Budget Presentation Final Review, Taxes, & 5-Year Projection March 27 th , 2017 6:00 P.M.
Meeting Agenda • 2017-18 Budget Status • Six Year Projections (to show w/o debt service) • Uniform assumptions • 2% tax increase • 3% tax increase • 0% tax increase • PASBO Conference Update • Berks Health Trust Update 2
2017-18 Budget Summary 2017-18 2017-18 Initial Budget Current Budget Revenues 31,188,373 31,284,106 Expenditures 33,414,310 33,161,040 Revenues over Expenditures (2,225,937) (1,876,934) Beginning Fund Balance 8,549,271 8,890,478 (Projected) Ending Fund Balance 6,323,334 7,013,544 3
2017-18 Operating Budget Summary • New Reductions/Additions 2017-18 • State revenue based on Budget Governor’s budget • $48k in basic ed. subsidy Revenues 31,284,106 • $19k in special ed. subsidy • Unlikely that transportation Expenditures 31,675,440 subsidy reduction will occur based on lack of interest from the Revenues over (391,334) legislature. Expenditures 4
Forecasted Revenue Assumptions • Local Revenue Increases (other than R/E taxes) • 2% - interims, per capita, EIT, IDEA, rentals, donations, tuitions • 1% - all others including transfer taxes, delinquents, interest, gate receipts • State Revenue Increases • 1% - basic education, special education, transportation, property tax rebate • Social security and PSERS increased based on 50% of expenditure • All others flat funded • Federal Revenue Increases • 1% for Title I and Title II • Could change based on federal budget (elimination of Title II) • All Access revenues removed 5
Forecasted Expenditure Assumptions • Salaries • 3.5% - medical opt out (based on assumed increase in medical benefits) • 2.8% - professional staff, LT subs • 2.5% - admin, technical, clerical, maintenance, custodial • 1% - co-curricular, coaches • Includes reduction 1 of FTE per year • Benefits • 7% - medical and RX • 2% - life insurance, LTD, vision, dental, tuition reimbursement • Social security, PSERS, unemployment, and workers comp % of salaries • Peak PSERS rate – 36.4% in 21-22 • Average rate – 35.17% 6
Forecasted Expenditure Assumptions • Professional Services • 3% - regular and special education services • 2% - business services, event/game official services • 1% - other services • Property Services • 2% - repair and maintenance services • 1% - lawn care, snow, trash, rentals • Other Services • 3% - tuitions (charter, private) • 2% - transportation, insurance, advertising, BCTC 7
Forecasted Expenditure Assumptions • Supplies • 3% - gasoline and diesel • 2% - fuel oil • 1% - natural gas, electric • .5% - other supplies • Equipment – no increase • Includes $200k/year for construction project contingency • Budgetary reserve – flat $200k per year • Dues, Fees, Debt Service • 2% - dues/fees • Debt service based on existing payoff schedule for principal and interest 8
Specific Projection Assumptions • Three scenarios • 2% R/E tax increase, 3% increase, or 0% increase • Each scenario includes a .1% increase for interims and assessment changes • Adjustments to fund balance and potential construction projects after debt is retired for each scenario • Attempt to budget $1.5mm for projects starting in 22-23 9
Construction Projects Elementary Intermediate/Middle School High School • • • Intercom, clock, and Building envelope Chiller replacement • • phone upgrade Replace hot water heaters Air handler upgrades • • • Rubber gym floor Intercom/Clock upgrade Phone upgrade • • replacement Condensing boilers Blacktop repair • • • Building envelope Auditorium renovations Grease trap • • Windows Stadium (lights and replacement • replacement) Building envelope • • Scoreboards Soccer field lights • Scoreboards 10
Fund Balance • Use of fund balance questions Fund Balance Projected Y/E • Amount to draw down from Designation 16-17 committed fund balance for PSERS employer rate increases? • Categories and amounts of assigned Committed 1,663,000 fund balance? • Creation of a capital reserve fund to Assigned 6,306,000 move money for future capital expenditures? • Change in allowable fund balance Unassigned 921,478 amounts? • Current 8% cap to unassigned • Possible caps to total fund balance? 11
PASBO Conference Updates • Property Tax Elimination • Current count at almost 30 no-votes • Other potential options • Changes based on age and income level for seniors • State Budget • Increases to basic and special ed. appear solid • Transportation subsidy decreases less than likely • Concerns from legislature • Method of changes to formula – 2 years in arrears 12
Berks Health Trust Update • Current not-to-exceed rate – 7.5% • Budgeted 7% • Expected final rate in May • RX Request for Proposal • Health trust awarded new Pharmacy Benefit Manager RFP to Express Scripts (administered through Mercer) • Potential $3.9mm in savings to the trust • Stop loss insurance renewal • Stop loss coverage insurance for high claims over $350k/year • 12 claims in the consortium • 67% increase in coverage with laser to 4 highest claimants • Approx. 230% increase without laser 13
Upcoming Meetings • Upcoming meetings • April 3, 2017 – Regular Board Meeting • May 1, 2017 – Regular Board Meeting • Approval of the proposed final budget • Adjustments can still be made • June 5, 2017 – Regular Board Meeting • Approval of the final budget • June 19, 2017 – Regular Board Meeting 14
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