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 Expense to Revenue Gap - Growing 46,000,000 44,000,000 42,000,000 40,000,000 38,000,000 36,000,000 34,000,000 32,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 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 Expense to Revenue Gap - Growing 45,000,000 43,000,000 41,000,000 39,000,000 37,000,000 35,000,000 33,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 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 – 1 st 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 PSERS - Employer Contribution Trend 40.00% 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 Employer Rate Prior Employer Rate Current

PSERS Impact PSERS - Employer Costs 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 Employer Cost Net of State Reimbursement

Expenditures 8% 19% Personnel Non-Personnel Debt Service 73%

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.

Revenue 1% 16% Local State Federal 83%

2017-2018 Preliminary Budget Scenario 1 - 0.00% Tax Increase 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) Scenario 2 - 2.50% Tax Increase - Act 1 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) Scenario 3 - 4.00% Tax Increase - Act 1 plus Exceptions 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)

2017-2018 Preliminary Budget Scenario 1 - 0.00% Tax Increase 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) Scenario 2 - 2.50% Tax Increase - Act 1 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) Scenario 3 - 4.00% Tax Increase - Act 1 plus Exceptions 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)

Expense to Revenue Gap - Continues Trending Apart 45,000,000 43,000,000 41,000,000 39,000,000 37,000,000 35,000,000 33,000,000 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Revenue Expense Current

Millage - Bucks County Schools 2015/2016 200.00 180.00 160.00 140.00 120.00 100.00 80.00 60.00 40.00 20.00 - *Source - BucksCounty.org - Government-Finance-Board of Assessment-Millage Rates