Presentation Transcript

1. 2011-2012 Budget

2. Stakeholder Takeaways The decline in real-estate assessed values impacts tax levy by $104,000 Federal and state subsides are declining; mandates are increasing Community engagement and participation are critical in order to ensure the long-term educational and financial success of our school district Beyond 2011-2012, there will be pressure on our district to identify even greater efficiencies that offset the costs of state pension increases, facility upgrades, and possible further declines in property values
3. 2011-2012 BudgetRevenue Strategies The district is committed to develop opportunities to support non-basic education with sustainable funds Fundraising Admission fee to sporting events, etc. Endowments/sponsorships Advertising from local merchants Facility rental Parking fees
4. Ten-Year History of Tax and Expenditure Budget Increases Year Tax Increase Budget Increase 1999-2000 4.9% 5.0% 2000-2001 n/a 5.8% 2001-2002 4.6% 6.3% 2002-2003 5.0% 7.0% 2003-2004 5.3% 5.3% 2004-2005 4.8% 5.1% 2005-2006 4.9% 7.1% 2006-2007 5.8% 6.8% 2007-2008 5.0% 6.4% 2008-2009 7.0% 3.5% 2009-2010 3.9% 3.5% 2010-2011 2.9% 1.9%
5. History of RTSD Interest Earnings update
6. History of RTSD Debt Service Payments
7. The PSERS Pension Dilemma Increases all Pa. districts share through 2015 2011-2012: 3.5%, increase of 12.15% 2012-2013: 4.5%, increase of 16.65% 2013-2014: 4.5%, increase of 21.15% 2014-2015: 4.5%, increase of 25.65%
8. Radnor’s PSERS Pension Dilemma *Districts must budget 100% of the expenditure and receive 50% back as revenue annually Increases for Radnor through 2015 2011-2012: 8.65% = $122,344 2012-2013: 12.15% = $1,412,045 2013-2014: 16.65% = $1961,555 2014-2015: 21.15% = $2,074,958 2015-2016: 28.65% = $2,170,315
9. Other Districts2011-2012 Proposed Tax Increases 3.5% 1.9% 1.4% 0-5.26% 7.2% 5.5% 4.5% 4.2% 3% 2.7% 2.3% Pennsbury Central Bucks Hatboro Horsham Quakertown New Hope-Solebury Marple Newtown Chichester Tredyffrin-Easttown Springfield (Delco) Penn Delco Garnet Valley
10. Goals 2011-2012 Goal 1To review and revamp (where necessary) the entire budget procedure from initial distribution of budget packets to buildings and departments through final adoption by the RTSD Board of School Directors Goal 2 To assess existing operational programs for efficiency and cost effectiveness Goal 3To review and revamp administrative and board reporting procedures for purposes of developing dashboard approach to formulating and presenting pertinent information on a standard monthly basis
11. Proposed Preliminary Budget The initial run of the 2011-12 general fund proposed preliminary budget indicates: Projected revenues $77,661,981 Projected expenditures $78,652,388 At this point, expenses exceed revenues by $990,407, assuming a 1.4% mill tax increase per the Act 1 index level. Total millage increase permitted for RTSDunder Act 1 is .2857 mills
12. Expenditures Salaries projected to increase by $1,668,993, representing a combination of anticipated salary increases at index level of 1.4% and existing and proposed contract offers presently in place. Fringe benefit costs projected to increase from 8.22% to 8.65%, with an additional 1.35% budgeted for future PSERS increases for a total of 10%. District’s share of employee insurance anticipates an increase of 15%. (Employer share of retirement contributions is determined annually by PSERS.) Books and supplies remain at 2010-11 budgeted levels.
13. Expenditures Operations and transportation utility and fuel requests are budgeted to increase by $33,000. Significant adjustments to utility and fuel costs in prior budgets are responsible for this modest increase. Fund transfers to the technology and the capital reserve funds are budgeted at $2,177,000. Capital requests represent a combination of fund balance ($615,000) and the 2011-12 operating budget ($562,000). The request for technology funding was set at $1 million and is coming totally from fund balance. Use of fund balance for both transfers is in compliance with GAAP (Generally Accepted Accounting Principals).
14. Expenditures Debt service obligations remains constant from 2010-11 budgeted levels, with the exception of the new 2010 debt, which was based on an estimate for the current 2010-11 budget. Expenditures for DCIU programs are based on current budget levels and will be adjusted as the IU provides actual estimates sometime in February. Overall 2011-2012 expenses are increasing by $2,706,600 (3.56%) over the existing 2010-2011 budget
15. Expenditures by Account2011-2012
16. Expenditures by Major Category2011-2012
17. Expenditures Unknowns as of January 15, 2011 One unresolved labor contract Medical insurance Educational expenses (DCIU) Utilities
18. Revenues The proposed preliminary budget raises the millage to the level of the Act 1 index, which is 1.4% for 2011-12. In RTSD’s case, this allows for a millage increase of .2857 mills, translating to $866,366 in additional real-estate tax revenues. The millage rate is also impacted by a decrease in assessed values of $5,099,111. This translates to lost revenue in the amount of $104,065 at the current millage rate. The 2011-12 budget assumes that 97% of all billable taxes will be collected during the 2011-12 budget year.
19. Revenues Overall budgeted revenues for 2011-12 were changed to better reflect the decrease in receipt levels due to the economic downturn we have experienced over the past year. This will be revisited later in the year as the full picture of the impact becomes fully known.
20. Revenues State subsidy revenue was estimated in the absence of the governor’s proposed budget, which will not be released until March. As a result the proposed preliminary budget assumes that the basic subsidy level will decrease by $200,000, as federal stimulus funding disappears. Assumption was also made that the other state subsidies will remain at 2010-11 budgeted levels. These are very conservative projections and will be adjusted once the governor announces his budget proposals.
21. Revenue Sources2011-2012
22. Revenue Unknowns as of January 15, 2011 State subsidies Grants (federal & state) Interest rate Transfer taxes Interim real-estate taxes
23. What’s Next? The budget must be adopted by February 15, 2011. A special meeting of the board has been set for 8 p.m. Tuesday, Feb. 8, for purpose of adopting the 2011-2012 proposed preliminary budget per the requirements set forth in Act 1.
24. RecapRealities of the 2010-2011 Budget The Act I index is 1.4%, which will yield about $866,366 in additional revenue The decline in state and national economies has resulted in unprecedented reductions to public education funding and is expected to continue under the Corbett administration Expenses are increasing at a rate that exceeds declining revenues
25. Budget to Level of Index Scenario 1 2010-2011 2011-2012 Prop. Prelim. Budget Budget = $75,945,788 Value of a mil = $3,037,375 No. mils in place = 20.8681 Tax increase = 2.9% Expenditure increase = 1.9% Budget = $78,652,388 Value of a mil = $3,032,433 No. mils in place = 21.1440 Tax increase = 1.4% Expenditure increase = 3.56% Budget gap = $990,407
26. Exceptions 26 A school district that adopts a preliminary budget with real-estate taxes that exceed its index may seek approval for referendum exceptions to increase tax rates by more than its adjusted index. Section 333 of Act 1 provides for 10 exceptions: three must be approved by the Court of Common Pleas and seven require approval by the Pa. Dept. of Education. For the 2011-2012 budget, Radnor may apply for exception in the areas of: Cost to implement a court order ($104,065) Retirement contributions ($122,344) Grandfathered debt ($190,905) Maintenance of local revenue or actual instruction expense ($1,331,323) Estimated total: $1,751,022
27. Budget to Level of Index + ExceptionsScenario 2 2010-2011 2011-2012plus exceptions Budget = $75,945,788 Value of a mil = $3,037,379 No. mils in place = 20.8681 Tax increase = 2.9% Expenditure increase = 1.9% Budget = $79,537,044 Value of a mil = $3,032,433 No. mils in place = 21.7214 Provides for an estimated $1,751,022 in additional real-estate tax revenues
28. Budget with No Tax Increase Scenario 3 2010-2011 2011-2012Proposed Prelim. Budget Budget = $75,945,788 Value of a mil = $3,037,379 No. mils in place = 20.8681 Tax increase = 2.9% Expenditure increase = 1.9% Budget = $78,652,388 Value of a mil = $3,032,433 No. mils in place = 20.8583 Tax increase = 0% Budget gap = $1,856,773
29. Summary 29
30. How to Close the Budget Gap
31. Questions?