Consideration to Post the Proposed Final Budget April 26, /26/ Proposed Final Budget 1

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Vivien Jennings
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1 Consideration to Post the -7 Proposed Final Budget April 4// -4- Proposed Final Budget

2 Budget Components Revenue Review Expenditure Review Millage Impact Budget Summary Debt Defeasance (pre payment) 4// -4- Proposed Final Budget

3 Revenues 4// -4- Proposed Final Budget 3

4 5- State Subsidy Update 4// -4- Proposed Final Budget 4

5 CBSD - 5- Major State Revenue Estimates as of March State Subsidies to CBSD 5- Revenue Budget Estimated Revenues 3/5/ Variance Basic Instructional Subsidy $774 $345 -$43775 Special Education Subsidy $7744 $75 -$747 Ready to Learn Block Grant $ $ $ $43 is about % more than the district received in 4-5. $55443 $43 -$37443 Construction Reimbursement $7 $ -$7 Soc. Sec. Cash flow (May & June Delayed until July & August) $537 $537 $ $337 $35 -$43 4// i:\my documents\budgeting\-7 budget\presentations\april Finance Committee 5

6 CBSD - 5- Major State Revenue Estimates as of April (assumes Legislative distribution formula) State Subsidies to CBSD 5- Revenue Budget Estimated HB 5 Revenues 4/3/ Variance Basic Instructional Subsidy $774 $54 -$775 Special Education Subsidy $7744 $75 -$747 Ready to Learn Block Grant $ $44 $44 $55443 $445 -$47 Construction Reimbursement $7 $ -$7 Soc. Sec. Cash flow (May & June Delayed until July & August) $537 $537 $ $337 $3337 -$7 4// i:\my documents\budgeting\-7 budget\presentations\april Finance Committee

7 -7 Revenue Update 4// -4- Proposed Final Budget 7

% - - -3 3-4 4-5 5- -7 7- - - - - -3 3-4 4-5 5- Est. -7 Bud. $5534 $555 $7 -.

8 Real Estate Transfer Tax Trend Indicator of Home Sales Within the School District 7.3%.3% $ % $ % $ % Est. -7 Bud. $5534 $555 $7 -.% $ % $ % $ % $ % $3555.3% $33 5.4% $3445.% $434.7% $437.% $4 4.5% $4 4// -4- Proposed Final Budget

$45 Interim Real Estate Tax Trend Indicator of Real Estate Construction Growth Within the School District $4 $35 $3 $5 $ $5 $ $5 $ $355 -.7% $5455-4.% $7.

9 $45 Interim Real Estate Tax Trend Indicator of Real Estate Construction Growth Within the School District $4 $35 $3 $5 $ $5 $ $5 $ $ % $ % $7.4% $ Est. -7 Bud. 7.7% $ % $44 -.% $ % $ % $73334 $7-44.% $47-3.% $55 -.% 47.% $444.5% $7 -.% $ % $75 $5-57.% 4// -4- Proposed Final Budget

% $344 $75-7 7- - - - - -3 3-4 4-5 5- -7 7- - - - - -3 3-4 * 4-5 * Keystone Collections increased effort to recover taxes from other

10 Earned Income Tax Trend Tax on Local Wage Earners. Indicator of Wage Growth and Employment Growth. $5 $ $5 $ $5 $ $4 $3.55% $73.4% 4.% 4.% $4 $374.%.5% 5.%.% $3557 $3753 $44544 $ %.3% 7.37%.% -.%.5% 5.34% 3.75% $444 $73374 $33 $4544 $555 $33 $33 $445.44% -5.% $344 $ * 4-5 * Keystone Collections increased effort to recover taxes from other jurisdictions after the transition to the one tax collector per county model. 5.% $ Est. $34 -.3% -7 Bud. 4// -4- Proposed Final Budget

11 .% 7.%.% Real Estate Assessed Value Trend Shows the general change in real estate value within a community.% 5.% 4.% 4.4% 4.7% 4.7% 4.% 3.% 3.% 4.3% 3.%.%.%.7%.%.%.%.%.4%.%.5%.7%.%.4%.5%.4%.% -.% -.4% -.34% -.% Est. -7 Bud. 4// -4- Proposed Final Budget

12 Local Sources of Revenue for CBSD Description Projection $ Projection % Budget Projection Change Change CURRENT REAL ESTATE TAXES (assessment growth) % INTERIM REAL ESTATE TAXES % EARNED INCOME TAX % REAL ESTATE TRANSFER TAX 4 4.% DELINQUENCIES ON REAL ESTATE TAXES % DELINQUENCIES ON EARNED INCOME TAXES % INTEREST EARNINGS TEMP DEPOSITS % I.D.E.A. FUNDS FROM I.U.# % TUITION FOR INCARCERATED STUDENTS % COMMUNITY SCHOOL PROGRAMS % ALL OTHER LOCAL REVENUES % Local Revenue Totals $537 $557 $7775.3% 4// -4- Proposed Final Budget

13 State Sources of Revenue for CBSD Projection $ Projection % Description Budget Projection Change Change Basic Instructional Subsidy % Tuition Wards of State and Foster Care Students % Special Educ./Except. Pupils % Misc. State Grants.% Accountability Block Grant (incorporated into Basic Instructional Subsidy) % Transportation % Rental & Sinking Fund Reimb % Health Services % Gambling Proceeds for R.E. Tax Reduction % Social Security Payments Reimbursement % Retirement Payments Reimbursement % State Revenue Totals $355 $35 $ % 4// -4- Proposed Final Budget 3

14 Historical State Revenue for CBSD $35 $3 $35 $3 $5 $ $5 $ Total State Subsidies * $334 $33 $37 $7 $777 $45 $545 $444 $54 $7435 $3757 $75 $7-7 Actual 7- Actual - Actual - Actual - Actual - Actual -3 Actual 3-4 Actual 4-5 Actual 5- Projected -7 Budget * Does not include retirement FICA gambling rebate and one-time debt reimbursement 4// -4- Proposed Final Budget 4

15 Federal and Other Sources of Revenue for CBSD Projection $ Projection % Description Budget Projection Change Change Title Reading and Math % Title Staff and Curriculum Development % Title 3 Limited English Proficiency % Medical Assistance Reimbursement (ACCESS) % Administrative Reimbursement for ACCESS % Other Revenue.% Federal and Other Revenue Totals $ $573 -$ % Total of All Revenue $37755 $3434 $4533.4% 4// -4- Proposed Final Budget 5

16 Expenses 4// -4- Proposed Final Budget

Enrollment is Expected to Continue to Decline Over the Next Several Years CBSD Enrollment 4// -4- Proposed Final Budget 7 5 5 4 5 7 3 4 5 7 3 4 5 7 3 4 5 7 5 5 4 5 7

17 Enrollment is Expected to Continue to Decline Over the Next Several Years CBSD Enrollment 4// -4- Proposed Final Budget CBSD enrollment October st each year Current Year Penna. Economy League Projections

18 Projected Staffing for -7 Reduce Staffing by 4 Teachers (enrollment decline) Add 4 Teachers for the QUEST Program (initiative) New: Add 5 Special Education Teachers (program need) New: Add psychologist (program need) 4// -4- Proposed Final Budget

19 Expense Summary Category -7 Budget 5- Projected Actual % Change Salaries % Employee Benefits % Prof. Services Special Ed OT/PT.EIT TaxLegal % Electricity Rentals Repairs Field Maintenance Painting % Contracted Services Transp. MBIT IU Charter Sch % Text books Supplies Natural Gas Diesel Heating Oil % Equipment % Interest Payments on Bonds % Principal Buses Technology Building Renovations % Total budget $37755 $3545.% 4// -4- Proposed Final Budget

20 Millage Impact 4// -4- Proposed Final Budget

21 Millage Calculation There is no Proposed Millage Increase The Act Real Estate Tax Increase Limit = Base Inflation Index of.4% +.% Retirement Exception = 3.5% or 4.3 Mills The -7 Proposed Millage Rate is 4. mills +. Mills = 4. Mills = % Increase For the Typical Homeowner 4 = 4 x 4. mills = $44 = no increase 4// -4- Proposed Final Budget

22 Act Tax Index + Exceptions Act Index with Allowable Exceptions in Mills CBSD Millage Rate Millage Increase % Increase in the Millage Rate Status % Actual % Actual % Actual % Actual % Actual % Actual % Actual % Actual % Actual % Proposed 4// -4- Proposed Final Budget

23 General Trends Enrollment is Declining - Reduces Budget Pressure Debt Payments are Declining - Reduces Budget Pressure General Inflation is Low - Reduces Budget Pressure Improving Energy Efficiency/Costs - Reduces Budget Pressure Health Insurance Expenses Lowest Increase in years Retirement Expenses will Increase by 4.% State Revenue Growth Still Lagging Pre-Recession Levels 4// -4- Proposed Final Budget 3

24 Summary Local Real Estate Assessed Values are on the Rise Retirement Expenses Continue to be the Major Stress Point for the Budget The District is Committed to Continuous Improvement Technology ipad Laptop and Wireless Initiative Expand Extra Duty Responsibilities (EDR s) Student Activities Elementary QUEST Program phase expansion 4// -4- Proposed Final Budget 4

25 Next Steps Board of School Directors Consideration to Publicly Post the -7 Proposed Final Budget of $37755 The State Budget Form will be posted on our website over the next several days Consider Final Budget Adoption on June 4 th Superintendent & Cabinet Develop Recommendations to Effectively Implement Program Initiatives 4// -4- Proposed Final Budget 5

26 CONSTRUCTION DEBT PREPAYMENT Proposal to Reduce Outstanding Debt Obligations April 4// -4- Proposed Final Budget

27 Debt Defeasance (Prepayment) Scenario per PFM 4// -4- Proposed Final Budget 7

28 The impact of the final planned debt defeasement of $3M will reduce future principal and interest expenses (green bars below). $4 Declining Principal and Interest Payments Help Relieve Budget Pressure $ $ $ $ $4 $ $ Principal and Interest Expenses Assuming $3M Construction Debt Defeasance (Prepayment) 4// -4- Proposed Final Budget

$4 Lower Debt Payments Counteract Higher PSERS Payments $35 $3

29 Projected state retirement payments (red bars) will continue to increase over time. $4 Lower Debt Payments Counteract Higher PSERS Payments $35 $3 $5 $ $5 $ $5 $ Projected PSERS Expenses 4// -4- Proposed Final Budget

expenses in the bar chart below. Debt defeasance will eliminate future budget growth associated with projected increases in PSERS expenses and will yield a return on investment of approximately 3.

30 The impact of the final planned debt defeasement of $3M will reduce future principal and interest expenses (green section of the bars below). This reduction will counteract the projected increases in mandated state retirement payments (red section of the bars below) resulting in a flat payment profile when combining PSERS and debt expenses in the bar chart below. Debt defeasance will eliminate future budget growth associated with projected increases in PSERS expenses and will yield a return on investment of approximately 3.%. $4 $35 $3 $5 $ $5 $ $5 Lower Debt Payments Counteract Higher PSERS Payments $ Principal and Interest Expenses Assuming $3M Construction Debt Defeasance (Prepayment) Projected PSERS Expenses 4// -4- Proposed Final Budget 3

31 Planning For a $3M Debt Prepayment Why Prepay Construction Debt: Gives the district greater confidence it can afford employee contracts currently being negotiated. Gives the district greater confidence it can afford the next teacher contract (-). Helps insulate CBSD from economic recession: (chances of a recession in the next 5 years?) Helps insulate CBSD from state subsidy reductions. Lowers overhead to help focus future budgets on academics Prepaying debt principal reduces future interest payments & accelerates state subsidy reimbursements. Return on Investment 3.% Plays a major role in long term budget planning Mandated state retirement expenses will likely continue to increase due to low returns on investments. Description Amount Debt Service Fund Balance $5 Transfer From the General Fund $5 Partial Use of 5- Budget Variance $ $4.M projected Use of O.P.E.B Capital Account $33 Potential Funding For Debt Prepayment $3 4// -4- Proposed Final Budget 3

32 4// i:\my documents\budgeting\-7 budget\presentations\april Finance Committee 3

33 Instruction -7 Proposed Final Budget Regular Education Programs Salaries and Wages Employee Benefits Professional Services 45 4 Purchased Property Services 75 5 Other Purchased Services 4 Supplies Property and Equipment 574 Other Expenses 574 Total 3354 Special Education Programs Salaries and Wages 3 Employee Benefits Professional Services Purchased Property Services 75 5 Other Purchased Services 33 Supplies Property and Equipment 535 Other Expenses 3 Total Vocational Education 5 Other Purchased Services 457 Total Other Instructional Programs Salaries and Wages 573 Employee Benefits 5 3 Professional Services 75 5 Other Purchased Services 3555 Supplies 7 Total Non Public School Program 5 Other Purchased Services - Total - Adult Education Programs Salaries and Wages 5 Employee Benefits Professional Services 55 4 Purchased Property Services 3 5 Other Purchased Services 5 Supplies 55 Other Expenses 55

34 Total 37 Total 57 Support Services Support Services - Pupil Personnel Salaries and Wages 575 Employee Benefits Professional Services 55 4 Purchased Property Services 5 Other Purchased Services Supplies Total Support Services - Instructional Staff Salaries and Wages 34 Employee Benefits Professional Services Purchased Property Services 5 Other Purchased Services 453 Supplies Property and Equipment 5 Other Expenses Total 54 3 Support Services - Administration Salaries and Wages Employee Benefits Professional Services 4 4 Purchased Property Services 7 5 Other Purchased Services 347 Supplies 5 7 Property and Equipment Other Expenses 53 Total Support Services - Pupil Health Salaries and Wages 44 Employee Benefits 43 3 Professional Services Purchased Property Services 5 5 Other Purchased Services 3 Supplies 5 7 Property and Equipment 7 Other Expenses 5 Total 37

35 5 Support Services - Business Salaries and Wages 3453 Employee Benefits 55 3 Professional Services 5 4 Purchased Property Services 74 5 Other Purchased Services 75 Supplies 7 Property and Equipment 5 Other Expenses 5 Total 54 Support Services - Operations & Maint. Salaries and Wages 3477 Employee Benefits 45 4 Purchased Property Services Other Purchased Services 577 Supplies 4 7 Property and Equipment 44 Other Expenses 3 Total 57 7 Support Services - Transportation Salaries and Wages 573 Employee Benefits Professional Services 35 4 Purchased Property Services 3 5 Other Purchased Services 444 Supplies 44 7 Property and Equipment Other Expenses 5 Total 5 Support Services Salaries and Wages 3 Employee Benefits 45 3 Professional Services 33 4 Purchased Property Services 34 5 Other Purchased Services 4 Supplies 3 7 Property and Equipment 75 Total 35 Other Support Services 5 Other Purchased Services 475 Total 475

36 Total 35 3 Operation Of Non-Instructional Services 3 Student Activities Salaries and Wages 7553 Employee Benefits Professional Services 55 5 Other Purchased Services 55 Supplies Property and Equipment 3 Total Community Services Salaries and Wages 347 Employee Benefits 43 3 Professional Services 4 Purchased Property Services 5 Other Purchased Services 474 Supplies Property and Equipment 5 Other Expenses Total 37 Total Other Expenditures and Financing Uses 5 Debt Service Other Expenses 433 Other Financing Uses 7 Total 3 5 Interfund Transfers Other Financing Uses 5 Total 5-5 Other Financing Uses Contingency - Total - Total Total 37755

01/23/2018 i:\budget\ Budget\ Budget Presentation and Finance Committee 1

$01/23/2018 i:\budget\ Budget\ Budget Presentation and Finance Committee 1$ 01/23/2018 i:\budget\2018-19 Budget\2018-01-23 Budget Presentation and Finance Committee 1 Pennsylvania School Employees Retirement System (PSERS) Employer Retirement Contributions - 100 Year Term School