2014-15 Proposed Final Budget Presentation (May 12, 2014)

Selinsgrove Area School District

GENERAL FUND FINANCIAL STATEMENT(Current financial position)

2012-13 Actual

2013-14 Budget

2013-14 Projected

Beginning Balance

$ 6,142,492 $ 6,810,646 $ 8,082,703

Revenues $ 36,936,892 $ 37,780,849 $ 37,957,589

Expenditures $ 34,996,681 $ 37,780,849 $ 36,844,022

Surplus/(Deficit) $ 1,940,211 $ 0 $ 1,113,567

Transfer out to Capital Reserve

$ (500,000)

Transfer out for IS School Roof

$ (850,000)

Ending Balance $ 8,082,703 $ 6,810,646 $ 7,846,270

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2013-14 BUDGET SAVINGS (Current Yr.)

Adopted budget balance $ 0 Personnel Salary Savings (2.5%) $ 450,000 Fringes/Benefit Savings $ 125,000 Medical insurance savings $ 95,000 Unemployment comp savings $ 63,000 All other department savings (net) $ 4,000 Revenues over budget (EIT) $ 176,000 Not using budgetary reserve $ 187,000Total Savings (projected surplus) 3% $1.1 million

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TOTAL FUND BALANCES AT 6-30-14

Designations (“buckets”) Balance

Restricted - Special Ed ACCESS $ 266,345

Nonspendable - Inventory of Supplies

$ 33,631

Nonspendable – Prepaid Expenses $ 31,563

Committed – Retiree Healthcare $ 2,318,334

Committed - Future PSERS Expenses

$ 2,648,258

Committed – Educational Resources

$ 300,000

Unassigned Balance $ 2,248,139 (6.1% of budget)

TOTAL GENERAL FUND RESERVES $ 7,846,270 (21.3% of budget)

DEBT SERVICE FUND RESERVES $ 1,842,373

CAPITAL RESERVE FUND RESERVES $ 2,400,227

TOTAL ALL GOV’T FUNDS RESERVES

$ 12,088,870

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FUTURE CAPITAL RESERVE PROJECTS – Importance of maintaining a healthy Capital Reserve Fund

Project Amount Project start date

Intermediate school roof project

$ 880,500 Summer 2014

Middle school addition (total cost of $650,000 balance from food service)

$ 275,424 Fall 2014

High school bleacher replacement

$ 163,100 Summer 2015

Intermediate school A/C chiller

$ 91,000 as needed

Football field turf replacement (total cost of $313,000)

$ 247,300 as needed

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Other expenses: annual summer maintenance projects for carpeting, paving, vehicle replacement. Middle school HVAC system replacement (possible performance contract), stadium track surface replacement. Fund used to offset any unforeseen major equipment replacement.

2014-15 BUDGET SUMMARY FLOW OF FUNDS – GENERAL FUND

Beginning Fund Balance $ 7,846,270

Revenues (without tax increase) $38,544,948

Expenditures $39,174,810

Deficit ( $ 629,862)

Transfer in from Educational Resources Reserve

$ 125,000

Adj Deficit before tax increase

( $504,862)

Proposed 1.66 mills (2.7%) Act 1 allowable tax increase

$411,811

Operating Deficit to be covered from unassigned fund balance

( $93,051 )

Ending Fund Balance $ 7,628,219

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REVENUE HIGHLIGHTS

Moderately growing local economy 1.66 mill real estate tax increase (2.7%) and a 0.5%

growth in the overall real estate base Earned Income Tax collection budgeted with a 2%

increase from proj 13-14 collections Basic education subsidy increase of 1.8% (state

funding is uncertain at this point) Special education subsidy level funding Accountability Block Grant level funding Reduction in federal funding (Keystone Literacy Grant

& Title I) Transfer in from educational resources reserve

$125,000

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2014-15 REVENUE BY SOURCE

LOCAL61%

STATE35%

FEDERAL4%

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$23.6 M

$13.7 M

$1.6 M

State averages: Local 54%, State 41%, Federal 3%, Other 2%

HISTORICAL REVENUES BY SOURCE

$-

$5

$10

$15

$20

$25

10-11 11-12 12-13 13-14 14-15

Local

State

Federal

9

millions

EXPENDITURE HIGHLIGHTS

Nine teacher retirements at end of 13/14 school year (not replacing one elementary position)

Salary increases per personnel contracts – teachers 3.9% salary plus 2.3% steps, administrators 3.5%, classified 3.9%

PSERS rate increase from 16.93% to 21.40% Medical insurance premium increase of 7% and move to tiered

rates instead of composite rate Building and technology budgets level funded (4th year at reduced

funding)

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EXPENDITURE HIGHLIGHTS

Transfer out to debt service fund reduced by $400,000 (debt service reserves to be used)

Capital reserve transfer of $96,000 reflects Jackson-Penn rental income

New K-5 reading textbook series ($125,000) Total budget of $39.17 million – overall

increase of $1.4 million or 3.7% from 13/14 original budget and $2.3 million or 6.3% from 13/14 projected actual ending budget

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MAJOR EXPENDITURE INCREASES

EXPENSE INCREASE FROM 13-14 Projected

EMPLOYER SHR OF RETIREMENT EXP

$ 1,003,000 33.5%

EMPLOYEE SALARY/WAGES

$ 993,600 5.7%

MEDICAL INSURANCE $ 621,000 15.0%

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2014-15 EXPENDITURE ANALYSIS

Contractual/ Fixed97%

Discretionary3%

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Personnel costs, student tuition, transportation, utilities, debt service

Supplies, textbooks, equipment ,repairs, travel

HISTORICAL USE OF FUNDS

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

10-11 11-12 12-13 13-14 14-15

Salaries

Fringes/ Benefits

Professional Svcs

Propoerty Svcs

Purchased Svcs

Supplies

Equipment

Debt Service

Other Expenses

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Personnel costs make up 75% of total budget

FUTURE BUDGET CONCERNS

Modest economic recovery producing inadequate local and state revenue growth

Act 1 index will remain low Limited state subsidy increases Reductions in federal revenue PSERS rate increases to reach 30% Teacher contract increases over the next 2

years New Federal Healthcare Legislation (increase

costs and administrative burden)

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PROJECTED PSERS RATE

4.785.64

8.6512.36

16.93

21.4025.8

28.3 29.1530.14 30.87

0

5

10

15

20

25

30

09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Employer % Rate

PSERS Rate

16Fiscal Year

NET PSERS COST TO DISTRICT10 Year Analysis

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BUDGET RESTRUCTURING: ACTIONS TAKEN SINCE 2010-11

Reduced 27 professional staff (12.7%) Reduced 2.4 administrative staff (18.6%) Reduced 29 support staff positions (18.6%) Salary freeze in 2011-12 for all personnel Reduced pay increase for administrative staff

in 2012-13 Eliminated indemnity health insurance plan Refinanced 4 bond issues Cut building and technology budgets by 30%

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BUDGET RESTRUCTURING: ACTIONS TAKEN SINCE 2010-11

Leased Jackson-Penn for rental income Long term energy contracts for natural gas &

electricity Strategic use of federal funds to offset costs Four day work weeks in the summer

TOTAL FOUR YEAR CUMULATIVE BUDGET SAVINGS OF $14.3 MILLION

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FUTURE BUDGET PROJECTIONS

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GENERAL FUND PROJECTED ENDING FUND BALANCE

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PROPOSED FINAL BUDGET SUMMARY“THE BOTTOM LINE”

REVENUES $38,956,759

EXPENSES ($39,174,810)

USE OF FUND BALANCE ($125,000 FROM EDUCATIONAL RESOURCES & 93,051 FROM UNASSIGNED)

$ 218,051

MILLAGE INCREASE% INCREASE

1.66 2.7%

TOTAL MILLS 1 mill = $247,000 in revenue

63.41

INCREASE TO AVG HOMEOWNERHomestead/Farmstead credit $133

$45 ($3.75 per month)

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PRESENTATION SUMMARY (POINTS TO REMEMBER)

Financial reserves (fund balance) – very strong position in the short term

State funding is uncertain Significant budget challenges remain for

the future – PSERS, Healthcare, teacher contract increases

NEW FISCAL REALITY Importance of long-term budgeting

decisions and forecasting

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