Lower Merion Board of School Directors PRELIMINARY BUDGET PRESENTATION January 23, 2017
Th The I Impact of of Enrollm lment G Growth The greatest cost to any school district is directly related to the number of children served. Our enrollment growth “cost” is about 1% annually. No other school district in the Commonwealth of Pennsylvania has been impacted more than Lower Merion.
Source: Pennsylvania Department of Education
2996 +872 8388 +1474 4002 +589 Source: Pennsylvania Department of Education
476 more students or a growth of 7.8% 1474 more students or a growth of 21.3% Source: Pennsylvania Department of Education
Source: Pennsylvania Department of Education
Two Dec Decisi sions T s That t Rea eally Mat attered In 2004 the Lower Merion Board of School Directors authorized the building of two new high schools In the Spring of 2007 the LMSD community voted against an EIT or a PIT
2017 2017-18 B Budget C Cycle Act 1 •Accelerated Budget Schedule •Exceptions •Back-End Referendum 9
201 2017-18 Budg Budget Cy Cycl cle •The 2017-18 Preliminary Budget must be on display at least 20 days prior to its adoption. •The deadline for the Board to advertise its intent to adopt the Preliminary Budget, is at least 10 days prior to its adoption. •February 15, 2017 is the deadline for Board to adopt the 2017-18 Preliminary Budget which is scheduled for February 13, 2017 Business Meeting. 1 0
2017-18 Budg dget C Cycle ( (cont’d) d) •At least one week before submission of exception- Deadline to advertise that Board is seeking exception to back-end referendum – February 23, 2017 •March 2, 2017– Deadline to submit exception filings to PDE •March 17, 2017– Deadline for Board to submit referendum to county officials 1 1
2017-18 Budget Cycle (cont’d) •March 22, 2017 – Deadline for PDE to rule and inform districts if exceptions have been granted or denied. •March 27, 2017 – Deadline for Board to submit referendum question to county officials if exception is denied. •June 10, 2017– Deadline to print and allow inspection of annual budget. •June 20, 2017– Deadline for Board to give notice of intent to adopt final budget. •June 30, 2017 – Deadline to adopt budget for 2017-18 fiscal year. 1 2
Historical Index and Tax Increase Scho hool Y l Year Index ex Tax I Increase 2006/0 2006/07 3. 3.9% 9% 10. 10.79 79% 2007/0 2007/08 3. 3.4% 4% 4. 4.46% 46% 2008/0 2008/09 4. 4.4% 4% 6. 6.36% 36% 2009/1 2009/10 4.1% 4. 1% 6. 6.59% 59% 2010/1 2010/11 2. 2.9% 9% 4. 4.15% 15% 2011/1 2011/12 1. 1.4% 4% 3. 3.31% 31% 2012/1 2012/13 1.7% 1. 7% 1. 1.99% 99% 2013/1 2013/14 1. 1.7% 7% 3.82% 3. 82% 2014/15 2014/1 2.1% 2. 1% 3. 3.90% 90% 2015/1 2015/16 1. 1.9% 9% 3. 3.55% 55% 2016/1 2016/17 2. 2.4% 4% 4. 4.44% 44% 2017/1 2017/18 2. 2.5% 5% 1 3
What Drives Budget Increases? 1. Instructional Program - maintaining low class size while continuing student programs a. Enrollment Growth b. Salaries c. Retirement Contribution – (PSERS 8% increase) 2. Special Education Program Mandates 3. No/Minimal Increase in State or Federal Funding 14
2017-18 Preliminary Budget Highlights Uncertain Issues •Current and Future tax revenues •State Budget – Governor will present the Commonwealth Budget in February •Pending Budget Litigation 15
Where the Money Comes From Local 84.01% State 13.20% Fund Balance 2.50% Federal .29% 16
Anticipated Revenue Budget Budget Description 2016-17 2017-18 Fund Balance Funds Designated as a Revenue 9,220,901 6,484,826 Local Sources Current Real Estate Taxes 204,197,135 208,764,687 Interim Real Estate Taxes 301,000 301,000 Public Utility Realty Tax 220,000 220,000 Local Services Tax 200,000 205,000 Realty Transfer Taxes 3,000,000 3,250,000 Delinquent Real Estate Taxes 3,850,000 3,600,000 Interest Income 250,000 375,000 Tuition - Summer Programs 200,000 200,000 IU Federal Funds 1,200,000 1,200,000 Misc. Other Local Sources 106,300 107,500 Total Local Sources 213,524,435 218,223,187 17
Anticipated Revenue (cont'd) Budget Budget Description 2016-17 2017-18 State Sources Basic Education Funding Subsidy 3,497,119 3,794,830 Special Education Subsidy 2,882,307 2,932,363 Transportation Subsidy 2,400,000 2,400,000 Revenue for Social Security Payment 4,600,000 4,700,000 Revenue for Retirement 18,200,000 20,000,000 State Property Tax Reduction Allocation 3,473,906 Health Services Subsidies 260,000 250,000 Rental & Sinking Fund Reimbursement 150,000 200,000 Misc. Other State Subsidies 20,000 20,000 Total State Sources 35,483,332 34,297,193 Federal Sources 705,600 745,000 Total Revenue 249,713,367 253,265,380 Total Revenue and Designated Fund Balance 258,934,268 259,750,206 18
How Does The Money Support Our Children? INSTRUCTIONAL SVCS 67.30% NON-INSTRUCTIONAL SVCS 2.14% Regular Education Athletics Special Education Student Activities Vocational Education Summer Programs Homebound Instruction DEBT SERVICES 10.53% Student Services Guidance Services Psychological Services Curriculum Development OTHER FINANCING USES- Staff Development .31% Library Services Technology Serv SUPPORT SVCS 19.72% Board Services Tax Collection Administration Legal Services Maintenance & Operations Public and Non-Public Transportation 19
Budget Preliminary Budget DESCRIPTION 2016-17 2017-18 Salaries 122,792,506 124,609,663 Benefits 75,971,829 81,926,498 Other - Purchased Professional and Technical Svcs (IU services, consultants, etc) - Purchased Property Svcs (utilities, repair work, leases etc) - Other Purchased Svcs (tuition payments to charters, special ed, vo-tech, general insurance, contracted transportation - Supplies (general supplies, books, software licenses, fuel, gas, etc) - Property (equipment, laptops, iPads, etc) - Other Objects (debt service principal payments) 59,369,933 60,438,092 Budget Reserve 800,000 800,000 258,934,268 267,774,253 Tax Monies required to balance the Budget (8,024,047) Budgeted Mill Value 7,576,074 7,620,178 Additional Increase in Mills Required 1.0530 Total Mills 27.3963 28.4493 Mills Increase 3.85% Budget Expenditure Increase 3.41% 20
Real Estate Tax Change Median Household Assessment $250,680 2016-17 Real Estate Tax mill rate 27.3963 Face amount of 2016-17 Real Estate Tax 6,868 2017-18 Real Estate Tax mill rate 28.4493 Face amount of 2017-18 Real Estate Tax 7,132 Tax Increase $264 Median household assessments provided by Montgomery Co. Board of Assessments 21
Exceptions for 2017-18 •Indebtedness Incurred Prior to Effective Date •Electoral Debt Incurred Under 53 PA CS Part VII Part B Special Education Retirement 7
Special Education Exceptions 2010/11 2011/12 2012/13 2013/14 2014/15 Special Education Instruction and $32,184,625 $35,238,811 $37,472,964 $39,616,694 $42,909,800 Related Services Expenditures Difference from $2,249,125 $3,054,186 $2,234,153 $2,143,730 $3,293,106 Prior Year Special Education Exception $711,781 $1,594,624 $1,932,946 $2,478,906 $1,592,463 Amount Approved Special Education $324,357 $1,543,574 $486,768 $2,478,906 $1,592,463 Exception Amount Utilized
Use of Special Education Exceptions 2010-11 2011-12 2012-13 2013-14 2014-15 Total Special Education Exception Amount Approved 1,592,463 8,310,720 711,781 1,594,624 1,932,946 2,478,906 Special Education Exception Amount Utilized 1,592,463 6,426,068 324,357 1,543,574 486,768 2,478,906 1,884,652
Five Y e Year ar Us Use Of Of Excep eptions in LMSD f for Sp Specia ial l Educatio ion Facts: • The District was entitled to tax over 1.88 million dollars more than was utilized. • In all but one year the actual special education costs exceeded the allowable exception. • In some years special education increases were partially funded through the Act 1 tax index. • The Actual Special Ed. instructional increases total 12.9 million dollars.
USE OF PSERS EXCEPTIONS Net PSERS Employer Increase Exception Exception Difference Between Fiscal Contribution % Inrease in From Approval Utilized Exception Approval Year End Rate Contribution Rate Prior Year by PDE by LMSD and Utilization 2012 8.65% 53% 1,602,037.83 1,621,343.00 1,621,343.00 - 2013 12.36% 43% 2,101,503.15 1,853,898.00 - (1,853,898.00) 2014 16.93% 37% 2,622,975.30 2,210,983.00 1,233,830.00 (977,153.00) 2015 21.40% 26% 2,829,946.72 2,086,531.00 1,714,965.00 (371,566.00) 2016 25.84% 21% 2,721,152.00 2,036,996.00 1,536,794.00 (500,202.00)
PSE SERS F S Facts The total amount NOT taxed as an exception is $3,702,819. The total amount taken within the index was $5,770,683.
WHY PSERS RESERVE IS NEEDED 450,000,000 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 - 2006 2016 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 Budgeted Budgeted Expenses Revenue 28
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