Preliminary Budget New Hope Solebury SY 2019 2020 School District - - PowerPoint PPT Presentation

Preliminary Budget SY 2019‐2020

New Hope‐Solebury School District

2019‐2020 Preliminary Budget Presentation

• Budget Goals
• School District Budget Basics
• 2019‐2020 Budget Process
• 2019‐2020 Budget Highlights
• Budget Timeline

Offer the best quality education possible for our community’s children

Offer

Increase student achievement and growth

Increase

Provide comprehensive services to students

Provide

Align to class size guidelines

Align

Encourage professional development and professional growth

Encourage

Develop a short and long term plan for capital projects

Develop

SY 2019‐2020

Budgetary Goals

Act 1 of 2006

• Establishes a set index by which property

taxes cannot be raised beyond

• 2019 – 2020 index is set at 2.3%
• Districts can apply for exceptions to

increase property taxes beyond the index

• Increases in Retirement, Special Education
• Fund Balance below required threshold
• Budget approval can take 1 of 2 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

• Apply for exceptions allowing for a tax

increase up to 2.75% (estimate)

• 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
• pportunity

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.

2019‐2020 Budget Process

• October 2018
• Began budget discussions with Leadership

Team

• Needs Based budget philosophy.
• November 2018
• Budgets reviewed internally with

building/department owners

• December 2018
• A first look was presented to the finance

committee

• December 2018
• Board approval to move forward with

advertising preliminary budget notice for public inspection.

• SY 2011‐2012 to SY 2015‐2016
• Total expenditure increase of 20%
• r 4% per year
• Tax Rate increase of 8.8% or

1.76% per year

• SY 2016‐2017 to SY 2018‐2019
• Total expenditure increase of 3.29%
• r 1.10% per year
• SY 2019‐2020
• Bring these increases back in line.
• Ideally expenditure increase should

be below tax rate increase as property taxes are only one revenue line item making up 70% of revenue.

Budget History

Preliminary Budget Highlights

Budgetary Areas 2018‐2019 2019‐2020 Change Expenditures 41,054,823 42,123,332 2.60% Revenues 41,054,823 42,029,140 2.37% Use of Fund Balance 94,192 Ending Uncommitted Fund Balance 3,268,811 3,174,619 Fund Balance as a % of Expenditures 7.96% 7.54%

SY 2019‐2020 Revenues

 Revenue Comparison – Increase of $975,000

 Tax Increase – 2.3% generates $745,000 in new revenue



Referendum Exceptions generate an additional estimated amount of $134,000 (2.75% tax increase)  Other Local – Increase of $50,000 for interest earnings  State Revenue – Increase of $197,000



Education Funding – Flat to 17‐18 final PDE budget – Increase of $20,000



Retirement and Social Security Subsidy – Increase of $165,000  Federal Revenue – Decrease of $150,000



Still working on usage of SBAP funds – Equal offset of revenues and expenses – No impact to budget

Revenue Type 2017‐2018 Actual 2018‐2019 Budget 2019‐2020 Preliminary Change % of Total Revenue 6000 Local 34,634,549 34,191,554 35,121,128 929,574 84% 7000 State 6,365,485 6,489,370 6,686,063 196,693 16% 8000 Federal 86,906 373,899 221,950 (151,950) 1% Total 41,086,940 41,054,823 42,029,140 974,317

SY 2019‐2020 Preliminary vs 18‐19 Final Budget

Summary of Changes – Salary and Benefits

Expenditure Reduction / (Increase) Increase (Decrease) Description

Salary 390,000 NHSEA increases per contract – July 1, 2017 to June 30, 2021 Support Staff increases per contract – July 1, 2018 to June 30, 2022 Act 93 increases per contract – July 1, 2018 to June 30, 2023 No changes to staffing in the preliminary version of the budget Medical/Rx 105,000 NHSD participates in the Bucks and Montgomery Health Care benefits consortium with 11 other school districts. First look of benefits rates – 7% increase Dental 20,000 Dental rates are completed in April – 10% placeholder PSERS 300,000 PSERS rate is certified at 34.29% and the projection was 34.69%. Current is 33.43%. PSERS expense for 2018‐2019 is estimated to be $6.4M or 15% of total operating budget

• Medical Renewal rates have been

trending positively

• Renewal rate average last 3 years –

2.75%

• Includes medical and prescription
• First look rates tend to trend higher

than the final rates:

• 21 months of trend – 8% trend rate
• Final look will have more actual data
• Final rates ‐ April 18th.
• Plan Costs for Medical/Prescription
• Single Plan Cost – $8,750
• Family Plan Cost ‐ $25,500
• Premium share ranges from 10% ‐

13.5%

Bucks and Montgomery Health Care Consortium

PSERS Impact

‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 10/11 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23

PSERS ‐ Employer Costs

Employer Cost Net of State Reimbursement

SY 2019‐2020 Preliminary vs 18‐19 Final

Summary of Changes – Other Functions

Expenditure Reduction / (Increase) Increase (Decrease) Description

Electricity (60,000) Consortium Pricing – Rate reduction for 2019‐2020 Rate for 19‐20 is .072 per kWh down from .083 per kWh 1:1 Program Device Purchase 150,000 300,000 budgeted for replacement of HS/MS 1:1 devices. 150,000 in 2018‐19 budget to transfer to a technology committed fund for the purchase in 19‐20. Special Education Costs 100,000 BCIU – Increase of $200,000 for student placements Out of District Tuition – Reduction of $100,000 Charter School Tuition 40,000 1 additional charter school student – Special Education Transportation Contract ends June 30, 2018 Increase included for new agreement – reduction of 1 bus from current budget implemented this year. Capital Improvement Placeholder 2018‐2019 budget is $243,000 and the preliminary budget includes the same amount for potential capital project needs. Budgetary Reserve 100,000 for general budgetary unknown items 50,000 for donations

2019‐2020 Preliminary Budget Scenarios

19‐20 20‐21 21‐22 22‐23 Beginning Fund Balance 5,728,811 4,806,687 3,602,332 1,833,971 Total Revenue ‐ 0.00% Tax Increase 41,201,209 41,948,079 42,709,147 43,511,652 Total Expenditures 42,123,332 43,152,434 44,477,509 45,600,963 Surplus / (Deficit) (922,124) (1,204,355) (1,768,361) (2,089,311) Ending Fund Balance 4,806,687 3,602,332 1,833,971 (255,340) 19‐20 20‐21 21‐22 22‐23 Beginning Fund Balance 5,728,811 5,499,133 5,001,072 3,953,131 Total Revenue ‐ 2.30% Tax Increase 41,893,654 42,654,374 43,429,568 44,246,481 Total Expenditures 42,123,332 43,152,434 44,477,509 45,600,963 Surplus / (Deficit) (229,678) (498,061) (1,047,941) (1,354,482) Ending Fund Balance 5,499,133 5,001,072 3,953,131 2,598,650 19‐20 20‐21 21‐22 22‐23 Beginning Fund Balance 5,728,811 5,634,619 5,274,754 4,367,772 Total Revenue ‐ 2.75% Tax Increase 42,029,140 42,792,569 43,570,527 44,390,260 Total Expenditures 42,123,332 43,152,434 44,477,509 45,600,963 Surplus / (Deficit) (94,192) (359,865) (906,981) (1,210,703) Ending Fund Balance 5,634,619 5,274,754 4,367,772 3,157,069 Scenario 1 ‐ 0.00% Tax Increase Scenario 2 ‐ 2.30% Tax Increase ‐ Act 1 Scenario 3 ‐ 2.75% 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 47,000,000 12‐13 13‐14 14‐15 15‐16 16‐17 17‐18 18‐19 19‐20 20‐21 21‐22 22‐23

Expense to Revenue Gap continues to Trend Apart

Revenue Current Expense Current

‐ 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Fund Balance Projections

Final 18‐19 Prelim ‐ 19‐20

New Hope‐Solebury Millage History

Fiscal Year Tax Rate Change Average Tax Bill Average Increase % Increase Act 1 Index

2009/2010 79.84 3.14 4,316 170 4.09% 4.10% 2010/2011 82.15 2.31 4,441 125 2.90% 2.90% 2011/2012 83.30 1.15 4,503 62 1.39% 1.40% 2012/2013 84.72 1.42 4,579 76 1.70% 1.70% 2013/2014 86.16 1.44 4,657 78 1.70% 1.70% 2014/2015 87.96 1.81 4,755 98 2.10% 2.10% 2015/2016 89.64 1.67 4,845 90 1.90% 1.90% 2016/2017 93.94 4.30 5,078 233 4.80% 2.40% 2017/2018 97.69 3.76 5,279 201 4.00% 2.50% 2018/2019 100.04 2.34 5,420 141 2.40% 2.40% 2019/2020 102.79 2.75 5,569 149 2.75%* 2.30%

*Final tax increase is not approved until the final budget in May/June

Budgetary Unknowns

• Staffing/Enrollment
• State/Federal Revenues
• Medical Benefits rate
• MBIT enrollment
• MBIT Capital Projects Financing
• Charter School Enrollments
• Transportation Contract

Summary

• Financial Position of the district is stable
• Recommending approval of this Preliminary

Budget to be put on public display to approve at January Board meeting

• Apply for referendum exceptions for flexibility
• This is not a final budget and you are not

setting a tax rate tonight.

• This is the first step along a 6 month process to

the adoption of a final budget.

• This presentation only includes the budget

highlights

• Supplemental data and reports are

included in the budget packet

• Including form PDE‐2028 which is the
• fficial budget document submitted to

PDE

Timeline

• December 20 – Approval to display and

advertise preliminary budget.

• January Board Meeting
• Approve Preliminary Budget
• Authorize the District to file for referendum

exceptions

• February – April/May
• District continues to review and update

budget and provides monthly updates at the Finance Committee meetings.

• May Board –Proposed Final Budget

Adoption Resolution

• Authorize Proposed Final Budget Advertising

and Public Inspection

• June Board – Final Budget Adoption

Resolutions

QUESTIONS?