Solanco School DistrictPreliminary Budget Work
For 2013-14FY 2011-12 Close outFY 2012-13 in Process
FY 2013-14 Preparation and PlanningNovember 5, 2012 Board Session
Multi-Year Planning and Perspective• 2011-12 Fiscal year End and Audit
completion...finalization December / January Board meeting....end point = starting point
• Current 2012-13 Fiscal year up and running; new CBA, optional QHDHC program, student testing changes, Keystones, virtual and on-line programs, charter reforms, athletic reporting, February Governor’s budget address for 2013-14 –What’s next?
Multi-Year Planning and Perspective (2)
• Budget formation already started with staff for 2013-14;
• Board extended session Nov. 5, 2012• 2014-15 and beyond: Health Care,
Pension, State funding and education policy, local revenues, general economy....
• Deliver Services to the Community.
Fiscal Year Financial Results: Preliminary 2011-12 Audit Highlights
• Fund Balances:– Total – Deficit for the FY was $76,610
• Revenues = $44,420,679• Expenditures = $44,497,289• Deficit = $76,610
• Budgetary Structure for 2011-12 was $1.8M
• Budgetary Structure for 2012-13 is $2.02M
Fiscal Year Financial Results: Selected 2011-12 Audit Highlights
• Expenditures:– Total - Reduced year over year by $211,400 – Salaries - Reduced year over year by $307,700– Benefits – Reduced year over year by $350,000– Other Purchased Services - (e.g. Tuition for Special
Education and Charters) Increased year over year by $277,500
Fiscal Year Financial Results: Selected 2011-12 Audit Highlights
• Revenues:– Total - Increased year over year by $23,294– Earned Income Tax: Increased year over year by
$884,000 [approx. $300K was a one time prior years distribution] [From $4.9M to $5.4M ]
– Transfer taxes: Increased year over year by $30,000 [total is above 2008-09 FY level]
– Interest Earnings: Decreased year over year by $20,000 [Down from $594,000 in 2008]
2013-14 Preliminary Budget Work:Keeping the Main things in front....
• Solanco’s Act 1 Base property tax increase cap is 2.0%
• Pension Rate grows by 4.31% of payroll, the largest increase to date...2014-15 is 4.51%
• Solanco’s 2013-14 Act 1 cap does not cover the pension increase...Exceptions
• Salaries, Benefits, Special Education
• Assuming Zero from the State in additional revenue...
• ...Except for State share of the pension increase
• Cost Pressures expected due to additional & continued mandates
• Federal funds; Sequestration & Jan 1 2103 tax code
• Revenue overall trend...
Déjà vu
PENSION---PSERS
Last Year’s Slide ------Expenditures: Budget Assumptions
• Salaries in total remain flat from 11-12 to 12-13
• State mandated Pension Employer Cost Rate (ECR) grows from 8.65% to 12.36% of payroll [+3.71% of pyrl]
This Year ------Expenditures: Budget Assumptions
• Salaries in total remain flat from 12-13 to 13-14
• State mandated Pension Employer Cost Rate (ECR) grows from 12.36% to 16.67% of payroll [+4.31%]
• State Share remains intact
Pension
11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
8.65%
12.36%
16.69%
21.18%
23.66%24.50%
25.27%26.24%
26.96% 26.96%
Total Employer Contribution Rate % : As Per Act 120 December 2010
Above the line and below the line: Act 120 Collars are in Play up to
2014-15• Pension Rates --- Years from 2015-16 and
beyond... Unknown....
–Most likely understated....revisions (by the Actuaries) will be made in December
2012.
Pension: Rate times SalaryFiscal Year
Employer cost rate
Pension ECR:
Projected FY Percent increase
Gross % of Payroll
Increase
Payroll Actual and Estimated
Mandated Pension
Payments
2010-11 5.64% 17.99% 0.86% 21,472,833 1,211,068
2011-12 8.65% 53.37% 3.01% 21,165,171 1,830,787
2012-13 12.36% 42.89% 3.71% 21,100,000 2,607,960
2013-14 16.67% 34.86% 4.31% 21,150,000 3,525,494
2014-15 21.18% 27.06% 4.51% 21,150,000 4,479,570
2015-16 23.66% 11.71% 2.48% 21,450,000 5,075,070
2016-17 24.50% 3.55% 0.84%
2017-18 25.27% 3.14% 0.77%
2018-19 26.24% 3.84% 0.97%
2019-20 26.96% 2.74% 0.72%
2020-21 26.96% 0.00% 0.00%
Mandated Pension
Payments
FY Pension Increase
FY
1,211,068 213,106 2010-11
1,830,787 619,720 2011-12
2,607,960 777,173 2012-13
3,525,494 917,534 2013-14
4,479,570 954,077 2014-15
5,075,070 595,500 2015-16
Solanco SD: Budget Impact
$458,767
NET
PROPERTY TAX
So far, Good Trend
1,790,000,000
1,795,000,000
1,800,000,000
1,805,000,000
1,810,000,000
1,815,000,000
1,820,000,000
1,825,000,000
1,830,000,000
1,808,469,000
1,799,842,500
1,823,817,900
Solanco: Taxable Assessment Trend
Pension v. Property Tax
Pension Increase Net 458,767
1% Property tax yields 196,650
Equivalent % Property tax to cover Pension
Increase 2.33
Assumes $1,825 B assessment
Building the 2013-14 Budget:Two Years out from Completion
Current Mills 2012-13
11.2243 11.2243 Current Mills 2012-13
Minimum Increase to
Cover Pension 2.33% 2.60%
Target: Requires .6% in
Exceptions
Mill Increase 0.2619 0.2918 0.0300
Tentative Mills 2013-14 11.4862 11.5161 0.0300
Solanco 2013-14 Act 1 Cap at 2.0% - Revised PDE methodology from prior 7 years lowered
the Index with 3 year SAWW averaging
Earned Income Tax
So far, Better than Good trend...
Approx. $300K One time funds in 11-12
Approx. $600K one time funds in 12-13
Actual Actual Actual Budgeted Estimated Budget
Fiscal Year 2009-10 2010-11 2011-12 2012-13 2012-13 2013-14Amount 4,756,179 4,888,591 5,772,632 5,100,000 5,600,000 5,400,000
Increase $'s 132,412 884,041 500,000 (200,000)
Increase % 2.784% 18.084% 9.804% -3.57%% Over Budget %Over Estimated
Earned Income Tax
Actual to Actual
HEALTH CARE
Multiple Plans and Issues• Results from efforts--Health Care Cost Growth
Trend Reduced– 2.78% actuarial rate increase for 2012-13...prior years
were at double digit.– Optimistic, but cautious of rebound
• Near Term & Forward Planning – In Process– QHDHCP implementation January 2013– January 2014 increase deductible; adjust co-pays– January 2015 additional Co-pay adjustments
• Future -- PPACA – Excise Tax 2018; 30 hour staff; Exchanges ??? ( $’s from Early Ret?)
Additionally, On the Watch List...
• Special Education costs and contracts– Recent Senate bill passed to revise Special Education
funding – prospective only as written• Continued State tinkering on funding shares (i.e.
district state revenue) of long embedded programs (Transportation, Social Security, Pension, Plan Con debt reimbursement, BEF)
• Federal Programs and Fiscal shut down threat– IDEA [Special Education]– Title I– Other....economy in general, and payroll tax
• Property Tax; Act 1, Assessments, appeals, County Re-assessment....
Awareness....• Continued mandate driven cost increases• Continued state policy efforts to constrict
Board of Education funding authority• Continued policy efforts to increase student
accountability measures• Increasingly complex / conflicting / costly
reporting requirements...all dependent on IT processes and systems
• PDE restricted exception approval process
Bottom Line• 2011-12 FY end is in good shape...provides
improved base to manage 2012-13• 2012-13 issues one year closer, improvement
for operational needs in planning 2013-14.• A lot of work----Prior actions & efforts, solid
implementations have had positive impact --- student side and fiscal side ---good results
• Clearly, many things in motion and cost pressures remain in the forefront
NEXT STEPS
• 2012-13 Estimate work – ongoing through June• 2013-14 December 4 -Department and Building budget
sessions are held• 2013-14 Continue Budget Work For December 10 board
review • 2013-14 December 17 Preliminary Action• 2013-14 January / Early February ----Final Preliminary
Budget adoption• 2013-14 May – Preliminary Final • 2013-14 June – Final Budget
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