Northeastern School District

Preliminary Budget Presentation

2013-2014 School Year

The Bobcat Way: 100% of our students will graduate and be fully prepared for post-secondary education.

Preliminary BudgetDESCRIPTION 2013-14 BUDGET

SUMMARY

TOTAL REVENUE $55,743,313

- TOTAL EXPENDITURES $57,746,004

DIFFERENCE: (DEFICIT) $(2,002,691)

Ways to Balance Budget:Increase RevenueExpenditure Cuts

$ 374,478$ 550,514

Use of Fund Balance $ 0

TAXES: to Adjusted IndexAnd Retirement Exception

$ 715,000$ 400,693

DIFFERENCE: SURPLUS $ 37,994

Budget 2013-2014 Summary

• Revenue– Total increase of <$1M from 2012-13 (w/o tax increases).– Local

• Growth through higher assessed values is non-existent.• ES3 challenging district on LERTA and assessed value at -$900k.• Relying on millage rate tax increases to fuel revenue growth

– State• Partially offsetting employer retirement payments into PSERS.• State no longer supports cyber and charter school funding costs.

• Expenditures– Total increase of $2.8M– Total Salary increased $525k.– Gross Retirement cost increased $1.2M , net cost >500k.– Health insurance (after plan redesign) increased $72k– Debt Service budget increased >$600k.– We must continue to look for ways to reduce REOCCURING expenditures while maintaining a

quality education for our children. •

Budget 2013-2014 Summary

• Savings– No use of fund balance and no transfer of money into Capital

Reserve fund.– Have less than 2 weeks of savings left.

• Taxes– The school board approved a preliminary budget AND filed

for the retirement exception capping additional tax revenue at $1.1M and the possible millage rate increase to 3.5%.

– FIRST TIME district has filed for a tax exception to balance budget!

Revenue: Local $38,129,956

Revenue: State $18,185,793

Revenue: Federal $516,886

2013 -14 Revenue Categories

Revenue: Local

Revenue: State

Revenue: Federal

Salary $25,980,103

Benefits $13,072,121

Debt Service $5,905,594

Other $12,235,497

2013 -14 Expenditure Categories

Salary Benefits

Debt Service Other

Group Life Insurance; 33000; 0.3% Social Security; 2010738.53209

285; 15.3%

Retirement; 4449908.93442247; 33.9%

Tuition Reimbursement; 500000; 3.8%Unemployment Compensation; 105000; 0.8%

Worker's Compensation; 172500; 1.3%

Health Insurance; 5859602; 44.6%

2013 -14 Benefit Budget

Group Life Insurance

Social Security

Retirement

Tuition Reimbursement

Unemployment Compensation

Worker's Compensation

Health Insurance

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 B2012-13 B2013-14 PDE

-0.05

0

0.05

0.1

0.15

0.2

8.1%

13.4%

16.1%

9.7%

2.6%

7.5%

6.3%

-2.6%

4.3%

3.3%

8.3%

10.3%

13.4%

14.3%

8.7%

6.8%

4.9%

-2.5%

3.5%3.9%

Revenue vs. Expenditure Growth % - 10 year History

% rev growth % exp growth

Fund Balance: Total $ amount

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 B2012-13 B2013-14 PDE

-

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1,594,343

2,270,106

2,927,300

4,335,578

5,739,880

3,967,481

2,812,187

2,326,443

1,925,756 1,925,756 1,925,756

School Year

Fund

Bal

ance

Rem

aini

ng

TAXES: District Perspective

Real Estate Millage Increase based on assessed property value 1 mil = $1.3M in new reoccurring revenue

Adjusted Index +2.3%

Retirement ExceptionTo +3.5%

Additional Real Estate Revenue projected

Maximum new real estate revenue

$715,000 $400,693

$1,115,693

TAXES: Taxpayer Perspective

Real Estate Millage Increase based on assessed property value

$ 100k $ 150k $ 200k

Adjusted Index to 2.3%

Retirement Exception to 3.5%

Real Estate Tax bill (assuming AI + Ret Exc)

+$ 55

+$ 85

$2,511

+$ 82.50

+$127.50

$3,766.5

+$ 110

+$ 170

$5,022

Series1 $(4,500,000)

$(4,000,000)

$(3,500,000)

$(3,000,000)

$(2,500,000)

$(2,000,000)

$(1,500,000)

$(1,000,000)

$(500,000)

$-

$500,000

$31,817

$(2,497,679)

$(3,020,814)

$(4,029,630)

$(1,683,619)

$(2,193,624)

$(2,178,300)

3 YEAR BUDGET FORECASTImpact of Millage Rate Decisions on Deficit

No Tax Increase 0% TAXES INCREASE TO ADJ INDEX + RETIREMENT 3.5%

Ways to Balance Budget

REVENUE NEW REVENUE EXPLORATION IDEA

Governor's state budget proposal +1.7% BEF increase: +$208k

Local Real estate: New LERTA property New $20M business in EMT: +$70k

Aquatic Center Attract diving clubs: +$3kConsidering taking back pool from YMCA

Athletics Pay to play – proposal to committee: +$93k

Taxes (See later)

Expenditure ReductionsMAJOR EXPENDITURE COST CUTTING EXPLORATION IDEA

Salaries and Benefits Convert Full Day Kindergarten to ½ K: Board rejected this proposal to save $325k

Salary and Benefits: Administration Eliminated 1 Asst. Superintendent position: $150k

Salaries and Benefits: Professional Do not replace teacher retirements: $286k

Salaries and Benefits: Professional Program elimination of several positions: $126k

Salaries and Benefits: Classified Do not replace HS custodian resignation: $20kReplace Warehouse Coordinator’s retirement w/ ½ position in district: $18k

Benefits: Classified Increased Classified contribution to health insurance to reduce employer cost: +$20k

Technology Remove new phone request: $70k

Operations NO use of fund balance NO transfer to Capital Reserve fund: $175k

Salary , Benefits, and Operations Rolling Furlough: 1 day over 2 year: $140 each yr

Rolling Furlough• Shutdown for 1 school day in 2013-14 and 1

school day in 2014-15• Saves district $140k per year of reoccurring

savings• Amend (not open) professional contract

through an MOU to have 189 work and paid days and reduce the student days to 180.

• Amend calendar to have furlough last day of year after the clerical day

Final Thoughts• Financial:

– Revenue– Expenditures– Fund Balance– Taxation– Budget Forecast

Northeastern School District: One Family

• "Although the 2013-14 budget and forecasted upcoming budgets probably will require both tax increases and significant cost cutting to balance, Northeastern School District will balance its budgets while providing a quality education for all of our students." - Brian Geller, Director of Operations

• “Northeastern School District, in partnership with the community, is committed to provide a high quality education to our students while developing a fiscally responsible long-term plan. Achievement of this goal is only made possible by all stakeholders working together.” –Dr. Shawn Minnich, Asst. Superintendent of Curriculum & Instruction