Preliminary Budget New Hope Solebury SY 2018 2019 School District - - PowerPoint PPT Presentation

Preliminary Budget SY 2018‐2019

New Hope‐Solebury School District

2018‐2019 Preliminary Budget Presentation

• Budget Goals
• School District Budget Basics
• Budget History
• 2018‐2019 Budget Process
• 2018‐2019 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 2018‐2019

Budgetary Goals

Act 1 of 2006

• Establishes a set index by which property

taxes cannot be raised beyond

• 2018 – 2019 index is set at 2.4%
• 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

• Set a goal of balancing the 2018‐2019

budget while staying within the Act 1 index

• f 2.4%
• Apply for exceptions allowing for a tax

increase up to 3.1% (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 opportunity

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.

A Look Back

Reflecting on the Past

• 2015‐2016 Budget
• Revenues –

$37.1M

• Expenditures –

$39.7M

• Use of Fund Balance ‐

$ 2.6M

• Beginning Fund Balance ‐ $ 6.3M
• Ending Fund Balance ‐

$ 3.7M

• Preliminary budget for SY 2016‐2017

showed a deficit of ~$4.1M

• Leaving no available fund balance.
• 2016‐2017 and 2017‐2018 budgets

needed to make significant improvements to both revenues and expenditures.

A Look Back

Reflecting on the Past

• Budget freeze October 2016
• Two large tax increases
• 2016‐2017 – 4.8% (index plus exceptions)
• 2017‐2018 – 4.0% (index plus exceptions)
• Retirement incentive for professional and

administrative staff members

• Total Teacher retirees: 14
• Total Admin retirees: 3
• Other staffing efficiencies at both the

administrative and professional level.

• Needs based budget philosophy

2018‐2019 Budget Process

• September 2017
• Began budget discussions with Leadership

Team

• Needs Based budget philosophy.
• October 2017
• Budgets presented to internal team for review
• November 2017
• A first look was presented to the finance

committee

• December 2017
• Board approval to move forward with

advertising preliminary budget notice for public inspection.

Preliminary Budget Highlights

Budgetary Areas 2017‐2018 2018‐2019 Change Expenditures 40,337,604 41,194,399 2.2% Revenues 40,112,467 41,076,937 2.4% Use of Fund Balance 225,137 117,462 Ending Uncommitted Fund Balance 3,043,674 2,926,211 Fund Balance as a % of Expenditures 7.55% 7.10%

SY 2018‐2019 Revenues

 Revenue Comparison – Increase of $964,471

 Tax Increase – 3.1% generates $915,000 in new revenue  Delinquent Tax Reduction ‐ $75,000 in line with current estimates  Other Local – Increase of $20,000 for interest earnings  State Revenue – Increase of $113,075



Education Funding – Flat to 17‐18 Budget



Special Education Funding – Reduction of $100,000 for out of state revenue



Retirement and Social Security Subsidy – Increase of $200,000  Federal Revenue – Decrease of $9,500



Estimating slight reductions in Title funding

Revenue Type 2016‐2017 Actual 2017‐2018 Budget 2018‐2019 Preliminary Change % of Total Revenue 6000 Local 32,997,729 33,485,775 34,346,671 860,896 84% 7000 State 6,337,853 6,407,192 6,520,266 113,075 16% 8000 Federal 146,310 219,500 210,000 (9,500) 1% Total 39,481,892 40,112,467 41,076,937 964,471

SY 2018‐2019 Preliminary vs 17‐18 Final Budget

Summary of Changes – Salary and Benefits

Expenditure Reduction / (Increase) Increase (Decrease) Description

Salary 285,000 NHSEA contract ended June 30, 2017 Support Staff contract end date is June 30, 2018 Act 93 increases per contract Retirement incentive is reduced by $240,000 from prior year Medical/Rx 350,000 NHSD participates in a benefits consortium with other school districts in Bucks and Montgomery County. First look of benefits rates not yet produced – 10% placeholder Dental 21,000 First look of benefits not yet produced – 7% placeholder PSERS 350,000 PSERS rate is certified at 33.43% and the estimate was 34.18%. Current is 32.57%. PSERS expense for 2018‐2019 is estimate to be $6.1M or 15% of total operating budget

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 Current

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

PSERS ‐ Employer Costs

Employer Cost Net of State Reimbursement

SY 2018‐2019 Preliminary vs 17‐18 Final

Summary of Changes – Other Functions

Expenditure Reduction / (Increase) Increase (Decrease) Description

Building/Department Budgets (20,000) Needs Based Budgeting – 1st review of all budgets 3rd year using this budget philosophy. 1:1 Program Device Purchase (150,000) 300,000 was budgeted last year to purchase versus lease. Leaving 150,000 in budget to transfer to a technology committed fund for next years purchase. Special Education Tuition (180,000) Students in out of district placements are graduating or being brought back in house or more cost efficient programs while still meeting educational needs. Transportation 30,000 Standard contract increase for optional 5th year of contract with First Student Capital Improvement Placeholder 45,000 16‐17 Added a placeholder to the budget for this item. Increased to 100,000 and is funded with PlanCon reimbursement Budgetary Reserve 100,000 for general budgetary unknown items 50,000 for donations – considering increasing this line item

2018‐2019 Preliminary Budget Scenarios

18-19 19-20 20/21 21-22 Beginning Fund Balance 5,503,674 4,478,111 2,874,014 845,793 Total Revenue - 0.00% Tax Increase 40,168,837 40,797,036 41,529,616 42,290,130 Total Expenditures 41,194,399 42,401,133 43,557,837 44,744,001 Surplus / (Deficit) (1,025,562) (1,604,097) (2,028,221) (2,453,871) Ending Fund Balance 4,478,111 2,874,014 845,793 (1,608,078) 18-19 19-20 20/21 21-22 Beginning Fund Balance 5,503,674 5,181,150 4,294,152 2,997,371 Total Revenue - 2.40% Tax Increase 40,871,876 41,514,135 42,261,057 43,036,200 Total Expenditures 41,194,399 42,401,133 43,557,837 44,744,001 Surplus / (Deficit) (322,524) (886,998) (1,296,780) (1,707,801) Ending Fund Balance 5,181,150 4,294,152 2,997,371 1,289,571 18-19 19-20 20/21 21-22 Beginning Fund Balance 5,503,674 5,386,211 4,708,376 3,624,942 Total Revenue - 3.10% Tax Increase 41,076,937 41,723,298 42,474,403 43,253,813 Total Expenditures 41,194,399 42,401,133 43,557,837 44,744,001 Surplus / (Deficit) (117,462) (677,835) (1,083,434) (1,490,188) Ending Fund Balance 5,386,211 4,708,376 3,624,942 2,134,755 Scenario 1 - 0.00% Tax Increase Scenario 2 - 2.40% Tax Increase - Act 1 Scenario 3 - 3.10% 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 20‐21 21‐22

Expense to Revenue Gap ‐ Continues Trending Apart

Revenue Expense Current

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 4,537 178 4.09% 4.10% 2010/2011 82.15 2.31 4,668 131 2.90% 2.90% 2011/2012 83.30 1.15 4,733 65 1.39% 1.40% 2012/2013 84.72 1.42 4,814 80 1.70% 1.70% 2013/2014 86.16 1.44 4,896 81 1.70% 1.70% 2014/2015 87.96 1.81 4,998 102 2.10% 2.10% 2015/2016 89.64 1.67 5,093 94 1.90% 1.90% 2016/2017 93.94 4.30 5,338 244 4.80% 2.40% 2017/2018 97.69 3.76 5,551 213 4.00% 2.50% 2018/2019 100.72 3.03 5,724 172 3.10% 2.40%

• 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 2017‐2018
• Total expenditure increase of 1.52%
• r 0.76% per year
• SY 2018‐2019
• Bring these increases back in line.
• Expenditure increase should be

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

Budget History

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

Budget History

Expenditure % Change Tax Rate % Change

Budgetary Unknowns

• State/Federal Revenues
• Medical Benefits rate increases
• MBIT enrollment figures
• Charter School Enrollments and

Tuition

• New Hope‐Solebury Education

Association Contract Negotiations

• Preparation for New Hope‐

Solebury Education Support Personnel Contract Negotiations

Summary

• Financial Position of the district continues to

improve – still fragile

• Recommending approval of this Preliminary

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

• Strive to approve a final budget with a tax increase

not to exceed the index of 2.4%.

• 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 21 – Approval to display and

advertise preliminary budget.

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

exceptions

• February – 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?