Downingtown Area School District Budget€¦ · 540 Trestle Place 610-269-8460 . Downingtown,...

Downingtown Area School District

Budget

Fiscal Year 2016-2017

540 Trestle Place 610-269-8460 Downingtown, Pennsylvania 19335 www.dasd.org Chester County

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Downingtown Area School District Budget 2016-2017

Table of Contents

Introductory Section ................................................................................................... 1 Board of School Directors ................................................................................... 2 Administration ..................................................................................................... 3 Buildings and Administrators .............................................................................. 4 Consultants and Advisors ................................................................................... 5 Executive Summary of the 2016-2017 Budget ................................................... 6 Organizational Section ............................................................................................. 21 The School Entity ............................................................................................. 22 Financial Structure and Reporting .................................................................... 29 Classification and Presentation of Revenue and Expenditures ........................ 30 Significant Laws Affecting Budget and Fiscal Administration ........................... 42 Significant Policies and Procedures Affecting Budget and Fiscal Administration ....... 45 Organization Chart ........................................................................................... 49 Mission Statement and Vision Planks ............................................................... 50 Comprehensive Education Plan ....................................................................... 51 Major Goals and Objectives.............................................................................. 52 Budget Development Process .......................................................................... 53 Financial Section ....................................................................................................... 59 Summary of All Funds ...................................................................................... 60 General Fund 63 Summary of General Fund with Prior Years Comparison ................................. 64 General Fund Forecast ..................................................................................... 65 Detail of General Fund Revenue ...................................................................... 67 General Fund Expenditures by Object .............................................................. 68 General Fund Expenditures by Function and Object ........................................ 69 Significant Revenue and Expenditure Categories Discussion, Analysis, and Trends . 73 Capital Projects Fund . 79 Capital Projects Fund with Prior Years Comparison ......................................... 80 Capital Projects Fund Forecast ........................................................................ 81 Capital Expenditure Budget .............................................................................. 82 Capital Plan Detail ............................................................................................ 83

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Table of Contents

Debt Service Fund 87 Debt Service Fund with Prior Years Comparison ............................................. 88 Debt Service Fund Forecast ............................................................................. 89 Legal Debt Limit and Borrowing Capacity ......................................................... 90 Schedule of Outstanding Debt .......................................................................... 91 Debt Amortization (Debt Service) Schedule ..................................................... 92 Informational Section ................................................................................................ 94 Assessed and Market Value of Taxable Property ............................................. 95 Real Estate Tax Rate and Collection Data ....................................................... 96 Analysis of Property Tax Burden ...................................................................... 97 Chester County School District Property Tax Comparison ............................... 98 District’s Ten Largest Real Estate Taxpayers ................................................... 99 Enrollment Forecasting Methodology and Techniques ................................... 100 Enrollment History and Projections ................................................................. 101 School Building Information ............................................................................ 102 Personnel Resource Allocation ....................................................................... 103 Debt Amortization (Debt Service) Schedule ................................................... 105 Performance Measurements .......................................................................... 107 Students Eligible for Free and Reduced Meals............................................... 117 Glossary ................................................................................................................... 118

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This Meritorious Budget Award is presented to

DOWNINGTOWN AREA SCHOOL DISTRICT

For excellence in the preparation and issuance of its budget

for the Fiscal Year 2015-2016.

The budget adheres to the principles and standards of ASBO International’s Meritorious Budget Award criteria.

Brenda R. Burkett, CPA, CSBA, SFO John D. Musso, CAE, RSBA President Executive Director


Introductory Section

Fiscal Year 2016-2017 Budget

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Board of School Directors

Colleen Cranney ................................................................................ President Carl Croft. ................................................................................... Vice-President Barbara Albright. .................................................................................. Member

Jane Bertone. ....................................................................................... Member David Kring ........................................................................................... Member Jaime Mehler ........................................................................................ Member Ted Rauth. ........................................................................................... Member Suzanne Simonelli .............................................................................. Member Robert Yorczyk ..................................................................................... Member Virginia Warihay (non-voting member) ............................................... Secretary Richard A. Fazio (non-voting member)............................................... Treasurer


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Downingtown Area School District Administration

Dr. Lawrence Mussoline ............................................................... Superintendent Dr. Robert Reed ........................................................... Assistant Superintendent Richard A. Fazio ................................................................ Chief Financial Officer Matthew Friedman .......................................................... Chief Academic Officer Dr. Linda MacNeal .................................................... Chief Accountability Officer Dr. Louis Chance ......................................................... Director of Pupil Services Sharon Standish .................................................... Director of Human Resources Dale Lauver ...........................................................................Director of Facilities Colleen Yenser ................................................................. Director of Technology Patricia McGlone ....................................................... Director of Public Relations


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Downingtown Area School District Buildings and Administrators

Elementary Schools

Beaver Creek Elementary School Bradford Heights Elementary School 601 Pennsylvania Avenue 1330 Romig Road Downingtown, PA 19335 Downingtown, PA 19335 Principal: Dr. Dawn Lawless Principal: Andy Hoffert Brandywine-Wallace Elementary School East Ward Elementary School 435 Dilworth Road 435 Washington Avenue Downingtown, PA 19335 Downingtown, PA 19335 Principal: Linda Leib Principal: Dr. Nick Argonish Lionville Elementary School Pickering Valley Elementary School 526 W. Uwchlan Avenue 121 Byers Road Downingtown, PA 19335 Chester Springs, PA 19425 Principal: Shelda Perry Principal: Joseph Fernandes Shamona Creek Elementary School Uwchlan Hills Elementary School 501 Dorlans Mill Road 50 Peck Road Downingtown, PA 19335 Downingtown, PA 19335 Principal: Norma Jean Welsh Principal: Bob Giering West Bradford Elementary School Springton Manor Elementary School 1475 Broad Run Road 400 Fairview Rd. Downingtown, PA 19335 Glenmoore, PA 19343 Principal: Dr. Dina Wert Principal: Diane Boff

Marsh Creek 6th Grade Center

489 Dorlans Mill Rd. Downingtown, PA 19335 Principal: Tom Mulvey

Secondary Schools

Downingtown Middle School Lionville Middle School 115 Rock Raymond Road 550 W. Uwchlan Avenue Downingtown, PA 19335 Downingtown, PA 19335 Principal: Nick Indeglio Principal: Jonathan Ross Downingtown High School Downingtown High School West Campus East Campus 445 Manor Avenue 50 Devon Drive Downingtown, PA 19335 Exton, PA 19341 Principal: Kurt Barker Principal: Paul R. Hurley, III Downingtown STEM Academy 335 Manor Avenue Downingtown, PA 19335 Headmaster: Art Campbell


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Downingtown Area School District Consultants and Advisors

Independent Auditors

Rainer and Company 2 Campus Boulevard, Suite 220

Newtown Square, PA 19073

Legal Counsel

Lamb McErlane P.C. 24 East Market Street, PO Box 565

West Chester, PA 19381 (General Counsel)

Financial Advisor

Public Financial Management

One Keystone Plaza, Suite 300 North Front & Market Streets

Harrisburg, PA 17101


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540 Trestle Place, Downingtown, PA 19335 Dr. Lawrence J. Mussoline, Ph.D., Superintendent

Phone: 610-269-8460 www.dasd.org

Executive Summary of the 2016-2017 Budget Members of the Board of School Directors Downingtown Area School District 540 Trestle Place Downingtown, PA 19335 Dear School Directors: Presented herein is the 2016-2017 fiscal year budget for the Downingtown Area School District. The District Superintendent, Chief Financial Officer, and Assistant Director of Finance assume responsibility for data accuracy and completeness. The discussion below is an executive summary of the budget document. Budget Presentation The Downingtown Area School District strategically budgets an annual spending plan that provides quality educational programs for all students while carefully managing the District’s resources. The development, review, and consideration of the 2016-2017 budget was completed with a detailed review of revenue and expenditure items to ensure the necessary resources are available and allocated to meet the needs of the District while minimizing tax increases for the District’s taxpayers. The information included in this document is structured to meet the requirements of the Meritorious Budget Award (MBA) of the Association of School Business Officials International (ASBO). The MBA is the highest form of recognition in budgeting for school entities. Its attainment represents a significant accomplishment by a school entity and its management. The District has received the award since 2005-2006, and we believe this 2016-2017 budget document also meets the requirements to receive the MBA. However, the most important focus in the presentation of the budget data is to communicate to the community and other stakeholders the District’s financial plan to support its educational programs and services. Impact of Economy and State Funding on 2016-2017 Budget The economy in Chester County continues to grow and the District’s real estate tax assessment base has increased about 1.4% in 2016-2017 due to this growth. Earned income tax revenue is budgeted at higher levels as the District has seen continual growth in this revenue source. Investment income continues to be minimal caused by historically low interest rates. The District has budgeted an increase in State funding in 2016-2017 as the new Governor has made education funding a priority with increases in

http://www.dasd.org/


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the basic education subsidy and new funding from the Ready to Learn grant from the state. Mission Statement, Comprehensive Education Plan, Goals and Objectives Mission Statement Proud of our tradition of excellence, the mission of the Downingtown Area School District is to educate all students to meet the rigorous challenges of a global society. Comprehensive Education Plan The District’s has two goals for its comprehensive education plan. Goal #1: We will ensure a system is in place within the district that promotes, enhances,

and sustains a shared vision of high expectations for all students via the creation and implementation of common formative and summative assessments and standards aligned units of study.

Goal #2: We will implement a comprehensive district-wide-system that will create a

positive school climate by ensuring students who are academically and/or socially/emotionally/behaviorally at risk are identified early and are supported by a process that provides interventions based upon student needs and includes procedures for monitoring effectiveness.

Vision Planks The District has set the following vision planks that are the drivers for the mission, comprehensive education plan, and Board of Directors goals.

1. Improve Student Achievement 2. Improve Professional Development 3. Improve Technology 4. Improve Communication 5. Improve Fiscal Responsibility and Create Development Opportunities 6. Analyze Demographics and Seek to Understand Diversity

Board of Directors Goals for the District The following table shows the Board of School Directors 2016-2017 goals for the Board and the District, and how they are linked to the Vision Planks.

Goal Vision Plank Hire a new Superintendent – start date 7/1/2017

All planks

Finalize a new contract with the teacher’s union

Improve Student Achievement/ Fiscal Responsibility

No tax increase in the 2017-2018 budget

Improve Fiscal Responsibility

Re-negotiate contract with before and after school child care provider

Improve Fiscal Responsibility

Plan for renovation of Uwchlan Hills Elementary based on feasibility study

Improve Student Achievement/ Fiscal Responsibility


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The Board has developed objectives and measures of success in achieving their goals. The budget represents how the financial and human resources are allocated to support educational programs and services defined by the District’s mission, comprehensive education plan, vision planks, and goals. Preparing the annual budget requires decisions that represent a delicate balance between the educational needs of students and the ability of the community to support the schools. Budget Process and Allocation of Resources The budget process is comprised of five phases – planning, preparation, adoption, implementation and evaluation. The process is driven by two objectives - to provide every child in the District with the best possible educational opportunities and to maximize the use of available resources. Within this framework, the Board attempts to balance the educational needs of students and the resources available to the District from local, state, and federal sources. The timeline for the beginning of the annual budget process starts in September so a preliminary budget can be adopted in February if necessary. This preliminary budget serves to identify any potential tax increase over a state mandated limit (2.4% for 2016-2017) that will need to be addressed through exceptions or voter approval before final adoption of the budget in June. If the Board of Directors adopts a resolution that it will not need to raise taxes above the state mandated limit, it can forgo the adoption of the preliminary budget.

Planning For the fiscal year that begins July 1, the planning process for budgeting starts about ten months prior in September of the previous year when the Administration develops a budget timeline that includes all of the important activities in the budgeting process. The timeline represents the guidelines for the preparation and adoption of the School District’s annual budget. Below is a summary of the timeline.

• September-October – Budget allocations to budget owners determined • November-December – Detail budget compiled including revenue • January-February – Preliminary budget adopted or resolution adopted • March-May – Budget refined and proposed budget adopted • June – Final budget adopted

Preparation The preparation of the budget is the process of defining service levels. Primary inputs into this process are identifying course offerings in the educational program and projecting student enrollment. With service levels defined, the District allocates resources to meet these levels by developing staffing allocations; estimating expenditure needs to support programs and services; and projecting available revenues. Adoption For the 2016-2017 budget, the District adopted a resolution that it would not raise taxes above the state mandated limit (Act 1 index) of 2.4%. This resolution was adopted in January 2016 and eliminated the need to adopt the preliminary budget for purposes of


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determining a tax rate increase. The budget continued to be reviewed and adjusted through June, and was adopted at the June 2016 Board meeting. Implementation Implementation of the budget is accomplished through the budget administration and management process. This involves regulating expenditures during the fiscal year to ensure that they do not exceed authorized amounts and that they are used for intended, proper, and legal purposes. This is done by monitoring expenditure account balances, monitoring purchases through a purchase order approval system, tracking revenue receipts, making corrections in expenditure allocations to reflect changes in costs, service levels, or plans; and reporting to the Board and public on fiscal operations. Evaluation The District maintains a budgetary accounting and control software information system that provides reports to assist Board Members, the Business Office staff, and responsibility cost center managers in evaluating the implementation of the budget. The accounting information system also provides detail transactional information to allow for auditing of expenditure and revenue activity compared to the budget. Information is also produced that allows for evaluating the overall financial condition of the District. Student Enrollment A primary input into the budget process is the projecting of student enrollment. Below is a chart that shows the District’s enrollment trend.

Enrollment History and Projections

For the budget year 2016-2017 the student enrollment is estimated to be 12,668. This is an increase of 378 students over the 2015-2016 enrollment. This is the largest increase since 2006-2007 and represents the highest enrollment in the history of the


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District. Future year enrollment is estimated to continue to grow as residential development continues in the District. Personnel Resources The 2016-2017 budget includes the addition of 15.5 new full time equivalent staff. This includes 8.5 classroom teachers to address higher enrollment and to maintain class size at both the elementary and secondary levels. Four of these teachers are specifically for special education students. Other new staff include 7 support staff positions that include four special education aides and three administrative clerical positions. The District’s special education student enrollment continues to grow due to the District’s strong support of special education students and their needs. The District has a strong reputation for supporting special education which has resulted in families of special education students moving into the District specifically for the District’s special education programs. Summary of Budgets for All Funds The following schedule presents a comparison of the total budget revenue and expenditures in the current and prior year for each of the District’s funds. It represents the financial resources budgeted to be available to support the District’s programs and services from local, state, and federal sources as well as fund balance.

Revenues:

2016-2017 Budget

2015-2016 Budget

General Fund 211,112,000$ 202,803,000$ Capital Projects Fund 500,000 500,000 Debt Service Fund 160,000 44,361

Total Revenue 211,772,000 203,347,361

Expenditures:General Fund 211,112,000 207,303,000 Capital Projects Fund 10,000,000 10,100,000 Debt Service Fund 2,095,407 -

Total Expenditures 223,207,407 217,403,000 Other Financing Sources 100,000 608,000

Net Change in Fund Bal. -Original Budget (11,335,407) (13,447,639) Revised Budget Adjustment 4,500,000 Net Change in Fund Bal. -Estimated Actual 12,000,000 13,465,000

Fund Balance July 1 160,893,131 156,375,770 Fund Balance June 30 161,557,724 160,893,131

Summary of Funds

The summary information above is discussed below by analyzing the trends and details of revenues and expenditures for each fund separately.


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General Fund Discussion and Analysis General Fund Revenue The General Fund budget of the School District is funded from local, state and federal sources of revenue. The primary funding source for District operated programs and services is local revenue, which accounts for 78.3% of the $202,803,000 total budgeted General Fund revenue for the 2016-2017 fiscal year. Other revenue to fund operating expenditures is primarily derived from state subsidies. Federal sources are minimal and are derived primarily from federal grant money.

2016-2017 2015-2016 %Budget Budget Change

Local 163,745,222$ 158,782,552$ 3.1%State 46,198,778 43,095,448 7.2%Federal 1,168,000 925,000 26.3%

Total 211,112,000$ 202,803,000$ 4.1%

Revenue Sources

77.6%

21.9%

0.5%

78.3%

21.2%

0.5%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Local State Federal

Revenue Sources as a Percent of Total Revenue

2016-2017 Budget 2015-2016 Budget

Local Sources The largest portion of local revenue (83%) is derived from current taxes on real estate property. Current real estate tax revenue has increased about $2.9 million over the prior year budget due to an increase in the assessment base, as there was no increase in the tax rate for 2016-2017. For 2016-2017 the budgeted assessed real estate property value is $5.375 billion, a $71.6 million (1.4%) increase over the actual 2015-2016 assessed value. The assessed property value is the tax base on which the District levies a real estate tax. As shown in the chart below, growth in the tax base has been in the 0.3% to 1.5% range since 2012-2013. This is smaller growth than in the ten years prior to 2012-2013 when the District was averaging 3% to 4% assessment growth each year. The slower growth is a result of slower residential development in recent years.

$5,000,000,000 $5,050,000,000 $5,100,000,000 $5,150,000,000 $5,200,000,000 $5,250,000,000 $5,300,000,000 $5,350,000,000 $5,400,000,000

0.0%

0.5%

1.0%

1.5%

2.0%

2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Assessed Real Estate Property Values

Assessed Value Percent Increase


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Residential property accounts for about 80% of the total tax base with commercial, industrial, and agricultural property accounting for the remaining 20%. The real estate tax rate required to fund the District’s programs and services in 2016-2017 is 27.182 mills which is unchanged from 2015-2016. The District is pleased to not have a tax increase for its taxpayers in 2016-2017, the fourth year in a row. The chart below shows a history of the District’s tax rate.

History of Real Estate Tax Rate (Mills)

% Increase 1.70% 0.00% 0.00% 0.00% 0.00% For 2016-2017, the property taxes due on the average assessed property value in the District is $4,947. This reflects no increase from 2015-2016 based on a consistent average assessed property value of $182,000. To help offset the property tax burden on taxpayers, Act 1 of 2006 provides qualified homesteads a tax credit that is funded by state gaming revenue. For 2016-2017 the estimated amount of tax credit is $200 per homestead regardless of the assessed value. The District is proud to continue to fund nationally recognized top performing schools without needing to raise taxes since 2012-2013. The District has been able to achieve this with prudent financial management, growth in other revenue sources, and controlling unnecessary spending. Revenue from local sources other than current real estate taxes is primarily derived from earned income taxes, real estate transfer taxes, interim real estate taxes, and delinquent real estate taxes. The total of all other local sources of revenue are budgeted about $2.1 million higher than the 2015-2016 budget due to the continued growth in the District. State Sources Over the past two decades, Pennsylvania school districts have experienced a substantial shift from the state level to the local level to provide funding for school district budgets. The percentage of state funding in relation to total revenue sources has declined significantly over the past two decades. If the District received the same percentage of state revenue in 2016-2017 as it did for example in 1995-1996 (27.2%), state sources of revenue would be about $11 million higher in the 2016-2017 budget. This additional revenue could allow the District to expand programs and provide for

0.000

5.000

10.000

15.000

20.000

25.000

30.000

2012-13 2013-14 2014-15 2015-16 2016-17

27.182 27.182 27.182 27.182 27.182


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additional resources that would help student achievement. The additional funding would also reduce the need to rely more heavily on taxpayers for funding.

The 7.2% increase in state revenue in the 2016-2017 budget compared to the 2015-2016 budget is primarily caused by the $2.1 million increase in the Public School Employees Retirement System (PSERS) contribution rate of which the state reimburses half. The 2016-2017 contribution rate is 30.03% of employee wages compared to 25.84% in 2015-2016. The rate is set by the state and contributions are required for all Pennsylvania school districts. The budget also reflects a combined almost $1 million increase in the basic education subsidy and Ready to Learn grant from the state as the state’s education budget is expected to increase. Federal Sources The increase in federal revenue in the 2016-2017 budget compared to the 2015-2016 budget is primarily due to anticipated increases in Title I, II, and III federal grants, and additional funding for the Medical ACCESS program for special needs student expenditure reimbursements.


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General Fund Expenditures For the 2016-2017 fiscal year, total expenditures in the General Fund are budgeted to increase from $201,335,000 to $207,303,000, an increase of $5,968,000. The following table details this increase by object expenditure category.

Expenditures & Budget Budget PercentOther Uses of Funds 2016-2017 2015-2016 $ Change Change

Salaries (100) $ 91,999,767 $ 89,944,770 $ 2,054,997 2.3%Employee Benefits (200) 55,919,975 51,716,472 4,203,503 8.1%

Salary and Benefits 147,919,742 141,661,242 6,258,500 4.4%

Professional Services (300) 13,424,029 11,559,152 1,864,877 16.1%Purchased Property Services(400) 4,550,295 4,405,825 144,469 3.3%Other Purchased Services(500) 27,154,516 26,079,598 1,074,918 4.1%

Purch. & Prof. Svcs. 45,128,839 42,044,576 3,084,264 7.3%

Supplies (600) 6,046,209 6,089,631 (43,422) -0.7%

Property (700) 732,634 713,479 19,155 2.7%

Other Objects & Contingency(800) 1,284,576 1,294,073 (9,497) -0.7%Debt Service (900) 10,000,000 15,500,000 (5,500,000) -35.5%Other Objects and Uses of Funds (800/900)

11,284,576 16,794,073 (5,509,497) -32.8%

Total $ 211,112,000 $ 207,303,000 3,809,000 1.8%

General Fund

Expenditure Analysis Salaries increased from 2015-2016 to 2016-2017 due to employee wage increases and new staff offset by lower salaries budgeted for personnel replacing higher salary retirees. The increase in employee benefit costs is primarily driven by a state mandated increase in contributions to the Public School Employee Retirement System (PSERS) noted above in the discussion of State Source revenue. The increase in Purchased and Professional Services is primarily due to an increase in professional services for special education students, charter school tuition costs and student transportation. Supplies include all consumable material items that are expendable and are budgeted to be about the same in 2016-2017 compared to 2015-2016. Property includes equipment and capital assets with useful lives greater than one year, and is also budgeted to be about the same in 2016-2017 compared to 2015-2016.


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Other Objects and Contingency primarily include various dues, fees, and tax refunds paid by the District, and a $500,000 budgetary reserve as a contingency for unforeseen expenditures in 2016-2017. The amounts are budgeted to be about the same in 2016-2017 as 2015-2016.

Debt Service represents the repayment of principal and interest on debt incurred by the District from issuing bonds and notes. The proceeds from bond and note issues have been used to fund capital projects such as the construction and renovations of school buildings over the years. The 2016-2017 General Fund budget includes $10 million of a total $12.1 million in debt service on the District’s outstanding amount of bonds and notes as of June 30, 2016. The additional $2.1 million will be paid out of the Debt Service fund the District has established. The Debt Service fund allows the District to level the General Fund debt service budget at $10 million until 2023-2024 when the District’s debt service is scheduled to drop to $6.9 million. Debt service requirements over $10 million will be funded by the Debt Service Fund through 2023-2024. Budget debt service has decreased in the General Fund due to the establishment of the Debt Service Fund. The $15.5 million of total debt service budgeted in 2015-2016 included about $3.4 million for future year increases that will now be funded from the Debt Service Fund.

The chart below displays the expenditure categories discussed above as a percentage of the total General Fund expenditures for the 2016-2017 budget.

General Fund Estimated Actual Results

The estimated actual 2016-2017 results are anticipated to result in a general fund surplus for the year of about $12 million. The surplus is anticipated to come from higher real estate tax revenue due to appeals by the District and higher than budgeted collection percentage. Also adding to the surplus are lower than budgeted salary and


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benefit costs. The District budgets conservatively in salary and benefits which results in these costs being under budget. Salary costs are anticipated to be under budget primarily due to lower salary personnel replacing personnel budgeted at a higher amount. Benefit costs are budgeted conservatively due to the District being self-insured for healthcare costs. Claims are anticipated to be lower than budgeted.

The surplus generated by these anticipated budget variances is used to fund the District’s capital expenditures plan funded out of the Capital Projects Fund.

Capital Projects Fund Discussion and Analysis

Below is a summary of the Capital Projects Fund revenue and expenditures

2015-2016 2015-2016Revenue Budget Budget6000 Local Sources

Interest on Investments 500,000$ 500,000$

Total Revenue 500,000 500,000

Expenditures 400 Purchased Property Services 3,815,000 6,230,000 700 Property 6,185,000 3,870,000

Total Expenditures 10,000,000 10,100,000

Capital Projects Fund Revenue

The $500,000 budgeted revenue in the Capital Projects Fund represents interest earnings on the Capital Projects fund balance which is invested in certificates of deposit and money market accounts in accordance with the state investment laws for governmental entities. Interest rates remain low and the 2016-2017 interest earned is estimated to be the same as the 2015-2016 budget.

Capital Projects Fund Expenditures

The District's Capital Projects Fund is used to account for capital budget expenditures for facility improvements, technology improvements, and equipment. These include improvements to school roofs, security systems, athletic facilities, HVAC systems, paving, computer equipment and network infrastructure. Total expenditures are about the same in 2016-2017 compared to 2015-2016 with a $2.3 million increase in property expenditures primarily due to the purchase of laptops and iPads budgeted for the implementation of the District’s one to one student computer initiative. Purchased property in 2015-2016 was higher than 2016-2017 due to contractor costs for the purchase and installation of artificial turf at Downingtown East High School.

The District estimates the fund balance in the Capital Projects Fund will be approximately $102 million as of June 30, 2016 which includes an estimated transfer


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from the General Fund of $13.1 million generated by the 2015-2016 operating surplus in the General Fund. The remainder of the Capital Projects fund balance consists of operating surpluses transferred from the General Fund in prior years. The fund balance will be used to fund current year expenditures, and the future capital expenditure plan.

Debt Service Fund

The District established a Debt Service Fund in 2015-2016 in order to level the General Fund debt service budget at $10 million until 2023-2024 when the District’s debt service is scheduled to drop to $6.9 million. Debt service requirements over $10 million will be funded by the Debt Service Fund through 2023-2024. The District transferred $33.8 million from the Capital Projects Fund in 2015-2016 to establish this fund. The 2016-2017 amount of debt service budgeted to be paid from this fund is $2.1 million.

Budget Forecast

General Fund

2017-2018 2018-2019 2019-2020Forecast Forecast Forecast

RevenueLocal Revenue 167,291,708$ 169,950,000$ 172,880,000$ State Revenue 48,593,292 49,500,000 50,500,000 Federal Revenue 1,168,000 1,000,000 1,000,000

Total Revenue 217,053,000 220,450,000 224,380,000

ExpendituresSalaries 94,237,175 96,121,919 98,044,357 Benefits 59,805,825 61,318,081 63,025,643 Other Expenditures 53,010,000 53,010,000 53,310,000 Debt Service 10,000,000 10,000,000 10,000,000

Total Expenditures 217,053,000$ 220,450,000$ 224,380,000$

Capital Projects Fund

2017-2018 2018-2019 2019-2020Forecast Forecast Forecast

Capital Expenditure Budget 8,795,614$ 8,895,443$ 8,998,089$

Debt Service Fund2017-2018 2018-2019 2019-2020Forecast Forecast Forecast

Debt Service 2,096,736$ 5,777,850$ 5,612,175$


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General Fund Forecast The forecasted growth in General Fund local revenue is mainly due to real estate tax growth from projected assessment growth and earned income tax increases. This is a conservative forecast that assumes no real estate tax increase from millage rate increases and minimal assessment growth. If the District assessment growth was about 1.5% each year and the District increased millage rates 1.5% each year beginning in 2018-2019, revenue would be over 2% higher in 2018-2019 and 4% higher in 2019-2020. The State source revenue forecasted increase is due mostly to the 50% reimbursement of the PSERS contribution increase. Minimal future increases in the basic education subsidy are included in the forecast. Federal revenue is forecasted to remain minimal.

Total forecasted growth in General Fund expenditures is driven by the increase in salaries and benefits. The increase in salaries is due to projected wage increases and addition of new staff. Benefits increases are driven by healthcare costs and the increase the District’s required contribution to PSERS which is determined by the state. This represents a conservative forecast of salary and benefit costs (high estimates). Other expenditures are forecasted to remain the same. The District’s debt service is forecasted at a flat $10 million in the General Fund with any amount over $10 million being funded by the Debt Service Fund.

Capital Projects Fund Forecast The District's Capital Projects Fund is used to account for capital budget expenditures for facility improvements, technology improvements, equipment, and large group textbook purchases. The expenditures shown in each forecast year represent the capital expenditures in the District's long-range capital improvement plan. These include improvements to school roofs, athletic facilities, HVAC systems, paving, technology equipment and network infrastructure, and curriculum items. The total capital expenditures are estimated to be consistent over the forecast years.

Debt Service Fund Forecast The forecast for the Debt Service Fund shows the portion of the District's total debt service over $10 million that will be funded from this fund. $10 million is funded from the General Fund. The increase in 2018-2019 is based on the District’s debt service amortization schedule that is structured with higher debt service up to $16.7 million until 2023-2024 when the District's total debt service is scheduled to drop to $6.9 million.

Overview of Debt

The District has $123,350,088 of issued and outstanding debt as of June 30, 2016. This amount is comprised of six bond issues that have been incurred to fund school building construction projects over the years with subsequent re-financings. All bond proceeds have been spent and all projects funded with bond proceeds have been completed. The most recent construction project funded with debt was the Marsh Creek 6th Grade


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Center that opened in 2014-2015. The schedule below illustrates the change in outstanding bonds from June 30, 2016 to June 30, 2017 due to principal payments.

Performance Measurement

The budget process is driven by the number of students enrolled, and yields an instructional expenditures per student amount of $10,721 for 2016-2017. This amount has increased each year even with growing enrollment and includes only General Fund spending. Capital Projects Fund spending adds another $790 per student in 2016-2017. Capital spending supports the District’s one to one laptop / iPad initiative that provides direct access to technology by providing each student with their own laptops or iPad. This level of per student expenditures has allowed the District to continue providing the quality of education necessary to achieve the strong student performance as shown in the chart below. The District’s schools’ performance and student achievement are among the highest in the state and have been nationally recognized. The District puts student achievement as a top priority, and based on strong performance data, the level of per student expenditures budgeted is appropriate.

The District also determines success of its mission and comprehensive education plan through the measurement of student performance and achievement. Performance data indicates that Downingtown Area School District students have performed considerably better in standardized evaluations of learning such as the Pennsylvania System of School Assessment (PSSA) and the Scholastic Aptitude Test (SAT), compared to other students on a state-wide basis as shown in the data below.

BondsOutstanding

June 30, 2016 123,350,0882016-2017 Principal Pmts. (7,984,632)June 30, 2017 115,365,456

District State2016 2016

Percent of Students Proficient or AdvancedEnglish Language Arts (ELA) % %Grade 5 ELA 87 62Grade 8 ELA 83 58Grade 11 ELA/ Reading (Keystone Exam) 95 77Percent of Students Proficient or AdvancedMathematics % %Grade 5 Math 73 44Grade 8 Math 52 31Grade 11 Math 92 68

District State

20162015

2016 not availVerbal 538 499Math 554 504Writing 530 482

PSSA State Performance Testing

SAT College Entrance Exam (Mean Scores)


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These tests are key elements in the calculation of Pennsylvania’s School Performance Profile (SPP) score which provides the public with a comprehensive overview of student academic performance in every Pennsylvania public school building. The score is based on a 100 point system with 100 being the highest. The District’s three high schools had an average score of 95 in 2016. For grades 3 through 8, the tests included in the SPP calculation were significantly changed by the state in 2015 and are not comparable to the high school scores. The District’s two middle schools had an average score of 68, and the ten elementary schools and sixth grade center had an average score of 81.

Success in educating the District’s students can also be seen in the percentage of students pursuing higher education (96% for the Class of 2016) which has been significantly higher than the historical state-wide percentage (about 70%). Graduating students also receive thousands of dollars in scholarships each year. In addition, the District offers advanced placement courses with about one-third of 11th and 12th graders taking them. Over the past few years, the District has had several students who were finalists, semi-finalists, and commended in the National Merit Scholars program. The District continues to be well respected by the community it serves and is seen as one of the top performing public school districts in the region, the state, and nationally. This is evidenced by a recent Washington Post ranking of high schools that ranked the STEM Academy as the number one high school in the state, with East high school number 21 and West high school number 31 in the state. The District as a whole was ranked 24th in the state out of 500 Districts by the Pittsburgh Business Times.

Acknowledgements

We appreciate the support provided by the Downingtown Area School District Board of School Directors and the community for the development, implementation, and maintenance of an excellent educational program for the children of the District.

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Organizational Section



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The School Entity

Geographic Location / Area Downingtown Area School District is located in southeastern Pennsylvania, 30 miles west of Philadelphia in central Chester County. The District covers an area of 82 square miles that includes a mix of suburban and rural communities with a population of approximately 68,000. The local municipalities included within the District are the borough of Downingtown and the townships of East Brandywine, East Caln, Upper Uwchlan, Uwchlan, Wallace, West Bradford, and West Pikeland. The District has experienced steady population and economic growth over the last 10 years. Legal Autonomy and Fiscal Independence The District is a legally autonomous and fiscally independent entity under the laws of Pennsylvania. The laws of Pennsylvania give the District corporate powers that distinguish it as a legally separate entity from the Commonwealth of Pennsylvania and any of its political subdivisions. The District has the power to determine its budget; to approve and modify that budget; to levy taxes, set rates and establish charges; and to issue bonded debt. The powers may be exercised without substantive approval by another government. The District is a political subdivision of the Commonwealth created to assist in the administration of the General Assembly’s duties under the Constitution of Pennsylvania to “provide for the maintenance and support of a thorough and efficient system of public education to serve the needs of the Commonwealth.” The District is governed by a board of nine school directors, who are residents of the School District and who are elected every two years, on a staggered basis for a four-year term. Each director represents a region of the District. The Directors serve on the Board without compensation. The School Board has the power and duty to establish, equip, furnish and maintain a sufficient number of elementary, secondary and other schools necessary to educate every person residing in the District, between the ages of six and twenty-one years, who may attend.


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The current School Board members are Colleen Cranney - President, Carl Croft – Vice President, Barbara Albright, Jane Bertone, David Kring, Jaime Mehler, Ted Rauth, Suzanne Simonelli, and Robert Yorczyk. The Superintendent is the chief administrative officer and chief instructional officer of the District and is responsible for the administration and operation of the public school system and oversees all matters pertaining to instruction. Number of Schools The District consists of ten elementary schools (grades K-5), a sixth grade center, two middle schools (grades 7-8), and three high schools (grades 9-12) that includes the STEM Academy. These schools educate a total of 12,668 students. Education Overview At Downingtown, we believe that the education of our students should encompass much more than reading, writing and arithmetic. Our goal is to give our students the tools that they need to collaborate with others, communicate openly and honestly, and make informed decisions based on civic responsibility. For this to occur, we not only educate our students academically, we also empower them to respect diversity, take part in community service and develop a high level of ethics and integrity. Within our school district, students are provided with an environment to grow their intellect and their character. Located in Chester County – a former farming community that is now bustling with economic and residential growth – Downingtown offers students the best of both worlds. Because of the vital economy in our region, we have the resources to offer programs of a breadth and depth that many smaller districts cannot provide. Our region’s residential growth has yielded a diverse student body and faculty, allowing students the opportunity to embrace a heightened sense of cultural awareness. At the same time, our attention to the individual and respect for family and community involvement in schools means we can maintain a small-town feel in our classrooms. Downingtown students study a broad, challenging curriculum that is designed to inspire them and equip them for success outside the classroom. Students are offered a wide range of courses that are taught in creative and meaningful ways. For example, at the elementary and secondary levels, major subject areas are often creatively linked together to make the curriculum more relevant for students. Students might find that a science lesson can extend over into a language arts activity, or vice versa. These thematic approaches help children develop a deeper understanding of the topics addressed. To make sure that students are always receiving the most up-to-date, effective instruction, Downingtown administrators and teachers make it a practice to review


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curriculum so that it is aligned with federal and state standards, as well as with standards set by national organizations. In addition, teachers and administrators also use the curriculum review cycle to ensure that programs are being updated and monitored on a timely basis. Downingtown also remains at the forefront of educational practices because our teachers make a tremendous effort to stay current through professional development opportunities that are available inside and outside the district. Their commitment ensures that Downingtown students are on the receiving end of the most up-to-date, proven instructional practices in education today. Elementary Education Students begin their careers at Downingtown in integrated kindergarten classrooms, where students with varying levels of academic, social and emotional progress learn together. Half-day classes are offered in both the morning and afternoon. Downingtown recognizes the value of practices such as flexible grouping, where students are encouraged to work cooperatively in pairs, groups of two or three, or as a whole class. Such strategies are regularly employed in elementary classrooms to help students learn how to work together. Instruction in all elementary schools is child-centered and appropriate to a child’s developmental stage, ensuring that students receive the type of instruction that best suits their needs. For students with special needs, Instructional Support Teams are there to develop instructional plans that are appropriate to a student’s abilities. These teams help identify a student’s need for academic or behavioral support, determine strategies to assist the student, implement prevention strategies through a continuum of services, and monitor progress to ensure continued success. For students who are identified as gifted, the Downingtown Educational Enrichment Program (DEEP) is available to provide students with challenging classroom opportunities. Language arts instruction is literature-based and balanced, and the subjects of social studies, science and math are integrated into thematic units for depth and breadth of understanding. Technology is used on a consistent basis in all schools to support and deliver the instructional program. Downingtown elementary school students have a variety of unique learning opportunities available to them. Students have access to television studios where they can write, perform and produce their own news show each morning. Students can also write, illustrate and bind their own books through the school’s publishing center. In addition, students have exposure to learning a foreign language of their choosing by performing self-paced instruction with Rosetta Stone software on iPads. Science fairs, community service events, athletic activities and music and art programs are also key elements of the elementary curriculum, ensuring that students receive a comprehensive academic foundation that will benefit them in higher grade levels.


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Sixth Grade Center and Middle School Education Grades 6th through 8th can be challenging for many students. Knowing that the transition to a new school can be daunting, the faculty and staff of our sixth grade center and two middle schools go to great lengths to create a personal environment for students. One of the ways this is accomplished is by assigning students and teachers to teams within each school. In addition to fostering a sense of camaraderie, the use of teams allows for the overlap and integration of subject areas such as language arts, science, math and social studies between classrooms. Technology skills are honed in these grades with computer classes, and the integration of technology into regular classroom activities. 6th graders have their own iPad used for instruction that they can take home with them, and they will keep that iPad through 8th grade. Art, music, physical education and health are also important parts of the 6th – 8th grade curriculum. High School Education The wide variety of course offerings and extra-curricular activities continues once Downingtown students reach high school. In three state-of-the-art facilities, students have the opportunity to grow academically and socially while also developing a feel for their future. The emphasis on English, math, social studies and science continues at the high school level, with students exposed to a variety of learning experiences ranging from class discussions, experiments and special projects to reading assignments and homework. At the high school level, students can really begin to explore courses that will help them define their future. Many opportunities are available, including Advanced Placement courses in subjects such as German, Spanish, French, biology, calculus, English, government, U.S. history and physics; along with business education, industrial arts technology and vocational-technical courses. In addition the use of technology is emphasized throughout the curriculum with the District implementing a one to one student to laptop initiative in 2016-2017 where each high school student will be issued a laptop for their individual use or they can opt to bring their own laptop.


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In addition to the rigorous curriculum, students can discover career opportunities through programs like Pupils Reaching Out, which utilizes resources within the business community to help students develop their own individuality, a sense of responsibility and the skills necessary to succeed outside of school. Through the Career Experience program, highly motivated students can spend part of their school year working at a professional job. Other options for highly motivated students include Independent Study and Early College Acceptance. In 2011-2012 the District’s Science, Technology, Engineering and Math (STEM) academy opened as the District’s third high school, and provides students an opportunity to spend their high school years at a school dedicated to preparing interested students to gain entrance into colleges and careers related to science, technology, engineering, and mathematics. There is an individualized learning plan for every student and the school is a state of the art facility providing students with access to cutting edge technology and resources for the 21st century. Academic Performance Students in the Downingtown Area School District are among the top performers in the state when it comes to academics. Our highly educated and dedicated teaching staff provides students with a well-rounded and balanced curriculum that is aligned with state standards, ensuring our students are prepared for the rigors of standardized testing as well as the challenges of life after high school. The desire to learn is instilled in Downingtown students at a young age, and is cultivated so that it continues to grow, long after graduation. Our students’ commitment to learning is evidenced by the number of graduates who opt to continue their education. The majority of our graduates go on to further their educational interests, most of them at four-year colleges. Downingtown students have gone on to attend institutions such as Harvard University, Princeton, University, the University of Pennsylvania, Penn State University, Temple University, West Chester University, as well as area community colleges, trade schools, and the armed services. When it comes to the standardized testing that is used to measure performance, Downingtown students’ scores are among the highest in the state. The Pennsylvania System of School Assessment (PSSA) test and Keystone Exams are used, and Downingtown students consistently meet and exceed the requirements for achievement on these tests, and score significantly higher than the state average. These tests are key elements in the calculation of Pennsylvania’s School Performance Profile score which provides the public with a comprehensive overview of student academic performance in every Pennsylvania public school building. It is our aim to continue this trend, even as the expectations for student achievement are raised higher.


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The PSSA is not the only test that we use to gauge our students’ performance. The Scholastic Aptitude Test (SAT) is another important indicator of success. The majority of our high school students opt to take this test, and they score consistently above state averages. These statistics, which are by no means the sole indicators of our district’s worth, demonstrate that our staff is fully committed to helping our students to meet state and federal standards. The number of students who continue on to post-secondary education shows that our teachers have also inspired our students to commit to learning throughout their lives, not just in Downingtown classrooms. Quality Teaching Staff Downingtown Area School District teachers are superior professionals who are dedicated to drawing out students’ strengths while helping them to overcome their weaknesses. Knowing that parental involvement is integral to a child’s education, teachers work closely with families to ensure student success. Our teachers are highly-qualified and experienced. About 70 percent have attained a master’s degree or higher. Their extensive schooling means our students are receiving instruction from professionals who are well-versed in their subject areas. Downingtown teachers are supportive both inside and outside the classroom. They regularly attend extra-curricular activities to support students and are heavily involved in advising and coaching students in these activities. Many of our retired teachers remain active and involved in our schools by volunteering regularly or serving as substitute teachers. This level of commitment means Downingtown students leave our schools feeling like they are part of a family. Diversity The diversity in Downingtown’s classrooms is embraced and celebrated in a number of ways. Through the Downingtown Area School District Diversity Committee, students, staff and community members are learning to foster multicultural knowledge and respect differences. The Committee aims to provide staff with training in sensitivity issues, examine curriculum to make sure that it reflects a multicultural perspective, and support minority-hiring practices.


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In the classroom, children are taught to respect and work out differences through peer mediation programs. Class studies examine issues like the Holocaust and civil rights, and a number of school district clubs – such as the United Nations Club, the International Club and the Black Student Union – embrace a multicultural view. The diversity of our district is also reflected in the administrative staff and faculty of the Downingtown Area School District. Our employees come from a wide variety of experiences and backgrounds, providing our district with the valuable perspectives of people from all walks of life. Extra-Curricular Activities While our emphasis on academics is strong, we also realize that for our students to be well-rounded, they must have more in their life than their studies. That is why we provide many opportunities for involvement in extra-curricular activities. Our commitment to the extra-curricular experience is demonstrated by the multitude of clubs and activities available to students at all levels. At the secondary level, students can participate in sports such as soccer, football, wrestling, field hockey and basketball. Clubs run the gamut, with everything from a Shakespeare Club to an Ecology Club to a Multicultural Club. For the musically inclined, students can join the band, chorus or cast of the school musical. Whether your student is interested in playing sports, acting, singing, playing chess, writing, helping the community or saving the environment, Downingtown high schools have a club or team to match it.


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Financial Structure and Reporting Fund Structure and Accounting The accounting system of the School District is organized on the basis of funds. Each fund is considered a separate accounting entity, with a set of self-balancing accounts that comprise its assets, liabilities and fund equity, revenues and expenditures or expenses, as appropriate. School District resources are allocated to and accounted for in each fund based upon the purpose for which they are to be spent. The fund classifications used by the School District have been defined by generally accepted accounting standards. The District uses two funds which are considered governmental fund types by generally accepted accounting standards. Governmental fund reporting focuses on the sources, uses, and balances of current financial resources. The difference between governmental fund assets and liabilities is reported as fund balance. The District uses three types of Governmental Funds:

General Fund The General Fund is the general operating fund of the District. It is used to account for all financial revenues and expenditures used in the operations of the District. Capital Projects Fund The Capital Projects Fund is used to account for capital expenditures incurred for the renovation and improvement of facilities, acquisition of capital equipment, and the acquisition or construction of facilities. Financing sources for these capital expenditures are accumulated in this fund. Debt Service Fund The Debt Service Fund accounts for resources accumulated to provide for payment of general long-term debt principal and interest.

Measurement Focus and Basis of Accounting for Revenue and Expenditures Measurement Focus Governmental fund accounting using a flow of current financial resources measurement focus. With this measurement focus, only current assets and current liabilities are generally included in the balance sheet. The statement of revenues, expenditures, and changes in fund balances reflects the sources (i.e., revenues and other financing sources) and uses (i.e., expenditures and other financing uses) of current financial resources. Basis of Accounting Basis of accounting refers to the timing of recognition of revenues and expenditures or expenses in the accounts and in the financial statements, regardless of the measurement focus.


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Governmental fund accounting calls for the modified accrual basis of accounting to be used for each fund. Under this basis, revenue is recorded in the fiscal year in which the resources are measurable and become available. Available means the resources will be collected within the current fiscal year or are expected to be collected soon enough thereafter to be used to pay liabilities of the current fiscal year. Expenditures are generally recognized in the accounting period in which the related fund liability is incurred, if measurable, except for principal and interest on general long-term debt which is recognized when due. Government Accounting Standards Board (GASB) GASB Statement No. 34 established financial reporting requirements for state and local governments throughout the United States. It significantly changed the way school districts report and present financial information in conformity with Generally Accepted Accounting Principles (GAAP). The reporting model requires that a school district’s basic financial statements include new government-wide statements. These government-wide statements display information about the school entity as a whole and recognize all assets, liabilities, revenues and expenses on the economic resources measurement focus and the full accrual basis of accounting. In addition to the government-wide financial statements, the fund financial statements will continue to provide the same information for the individual funds as discussed above under the Measurement Focus and Basis of Accounting sections. The budget information presented in this document is consistent with fund financial statement reporting. GASB Statement No. 54 effects the presentation of fund balance information on the financial statements. The fund balance classifications are non-spendable, restricted, committed, assigned, and unassigned. Each category has a different level of restrictions and a different level of authority to place those restrictions. The highest level of restrictions is on the non-spendable category with restrictions decreasing in each category from “restricted” to “unassigned”. For purposes of this document, the fund balances shown in the financial information section are total fund balances and any classifications are noted. Classification and Presentation of Revenue and Expenditures The Pennsylvania Department of Education has adopted a system for the classification of revenue and expenditures based on generally accepted accounting standards for school entities. The system is used for budgeting, accounting, and financial reporting in compliance with Generally Accepted Accounting Principles (GAAP), as established by the Governmental Accounting Standards Board (GASB). The classification and coding structure to record financial transactions under the accounting system provides for the identification of revenue and expenditure transactions. For each type of transaction, the specific account code is made up of a combination of dimensions. Revenue and expenditure codes used by the District are


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discussed below. These codes are used in presenting the detail financial information in the Financial section of this document. Revenue As required by the Pennsylvania Department of Education, the District classifies revenues by revenue source dimensions represented by four digit codes. Revenues are segregated into three sources: Local Sources, State Sources, and Federal Sources. Local sources include such receipts as property taxes and interest on investments. State sources consist of monies received by the District from the State of Pennsylvania among which are funds to support the basic instructional program, special education services, and the transportation of students. Federal sources are provided by the federal government to support specific programs as designated by the federal government. The following is a description of revenue source dimensions (codes) used by the District. 6000 Local Revenue Sources Revenue produced within the boundaries of the District and available to the District for its use.

• 6111 Current Real Estate Tax Real Estate Tax is the main source of revenue for funding the operation of the Downingtown Area School District. It is based on the assessed valuation, as determined by the Chester County Board of Assessment, of all taxable property within the School District. The District levies a real estate tax on every $1,000 of assessed property value based on a rate that is stated in mills. The number of mills levied by the District is multiplied by the assessed value divided by 1,000 to determine the real estate tax due.

• 6112 Interim Real Estate Tax

Interim taxes are levied under Act 544 of 1952 on the increase in assessed valuations of local property as a result of construction or improvements to that property during the school year.

• 6113 Public Utility Realty Tax

Lands and structures owned by public utilities and used in providing their services are subject to state taxation under Act 66 of 1970. The state collects and then distributes a prescribed sum among local taxing authorities including school districts and that payment of state tax is in lieu of local taxes upon public utility realty.


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• 6142 Occupation Tax

Revenue received under Act 511 for flat rate assessment of occupation taxes. The flat rate occupation tax is a tax placed on the occupations of persons residing within the district.

• 6151 Earned Income Tax

Earned income taxes are levied under Act 511 of 1965 (Local Tax Enabling Act) at the rate of one half of one percent (.5%) of wages, salaries, commissions, net profits or other compensation of those who earn income and reside within the School District.

• 6153 Real Estate Transfer Tax

Transfer tax is levied under Act 511 at the rate of one half of one percent (.5%) of the value on the transferring of real estate or interest in real property situated within the boundaries of the School District.

• 6411 Delinquent Real Estate Taxes

Revenue received from taxes assessed and levied upon real property which have become delinquent. Delinquent taxes are taxes that were not collected during the original year of issue.

• 6510 Interest on Investments

Interest on investments is revenue received from the investing of School District money as it becomes available in investment vehicles as permitted by Pennsylvania law.

• 6710 Admissions

Revenue from patrons of a school-sponsored activity, such as a concert or athletic event.

• 6740 Activity Fees

Revenue from fees for participation in school sponsored activities.

• 6831 Revenue From Intermediary Sources – Federal Funds

Revenue received through an intermediate source as agent of the Federal Government. For the District this represents IDEA funds from the Federal Government received through the Chester County Intermediate Unit. IDEA funds support special education.


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• 6910 Rent of Facilities

Rent of Facilities is revenue received from various government bodies, organizations, and civic groups for the rental of the District's buildings and facilities.

• 6920 Contributions and Donations from Private Sources

Revenues from philanthropic foundations, private individuals or private organizations for which no repayment or special service is expected.

• 6940 Tuition from Patrons

Revenue received from patrons for education provided by the District.

• 6990 Miscellaneous Revenue

Revenue from local sources not classified elsewhere.

7000 Revenue from State Sources Revenue originating from Pennsylvania state appropriations and directly disbursed to school districts.

• 7110 Basic Education Subsidy

Revenue received from the State designated for Basic Education.

• 7140 Charter Schools Subsidy

Revenue received from the State to fund the Charter Schools initiative.


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• 7160 Tuition for Orphans and Children Placed In Private Homes

Revenue received from the State as tuition for children who are orphans and/or children who are placed in private homes by the court.

• 7230 Alternative Education

Revenue received from the State as subsidy for alternative education. Alternative education is specialized educational instruction and support services to students that must be removed from regular classrooms because of disruptive behavior. These funds enable schools to provide students with a sound education course of study and counseling designed to modify disruptive behavior and return the students to a regular school curriculum.

• 7271 Special Education

Revenue received from the State for expenditures incurred in instructing school age special education students.

• 7310 Transportation

Revenue received from the State for pupil transportation expenditures and / or board and lodging in lieu of transportation. This account also includes transportation subsidies for nonpublic and charter school students.

• 7320 Rental and Sinking Fund Payments

Revenue received from the State as a full or partial payment for approved lease rentals, sinking fund obligations, or any approved District debt obligations for which the State Department of Education has assigned a lease number.

• 7330 Health Services

Revenue received from the State for expenditures for health services including medical, dental, and nurse services.

• 7501 Pennsylvania Accountability Grants

Revenue received from the State to implement research-based programs to boost student achievement.

• 7810 Social Security and Medicare Taxes – State Share

Revenue received from the State designated as the State’s matching share of the employer’s contribution of the Social Security and Medicare Taxes for covered employees who are not Federally funded.


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• 7820 Retirement Contributions – State Share

Revenue received from the State designated as the State’s matching share of the employer’s contribution of Retirement Contributions for active members of the Public School Employees Retirement System.

8000 Revenue from Federal Sources Revenue originating from the Federal government.

• 8514 Title I – Improving the Academic Achievement of the Disadvantaged Revenue received for the education of disadvantaged children. Includes such programs as Comprehensive School Reform Program, Reading First, Even Start, and Improving Literacy Through Libraries.

• 8515 Title II – Preparing, Training and

Recruiting High Quality Teachers And Principals

Revenue received for the education of children under NCLB Title II. Improving Teacher Quality, and Eisenhower Professional Development are samples of funding.

• 8516 Title III – Language Instruction For Limited English Proficient And Immigrant Students

Revenue received for the education of children under NCLB, Title III. Includes Grants for English Language Acquisition, and Technology Literacy Challenge.

• 8518 Title V – Promoting Informed Parental Choice And Innovative Programs Revenue received for the education of children under NCLB, Title V. Includes Innovative Programs, and Smaller Learning Communities.

• 8810 Medical Assistance Reimbursements (ACCESS) Reimbursements received from the Federal Government through the Commonwealth of PA for eligible related health services provided to special education students as part of their Individual Education Plan (IEP). Reimbursable services include, but are not limited to, occupational therapy, physical therapy and psychological counseling.


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9000 Other Financing Sources Other financing sources include governmental fund general long-term debt proceeds, fund transfers-in, proceeds from fixed asset dispositions, and other receipts. Such amounts are classified separately from revenues.

Expenditures The Pennsylvania Department of Education also requires the District to classify expenditures by a combination of dimensions. The required expenditure dimensions for budget preparation are function and object. Function and object dimensions are used together to classify each expenditure. The function dimension (four digit code) is used to classify expenditures according to the principal purpose for which expenditures are made (e.g. Instruction and Support Services). The object dimension (three digit code) applies to the nature of the expenditure, item purchased, or service obtained (e.g. Salaries, Benefits, Supplies and Equipment). The following is a description of expenditure dimensions (codes) used by the District. Functions The District uses five major function codes (1000, 2000, 3000, 4000, 5000) to record and control financial transactions. However, expenditures are not charged directly to these major function categories described below but to sub-accounts or sub-functions that provide a more detailed classification of expenditures.

1000 Instruction Activities dealing directly with the teaching of pupils, or the interaction between teacher and pupils and related costs, which can be directly attributed to a program of instruction. Teaching may be provided for pupils in a school classroom, in another location such as a home or a hospital, and in other learning situations. It may also be provided through some other approved medium. Included in this function are the salaries for teachers and assistants of any type that provide support for the instructional process. Also included in this function are equipment and supplies directly related to instruction and the instructional process.


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• 1100 Regular Programs

Elementary and Secondary programs include activities designed to provide students (grades K through 12) with the learning experiences to prepare them for activities as citizens, family members, and non-vocational workers as contrasted with programs designed to improve or overcome physical, mental, social and/or emotional handicaps.

• 1200 Special Education Programs

Activities designed primarily for students having special needs. These special programs include services for the gifted, learning disabled and physically handicapped students.

• 1300 Vocational Education Programs

Pennsylvania Department of Education approved programs designed to prepare students to pursue occupational fields including agriculture, business, distribution, health, home economics and trade and industry.

• 1400 Other Instructional Programs

Elementary and Secondary programs that provide students (grades K through 12) with learning experiences not included in the regular, special education or vocational education programs. This includes the Summer School Program, Homebound Instruction, Driver Education Classroom Instruction, and Federal Instructional Programs.

2000 Support Services

Services which provide administrative, technical, personal and logistical support to facilitate and enhance instruction. Support services exist to sustain and enhance instruction, rather than entities within themselves. They include such services as: pupil personnel, guidance, psychology, library, health, attendance, and transportation. • 2100 Pupil Services

Activities designed to assess and improve the well-being of students, to supplement the teaching process, and meet the provisions of Article Xlll of the Public School Code of 1949, as amended. This includes the Director of Pupil Services, guidance counselors and psychological services.


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• 2200 Instructional Staff Services

Those activities associated with assisting, supporting, advising and directing the instructional staff in improving the content and process of providing learning experiences for students. These activities include audio-visual/multi-media services, library operations, curriculum development and staff development.

• 2300 Administration

Those activities concerned with recommending new policies, administering existing policies, and the developing and implementing of procedures in connection with the operation of the School District. It also includes the services of those professional, independent, and separate agencies or individuals that are elected, appointed, or retained to assist in the administration including attorneys, accounting services and tax collection services.

• 2400 Pupil Health Services Programs

Activities that provide physical and mental health services which are not part of curriculum and instruction. Included are activities that provide students and staff with appropriate medical, dental, and nursing services as required by the State.

• 2500 Business Services

Those activities concerned with the administering of the District’s business functions, the accounting of the District’s receipts and expenditures, and the purchasing, storage and maintenance of goods and services.

• 2600 Plant Operation and Maintenance

Those activities concerned with keeping the physical plant open, comfortable, and safe. This includes keeping the grounds, buildings and equipment in effective working condition and maintaining safety on all school property.

• 2700 Transportation

Those activities concerned with the conveyance of students to and from school, as provided by state law, including trips between home and school and trips to school activities.

• 2800 Central Support Services

Activities, other than general administration, which support each of the other instruction and supporting services programs. These activities include planning, research, development, evaluation, information, staff and technical services.


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• 2900 Other Support Services

All other support services not classified elsewhere in the 2000 series. This includes amounts paid for services from the Chester County Intermediate Unit.

3000 Operation of Non-Instructional Services Activities concerned with providing non-instructional services to students, staff or the community. Expenditures accounted for in this function include student activities and community services.

• 3100 Food Services

Those activities concerned with providing food to students and staff. This service area includes the preparation and serving of regular and incidental meals, lunches or snacks in connection with school activities and the delivery of food.

• 3200 Student Activities

School sponsored activities, under the guidance and supervision of the School District’s staff, designed to provide students such experiences as motivation, enjoyment, and improvement of skills. Co-curricular activities normally supplement the regular instructional program and include such activities as band, chorus, speech and debate. Also, student activities includes the athletic program, which fields sports teams for interscholastic competition.

• 3300 Community Services

Activities concerned with providing services for the community as a whole.


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4000 Facilities Acquisition, Construction and Improvement Services Represent capital outlay for the purchase of land, buildings, service systems and built-in equipment. Expenditures include the initial purchase of land and buildings, construction remodeling and additions and improvement to buildings, initial installation, replacement or extension of service systems and other built-in equipment, as well as improvement to sites, and activities related to all of the above. • 4500 Building Acquisition and Construction Services

Costs incurred to purchase or construct buildings, additions to buildings, and original or additional installation or extension of service systems and built-in equipment.

• 4600 Existing Building Improvement Services

Capital expenditures incurred to renovate or improve existing buildings, service systems and other built-in equipment. Capital expenditures include non-routine and substantial costs incurred to maintain or improve buildings, service systems and other built-in equipment.

5000 Other Expenditures and Financing Uses Other financing uses represent the disbursement of governmental funds not classified in other functional areas that require budgetary and accounting control. These include transfers of monies from one fund to another and budgetary reserve. • 5100 Debt Service / Other Expenditures and Financing Uses

This function is used to record and accumulate expenditures incurred to retire current year principal and interest payments on long-term debt.

• 5200 Fund Transfers

This function provides for funds to be transferred from one fund to another fund without expectation of repayment. Transfers from the General Fund are budgeted to support the Athletic Fund and Capital Reserve Fund.

• 5900 Budgetary Reserve

The District maintains a budgetary reserve account in the amount of less than one percent of budgeted expenditures in order to provide for operating contingencies. Expenditures may not be made through the budgetary reserve, but only against the line items which appear throughout the appropriations. An amount equal to the expenditure shall be transferred from the budgetary reserve into the appropriate line item.


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Objects The District uses nine major object classifications to record and control financial transactions.

• 100 Personnel Services – Salaries

Gross salaries paid to employees of the District. Salary costs are related to personnel positions, overtime, temporary employees and supplemental pay.

• 200 Personnel Services – Benefits

Amounts paid on behalf of employees; these amounts are not included in gross salary, but are in addition to that amount. Such payments are fringe benefit payments; and, while not paid directly to employees, are part of the cost of personnel services. Fringe benefits include health insurance, retirement plans, social security, life insurance, unemployment compensation and workers’ compensation.

• 300 Purchased Professional Services

Services that by their nature require persons or firms with specialized skills and knowledge. Included in this classification are contracted services such as; legal and accounting services, tax collection and administrative services, curriculum improvement and instructional services, counseling and guidance services, computer services and medical and dental services. This classification also includes fees paid to the Chester County Intermediate Unit for special education services and alternative regular education services.

• 400 Purchased Property Services

Services required to operate, repair, and maintain property used by the District. Also used for facility construction, renovation, and remodeling expenditures paid to contractors.

• 500 Other Purchased Services

Amounts paid for services not provided by District personnel but rendered by organizations or personnel, other than Professional Services and Purchased Property Services. Such services include those for contractual agreements to transport students, printing and binding, travel, the cost of tuition at approved private schools for special education programs, costs incurred to educate adjudicated or court placed children, liability insurance, and telephone costs. This category also includes the District’s share of costs for general and administrative services received from the Chester County Intermediate Unit.


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• 600 Supplies

Amounts paid for material items of an expendable nature that are consumed, worn out, or deteriorated in use. Such costs include textbooks and periodicals, instructional supplies and materials, general and office supplies, custodial supplies, medical supplies, maintenance and transportation materials, and energy costs for electricity and heating.

• 700 Property

Expenditures for the acquisition of fixed / capital assets, including expenditures for land or existing buildings and improvements of grounds; initial equipment; additional equipment and replacement of equipment.

• 800 Other Objects

Amounts paid for expenditures not otherwise classified in objects 100 through 700. Such expenditures include dues and fees, taxpayer refunds, and an amount for operating contingencies (budgetary reserve).

• 900 Debt Service and Other Uses of Funds

Outlays from current funds for debt service. Also used to record transfers to other funds.

Significant Laws Affecting Budget and Fiscal Administration

The Pennsylvania Public School Code of 1949, as amended, gives local Boards the authority to conduct the financial affairs of the District. The School Code contains provisions that require the Board to perform certain acts (mandatory), provisions that provide discretion to the Board to either act or refrain from acting (permissive), and provisions where the Board is prohibited from acting either in total or until certain conditions have been satisfied (prohibited). The School Code laws affect the budget and fiscal administration of the District as discussed below. Act 1 The Pennsylvania state legislature passed Act 1 in June of 2006. Beginning in 2007-2008, the Act placed annual limits on the percentage increase in property taxes that the District can levy. This is a significant factor in the District’s ability to fund its programs and services. The limit is equal to an inflationary index calculated each year by the State (2.4% for 2016-2017), and is imposed upon all school districts in Pennsylvania in order to provide tax relief to taxpayers. There are exceptions to the limit that the District can apply to the State for, which may allow the District to increase its millage (tax rate) above the limit. If the District needs to raise its millage above the limit including any


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approved exceptions, it must have the increase approved by voters using a ballot question at a primary election preceding the beginning of the fiscal year. If the increase is not approved the District must cut expenditures to stay within the limit. Act 1 also allocates the state’s gaming revenue to school districts for property tax relief. In 2016-2017 the District estimates it will receive $3.9 million that would equate to a tax credit of about $200 for each approved property. Budget Statutes The School Laws of Pennsylvania, as enacted by the State legislature, mandate that public school districts approve (adopt) an annual budget prior to the start of the fiscal year. The School Code requires that a proposed budget be prepared at least thirty days prior to adoption of the final budget for the following fiscal year. The School Code also mandates that the proposed budget be available for public inspection at least twenty days prior to the date set for adoption. Districts are also required to provide public notice of final budget adoption ten days prior to any final action on the budget. The School Code requires five affirmative votes of the Board of School Directors to adopt the annual budget. The total amount of the adopted annual budget expenditures may exceed annual budget revenues, however, the expenditures may not exceed the amount of funds available to the District. In addition to revenues, funds available to the District may include fund balance (surpluses from prior years), and other financing sources such as borrowings. The adopted budget must be filed with the Pennsylvania Department of Education. The adopted budget becomes the approved spending plan of the District for the coming fiscal year, and the Board is prohibited from spending or obligating funds in excess of the budgeted amounts. However, the Board is authorized to transfer funds within the budget from one category to another without changing the total budget. These transfers must occur in the last nine months of the fiscal year. Accounting System The State has established a mandatory accounting system that must be used by every school entity that is based on Generally Accepted Accounting Principles (GAAP) for governmental units. The accounting system is discussed above in the Financial Structure and Reporting section. Bidding and Purchasing Statutes School Boards are required under Section 801 of the Public School Code to purchase and provide all furniture, equipment, textbooks, school supplies and other items for the use of the District to maintain the educational environment. Section 807.1 (as amended by Act 30 of 1990) sets forth the requirement for competitive bidding at $19,700 or more, and any purchase of $10,700 but less than $19,700 requires three price quotations under Section 807.1.


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For District purchases that are subject to competitive bid, the Board must accept the lowest responsible bid (where kind, quality and material are equal). Boards may reject any and all bids or select a single item from any bid. Section 521 of the School Code permits purchases to be made through intergovernmental cooperative agreements (joint purchase agreements). School entities may also “piggy-back” on state or other government contracts following the appropriate legal requirements. Even though purchasing may require competitive bidding, Boards may establish reasonable criteria such as color, unit/size, or any other reasonable criteria specific to the District’s needs. The School Code also provides for the exemption of several items from competitive bids. The exceptions include but are not limited to: textbooks, educational videos, and teacher demonstration devices. Services are also excluded from the competitive bidding requirement but school districts may choose to bid service agreements and contracts. Cash Management and Investments Statutes Section 440.1 of the Public School Code permits the investment of funds in (a) United States Treasury bills; (b) short-term obligations of the United States Government or its agencies or instrumentalities; (c) obligations of the United States of America or any of its agencies or instrumentalities backed by the full faith and credit of the United States of America; (d) obligations of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the Commonwealth; (e) obligations of any political subdivision of the Commonwealth of Pennsylvania or any of its agencies or instrumentalities backed by the full faith and credit of the political subdivision; or (f) deposits in savings accounts, time deposits or share accounts of institutions insured by the Federal Deposit Insurance Corporation to the extent that such accounts are so insured, and, for any amounts above the insured maximum, provided that approved collateral as provided by law therefore shall be pledged by the depository. Payment of Financial Obligations Section 439 and 607 of the Public School Code provide direction on the payment of financial obligations. Section 439 requires that all payments be approved by the Board of School Directors. Bills may be paid prior to Board approval for certain conditions that include the receipt of a discount, the avoidance of a late charge, or other advantages that may accrue to the District. Section 607 requires proper documentation to support each expenditure prior to payment, and that there be sufficient funds available. Construction of Facilities School Boards are charged with the requirement to provide the necessary grounds and suitable buildings to accommodate all school-age children in the district. This authority also includes the renovation and expansion of existing facilities. In most cases, school districts seeking state reimbursement are required to participate in PlanCon, an acronym for the Pennsylvania Department of Education’s Planning Construction Workbook. The process involves a number of phases, beginning with a definition of the


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project and justification of its need. Succeeding steps include: site approval; estimated project cost data; architectural reviews; cost data based on actual bids; and finally, approval of the bond issue or other funding mechanism. School buildings may be financed in a variety of ways that include: local authority, state authority, general obligation bonds or local funds. Audits of Financial Records All school districts are required to have an annual audit of financial records. The audit must be completed by an independent certified public accountant. The audit report must be prepared in accordance with Generally Accepted Accounting Principles (GAAP) to insure consistency. Completion of the audit and issuance of the audited financial statements marks the end of the budget cycle for a single year. In addition to the requirement of an annual audit by an independent certified public accountant, the state’s auditor general’s office performs regular audits of the District. The primary purpose of these audits is to verify that the monies received from the State were properly expended and that the District properly complied with all applicable laws and regulations. There have been no findings in any of the District’s audits over the past several years.

Significant Policies and Procedures Affecting Budget and Fiscal Administration The Board of Directors is an extension of the State Legislature with the responsibility to provide for a thorough and efficient education for the students of the District. To accomplish this responsibility, the Board of Directors is granted authority through the Public School Code and the Pennsylvania constitution to establish policies for the operation of the school system. Policies are plans and procedures that are developed to provide guidelines for desired actions. A number of these policies affect the budget and fiscal administration of the District as discussed below.


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Operating Budget Policy The operating budgets will be prepared within the context of the Board’s intent to provide the best possible education for students while minimizing the impact on taxpayers who provide funding for District programs and services. The District will ensure that budgeted expenditures can be paid for with budgeted revenues and any necessary fund balance. The District will continue to maintain an interactive on-line budgetary accounting information system that is employed as a management control device to administer the budget. The data in the budgetary accounting information system will be utilized to prepare management reports for fiscal control and to prepare reports for the Board of Directors that compare actual revenues and expenditures to budget amounts. The budget will be administered within applicable local, state, and federal laws. Accordingly, the District will not obligate funds in excess of the approved financial plan unless the Board amends the budget by making additional appropriations or increasing existing appropriations to meet emergencies. All expenditures will be made in accordance with approved disbursement practices and legal purchasing requirements. The delegation of budget management will be based on a philosophy that is consistent with the site-based approach to decision-making through responsibility cost centers (sites or areas of responsibility). Decision making authority is delegated to budget managers of responsibility cost centers who are accountable for the effective and efficient utilization of resources appropriated by the Board. Capital Improvement Budget Policy The District will maintain a capital expenditure plan to provide for the improvement of District facilities and technology. Proposed projects will be prioritized based on: (1) the resolution of safety issues; (2) compliance with state and federal mandates; (3) improvement of facilities based an assessment of needs by the Director of Facilities and Director of Technology; and (4) the improvement of existing buildings as recommended by the building principals. The District shall also plan any new or replacement construction of school buildings based on state guidelines (PlanCon) for school building utilization. The decision to undertake any new or replacement construction shall be based on the needs of the educational program, the condition of existing facilities, and the projected capacity needs of the District. The District will identify the estimated costs and funding sources for its capital expenditure plan before it is submitted to the Board for approval. Debt Policy The District will confine long-term borrowing for capital improvements to existing facilities or for the construction of new facilities. Long-term borrowing may therefore be used for the renovation or expansion of current buildings based on the needs of the educational program, the condition of the buildings and the capacity needs of the


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District. When the District finances capital projects through the issuance of bonds, the payback period (term of the bond issue) will not exceed the expected useful life of the asset renovated or acquired. In no case will the District use long-term debt to fund current operations. However, the District may issue debt for the purpose of refunding certain bonds provided when there is a significant present value savings in the transaction. The District will maintain communication with bond rating agencies about its financial condition. The District currently has a AAA rating with both Moody’s and S&P rating agencies. The District will follow a policy of full disclosure in every financial report and official statement provided to bond rating agencies; to legal and professional service providers for bond issues; and to investors. The District will meet all debt service obligations when due and payable. Revenue Estimation Policy The Chief Financial Officer and his staff will estimate annual revenues by an objective, analytical process. Revenue estimates shall be based on objective data such as historical trend analysis and validated state estimates of sources and amounts of subsidy. Budgetary Reserve Policy The District will maintain a budgetary reserve in order to provide for operating contingencies. The maintenance of a budgetary reserve is recognized by the Department of Education to be a sound management practice given that there are certain variables over which control is not possible regardless of the care with which the budget is prepared. These variables include unpredictable changes in the cost of goods and services as well as the occurrence of events that are unanticipated during the time of budget preparation and require expenditures by the District during the year for which the budget is prepared. The expenditures will not be made through the budgetary reserve, but only against the line items which appear throughout the functional appropriations. Fund Balance Policy The District will maintain an unassigned General Fund balance not to exceed the amount permitted by the State of Pennsylvania, currently 8% of the expenditure budget. The District also keeps at least 12% of General Fund budget expenditures in the Capital Project Fund balance to maintain its AAA credit ratings. The Board recognizes that the maintenance of a fund balance is essential to the preservation of the sound financial condition of the District, allows the District to contain or reduce costs through participation in self-insurance programs, and protects the bond rating of the District. In addition, the District’s fund balance will be used to improve and renovate the District’s facilities and technology, purchase capital equipment, help fund pension contributions, and help fund debt service when necessary.


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Accounting, Financial Reporting, and Auditing Policies The accounting system will report financial information in accordance with the Pennsylvania Department of Education requirements and Generally Accepted Accounting Principles (GAAP). Management control and Board oversight will be maintained through the use of regular reports that present financial activity by fund, function, and object as well as by responsibility cost center. An independent public accounting firm will perform an annual audit of the financial records of the District. The audit report will provide an opinion on the financial controls and records of the District.


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Organization Chart

SUPERINTENDENT Lawrence Mussoline

ASSISTANT SUPERINTENDENT

Robert Reed

PrincipalsK-12

Athletics

Chief Security Officer

CHIEF ACADEMIC OFFICER

Matthew Friedman

Cyber & Blended Learning

Tech Integration

CHIEF ACCOUNTABILITY

OFFICER Linda MacNeal

Assessment & Accountability

PIMS

DIRECTOR OF PUPIL

SERVICESLouis Chance

Special Ed

504's

Gifted

Central Registration

MedicalAccess

Psychologists

Nurses

Counselors

Student Assistance

DIRECTOR OF TECHNOLOGYColleen Yenser

Network & Site Svcs

Applications

Client Services

Video/Media

DIRECTOR OF HUMAN

RESOURCES Sharon Standish

Staffing

Labor Relations

Benefits

Payroll

CHIEF FINANCIAL OFFICER

Richard Fazio

Accounting/Finance

Facilities

Inventory

Food Service

Transportation

Print Shop

DIRECTOR OF FACILITIESDale Lauver

Capital Projects

Buildings

Grounds

Maintenance

Custodial

Facilities Use

DIRECTOR OF PUBLIC

RELATIONS Patricia McGlone

Communication

Website

ADMINISTRATIVE ASSISTANTGinny Warihay


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Mission Statement Proud of our tradition of excellence, the mission of the Downingtown Area School District is to educate all students to meet the rigorous challenges of a global society.

Vision Planks

The District has set the following vision planks that are the drivers for the mission, comprehensive education plan, and Board of Directors goals. 1) Improve Student Achievement a. Indefatigably create a 21st century school curriculum and culture fostering innovation, academic achievement, and growth for all students. b. Understand a standards-aligned system in order to guarantee that our curriculum supports national, state, and local standards of achievement. c. Create a rigorous approach to teaching and learning to insure success for all. d. Be responsive in creating interventions to insure the success of all students. e. Continually improve student achievement in all schools based on PSSA as well as other indicators. 2) Improve Professional Development a. Continually improve professionally in order to create a culture fostering the academic growth of all students. b. Able to analyze and evaluate data in order to inform our practice to understand our strengths and adjust to improve weaknesses. c. Preparation for organizational agility in a changing political world. 3) Improve Technology a. Improve the use, infrastructure, support, and communication surrounding the implementation of innovative technologies to both accelerate work and improve student achievement. 4) Improve Communication a. Create a flatter organization for stakeholder contact, collaboration, and agility. b. Over communicate both internally and externally using 21st century platforms c. Strive for transparency to improve trust within and outside of the organization. d. Check the vision through an action planning method tied to organizational goals.


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5) Improve Fiscal Responsibility and Create Development Opportunities a. Determinedly manage recourses wisely. b. Prepare for the future. c. Create structures for alternative revenue generation. 6) Analyze Demographics & Seek to Understand Diversity a. Strive to understand cultural changes, population shifts, and demographic patterns in a growing district. b. Cohesively create and adjust for balanced organizational patterns for our K-12 children. c. Maintain a clear understanding of the traditions and historical perspective of the greater Downingtown community.

Comprehensive Education Plan

The District’s has two goals for its comprehensive education plan. Goal #1: We will ensure a system is in place within the district that promotes, enhances,





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Major Goals and Objectives The Board of School Directors has developed the following goals for 2016-2017. The following table provides the goals, how successful achievement of these goals will be measured, and how they are linked to the Vision Planks.

Goal

Measures of Success / Objectives

Vision Plank

Hire a new Superintendent – start date 7/1/2017

• Perform search process with assistance of Chester County

Intermediate Unit • Successfully negotiate a contract with selected candidate

Vision Plank: All Planks

Finalize a new contract with the teacher’s union

• Successfully negotiate a three year collective bargaining

agreement

Vision Plank: Improve Student Achievement/ Fiscal Responsibility

No tax increase in the 2017-2018 budget

• Create a budget that meets the needs of the curriculum and

provides sufficient funding without raising taxes

Vision Plank: Improve Fiscal Responsibility

Re-negotiate contract with before and after school child care provider

• Successfully negotiate a contract with A Child’s Place that

increases revenue and provides services to meet demands

Vision Plank: Improve Fiscal Responsibility

Plan for renovation of Uwchlan Hills Elementary based on feasibility study

• Obtain 3rd party feasibility study and evaluate the options

presented in order to make a final decision on how to renovate.

Vision Plank: Improve Student Achievement/ Fiscal Responsibility


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Budget Goal and Cost of Goals All of the goals above involve fiscal responsibility, and each year it is always the District’s goal to create an operating budget that provides the best possible education for students while minimizing the impact on taxpayers who provide funding for District programs and services. This goal ensures that budgeted expenditures can be paid for with budgeted revenues and any necessary fund balance. The cost of the new teachers’ contract will likely result in about a 3% annual increase in teachers wages over the next three years which equates to about $1.9 million per year. The new before and after school child care contract will likely result in about $15,000 to $20,000 in additional revenue per year. The renovation plan options for Uwchlan Hills Elementary will likely range from $18 to $36 million.

Budget Development Process

The budget process is comprised of five phases – planning, preparation, adoption, implementation and evaluation. The process is driven by two objectives - to provide every child in the District with the best possible educational opportunities and to maximize the use of available resources. Within this framework, the Board attempts to balance the educational needs of students and the resources available to the District from local, state, and federal sources. Factors Effecting the 2016-2017 Budget Similar to prior years, salaries and benefits account for 70% of the 2016-2017 budget and therefore the increases in those costs have a significant effect on the budget. Salary increases for teachers and support staff are contractually driven, and administrator salary increases are based on current agreements. Healthcare benefits continue to escalate, and the PSERS rate continues grow causing the related expense to be a major factor in developing the budget. Other significant factors are the increasing costs for charter school students and special education students. On the revenue side, real estate property taxes account for 65% of the District’s revenue. This revenue is driven by the District’s assessment base which continues to show small growth. The District will not have a tax rate increase for 2016-2017. Revenue from state sources is uncertain and budgeted conservatively as the state continues to adjust education funding and has struggled to pass a budget in prior years. Act 1 Act 1 (discussed above under the Significant Laws Affecting Budget and Fiscal Administration section) imposes a budget timeline on School Districts in addition to tax increase limits. It requires the timeline for the beginning of the annual budget process to begin in September so a preliminary budget can be adopted in February at the latest. This preliminary budget serves to identify any potential tax increases over the index that will need to be addressed through exceptions or voter approval before final adoption of the budget in June.


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Act 1 effects each step of the budget process, as the District needs to carefully plan and prepare the budget so that any tax increase will be within the limit imposed by Act 1. Adoption of the budget will be effected if the District needs to seek voter approval for a tax increase over the limit. Implementation and evaluation of the budget will be focused on identifying areas throughout the year that may save the District money in order to stay within future year tax increase limits. Budget Planning For the fiscal year that begins July 1, the planning process for budgeting starts about ten months prior in September of the previous year when the Administration finalizes the enrollment forecast and approves a budget timeline that includes all of the important activities in the budgeting process. Once approved, the timeline represents the guidelines for the preparation and adoption of the School District’s annual budget. Preparation of the Operating Budget (General Fund) The preparation of the budget is the process of defining service levels such as the course offerings in the educational program; projecting student enrollment; developing staffing allocations; estimating expenditure needs to support programs and services; and projecting available revenues. The process begins with a forecast of elementary and secondary enrollment which establishes an important assumption on which per pupil expenditure appropriations, instructional staffing allocations, and service levels such as the number of course sections and the number of transportation vehicles are based. The Administration establishes building budgets that are primarily based on per pupil allocations for the projected student enrollment. Building principals determine budget allocations within the buildings. Since salaries and employee benefits constitute seventy percent of budget expenditures, the Board gives careful consideration to staffing requirements for both instructional and non-instructional positions to provide for defined service levels. The professional staffing needed to support the educational program is a function of the projected student enrollment, the course offerings, and class size guidelines. The District has a centralized approach to the development of the salary and benefit budget. Preparation of the Capital Budgets Each year the District updates its capital expenditure plan that provides for the improvement of District facilities and technology. Proposed capital improvement projects are specifically identified and prioritized based on resolution of safety matters, compliance with state and federal statutes, and the assessment of improvement needs. In the update of the plan, the Administration considers recommendations from the Director of Facilities, Director of Technology, the Board’s Finance and Facilities Committees, and building principals. The capital expenditure plan is budgeted in the Capital Projects Fund and funded with existing fund balance.


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New construction projects or major building renovations are planned based on the needs of the educational programs, capacity needs derived from enrollment forecasts, and the physical condition of the buildings. New construction projects are budgeted in the Capital Projects Fund and are funded with bond proceeds or existing fund balance. Budget Adoption For 2016-2017 the preliminary budget was prepared in February 2016, but was not required to be adopted then because the Board instead adopted a resolution that it would not raise taxes more than the Act 1 index of 2.4%. This preliminary budget was then refined until finalized for adoption in June 2016. Budget Timeline September-October • Act 1 index published

• Administration finalizes enrollment forecast • Per pupil budget allocations per school, and

administrative department budget allocations determined

October-November • Building and department operating budget allocations

given to budget owners with budget account spreadsheet

• Revenue budget developed by Business Office

November - December

• Building and department operating budget spreadsheets are submitted, reviewed and compiled.

• Salary budget and new staff budgets developed • Benefit projections generated

January - February • Capital Expenditure Plan updated; new projects identified and evaluated

• Preliminary Budget presented and adopted by the Board OR Resolution adopted to not increase taxes above Act 1 index.

• Act 1 exceptions are applied for if necessary

March – May

• Capital Expenditure Plan reviewed with Board • General Fund budget is refined by Administration –

salaries, benefits and revenues finalized • Proposed Final Budget Adopted by Board in May

June • Board adopts Final General Fund Budget and Capital Budget


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Implementation - Budget Administration and Management Process Budget administration and management is the process of regulating expenditures during the fiscal year to ensure that they do not exceed authorized amounts and that they are used for intended, proper, and legal purposes. The management of the budget is accomplished in a variety of ways: controlling expenditures; tracking revenue receipts; making corrections in expenditure allocations to reflect changes in costs, service levels, or plans; and reporting to the Board and public on fiscal operations. The budget serves as the vehicle for planning and resource allocation decisions in the District. After the Board adopts the budget in June and the appropriations are made to the various accounts, the budget becomes the major fiscal management tool for administering and controlling expenditures. There are however other budget administration and management issues important to the budget process that are discussed below. Organization for Budget Management The overall revenue, expenditure and capital budgets are coordinated by the administrative budget team to keep the District’s total expenditures within available revenues and other financing sources. This team includes the Superintendent, Chief Financial Officer and the other executive Directors along with the Business Office staff. Decisions on budgetary allocations to responsibility cost centers and capital budget projects are primarily determined by the budget team. Allocations are provided in an unrestricted lump-sum amount, and decisions on how to spend these monies are primarily made at the site or department level. Salary costs are primarily determined by contractual agreements and budgeted on a centralized basis. Expenditure Control and Approvals All of the fund budgets of the District are controlled by a combination of District level oversight and building or department level management. The operating budget (General Fund) of the District is disaggregated into responsibility cost centers. A budget manager (an administrator or coordinator such as a building principal) is accountable for the management of the financial resources budgeted in their cost center. The Chief Financial Officer, Director of Facilities and Director of Technology are the budget managers for the Capital Project Fund. Overall management and control of fund and responsibility cost center budgets resides at the District level with the Business Office. The Business Office monitors spending and manages expenditures within the context of the accounting structure, focusing on the appropriate function and object classification. Revenue is controlled and managed by the Business Office, ensuring that it is properly recognized and correctly classified by source. Each of the budget managers is authorized to approve the expenditure of funds within their respective responsibility cost center appropriations, provided that funds are expended in accordance with District purchasing procedures and legal requirements. Administrative regulations require that all purchase orders be approved by the Business Office in addition to the appropriate responsibility cost center approval to verify


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availability of funds, proper account coding, and compliance with legal purchasing procedures. All bid awards and contracts must be approved by the Board of Directors. The Chief Financial Officer also carefully monitors comparisons between budget and actual expenditures to maintain cost control and to ensure against overspending. The capital budget is monitored by the business office, facilities department and technology department to ensure capital spending is within the budget. Encumbrance Control Another important component in the District’s financial control and reporting system is the encumbrance of funds. Encumbrances are obligations in the form of purchase orders, contracts, or salary commitments chargeable to an appropriation and for which part of the appropriation is reserved and not yet spent. The purpose for the encumbrance of funds is to ensure that obligations are recognized as soon as financial commitments are made. Otherwise, the accounting system would only record actual amounts entered into the expenditure accounts, not those that are planned or anticipated. In short, the encumbrance of funds is an important control measure to prevent the inadvertent over-expenditure of budget appropriations due to the lack of information about future commitments. For budgetary purposes, appropriations lapse at fiscal year-end and outstanding encumbrances at year-end are canceled. Transfers Between Budget Accounts The budget is a spending plan based on a series of assumptions and estimates. Rarely, if ever, will all of the actual expenditures be equal to the detailed budget estimates. As actual expenditures are incurred, adjustments are required in the budget between accounts to cover higher than expected costs or to provide for an unanticipated expense. Transfers between accounts can be requested by responsibility cost center managers, but are executed at a centralized level by Business Office staff. This allows for additional control over the appropriateness of the transfers. The Business Office staff also monitors budget accounts and initiates transfers when appropriate.

Evaluation - Management Information and Financial Reporting The District maintains a budgetary accounting and control software information system that provides information and reports to assist Board Members, the Business Office staff, and responsibility cost center managers in administering, monitoring and evaluating the implementation of the operating and capital budget. The information from the accounting information system is important and relevant in evaluating the financial condition of the District and the fiscal performance of responsibility cost center managers. The reports produced from the information system are designed for specific District needs and to meet state and federal reporting requirements. They include management control reports that detail expenditure and budget status by responsibility cost center, and by function and object. Revenue reports are also prepared that track receipts against budget. The information system is interactive and provides users with the ability to review up to date accounting information on their computer.


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The District produces annual financial statements that are audited by an independent public accounting firm. These financial statements reflect the actual financial activity for the fiscal year. The budget is evaluated against these financial statements which are then used as a tool to begin development of the next year’s budget. Factors effecting the District’s Future The level of state funding that the District receives in the future years is uncertain. There has been a new basic education subsidy funding formula established that should result in additional state funding to the District, however it is unclear if that formula will ultimately be used and how much funding it would provide. The political decisions influencing the state budgets are a key factor in determining the level of funding to the District. Lack of significant growth in other state funding continues to be a concern, and will require the District to continue to rely on local funding sources such as property taxes. The District estimates that its property tax assessment base will continue to experience some small growth. There has been discussion at the state level of eliminating the ability of Districts to increase property taxes unless it is approved by a voter referendum. This would have a serious effect on the District’s ability to fund its programs and services in future years. The projected PSERS employer contribution rate for future years will continue to cause a significant burden to the District to meet this obligation. Tuition paid by the District for Charter School students also continues to grow and be significant. The District’s Capital spending plan will continue to emphasize technology purchases as the District looks to implement a one to one student laptop program across its schools. Renovation plans for Uwchlan Hills Elementary school will be evaluated, which may result in a significant construction project. Capital expenditures for improvements and replacement of systems and equipment at existing facilities will continue at a steady level as the District is committed to providing outstanding facilities.

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Financial Section


Summary of the information in this section

This section includes the summary and detail financial information in the budget. It also includes prior year actual comparative results and forecast budgets for future years. This information is shown for each fund; the General Fund, the Capital Projects Fund, and the Debt Service Fund. Detail information on the capital expenditure plan and the District’s outstanding debt obligations are also included in this section.


Summary of All Funds

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2016-2017 General Fund

Budget

2016-2017 Capital

Projects Fund Budget

2016-2017 Debt

Service Fund Budget

2016-2017 Total Funds

Budget


Budget


Actual


Actual


ActualSource / Object

Revenue6000 Local Sources 163,745,222$ 500,000$ 160,000$ 164,405,222$ 159,326,913$ 161,781,070$ 158,626,415$ 155,385,557$ 7000 State Sources 46,198,778 - - 46,198,778 43,095,448 40,489,476 38,795,263 35,850,554 8000 Federal Sources 1,168,000 - - 1,168,000 925,000 2,758,809 3,057,783 3,012,007

Total Revenue 211,112,000 500,000 160,000 211,772,000 203,347,361 205,029,355 200,479,461 194,248,118

Expenditures100 Personnel Services - Salaries 91,999,767 91,999,767 89,944,770 83,791,002 80,785,971 78,895,069 200 Personnel Services - Employee Benefits 55,919,975 55,919,975 51,716,472 41,783,652 36,461,190 31,776,902 300 Purchased Professional Services 13,424,029 13,424,029 11,559,152 11,999,647 9,827,552 9,395,930 400 Purchased Property Services 4,550,295 3,815,000 8,365,295 10,635,825 16,168,569 32,629,447 16,149,348 500 Other Purchased Services 27,154,516 27,154,516 26,079,598 24,703,978 23,381,139 22,606,968 600 Supplies 6,046,209 6,046,209 6,089,631 5,387,160 4,898,803 5,423,630 700 Property 732,634 6,185,000 6,917,633 4,583,479 664,868 388,799 2,312,644 800 Other Objects & Contingency 1,284,576 1,284,576 1,294,073 582,190 851,988 516,832 900 Debt Service 10,000,000 2,095,407 12,095,407 15,500,000 38,864,170 16,801,219 27,185,883

Total Expenditures 211,112,000 10,000,000 2,095,407 223,207,407 217,403,000 223,945,236 206,026,108 194,263,206

Excess of Revenue Over (Under)Expenditures - (9,500,000) (1,935,407) (11,435,407) (14,055,639) (18,915,881) (5,546,647) (15,088)

Other Financing Sources / (Uses) - 100,000 - 100,000 608,000 504,627 1,332,355 -

Net Change in Fund Balance - Original Budget - (9,400,000) (1,935,407) (11,335,407) (13,447,639) (18,411,253) (4,214,291) (15,088)

(1) Net Change in Fund Bal. - Revised Budget Adjustment 4,500,000

(2) Net Change in Fund Balance - Estimated Actual 12,000,000 12,000,000 13,465,000 (3) Estimated Actual Transfers (Out) / In (12,000,000) 12,000,000 - -

Fund Balance July 1 24,610,950 102,388,513 33,893,668 160,893,131 156,375,770 174,787,024 179,001,315 179,016,403

Fund Balance June 30 24,610,950$ 104,988,513$ 31,958,261$ 161,557,724$ 160,893,131$ 156,375,770$ 174,787,024$ 179,001,315$

(1) Net Change in Fund Balance - Revised Budget AdjustmentThe General Fund portion of the 2015-2016 original budget had a net change in fund balance of negative $4,500,000. The Revised Budget Adjustment offsets this to reflect a revised 2015-2016 General Fund budget net change in fund balance of $0.

(2) Net Change in Fund Balance - Estimated ActualThese amounts reflect the estimated actual results for the budget years. They represent the estimated actual amount that revenues will exceed expenditures which will increase the fund balance. The District budgets conservatively and anticipates higher than budgeted revenue and lower than budgeted expenditures in its actual results for the year. This generates a surplus that is transferred to the Capital

Projects Fund to fund the District's capital spending plan. The primary sources of the surplus are anticipated to be higher property tax revenue, lower salary expense, and lower benefit expense. (3) Estimated Actual Transfers (Out) / In

This represents the amount of Estimated Actual Net Change in Fund Balance that is transferred to the Capital Projects Fund from the General Fund. This transfer nets to $0 in the Total Funds view of the Budget.


Summary of All Funds - Forecast

61

2016-2017 General Fund

Budget

2016-2017 Capital

Projects Fund Budget

2016-2017 Debt

Service Fund Budget


Budget


Forecast


Forecast


ForecastSource / Object

Revenue6000 Local Sources 163,745,222$ 500,000$ 160,000$ 164,405,222$ 167,946,708$ 170,590,000$ 173,500,000$ 7000 State Sources 46,198,778 - - 46,198,778 48,593,292 49,500,000 50,500,000 8000 Federal Sources 1,168,000 - - 1,168,000 1,168,000 1,000,000 1,000,000

Total Revenue 211,112,000 500,000 160,000 211,772,000 217,708,000 221,090,000 225,000,000

Expenditures100 Personnel Services - Salaries 91,999,767 91,999,767 94,237,175 96,121,919 98,044,357 200 Personnel Services - Employee Benefits 55,919,975 55,919,975 59,805,825 61,318,081 63,025,643 300 Purchased Professional Services 13,424,029 13,424,029 13,000,000 13,000,000 13,000,000 400 Purchased Property Services 4,550,295 3,815,000 8,365,295 8,087,500 8,095,000 8,712,000 500 Other Purchased Services 27,154,516 27,154,516 27,210,000 27,210,000 27,510,000 600 Supplies 6,046,209 6,046,209 6,150,000 6,150,000 6,150,000 700 Property 732,634 6,185,000 6,917,633 6,058,114 6,150,443 5,636,089 800 Other Objects & Contingency 1,284,576 1,284,576 1,300,000 1,300,000 1,300,000 900 Debt Service 10,000,000 2,095,407 12,095,407 12,096,736 15,777,850 15,612,175

Total Expenditures 211,112,000 10,000,000 2,095,407 223,207,407 227,945,350 235,123,292 238,990,264

Excess of Revenue Over (Under)Expenditures - (9,500,000) (1,935,407) (11,435,407) (10,237,350) (14,033,293) (13,990,264)

Other Financing Sources / (Uses) - 100,000 - 100,000 100,000 100,000 100,000

Net Change in Fund Balance - Original Budget - (9,400,000) (1,935,407) (11,335,407) (10,137,350) (13,933,293) (13,890,264)

(1) Net Change in Fund Balance - Estimated Actual 12,000,000 12,000,000 8,800,000 5,100,000 1,840,000 (2) Estimated Actual Transfers (Out) / In (12,000,000) 12,000,000 -

Fund Balance July 1 24,610,950 102,388,513 33,893,668 160,893,131 161,557,724 160,220,375 151,387,082

Fund Balance June 30 24,610,950$ 104,988,513$ 31,958,261$ 161,557,724$ 160,220,375$ 151,387,082$ 139,336,818$

The declining fund balance represents the use of the Debt Service Fund balance to pay a portion of the District's debt service and the excess of Capital Projects Fund expenditures over the Estimated Actual Net Change in Fund Balance in the General Fund. The District has very strong Capital Project Fund reserves to fund future capital expenditures. The General Fund forecast is conservative and does not include any tax millage increases. Tax millage increases would minimize or eliminate fund balance reductions.

(1) Net Change in Fund Balance - Estimated ActualThese amounts reflect the estimated actual results for the budget years. They represent the estimated actual amount that revenues will exceed expenditures which will increase the fund balance. The District budgets conservatively and anticipates higher than budgeted revenue and lower than budgeted expenditures in its actual results for the year. This generates a surplus that is transferred to the Capital Projects Fund to fund the District's capital spending plan. The primary sources of the surplus are anticipated to be higherproperty tax revenue, lower salary expense, and lower benefit expense.

(2) Estimated Actual Transfers (Out) / InThis represents the amount of Estimated Actual Net Change in Fund Balance that is transferred to the Capital Projects Fund from the General Fund. This transfer nets to $0 in the Total Funds view of the Budget.


Percentage of All Budget Fund Balances as of June 30, 2017

62

General Fund, 15.2%

Capital Projects

Fund, 65.0%

Debt Service Fund, 19.8%

63


General Fund

The General Fund is the general operating fund of the District. The General Fund is the primary fund of the District, and is where the operating revenue and expenditures of the District are budgeted and recorded.


Summary of General Fund with Prior Years Comparison

Source / Object2016-2017

Budget2015-2016

Budget2014-2015

Actual2013-2014

Actual2012-2013

ActualRevenue6000 Local Sources 163,745,222$ 158,782,552$ 161,506,454$ 158,323,769$ 155,181,205$ 7000 State Sources 46,198,778 43,095,448 40,489,476 38,795,263 35,850,554 8000 Federal Sources 1,168,000 925,000 2,758,809 3,057,783 3,012,007

Total Revenue 211,112,000 202,803,000 204,754,739 200,176,815 194,043,766

Expenditures100 Personnel Services - Salaries 91,999,767 89,944,770 83,791,002 80,785,971 78,895,069 200 Personnel Services - Employee Benefits 55,919,975 51,716,472 41,783,652 36,461,190 31,776,902 300 Purchased Professional Services 13,424,029 11,559,152 11,999,647 9,827,552 9,395,930 400 Purchased Property Services 4,550,295 4,405,825 4,216,447 5,199,450 4,286,340 500 Other Purchased Services 27,154,516 26,079,598 24,703,978 23,381,139 22,606,968 600 Supplies 6,046,209 6,089,631 5,387,160 4,898,803 5,423,630 700 Property 732,634 713,479 664,868 388,799 2,312,644 800 Other Objects & Contingency 1,284,576 1,294,073 582,190 851,988 516,832 900 Debt Service 10,000,000 15,500,000 13,887,127 16,801,219 27,185,883

Total Expenditures 211,112,000 207,303,000 187,016,071 178,596,111 182,400,198

Excess of Revenue Over (Under)Expenditures - (4,500,000) 17,738,668 21,580,704 11,643,568

900 Other Financing Uses- Transfers (19,572,644) (25,071,254) (20,745,138)

Net Change in Fund Balance - Orig. Budget - (4,500,000) (1,833,976) (3,490,550) (9,101,570)

(1) Net Change in Fund Bal. - Revised Budget Adjustment 4,500,000

(2) Net Change in Fund Balance - Estimated Actual 12,000,000 13,465,000 (3) Estimated Actual Transfer Out to Capital Fund (12,000,000) (13,128,000)

Fund Balance July 1 24,610,950 24,273,950 26,107,926 29,598,476 38,700,045

Fund Balance June 30 24,610,950$ 24,610,950$ 24,273,950$ 26,107,926$ 29,598,476$

(a) Assigned Fund Balance 7,246,710$ 7,721,990$ 7,689,708$ 10,001,126$ 14,012,300$ (a) Unassigned Fund Balance 17,364,240$ 16,888,960$ 16,584,242$ 16,106,800$ 15,586,176$


(a) The Assigned Fund Balance represents a reserve for future healthcare claims and future PSERS obligations. The District strives to keep the Unassigned fund balance at 8% of the next years budgeted expenditures which is the maximum under Pennsylvania law.

Post‐employment healthcare liabilityThe District has a $10.5 million actuarially determined liability for its post‐employment (retirees) healthcare obligation in accordance with the GASB 45 accounting standard. This represents the estimated present value of all future healthcare benefits that will be paid in retirement to current active and retired employees. The District funds its healthcare claims on a pay as you go basis, and budgets an estimate of total claims expense for each year. It does not pre‐fund the actuarial liability. The portion of the Assigned fund balance for healthcare is a reserve for the pay as you go claims and does not represent pre‐funding of the actuarial liability.

(1) Net Change in Fund Balance ‐ Revised Budget AdjustmentThe General Fund portion of the 2015‐2016 original budget had a net change in fund balance of negative $4,500,000. The Revised Budget Adjustment offsets this to reflect a revised 2015‐2016 General Fund budget net change in fund balance of $0.

(2) Net Change in Fund Balance ‐ Estimated ActualThese amounts reflect the estimated actual results for the budget years. They represent the estimated actual amount that revenues will exceed expenditures which will increase the fund balance. The District budgets conservatively and anticipates higher than budgeted revenue and lower than budgeted expenditures in its actual results for the year. This generates a surplus that is transferred to the Capital Projects Fund to fund the District's capital spending plan. The primary sources of the surplus are anticipated to be higher property tax revenue, lower salary expense, and lower benefit expense.

(3) Estimated Actual Transfers (Out) / InThis represents the amount of Estimated Actual Net Change in Fund Balance that is transferred to the Capital Projects Fund from the General Fund.

64


General Fund Forecast

2016-2017 2017-2018 2018-2019 2019-2020Source / Object Budget Forecast Forecast Forecast

Revenue6000 Local Sources 163,745,222$ 167,291,708 169,950,000 172,880,000 7000 State Sources 46,198,778 48,593,292 49,500,000 50,500,000 8000 Federal Sources 1,168,000 1,168,000 1,000,000 1,000,000

Total Revenue 211,112,000 217,053,000 220,450,000 224,380,000

Expenditures100 Personnel Services - Salaries 91,999,767 94,237,175 96,121,919 98,044,357 200 Personnel Services - Employee Benefits 55,919,975 59,805,825 61,318,081 63,025,643 300 Purchased Professional Services 13,424,029 13,000,000 13,000,000 13,000,000 400 Purchased Property Services 4,550,295 4,600,000 4,600,000 4,600,000 500 Other Purchased Services 27,154,516 27,210,000 27,210,000 27,510,000 600 Supplies 6,046,209 6,150,000 6,150,000 6,150,000 700 Property 732,634 750,000 750,000 750,000 800 Other Objects & Contingency 1,284,576 1,300,000 1,300,000 1,300,000 900 Debt Service 10,000,000 10,000,000 10,000,000 10,000,000

Total Expenditures 211,112,000 217,053,000 220,450,000 224,380,000

Net Change in Fund Balance - Orig. Budget 0 0 0 0

(1) Net Change in Fund Balance - Estimated Actual 12,000,000 8,800,000 5,100,000 1,840,000 (2) Estimated Actual Transfer Out to Capital Fund (12,000,000)$ (8,800,000)$ (5,100,000)$ (1,840,000)$

Fund Balance July 1 24,610,950 24,610,950 24,610,950 24,610,950

Fund Balance June 30 24,610,950$ 24,610,950$ 24,610,950$ 24,610,950$

Discussion of Forecast Drivers and AssumptionsRevenue: The forecasted growth in General Fund local revenue is mainly due to real estate tax growth from projected assessment growth and earned income tax increases. This is a conservative forecast that assumes no real estate tax increase from millage rate increases and minimal assessment growth. If the District assessment growth was about 1.5% each year and the District increased millage rates 1.5% each year beginning in 2018‐2019, revenue would be over 2% higher in 2018‐2019 and 4% higher in 2019‐2020. The State source revenue forecasted increase is due mostly to the 50% reimbursement of the PSERS contribution increase. Minimal future increases in the basic education subsidy are included in the forecast. Federal revenue is forecasted to remain minimal.

Expenditures: Total forecasted growth in General Fund expenditures is driven by the increase in salaries and benefits. The increase in salaries is due to projected wage increases and addition of new staff. Benefits increases are driven by healthcare costs and the increase the District’s required contribution to PSERS which is determined by the state. This represents a conservative forecast of salary and benefit costs (high estimates). Other expenditures are forecasted to remain the same. The District’s debt service is forecasted at a flat $10 million in the General Fund with any amount over $10 million being funded by the Debt Service Fund.

(1) Net Change in Fund Balance ‐ Estimated ActualThese amounts reflect the estimated actual results for the budget years. They represent the estimated actual amount that revenues will exceed expenditures which will increase the fund balance. The District budgets conservatively and anticipates higher than budgeted revenue and lower than budgeted expenditures in its actual results for the year. This generates a surplus that is transferred to the Capital Projects Fund to fund the District's capital spending plan. The primary sources of the surplus are anticipated to be higher property tax revenue, lower salary expense, and lower benefit expense.

(2) Estimated Actual Transfers (Out) / InThis represents the amount of Estimated Actual Net Change in Fund Balance that is transferred to the Capital Projects Fund from the General Fund.

65


Summary of Revenue and Expenditures - General Fund2016-2017

Local Sources77.6%

State Sources21.9%

Federal Sources0.5%

REVENUE

Salaries43.6%

Benefits26.5%

Purchased Services21.4%

Supplies, Property, Other

3.8%

Debt Service4.7%

EXPENDITURES

66


Detail of General Fund Revenue

REVENUE 2016-2017

Budget 2015-2016

Budget 2014-2015

Actual 2013-2014

Actual 2012-2013

Actual SourceCode LOCAL SOURCES

6111 Current Real Estate Tax 135,339,811$ 132,448,493$ 132,009,040$ 130,277,236$ 129,407,143$ 6112 Interim Real Estate Tax 2,350,000 2,100,000 3,176,436 2,360,683 1,752,473 6113 Public Utility Taxes 170,200 185,000 191,740 186,605 189,265 6142 Act 511 - Local Services Tax 200,000 200,000 203,886 204,042 170,459 6151 Act 511 - Earned Income Tax 16,225,000 15,000,000 16,076,800 15,098,451 14,065,246 6153 Act 511 - Real Estate Transfer Tax 2,500,000 2,500,000 2,514,756 2,443,816 2,678,500 6411 Delinquent Real Estate Tax 3,350,000 3,200,000 3,355,254 3,954,319 3,379,685 6510 Interest on Investments 380,000 300,000 381,737 309,237 377,824 6700 Student Activities 1,000,000 810,000 1,275,591 1,171,632 1,090,746 6831 Intermediary Sources - IDEA 1,600,000 1,600,000 1,691,913 1,593,535 1,682,844 6910 Rentals 430,000 250,000 235,404 267,334 158,046 6940 Tuition from Patrons 60,000 60,000 53,854 58,790 77,561 6990 Miscellaneous Revenue 140,211 129,059 340,043 398,089 151,413

TOTAL LOCAL SOURCES 163,745,222 158,782,552 161,506,454 158,323,769 155,181,205

STATE SOURCES7110 Basic Education Subsidy 13,870,652 13,509,704 13,474,564 13,509,785 13,062,583$ 7160 Tuition for Court Placed Students 150,000 170,000 150,544 102,923 131,695 7271 Special Education Subsidy 5,557,712 5,413,482 5,500,007 5,411,988 5,310,990 7310 Transportation Subsidy 3,800,000 3,700,000 3,804,844 3,754,560 3,649,538 7320 Rentals & Sinking Fund Payments 667,000 880,000 782,427 1,892,129 1,541,547 7330 Health Services Subsidy 300,000 300,000 290,606 313,153 308,513 7340 State Property Tax Reduction Allocation 3,906,948 3,808,899 3,881,937 3,813,172 3,828,397 7360 Safe Schools - - 1,000 - 13,434 7501 PA Ready To Learn Grant 874,969 264,742 660,098 264,742 264,742 7810 Social Security Tax - State Share 3,395,835 3,437,502 3,082,605 2,964,554 2,890,657 7820 Retirement Contribution-State Share 13,675,662 11,611,119 8,860,844 6,768,257 4,848,458

TOTAL STATE SOURCES 46,198,778 43,095,448 40,489,476 38,795,263 35,850,554

FEDERAL SOURCES8514 Title I - Grant - Low income 300,000 250,000 298,055 265,935 253,603 8515 Title II - Grant - Imprv Teach quality 262,000 150,000 148,398 105,225 138,074 8516 Title III - Grant - English Language 56,000 25,000 22,958 18,016 33,528 8732 American Recovery Stimulus - QSCB - - 1,823,177 1,809,417 1,965,689 8670 Drug Free Schools Grant - - - 28,356 700 8810 Medical Assistance Reimbursement 550,000 500,000 466,221 830,834 620,413

TOTAL FEDERAL SOURCES 1,168,000 925,000 2,758,809 3,057,783 3,012,007

9000 Use of Fund Balance 4,500,000

GRAND TOTAL REVENUE 211,112,000$ 207,303,000$ 204,754,739$ 200,176,815$ 194,043,766$

67


General Fund Expenditures by Object

2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

100 Personnel Services - Salaries 91,999,767$ 89,944,770$ 83,791,002$ 80,785,971$ 78,895,069$ 200 Personnel Services - Employee Benefits 55,919,975 51,716,472 41,783,652 36,461,190 31,776,902 300 Purchased Professional Services 13,424,029 11,559,152 11,999,647 9,827,552 9,395,930 400 Purchased Property Services 4,550,295 4,405,825 4,216,447 5,199,450 4,286,340 500 Other Purchased Services 27,154,516 26,079,598 24,703,978 23,381,139 22,606,968 600 Supplies 6,046,209 6,089,631 5,387,160 4,898,803 5,423,630 700 Property 732,634 713,479 664,868 388,799 2,312,644 800 Other Objects & Contingency 1,284,576 1,294,073 582,190 851,988 516,832 900 Debt Service and Transfers 10,000,000 15,500,000 33,459,771 41,872,473 47,931,021

211,112,000$ 207,303,000$ 206,588,714$ 203,667,365$ 203,145,335$

Expenditures by Object as a Percent of Total2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

100 Personnel Services - Salaries 44% 43% 41% 40% 39%200 Personnel Services - Employee Benefits 26% 25% 20% 18% 15%300 Purchased Professional Services 6% 6% 6% 5% 5%400 Purchased Property Services 2% 2% 2% 3% 2%500 Other Purchased Services 13% 13% 12% 11% 11%600 Supplies 3% 3% 3% 2% 3%700 Property 0% 0% 0% 0% 1%800 Other Objects & Contingency 1% 1% 0% 0% 0%900 Debt Service and Transfers 5% 7% 16% 21% 24%

100% 100% 100% 100% 100%

Expenditures by Object

Total

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2016‐2017Budget

2015‐2016Budget

2014‐2015Actual

2013‐2014Actual

2012‐2013Actual

Personnel Services ‐ Salaries

Personnel Services ‐ Employee Benefits

Purchased Professional Services

Purchased Property Services

Other Purchased Services

Supplies

Property

Other Objects & Contingency

Debt Service and Transfers

68

Downingtown Area School DistrictBudget 2016-2017

General Fund Expenditures by Function and Object

FunctionObject

2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

1100 Regular Programs100 Personnel Services - Salaries 53,265,108$ 52,033,745$ 48,312,936$ 46,344,284$ 44,970,224$ 200 Personnel Services - Employee Benefits 32,469,061 30,119,541 23,959,694 20,838,578 18,037,398 300 Purchased Professional Services 1,794,350 1,448,133 1,460,430 1,343,238 1,212,319 400 Purchased Property Services 500,680 421,780 420,333 1,227,151 1,223,286 500 Other Purchased Services 7,086,769 6,836,873 6,326,633 5,790,415 5,587,510 600 Supplies 2,250,086 2,183,858 2,006,940 1,570,514 2,412,107 700 Property 433,064 418,894 274,746 211,781 436,706 800 Other Objects 196,950 217,711 171,906 154,106 45,893

Total Regular Programs 97,996,068 93,680,535 82,933,616 77,480,068 73,925,443

1200 Special Programs100 Personnel Services - Salaries 10,990,721 10,595,129 9,716,495 9,365,792 9,039,770 200 Personnel Services - Employee Benefits 6,740,457 6,137,877 4,414,501 3,764,139 3,263,174 300 Purchased Professional Services 7,149,779 6,265,449 6,519,415 5,123,885 4,526,461 400 Purchased Property Services - - - - 2,938 500 Other Purchased Services 4,367,250 4,113,250 3,439,695 4,106,483 3,978,668 600 Supplies 465,650 530,650 341,537 543,678 223,186 700 Property 51,000 51,000 44,654 36,951 44,491 800 Other Objects 26,200 26,200 9,384 6,783 6,506

Total Special Programs 29,791,057 27,719,555 24,485,682 22,947,710 21,085,194

1300 Vocational Education100 Personnel Services - Salaries 2,111,634 2,098,816 2,026,374 2,454,660 2,707,503 200 Personnel Services - Employee Benefits 1,275,821 1,193,131 1,021,078 1,122,463 1,108,197 300 Purchased Professional Services 8,525 7,445 - - - 400 Purchased Property Services - - 1,594 1,938 2,073 500 Other Purchased Services 2,780,912 2,766,175 2,238,667 2,071,717 2,279,787 600 Supplies 86,902 87,242 77,531 72,548 78,886 700 Property 6,250 4,500 2,049 - - 800 Other Objects - - - - -

Total Vocational Education 6,270,044 6,157,309 5,367,294 5,723,326 6,176,446

1400 Other Instructional Programs100 Personnel Services - Salaries 720,164 704,181 647,807 627,719 627,941 200 Personnel Services - Employee Benefits 435,113 400,312 305,992 290,650 283,587 300 Purchased Professional Services 49,525 44,425 21,205 4,522 11,508 400 Purchased Property Services - - - - - 500 Other Purchased Services 532,700 426,700 559,865 496,427 435,860 600 Supplies 6,775 6,775 5,915 1,167 7,060 700 Property - - - - - 800 Other Objects 250 250 - - 12

Total Other Instructional Programs 1,744,526 1,582,643 1,540,784 1,420,485 1,365,969

1500 Non-Public Schools300 Purchased Professional Services 12,000 15,000 9,661 5,284 13,394

Total Instruction 135,813,695 129,155,042 114,337,037 107,576,873 102,566,445

69



FunctionObject

2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

2100 Support Services - Pupil Personnel100 Personnel Services - Salaries 4,470,912 4,330,069 4,136,695 3,889,745 3,783,480 200 Personnel Services - Employee Benefits 2,699,921 2,380,584 2,209,966 1,933,610 1,707,141 300 Purchased Professional Services 9,500 8,500 17,365 2,871 58,077 400 Purchased Property Services 1,000 1,000 1,448 568 13,568 500 Other Purchased Services 23,100 23,100 15,969 16,092 4,322 600 Supplies 129,153 131,758 118,956 44,981 157,991 700 Property 2,000 2,000 2,637 26,483 1,620 800 Other Objects 145,000 145,500 141,700 131,088 2,230

Total Support Services - Pupil Personnel 7,480,585 7,022,511 6,644,737 6,045,437 5,728,429

2200 Support Services - Instructional Staff100 Personnel Services - Salaries 3,058,091 3,056,358 2,951,774 2,711,407 2,776,298 200 Personnel Services - Employee Benefits 1,870,859 1,803,683 1,407,876 1,191,005 1,052,905 300 Purchased Professional Services 346,826 201,276 303,044 122,136 296,865 400 Purchased Property Services 4,595 5,503 8,608 5,454 8,748 500 Other Purchased Services 73,276 66,776 46,022 36,230 52,712 600 Supplies 364,812 380,050 307,259 334,729 270,167 700 Property 13,000 3,500 133,704 16,584 79 800 Other Objects 6,800 4,500 1,536 3,190 2,692

Total Support Services - Instructional Staff 5,738,259 5,521,646 5,159,824 4,420,735 4,460,466

2300 Support Services - Administration100 Personnel Services - Salaries 5,857,132 5,736,946 5,353,378 5,225,174 4,878,533 200 Personnel Services - Employee Benefits 3,882,402 3,611,337 3,110,063 2,627,897 2,165,791 300 Purchased Professional Services 1,663,920 1,416,700 1,523,018 1,120,013 1,383,922 400 Purchased Property Services 18,250 13,176 10,888 9,445 14,631 500 Other Purchased Services 238,860 232,950 193,288 188,700 140,032 600 Supplies 188,330 185,383 141,910 130,242 122,519 700 Property 81,778 88,000 79,262 29,825 55,461 800 Other Objects 173,371 164,552 183,039 148,452 65,385

Total Support Services - Administration 12,104,043 11,449,044 10,594,845 9,479,748 8,826,274

2400 Support Services - Pupil Health100 Personnel Services - Salaries 1,124,100 1,164,023 1,049,810 1,067,170 1,076,970 200 Personnel Services - Employee Benefits 684,000 661,723 594,337 550,817 495,007 300 Purchased Professional Services 1,038,600 986,600 900,027 959,540 1,029,782 400 Purchased Property Services - - - - - 500 Other Purchased Services 725 725 799 95 182 600 Supplies 18,075 18,900 21,531 12,243 13,227 700 Property 10,350 14,100 3,299 10,078 18,671 800 Other Objects 350 450 - 651 -

Total Support Services - Pupil Health 2,876,200 2,846,521 2,569,803 2,600,594 2,633,840

2500 Support Services - Business100 Personnel Services - Salaries 1,078,540 987,178 967,504 769,921 755,359 200 Personnel Services - Employee Benefits 651,642 561,701 458,635 361,935 330,479 300 Purchased Professional Services 118,200 153,200 155,028 120,118 74,082 400 Purchased Property Services 23,000 23,000 944 10,837 6,968 500 Other Purchased Services 5,000 3,000 3,805 1,158 4,129 600 Supplies 83,000 84,500 61,664 77,786 37,416 700 Property 48,000 48,000 12,914 9,305 71,995 800 Other Objects 34,000 34,500 26,929 24,100 18,185

Total Support Services - Business 2,041,383 1,895,078 1,687,424 1,375,160 1,298,612

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FunctionObject

2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

2600 Operation & Maintenance of Plant Services100 Personnel Services - Salaries 5,442,193 5,449,342 5,044,774 4,906,218 4,823,473 200 Personnel Services - Employee Benefits 3,288,106 3,097,840 2,825,851 2,514,516 2,196,703 300 Purchased Professional Services 657,673 581,490 559,659 547,216 356,191 400 Purchased Property Services 3,288,070 3,082,866 3,199,480 3,049,724 2,556,885 500 Other Purchased Services 435,126 422,585 343,211 352,791 324,397 600 Supplies 1,675,067 1,636,650 1,760,343 1,693,269 1,349,207 700 Property 60,300 60,000 13,988 18,804 82,913 800 Other Objects 5,150 5,000 2,538 2,584 4,677

Total Operation & Maintenance of Plant Services 14,851,683 14,335,773 13,749,844 13,085,122 11,694,446

2700 Support Services - Student Transportation100 Personnel Services - Salaries 220,043 212,095 192,737 170,296 150,890 200 Personnel Services - Employee Benefits 132,947 120,572 93,816 67,483 57,778 300 Purchased Professional Services 1,000 20,000 33,222 31,078 36,251 400 Purchased Property Services 1,000 21,000 802 13,894 12,310 500 Other Purchased Services 10,984,466 10,598,950 10,590,284 9,649,831 9,165,175 600 Supplies 29,000 108,284 14,196 97,126 147,804 700 Property 1,000 1,500 - 180 522 800 Other Objects 2,150 2,350 1,799 1,260 1,360

Total Support Services - Student Transportation 11,371,607 11,084,751 10,926,856 10,031,148 9,572,089

2800 Support Services - Central100 Personnel Services - Salaries 1,661,613 1,627,309 1,447,604 1,396,520 1,387,329 200 Personnel Services - Employee Benefits 1,003,928 924,582 730,916 697,757 640,361 300 Purchased Professional Services 320,290 206,065 229,965 239,648 178,278 400 Purchased Property Services 337,700 333,000 414,529 564,290 426,174 500 Other Purchased Services 292,782 289,610 262,673 231,058 241,650 600 Supplies 645,413 643,000 321,976 216,310 477,588 700 Property 20,800 18,500 11,257 14,711 740 800 Other Objects 13,500 10,500 15,827 5,547 13,855

Total Support Services - Central 4,296,025 4,052,566 3,434,747 3,365,842 3,365,975

2900 Other Support Services100 Personnel Services - Salaries - - - - - 200 Personnel Services - Employee Benefits - - - - - 300 Purchased Professional Services - - - - - 400 Purchased Property Services - - - - - 500 Other Purchased Services 91,500 91,500 91,475 90,436 92,293 600 Supplies - - - - - 700 Property - - - - - 800 Other Objects - - - - -

Total Other Support Services 91,500 91,500 91,475 90,436 92,293

Total Support Services 60,851,285 58,299,390 54,859,554 50,494,223 47,672,424

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FunctionObject

2016-2017 Budget

2015-2016 Budget

2014-2015 Actual

2013-2014 Actual

2012-2013 Actual

3200 Student Activities100 Personnel Services - Salaries 1,934,517 1,914,580 1,890,483 1,850,489 1,901,382 200 Personnel Services - Employee Benefits 772,000 699,588 640,290 492,560 430,949 300 Purchased Professional Services 251,342 202,370 255,256 207,277 218,801 400 Purchased Property Services 26,000 19,500 42,917 15,898 17,585 500 Other Purchased Services 242,049 207,404 591,592 349,706 300,250 600 Supplies 103,947 92,582 207,403 104,211 125,377 700 Property 5,092 3,485 25,141 14,096 41,314 800 Other Objects 158,355 160,060 22,776 366,584 341,406

Total Student Activities 3,493,302 3,299,568 3,675,857 3,400,820 3,377,064

3300 Community Services100 Personnel Services - Salaries 65,000 35,000 52,631 6,575 15,917 200 Personnel Services - Employee Benefits 13,718 4,000 10,638 7,782 7,432 300 Purchased Professional Services 2,500 2,500 850 727 - 400 Purchased Property Services - - - 1,175 500 Other Purchased Services - - - - 600 Supplies - - - 1,094 700 Property - - - - 800 Other Objects 2,500 2,500 2,281 2,165 3,261

Total Community Services 83,718 44,000 66,400 17,249 28,879

4000 Building Improvement Services / Site Acquisition300 Purchased Professional Services 11,500 400 Purchased Property Services 350,000 485,000 114,903 300,250 - 700 Property - - 61,218 1,558,131

Total Operation of Noninstructional Services 3,927,019 3,828,568 3,929,877 3,718,319 4,964,075

5000 Other Financing Uses5100 800 Other Objects & Contingency 520,000 520,000 2,475 5,476 11,371 5100 900 Debt Service 10,000,000 15,500,000 13,887,127 16,801,219 27,185,883 5200 900 Other Uses of Funds - Transfers - - 19,572,644 25,071,254 20,745,138

Total Other Financing Uses 10,520,000 16,020,000 33,462,246 41,877,949 47,942,391

Grand Total 211,112,000$ 207,303,000$ 206,588,714$ 203,667,365$ 203,145,335$

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General Fund – Significant Revenue and Expenditure Categories Discussion, Analysis, and Trends

General Fund Revenue The General Fund budget of the School District is funded from local, state and federal sources of revenue. The primary funding source for District operated programs and services is local revenue, which accounts for 78.3% of the $202,803,000 total budgeted General Fund revenue for the 2016-2017 fiscal year. Other revenue to fund operating expenditures is primarily derived from state subsidies. Federal sources are minimal and are derived primarily from federal grant money.

2016-2017 2015-2016 %Budget Budget Change

Local 163,745,222$ 158,782,552$ 3.1%State 46,198,778 43,095,448 7.2%Federal 1,168,000 925,000 26.3%

Total 211,112,000$ 202,803,000$ 4.1%

Revenue Sources

77.6%

21.9%

0.5%

78.3%

21.2%

0.5%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Local State Federal

Revenue Sources as a Percent of Total Revenue

2016-2017 Budget 2015-2016 Budget

Local Sources The largest portion of local revenue (83%) is derived from current taxes on real estate property. Current real estate tax revenue has increased about $2.9 million over the prior year budget due to an increase in the assessment base, as there was no increase in the tax rate for 2016-2017. For 2016-2017 the budgeted assessed real estate property value is $5.375 billion, a $71.6 million (1.4%) increase over the actual 2015-2016 assessed value. The District budgets conservatively for assessment growth and anticipates about a $2 million positive budget variance as actual property tax revenue is estimated to be higher than budget. The assessed property value is the tax base on which the District levies a real estate tax. As shown in the chart on the next page, growth in the tax base has been in the 0.3% to 1.5% range since 2012-2013. This is smaller growth than in the ten years prior to 2012-2013 when the District was averaging 3% to 4% assessment growth each year. The slower growth is a result of slower residential development in recent years.


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Residential property accounts for about 80% of the total tax base with commercial, industrial, and agricultural property accounting for the remaining 20%. The real estate tax rate required to fund the District’s programs and services in 2016-2017 is 27.182 mills which is unchanged from 2015-2016. The District is pleased to not have a tax increase for its taxpayers in 2016-2017, the fourth year in a row. The chart below shows a history of the District’s tax rate.

History of Real Estate Tax Rate (Mills)

% Increase 1.70% 0.00% 0.00% 0.00% 0.00% For 2016-2017, the property taxes due on the average assessed property value in the District is $4,947. This reflects no increase from 2015-2016 based on a consistent average assessed property value of $182,000. To help offset the property tax burden on taxpayers, Act 1 of 2006 provides qualified homesteads a tax credit that is funded by state gaming revenue. For 2016-2017 the estimated amount of tax credit is $200 per homestead regardless of the assessed value. The District is proud to continue to fund nationally recognized top performing schools without needing to raise taxes since 2012-2013. The District has been able to achieve this with prudent financial management, growth in other revenue sources, and controlling unnecessary spending.


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Revenue from local sources other than current real estate taxes is primarily derived from earned income taxes, real estate transfer taxes, interim real estate taxes, and delinquent real estate taxes. The total of all other local sources of revenue are budgeted about $2.1 million higher than the 2015-2016 budget due to the continued growth in the District. State Sources Over the past two decades, Pennsylvania school districts have experienced a substantial shift from the state level to the local level to provide funding for school district budgets. The percentage of state funding in relation to total revenue sources has declined significantly over the past two decades. If the District received the same percentage of state revenue in 2016-2017 as it did for example in 1995-1996 (27.2%), state sources of revenue would be about $11 million higher in the 2016-2017 budget. This additional revenue could allow the District to expand programs and provide for additional resources that would help student achievement. The additional funding would also reduce the need to rely more heavily on taxpayers for funding.

The 7.2% increase in state revenue in the 2016-2017 budget compared to the 2015-2016 budget is primarily caused by the $2.1 million increase in the Public School Employees Retirement System (PSERS) contribution rate of which the state reimburses half. The 2016-2017 contribution rate is 30.03% of employee wages compared to 25.84% in 2015-2016. The rate is set by the state and contributions are required for all Pennsylvania school districts. The budget also reflects a combined almost $1 million increase in the basic education subsidy and Ready to Learn grant from the state as the state’s education budget is expected to increase. Federal Sources The increase in federal revenue in the 2016-2017 budget compared to the 2015-2016 budget is primarily due to anticipated increases in Title I, II, and III federal grants, and additional funding for the Medical ACCESS program for special needs student expenditure reimbursements. General Fund Expenditures For the 2016-2017 fiscal year, total expenditures in the General Fund are budgeted to increase from $207,303,000 to $211,112,000, an increase of $3,809,000. The following table on the next page details this increase by object expenditure category.


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Expenditures & Budget Budget PercentOther Uses of Funds 2016-2017 2015-2016 $ Change Change

Salaries (100) $ 91,999,767 $ 89,944,770 $ 2,054,997 2.3%Employee Benefits (200) 55,919,975 51,716,472 4,203,503 8.1%

Salary and Benefits 147,919,742 141,661,242 6,258,500 4.4%

Professional Services (300) 13,424,029 11,559,152 1,864,877 16.1%Purchased Property Services(400) 4,550,295 4,405,825 144,469 3.3%Other Purchased Services(500) 27,154,516 26,079,598 1,074,918 4.1%

Purch. & Prof. Svcs. 45,128,839 42,044,576 3,084,264 7.3%

Supplies (600) 6,046,209 6,089,631 (43,422) -0.7%

Property (700) 732,634 713,479 19,155 2.7%

Other Objects & Contingency(800) 1,284,576 1,294,073 (9,497) -0.7%Debt Service (900) 10,000,000 15,500,000 (5,500,000) -35.5%Other Objects and Uses of Funds (800/900)

11,284,576 16,794,073 (5,509,497) -32.8%

Total $ 211,112,000 $ 207,303,000 3,809,000 1.8%

General Fund

Expenditure Analysis Salaries increased from 2015-2016 to 2016-2017 due to employee wage increases and new staff offset by lower salaries for personnel replacing higher salary retirees. Salary increases for teachers and support staff are driven by contractual agreements that are renewed every 3 to 5 years. Annual increases have been in the 3% range. Salaries account for 44% of the District’s total expenditure budget in 2016-2017. The District budgets conservatively for salaries and anticipates about a $3 million positive budget variance as actual salaries are estimated to be lower than budget. The increase in employee benefit costs includes a state mandated increase in contributions to the Public School Employee Retirement System (PSERS). The PSERS employer contribution rate has been dramatically increasing since 2010-2011 when it was 5.64%, to 2016-2017 where it is 30.03% of employee wages. The rate is expected to go as high as 34% over the next 10 years. PSERS contributions account for almost half of employee benefit costs budgeted. The other significant portion of employee benefit costs is for healthcare benefit plans provided to employees. The District is self-insured, and rising healthcare costs continue to be a significant driver of the budget increases which have been in the 5% to 10% range. Total employee benefits account for 26% of the District’s 2016-2017 budget. Because the District is self-insured, healthcare benefits are budgeted conservatively, and the District anticipates about a $5 million positive budget variance as actual benefit costs are estimated to be lower than budget.


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The increase in Purchased and Professional Services is primarily due to an increase in professional services for special education students, charter school tuition costs and student transportation. Charter school tuition has significantly increased over the years due to increased enrollment and tuition costs. In 2010-2011 the District’s costs for charter school students was about $5 million. In 2016-2017 the District has budgeted about $9.5 million. Special education costs continue to increase as the District’s strong special education services have attracted more and more families to the District. The District uses a contracted carrier for its student transportation services and the increases are contractually driven which have been in the 2% range over the last 5 years. The 2016-2017 Supplies and Property budgets are about the same as 2015-2016. This reflects an effort to maintain spending levels in these categories. Supplies include all consumable material items that are expendable. Property includes equipment and capital assets with useful lives greater than one year. Other Objects and Contingency primarily include various dues, fees, and tax refunds paid by the District, and a $500,000 budgetary reserve as a contingency for unforeseen expenditures in 2016-2017. The amounts are budgeted to be about the same in 2016-2017 as 2015-2016.

Debt Service represents the repayment of principal and interest on debt incurred by the District from issuing bonds and notes. The proceeds from bond and note issues have been used to fund capital projects such as the construction and renovations of school buildings over the years. The 2016-2017 General Fund budget includes $10 million of a total $12.1 million in debt service on the District’s outstanding amount of bonds and notes as of June 30, 2016. The additional $2.1 million will be paid out of the Debt Service fund the District has established. The Debt Service fund allows the District to level the General Fund debt service budget at $10 million until 2023-2024 when the District’s debt service is scheduled to drop to $6.9 million. Debt service requirements over $10 million will be funded by the Debt Service Fund through 2023-2024. Budget debt service has decreased in the General Fund due to the establishment of the Debt Service Fund. The $15.5 million of total debt service budgeted in 2015-2016 included about $3.4 million for future year increases that will now be funded from the Debt Service Fund.


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The chart below displays the expenditure categories discussed above as a percentage of the total General Fund expenditures for the 2016-2017 budget.

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Capital Projects Fund The Capital Projects Fund is used to account for capital expenditures incurred for the renovation and improvement of facilities, acquisition of capital equipment, and the acquisition or construction of facilities. It is the fund where the District budgets its capital budget. The 2016-2017 capital budget includes capital expenditures for facility improvements, technology improvements, and equipment. Financing sources for these capital expenditures are accumulated in this fund.


Capital Projects Fund with Prior Years Comparison

Source 2016-2017 2015-2016 2014-2015 2013-2014 2012-2013Object Budget Budget Actual Actual Actual

Revenue6000 Local Sources

Interest on Investments 500,000$ 500,000$ 274,616$ 302,646$ 204,352$

Total Revenue 500,000 500,000 274,616 302,646 204,352

Expenditures 400 Purchased Property Services 3,815,000 6,230,000 11,952,122 27,429,997 11,863,008 700 Property 6,185,000 3,870,000

Total Expenditures 10,000,000 10,100,000 11,952,122 27,429,997 11,863,008

Excess of Revenue Under Expenditures (9,500,000) (9,600,000) (11,677,506) (27,127,351) (11,658,656)

9000 Other Financing Sources /(Uses)Debt Retirement (24,977,043) Sale of BondsSale of Assets / Other 100,000 608,000 516,465 1,332,355 Interfund Transers Out (33,849,307) Interfund Transfers In 19,560,806 25,071,254 20,745,138

Net Change in Fund Balance - Budget (9,400,000) (42,841,307) (16,577,278) (723,742) 9,086,482

(1) Estimated Actual Interfund Transfer In from General Fund 12,000,000 13,128,000

Fund Balance July 1 102,388,513 132,101,820 148,679,098 149,402,840 140,316,358


Bond Proceeds included in Fund Balance 3,571,632 16,975,938 37,477,853

Discussion of Capital Projects Fund Revenue and ExpendituresThe $500,000 budgeted revenue in the Capital Projects Fund represents interest earnings on the Capital Projects fund balance which is invested in certificates of deposit and money market accounts in accordance with the state investment laws for governmental entities.

The District's Capital Projects Fund is used to account for capital budget expenditures for facility improvements, technology improvements, and equipment. These include improvements to school roofs, athletic facilities, HVAC systems, paving, technology equipment and network infrastructure. The 2012‐2013 through 2014‐2015 expenditures shown above also include the construction expenditures for the 6th grade center which were funded with bond proceeds.

The District has a budgeted fund balance in the Capital Projects Fund of approximately $102 million as of 6/30/16 which will be used to fund current year expenditures, and the future capital expenditure plan. The fund balance consists of operating surpluses transferred from the General Fund in prior years.

(1) The estimated General Fund surpluses for 2015‐2016 and 2016‐2017 are shown in the financial statement above in the line item labeled "Estimated Actual Interfund Transfer In from General Fund". It represents General Fund surplus that is estimated to be transferred to the Capital Projects Fund from the General Fund.

There are no unused bond proceeds in the Capital Projects Fund balance as of 6/30/16.

Other Financing UsesThe District retired $25 million in outstanding debt with the Capital Projects Fund fund balance in 2014‐2015. The $33.8 million Interfund Tranfer Out in 2015‐2016 is a transfer to the Debt Service fund to establish a separate fund to pay a portion of the District's debt service over the next several years. The Interfund Transfers In represent transfers from the General Fund to fund the District's capital expenditure plans.

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Capital Projects Fund Forecast

Source 2016-2017 2017-2018 2018-2019 2019-2020Object Budget Forecast Forecast Forecast


Interest on Investments 500,000$ 500,000$ 500,000$ 500,000$

Total Revenue 500,000 500,000 500,000 500,000

Expenditures 400 Purchased Property Services 3,815,000 3,487,500 3,495,000 4,112,000 700 Property 6,185,000 5,308,114 5,400,443 4,886,089


Excess of Revenue Under Expenditures (9,500,000) (8,295,614) (8,395,443) (8,498,089)

9000 Other Financing Sources and Uses 100,000 100,000 100,000 100,000

Net Change in Fund Balance - Budget (9,400,000) (8,195,614) (8,295,443) (8,398,089)

(1) Estimated Actual Interfund Transfer In from General Fund 12,000,000 8,800,000 5,100,000 1,840,000



The District's Capital Projects Fund is used to account for capital budget expenditures for facility improvements, technology improvements, equipment, and large group textbook purchases. The expenditures shown in each budget / forecast year represent the capital expenditures in the District's long-range capital improvement plan. These include improvements to school roofs, athletic facilities, HVAC systems, paving, technology equipment and network infrastructure, and curriculum items.

Details of these capital expenditures are on the following pages.

Capital Plan Funding SourceThe District has a significant fund balance in the Capital Projects Fund which will be used to fund the capital improvement plan expenditures over the next several years. The fund balance consists of operating surpluses transferred from the General Fund in prior years.The capital expenditure plan will be funded with this fund balance and future surpluses in the General Fund that will be transferred to the Capital Projects Fund Balance. The significant fund balance will be used more as the transfers from the General Fund decline. The General Fund surplus / transfer is conservative and does not factor in additional revenue from tax increases.

(1) Represents the estimated General Fund surplus that is transferred to the Capital Projects Fund from the General Fund.

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Capital Expenditure Budget

2016-2017 2017-2018 2018-2019 2019-2020Budget Forecast Forecast Forecast

Capital Expenditures:

Facility Improvements 3,815,000$ 3,487,500$ 3,495,000$ 4,112,000$ Technology Equipment and Improvements 4,573,121 3,888,464 3,771,253 3,686,089 Curriculum Textbooks 956,977 883,000 1,079,190 650,000 Curriculum and Extra Curricular Equipment 263,313 36,650 50,000 50,000 Furniture, Copiers, Vehicles 250,000 250,000 250,000 250,000 General Contingency 141,589 250,000 250,000 250,000

Total Capital Expenditures 10,000,000$ 8,795,614$ 8,895,443$ 8,998,089$

Funding Source:Capital Projects Fund Balance and Transfers from General Fund 10,000,000$ 8,795,614$ 8,895,443$ 8,998,089$

Discussion of Capital Expenditure Budget and Improvement Plan

The District maintains a capital expenditure budget and improvement plan that allocates funds to the categories shown above. The plan is reviewed annually by the Administration and the Board. Additional information on these categories is described below:

Facility Improvements: The list of facility improvement projects totaling each year's budget / forecast are on the following pages. Projects are prioritized based on: (1) the resolution of safety issues; (2) compliance with state and federal mandates; (3) improvements based on an assessment of needs by the District's Director of Facilities and the Board (4) the improvement of existing buildings as recommended by the building principals.

Technology Equipment and Improvements: The list of technology equipment and improvement expenditures totaling each year's budget / forecast are on the following pages. Equipment and projects to be funded are determined by the District's Technology Director and the Board based on technology initiatives and equipment replacement cycles.

Curriculum Textbooks: The District's capital plan includes new curriculum textbook adoptions and large quantity replacement / update of textbooks scheduled by the Curriculum department based on the District's curriculum cycle.

Curriculum and Extra Curricular Equipment: This includes new band uniforms in 2016-2017, and musical instruments and athletic equipment in the forecast years. General curriculum capital equipment is also included here.

Furniture, Copiers, Vehicles: The District replaces furniture on an as need basis. Vehicles are replaced at the end of a vehicles life, and copiers are replaced based on an annual analysis of copier age and maintenance history in each building.

General Contingency: The District includes a contingency for the capital plan as a whole to cover unforeseen expenditures in each of the categories.

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Downingtown Area School DistrictBudget 2016-2017Capital Plan Detail

FISCAL FACILITIES IMPROVEMENTS

YEAR PROJECT DESCRIPTION Budget

2016‐2017 DHS‐East Elevator 150,000$

2016‐2017 Shamona Creek ‐ Replace Fire Alarm System 175,000$

2016‐2017 Bradford Heights ‐ Replace Fire Alarm System 200,000$

2016‐2017 Windows ‐ district‐wide 20,000$

2016‐2017 BAS head end controllers 200,000$

2016‐2017 Air Handler LMS 137,500$

2016‐2017 Air Handler DMS 137,500$ 2016‐2017 Beaver Creek ‐ Walk In Freezer 70,000$

2016‐2017 DHS‐West Roof 1,300,000$

2016‐2017 Pickering Valley Retaining Wall & Loading Dock Paving 100,000$

2016‐2017 Kottmeyer Stadium ‐ Replace Turf 480,000$

2016‐2017 DiSerafino Stadium ‐ Replace Turf 435,000$

2016‐2017 DHS‐West ‐ Resurface Running Track 235,000$

2016‐2017 Springton Manor Retaining Wall Repair 50,000$

2016‐2017 Asphalt Allowance 100,000$ 2016‐2017 Contingency 25,000$

3,815,000$

2017‐2018 DHS ‐ East Replace Generator, Transformer & Disconnect 230,000$


2017‐2018 Bradford Heights ‐ Pneumatic HVAC Controls 75,000$

2017‐2018 East Ward ES ‐ Replace DX Unit 37,500$

2017‐2018 East Ward ES ‐ Replace AHU 75,000$

2017‐2018 Lionville ES Replace Walk‐in Freezer 70,000$

2017‐2018 West Bradford ES Replace Walk‐in Freezer 70,000$

2017‐2018

West Bradford ‐ reseal windows, façade work and replace exterior stairs at

gym 300,000$

2017‐2018 Lionville MS ‐ Roof restoration 900,000$

2017‐2018 DHS‐East ‐ Recoat Tennis Courts 60,000$

2017‐2018 DHS‐West ‐ Recoat Tennis Courts (8 courts) 75,000$

2017‐2018 Bradford Heights ‐ Replace Elevator 100,000$

2017‐2018 DHS ‐ East Replace Gym Floors 650,000$

2017‐2018 DHS ‐ West ‐ Replace Culvert Betweeb DHSW & DMS 100,000$

2017‐2018 Asphalt Allowance 400,000$

2017‐2018 Lionville ES ‐ Replace Classroom doors 45,000$ 2017‐2018 Contingency 100,000$

3,487,500$


2018‐2019 East Ward ‐ Replace Boilers/Pumps 215,000$

2018‐2019 DHS‐West ‐ Replace Walk‐In Freezer & Refrigerator 70,000$

2018‐2019 Bradford Heights ‐ Replace Walk‐In Freezer & Refrigerator 70,000$

2018‐2019 DHS‐East Roof Restoration (see Roof Report) 1,200,000$

2018‐2019 Lionville Elementary School Roof Restoration 340,000$

2018‐2019 Downingtown Middle School Roof Restoration 750,000$

2018‐2019 Lionville ES ‐ Replace Elevator 150,000$


3,495,000$

TOTAL 2016‐2017

TOTAL 2017‐2018

TOTAL 2018‐2019

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FISCAL FACILITIES IMPROVEMENTS


2019‐2020 Shamona Creek ‐ Replace Boilers/Pumps 130,000$


2019‐2020 Shamona Creek ‐ Replace Walk‐In Freezer & Refrigerator 70,000$

2019‐2020 BWES Restoration 35,000$

2019‐2020 Pickering Valley Roof Restoration 477,000$

2019‐2020 Shamona Creek ‐ Roof Restoration/Replacement 2,800,000$


4,112,000$ TOTAL 2019‐2020

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FISCAL TECHNOLOGY EQUIPMENT AND IMPROVEMENTS


2016‐2017 Building: Elementary Intervention Specialists (Reading, IST, ESL) 27,240$ 2016‐2017 Building: Elementary Library Back of Room Computers 28,000$ 2016‐2017 Building: Elementary Library Circulation Desk 5,600$ 2016‐2017 Building: Elementary Reg Ed Classroom iPads 845,000$ 2016‐2017 Building: High School (incl STEM)1:1 Projected Costs Without Technology Fee 1,762,206$ 2016‐2017 Building: High School Art Shared Laptop Cart 103,012$ 2016‐2017 Building: High School Business Education 132,240$ 2016‐2017 Building: High School FCS 2,240$ 2016‐2017 Building: High School Music Practice Rooms (3 East, 4 West, 1 STEM) 8,728$ 2016‐2017 Building: High School Nurse Kiosk 1,362$ 2016‐2017 Building: High School PLTW/Technology Education 112,521$ 2016‐2017 Building: Middle Art Shared Laptop Cart 154,518$ 2016‐2017 Building: Middle School 1:1 Projected Costs Without Technology Fee 466,712$ 2016‐2017 Building: Middle School Nurse Kiosk 1,362$ 2016‐2017 Building: SmartBoards/Projectors 120,000$ 2016‐2017 Staff Laptops (STEM & Mac Staff Replacements) 88,000$ 2016‐2017 Building: Elementary Special Ed Back of Classroom Computers 31,360$ 2016‐2017 Building: High School Low Incidence Classrooms 7,264$ 2016‐2017 Sub‐total: Technology ‐ Educational/Devices 3,897,365$ 2016‐2017 Network Operations Center 85,000$ 2016‐2017 AV Projects 65,000$ 2016‐2017 SPAM Filter Appliance 22,400$

2016‐2017 Switches 125,000$

2016‐2017 Sub‐total: Technology ‐ Infrastructure & AV 297,400$ 2016‐2017 Security Cameras 378,356$

4,573,121$

2017‐2018 Building: Elementary Reg Ed Classroom iPads 1,141,704$

2017‐2018 Building: High School 1:1 Projected Costs Without Technology Fee 726,583$

2017‐2018 Building: High School Library East/West Labs 33,600$

2017‐2018 Building: High School Library Floor Desktops 34,080$

2017‐2018 Building: High School Music 27,275$

2017‐2018 Building: Elementary Substitute Cart 74,060$ 2017‐2018 Building: High School Substitute Laptop Carts 34,218$ 2017‐2018 Building: Middle School 1:1 Projected Costs Without Technology Fee 473,976$

2017‐2018 Building: Middle School Teacher iPads 308,720$

2017‐2018 Building: Projectors All Levels 60,000$

2017‐2018 Building: SmartBoards/Interactive Needs 60,000$

2017‐2018 Building: STEM 1:1 Projected Costs Without Technology Fee 209,496$

2017‐2018 Sub‐total: Technology ‐ Educational/Devices 3,183,712$ 2017‐2018 Load Balancer 10,000$

2017‐2018 Telephone/VOIP 45,000$

2017‐2018 AV Projects 68,000$

2017‐2018 Physical Servers 150,000$

2017‐2018 Sub‐total: Technology ‐ Infrastructure & AV 273,000$ 2017‐2018 Security Cameras 431,752$

3,888,464$

2018‐2019 Administration: TP Laptop 149,500$ 2018‐2019 Building: Elementary Reg Ed Classroom iPads 225,000$

2018‐2019 Building: High School 1:1 Projected Costs Without Technology Fee 654,265$ 2018‐2019 Building: High School PLTW/Technology Education 187,535$ 2018‐2019 Building: Middle Art Shared Laptop Cart 54,081$ 2018‐2019 Building: Middle School 1:1 Projected Costs Without Technology Fee 466,258$

TOTAL 2016‐2017

TOTAL 2017‐2018

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FISCAL TECHNOLOGY EQUIPMENT AND IMPROVEMENTS


2018‐2019 Building: Middle School Teacher iPads 617,440$ 2018‐2019 Building: Projectors All Levels 60,000$ 2018‐2019 Building: SmartBoards/Interactive Needs 60,000$ 2018‐2019 Building: STEM 1:1 Projected Costs Without Technology Fee 209,496$ 2018‐2019 Staff Laptops (Lenovo Replacements) 873,678$ 2018‐2019 Sub‐total: Technology ‐ Educational/Devices 3,557,253$ 2018‐2019 AV Projects 64,000$ 2018‐2019 Physical Servers 150,000$ 2018‐2019 Sub‐total: Technology ‐ Infrastructure & AV 214,000$

3,771,253$

2019‐2020 Building: Middle Music 49,095$ 2019‐2020 Building: Elementary Gifted Education Classroom iPads 57,204$ 2019‐2020 Building: Projectors All Levels 60,000$ 2019‐2020 Building: SmartBoards/Interactive Needs 60,000$ 2019‐2020 Building: Elementary Encore Areas (Art, Music, Health/PE) 157,773$ 2019‐2020 Building: Elementary Reg Ed Classroom iPads 181,600$ 2019‐2020 Building: STEM 1:1 Projected Costs Without Technology Fee 209,496$ 2019‐2020 Building: Middle School 1:1 Projected Costs Without Technology Fee 403,152$ 2019‐2020 Building: High School 1:1 Projected Costs Without Technology Fee 650,011$ 2019‐2020 Building: Elementary Learning Support/BRIDGES Classrooms iPads 219,622$ 2019‐2020 Building: Elementary Low Incidence Classrooms iPads 38,136$ 2019‐2020 Sub‐total: Technology ‐ Educational/Devices 2,086,089$ 2019‐2020 AV Projects 60,000$ 2019‐2020 Switches 390,000$

2019‐2020 SAN 400,000$ 2019‐2020 Firewall 250,000$ 2019‐2020 Telephone/VOIP 500,000$ 2019‐2020 Sub‐total: Technology ‐ Infrastructure & AV 1,600,000$

3,686,089$

TOTAL 2018‐2019

TOTAL 2019‐2020

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Debt Service Fund The District established a Debt Service Fund in 2015-2016 in order to level the General Fund debt service budget at $10 million until 2023-2024 when the District’s debt service is scheduled to drop to $6.9 million. Debt service requirements over $10 million will be funded by the Debt Service Fund through 2023-2024. The District transferred $33.8 million from the Capital Projects Fund in 2015-2016 to establish this fund. The 2016-2017 amount of debt service budgeted to be paid from this fund is $2.1 million.


Debt Service Fund with Prior Years Comparison

Source 2016-2017 2015-2016 2014-2015 2013-2014 2012-2013Object Budget Budget Actual Actual Actual


Interest on Investments 160,000$ 44,361$

Total Revenue 160,000 44,361 - - -

Expenditures 900 Debt Service 2,095,407 -

Total Expenditures 2,095,407 - - - -

Excess of Revenue Under Expenditures (1,935,407) 44,361 - - -

9000 Other Financing Sources /(Uses)Interfund Transfers In 33,849,307

Net Change in Fund Balance - Budget (1,935,407) 33,893,668 - - -

Fund Balance July 1 33,893,668 - - - -

Fund Balance June 30 31,958,261$ 33,893,668$ -$ -$ -$

Fund Did Not Exist

The $33.8 million Interfund Tranfer In in 2015‐2016 is a transfer from the Capital Projects fund to establish this separate Debt Service Fund to pay a portion of the District's debt service over the next several years.

The District’s debt service is budgeted and forecasted at a flat $10 million in the General Fund with any amount over $10 million being funded by the Debt Service Fund. For 2016‐2017 the amount of Debt Service over $10 million is shown above in the amount of $2,095,407.

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Debt Service Fund Forecast

Source 2016-2017 2017-2018 2018-2019 2019-2020Object Budget Forecast Forecast Forecast


Interest on Investments 160,000$ 155,000$ 140,000$ 120,000$

Total Revenue 160,000 155,000 140,000 120,000

Expenditures 900 Debt Service 2,095,407 2,096,736 5,777,850 5,612,175


Excess of Revenue Under Expenditures (1,935,407) (1,941,736) (5,637,850) (5,492,175)

9000 Other Financing Sources /(Uses)Interfund Transfers In

Net Change in Fund Balance - Budget (1,935,407) (1,941,736) (5,637,850) (5,492,175)



The forecast for the Debt Service Fund shows the portion of the District's debt service that will be funded from this fund. It is equal to the amount of total annual debt service over $10 million. The $10 million is funded from the General Fund. The fund balance in this fund will fund the amount of debt service over $10 million until 2023‐2024 when the District's debt service is scheduled to drop to $6.9 million.

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Legal Debt Limit and Borrowing Capacity

2013-2014 2014-2015 2015-2016Actual Actual Actual

Total General Fund Revenue 200,176,815$ 204,754,739$ 211,968,925$

Less: Required Deductions if Includedin Total Revenue

- Rental and Sinking Fund reimbursement 1,892,129 782,427 591,455

Net Revenue 198,284,686 203,972,312 211,377,470

Total Net Revenue for Three Years 613,634,468

Borrowing Base - Average Net Revenue for Three Year Period 204,544,823

Multiplier 225%

Total Nonelectoral Debt Limit 460,225,852

Less Amount of Debt Issued and Outstanding (as of 6/30/16) 123,350,088

Total Debt Margin (Remaining Borrowing Capacity) 336,875,764$

Total Debt Margin Percentage (Remaining Borrowing Capacity) 73.20%

The Local Government Unit Debt Act (Act 52 of 1978, re-enacting and amending Act 185 of 1972) imposes debt limits for all local government units in Pennsylvania. Act 50 of 1998 amended the Debt Act resulting in a debt limit of 225% of the District's borrowing base. The "Debt Act" is administered by the Pennsylvania Department of Community Affairs.

Below is the calculation prescribed by the Debt Act in determining the District's debt limit and remaining borrowing capacity. It uses the three most recent actual annual revenue amounts as the primary basis for the calculation. Therefore this calculation will change in future years as future year's revenue changes.

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Schedule of Outstanding Debt

FiscalYearEnded

2006 A Notes

2006 C Notes

2009 AA Bonds 2010 Bonds 2010 QSCB

Bonds2011 QSCB

Bonds

TotalOutstanding

Debt06/30

2016 19,100,000 15,200,000 40,720,000 18,065,000 19,978,588 10,286,500 123,350,0882017 19,000,000 15,200,000 36,190,000 17,110,000 18,313,706 9,551,750 115,365,4562018 18,900,000 15,200,000 31,445,000 16,115,000 16,648,824 8,817,000 107,125,8242019 18,800,000 15,200,000 22,705,000 15,075,000 14,983,941 8,082,250 94,846,1912020 11,400,000 15,200,000 21,000,000 13,985,000 13,319,059 7,347,500 82,251,5592021 3,700,000 15,200,000 19,230,000 12,850,000 11,654,177 6,612,750 69,246,9272022 9,600,000 17,395,000 11,660,000 9,989,294 5,878,000 54,522,2942023 15,490,000 10,415,000 8,324,412 5,143,250 39,372,6622024 13,515,000 9,115,000 6,659,529 4,408,500 33,698,0292025 11,465,000 7,760,000 4,994,647 3,673,750 27,893,3972026 9,335,000 6,340,000 3,329,765 2,939,000 21,943,7652027 7,130,000 4,860,000 1,664,882 2,204,250 15,859,1322028 4,840,000 3,310,000 1,469,500 9,619,5002029 2,465,000 1,690,000 734,750 4,889,7502030

The schedule above shows the District's outstanding balance for each bond, and the amortization of the balance each year due to principal payments.The schedule below illustrates the change in outstanding bonds from June 30, 2016 to June 30, 2017 due to principal payments in 2016-2017.

BondsOutstanding


Series

Description of the Projects Funded by Outstanding Bond IssuesThe 2006A and 2006C Notes were incurred to purchase land for possible future schools and to fund renovations to West Bradford Elementary, Shamona Creek Elementary and both Middle Schools. The 2009AA Bonds is a refinancing bond that refunded the original outstanding issues to take advantage of lower interest rates. The original refunded bonds funded the construction ofPickering Valley and Springton Manor Elementary schools. The 2010 Bonds, and 2010 QSCB and 2011 QSCB Bonds funded the renovation of the STEM Academy and the construction of the 6th Grade Center Building. All Bond proceeds have been spent andall projects funded with bond proceeds have been completed.

Bond RatingThe District's bond rating is AAA with Moody's and S&P rating services, which is their highest rating. This strong rating allows the District to minimize borrowing / interest costs when it needs to issue new bonds.

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Debt Amortization (Debt Service) Schedule

continued on next page >>>

Fiscal YearEnded06/30

Interest Principal Total Interest Principal Total Interest Principal Total Interest Principal Total2017 825,167 100,000 925,167 658,616 0 658,616 1,826,488 4,530,000 6,356,488 752,389 955,000 1,707,3892018 820,834 100,000 920,834 658,616 0 658,616 1,616,925 4,745,000 6,361,925 712,614 995,000 1,707,6142019 816,501 100,000 916,501 658,616 0 658,616 1,303,813 8,740,000 10,043,813 671,174 1,040,000 1,711,1742020 634,303 7,400,000 8,034,303 658,616 0 658,616 1,048,650 1,705,000 2,753,650 627,859 1,090,000 1,717,8592021 306,352 7,700,000 8,006,352 658,616 0 658,616 966,038 1,770,000 2,736,038 582,461 1,135,000 1,717,4612022 70,170 3,700,000 3,770,171 522,172 5,600,000 6,122,172 875,913 1,835,000 2,710,913 535,190 1,190,000 1,725,1902023 182,064 9,600,000 9,782,064 782,413 1,905,000 2,687,413 485,627 1,245,000 1,730,6272024 685,413 1,975,000 2,660,413 433,774 1,300,000 1,733,7742025 592,475 2,050,000 2,642,475 379,631 1,355,000 1,734,6312026 502,319 2,130,000 2,632,319 323,196 1,420,000 1,743,1962027 406,113 2,205,000 2,611,113 264,055 1,480,000 1,744,0552028 299,250 2,290,000 2,589,250 202,414 1,550,000 1,752,4142029 182,625 2,375,000 2,557,625 137,858 1,620,000 1,757,8582030 61,625 2,465,000 2,526,625 70,387 1,690,000 1,760,387

Totals 3,473,326 19,100,000 22,573,326 3,997,316 15,200,000 19,197,316 11,150,056 40,720,000 51,870,056 6,178,629 18,065,000 24,243,629

2006A General Obligation NotesOriginal Borrowing $19,900,000

2006C General Obligation NotesOriginal Borrowing $15,200,000

2010 General Obligation BondsOriginal Borrowing $23,680,000

2009AA General Obligation BondsOriginal Borrowing $67,070,000

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20172018201920202021202220232024202520262027202820292030

Totals

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Interest Principal Total Interest Principal Total Interest Principal Total48,115 1,664,882 1,712,997 0 734,750 734,750 4,110,774 7,984,632 12,095,40748,115 1,664,882 1,712,997 0 734,750 734,750 3,857,104 8,239,632 12,096,73648,115 1,664,882 1,712,997 0 734,750 734,750 3,498,218 12,279,632 15,777,85048,115 1,664,882 1,712,997 0 734,750 734,750 3,017,543 12,594,632 15,612,17548,115 1,664,882 1,712,997 0 734,750 734,750 2,561,581 13,004,632 15,566,21448,115 1,664,882 1,712,997 0 734,750 734,750 2,051,560 14,724,632 16,776,19248,115 1,664,882 1,712,997 0 734,750 734,750 1,498,219 15,149,632 16,647,85148,115 1,664,882 1,712,997 0 734,750 734,750 1,167,302 5,674,632 6,841,93448,115 1,664,882 1,712,997 0 734,750 734,750 1,020,221 5,804,632 6,824,85348,115 1,664,882 1,712,997 0 734,750 734,750 873,630 5,949,632 6,823,26248,115 1,664,882 1,712,997 0 734,750 734,750 718,282 6,084,632 6,802,91524,058 1,664,882 1,688,940 0 734,750 734,750 525,722 6,239,632 6,765,354

0 734,750 734,750 320,483 4,729,750 5,050,2330 734,750 734,750 132,012 4,889,750 5,021,762

553,324 19,978,588 20,531,912 0 10,286,500 10,286,500 25,352,651 123,350,088 148,702,739

Grand Total2010 Qualified School Construction (QSCB) Bonds

Original Borrowing $28,303,000

2011 Qualified School Construction (QSCB) Bonds


Effect of Debt Level on Current and Future Budgets

The District pays debt service (principal and interest) on outstanding debt out of its General Fund and its Debt Service Fund. The District has budgeted $10 million in the General Fund for debt service in 2016-2017 and budgeted the additional $2.1 million in its Debt Service Fund. The District established a Debt Service Fund in 2015-2016 that will allow the annual budgeted debt service in the General Fund to be stable at $10 million until 2023-2024 when the total debt service drops to $6.9 million. The amount of annual debt service over $10 million will be funded out of the Debt Service fund until 2023-2024. The District currently does not anticipate issuing any new debt.

Note that the 2010 QSCB and 2011 QSCB bonds are Federally funded and interest reimbursable. The 2010 QSCB bonds carry a minimal interest cost and the 2011 QSCB bonds are fully reimbursed causing the interest on these bonds to be zero.

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Informational Section



Assessed and Market Value of Taxable Property

(a)District % Increase in STEB Total ImpliedFiscal Total Assessed Assessed Common Level Market ValueYear Value Billed Value Billed Ratio (CLR) (b) using CLR (b)

2019-2020 Forecast 5,557,504,800 1.0% 0.538 10,329,934,572

2018-2019 Forecast 5,502,480,000 1.0% 0.538 10,227,657,993

2017-2018 Forecast 5,448,000,000 1.36% 0.538 10,126,394,052

2016-17 (1) 5,374,998,255 1.35% 0.538 9,990,703,076

2015-16 5,303,352,509 1.12% 0.552 9,607,522,661

2014-15 5,244,804,987 1.53% 0.578 9,074,057,071

2013-14 5,165,841,057 0.75% 0.602 8,581,131,324

2012-13 5,127,224,052 0.33% 0.590 8,690,210,258

2011-12 5,110,335,248 0.1% 0.560 9,125,598,657

2010-11 5,106,774,914 -0.6% 0.554 9,218,005,260

2009-10 5,138,824,590 1.5% 0.530 9,695,895,453

2008-09 5,061,333,674 2.7% 0.517 9,549,686,177

2007-08 4,929,607,031 4.5% 0.518 9,535,023,271

2006-07 4,718,724,908 4.3% 0.549 9,109,507,544

(a) Source: Pennsylvania State Tax Equalization Board (STEB)

(b) The Common Level Ratio (CLR) is calculated by STEB and used to calculate the assessed value by taking the market value of the taxable property and multiplying it by the CLR.

The implied market value of taxable proprty is shown above based on the total assessed value billed divided by the CLR.

(1) The 2016-2017 and prior years Total Assessed Value Billed are the Actual amounts

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Real Estate Tax Rate and Collection Data

Assessed Value Billed

Tax Rate stated in Mills (a) Tax Levy (b)

Tax Collection (c)

% of Levy Collected

5,374,998,255 27.182 142,196,255$ 137,194,185$ 96.48%

5,303,352,509 27.182 140,346,829$ 134,549,959$ 95.87%

5,244,804,987 27.182 138,682,352$ 132,009,040$ 95.19%

5,165,841,057 27.182 136,604,720$ 130,277,236$ 95.37%

5,127,224,052 27.182 135,539,807$ 129,407,143$ 95.48%

5,110,335,248 26.728 132,738,092$ 126,413,056$ 95.23%

5,106,774,914 26.213 129,959,908$ 123,849,460$ 95.30%

5,138,824,590 25.475 127,027,932$ 121,308,451$ 95.50%

5,061,333,674 24.850 121,981,270$ 116,188,316$ 95.25%

4,929,607,031 24.050 118,557,049$ 112,218,749$ 94.65%

4,718,724,908 23.150 109,238,482$ 105,213,830$ 96.32%

(a) One mill of tax is equal to $1.00 for every $1,000 of assessed valuation ofreal estate property.

(b) The Tax Levy reflects a reduction for the homestead credit that approved property owners receive.This homestead credit is reimbursed to the District from State gaming funds and is reflected inState Source revenue. The reimbursed amount has been about $3.8 million each yearsince 2008-2009 when the homestead credits were implemented.

(c) Tax bills are mailed on July 1 and may be paid at a two percent discount during the months of July and August. After October 31, a ten percent penalty is added and all taxes not paid by December 31 are turned over to the Chester County Tax Claim Bureau for collection.

(1) 2016-2017 and 2015-2016 Assessed Value Billed represents Actual billings.The 2016-2017 Tax Collection amount is the Estimated Actual amount

2016-2017 (1)

2015-2016 (1)

2013-2014

2011-2012

2008-2009

2010-2011

2009-2010

2012-2013

Year

2007-2008

2006-2007

2014-2015

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Analysis of Property Tax Burden

2012-13 2013-14 2014-15 2015-16 2016-17Average AssessedProperty Value $182,000 $182,000 $182,000 $182,000 $182,000

Tax Rate (Mills) 27.182 27.182 27.182 27.182 27.182Tax Rate % Increase 1.70% 0.00% 0.00% 0.00% 0.00%

Property Tax Due $4,947 $4,947 $4,947 $4,947 $4,947

Change in Average $83 $0 $0 $0 $0Property Tax

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

2012-13 2013-14 2014-15 2015-16 2016-17

$4,947 $4,947 $4,947 $4,947 $4,947

Property Tax on Average Assessed Property Value

2016-2017 will be the 4th year in a row that the District has been able to fund its budget without an increase in property taxes. The District's assessment base and other revenue have continued to grow enough to fund operating cost increases over the past four years.

The Pennsylvania State legislature passed a law (Act 1) that places annual limits on the amount of tax rate % increases. The limit is equal to an inflationary index calculated each year by the State, and is imposed upon all school districts in Pennsylvania. For 2016-2017 the % increase limit index is 2.4%.

In 2016-2017 the state will be allocating about $3.9 million of gaming revenue to the District to fund tax relief per Act 1. This amount will be equally allocated to approved residential property owners and will result in an estimated $207 credit on their 2016-2017 tax bill.

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Chester County School District Property Tax Comparison

The chartabove shows the 2016‐2017 percentage increase in property tax (millage) for each school district in Chester County. Downingtown is proud to have no tax increase for 2016‐2017, the fourth year in a row.

20.0982 20.8000 21.7423

27.1820 27.6900 29.0400 29.1600 29.2408 29.6305

30.8400

33.4598

38.6300

‐

5.0000

10.0000

15.0000

20.0000

25.0000

30.0000

35.0000

40.0000

45.0000

Millage

The chart above shows the 2016‐2017 millage rate for assessing property tax for each school district in Chester County. 1 mill = $1 for every $1000 of assessed valuation of real estate property.

0.0%

0.9% 1.0%

2.1%2.2%

2.4%

2.6% 2.7%2.8%

3.0%3.1%

3.6%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Tax Increase

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District's Ten Largest Real Estate Taxpayers

Assessed Owner Property Property Value Taxes Due

Brandywine Square LLC Shopping Complex 62,316,000$ 1,693,874$

BRE DDR IVA Ashbridge PA LLC Shopping Complex 31,906,000 867,269

Cornerstone Terrace Venture LP Apartments 22,750,000 618,391

Claremont Apartments LP Apartments 21,830,000 593,383

Marchwood Associates Apartments 17,250,290 468,897

West Pharmacutical Svcs. Inc. Business 13,551,370 368,353

Kensey Nash Corp. Business 12,706,500 345,388

Severgn Apartments LP Apartments 12,161,150 330,564

505 Eagleview Blvd. Assoc. Office Complex 11,342,000 308,298

Lion Associates LP Office Complex 10,291,310 279,738

Total 216,104,620$ 5,874,156$

Percent of Budgeted Current Real Estate Tax Revenue 4.3%

This table shows the ten largest taxpayers in the District who have the highest value of assessed property, which correlates to the amount of taxes paid. As shown above these ten taxpayers account for 4.3% of the 2016-2017 budgeted current real estate tax revenue.

The District has about 20% of its tax base come from commercial property such as these ten properties. Commercial property generates higher assessed values than residential propertywhich presents a challenge for the District in generating tax revenue because the District needs to generate 80% of its tax revenue from residential property owners, thus placing more tax burden on them.

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Enrollment Forecasting Methodology and Techniques

The District uses an enrollment forecasting consultant to assist in forecasting student enrollment. Their primary methodology used is the cohort-survival method which is a common forecasting method used by many school districts. It has a good record of reliability, the calculations are straightforward, and the data requirements are reasonably fulfilled. Adjustments are made by the consultant based on discussions with the District regarding trends, so the results are not reflective of a strict cohort-survival calculation as discussed below. The Cohort-Survival Method The basic assumption of the cohort-survival method for projecting school enrollments is that what has happened in the past will, to a large extent, continue to occur in the future; that is, given the number of births, the net effect of all other influences on enrollment will remain proportionately similar, and the percentage of students “surviving” to subsequent grades will be consistent with prior years. The basic technique requires calculating the ratio of the number of children in one grade in one year, compared to the number of children who “survive” the year and enroll in the next grade, the following year. Fluctuations in such data from year to year create a pattern from which an average survival rate can be calculated to project an enrollment. Thus, if over a period of years, an average of 96 percent of the enrollment in Grade 3 goes on to Grade 4 and if 300 children are enrolled in Grade 3, then next year’s Grade 4 enrollment may be estimated at 96 percent of 300 or 288 students. Eleven average rates of survival are calculated for a system with twelve grades. These rates can then be applied to the present enrollment and used to project enrollments for each succeeding year. Thus if the average survival rate from Grade 4 , with 288 students, to Grade 5 is 1.10 or 110 percent, then for the second projected year the estimate for Grade 5 is 1.10 times 288 or 317 students. Forecasts for successive years must take as their starting point an estimate of the number of children entering kindergarten or first grade. An average birth survival rate may be obtained by comparing known enrollments in kindergarten or first grade with birth data five or six years earlier. This rate may then be used to project enrollments for the initial school years from birth. Thus, if an average birth survival rate, births to Grade 1, was found to be 1.17 or 117 percent in recent years, reflecting a net influx of pre-school age children, the District could reasonably project future first grade enrollment from the number of recent births.


Enrollment History and Projections

Year K 1 2 3 4 5 6 7 8 9 10 11 12 Total Change % Change2006-2007 803 875 858 898 852 939 863 864 926 911 935 998 874 11,596 242 2.13%

2007-2008 790 890 903 869 919 878 959 891 878 952 912 942 960 11,743 147 1.27%

2008-2009 794 920 926 916 900 934 886 988 893 905 959 913 919 11,853 110 0.94%

2009-2010 702 951 919 922 933 924 943 911 980 902 895 934 891 11,807 (46) (0.39%)

2010-2011 717 836 949 921 930 936 953 951 917 982 916 875 933 11,816 9 0.08%

2011-2012 721 846 856 968 938 942 944 954 956 917 975 902 880 11,799 (17) (0.14%)

2012-2013 692 877 880 878 989 936 975 970 962 963 925 968 902 11,917 118 1.00%

2013-2014 640 861 930 911 908 1,011 954 979 1,029 992 964 921 976 12,076 159 1.33%

2014-2015 641 776 921 958 935 935 1,047 994 998 1,007 990 961 920 12,083 7 0.06%

2015-2016 642 850 840 972 985 974 985 1,064 1,003 1,023 1,010 986 956 12,290 207 1.71%

2016-2017 732 846 919 904 1,009 1,049 1,033 1,022 1,078 1,037 1,027 1,016 996 12,668 378 3.08%

2017-2018 740 854 937 922 1,029 1,070 1,054 1,054 1,022 1,078 1,037 1,027 1,016 12,840 172 1.36%

2018-2019 754 863 956 941 1,050 1,091 1,075 1,075 1,054 1,022 1,078 1,037 1,027 13,022 182 1.41%

2019-2020 758 872 975 959 1,071 1,113 1,096 1,096 1,075 1,054 1,022 1,078 1,037 13,206 184 1.41%

2016-17 2015-16 2014-15 2013-14 2012-13Beaver Creek Elementary 451 436 421 467 469

Bradford Heights Elementary 516 511 517 506 495

Brandywine-Wallace Elementary 521 546 478 431 382

East Ward Elementary 571 568 564 573 561

Lionville Elementary 660 610 600 668 636

Pickering Valley Elementary 504 480 491 677 675

Shamona Creek Elementary 609 597 578 415 463

Springton Manor Elementary 500 425 433 398 433

Uwchlan Hills Elementary 521 497 502 528 540

West Bradford Elementary 606 593 582 598 598

Marsh Creek 6th Grade Center 1,033 985 1,047

Downingtown Middle School 1,038 974 926 1,352 1,307

Lionville Middle School 1,062 1,093 1,066 1,610 1,600

STEM Acadedmy 793 793 789 767 604

Downingtown High School East 1,791 1,723 1,681 1,618 1,659

Downingtown High School West 1,492 1,459 1,408 1,468 1,495

12,668 12,290 12,083 12,076 11,917

Proj

ecte

dGRADE

5 Year Enrollment by School

Actu

al E

nrol

lmen

t

not open

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School Building Information

OriginalConstruction Renovation Square Student

Building Date Dates Footage Grades Capacity

Beaver Creek Elementary School 1960 1988, 2004 57,794 K-5 525

Bradford Heights Elementary School 1990 65,566 K-5 550

Brandywine-Wallace Elementary School 1960 1965, 1982 45,905 K-5 5502008

East Ward Elementary School 1968 1997 74,300 K-5 650

Lionville Elementary School 1960 1964, 1997 84,405 K-5 600

Pickering Valley Elementary School 2006 86,926 K-5 650

Shamona Creek Elementary School 1990 2006 62,603 K-5 675

Springton Manor Elementary School 2008 87,782 K-5 650

Uwchlan Hills Elementary School 1972 2004 63,443 K-5 575

West Bradford Elementary School 1966 1980, 2006 66,864 K-5 575

Marsh Creek 6th Grade Center 2014 150,000 6 1,200

Downingtown Middle School 1997 2006 158,000 7-8 1,350

Lionville Middle School 1997 2006 158,000 7-8 1,350

Downingtown High School-East Campus 1968 1988, 2000 253,000 9-12 1,700

Downingtown High School-West Campus 1959 1964, 1978, 265,600 9-12 1,8001988, 2002

STEM Academy 1932 1952, 1977 119,000 9-12 8002011

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Personnel Resource Allocation

Personnel Type

2016-2017 Budget FTEs

2015-2016 FTEs

2014-2015 FTEs

2013-2014 FTEs

2012-2013 FTEs

Teachers & Specialists 916.35 907.85 891.40 870.83 863.23

Administrators - Educational 55.00 55.00 52.00 51.00 49.00 - All Other 41.00 41.00 41.00 40.00 39.00

Total Administrators 96.00 96.00 93.00 91.00 88.00

Support Staff - Secretarial / Clerical 85.26 84.26 83.95 83.95 82.95 - Custodial 81.00 81.00 76.97 72.40 72.40 - Maintenance 18.00 16.00 18.00 18.00 18.00 - Computer Tech 12.00 12.00 10.00 10.00 10.00 - Aides 234.51 230.51 230.41 223.41 220.41- Other Support Staff 25.78 25.78 22.12 20.12 20.12

Total Support Staff 456.55 449.55 441.45 427.88 423.88

Total All Staff 1,468.90 1,453.40 1,425.85 1,389.71 1,375.11

Full Time Equivalents (FTEs)

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Schedule of Outstanding Debt

FiscalYearEnded

2006 A Notes

2006 C Notes

2009 AA Bonds 2010 Bonds 2010 QSCB

Bonds2011 QSCB

Bonds

TotalOutstanding

Debt06/30

2016 19,100,000 15,200,000 40,720,000 18,065,000 19,978,588 10,286,500 123,350,0882017 19,000,000 15,200,000 36,190,000 17,110,000 18,313,706 9,551,750 115,365,4562018 18,900,000 15,200,000 31,445,000 16,115,000 16,648,824 8,817,000 107,125,8242019 18,800,000 15,200,000 22,705,000 15,075,000 14,983,941 8,082,250 94,846,1912020 11,400,000 15,200,000 21,000,000 13,985,000 13,319,059 7,347,500 82,251,5592021 3,700,000 15,200,000 19,230,000 12,850,000 11,654,177 6,612,750 69,246,9272022 9,600,000 17,395,000 11,660,000 9,989,294 5,878,000 54,522,2942023 15,490,000 10,415,000 8,324,412 5,143,250 39,372,6622024 13,515,000 9,115,000 6,659,529 4,408,500 33,698,0292025 11,465,000 7,760,000 4,994,647 3,673,750 27,893,3972026 9,335,000 6,340,000 3,329,765 2,939,000 21,943,7652027 7,130,000 4,860,000 1,664,882 2,204,250 15,859,1322028 4,840,000 3,310,000 1,469,500 9,619,5002029 2,465,000 1,690,000 734,750 4,889,7502030

The schedule above shows the District's outstanding balance for each bond, and the amortization of the balance each year due to principal payments.The schedule below illustrates the change in outstanding bonds from June 30, 2016 to June 30, 2017 due to principal payments in 2016-2017.

BondsOutstanding


Series

Description of the Projects Funded by Outstanding Bond IssuesThe 2006A and 2006C Notes were incurred to purchase land for possible future schools and to fund renovations to West Bradford Elementary, Shamona Creek Elementary and both Middle Schools. The 2009AA Bonds is a refinancing bond that refunded the original outstanding issues to take advantage of lower interest rates. The original refunded bonds funded the construction ofPickering Valley and Springton Manor Elementary schools. The 2010 Bonds, and 2010 QSCB and 2011 QSCB Bonds funded the renovation of the STEM Academy and the construction of the 6th Grade Center Building. All Bond proceeds have been spent andall projects funded with bond proceeds have been completed.

Bond RatingThe District's bond rating is AAA with Moody's and S&P rating services, which is their highest rating. This strong rating allows the District to minimize borrowing / interest costs when it needs to issue new bonds.

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Interest Principal Total Interest Principal Total Interest Principal Total Interest Principal Total2017 825,167 100,000 925,167 658,616 0 658,616 1,826,488 4,530,000 6,356,488 752,389 955,000 1,707,3892018 820,834 100,000 920,834 658,616 0 658,616 1,616,925 4,745,000 6,361,925 712,614 995,000 1,707,6142019 816,501 100,000 916,501 658,616 0 658,616 1,303,813 8,740,000 10,043,813 671,174 1,040,000 1,711,1742020 634,303 7,400,000 8,034,303 658,616 0 658,616 1,048,650 1,705,000 2,753,650 627,859 1,090,000 1,717,8592021 306,352 7,700,000 8,006,352 658,616 0 658,616 966,038 1,770,000 2,736,038 582,461 1,135,000 1,717,4612022 70,170 3,700,000 3,770,171 522,172 5,600,000 6,122,172 875,913 1,835,000 2,710,913 535,190 1,190,000 1,725,1902023 182,064 9,600,000 9,782,064 782,413 1,905,000 2,687,413 485,627 1,245,000 1,730,6272024 685,413 1,975,000 2,660,413 433,774 1,300,000 1,733,7742025 592,475 2,050,000 2,642,475 379,631 1,355,000 1,734,6312026 502,319 2,130,000 2,632,319 323,196 1,420,000 1,743,1962027 406,113 2,205,000 2,611,113 264,055 1,480,000 1,744,0552028 299,250 2,290,000 2,589,250 202,414 1,550,000 1,752,4142029 182,625 2,375,000 2,557,625 137,858 1,620,000 1,757,8582030 61,625 2,465,000 2,526,625 70,387 1,690,000 1,760,387

Totals 3,473,326 19,100,000 22,573,326 3,997,316 15,200,000 19,197,316 11,150,056 40,720,000 51,870,056 6,178,629 18,065,000 24,243,629

2006A General Obligation NotesOriginal Borrowing $19,900,000

2006C General Obligation NotesOriginal Borrowing $15,200,000

2010 General Obligation BondsOriginal Borrowing $23,680,000

2009AA General Obligation BondsOriginal Borrowing $67,070,000

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20172018201920202021202220232024202520262027202820292030

Totals

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Interest Principal Total Interest Principal Total Interest Principal Total48,115 1,664,882 1,712,997 0 734,750 734,750 4,110,774 7,984,632 12,095,40748,115 1,664,882 1,712,997 0 734,750 734,750 3,857,104 8,239,632 12,096,73648,115 1,664,882 1,712,997 0 734,750 734,750 3,498,218 12,279,632 15,777,85048,115 1,664,882 1,712,997 0 734,750 734,750 3,017,543 12,594,632 15,612,17548,115 1,664,882 1,712,997 0 734,750 734,750 2,561,581 13,004,632 15,566,21448,115 1,664,882 1,712,997 0 734,750 734,750 2,051,560 14,724,632 16,776,19248,115 1,664,882 1,712,997 0 734,750 734,750 1,498,219 15,149,632 16,647,85148,115 1,664,882 1,712,997 0 734,750 734,750 1,167,302 5,674,632 6,841,93448,115 1,664,882 1,712,997 0 734,750 734,750 1,020,221 5,804,632 6,824,85348,115 1,664,882 1,712,997 0 734,750 734,750 873,630 5,949,632 6,823,26248,115 1,664,882 1,712,997 0 734,750 734,750 718,282 6,084,632 6,802,91524,058 1,664,882 1,688,940 0 734,750 734,750 525,722 6,239,632 6,765,354

0 734,750 734,750 320,483 4,729,750 5,050,2330 734,750 734,750 132,012 4,889,750 5,021,762

553,324 19,978,588 20,531,912 0 10,286,500 10,286,500 25,352,651 123,350,088 148,702,739

Grand Total2010 Qualified School Construction (QSCB) Bonds


2011 Qualified School Construction (QSCB) Bonds


Effect of Debt Level on Current and Future Budgets

The District pays debt service (principal and interest) on outstanding debt out of its General Fund and its Debt Service Fund. The District has budgeted $10 million in the General Fund for debt service in 2016-2017 and budgeted the additional $2.1 million in its Debt Service Fund. The District established a Debt Service Fund in 2015-2016 that will allow the annual budgeted debt service in the General Fund to be stable at $10 million until 2023-2024 when the total debt service drops to $6.9 million. The amount of annual debt service over $10 million will be funded out of the Debt Service fund until 2023-2024. The District currently does not anticipate issuing any new debt.

Note that the 2010 QSCB and 2011 QSCB bonds are Federally funded and interest reimbursable. The 2010 QSCB bonds carry a minimal interest cost and the 2011 QSCB bonds are fully reimbursed causing the interest on these bonds to be zero.

106


107

Performance Measurements The District determines success of its mission and comprehensive education plan through the measurement of student performance and achievement. The mission of the Downingtown Area School District, proud of our tradition of excellence, is to educate all students to meet the challenges of a global society. In support of this mission, the District has developed a Comprehensive Education Plan with two goals. Goal #1: We will ensure a system is in place within the district that promotes, enhances,




The District believes its mission and comprehensive education plan have been successful based on student performance and achievement data. Performance data indicates that Downingtown Area School District students have performed considerably better in standardized evaluations of learning such as the Pennsylvania System of School Assessment (PSSA) and the Scholastic Aptitude Test (SAT), compared to other students on a state-wide basis. Success in educating the District’s students can also be seen in the percentage of students pursuing higher education (96% for the Class of 2016) which has been significantly higher than the state-wide percentage (about 70%). These students have also received several thousands of dollars in scholarships. The District offers sixteen advanced placement courses with about one-third of 11th and 12th graders taking them. Over the past few years, the District has had several students who were finalists, semi-finalists, and commended in the National Merit Scholars program. The budget process is driven by the number of students enrolled, and yields an instructional expenditures per student amount of $10,721 for 2016-2017. This amount has increased each year even with growing enrollment and includes only General Fund spending. Capital Projects Fund spending adds another $790 per student in 2016-2017. Capital spending supports the District’s one to one laptop / iPad initiative that provides direct access to technology by providing each student with their own laptops or iPad. This level of per student expenditures has allowed the District to continue providing the quality of education necessary to achieve the strong student performance Downingtown students have displayed. The District’s schools’ performance and student


108

achievement are among the highest in the state and have been nationally recognized. The District puts student achievement as a top priority, and based on strong performance data, the level of per student expenditures budgeted is appropriate. PSSA assessment One of the main student performance measures for Pennsylvania school districts is the PSSA assessment. The annual Pennsylvania System of School Assessment (PSSA) is a standards based criterion-referenced assessment used to measure a student's attainment of the academic standards while also determining the degree to which school programs enable students to attain proficiency of the standards. Every Pennsylvania student in 3rd through 8th grade is assessed in reading and math. In 2013 11th graders started taking a similar test called the Keystone Exam. There are four performance levels defined by the PSSA: Advanced, Proficient, Basic, and Below Basic. The District strives to enable its students to perform at the Advanced and Proficient levels. These higher levels are defined as follows: Advanced - The Advanced Level reflects superior academic performance. Advanced work indicates an in-depth understanding and exemplary display of the skills included in the Pennsylvania Academic Content Standards. Proficient - The Proficient Level reflects satisfactory academic performance. Proficient work indicates a solid understanding and adequate display of the skills included in the Pennsylvania Academic Content Standards. The percent of District students achieving advanced and proficient scores on the PSSA tests are seen on the following pages and compared to state percentages. SAT Test Another performance measure that the District uses to determine the success of its mission and strategies is the SAT test. The SAT test is a measure of the critical thinking skills needed for academic success in college. The SAT assesses analysis and


109

problem solving skills in three areas – critical reading, mathematics, and writing. Each areas is scored on a scale of 200—800. The test is typically taken by high school juniors and seniors. The average SAT test scores for the District’s students is shown on a following page and compared to state average scores. District Recognition and Communication The PSSA and SAT tests are key elements in the calculation of Pennsylvania’s School Performance Profile (SPP) score which provides the public with a comprehensive overview of student academic performance in every Pennsylvania public school building. The score is based on a 100 point system with 100 being the highest. The District’s three high schools had an average score of 95 in 2016. For grades 3 through 8, the tests included in the SPP calculation were significantly changed by the state in 2015 and are not comparable to the high school scores. The District’s two middle schools had an average score of 68, and the ten elementary schools and sixth grade center had an average score of 81. The District continues to be well respected by the community it serves and is seen as one of the top performing public school districts in the region and nationally. This is evidenced by a recent Washington Post ranking of high schools that ranked the STEM Academy as the number one high school in the state, with East high school number 21 and West high school number 31 in the state. The District as a whole was ranked 24th in the state out of 500 Districts by the Pittsburgh Business Times. Our communication efforts have allowed us to keep in close contact with all of our stakeholders. Our efforts include direct e-mailing of regular newsletters throughout the year, Superintendent communication with the public, and extensive web-site communication including blogs. These blogs on various issues have yielded tremendous feedback from parents, students, and taxpayers that let the District know what these stakeholders are happy with, what they would like to see changed, and what recommendations they may have. This feedback has allowed the District to feel that its stakeholders are generally very positive about the District’s performance. Perhaps the most important communication tool is the open culture in our schools among teachers, principals, students, and parents that promote effective communication to provide the best education possible.

110


Budget 2016-17

Performance Measurements

2014-15 and 2015-16 Grades 3-8 English Language Arts (ELA) PSSA Testing

% of DASD and PA State Students Advanced and Proficient

2014-15 was the first year of the new PSSA assessments. Prior years’ proficiency rates should not be compared to 2014-15 or 2015-16 results since the tests were not the same. This is as per the Pennsylvania Dept. of Education. In the chart above and charts that follow, “PA” is the state data and “DASD” is the District data.

62%

85%

61%

87%

59%

85%

59%

86%

62%

86%

62%

87%

61%

84%

62%

84%

59%

87%

62%

85%

58%

81%

58%

83%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014-15 2014-15 2015-16 2015-16

PA - ELA DASD - ELA PA - ELA DASD - ELA

Gr 3 Gr 4 Gr 5 Gr 6 Gr 7 Gr 8

111


Budget 2016-17


2014-15 and 2015-16 Grades 3-8 Mathematics PSSA Testing

% of DASD and PA State Students Advanced and Proficient

2014-15 was the first year of the new PSSA assessments. Prior years’ proficiency rates should not be compared to 2014-15 or 2015-16 results since the tests were not the same. This is as per the Pennsylvania Dept. of Education. In the chart above and charts that follow, “PA” is the state data and “DASD” is the District data.

49%

76%

54%

79%

45%

75%

47%

73%

43%

73%

44%

73%

40%

60%

41%

62%

33%

59%

37%

59%

30%

54%

31%

52%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2014-15 2014-15 2015-16 2015-16

PA - MATH DASD - MATH PA - MATH DASD - MATH

Gr 3 Gr 4 Gr 5 Gr 6 Gr 7 Gr 8

112


Budget 2016-17


Grade 11 Results

(2009-2012 PSSA and 2013-2016 Keystone Exams)

% of DASD Students Advanced and Proficient

Comparative State Percentages

Mathematics/Algebra I

2009 2010 2011 2012 2013 2014 2015 2016 DASD 70% 79% 83% 85% 84% 87% 88% 92%

PA 55% 60% 60% 59% 64% 64% 65% 68%

Reading/Literature

2009 2010 2011 2012 2013 2014 2015 2016 DASD 81% 82% 87% 89% 92% 95% 93% 95%

PA 65% 67% 69% 67% 75% 74% 73% 77%

70%

81%79%82%83%

87%85%89%

84%

92%87%

95%

88%93%92%

95%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

MATHEMATICS/ALGEBRA I READING/LITERATURE

2009 2010 2011 2012 2013 2014 2015 2016

113


Budget 2016-17


School Performance Profile (SPP) Building Level Academic Scores

2013 SPP 2014 SPP 2015 SPP 2016 SPP Beaver Creek El 86.3 78.4 2014-15 new 69.8 Bradford Heights El 96.1 85.2 PSSA 85.7 Brandywine Wallace El 88.7 94.3 Assessments 85.0 East Ward El 79.4 86.1 Grades 3-8 75.0 Lionville El 87.3 86.3 did not 86.7 Pickering Valley El 94.9 90.7 receive SPP 74.5 Shamona Creek El 97.7 90.4 94.6 Springton Manor El 94.5 97.0 84.3 Uwchlan Hills El 91.6 91.5 81.8 West Bradford El 91.8 83.5 88.3 Marsh Creek 6th Gr Not open Not open 65.9 Downingtown MS 91.2 90.9 70.4 Lionville MS 91.9 94.9 66.3 Downingtown HS East 95.5 97.3 93.8 90.7 Downingtown HS West 93.0 94.1 87.8 95.6 Downingtown STEM 101.4 101.4 99.1 98.3

The SPP score is intended to provide a comprehensive overview of student academic performance in every Pennsylvania public school building. The score is out of 100 points,

with additional points awarded for certain advanced test score rankings.

The underlying tests and grading benchmarks contributing to the SPP score were significantly changed by the state in 2015 for grades 3-8 which resulted in significant

changes in the SPP scores. Therefore scores prior to 2015 are not comparable to 2016 or comparable to the high school scores.

114


Budget 2016-17


DASD Mean SAT Scores

Comparative State Percentages Mathematics

2010 2011 2012 2013 2014 2015 2016 DASD 546 551 557 556 566 568 554

PA 483 481 480 480 504 504 no record

Verbal 2010 2011 2012 2013 2014 2015 2016

DASD 530 533 536 535 551 551 538 PA 473 473 471 470 497 499 no record

Writing 2010 2011 2012 2013 2014 2015 2016

DASD 524 524 535 527 550 548 530 PA 459 450 456 450 480 482 no record

The Scholastic Aptitude Test (SAT) is a standard college-board examination taken by students interested in pursuing higher education.

546530 524

551533 524

557536 535

556535 527

566551 550

568551 548554

538 530

MATHEMATICS VERBAL WRITING

2010 2011 2012 2013 2014 2015 2016

115


Budget 2016-17


% of DASD Graduates Pursuing Higher Education

Comparative State Percentages 2009 2010 2011 2012 2013 2014 2015 2016

DASD 91% 94% 92% 94% 90% 90% 89% 96% PA 75% 75% 75% 71% 67% 70% 73% no record

91%94% 92% 94%

90% 90% 89%

96%

2009 2010 2011 2012 2013 2014 2015 2016

116


Budget 2016-17


DASD Numbers of Dropouts

DASD Dropout Rates

Dropout Rate is calculated by dividing the number of dropouts per grade by the total enrollment for that grade.

Comparative State Dropout Rates (Before grade 10 through grade 12) 2009 2010 2011 2012 2013 2014 2015 2016

DASD 0.4% 0.3% 0.4% 0.5% 0.8% 0.4% 0.3% 0.2% PA 2.0% 1.8% 1.8% 1.9% 1.4% 1.6% 1.3% no record

0

5

10

15

20

25

30

Grade 12 Grade 11 Grade 10 Before Grade 10

2009 2010 2011 2012 2013 2014 2015 2016

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Grade 12 Grade 11 Grade 10 Before Grade 10

2009 2010 2011 2012 2013 2014 2015 2016


Students Eligible for Free and Reduced Meals

School

School

Enrollment

Total #

Free &

Reduced

% Free &

Reduced

School

Enrollment

Total #

Free &

Reduced

% Free &

Reduced

School

Enrollment

Total #

Free &

Reduced

% Free &

Reduced

School

Enrollment

Total #

Free &

Reduced

% Free &

Reduced

School

Enrollment

Total #

Free &

Reduced

% Free &

Reduced

Beaver Creek Elementary 451 79 17.5% 436 72 16.5% 421 69 16.4% 467 77 16.5% 469 64 13.6%

Bradford Heights Elementary 516 80 15.5% 511 77 15.1% 517 68 13.2% 506 64 12.6% 495 55 11.1%

Brandywine Wallace Elementary 521 17 3.3% 546 15 2.7% 478 14 2.9% 431 19 4.4% 382 14 3.7%

East Ward Elementary 571 108 18.9% 568 118 20.8% 564 129 22.9% 573 116 20.2% 561 83 14.8%

Lionville Elementary 660 83 12.6% 610 91 14.9% 600 88 14.7% 668 69 10.3% 636 61 9.6%

Pickering Valley Elementary 504 19 3.8% 480 14 2.9% 491 17 3.5% 677 21 3.1% 675 14 2.1%

Shamona Creek Elementary 609 19 3.1% 597 19 3.2% 578 16 2.8% 415 12 2.9% 463 13 2.8%

Springton Manor Elementary 500 42 8.4% 425 39 9.2% 433 32 7.4% 398 27 6.8% 433 16 3.7%

Uwchlan Hills Elementary 521 33 6.3% 497 32 6.4% 502 13 2.6% 528 4 0.8% 540 3 0.6%

West Bradford Elementary 606 45 7.4% 593 50 8.4% 582 47 8.1% 598 34 5.7% 598 17 2.8%

Total Elementary 5,459 525 9.6% 5,263 527 10.0% 5,166 493 9.5% 5,261 443 8.4% 5,252 340 6.5%

Marsh Creek Sixth Grade Center 1,033 105 10.2% 985 110 11.2% 1,047 90 8.6% 0.0% 0.0%

Downingtown Middle School 1,038 105 10.1% 974 93 9.5% 926 86 9.3% 1,352 136 10.1% 1,307 87 6.7%

Lionville Middle School 1,062 110 10.4% 1,093 107 9.8% 1,066 90 8.4% 1,610 103 6.4% 1,600 93 5.8%

Total Middle Schools 3,133 320 10.2% 3,052 310 10.2% 3,039 266 8.8% 2,962 239 8.1% 2,907 180 6.2%

Downingtown East High School 1,791 223 12.5% 1,723 218 12.7% 1,681 203 12.1% 1,618 175 10.8% 1,659 112 6.8%

Downingtown West High School 1,492 213 14.3% 1,459 208 14.3% 1,408 175 12.4% 1,468 167 11.4% 1,495 108 7.2%

STEM Academy 793 25 3.2% 793 29 3.7% 789 26 3.3% 767 13 1.7% 604 6 1.0%

Total High Schools 4,076 461 11.3% 3,975 455 11.4% 3,878 404 10.4% 3,853 355 9.2% 3,758 226 6.0%

Total All District Schools 12,668 1,306 10.3% 12,290 1,292 10.5% 12,083 1,163 9.6% 12,076 1,037 8.6% 11,917 746 6.3%

2016‐2017

not open not open

2015‐2016 2014‐2015 2013‐2014 2012‐2013

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Glossary

118

The District has tried to define or explain most terms in the document when they have been used. This glossary serves as a supplemental reference and contains definitions of certain terms used in the budget to provide a common understanding of financial accounting procedures for schools. The glossary is arranged alphabetically. Accounting System - The total structure of records and procedures which discover, record, classify, and report information on the financial position and operations of a school district or any of its funds, accounts, and organizational components. Act 1 - This Act places annual limits on the percentage increase in property taxes that the District can levy. The limit is equal to an inflationary index calculated each year by the State. When state gaming revenue is allocated to the District, it will also fund property tax reductions to homeowners. Act 511 - The local tax enabling act of 1965 that allows public school districts to levy certain taxes in order to obtain funding from local sources. For the District, these taxes include Occupation Tax, Earned Income Tax, and Real Estate Transfer Tax. Appropriation - An authorization granted by a legislative body to make expenditures and to incur obligations for specific purposes. An appropriation is usually limited in amount and as to the time when it may be expended. Assessed Value - The value placed on property, both land and building, by the Chester County Board of Assessment Appeals. This is the value upon which the District levies a property tax. Basic Education Subsidy – An amount of money provided by the state to help fund basic education expenditures of the District. Amount is determined by an allocation formula done at the state. Board Of School Directors - The elected or appointed body which has been created according to state law and vested with responsibilities for educational activities in a given geographical area. The District is governed by a Board of School Directors. Bond (or Note)- A written promise to pay specified amounts of money that have been borrowed. The repayment is at certain times in the future, and there is a principal and interest component to the amounts paid. The obligation to pay is backed by the taxing authority of the District. The proceeds (money borrowed) are primarily used to pay for capital projects and improvements. Budget - A plan of financial operation embodying an estimate of proposed expenditures for a given period or purpose and the proposed means of financing them.


Glossary

119

Budgetary Control - The control or management of the business affairs of the District in accordance with an approved budget with a responsibility to keep expenditures within the authorized amounts. Budget Owner – Person responsible for managing an assigned number of budgetary accounts. Budgetary Reserve - A budget account to provide for contingency expenditures. Capital Expenditures - Expenditures which result in the acquisition of, or addition to, fixed assets. Examples are expenditures for buildings, equipment, and substantial improvements to such assets. CLR – Common Level Ratio. Is the ratio of assessed value to current market value used in the county as last determined by the State Tax Equalization Board (see STEB definition). The ratio converts a property’s market value into an assessed value on which the property is taxed. Contracted Services - Labor, material and other costs for services rendered by personnel who are not on the payroll of the District. DASD – Acronym for Downingtown Area School District Debt Limit - The maximum amount of debt that the District is legally permitted to have outstanding. Limit is imposed by Pennsylvania state law on all local government units in the state. Debt Service - Repayment of all borrowings of the District (such as bonds) that includes both principal and interest. Dropout - A student who chooses to leave school before graduation without transferring to another school / institution. Encumbrances - Purchase orders, contracts, and/or other commitments, which are chargeable to an appropriation. Encumbrances are not liabilities and therefore are not recorded as expenditures until receipt of the goods or services. Encumbrances are used in the accounting records for budgetary control. ELA – English Language Arts. The area of curriculum teaching reading and writing. Expenditures - Charges incurred, whether paid or not paid, which benefit the current period.


Glossary

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Fiscal Year - A twelve month period of time to which the annual budget applies, and at the end of which, the District determines its financial position and results of its operations. Function - An expenditure account dimension used to denote the expenditure activity or service aimed at accomplishing a certain purpose. Examples include Regular Instruction Programs, Plant Operation and Maintenance, and Instructional Staff Services. Fund - A fiscal and accounting entity, with a self-balancing set of accounts recording cash and other financial resources. It also contains all related liabilities and residual equities or balances or changes therein. Fund Balance - The excess of assets of a fund over its liabilities and reserves. Fund Transfers - The transfer of funds from one fund to another. Levy - To impose taxes or special assessments. Mill - Property tax rate per thousand dollars of assessed value. One mill is equal to $1.00 per $1,000 of assessed value. Non-electoral Debt limit - the bonds or notes the District issues directly, without voter approval is non-electoral debt. The state prescribes a limit on the amount of such debt at 225% of the average net revenue of the District for the past 3 years. Object - An expenditure account dimension used to describe the service or commodity obtained as the result of a specific expenditure. Examples include Personnel Services, Professional Services, Supplies, and Property. PSERS – Acronym for Pennsylvania School Employees Retirement System. This is the pension plan for school employees that the District is required to contribute to. PSSA – Pennsylvania System of School Assessment. Standardized test that measures students’ proficiency in Math and English Language Arts. QSCB – Qualified School Construction Bond. Federally subsidized bonds that reimburse the District for most or all of the interest paid on the bonds. The District has about $30.3 million in QSCB bonds outstanding as of June 30, 2016. Revenue - Monies received from taxes, fees, state and federal subsidies, and other sources that are available to the District to fund expenditures.


Glossary

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SPP - School Performance Profile score which provides the public with a comprehensive overview of student academic performance in every Pennsylvania public school building. The score is based on a 100 point system with 100 being the highest. STEB – State Tax Equalization Board. The state agency that calculates a common level ratio (see CLR definition) for each county that is used to reflect the level of assessment in a county at a particular time. Taxes - Compulsory charges levied by a governmental unit for the purpose of financing services performed for the common benefit.

Downingtown Area School District Budget€¦ · 540 Trestle Place 610-269-8460 . Downingtown,...

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Transcript of Downingtown Area School District Budget€¦ · 540 Trestle Place 610-269-8460 . Downingtown,...