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