Preliminary Budget New Hope ‐ Solebury SY 2018 ‐ 2019 School District
• Budget Goals • School District Budget Basics 2018 ‐ 2019 Preliminary • Budget History Budget • 2018 ‐ 2019 Budget Process Presentation • 2018 ‐ 2019 Budget Highlights • Budget Timeline
Offer the best quality education possible for our Offer community’s children Increase Increase student achievement and growth SY 2018‐2019 Provide Provide comprehensive services to students Budgetary Goals Align Align to class size guidelines Encourage professional development and professional Encourage growth Develop Develop a short and long term plan for capital projects
• 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 Act 1 of 2006 • 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
• 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 of 2.4% Act 1 of 2006 • Apply for exceptions allowing for a tax Recommendation 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 – 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 Fund Balance 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.
• 2015 ‐ 2016 Budget • Revenues – $37.1M • Expenditures – $39.7M • Use of Fund Balance ‐ $ 2.6M A Look Back • Beginning Fund Balance ‐ $ 6.3M Reflecting on • Ending Fund Balance ‐ $ 3.7M • Preliminary budget for SY 2016 ‐ 2017 the Past 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.
• Budget freeze October 2016 • Two large tax increases • 2016 ‐ 2017 – 4.8% (index plus exceptions) • 2017 ‐ 2018 – 4.0% (index plus exceptions) A Look Back • Retirement incentive for professional and administrative staff members Reflecting on • Total Teacher retirees: 14 the Past • Total Admin retirees: 3 • Other staffing efficiencies at both the administrative and professional level. • Needs based budget philosophy
• September 2017 • Began budget discussions with Leadership Team • Needs Based budget philosophy. • October 2017 2018 ‐ 2019 • Budgets presented to internal team for review Budget Process • 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 3,043,674 2,926,211 Balance Fund Balance as a % of 7.55% 7.10% Expenditures
SY 2018 ‐ 2019 Revenues 2016 ‐ 2017 2017 ‐ 2018 2018 ‐ 2019 % of Total Revenue Type Actual Budget Preliminary Change 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 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
SY 2018 ‐ 2019 Preliminary vs 17 ‐ 18 Final Budget Summary of Changes – Salary and Benefits Expenditure Reduction / Increase Description (Increase) (Decrease) 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
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 Current
PSERS ‐ Employer Costs 8,000,000 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
SY 2018 ‐ 2019 Preliminary vs 17 ‐ 18 Final Summary of Changes – Other Functions Expenditure Reduction / Increase Description (Increase) (Decrease) Needs Based Budgeting – 1 st review of all budgets Building/Department Budgets (20,000) 3 rd 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. Standard contract increase for optional 5 th year of contract with First Transportation 30,000 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 0 100,000 for general budgetary unknown items 50,000 for donations – considering increasing this line item
2018 ‐ 2019 Preliminary Budget Scenarios Scenario 1 - 0.00% Tax Increase 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) Scenario 2 - 2.40% Tax Increase - Act 1 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 Scenario 3 - 3.10% Tax Increase - Act 1 plus Exceptions 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
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 20 ‐ 21 21 ‐ 22 Revenue Expense Current
New Hope ‐ Solebury Millage History Fiscal Year Tax Rate Change Average Tax Average % Increase Act 1 Index Bill Increase 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%
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