your mortgage with savings – eventually

run out of money

 Fund Balance should be used strategically, not to pay for

recurring expenses.

 Pre-planned purposes, one-time expenditures, unexpected items  Not – Increases in salaries and benefits

 Fund Balance is also essential for cash flow purposes.  The trend of the prior years has put our district in a position of

using large portions of Fund Balance to fund recurring expenses.

What is Millage

 Millage is the amount per $1,000 of assessed value that is

used to calculate taxes on property.

 It is ultimately the rate that we will set when approving the

final budget.

 The current millage for 2016-2017 is set at 93.9387

 Average tax bill is $5,338.44

 Tax increases were maintained at the Act 1 index for 7 years:

09-10 through 15-16

 One of the reasons expenditures are outpacing revenues.

2016-2017 Preliminary Budget

Year Revenues Expenses Deficit Ending Fund Balance 2015-2016 Budget $37.1M $39.7M $2.6M $3.7M 2016-2017 Prelim (1) $37.5M $41.7M $4.2M ($0.5M) 2016-2017 Prelim (2) $38.8M $41.7M $2.9M $0.8M 2017-2018 Estimate (3) $39.3M $42.6M $3.3M ($3.0M) 2018-2019 Estimate (3) $40.0M $43.7M $3.7M ($6.7M) 2019-2020 Estimate (3) $40.6M $44.8M $4.2M ($10.9M)

(1) – 0% Tax Increase (2) – 4.8% Tax Increase (3) – 2.0% Tax Increase estimate

2016-2017 Preliminary Budget

32,000,000 34,000,000 36,000,000 38,000,000 40,000,000 42,000,000 44,000,000 46,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Expense to Revenue Gap - Growing

Revenue Expense

2016-2017 Final Budget

Year Revenues Expenses Deficit Ending Fund Balance 2015-2016 Actual $37.1M $38.4M $1.3M $5.0M 2016-2017 Final (1) $38.7M $40.1M $1.4M $3.6M 2017-2018 Estimate (2) $39.4M $41.3M $1.8M $1.8M 2018-2019 Estimate (2) $40.1M $42.1M $2.0M ($0.2M) 2019-2020 Estimate (2) $40.9M $43.3M $2.4M ($2.6M)

(1) – 4.8% Tax Increase (2) – 2.0% Tax Increase estimate

2016-2017 Final Budget

33,000,000 35,000,000 37,000,000 39,000,000 41,000,000 43,000,000 45,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Expense to Revenue Gap - Growing

Revenue Expense Current Expense Prior

2016-2017 Final Budget

Year Revenues Expenses Deficit Ending Fund Balance 2015-2016 Actual $37.1M $38.4M $1.3M $5.0M 2016-2017 Final (1) $38.7M $40.1M $1.4M $3.6M 2017-2018 Estimate (2) $39.4M $41.3M $1.8M $1.8M 2018-2019 Estimate (2) $40.1M $42.1M $2.0M ($0.2M) 2019-2020 Estimate (2) $40.9M $43.3M $2.4M ($2.6M)

(1) – 4.8% Tax Increase (2) – 2.0% Tax Increase estimate

2017-2018 Budget Process

 September 2016

 Started budget discussions with Leadership Team  Needs Based budget philosophy.

 October 2016

 Budgets presented to internal team for review

 November 2016

 A first look was presented to the finance committee

 December 2016

 Board approval to move forward with advertising

preliminary budget notice for public inspection.

2017-2018 Budget Highlights Expenditures

 Expenditures - $857,000 increase or 2.1% from 16-17 budget

 Salaries and Wages - $482,000 increase

 Act 93 and Support Staff based on contracts  Teachers – Contract ends June 30, 2017

 Benefits - $793,000 increase

 Medical Benefits – 11.1% increase – 1st look  PSERS – $616,000 increase or 11%

 Other Expenditure Categories - $76,000 decrease

 Departmental Budgets – $276,000 decrease  Charter School - $80,000 increase  MBIT - $80,000 increase based on enrollment increase  Transportation - $40,000 increase (contractual 2.5%)

 Debt Service - $342,000 decrease per current debt schedule

PSERS Impact

0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00% 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22

PSERS - Employer Contribution Trend

Employer Rate Prior Employer Rate Current

PSERS Impact

• 1,000,000

2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22

PSERS - Employer Costs

Employer Cost Net of State Reimbursement

73% 19%

8% Expenditures

Personnel Non-Personnel Debt Service

2017-2018 Budget Highlights Revenues

 Earned Income Tax - $50,000 decrease to match 2 year

trend.

 NJ/PA Reciprocal tax agreement no longer an issue

 State Revenues

 Educational Subsidies remain flat to 16-17 budget  Retirement and FICA Subsidy - $327,800 based on increased

expense

 Receive 50% subsidy on all PSERS/FICA expenditures

 Federal Revenues - $50,000 Decrease

 In line with $50,000 expense reduction for special

education contingency – no budget impact.

83%

16%

1%

Revenue

Local State Federal

2017-2018 Preliminary Budget

17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 1,584,005 (918,972) (3,892,214) Total Revenue - 0.00% Tax Increase 38,925,961 39,589,020 40,357,408 41,078,794 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (2,041,944) (2,502,977) (2,973,242) (3,366,364) Ending Fund Balance 1,584,005 (918,972) (3,892,214) (7,258,578) 17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 2,287,794 502,683 (1,738,337) Total Revenue - 2.50% Tax Increase 39,629,751 40,306,885 41,089,631 41,825,662 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (1,338,154) (1,785,111) (2,241,020) (2,619,497) Ending Fund Balance 2,287,794 502,683 (1,738,337) (4,357,833) 17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 2,710,038 1,355,615 (446,103) Total Revenue - 4.00% Tax Increase 40,051,994 40,737,573 41,528,933 42,273,750 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (915,911) (1,354,423) (1,801,718) (2,171,409) Ending Fund Balance 2,710,038 1,355,615 (446,103) (2,617,512) Scenario 1 - 0.00% Tax Increase Scenario 2 - 2.50% Tax Increase - Act 1 Scenario 3 - 4.00% Tax Increase - Act 1 plus Exceptions

2017-2018 Preliminary Budget

17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 1,584,005 (918,972) (3,892,214) Total Revenue - 0.00% Tax Increase 38,925,961 39,589,020 40,357,408 41,078,794 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (2,041,944) (2,502,977) (2,973,242) (3,366,364) Ending Fund Balance 1,584,005 (918,972) (3,892,214) (7,258,578) 17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 2,287,794 502,683 (1,738,337) Total Revenue - 2.50% Tax Increase 39,629,751 40,306,885 41,089,631 41,825,662 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (1,338,154) (1,785,111) (2,241,020) (2,619,497) Ending Fund Balance 2,287,794 502,683 (1,738,337) (4,357,833) 17-18 18-19 19-20 20-21 Beginning Fund Balance 3,625,949 2,710,038 1,355,615 (446,103) Total Revenue - 4.00% Tax Increase 40,051,994 40,737,573 41,528,933 42,273,750 Total Expenditures 40,967,905 42,091,996 43,330,650 44,445,158 Surplus / (Deficit) (915,911) (1,354,423) (1,801,718) (2,171,409) Ending Fund Balance 2,710,038 1,355,615 (446,103) (2,617,512) Scenario 1 - 0.00% Tax Increase Scenario 2 - 2.50% Tax Increase - Act 1 Scenario 3 - 4.00% Tax Increase - Act 1 plus Exceptions

33,000,000 35,000,000 37,000,000 39,000,000 41,000,000 43,000,000 45,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Expense to Revenue Gap - Continues Trending Apart

Revenue Expense Current

*Source - BucksCounty.org - Government-Finance-Board of Assessment-Millage Rates

• 20.00

40.00 60.00 80.00 100.00 120.00 140.00 160.00 180.00 200.00

Millage - Bucks County Schools 2015/2016

Millage History

Fiscal Year Tax Rate Change Average Tax Bill Average Increase % Incr Act 1 Index 2009/2010 79.84 3.14 4,537.23 178.44 4.09% 4.10% 2010/2011 82.15 2.31 4,668.72 131.49 2.90% 2.90% 2011/2012 83.30 1.15 4,733.80 65.09 1.39% 1.40% 2012/2013 84.72 1.42 4,814.28 8048 1.70% 1.70% 2013/2014 86.16 1.44 4,896.11 81.83 1.70% 1.70% 2014/2015 87.96 1.81 4,998.93 102.82 2.10% 2.10% 2015/2016 89.64 1.67 5,093.91 94.98 1.90% 1.90% 2016/2017 93.94 4.30 5,338.44 244.54 4.80% 2.40% 2017/2018** 97.6962 3.76 5,551.98 213.53 4.00% 2.50%

**2017/2018 is an estimate only for the purposes of approving a preliminary budget.

Budget Unknowns

 Revenues

 State Educational Subsidies – Finalized with State Budget  Rabbit Run Creek Development

 Expenditures

 NHSEA Contract expires June 30, 2017  Benefits Rates – Medical/Dental/Workers Comp  Charter School Enrollment

Summary

 Financial Position of the district has improved – still fragile.  Recommending approval of this Proposed Preliminary Budget

to be put on public display moving toward approving a Preliminary Budget and applying for referendum exceptions.

 This is not the final budget and you are not setting a tax rate

tonight

 This presentation only includes the budget highlights

 Supplemental data and reports are included in the budget packet

 Including form PDE-2028 which is the official budget document that is

submitted to PDE.

 This is only the first step along a 6 month process to the

adoption of a final budget.

Timeline

 December 19 –

 Resolution Authorizing Proposed Preliminary Budget

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 January 26 – Preliminary Budget Adoption  February – Apply for referendum exceptions  May Board Meeting – Proposed Final Budget Adoption  June Board Meeting – Final Budget Adoption