Harrisburg School District Revised 2019-2020 Budget Review & - PowerPoint PPT Presentation

Harrisburg School District Revised 2019-2020 Budget Review & Discussion Tuesday, November 12, 2019 Lincoln Administration Building

AGENDA  Opening Remarks and Executive Summary  Review of Revenues by Category  Review of Expenditures by Category  Financial Strategy for Moving Forward  Future Challenges  Status of System Controls & Audits  2020-2021 Budget Development Process

Executive Summary  Original Budget Revenue: $155.7 million  Actual Budget Revenue: $149.5 million • Original budget over estimated revenue by $6.2 million  Original Budget Expenditures: $158.8 million  Actual Budget Expenditures: $152.1 million • Original budget planned to spend $6.2 million more  Original Transfer from Fund Balance: $3.1 million  Actual Transfer from Fund Balance: $2.6 million

Executive Summary Fund Balance as of 6/30/2019  16.2 million total  $5 million ( 3.4% of budget is unassigned)

Revenues by Major Function 37% 54% 9%

19-20 Revenue Budget Original Budget Revised Budget (Submitted to PDE on As of 11/12/19 6/30/19) Local Sources $ 57,486,426 $ 56,052,770 State Sources 84,446,600 79,392,355 Federal Sources 13,767,765 13,774,180 Other Sources/Balance 0 250,000 Total $ 155,700,791 $ 149,469,305 Note: The figures above include the implemented tax increase for the 2019-2020 school year.

State Revenue Variances 19-20 Original 19-20 Revised 18-19 Actual Budget as of 11/12/19 Difference Submitted to PDE Basic Ed $52,433,391 $54,210,847 $53,791,395 ($419,452) Special Ed 5,996,091 5,991,522 6,331,999 340,477 Transportation 1,399,643 953,593 1,375,000 421,408 Non Pub Tran 334,950 815,768 365,000 (450,768) Social Security 1,855,754 2,279,621 1,808,500 (471,121) Retirement 10,925,327 12,761,762 8,106,475 ($4,655,287) Budget submitted to PDE on 6/30/19 overestimated state revenue by $5,180,396.

Federal Revenue Variances 19-20 Original 19-20 Revised Budget Budget as of Difference Submitted to 11/12/19 PDE ELECT $235,000 $126,000 ($ 109,000) SIG $4,028,720 $1,953,660 ($2,075,060) The District lost $1,100,000 in SIG funds for John Harris High School for 18-19 and $1,826,324 for 19-20 due to the mismanagement of these funding sources within the prior Administration.

Expenditures by Major Function

19-20 Expenditure Budget 19-20 Original Budget 19-20 Revised Budget Submitted to PDE as of 11/12/19 100 - Employee Salaries $ 50,143,341 $ 47,823,265 200 - Employee Benefits 37,386,038 32,828,265 300 - Contracted Svcs 6,633,074 6,892,990 400 – Purchased Svcs 3,999,408 4,897,220 500 – Other Purch Svcs 31,757,243 32,818,640 600 – Supplies/Food 2,844,108 3,419,760 700 – Equipment 1,126,473 570,720 800 – Dues & Fees 3,024,190 2,987,010 900 – Other Uses 21,882,858 19,882,885 Total $ 158,796,733 $ 152,120,755

Expenditure Highlight #1 Charter School Tuition 18-19 Actual 19-20 Original 19-20 Revised Brick & Mortar $ 6,714,821 Not Available $ 7,050,560 Cyber Charter 8,184,197 Not Available 8,634,440 Total $ 14,899,018 $ 13,778,680 $ 15,685,000  The continued increase in Charter School Expenditures is a significant focus on the Amended Recovery Plan (See ED21).  The Administrative Team has placed a focused effort on oversight of Charter Schools under the prevue of the District.

Expenditure Highlight #2 Worker’s Compensation 19-20 Actual 20-21 Budget Proposed Cost $ 914,847 TBD Add: Safety Credit 30,467 TBD Revised Cost $ 945,314 $ 1,256,000 The District did not qualify for the Safety Credit, as the District did not have an active Workplace Safety Committee during the 2018-2019 school year. The new Administration can confirm a fully operating Workplace Safety Committee will be in place as of January 2020.

Expenditure Highlight #3 Facilities Management – Aramark Agreement Fiscal Year Contract Amount 2016-2017 $ 959,445 2017-2018 969,039 2018-2019 978,730 2019-2020 Estimated $ 969,060 The Administration has had ongoing collaborative discussions with Aramark leadership regarding the effectiveness of this arrangement.

Expenditure Highlight #4 Harrisburg Area Community College – Adult Tuition Program Adult Tuition Capital Outlay 2015-2016 $ 427,800 $ 51,668 2016-2017 341,800 76,671 2017-2018 341,800 74,819 2018-2019 174,694 * 48,763 Total $1,286,094 * $ 251,921 * Reflects Invoice for July – January 2019, the District has not received the final invoice for 18-19 yet. These services are for Adult students, not K-12 students.

Expenditure Highlight #5 Energy Management - Electricity Source: Provident Energy Consulting, October 2019

Expenditure Highlight #5 Energy Management - Electricity Fiscal Year Amount 2018-2019 $980,277 2019-2020 (Locked) 914,953 2020-2021 (Locked) 901,091 2021-2022 (Preliminary Results) 885,100 The District received preliminary responses on November 8, 2019 for the 2021-2022 school year. Final responses with recommendation from Broker expected on November 13, 2019.

Expenditure Highlight #6 New Stormwater Management Fees - Pending  Notice to the District on July 9, 2019 from Capital Region Water  Part of Larger program to invest over $300 Million into Harrisburg’s sewer and stormwater systems over the next 20 years.  Commercial properties will be charged a proposed fee of $6.15/month per each 1,023 square foot of impervious area associated with the properties. Monthly Estimated Cost to Harrisburg SD: $13,617.40 Annual Estimated Cost to Harrisburg SD: $163,408.80

19-20 Revised Revenue & Expenditure Summary Category Total Revenue $ 149,469,305 Expenditures 152,120,755 Total ( $ 2,651,450) With realistic revenue and expenditure estimates, the District is projecting a $2,651,450 deficit for the 19-20 school year.

Financial Strategy – Address Charter School Costs  Provide better accounting on enrollment invoices  The proposed 19-20 revised budget includes a new 1.00 FTE Accountant for Student Accounting for this initiative.  Improve Cougar Academy Program Offerings  Expand Cyber Educational Opportunities via the Montgomery Virtual Program  Increase oversight of brick and mortar charters to ensure compliance

Financial Strategy – Refinance Debt Debt Refinancing for Capital Improvements  Take Advantage of Historically Low Interest Rates  Reduce 2020-2021 Debt to ‘free up’ funds for Capital Improvements (Taxable Issuance)  Keep Annual Debt Service Payments below $20 Million Ongoing Discussions regarding the District’s Credit Watch Status with S&P Rating Agency will be integral to the viability of this opportunity.

Financial Strategy – Improve Management of Healthcare 16-17 Actual 17-18 Actual 18-19 Budget 18-19 Actual $14,865,498 $15,131,760 $13,800,000 $14,405,564  Request for Proposal for Benefits Consulting Services  Request for Proposals was issued October 30, 2019  Comprehensive Proposals due by December 15, 2019  Review Medical, Dental, & Prescription Drug Contracts  Prescription Drug Contract – Express Scripts (Ends 12/31/19)  Medical Contract – Highmark (Ends 6/30/20)  Dental Contract – United Concordia (Ends 6/30/20)  District is Self Funded with NO Reserves  Reserve Should be at least 2 Months of Premium or $2,400,930

Financial Strategy – Pursue New Revenue  Harrisburg SD – Recovery Plan Item RV07  Engage Professional Contracted Grant-Writing Services to Seek Additional Funding from Competitive Grants and Non-Traditional Sources  A 1.00 FTE position has been included in the revised 19-20 budget for this purpose.  Harrisburg SD – Recovery Plan Item – School Based ACCESS Prgm  Optimize Utilization of the Federal Medical Assistance (ACCESS) Program  Staff Training has been provided in August & November 2019 regarding the SBAP Program and how various Professionals can support the District in accessing these Dollars.

Financial Strategy – Address Special Education Costs Statewide Average Cost/Student: $23,132 Harrisburg SD Average Cost/Student: $29,880

Financial Strategy – Review & Develop Plan for Physical Assets Closed Facility Status Steele Elementary School Pulled Off the Market, Pending Elementary Enrollment Study Results William Penn High School Currently on the Market Seeking Potential Buyers Woodward Elementary School A Potential Buyer has been identified and the District is evaluating the final details of the proposed sale. Funds from the sale of properties would ideally be made available to provide capital improvements to other existing, open facilities.

Challenge – Need to Develop and Implement a Capital Plan Harrisburg School Capital Plan from 2017 $4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 Total $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2018 2019 2020 2021 2022

Challenge – Need to Develop and Implement a Capital Plan Action Steps for Capital Improvements  Complete evaluation of Building Facilities – Goal by 6/30/20  Update Capital Plan and Financial Projections  Seek Funding Opportunities for Building Improvements.