Elmira Heights Central School District Budget Presentation January 27, 2014

Transcription

1 Elmira Heights Central School District Budget Presentation January 27,

2 State of the Elmira Heights Central School District 2

3 State of the Elmira Heights Central School District 3

4 4 Executive Budget Bottom Line The increase in school aid is 3.1% which amounts to an increase of $608 million in direct aid. $208 million of the increase would go to reimburse schools for money already spent on BOCES, transportation, special education and school construction. $323 million would be used to reduce the Gap Elimination Adjustment (GEA). No funds allocated for Foundation Aid increases. Board of Regents estimated $1.3 billion was estimated as being needed next year therefore, the Executive budget falls short by $692 million dollars. Several other groups (AQE & SSFC) have said schools need an additional. SSFC has stated that $1.638 billion is needed just to repay the GEA taken from school districts. Since the GEA was implemented in school districts collectively have lost $8.4 billion. The Governor has said the state has at least a $500 million surplus and with the personal income tax change (PIT) calculated for schools half of the GEA could be wiped out!

5 Foundation Aid Phase-in o o o The CFE (Campaign for Fiscal Equity) lawsuit resulted in a plan to increase state aid to school districts (Foundation Aid). This plan was to be phased in over 4 years ( through ). Foundation Aid implementation came to a sudden halt due to the financial crisis.the phase in was pushed out for the next several years. To date full phase in has not been implemented. 5

6 Foundation Aid Phase-in School Year Foundation Aid Received Estimated Foundation Aid if fully funded by Difference between Aid Received and Full Foundation Aid % Fully Funded Foundation Aid $6,344,846 $8,032,592 ($1,687,746) 79.0% $6,677,298 $7,918,323 ($1,241,025) 84.3% $6,677,298 $7,931,655 ($1,254,357) 84.2% $6,677,298 $9,608,886 ($2,931,588) 69.5% $6,677,298 $9,644,093 ($2,966,795) 69.2% $6,717,361 $8,607,243 ($1,889,882) 78.0% $6,737,513 $8,714,645 ($1,977,132) 77.0% 6 Totals $46,508,912 $60,494,281 ($11,053,781) 76.9% underfunded

7 GAP Elimination Adjustment In Governor Patterson implemented the Gap Elimination Adjustment to balance the State budget GEA was offset by Federal ARRA monies the State received. ARRA funding was given to Districts in and and then eliminated for The GEA has not been eliminated through ; There has been some restoration of the GEA but the District has still lost over $6 million since due to the GEA! 7

8 GAP Elimination Adjustment State Aid Losses (GEA net of GEA restorations & ARRA funds) in the last 4 years: $921, $1,382, $1,499, $1,087, (proposed) $932,146 Cumulative Loss $5,824,122 8 GEA-Method NYS used to balance NYS budget by deducting money from school districts on a separate line from Foundation Aid (general aid to schools) ARRA funds Federal funds used to stimulate the economy. Used by NYS to offset GEA losses in & (2 year infusion of $ that was not replaced by NYS)

9 Summary of Aid to Fiscal Year Foundation Aid Gap Elimination Adjustment (GEA)-Net ARRA Funds Net Aid $6,344, $6,344, $6,677, $6,677, $6,677, $6,677, $6,677,298 ($1,394,911) $473,601 $5,755, $6,677,298 ($1,779,127) $396,402 $5,294, $6,717,361 ($1,499,989) - $5,217, $6,737,513 ($1,087,952) - $5,649, *** $6,737,513 ($932,146) - $5,805,367 Total $53,246,425 ($6,694,125) $870,003 $47,422,303 9 *** Projected per Executive Budget

10 Foundation Aid/GEA The District is projected to receive approximately $155,000 increase next year in Foundation Aid net of the GEA School Year Foundation Aid Gap Elimination Adjustment Net General Aid $6,737,513 ($932,146) $5,805, $6,737,513 ($1,087,952) $5,649,561 Increase (Decrease) $-0- ($155,806) $155, Projected increase of ERS, TRS and Health Insurance in is $157,165

11 General Aid Funding per Student School Year Number of Students K- 12 (BEDS day) Foundation Aid (net of GEA) if applicable Aid per Student $6,344,846 $5, $5,805,367 $5, Difference (14) ($539,479) ($432.59) 11

12 Building Aid Interest Rate Recalibration The Governor s budget does not include any changes in projected aid due to the 10-year recalibration of interest rates on capital project assumed amortizations. Projected amount of aid reduction ($24,015). We will have to deduct this amount from our building aid revenue estimate for

13 Instructional Materials Aid Textbook, software, computer hardware and library formula aids will not increase for although Districts are to implement the Common Core Through December we have spent over $10,000 on new books to support the reading modules in the elementary school. Through December we have spent over $2,500 additional money on copying Common Core modules. Estimated cost of textbooks to implement the Common Core for Grades K -2 in ELA alone in is over $75,000 13

14 Expense Driven Aids Aid Caps For , each district s state aid, exclusive of Building Aid and Full-Day K Conversion Aid, would be capped at the total listed on the Executive Budget Aid Run (BT dated 1/21/14). For , each district s state aid (also exclusive of Building Aid and Full-Day K Conversion Aid) would be capped at the total listed on the same aid run. In and beyond, state aid, other than Building Aid and Full-Day K Conversion Aid, would also be capped at the total amount listed on the Executive Budget aid run for that year. 14

15 State of the Elmira Heights Central School District 15

16 Use of Fund Balance and Reserves Capital Reserve (Education Law, Section 3651) The Capital Reserve Fund is used to pay the cost of any object or purpose for which bonds may be issued. The creation of a capital reserve fund requires authorization by a majority of the voters establishing the purpose of reserve, the ultimate amounts, its probable term, and the source of the funds. An expenditure may be made from the reserve only for a specific purpose further authorized by the voters. The form of the required legal notice for the vote on establishing and funding the reserve and the form of the proposition to be placed on the ballot are set forth in Section 3651 of Education Law. This reserve is accounted in the General Fund. (A 878) 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 $800,000 $802,861 $805,319 $806,992 $808,163 Per resolution authorized by Elmira Heights voters on 5/19/2009 ultimate amount allowed is $5,000,000 plus earnings in 10 years. Current Reserve Balance $808,163 16

17 Use of Fund Balance and Reserves Repair Reserve (GML, Section 6-d) The Repair Reserve Fund is used to pay the cost of repairs to capital improvements or equipment, which repairs are of a type not recurring annually. The Board of Education, without voter approval, may establish a repair reserve fund by a majority vote of its members. Voter approval is required to fund this reserve (See Opinion of the State Comptroller 81401). Expenditures from this reserve may be made only after a public hearing has been held, except in emergency situations. If no hearing is held, the amount expended must be repaid to the reserve fund over the next two subsequent fiscal years. This reserve is accounted in the General Fund. (A 882) 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 $201,896 $202,618 $203,238 $203,661 $203, Current Reserve Balance $203,957

18 Use of Fund Balance and Reserves Workers Compensation Reserve (GML, Section 6-j) The purpose of this reserve fund is to pay for compensation benefits and other expenses authorized by Article 2 of the Workers Compensation Law, and for payment of expenses of administering this self-insurance program. The reserve may be established by board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year s budget. This reserve is accounted in the General Fund (A 814). 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 $154,775 $255,240 $255,869 $256,343 $171, $84,560 allocated from the reserve in Current Reserve Balance $87,414

19 Use of Fund Balance and Reserves Unemployment Insurance Reserve (GML, Section 6-m) This reserve fund is used to pay the cost of reimbursement to the State Unemployment Insurance Fund for payments made to claimants where the employer has elected to use the benefit reimbursement method. The reserve may be established by board action and is funded by budgetary appropriations and such other funds as may be legally appropriated. Within sixty days after the end of any fiscal year, excess amounts may either be transferred to another reserve or the excess applied to the appropriations of the next succeeding fiscal year s budget. If the employer elects to convert to tax (contribution) basis, excess of fund over sum sufficient to pay pending claims may be transferred to any other reserve fund. This reserve is accounted in the General Fund. (A 815). 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 $122,072 $123,229 $224,333 $224,799 $200, $175,094 allocated from the reserve in Current Reserve Balance $25,000

20 Use of Fund Balance and Reserves Reserve for Tax Reduction (Education Law, Section 1604 (36); Education Law, Section 1709 (37)) This reserve is for the gradual use of the proceeds of the sale of school district real property where such proceeds are not required to be placed in a mandatory reserve for debt service. Specifically, the district is permitted to retain the proceeds of the sale for a period not to exceed ten years and to use them during that period for tax reduction. This reserve is accounted in the General Fund. (A 891) Not Established 20

21 Use of Fund Balance and Reserves Mandatory Reserve for Debt Service (GML, Section 6-l) Upon the sale of district property that was financed by obligations, which remain outstanding at the time of sale, a reserve must be established for the purpose of retiring the outstanding obligations. The funding of the reserve is from the proceeds of the sale of district property or capital improvement. This reserve is accounted in the Debt Service Fund. (A, V 884). 6/30/10 6/30/11 6/30/12 6/30/13 $31,760 $-0- $-0- $19,338 $627,585 transferred to reserve from excess capital project funds in $193,624 allocated from the reserve in to offset building aid deduction related to final cost reports filed. Current Reserve Balance $455,938 21

22 Use of Fund Balance and Reserves Insurance Reserve (GML, Section 6-n) This reserve is used to pay liability, casualty and other types of losses, except losses incurred for which the following types of insurance may be purchased: life, accident, health, annuities, fidelity and surety, credit, title residual value and mortgage guarantee. In addition, this reserve may not be used for any purpose for which a special reserve may be established pursuant to law, e.g., Unemployment Compensation Insurance. This reserve may be established by board action and funded by budgetary appropriations, or such other funds as may be legally appropriated. There is no limit on the amount that may be accumulated in the Insurance Reserve; however, the annual contribution to this reserve may not exceed the greater of $33,000 or 5% of the budget. Settled or compromised claims up to $25,000 may be paid from the reserve without judicial approval. This reserve is accounted in the General Fund. (A 863) Not Established Property Loss Reserve (Education Law, Section 1709 (8)(c ), and Liability Reserve (Education Law, Section 1709(8)(c )) Upon the sale of district property that was financed by obligations, which remain outstanding at the time of sale, a reserve must be established for the purpose of retiring the outstanding obligations. The funding of the reserve is from the proceeds of the sale of district property or capital improvement. This reserve is accounted in the Debt Service Fund. (A, V 884) 22

23 Use of Fund Balance and Reserves Tax Certiorari Reserve (Education Law, Section ) Chapter 588 of the laws of 1988 amended Section 3651 of the Education Law to permit the establishment of a reserve fund for tax certiorari and to expend from the fund without voter approval of the qualified voters of the school district. The new chapter further stipulates that the total of the monies held in the reserve fund shall not exceed the amount which might reasonably be deemed necessary to meet anticipated judgments and claims arising out of tax certiorari proceedings. Any monies deposited to such a reserve fund which are not expended for tax certiorari proceedings in the year such monies are deposited must be returned to the general fund on or before the first day of the fourth fiscal year after deposit of these monies. This reserve is accounted in the General Fund. (A 864). 6/30/10 6/30/11 6/30/12 6/30/13 $257,512 $280,301 $272,852 $202, $199,330 allocated from the reserve in Current Reserve Balance $2,796

24 Use of Fund Balance and Reserves Reserve for Insurance Recoveries (Education Law 1718(2)) This account is used at the end of the fiscal year to account for unexpended proceeds of insurance recoveries. They will be held here pending action by the board of education on their disposition. This account will not be used if the insurance recovery is expended in the same fiscal year it was received. This reserve is accounted in the General Fund. (A 887) Reserve for Encumbrances (A821) The balance of this account represents the amount of outstanding encumbrances (purchase orders) at the end of the fiscal year. 6/30/10 6/30/11 6/30/12 6/30/13 $140,418 $112,194 $72,170 $43,000 24

25 Use of Fund Balance and Reserves Reserve for Inventory (A845) This purpose of this account is to reserve funds for the payment of any accrued employee benefit due an employee upon termination of the employee s service. This reserve fund may be established by a majority vote of the board of education and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated. The reserve is accounted for in the General Fund (A 830). Reserve for Employee Benefit Accrued Liability The purpose of this account is to reserve funds for the payment of any accrued employee benefit due an employee upon termination of the employee s service. This reserve fund may be established by a majority vote of the board of education and is funded by budgetary appropriations and such other reserves and funds that may be legally appropriated. The reserve is accounted for in the General Fund (A 830). 6/30/10 6/30/11 6/30/12 6/30/13 $679,073 $246,391 $241,018 $257, Current Reserve Balance $257,743

26 Use of Fund Balance and Reserves Reserve for Retirement Contribution (ERS only) This purpose of this reserve fund is to fund employer retirement contributions. i.e. any portion of the amount(s) payable by an eligible school district to the NY State Local and Employees Retirement System (ERS) but not TRS. The reserve is accounted for in the General Fund (A 827). 6/30/10 6/30/11 6/30/12 6/30/13 $645,264 $1,037,197 $1,039,352 $737,478 $275,000 allocated from the reserve in Current Reserve Balance $462,478 26

27 Use of Fund Balance and Reserves Assigned and Unassigned Fund Balance Reserves Assigned (Subsequent Year s Expenditures) Unassigned Fund Balance (4% State maximum) 6/30/09 6/30/10 6/30/11 6/30/12 6/30/13 $400,000 $700,588 $1,146,954 $672,170 $643,000 $1,139,842 $1,592,988 $1,210,275 $44,381 $767,074 27

28 Unassigned Fund Balance & Reserve Summary Reserve Balance 6/30/13 Current Balance Capital Reserve $808,163 $808,163 Repair Reserve $203,957 $203,957 Workers Compensation $171,974 $87,414 Unemployment $200,094 $25,000 Debt Service $19,338 $455,938 Tax Certiorari $202,125 $2,796 Employee Benefit Accrued Liability Reserve $257,743 $257,743 Employees Retirement Reserve $737,478 $462,478 Unassigned Fund Balance $767,074 $767,074 Total Reserves $3,367,946 $3,070,563 28

29 Budget Cuts & Savings positions eliminated (7 attrition, 2 lay-offs) 1 Director of Human Resources/Assistant Elementary Principal ($90,180) 1 Librarian/Media Specialist ($87,800) 1 Secondary Social Studies Teacher ($54,900) 2.18 Teacher Aides ($29,350) 1 Bus Aide ($6,650) 1 Custodian ($59,000) 1 Bus Driver ($26,500) 1 Clerk Typist ($42,400) 29

30 Budget Cuts & Savings positions eliminated (6 attrition, 6 layoffs) 1 Administrative Position ($115,000) 1 Guidance Counselor ($67,700) 1 Reading Teacher ($67,700) 1 Alternative Learning Teacher ($50,400) 1 Speech Pathologist ($88,500) 1 Music Teacher ($58,000) 1 Science Teacher ($59,000) 1 Clerk Typist ($56,400) 3.18 Teacher Aides ($66,600) 1 Cleaner ($29,000) 10% cuts in Building budgets ($15,000) Reversed Retiree health insurance accrual ($457,000)

31 Budget Cuts & Savings no positions were eliminated but. Savings from change in health care plans negotiated concession with the unions ($658,000) Used EBALR Reserve to off set loss of state aid revenue ($481,000) 31

32 Budget Cuts & Savings Eliminated 3 Teaching positions ($245,600) Eliminated 1 Cleaning position ($35,000) Eliminated 1 Part-time Courier position ($4,400) Eliminated 4 Extracurricular Advisor positions ($5,800) Eliminated 1 modified sport ($5,700) Reduction of 4 Secretaries from 12 to 11 months ($7,300) Elimination of several student programs and services from BOCES budget ($71,000) 32

33 Budget Cuts & Savings Elimination of 1 Secondary ELA Teacher ($87,650) Savings from change in health care plans ($750,000) Elimination of several student programs and services from BOCES budget ($46,000) 33

34 Budget Cuts & Savings $396, $1,130, $1,139, $374, $883,000 5-Year budget cuts $3,923,880 and other savings 22 net jobs eliminated through lay-off or attrition since

35 State of the Elmira Heights Central School District 35

36 Estimated Revenue Shortfall Rollover Budgeted Expenditures *** $19,758,000 Estimated Revenues +++ $19,119,989 Revenue Surplus (Shortfall) ($638,011) *** Adjusted for projected salaries, employee benefits, debt service and other known increases. +++ Using Executive budget and tax levy. 36

37 Property Tax Cap Discourages Districts from exceeding the calculated tax cap Must have a super-majority to exceed Limits the ability of the District to raise revenue Catastrophic - if after 2 votes no super-majority is achieved levy cannot increase at all from prior year Linked to CPI (CPI or 2%; whichever is lower) CPI is a false indicator of costs for school districts Labor contracts are usually locked in for 3 years Districts must pay contractual contributions to NYS Teachers and Employers Retirement Systems; determined by the retirement systems 37

38 Property Tax Cap Calculated Cap 5.88% Actual Levy increase 3.88% Calculated Cap 5.47% Actual Levy increase 5.40% Preliminary Cap 2.22% $163,513 Factors affecting tax cap calculation: CPI less than 2% (1.46%) loss of $38,944 Tax base growth factor decreased from to No pension exclusion ( exclusion $130,498) 38

39 Property Tax Cap (slide 1 of 2) Tax Levy Cap Calculations and Totals Tax Levy Limit (Cap) Before Exclusions Tax Levy Fiscal Year Ending (FYE) 06/30/2014 $7,375,592 Total Tax Cap Reserve Amount from FYE 06/30/2014 $0 Tax Base Growth Factor** PILOTS receivable FYE 06/30/2014 $123,193 Capital Tax Levy for FYE 06/30/ , Allowable levy growth factor*** PILOTS receivable FYI 06/30/2015 $129,353 Available Carryover from FYE 06/30/2014 $0 Total Levy Limit Before Exclusions $7,187,905 ** As determined by the NYS Office of Real Property Tax Services (ORPTS) *** As determined by the NYS Office of the State Comptroller 39

40 Property Tax Cap (slide 2 of 2) Exclusions Tax levy necessary for expenditures resulting from tort $0 orders/judgments over 5% FYE 06/30/2014 tax levy Capital Tax Levy for FYE 06/30/2015 $351,200 Tax levy necessary for pension contribution expenditures casued by growth in the system average actuarial contribution rate (ERS) or normal contribution rate (TRS) in excess of 2 percentage points: ERS $0 TRS $0 Total Exclusions $ 351, Tax Levy Limit, Plus Exclusions $ 7,539, %

41 Executive Budget - Other Initiatives Smart Schools Aid ($936,641 Elmira Heights projected share) - $2 billion general obligation bond act to fund enhanced education technology (infrastructure improvements for high speed broadband access, purchase smart boards, tablet computers). Could also be used to construct new pre-k classroom space. Smart Schools Investment Plans will have to be approved by the State. This is a bond act so the voters of NYS will have to approve. 41

42 Executive Budget - Other Initiatives Statewide Universal Full-Day Pre-Kindergarten - The Executive Budget proposes the State will provide funding of $100 million in the school year, focusing expansion first on the highest-need students. In each subsequent school year, the State's commitment will grow by an additional $100 million. 42 After-school Programs - The Executive Budget proposes an estimated $160 million in the school year, growing to $200 million in the school year, in funds allowing schools to add or expand after-school programs to provide more enrichment opportunities for students.

43 43 Executive Budget - Other Initiatives Teacher Excellence Fund - The Executive Budget provides support to reward teacher excellence, and recruit and retain the most highly effective educators, particularly in high-needs schools. In order to qualify, teachers must be rated as highly effective" and will be eligible to receive up to $20,000 in annual supplemental compensation through the Teacher Excellence Fund. P-TECH Expansion - The Executive Budget provides $5 million to expand the Pathways in Technology and Early College High School (P-TECH) program included in last year's Enacted Budget.

44 44 Executive Budget - Other Initiatives Mandate Relief The Governor s proposal would create a new waiver process that would allow school districts, BOCES and approved private special education programs to petition the State Education Department for flexibility from certain special education requirements. School Mergers The Governor s proposal would allow districts seeking to merge with the option to delay for 1 year or phase in for up to 10 years, adjustments to tax rates in the participating districts. According to the Governor, this would prevent large one time fluctuations in tax rates, removing this issue as a barrier to school district mergers.

45 Executive Budget - Other Initiatives STAR The Governor proposes to allow the Department of Taxation and Finance to pay the STAR tax savings directly to eligible property owners who register for STAR after receiving their school tax bills. The Governor also proposes eliminating the annual cost of living adjustment (COLA) for the income standard applicable to the Enhanced STAR exemption under the STAR program beginning with the school year, effectively freezing the income threshold at $81,

46 Executive Budget Other Initiatives Property Tax Relief for Homeowners School Districts will be combined with all other municipal entities within a county and provided the entire aggregate county figure is below the 2% property tax cap, property taxpayers would have their increase paid for by the state. In subsequent years each county group would not only have to remain below the cap, but also have the state approve a plan to save at least 1% of their tax levy for each of three years. 46

47 Executive Budget Other Initiatives New Mandate Schools would be subject to the jurisdiction of the state Division of Human Rights. If accepted by the legislature, complaints of discrimination would be investigated by DHR, rather than being handled internally by school districts. Could result in revocation of license for Superintendents and Principals if not handled correctly. 47

48 New Law - Veteran s Exemption New legislation signed into law in December (RPTL Section 458-a) allows school districts to set Alternative Veterans Exemptions for school tax purposes. Has been allowed in Counties & other municipalities since Chemung County allows for the exemption as well as all municipalities in Chemung County with the exception of the Towns of Ashland and Baldwin. 48

49 New Law - Veteran s Exemption Law goes into effect immediately. Districts must approve a resolution to opt in by March 1 for the exemption to apply to the tax levy. If no resolution approved, exemption will not apply to school tax. Unlike the STAR exemption any loss of assessed value redistributes those taxes to other taxpayers in the district. Also, this is a % tax so the taxable value lost due to this exemption is subtracted from the assessment before the STAR exemption is calculated. Therefore, this may decrease the amount of our STAR reimbursement. 49

50 New Law - Veteran s Exemption Chemung County allows for veterans exemptions as follows: Service during a period of war 15% Up to $12,000 limit of assessed value Combat Zone 10% Up to $8,000 limit of assessed value Both 25% Up to $20,000 limit of assessed value Service Connected Disability ½ of the % of disability up to $40,000 limit of assessed value 50

51 Veteran s Exemption Towns Assessments Tax Levy Tax Rate Big Flats $29,921,669 $698, Elmira $90,532,711 $2,051, Horseheads $195,881,062 $4,625, Total Taxable $316,335,442 $7,375, Current Alt Vet Exemption Amount of Lost Value $5,810,266 $7,375, Net Taxable Value $310,525,176 $7,375, % increase in tax rate

52 Next Board Meetings February 10, :00 pm February 24, :00 pm TAE Community Room 52

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