Norristown Area School District Proposed Preliminary Budget

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1 Norristown Area School District Proposed Preliminary Budget January 22, 2018

2 Norristown Area School District PROPOSED PRELIMINARY BUDGET Act 1 of 2006 requires: Proposed Preliminary Budget must be on public display before adoption, specifically by January 25, We are complying with the public display requirement by presenting our Preliminary Budget tonight. We will also make sure that our budget document is available on our website, in our buildings, and in the offices of our local municipal partners Preliminary Budget must be adopted by February 14, 2018 We will hold a brief Special Meeting on February 12, 2018 for adoption

Norristown Area School District 2018-19 PROPOSED PRELIMINARY BUDGET As identified at our November Budget

3 Norristown Area School District PROPOSED PRELIMINARY BUDGET As identified at our November Budget Kick-Off Meetings: Primary Budgetary Challenge Balancing the needs of our students with the needs of our taxpayers

Norristown Area School District 2018-19 BUDGET RECOMMENDATIONS As a result, at the School Board s request, we will be using the next few months to explore the development of a with no tax

instructional materials & textbooks Maintain strong range of music, arts, and foreign languages courses Maintain manageable class sizes Maintain adequate staffing to support growing ELL

4 Norristown Area School District BUDGET RECOMMENDATIONS As a result, at the School Board s request, we will be using the next few months to explore the development of a with no tax increase Closer review of our traditional priorities will be needed; Maintain full-day kindergarten program; including maintaining Musselman as a kindergarten center Providing adequate instructional materials & textbooks Maintain strong range of music, arts, and foreign languages courses Maintain manageable class sizes Maintain adequate staffing to support growing ELL student population Maintain adequate staffing to support our Special Education programming Maintain School Resource Officers Adequately plan for facilities management, maintenance, repairs, and facility upgrades

5 REVENUES Norristown Area School District

6 Norristown Area School District REVENUE OVERVIEW: NASD Adjusted Act 1 Index = 2.90% = $ 135 to avg taxpayer Estimated Maximum Allowable Tax Increase = 3.81% With Special Education Exception Will submit to PDE for approval in March 2018 (Recognize that we may not use the exceptions, but our intent is to apply for them in case they would be needed) Proposed Preliminary Budget Tax Increase = 0.00% Difficult decisions will be needed in order to achieve this

7 Norristown Area School District REVENUE OVERVIEW: Local revenues sources: Limited growth in local real estate economy State revenue sources: Commonwealth facing est. $1 billion shortfall Election year Governor Wolf s budget address scheduled for February 6, 2018 Bare bones budget expected Federal revenue sources: Much uncertainty program details will not be available until late Spring We do not expect to see any new pro-public education policies adopted at either the state or federal level. Level funding has been projected at this point, but there are concerns that some of our funding may actually be cut.

8 Norristown Area School District SCHOOL TAX = OUR LARGEST REVENUE SOURCE Based on assessed value $3,000,000,000 $2,500,000,000 RELATIVELY FLAT MARKET = NO NEW REVENUE $2,000,000,000 $1,500,000,000 $1,000,000,

9 Norristown Area School District REVENUE SNAPSHOT CURRENT YEAR BUDGETED REVENUES $ 150,120,650 PROJECTED REVENUES (Jan 2018) $ 151,008,300 VARIANCE $ 887,650 No Tax Increase 0.59% NEXT YEAR BUDGETED REVENUES $ 151,333,300 VARIANCE (Compared to Projected) $ 325, %

10 Norristown Area School District REVENUE SNAPSHOT % % 24% 24% 71% 71% Local State Federal Local State Federal

11 EXPENSES Norristown Area School District

12 EXPENSE OVERVIEW: Wage Increases Negotiations On-Going (EANA Professional, EANA Support) Roughly 45% of our spending is being negotiated currently PSERS (Retirement) contribution rate increasing from 32.57% to 33.43% Net budget impact = + $ 500k Health Care First Look at : Medical 14.52% rate increase Prescription Drug 11.30% rate increase Budget Impact = + $ 1.9 million May be impacted by labor negotiations Debt Service payments drop as a result of our refinancing in 2016 Budget Impact = ( $ 395k ) Central Montgomery Technical High School - TBD Norristown Area School District Rates expected to drop 2 nd look late February 3 rd - Final look late March

13 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman

14 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven

15 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven

16 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven Gotwals Eliminate 2 Reg Ed teachers Enrollment driven

17 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven Gotwals Eliminate 2 Reg Ed teachers Enrollment driven Eisenhower Add 1 Reg Ed teacher Enrollment driven Stewart Add 1 Reg Ed teacher Enrollment driven ENMS Eliminate 2 Reg Ed teachers & 1 Spec Ed teacher Enrollment driven

18 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING` PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven Gotwals Eliminate 2 Reg Ed teachers Enrollment driven Middle Schools Net Impact: Eisenhower Add 1 Reg Ed teacher Enrollment driven No change in total # of Regular Ed Teachers Decrease of 1 Spec Ed Teacher Stewart Add 1 Reg Ed teacher Enrollment driven Middle School Boundaries under review may affect these recommendations ENMS Eliminate 2 Reg Ed teachers & 1 Spec Ed teacher Enrollment driven

19 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven Gotwals Eliminate 2 Reg Ed teachers Enrollment driven Eisenhower Add 1 Reg Ed teacher Enrollment driven Stewart Add 1 Reg Ed teacher Enrollment driven ENMS Eliminate 2 Reg Ed teachers & 1 Spec Ed teacher Enrollment driven NAHS Eliminate 1 Health/Phys Ed teacher Program changes

20 EXPENSE OVERVIEW: Staffing Proposed Preliminary Budget includes the following staffing changes: Norristown Area School District BUILDING PROPOSED STAFFING CHANGE RATIONALE Cole Manor Eliminate 2 kindergarten teachers Enrollment decline Students in CM boundary will attend Musselman Paul Fly Eliminate 1 Reg Ed &.50 Spec Ed teachers Enrollment driven Marshall St Eliminate.50 Spec Ed teacher Enrollment driven Gotwals Eliminate 2 Reg Ed teachers Enrollment driven Eisenhower Add 1 Reg EdTeacher Enrollment driven Stewart Add 1 Reg Teacher Enrollment driven ENMS Eliminate 2 Reg Ed teachers & 1 Spec Ed teacher Enrollment driven NAHS Eliminate 1 Health/Phys Ed teacher Program changes TBD Add 1 Community Liaison Enrollment driven NET IMPACT: REDUCTION IN 8 TEACHING POSITIONS & ADDITION OF 1 COMMUNITY LIAISON

21 Norristown Area School District EXPENSE SNAPSHOT CURRENT YEAR BUDGETED EXPENSES $ 149,179,300 PROJECTED EXPENSES (Jan 2017) $ 151,832,000 VARIANCE $ 2,652, % NEXT YEAR BUDGETED EXPENSES (Status Quo Programming) $ 155,183,000 VARIANCE $ 3,351, %

22 Norristown Area School District EXPENSE SNAPSHOT CURRENT YEAR BUDGETED EXPENSES CHALLENGE: $ 149,179,300 PROJECTED EXPENSES (Jan 2017) PROJECTED $ 151,832,000 GROWTH VARIANCE IN REVENUES $ 2,652,700 (Without Tax Increase) 1.77% = 0.21% NEXT YEAR BUDGETED EXPENSES (Status Quo Programming) $ 155,183,000 VARIANCE $ 3,351, %

2018-19 EXPENSES BY MAJOR OBJECT Other Purch Svc (Tuition, Transportation, etc) 16% Other

23 EXPENSES BY MAJOR OBJECT Other Purch Svc (Tuition, Transportation, etc) 16% Other (Primarily Debt) Supplies 4% 1% Equipment 2% Wages 44% Property Svc 1% Professional Svc 3% Benefits 29%

2018-19 EXPENSES BY MAJOR FUNCTION Business 1% Health 1% Other Support Central Support (IT) 0% 1% Student /Community Transportation

24 EXPENSES BY MAJOR FUNCTION Business 1% Health 1% Other Support Central Support (IT) 0% 1% Student /Community Transportation 1% Debt 6% 4% Operations 9% Reg Ed 42% Admin Support 7% Pupil Svcs 4% Instruct Support 1% Voc Ed 3% Other Instruction 1% Spec Ed 18%

25 SUMMARY / FUND BALANCE Norristown Area School District

26 Norristown Area School District FUND BALANCE $ 1,515, PROJECTED REVENUES (Jan 2018) $ 151,008, PROJECTED EXPENSES (Jan 2018) $ 151,832,000 FUND BALANCE $ 692,271

27 Norristown Area School District FUND BALANCE $ 1,515, PROJECTED REVENUES (Jan 2018) $ 151,008, PROJECTED EXPENSES (Jan 2018) $ 151,832,000 FUND BALANCE $ 692, PROJECTED REVENUES (No Tax Increase) $ 151,333, PROJECTED EXPENSES (Status Quo Programming) $ 155,183,050 MINIMUM FUND BALANCE NEEDED $1,000, BUDGET SHORTFALL $ 4,157,479

28 Norristown Area School District FUND BALANCE $ 1,515, PROJECTED REVENUES (Jan 2018) $ 151,008, PROJECTED EXPENSES (Jan 2018) $ 151,832,000 FUND BALANCE $ 692, PROJECTED REVENUES (No Tax Increase) $ 151,333, PROJECTED EXPENSES (Status Quo Programming) $ 155,183,050 MINIMUM FUND BALANCE NEEDED $1,000, BUDGET SHORTFALL $ 4,157,479 NEED TO REDUCE COSTS AND/OR RAISE NEW REVENUE IN THE AMOUNT OF $ 4,157,479 IN ORDER TO HAVE NO TAX INCREASE IN

29 Closing Gap: Norristown Area School District Recommend using the spring months to evaluate the viability of the following options: REVENUE GENERATING Implementation of activity/athletic fee structure Sale of Roosevelt Field Sale of Burnside Property Using proceeds as operating dollars rather than targeted them for Athletic Project

30 Closing Gap: Norristown Area School District Recommend using the spring months to evaluate the viability of the following options: REVENUE GENERATING Implementation of activity/athletic fee structure COST REDUCING Repurposing space at Roosevelt to operate an on-site alternative program Sale of Roosevelt Field Sale of Burnside Property Using proceeds as operating dollars rather than targeted them for Athletic Project Eliminate some/all non-mandated programs (including full-day kindergarten?) Identify/implement strategies designed to attract charter school students back to NASD Evaluate opportunities for outsourcing support staff (can only be done as staff resign/retire) Evaluate opportunities to eliminate positions/programs (may result in staff furloughs)

31 Closing Gap: Norristown Area School District Recommend using the spring months to evaluate the viability of the following options: REVENUE GENERATING Implementation of activity/athletic fee structure COST REDUCING Repurposing space at Roosevelt to operate an on-site alternative program Sale of Roosevelt Field THERE IS NO SINGLE RECOMMENDATION THAT WILL CLOSE OUR BUDGET SHORTFALL Eliminate some/all non-mandated programs (including full-day kindergarten?) Sale of Burnside Property Using proceeds as operating dollars rather than targeted them for Athletic Project SOLUTION WILL LIKELY NEED TO BE SOME COMBINATION OF THESE STRATEGIES Identify/implement strategies designed to attract charter school students back to NASD Evaluate opportunities for outsourcing support staff (can only be done as staff resign/retire) Evaluate opportunities to eliminate positions/programs (may result in staff furloughs)

32 Closing Gap: Norristown Area School District Recommend using the spring months to evaluate the viability of the following options: REVENUE GENERATING Implementation of activity/athletic fee structure Sale of Roosevelt Field Sale of Burnside Property Using proceeds as operating dollars rather than targeted them for Athletic Project COST REDUCING As we evaluate these options we will also continue to: Actively negotiate with EANA Quantify expected healthcare rate reduction Monitor activity in Harrisburg & Washington closely THESE WILL ALL IMPACT THE BUDGET SHORTFALL Repurposing space at Roosevelt to operate an on-site alternative program Eliminate some/all non-mandated programs (including full-day kindergarten?) Identify/implement strategies designed to attract charter school students back to NASD Evaluate opportunities for outsourcing support staff (can only be done as staff resign/retire) Evaluate opportunities to eliminate positions/programs (may result in staff furloughs)

33 Norristown Area School District Preliminary Budget: With no tax increase: $ 151,025,050 Options to close shortfall to be vetted during Spring Scheduled for Adoption: February 12, 2018 Questions?

34 THANK YOU

Norristown Area School District Budget

Norristown Area School District April 23, 2018 NOV 2017 2018-19 BUDGET KICK-OFF COMMUNITY FORUMS. JAN 2018 PRELIMINARY BUDGET ADOPTION NO TAX INCREASE $4.2 MILLION SHORTFALL Norristown Area School District