2020-21 ANNUAL BUDGET January 6, 2020 2020-21 ADMINISTRATIVE BUDGET - PowerPoint PPT Presentation

NORRISTOWN AREA SCHOOL DISTRICT 2020-21 ANNUAL BUDGET January 6, 2020

2020-21 ADMINISTRATIVE BUDGET GOALS GOAL #1 GOAL #3 GOAL #2 DEVELOP BUDGET THAT DEVELOP BUDGET THAT DEVELOP BUDGET THAT DOES NOT REQUIRE A DOES NOT RELY ON DOES NOT REQUIRE TAX INCREASE BEYOND FUND BALANCE AS STAFF FURLOUGHS OR OUR ACT 1 INDEX. REVENUE SOURCE PROGRAM REDUCTIONS.

Act 1 (Taxpayer Relief Act of 2006) Budget Implications • Limits taxing authority of School Boards: – Important - Prior law granted School Boards unlimited power to tax – Act 1 relies on inflationary based system; Index calculation impacted by Statewide Average Weekly Wage (SAWW ) And Education Cost Index (ECI) – Base Index • 2.60% for 2020-21 – Adjusted Index (for economically challenged Districts) • 3.30% for 2020-21 (NASD) – Exception Index • If applicable - will be determined by exceptions submitted to PDE • Special Education / PSERS – Voter Referendum • Prescriptive timeline for budget actions: (see next slide)

2020-21 Act 1 Budget Timeline (Presidential Election Year) December 11, 2019 Facilities-Finance Committee Mtg January 21, 2020 May 31, 2020 Act 1 Deadline to approve Act 1 Deadline to approve 2020-21 Preliminary Budget 2020-21 Proposed Final (not applicable if ”Opt - Out” Budget Resolution is approved) first point. February 13, 2020 Act 1 Deadline to file for exceptions to PDE January 9, 2020 June 30, 2020 (not applicable if “Opt - Out” Act 1 Deadline to make 2020-21 Act 1 Deadline to approve Resolution is approved Preliminary Budget available 2020-21 Final Budget for public inspection OR adopt “Opt - Out” Resolution

2020-21 Act 1 Budget Timeline (Presidential Election Year) December 11, 2019 Facilities-Finance Committee Mtg January 9, 2020 Act 1 Deadline to make 2020-21 Facilities-Finance Committee supports Preliminary Budget available recommendation to “Opt - Out” for public inspection OR adopt “Opt - Out” Resolution

Act 1 (Taxpayer Relief Act of 2006) Budget Implications • “Opt - Out” Resolution: – Section 311(d) allows Boards to “Opt - Out” of many of the complex steps of Act 1 by adopting a resolution certifying that their Final Budget will not include a tax increase greater than their Act 1 Index – For NASD – tax increase will be limited to 3.30%  Generates @ $3,130,000 in new revenue – Deadline – January 9, 2020

Act 1 (Taxpayer Relief Act of 2006) Budget Implications • “Opt - Out” Resolution: – Section 311(d) allows Boards to “Opt - Out” of many of the complex steps of Is this enough new revenue to Act 1 by adopting a resolution certifying that their Final Budget will not include support our budget goals? a tax increase greater than their Act 1 Index – For NASD – tax increase will be limited to 3.30%  Generates @ $3,130,000 in new revenue – Deadline – January 9, 2020

2020-21 Financial Snapshot Snapshot Revenue Overview

2020-21 Financial Snapshot Snapshot 2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) REVENUES: RE TAX GENERATED BY 3.30% TAX INCREASE $ 3,130,000 TAX LOSS – EST IMPACT OF WALMART CLOSURE ($ 175,000) ASSESSMENT INCREASE – BENTWOOD (EN TWP) – GRAND OPENING DEC 2019! ? EARNED INCOME TAX ? BASIC EDUCATION FUNDING / SPECIAL EDUCATION FUNDING ? SCHOOL RESOURCE OFFICER FUNDING (COMBO LOST REV & INCREASED EXP) ($ 120,000) FICA (SOCIAL SECURIIY)/ PSERS SUBSIDY $ 217,000 FEDERAL SUBSIDY – 21 ST CENTURY PROGRAM CONCLUSION ($ 399,000) OTHER FEDERAL REVENUES ? TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000

2020-21 Financial Snapshot Snapshot Expense Overview

2020-21 Financial Snapshot Snapshot 2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1 ST LOOK $ 680,000 PSERS / FICA $ 434,000 21 ST CENTURY PROGRAM CONCLUSION ($ 399,000) DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602,000

2020-21 Financial Snapshot Snapshot 2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1 ST LOOK $ 680,000 Can we close this gap over the PSERS / FICA $ 434,000 next 6 months without 21 ST CENTURY PROGRAM CONCLUSION ($ 399,000) sacrificing our goals ? DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000

2020-21 Financial Snapshot Snapshot 2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1 ST LOOK $ 680,000 Can we close this gap over the PSERS / FICA $ 434,000 next 6 months without 21 ST CENTURY PROGRAM CONCLUSION ($ 399,000) sacrificing our goals ? DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000 Yes! We expect to be able to address through a combination of increased revenue and reduced costs.

2020-21 Financial Snapshot Snapshot 2020-21 BROAD OVERVIEW - NEW REVENUES & NEW EXPENSES (EARLY ESTIMATES) TOTAL PRELIMINARY REVENUE CHANGES $ 2,653,000 EXPENSES: WAGE INCREASES $ 1,750,000 HEALTHCARE – 1 ST LOOK $ 680,000 Can we close this gap over the PSERS / FICA $ 434,000 next 6 months without 21 ST CENTURY PROGRAM CONCLUSION ($ 399,000) sacrificing our goals ? DEBT SERVICE – SAVINGS FROM REFUNDING ($ 300,000) VO-TECH TUITION - ? $ 300,000 CONTRACTED SVCS & UTILITY INCREASES (SPEC ED /TRANSPORTATION/OPER) $ 650,000 TECHNOLOGY PLAN – YEAR #3 $ 50,000 TECHNOLOGY UPGRADES (CYBER) $ 90,000 TOTAL PRELIMINARY EXPENSE CHANGES $ 3,255,000 2019-20 SHORTFALL (ESTIMATED DEC 2019) $ 602.000 Recommendation – Approve the “Opt - Out” Resolution limiting our 2020-21 tax increase to 3.30% by January 9, 2020

2020-21 Financial Snapshot Snapshot • Budget Concerns: – Charter Enrollment / Charter Reform – Tech School Tuition / Program Expansion – ELD (English Language Development) Program • Staffing levels to be revisited in Spring – Enrollment Projections • Updated study will be available after New Year • More concerned about future years than about 2020-21 – General concern about economy; trade wars, recession ?

2020-21 Budget Next Steps • January 6, 2020 – Adopt needed “Opt - Out” resolution at Special Board Mtg • January – May 2020 – Refining 2020-21 staffing levels • No furloughs, but expect transfers to be needed • Examine every resignation/retirement closely – Finalizing department /program budgets – Working with local tax collectors and municipalities on tax assessment and collection projections – Monitoring activity in Harrisburg & Washington • May 2020 – Present 2020-21 Proposed Final Budget

QUESTIONS ?