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BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT

BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT. March 14, 2007 Pocantico Hills PTA Meeting. 2007-2008 SCHOOL BUDGET. A school budget is a financial plan created to support the operation of the school system and the delivery of the educational program.

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BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT

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  1. BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT March 14, 2007 Pocantico Hills PTA Meeting

  2. 2007-2008 SCHOOL BUDGET • A school budget is a financial plan created to support the operation of the school system and the delivery of the educational program. • The budget process begins in November with a workshop with the staff.

  3. 2007-2008 SCHOOL BUDGETSignificant Budgetary Considerations • Impact of Tax Certiorari Claims/Settlements • Changes in Assessed Valuation • Transportation • BOCES and purchase of replacement buses, or Bid for new service • Incarcerated Youth • Increase in allocation/increase in resulting state aid

  4. 2007-2008 SCHOOL BUDGETSignificant Budgetary Considerations • Health Insurance Increases • Salary Increases • Retirement Cost Increases • Workers Compensation/Liability Insurance Cost Increases • High School Tuition Increases

  5. 2007-2008 March 6, Draft # 1 Budget$22,284,194 • The Initial Draft Budget provides for: • Budget to Budget Increase of 9.28% • Projected Tax Rate Increase: • With Tax Certiorari Claims: Greenburgh 18.72% Mt. Pleasant 18.20% • Without Tax Certiorari Claims: Greenburgh 7.50% Mt. Pleasant 7.03%

  6. 2007-2008 March 12 Draft # 2 Budget$21,830,565 • Draft # 2 Budget dated March 12, 2007 provides for: • Budget to Budget Increase of 7.05% • Projected Tax Rate Increase: • With Tax Certiorari Claims: Greenburgh 16.34% Mt. Pleasant 15.83% • Without Tax Certiorari Claims: Greenburgh 5.35% Mt. Pleasant 4.88%

  7. 2007-2008 March 12 Draft # 3 Budget$22,041,265 • Draft # 3 Budget dated March 12, 2007 provides for: • Budget to Budget Increase of 8.09% • Projected Tax Rate Increase: • With Tax Certiorari Claims: Greenburgh 17.09% Mt. Pleasant 16.57% • Without Tax Certiorari Claims: Greenburgh 6.02% Mt. Pleasant 5.55%

  8. WHERE EVERY REVENUE DOLLAR COMES FROM 2007-08 $22,041,265

  9. Tax Rate Comparison 2007-2008 Budget Development School True Value Taxes on District Tax Rate $500,000 Index 1 19.08 $9,540 2.69 10 15.75 $7,875 2.22 20 14.64 $7,320 2.06 30 12.46 $6,230 1.75 40 10.56 $5,280 1.49 45 8.78 $4,390 1.24 Pocantico 7.10 $3,550 1.00

  10. Tax Certiorari and Assessment Changes • A Tax Certiorari Change Comes About as a Result of a Commercial Property Owner Claim That Their Property Assessment is Too High, and Therefore Their Tax Bill is Too High. • Court Ordered Judgments to Reduce The Assessment of A Commercial Property, Plus Refunds of Taxes Overpaid in Prior Years Affects the School Tax Rate Negatively. • In 2006-2007 the District Settled Cases Originating in 2000 and 2001. • The Board of Education Hired a Defense Team to Address These Tax Certiorari Claims Saving the School District Hundreds of Thousands of Dollars

  11. Assessed Valuation Mt. Pleasant Greenburgh 2003-04 16,715,484 41,933,416 2004-05 16,631,073 41,723,576 2005-06 16,248,572 40,879,798 2006-07 15,870,156 40,827,504 2007-08 est. 15,274,065 35,001,691 06-07/07-08 Change (596,091) (5,825,813) Tax Rate Impact: 11.22% 11.17%

  12. Assessed Valuation Mt. PleasantBefore Changes Affecting 2007-2008

  13. Assessed Valuation Mt. PleasantAfter Tax Certiorari Claim SettlementsDecrease of $596,091

  14. Assessed Valuation – Greenburgh Before Changes Affecting 2007-2008

  15. Assessed Valuation – GreenburghAfter Tax Certiorari Claim SettlementsDecrease of $5,825,813

  16. Contingency Budgets Single revote: Upon the defeat of the original proposed school budget, a district may resubmit the original budget, submit a revised budget, or adopt a contingency budget. If the voters fail to approve the budget upon the second vote, the district must adopt a contingency budget. Expanded definition: Interscholastic athletics, field trips, other extracurricular activities, and related transportation expenses are contingent expenses.

  17. Contingency Budgets Administrative cap: The administrative component of a contingency budget will be limited to the lesser of: 1) the percentage of the administrative component in the prior year’s budget or 2) the percentage of the administrative component in the last defeated proposed budget. Cap on total spending: Total spending under a contingency budget may not increase by more than 120 % of national CPI or 4.00%, whichever is lower. For 2007-08 the cap is 3.84 %.

  18. 2007-2008 Contingency Budget • How the contingency/austerity budget cap is calculated: • 2006-2007 Adopted Budget $19,916,971 • Less Debt Service $( 489,309) • Adjusted Base Year Budget $19,427,662

  19. 2007-2008 Contingency Budget • How the maximum contingency/austerity budget cap is calculated: • Adjusted Base Year Budget $19,427,662 • Adjusted Budget x 120% of CPI 3.84% $20,173,684 • Debt Service $ 538,175 • Growth Related Expenditures $ 726,925 • Maximum Contingency Budget $21,438,784 • Required Budgetary Cuts $ 602,481 • Projected Tax Rate Increase: Greenburgh: 15.91% Mt. Pleasant: 15.40%

  20. Possible Areas of Expense Reduction • Summer Camp/Swim Program • Student Supplies • Community Use of Buildings and Grounds • Certain Equipment • Software • Staff • Technology • Overtime • Field Trips

  21. Tax Rate Table BUDGET AMOUNTIMPACT ON TAX RATE $ 100,000 .67% $ 148,000 1.00% $ 250,000 1.68% $ 500,000 3.35% $ 770,000 5.16% $ 1,000,000 6.73%

  22. 2007-2008 Budget Questions/Answers • How was this school budget prepared differently from prior years? This year the district the is seeking input from the community prior to the Board’s adoption of the budget on April 10, 2007. • How much will the budget and tax rate increase? The budget to budget to increase is projected to be 8.09%. The projected tax rate increase for Greenburgh is 17.09%, and the tax rate increase for Mt. Pleasant is projected to be 16.57%.

  23. 2007-2008 Budget Questions/Answers • Why is the projected tax rate increase so high? The reason that the projected tax rates are so high is because of a sudden and significant drop in the district’s assessed valuation of 5,825,813 in Greenburgh, and 596,091 in Mt. Pleasant. The district’s assessed valuation is part of the formula that divides the property tax levy among all residents and commercial properties in the district. As the assessed valuation drops, the rate that tax payers will pay increases, even if there is no change in the amount that the school district spends.

  24. 2007-2008 Budget Questions/Answers • Why is the projected tax rate increase so high? Continued For example, if there were no change to the district’s assessed valuation, then the projected tax rate for Greenburgh would be 6.02%, and for Mt. Pleasant would be 5.55%. So, if the school budget did not increase at all, and if revenue was exactly the same as it was in the last year, the tax rate increase would still be approximately 11% as result of the decrease in the district’s assessed valuation.

  25. 2007-2008 Budget Questions/Answers • Why has the assessed valuation of the district decreased? The assessed valuation of the district decreases primarily as a result of tax certiorari claims, and settlements.

  26. 2007-2008 Budget Questions/Answers • How much would need to be cut from the budget to have a zero % tax rate increase? A cut of approximately $150,000 in the budget is equivalent to a 1% decrease in the tax rate. Therefore, $1,650,000 would need to be cut from the budget to achieve a zero percent tax rate increase.

  27. 2007-2008 Budget Questions/Answers • What is a tax certiorari claim? A tax certiorari change comes about as a result of a commercial property owner claim that their property assessment is too high, and therefore their tax bill is too high. Court ordered judgments reduce the assessment of a commercial property, plus provide for refunds to the commercial property owner for the taxes they have overpaid in prior years.

  28. 2007-2008 Budget Questions/Answers • What is a tax certiorari claim? In 2006-2007 the District Settled Cases Originating in 2000 and 2001. The Board of Education Hired a Defense Team to Address These Tax Certiorari Claims Saving the School District Hundreds of Thousands of Dollars

  29. 2007-2008 Budget Questions/Answers • How much has the budget increased over 2006-2007, and what areas have expenditures increased in the most? The largest increase in the budget is brought about by increases in the cost of tuition for our high school students. Salary and health insurance, worker compensation and social security increases, contractual increases and the increased cost of the incarcerated youth program are the major forces in the overall budget increase of $1,645,888. Please note that the incarcerated youth program generates revenues completely offsetting the program cost, therefore no tax rate increase is associated with this program.

  30. 2007-2008 Budget Questions/Answers • How much discretion does the School Board have over the reducing the draft budget? Approximately 94.5% of the budget would be considered to reflect mandated costs. Approximately 5.5% would be non mandated. Some of the non mandated items include instructional and non instructional equipment, salaries, technology, textbooks, instructional supplies, summer day camp, after school program, and community swim program.

  31. 2007-2008 Budget Questions/Answers • How does the district plan to inform the community about the budget? The district has prepared a communication plan which can be found on the district’s website www.pocanticohills.org. Budget presentations will be made at each budget workshop to ensure that a resident missing one or more budget work sessions will not miss part of the description of the budget. A The district’s administration will make two PTA presentations, one to solicit input before the budget is approved, and one after the budget is approved by the board. All PowerPoint presentation and other documentation will be posted to the district’s website. Budget presentations will also be provided to the teaching staff, students, and school foundation.

  32. 2007-2008 Budget Questions/Answers • What will happen if the community does not approve the school budget on May 15, 2007? State law provides that the Board of Education can if it wishes resubmit the same or a different budget to the community for approval once. If it is disapproved by the community again, or the Board of Education decides not to resubmit the budget, the school district will operate on a contingency budget basis.

  33. 2007-2008 Budget Questions/Answers • What is a Contingency budget, how does it affect the school district, and what will the tax rate increase be under a Contingency budget? Under a contingency budget State law places a spending cap on the budget, with a few exceptions for debt costs, costs associated with enrollment growth etc. The spending cap for 2007-2008 will be 3.84% Therefore, under a contingency budget the Board of Education would need to reduce the budget by $602,481.

  34. 2007-2008 Budget Questions/Answers • What is a Contingency budget, how does it affect the school district, and what will the tax rate increase be under a Contingency budget? Continued On a Contingency budget the tax rate increase projected for Greenburgh is 15.91%, and for Mt. Pleasant it is 15.40%.

  35. Possible Areas of Expense ReductionUnder a Contingency Budget • Summer Camp/Swim Program • Student Supplies • Community Use of Buildings and Grounds • Certain Equipment • Software • Staff • Technology • Overtime • Field Trips

  36. 2007-2008 Budget Questions/Answers • What are the key dates remaining in the budget development process? • March 26, 2007 Board of Education Meeting • April 10, 2007 Board of Education Meeting – Adoption of Proposed Budget • April 16, 2007 Last Day to File Petitions for Board of Education and Propositions

  37. 2007-2008 Budget Questions/Answers • What are the key dates remaining in the budget development process? Continued • April 18, 2007 PTA Budget Presentation • April 25, 2007 PTA Meet the Candidates Night • May 7, 2007 Budget Hearing • May 15, 2007 Budget Vote 6:00a.m. – 9:00 P.M. School Library

  38. BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT

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