NORTH SYRACUSE CENTRAL SCHOOL DISTRICT. Fund Balance & Budget Assumptions December 4, 2017

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1 NORTH SYRACUSE CENTRAL SCHOOL DISTRICT Fund Balance & Budget Assumptions December 4,

2 AGENDA Fund Balance Reserves Economic Factors Revenue Assumptions Expenditure Assumptions Budget Timeline

3 TOTAL GENERAL FUND BALANCE June 30, 2017 Non-Spendable (Deposits & Prepaid) $105,805 Restricted for Reserves $7,608,455 Assigned to Appropriated Fund Balance (Lower Tax Levy) $2,700,876 Assigned to Unappropriated Fund Balance (Encumbrances) $2,638,382 Unassigned Fund Balance Available Savings $6,334,156 Total General Fund Balance $19,387,674 Unassigned Fund Balance Available Savings $6,334,156 Budget for : $158,690,481 Percentage of Budget: 3.99% 3

4 UNASSIGNED FUND BALANCE June 30, 2017 Unassigned Fund Balance at 6/30/16 (4.87% of Budget) $7,553,965 Unfavorable Variance in Revenues ($2,379,641) Favorable Variance in Expenditures $4,417,503 Decrease in Appropriation & Non-Spendable ($1,749,610) Increase in Reserves ($1,508,061) Unassigned Fund Balance 6/30/17 $6,334,156 Budget for : $158,690,481 Percentage of Budget: 3.99% 4

5 RESERVES June 30, 2017 June 30, 2016 June 30, 2017 Tax Certiorari $1,453,074 $2,000,000 Workers Compensation $2,105,338 $2,106,621 General Liability $ 41,695 $1,000,000 Capital Reserve $2,500,287 $2,501,834 Total $6,100,394 $7,608,455 5

6 ECONOMIC FACTORS Consumer Price Index (% Change) Local Economy (Business Activity) Unemployment Population changes and impact on enrollment 6

7 CONSUMER PRICE INDEX (CPI) The growth in annual tax levy is limited to the lesser of 2 percent or the Consumer Price Index (CPI), subject to certain limited exceptions and adjustments. For the purposes of the cap, the applicable CPI is the Unadjusted All Items Consumer Price Index for All Urban Consumers (CPI-U). The CPI-U is released on a monthly basis. School districts use the CPI-U through December which is released in the middle of January. 7

8 CPI U PERCENTAGE CHANGE Month 12 Month January February March April May June July August September October November December The change in CPI-U for 2016 used for budget was 1.26%

9 LOCAL ECONOMY / BUSINESS ACTIVITY The local economy impacts unemployment, enrollment and the growth or decline in our tax base. Consistent with the national and state economy, the CNY economy has improved dramatically over the past 5 years. We continue to see meaningful new housing development in the northern portion of our district. We have a significant amount of rental property including apartment complexes which encourage new entrants to the district. Tax Certiorari cases, whereby business owners request that their property assessments be reduced, are regularly presented to the towns. 9

10 UNEMPLOYMENT RATE Syracuse, NY Metropolitan Year Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Annual Ave % 5.70% 4.90% 4.70% 4.60% 5.00% 5.00% 4.80% 4.80% 4.60% % 5.50% 5.20% 4.70% 4.40% 4.70% 4.90% 4.70% 4.90% 4.60% 4.60% 5.00% 4.90% % 6.40% 5.90% 5.40% 5.50% 5.50% 5.40% 4.90% 5.00% 4.60% 4.80% 4.90% 5.40% % 7.20% 6.80% 5.80% 5.90% 6.00% 6.10% 5.80% 5.60% 5.30% 5.50% 5.50% 6.10% % 8.80% 8.00% 7.40% 7.20% 7.50% 7.40% 7.00% 7.00% 6.70% 6.50% 6.50% 7.40% % 9.60% 9.10% 8.30% 8.40% 8.70% 8.70% 8.20% 8.00% 7.70% 7.50% 8.10% 8.50% 10

11 UNEMPLOYMENT

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13 REVENUE ASSUMPTIONS Building Aid: Education law requires the Commissioner to revise the assumed amortization schedule for remaining debt service payments for outstanding principal and interest at the end of each 10-year segment of an assumed amortization for Building Aid if the current interest rate is at least one quarter percent (.25) lower than the original interest rate for the assumed amortization. Aid payback may be required for several building projects and we hope these issues will be addressed in connection with the legislative budget. General State Aid: Despite the positive general economic conditions and pressure to address the Foundation Aid issue, we are concerned that the NYS budget deficit may result in lower aid to schools. Real Property Taxes: The increase in the tax levy will be limited by the tax cap calculation. The largest component is inflation based on CPI as reported by the Bureau of Labor Statistics. Smart Schools Bond Act: Although this program continues to be funded, revenues will NOT impact the General Fund.

14 FOUNDATION AID Funding Shortfall The Laws of 2007 reformed the State s method of allocating resources to school districts by consolidating some thirty existing aid programs into a Foundation Aid formula. This formula distributes funds to school districts based on the cost of providing a sound basic education and adjusted to reflect regional costs. The Enacted Budget also included a four-year phase in of Foundation Aid. The Enacted Budget extended the phase in to and froze and payable Foundation Aid to Foundation Aid. The Enacted Budget extended the phase in to The promised phase in has not happened. 14

15 FOUNDATION AID Campaign for Fiscal Equity Law Suit ($145 Million Short) School Year Current Year Aid Full Phase-in Level Shortfall $38,127,395 $51,905,964 ($13,778,569) $42,285,090 $54,710,908 ($12,425,818) $42,317,268 $59,749,290 ($17,432,022) $42,317,268 $59,606,170 ($17,288,902) $42,317,268 $56,889,215 ($14,571,947) $42,579,693 $57,754,076 ($15,174,383) $42,699,660 $59,296,055 ($16,596,395) $43,178,688 $53,814,000 ($10,635,312) $43,324,523 $52,716,600 ($9,392,077) $43,747,558 $53,135,617 ($9,388,059) $44,998,315 $53,278,729 ($8,280,414) 15

16 Health Benefits: We are hopeful that the positive trend continues and that NSCSD will experience lower than average increases. Retirement Costs: TRS Actuary recommended increase from 9.8% to between 10.5% and 11.0%. ERS - The 2019 contribution rate for the Employee Retirement System (ERS) will be slightly less, going from 15.8% to 15.7% of salaries. Salaries & Wages: Settled contracts will increase by 3% for Fuel Costs (Transportation): This is a volatile market. However, we must consider net of aid savings only. Energy Costs (Gas & Electric): BOCES: EXPENDITURE ASSUMPTIONS Through BOCES, the district participates in an energy consortium that enters into a 3-year supply agreement. The new agreement will be bid next spring and commence in the school year. Once we have the information, the budget has been adjusted accordingly. Continue to evaluate opportunities to control costs through BOCES services.

17 BUDGET PROCESS TIMELINE October 2 nd BOE Approval of Budget Calendar November 14 th February 23 rd Principals, Directors & Cabinet and BOE subcommittee develop initial budget December 4 th - Board of Education Budget Assumptions December 18 th Board of Education Budget Process Overview & Status January 22 nd Board of Education Governor s Budget proposal Preliminary Tax Cap Calculation Fund Balance & Reserve Projections February 26 th Board of Education Initial Budget March 19 th Board of Education Budget Update Final Tax Cap Approve Bus Bond Proposition Approve Notice of Budget Hearing/Election April 2 nd Proposed Budget Presentation Budget Discussion & Deliberation BOE Adoption of Budget April 16 th BOCES Election and Budget Vote May 1 st Budget Hearing May 15 th Budget Vote 17