North Penn School District 2019-2020 Draft Preliminary Budget - PowerPoint PPT Presentation

North Penn School District 2019-2020 Draft Preliminary Budget Special Finance Committee Meeting February 4, 2019

Budget Agenda • Timeline • 10,000 ft. summary overview • Major drivers of budget • Next steps

Takeaways • Very early • Challenging budget • Worst case scenario • Tighter budget

3 Step Process Preliminary Proposed Final Final

Budget Timeline First Draft of Preliminary Budget 2/4 Special Finance Committee Meeting Preliminary Budget Adoption 2/12 Referendum Exceptions Consideration Board Worksession Adoption of Proposed Final Budget 5/16 Board Action Meeting Adoption of Final Budget 6/20 Board Action Meeting

Balanced Budget Revenues = Expenses

Deficit Budget Expenses > Revenues

Surplus Budget Revenues > Expenditures

0%

$14.1 M Deficit Budget

7.86% To Balance

Budget Comparison Fiscal Year Surplus Revenues Expenses Budget (Deficit) 2019-2020 $261,594,995 $275,684,302 -$14,089,307 2018-2019 $257,503,013 $260,247,826 -$2,744,813 $ Change $4,091,982 $15,436,476 -$11,344,493 % Change 1.59% 5.93%

Act I Index 5% 4.4% 4.1% 3.9% 3.75% 3.4% 3.3% 3.4% 2.9% 2.8% 2.4% 2.5% 2.4% 2.3% 2.5% 2.1% 1.9% 1.7% 1.7% 1.4% 1.25% 0% 0 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 - - - - - - - - - - - - - - - - - 0 0 0 1 1 1 1 1 1 1 1 1 1 2 2 2 2 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2 3

Act 1Exceptions Special Education $1,553,866

Act 1Exceptions Retirement $48,056

Act 1Exceptions Special Education Retirement +0.89% 3.19%

Expenditure Variances 7.00% 5.60% 4.20% 2.80% 1.40% 0.00% 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18

Revenue Variances 4.00% 3.20% 2.40% 1.60% 0.80% 0.00% -0.80% -1.60% 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18

Fund Balance Breakdown 6/30/18 Description Amount Nonspendable (inventory & prepaid items) $683,858 Assigned for self-funded insurance $2,700,000 Committed to PSERS $16,806,523 Unassigned (7.96%) $20,727,432 Total Fund Balances $40,917,813

Unassigned Fund Balance History $21,000,000 $16,800,000 $12,600,000 $8,400,000 $4,200,000 $0 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 Ending Fund Balance

The Good… • Expiration of technology lease ~ $1.4 M • No retirements as of yet ~ $1,000,000 • Retirement rate ~ 2.57% increase

The Good… • Health care 1st look rates ~ $464,356 • Growth in EIT, transfer tax, investment income ~ $1,350,000 • Additional propane bus grant ~ $500,000

The Unknowns… • State funding ~ 2.0% budgeted • Federal funding ~ 2.0% budgeted • Retirements • Staffing changes • Worker’s comp rates ~ 0% budgeted

The Financial Challenges… • Capital plan ~ $500,000 • Retirement increase ~ $3.3 M • Tax base ~ 0.13% increase • Tax base ~ $242,254 new revenue

The Financial Challenges… • Salary increases ~ $4.8 M • Charter school tuition ~ $500,000 • New debt ~ $1.0 M

Retirement Rate 40% 32% 24% 16% 8% 0% 00-01 02-03 04-05 06-07 08-09 10-11 12-13 14-15 16-17 18-19 20-21 22-23 24-25 Employer Rate

Retirement Expense $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Gross Retirement Expense

Retirement as a % of Budget 18% 14% 11% 7% 4% 0% 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20 Retirement % of Budget

Budget Scenario Current Budget Deficit -$14,089,307 Act 1Increase - 2.30% $4,127,883 Anticipated Retirements $1,000,000 Budgetary Reserve $1,500,000 Potential Positive Variances (0.50%) $2,686,396 Revised Deficit -$4,775,028

Tax Scenarios Average Tax Additional Remaining Homestead Increase Revenue Deficit Increase 0.00% $0.00 $14,089,307 $0 1.00% $1,786,171 $12,303,136 $38 1.50% $2,686,289 $11,403,018 $57 2.00% $3,586,406 $10,502,901 $75 2.30% $4,127,883 $9,961,424 $87 3.19% $5,731,218 $8,358,089 $121

Next Steps • Line item review of all revenues and expenses • Governor’s budget address • PSERS rate stabilization fund utilization analysis • Staffing recommendations • 5-year projections • Refine and update data based on new information

Discussion