North Penn School District · 2019. 6. 21. · 2018-19 Budget Update ... 3 Step Process Preliminary Proposed Final Final. 3 Step Process Preliminary Need for Exceptions Approved for

North Penn School District

2018-19 Budget UpdateFinance Committee

April 30, 2018

Budget Agenda

• Budget update

• Highlights of changes

• 5-year projections

• Direction on tax rate

• Next steps

3 Step Process

Preliminary

Proposed Final

Final

3 Step Process

PreliminaryNeed for Exceptions

Approved for $1,781,977

4/30Budget Presentation and Updates

Finance Committee MeetingDirection on Millage Rate

5/17 Adoption of Proposed Final BudgetBoard Action Meeting

6/21 Adoption of Final BudgetBoard Action Meeting

Budget Timeline

0%

$9.873 M Deficit Budget

5.70%

Budget Comparison

Fiscal Year Budget Revenues Expenses Surplus

(Deficit)

2018-2019 $251,736,589 $261,609,513 -$9,872,924

2017-2018 $247,856,963 $252,401,886 -$4,544,923

$ Change $3,879,626 $9,207,628 -$5,328,001

% Change 1.57% 3.65% 117%

Tax Scenarios

Tax Increase

Additional Revenue

Remaining Deficit

Average Homestead

Increase

0.00% $0.00 $9,872,924 $0

1.00% $1,727,386 $8,145,538 $36

2.00% $3,468,815 $6,404,109 $73

2.40% $4,149,939 $5,722,985 $87

2.90% $5,021,356 $4,851,568 $106

3.40% $5,891,368 $3,981,556 $124

+$848,160 Revenue Changes

Revenue Changes

• +$1.1 million - investment earnings

• +109,546 - basic education subsidy

• +$77,921 - additional tax base revenue

• -$155,000 - transportation subsidy

+$988,266 Expenditure Changes

Expenditure Changes

• -$456,050 - removed 5 elementary “class size” positions

• -$339,417 - final workers’ comp rates

• -$727,593 - 3rd look medical rates

• +$1,918,352 - 21 FTE new staffing requests

Budget Scenario 1

Current Budget Deficit -$9,872,924

Act 1Increase - 2.40% $4,149,939

Anticipated Retirements $1,000,000

Retirement Stabilization Fund $1,746,621

Revised Deficit $2,976,364

Budget Scenario 2

Current Budget Deficit -$9,872,924

Act 1 + Exceptions Increase - 3.40% $5,891,368

Anticipated Retirements $1,000,000

Retirement Stabilization Fund $1,746,621

Revised Deficit $1,234,935

Fund Balance Breakdown 6/30/17

Description Amount

Nonspendable (inventory & prepaid items) $567,199

Assigned for self-funded insurance $2,700,000

Committed to PSERS $16,906,187

Unassigned (8.00%) $20,844,091

Total Fund Balances $41,017,477

5-Year Projections

• 2018-19 base year + 5 years

• Interactive

• Built on a series of assumptions

• Impact on fund balance

5-Year Projections

• 5 scenarios

• Baseline, no new major initiatives

• $125 million borrowing, 10-year term

• $125 million borrowing, 15-year term

• Full-day kindergarten 2019-20

• Full day K, $125 million, 10-year

5-Year Projections

• Assumptions

• 0.40% increase to tax base

• Act 1 index increase in taxes each year

• Projected PSERS rate

• 2.75% increase in salaries net of new positions and retirements

5-Year Projections

• Assumptions

• 5.0% increase in medical benefits

• 10 new school buses per year

• No new charter schools in district

• No new leases

• Continuation of digital initiative

5-Year Projections

• Assumptions

• Inflationary increase for most other items

• Existing debt schedules except for new borrowing

Projection 1 - Benchmark

Fiscal Year Tax Increase Annual Surplus (Deficit)

Ending Total Fund Balance

2018-19 2.40% ($4,997,179) $35,453,099

2019-20 2.70% ($4,236,699) $31,216,400

2020-21 2.80% ($3,171,270) $28,045,130

2021-22 3.30% $207,555 $28,252,685

2022-23 3.40% $1,176,808 $29,429,493

2023-24 3.40% $2,578,141 $32,007,634

Projection 2 - 10-year Borrowing

Fiscal Year Tax Increase Annual Surplus (Deficit)

Ending Total Fund Balance

2018-19 2.40% ($4,997,179) $35,453,099

2019-20 2.70% ($4,338,276) $31,114,823

2020-21 2.80% ($5,330,002) $25,784,821

2021-22 3.30% ($9,543,164) $16,241,657

2022-23 3.40% ($10,800,494) $5,441,163

2023-24 3.40% ($9,397,439) ($3,956,276)

Projection 3 - 15-year Borrowing

Fiscal Year Tax Increase Annual Surplus (Deficit)

Ending Total Fund Balance

2018-19 2.40% ($4,997,179) $35,453,099

2019-20 2.70% ($4,338,276) $31,114,823

2020-21 2.80% ($5,371,952) $25,742,871

2021-22 3.30% ($4,269,480) $21,473,391

2022-23 3.40% ($4,659,343) $16,814,048

2023-24 3.40% ($3,258,289) $13,555,759

Projection 4 - Full-day K

Fiscal Year Tax Increase Annual Surplus (Deficit)

Ending Total Fund Balance

2018-19 2.40% ($4,997,179) $35,453,099

2019-20 2.70% ($6,285,990) $29,167,109

2020-21 2.80% ($5,292,968) $23,874,141

2021-22 3.30% ($1,989,017) $21,885,124

2022-23 3.40% ($1,098,637) $20,786,487

2023-24 3.40% $224,337 $21,010,824

Projection 5 - Full-day K +10

Fiscal Year Tax Increase Annual Surplus (Deficit)

Ending Total Fund Balance

2018-19 2.40% ($4,997,179) $35,453,099

2019-20 2.70% ($6,387,567) $29,065,532

2020-21 2.80% ($7,451,700) $21,613,832

2021-22 3.30% ($11,739,736) $9,874,096

2022-23 3.40% ($13,075,939) ($3,201,843)

2023-24 3.40% ($11,751,243) ($14,953,086)

Tax Scenarios

Tax Increase

Additional Revenue

Remaining Deficit

Average Homestead

Increase

0.00% $0.00 $9,872,924 $0

1.00% $1,727,386 $8,145,538 $36

2.00% $3,468,815 $6,404,109 $73

2.40% $4,149,939 $5,722,985 $87

2.90% $5,021,356 $4,851,568 $106

3.40% $5,891,368 $3,981,556 $124

Next Steps

• Final staffing recommendations

• Retirement savings

• Update data based on new information

• Lock in budget next week

Discussion