The Process The budget development process the District has historically utilized is a unique one immensely different from the model used by corporate/for-profit entities. North Allegheny utilizes Zero-Based ing (ZBB), which is a tool used in the budget development process that identifies and prioritizes activities and functions required to support learning and instruction within available funding limits and improve budget development and reconciliation effectiveness. Each of the activities in the development stage, are linked to the goals, objectives, strategies and actions of the Strategic Plan. Expenditures are zerobased; that is, they are justified from the ground up every year. On June 27, 2006, Governor Edward Rendell signed into law Act 1 of 2006, also known as Taxpayer Relief Act. Act 1 became effective immediately upon signing; however, the School District first realized the impact in fiscal year 2007-2008. The legislation requires, among other provisions, that each Pennsylvania School Board that intends to raise taxes by more than the index and exceptions, (a calculation that includes the average percentage increase in the Statewide Average Weekly Wage (SAWW) and the Employment Cost Index (ECI) ), must have the tax increase approved by voters at the election preceding the start of the fiscal year. Since the enactment of Act 1, the has not been required to place on the Ballot any tax increases for approval. The budget process timeline is as follows: o At the beginning of the school year, in September, budget controllers, professional staff members, and administrators review and substantiate each line item of expenditure and revenue in this planning document. o As stated above, each of these line items is linked to the goals, objectives, strategies, and actions of the Strategic Plan. Also, the appropriate Executive Council member reviews, ranks, and modifies the controllers budget submissions. o The Superintendent of Schools reviews the budget requests and the correlation each submission has to the District s mission, priorities, and objectives of the Strategic Plan and resource levels available. o For, the Proposed Final budget was presented in May to the Board of School Directors for approval in a public session and was placed on public display at the Central Administration Offices, all schools, all municipal offices, and at the Northland Public Library. The final adoption of the Proposed Final occurred on May 19, 2010. o The final budget will be presented to the School Board for review and approval on June 23, 2010. - 1 -
Executive Summary The has committed itself to financial excellence for many years. The School District's system of financial planning, budgeting, and internal financial controls are well regarded as represented in an unqualified opinion from the School District s auditors the past several years. The School District plans to continue its sound fiscal management to meet the challenges of the future. After several refinements of the budget, with close scrutiny to every budget request, the District has balanced a proposed final budget with a.75 millage increase. This increase consists of the state generated index and the partial use of the retirement expense exception. Over the previous three budget years, the District has decreased the millage in the amount of.732 mills. The following points are provided to highlight important aspects of the budget, as well as the changes relative to the budget: Revenues Local sources o 76.5% and 77.7% of revenue for 2010-2011 and 2009-2010 respectively. o ed at $92,938,021, an increase of 4.1% or $3,647,679. o Increases in current real estate taxes have been budgeted. Decreases have been budgeted for interim taxes, deed transfer taxes, investment earnings, earned income taxes and delinquent real estate taxes. State sources o 19.7% and 19.6% of revenue for 2010-2011 and 2009-2010 respectively. o ed at $23,983,271, an increase of 6.6% or $1,476,149. o A decrease in the Special Education Subsidy in the amount of $123K has been offset by a nominal increase in the Basic Education subsidy in the amount of $258K. Retirement reimbursement has increased $1,238,500 due to the retirement contribution rate increase to 8.22% from 4.78%. Also included in State sources is funding attributable to revenues from state gaming that has been made available to fund property tax reductions in the amount of approximately $154 for each approved homestead exclusion property within the District. Federal sources o 2.4% and 2.0% of revenue for 2010-2011 and 2009-2010 respectively. o ed at $2,907,819, an increase of 23.7% or $556,569. o The largest change is the increase in the utilization of Access funds in the amount of $875K. This increase has been offset by a decrease in the IDEA American Reinvestment and Recovery Act (ARRA) funds in the amount of $330K. There is a reduction in the Title I Improving Academic Achievement Grant in the amount of $13,154 and an increase Individuals with Disabilities Education Act (IDEA) funds in the amount of $81,906. Also included is the elimination of the Library Services and Technology Act (LSTA) grant in the amount of $60,000. - 2 -
- 3 - Executive Summary (continued) Fund Balance Allocation o A fund balance allocation of $1,631,258 has been provided for a number of one time items in 2010-2011. Expenditures Salary Requirements o 55.5% and 57.1% of expenditure for 2010-2011 and 2009-2010 respectively. o ed at $67,374,526 an increase of 2.7% or $1,800,036. o Increases for regular wages $1,140,259 (includes approximately $260K for additional professionals hitting the bump pay scale), terminal and severance pay for $237,150, and substitutes in the amount of $210,860. Benefits o 19.8% and 18.2% of expenditure for 2010-2011 and 2009-2010 respectively. o ed at $24,063,325 an increase of 15.1% or $3,158,761. o This increase is mainly attributable to an increase in the funding percent of retirement costs from 4.78% to 8.22% which amounts to $2,477,000. Also included is an increase in medical insurance for $410K. Professional and Technical Services o 2.2% of expenditure for both 2010-2011 and 2009-2010. o ed at $2,718,042 an increase of 8.1% or $203,239. o Increases for professional educational services have been budgeted. Purchased Services o 7.9% and 8.1% of expenditure for 2010-2011 and 2009-2010 respectively. o ed at $9,551,936 an increase of 3.2% or $296,036. o Student transportation and utility services have increased nominally. Repair and maintenance and rentals have increased $296K and tuition costs have increased $106K. Offsetting these increases was a decrease in construction services in the amount of $250K. Supplies, Natural Gas/Fuel & Books o 4.1% and 3.0% of expenditure for 2010-2011 and 2009-2010 respectively. o ed at $4,965,417 an increase of 42.6% or $1,482,351. o Natural Gas/Fuel increased $78K. o Books/Publications and Subscriptions have increased $863K chiefly for the purchase of textbooks for communication arts and social studies. o General Supplies have increased $541K mainly for software. Other Objects & Financing o 9.9% and 11.1% of expenditure for and 2009-2010, respectively. o ed at $12,057,118 a decrease of 5% or $639,910. o Serial bond debt and lease payments have remained consistent. o Fund transfers have decreased in the amount of $659,446.
Where Does Our Money Come From? Of the $121,460,369 revenue budget, most money for our District comes from local funding. Local 76.5% Federal 2.4% State 19.7% Per Capita 0.38% Local Revenue Actuals-$87,695,206 Wage 11.21% Real Estate 86.65% Other Revenues 1.76% Local Revenue -$89,290,342 Per Capita 0.38% Wage 11.85% Real Estate 86.30% Other Revenues 1.47% Local Revenue -$92,938,021 Per Capita 0.37% Wage 10.81% Other Revenues 0.95% Real Estate 87.87% State Revenue Actuals-$21,994,469 Accountability Grant 1.82% Other State Revenues 0.43% State Revenue -$22,507,122 Accountability Grant 1.76% Other State Revenues 0.14% State Revenue -$23,983,271 Accountability Grant 1.66% Other State Revenues 0.05% Reimbursements 35.22% Basic Education 38.50% Reimbursements 35.71% Basic Education 38.00% Reimbursements 39.37% Basic Education 36.74% Transportation 7.51% Special Education 16.52% Transportation 7.77% Special Education 16.62% Transportation 7.10% Special Education 15.09% - 4 -
Revenue Per Student The following categories display a portion of the expected revenue per student for, budgeted revenues per student for, and actual revenues per student for. Revenue Class Actual Revenue Per Student Revenue Per Student Revenue Per Student Local Revenues 10,852 11,049 11,525 State Subsidies and Reimbursements 2,722 2,785 2,974 Federal Grants and Funding 222 291 361 Student Enrollment used for & : 8,081 Student Enrollment used for : 8,064 must rely mainly on Local Revenues as a result of minimal funding from State and Federal governments as compared to State and County averages. Revenues by Source (% of Total) 1.61% 19.73% 4.80% 6.30% 78.66% 38.66% 33.36% 56.54% 60.34% Federal & Other State Local District State County - 5 -
Where Does the Money Go? The expenditure budget is $121,460,369, an increase of 5.7% from the. Personnel costs are the largest component of a school system s budget, generally comprising 70% to 80% of a District s operating expenses. The District employs approximately 636 certified teachers with an average of 15+ years of teaching experience. 64% of those teachers have a Masters or Doctorate degree. Salaries 55.5% Benefits 19.8% Purchased Services 7.9% Other Objects 5.2% Principal, Transfers 4.7% Supplies 4.1% Professional Services 2.2% Property 0.6% One of the most valuable resources at is the employees. The District s spending shows a direct investment in supporting teachers and school staff. They are the people on the front lines, leading instruction in the classrooms and providing highquality educational experiences for our students. There is nothing more important than ensuring that trained, effective educators are in positions to have the greatest possible impact on educating tomorrow s leaders. The chart below compares gross salaries and benefits (compensation) for instructional programs to State and County Averages. Approximately 74% of all salaries and benefits (see chart below) are directly allocated to instructional programs at. (Latest results for State/County Averages from School Data Direct online database-2006) 2006 Compensation Expenditures per Student Instruction County State District 0% 25% 50% 75% - 6 -
Expenditure Trends and Non Financial Considerations The District s trend of expenditures as presented in the budget: Expenditure Category Actuals % Change From Actual $ Change From % Change From Salaries $ 63,072,250 $ 65,574,490 4.0% $ 67,374,526 $ 1,800,036 2.7% Benefits 19,874,396 20,904,564 5.2% 24,063,325 3,158,761 15.1% Professional Services 3,132,291 2,514,803-19.7% 2,718,042 203,239 8.1% Purchased Services 8,418,397 9,255,900 9.9% 9,551,936 296,036 3.2% Supplies 4,023,980 3,483,066-13.4% 4,965,417 1,482,351 42.6% Property 638,760 493,863-22.7% 730,005 236,142 47.8% Other Objects 6,675,938 6,598,222-1.2% 6,351,893 (246,329) -3.7% Principal, Transfers 7,200,259 6,098,806-15.3% 5,705,225 (393,581) -6.5% Total Expenditures $ 113,036,271 $ 114,923,714 1.7% $ 121,460,369 $ 6,536,655 5.7% While this document is an analysis of the District s budget, it is important to remember that has set high standards for student achievement. continually scrutinizes budget lines while realizing the impact on student achievement. Efforts of fiscal responsibility have been exercised while stressing the quality of the educational programs that our citizens have historically received for their tax dollars. Statewide, Pennsylvania school districts are required to administer standardized tests to students. The focus of the assessment is to determine the degree to which the students and schools in the State of Pennsylvania are proficient in achieving the content contained in the Pennsylvania Academic Standards in the areas of mathematics, reading, and writing. This system is known as the Pennsylvania System of School Assessment (PSSA). As displayed in the following graph, North Allegheny continues to excel in attaining higher scores than the State averages. 100 2009 80 60 92 73 91 71 North Allegheny 40 State 20 0 Math (%) Reading (%) - 7 -
Expenditure by Function Another way to look at the North Allegheny School District expenditure budget is by function. Functions are organized within the accounting structure in relation to the magnitude of expenditures usually found in a typical school district. The function describes the activity for which a school expends funds. Instructional Costs 59.4% Facilities 7.1% Transportation 4.7% Financing/ Transfers 9.8% Administration 6.6% The above function categories can be further categorized by major program. The following table details the expected cost per student provided to each area. % of Program Projected Cost per Student 9.57% Special Educational Programs* 14,869 45.57% Regular Programs 6,863 2.03% GOAL ** 2,014 9.78% Financing /Transfers 1,472 7.05% Operation,Maintenance, Acquis. 1,062 6.60% Administration 994 4.74% Student Transportation 715 3.77% Business/Data/Support Services 568 3.06% Pupil Personnel 461 2.60% Instructional Staff Support 392 2.20% Additional Instruction 331 1.99% Noninstructional Services 299 0.90% Pupil Health 135 Above calculations: ed Expenditure/Student Enrollment (8,064) *Special Program Costs per student are based on Special Education expenditures and enrollment (782) only. ** GOAL Program Costs per student are based on GOAL specific expenditures and enrollment (1,223) only. Please note that a portion of the above areas also support Special Education and GOAL Services. - 8 -
Expenditure by Function (continued) As in most Districts, the largest percent (%) of expenditures per student is spent for instructional costs. spends approximately 67% of its operating budget on instructional programs as represented below. (Latest results for State/County Averages from School Data Direct online database-2006. There have been no updates since this time.) 2006 Operating Expenditures by Function per Student 4.58% 2.93% 2.87% 4.53% 5.78% 5.85% 8.27% 11.41% 11.43% 7.47% 7.63% 8.52% 8.07% 8.45% 8.09% 67.08% 63.80% 63.23% District State County Instruction General & School Administration Transportation Instructional Support Operations & Maintenance Other - 9 -
Expenditure by Function (continued) Instruction (1100, 1200, 1300, 1400) Represents 59.4% of the budget, Covers 8,064 students located in 12 buildings. Instruction includes costs for all program areas which offer courses to students in the K-12 intructional program during the regular school day. It includes offerings for a range of student abilities levels from modified classes through advanced placement courses at the secondary level, and includes all subject areas. Actuals Description Salaries $ 44,734,420 $ 46,643,066 $ 48,050,059 Includes 589 teachers averaging $72,549 regular salaries per professional. Additional pays, substitutes, vacation, terminal and severance and other various items are included. Benefits 14,294,507 15,127,884 17,293,336 The retirement expense budget is 8.22% of salaries. For increases in medical expense District wide has been included. Also included are social security, medicare and workers compensation insurance. Professional & Technical 1,250,040 1,225,487 1,442,076 Special Education Costs have increased slightly due to usage. English as a Second Language and Hearing Impaired services are provided by District personnel. Allegheny Intermediate Unit (AIU) consulting and professional fees are included in this category. Purchased Property Service 75,456 88,265 88,101 includes repairs and rentals. Other Purchased Service 2,396,436 2,865,401 2,971,240 Increases in tuition costs for debt service payments to A.W. Beattie, for the first time in. Tuition for approved private schools, alternative and charter schools are also included. Other charges include postage, internet, and travel expenditures. Supplies & Books 1,239,413 937,675 1,680,037 Purchases of textbooks, classroom, and other supplies. Increases in textbooks for Curriculum Arts and Social Studies. Property 437,871 376,202 572,879 Instructional new and replacement equipment purchases. Conf, Registrations, Dues 8,844 8,073 7,628 Expenditures for conferences, dues and registrations. TOTAL $ 64,436,987 $ 67,272,053 $ 72,105,356 Vocational Education 2,558,352 3.55% Other Inst. Programs 110,337 0.15% Special Ed/GOAL Programs 14,090,855 19.54% Regular Programs 55,345,812 76.76% - 10 -
Expenditure by Function (continued) Support Services (2000) Represents 28.9% of the budget. Support Services are those services which provide administrative, technical, guidance, health, and logistical support to facilitate and enhance instruction. This category also includes business, fiscal, purchasing, printing duplicating, transportation, and facilities and maintenance services. Actuals Description Salaries $ 16,873,652 $ 17,556,399 $ 17,756,802 Contracted salary increases are included. Includes 50 teachers averaging $72,692 per person and 35 Administrators averaging $111,395 per person. Other regular salaries includes facilities staff for $2,996,336, para professional and clerical regular salaries for $2,951,522 and transportation staff for $2,307,804. Additional pays, overtime, vacation pay, substitutes, and terminal and severance are included in this budget category. Benefits 5,344,251 5,543,685 6,447,220 The retirement expense budget is 8.22% of salaries. For increases in medical expense District wide has been included. Also included are social security, medicare, and workers compensation insurance. Professional & Technical 1,732,969 1,160,116 1,154,966 Decreases were budgeted for and for professional services. also includes human resource consultants, software consultants, drivers testing, in-service programs for facilities staff, medical exams for transportation staff, curriculum and strategic planning, test scoring, towing, fire alarm monitoring and environmental testing. Purchased Property Services 3,246,033 3,689,377 3,771,968 Repairs and maintenance have increased while construction services have decreased. Also included is utility and cleaning services. Other Purchased Services 2,507,155 2,441,012 2,548,662 Small increases have been budgeted for student transportation services, property insurance and communications. Supplies, Fuel & Books 2,630,279 2,400,112 3,115,508 Diesel fuel and natural gas costs have increased $78K. Student/Financial Software costs have been included in this line item. Property 130,212 84,761 100,726 includes new and replacement equipment. Conf, Registrations, Dues 178,504 150,210 151,778 Registrations are included in this budget line. TOTAL $ 32,643,055 $ 33,025,672 $ 35,047,630 Transportation 5,762,332 16.44% Central Admin 2,781,665 7.94% Pupil Personnel 3,721,161 10.62% Instructional Staff Support 3,160,720 9.02% Other Support Svs 149,630 0.43% Op/Maint Plant Svs 8,562,622 24.43% Administration 8,019,409 22.88% Business 1,801,165 5.14% Pupil Health 1,088,926 3.11% - 11 -
Expenditure by Function (continued) Noninstructional Services (3000) Represents 1.99% of the budget. Operating of Noninstructional Services are those activities concerned with providing noninstructional services to students, staff or the community. Actuals Description Salaries $ 1,464,178 $ 1,375,025 $ 1,567,665 Contractual salary increases in addition to using District employees for some supplemental contracts. also includes swimming pool guards, athletic deparment salaries, and athletic trip drivers' wages. Benefits 235,638 232,995 322,769 The retirement expense budget is 8.22% of salaries. For increases in medical expense District wide has been included. Also included are social security, medicare and workers compensation insurance. Professional & Technical 121,671 104,200 99,000 Some supplemental contracts, school crossing guards, professional health services, and physiotherapist are expended in this category. Purchased Property Service 33,891 34,750 35,250 Reconditioning equipment and rentals are budgeted within this line. Other Purchased Service 159,426 137,095 136,715 Scouting, athletic trips, all sports insurance, vehicle costs, and student travel are included within this category. Supplies & Books 154,288 145,279 169,872 Purchase of supplies for athletics, band, orchestra, choral, music, drill team, mini course, stage and Alliance against highly addictive drugs. Property 70,677 32,900 56,400 Stage, pool, club sports, marching band, athletics, and miscellaneous new and replacement equipment purchases. Conf, Registrations, Dues 23,890 18,512 23,762 Increases have been included for registrations. TOTAL $ 2,263,659 $2,080,756 $2,411,433 Community Services 88,732 3.68% Student Activities 2,322,701 96.32% - 12 -
Expenditure by Function (continued) Facilities Acquisition, Construction and Improvements Services (4000) Represents.02% of the budget. Expenditures incurred to purchase land and buildings. Architecture and engineering services related to acquiring and improving sites. Actuals Description Professional & Technical $ 27,611 $ 25,000 $ 22,000 Fees for construction models. TOTAL $ 27,611 $ 25,000 $ 22,000 Other Expenditures and Financing Uses (5000) Represents 9.78% of the budget. Current debt service, other financing transactions, transfers and refunds of prior years are included within this function series. Actuals Description Refunds and Interest $ 6,464,700 $ 6,421,427 $ 6,168,725 Over the past few years prior year refunds have decreased substantially in addition to debt interest. Principal, Transfers 7,200,259 6,098,806 5,705,225 Debt principal increases.transfers have decreased in the amount of $1,303,354 for the budget. There are no transfers included in the budget. TOTAL $13,664,959 $ 12,520,233 $ 11,873,950-13 -
Expenditure by Department A final look at the budget is to categorize the expenditures by a specific activity. This information is sorted by the highest cost per student to the lowest. % of Specific Activity Cost per Student 9.40% *Special Education 14,596 25.25% **Unallocated Instruct ional & Other 3,803 2.03% GOAL (see note below) 2,014 10.30% Administrative 1,550 9.75% Debt Service 1,469 6.99% Facilities 1,053 5.07% *Transportation 763 3.55% Communication Arts 535 2.84% School Counseling 428 2.57% Science 387 2.46% Music 371 2.40% Mathematics 361 2.18% Social Studies 329 1.88% Physical Education 284 1.73% Library 260 1.63% Foreign Language 245 1.55% Family & Consumer Science 233 1.48% Athletics 224 1.47% Arts & Crafts 221 0.90% Health Services 135 0.88% Inst'l, Alternative, & Cyber Schools 133 0.77% Graphic Arts 117 0.76% Industrial Arts 114 0.49% Pupil Services 74 0.44% Beattie Tech 66 0.30% Student Activities 45 0.26% School Community/Relations 40 0.18% Staff Development 27 0.16% ROTC 25 0.11% Audio Visual Dept 17 0.09% TV Studio 14 0.07% Outdoor Education 10 0.03% Homebound 4 0.02% Construction Costs 3 Note: All above allocations are based on Total Enrollment, except for Special Education and GOAL costs. *Special Education A portion of transportation costs in the amount of & Transportation $1,285 can be allocated to Special Education services. In addition, there are various other departments that are directly attributable to the Special Education Department for $273 per student. These additions will increase Special Education costs to $14,869 plus the transportation allocation of $1,285 will total $16,154 cost per student. ** Unallocated Includes approximately $29.9M for general instructional salaries and benefits. - 14 -