PERKIOMEN VALLEY SCHOOL DISTRICT 2013-14 GENERAL FUND BUDGET - PowerPoint PPT Presentation

PERKIOMEN VALLEY SCHOOL DISTRICT 2013-14 PROJECTED REVENUES LOCAL REVENUES SUMMARY (as of February 11, 2013) Audited BUDGET BUDGET 2011-12 2012-13 2013-14 Real Estate Tax $54,615,231 $55,834,054 $55,908,958 Earned Income Tax 9,944,026 9,650,000 10,600,000 Interim RE Tax 154,721 250,000 150,000 R. E. Transfer Tax 671,232 700,000 700,000 Del. R.E. and P .C. 2,011,909 1,839,000 1,839,000 Interest Earnings 64,799 100,000 100,000 All Other Local 2,364,987 2,440,810 2,425,600 TOTALS $ 69,826,905 $70,813,864 $71,723,558 23

PERKIOMEN VALLEY SCHOOL DISTRICT 2013-14 PROJECTED REVENUES LOCAL REVENUES SUMMARY (as of February 11, 2013)  Highlights of Local Revenues:  Local Revenues are increasing by $ 909,694 (1.28%) budget 2012-2013 vs. budget 2013-2014  Several main areas to consider:  Real Estate Tax appeal assessments continue  This shows growth and is different than past several years have been at this point  EIT may help us out even more as it is showing strength 24

Where have the alternative revenue streams gone?? 3,500,000.00 Investment Earnings $3,050,000 3,000,000.00 Re Transfer Tax Interim Tax 2,500,000.00 $2,100,000 2,000,000.00 reduction which is a 68.85% 1,500,000.00 reduction in 6 $ 950,000 fiscal budget 1,000,000.00 years 500,000.00 0.00 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 25

2013-14 GENERAL FUND BUDGET PROPOSED LOCAL REVENUES Real Estate Tax 60000000 Earned Income Tax 50000000 Interim RE Tax 40000000 30000000 RE Transfer Tax 20000000 Del. RE and Personal Tax 10000000 Interest Earnings 0 Other Local Audited 11-12 Budget 2012- Budget 2013- 13 14 26

Local Revenue History Budget vs. Actual Local Revenue History Budget Actual 80,000,000 70,000,000 60,000,000 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 Budget 65,383,983 67,917,385 68,355,130 69,050,356 70,813,864 71,723,558 Actual 64,247,320 66,700,592 66,841,261 69,826,905 70,813,864 71,723,558 27

State Subsidies as of February 11, 2013 State Subsidies as of February 11, 2013 28

State Subsidies  Governor Corbett proposed the State’s budget on Tuesday, February 5, 2013.  Professional groups are reviewing the proposal and trying to evaluate the impact of the proposal  More information will be learned about the budget over the next several weeks and months to come  Remember that the proposal is complicated in the way that it draws on several different ideas to help fund the proposed additional dollars to fund these programs  We must remain conservative in our approach and how we shows these monies. Nothing is guaranteed! 29

State Subsidies (cont’d)  These things we do know about the PROPOSED budget from Governor Corbett and Perkiomen Valley: There is increased funding for Basic Education Subsidy 1. There is increased funding for Transportation- What 2. does that mean for PV? There is increased funding for PSERS increase- 3. Commitment of state is in proposal There is reduced funding for Special Education 4. There is flat funding for ABG 5. How do these PROPOSED items impact Perkiomen Valley? 30

Conservative approach to subsidy information from governor’s proposal Total State Subsidies shown in Budget as reviewed December 10, 2012: $ 19,006,480 (Not adjusted in January's one page presentation) Currently in budget as of December 10, 2012 ESBE (Basic Education Subsidy) $ 5,577,546 Tranpsortation (Pub and Non ‐ pub) 2,270,000 Spec ED 2,030,000 FICA 1,646,239 $ 11,523,785 Per Governor's budget presentation February 5, 2013 ESBE (Basic Education Subsidy) $ 5,817,134 $ 239,588 Tranpsortation (Pub and Non ‐ pub) 2,270,000 Spec ED 2,009,872 (20,128) FICA 1,646,239 $ 11,743,245 Projected difference Prelim Budget vs. State Budget $ 219,460 $ 219,460 Estimated Impact in dollars $ 19,225,940 Net increase budget to budget of 1.15% 31

If Governor’s proposal on PSERS is passed as presented then… PSERS Retirement change impact Total Expenditures for PSERS at 16.93% 7,661,073 Total Expenditures for PSERS at 14.68% 6,642,915 Total GROSS expenditure reduction 1,018,158 NET LOSS from half Revenue 509,079 Net impact on Deficit (509,079) The proposal would help to decrease deficit. It has way too many variables to confidently place into consideration so we will take note and wait 32

Adjustments already made to State Subsidies The following adjustments were made to beginning revenue subsidy information in November 2012 presentation: 1. Fica Subsidy (driven by Payroll) $ 40,152 2. Retirement Subsidy (driven by Payroll) $1,485,000 3. Transportation Subsidy (reduce) ($ 210,000) 4. Rental Reimbursement (reduce) ($ 160,000) Net adjustments to start with $ 1,155,152 33

Changes from January 14, 2013 Budget presentation for State Subsides  The following additional adjustment has been made from the January 14, 2013 budget presentation for state subsidies Reduce PSERS revenue for salary adjustment ($57,679) 1. 34

Aid ratio 35

AID RATIO FOR 12-13 APPLICABLE FOR THE 13-14 BUDGET YEAR 123460302 Abington SD Montgomery 0.2195 0.2225 0.2151 123460504 Bryn Athyn SD Montgomery 0.1500 0.1000 0.1000 123461302 Cheltenham Tow nship SD Montgomery 0.2847 0.2894 0.2778 123461602 Colonial SD Montgomery 0.1500 0.1000 0.1000 123463603 Hatboro-Horsham SD Montgomery 0.2004 0.1459 0.2824 123463803 Jenkintow n SD Montgomery 0.1765 0.2276 0.1000 123464502 Low er Merion SD Montgomery 0.1500 0.1000 0.1000 123464603 Low er Moreland Tow nship SD Montgomery 0.1500 0.1610 0.1217 123465303 Methacton SD Montgomery 0.2172 0.1913 0.2564 123465602 Norristow n Area SD Montgomery 0.3851 0.3772 0.3971 123465702 North Penn SD Montgomery 0.1655 0.1000 0.2638 123466103 Perkiomen Valley SD Montgomery 0.4216 0.4273 0.4134 123466303 Pottsgrove SD Montgomery 0.5311 0.5211 0.5463 123466403 Pottstow n SD Montgomery 0.6490 0.6355 0.6694 123467103 Souderton Area SD Montgomery 0.3643 0.3400 0.4008 123467203 Springfield Tow nship SD Montgomery 0.1500 0.1000 0.1000 123467303 Spring-Ford Area SD Montgomery 0.2774 0.2115 0.3764 123468303 Upper Dublin SD Montgomery 0.1500 0.1000 0.1134 123468402 Upper Merion Area SD Montgomery 0.1500 0.1000 0.1000 123468503 Upper Moreland Tow nship SD Montgomery 0.2750 0.1916 0.4004 123468603 Upper Perkiomen SD Montgomery 0.4419 0.4066 0.4951 123469303 Wissahickon SD Montgomery 0.1500 0.1000 0.1000 36

Basic Education Subsidy (ESBE)  The Governor’s proposed budget provides for an increase of $239,588 or about 4.3% for this subsidy  This is welcome but may be tied to the accomplishment of other variables not necessarily education related  Budget process will need to be complete but we feel confident this will stay in the final budget Total Proposed ESBE 13-14 $ 5,817,134 Total Budgeted ESBE 12-13 $ 5,577,546 Increase of $ 239,588 37

Basic Education Subsidy (ESBE) ESBE 6,000,000 19.63% over 5 fiscal years. Average increase under Governor Corbett is 1.4% over 3 yrs (Please note 11-12 was Funding study shortfall makeup year for PV) 5,800,000 5,600,000 5,400,000 5,200,000 ESBE 5,000,000 4,800,000 4,600,000 4,400,000 4,200,000 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 38

Special Education Subsidy  The Governor’s proposed budget shows a reduction of $20,128 or about a 1.0% decline for this subsidy  Budget process will need to be complete but we feel confident this will not be impacted throughout the Commonwealth’s budget process Total Proposed Spec Ed 13-14 $ 2,009,872 Total Budgeted Spec Ed 12-13 $ 2,030,000 Decrease of ($ 20,128) 39

Special Education Subsidy Special Ed 2,150,000 Special Ed Funding has actually decreased by 1.21% over the past five fiscal years 2,100,000 2,050,000 Special Ed 2,000,000 1,950,000 1,900,000 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 40

FICA Subsidy  The Governor’s proposed budget maintains the Commonwealth’s commitment to fund 50% of this expense back to Pennsylvania School Districts  Funding on this does not depend on budget approval for this fiscal year  Revenue is ultimately driven by Salaries subject to FICA Total Proposed FICA 13-14 $ 1,646,239 Total Budgeted FICA 12-13 $ 1,606,087 Increase of $ 40,152 41

FICA Subsidy FICA 1,700,000 FICA subsidy has increased by 10.36% over the past 5 years as shown This is driven by total salaries subject to FICA 1,650,000 1,600,000 1,550,000 FICA 1,500,000 1,450,000 1,400,000 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 42

Retirement Subsidy (PSERS base)  The Governor’s proposed budget maintains the Commonwealth’s commitment to fund 50% of this expense back to Pennsylvania School Districts  Funding on this does not depend on state budget approval for this fiscal year (Note some years it has been)  Revenue is ultimately driven by Salaries subject to PSERS and Commonwealth approved employer rate (16.93% for 13-14)  The 2013-14 budget figure was adjusted in February for salary adjustments Total Proposed PSERS 13-14 $ 4,190,961 Total Budgeted PSERS 12-13 $ 2,763,640 Increase of $1,427,321 43

Breaking down the Governor’s proposal for Perkiomen Valley for Retirement  The Governor’s proposed budget is funding the PSERS commitment by 100%  This is being done by honoring the legal requirement and also “tailoring” the collars further to a max 2.5% increase per year  Please remember that the vast majority of the funding increase will go directly towards the employers share of the PSERS mandate (12-13 budget 92% of increase)  Also, consider that we have an offsetting dollar increase to the district’s share of PSERS that is not covered but still subject to the Act 1 Index limits! 44

Retirement Subsidy (PSERS base) PSERS Retirement Increase has been 351% over past 5 years. 4,500,000 Actual Employer Rate in 09-10 was 4.78% and the proposed rate for 13-14 is 16.93% 4,000,000 3,500,000 3,000,000 2,500,000 PSERS 2,000,000 1,500,000 1,000,000 500,000 - 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 45

Rental Reimbursement  The Commonwealth of Pennsylvania provides a reimbursement for Debt Service expenses to districts that follow the PlanCon process  Perkiomen Valley School District has followed the PlanCon process for all building projects (rates range from 17% to 34% for PV)  Whenever the district has a successful refunding, the Commonwealth also shares in that savings  We have had successful refundings over the past four fiscal years and so our Rental Reimbursement will be reduced 46

Rental Reimbursement Rental Reimbursement 2,000,000 Rental 1,800,000 Reimbursement 1,600,000 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 2009-2010 2010-2011 2011-2012 2012-2013 2013-2014 Peak year of 2010-2011 includes Final approval of PlanCon J for Schwenksville, MS WEST and HS renovation/Technology wing 47

2013-14 GENERAL FUND REVENUES STATE SUMMARY (AS OF February 11, 2013) Audited BUDGET BUDGET 2011-12 2012-13 2013-14 ESBE $ 5,577,546 $ 5,577,546 $ 5,817,134 Spec Ed. 2,019,972 2,019,972 2,009,872 Transportation 2,270,381 2,480,000 2,270,000 FICA 1,584,027 1,606,087 1,646,239 Retirement 1,765,263 2,763,640 4,190,961 Rental Reimbursement 1,086,867 1,210,000 1,050,000 Charter Schools 0 0 0 Tax Relief 1,702,407 1,891,055 1,891,055 Other State* 401,263 $ 345,717 $ 293,000 TOTALS $16,407,726 $17,894,017 $19,168,261 Tax Relief monies is included in these totals…if no gaming monies approved for distribution…offset will be to increase the Real Estate taxes under Local Revenues 48

2013-14 GENERAL FUND REVENUES STATE SUMMARY (AS OF February 11, 2013)  Highlights of State Revenues:  T otal growth shows an increase of 7.12% or $1,274,244  Main growth is through increase in Retirement Subsidy (remember the total expenditure side grows as rate goes from 12.36% to 16.93% for 13-14)  There are some adjustments as we enter different figures into calculations which drive less subsidy (Debt and Transportation)  Hold off on any other changes until the Commonwealth budget process takes shape and more in known 49

2013-14 GENERAL FUND REVENUES STATE MONIES 6000000 5000000 ESBE Spec. Ed 4000000 Transpo. FICA 3000000 Retirement 2000000 DS Reimb. Tax Relief 1000000 Other 0 Actual 2011-12 Budget 2012-13 Budget 2013-14 50

State Revenue History Budget vs. Actual State Revenue History Budget Actual 30,000,000 20,000,000 10,000,000 0 2008- 2009- 2010-11 2011-12 2012-13 2013-14 2009 2010 Budget 15,950,034 16,699,399 17,565,819 16,515,220 17,894,017 19,168,261 Actual 15,720,635 15,448,049 16,312,022 16,407,726 17,894,017 19,168,261 51

2013-14 GENERAL FUND REVENUES FEDERAL We continue to participate in Title I, Project Access and other grants Continued discussion on Federal participation in Education remains something “less than stable” at this point “Sequestration” and “fiscal cliff” realities will be driving any federal monies for 13-14 which could result in a reduction if this happens Continue to watch closely! 52

Possible Sequestration Loss for PV SUMMARY Program Outstanding Balance 7.8% Cut 8.2% Cut 9.1% Cut Title I/Basic Programs $10,835.92 $11,391.60 $12,641.90 Title II $7,979.48 $8,388.68 $9,309.39 IDEA Section 611 $1,142.86 $1,201.46 $1,333.33 IDEA Section 619 $641.94 $674.86 $748.93 Title III $0.00 $0.00 $0.00 Title I/Delinquent $0.00 $0.00 $0.00 Perkins Grant Funds $0.00 $0.00 $0.00 Homeless Children's Pgrm $0.00 $0.00 $0.00 IDEA Section 611 $67,205.35 $70,651.77 $78,406.24 TOTAL $87,805.54 $92,308.38 $102,439.79 BALANCE DUE: $87,805.54 $92,308.38 $102,439.79 53

TOTAL REVENUES THREE YEAR ANALYSIS (as of February 11, 2013) Audited BUDGET BUDGET 2011-12 2012-13 2013-14 Local $69,826,905 $70,813,864 $71,723,558 State 16,407,726 17,894,017 19,168,261 Federal 452,512 500,000 500,000 Other 0 0 0 TOTALS $86,687,143 $89,207,881 $91,391,819 54

TOTAL REVENUES THREE YEAR ANALYSIS (as of February 11, 2013)  Total Revenues Highlights:  T otal Revenues are up by $2,183,938 (or about 2.45%) overall  Major driving force is PSERS (as presented) and EIT growth in budget figures- increases of $2,377,321  In fact, taking those two revenues aside  We actually reduced revenues by $251,032 (.28%) 55

TOTAL REVENUES THREE YEAR ANALYSIS (as of February 11, 2013)  Watch and be patient!!  Final decisions and assumptions will be driven by trend and actual data over the 2012-13fiscal year  Impact of a Governor’s budget on the district and will it be approved as is? What changes or challenges lie ahead for the Commonwealth budget as proposed? 56

TOTAL REVENUES THREE YEAR GRAPH Local 80000000 State 70000000 Federal 60000000 Other 50000000 40000000 30000000 20000000 10000000 0 Audited 11-12 Budget 2012-13 Budget 2013-14 57

TOTAL REVENUES THREE YEAR GRAPH “Another way to look at it” 100% 18.56 20.3 19.73 20.26 21.02 90% 80% 70% Federal 60% 80.15 79.54 78.99 79.38 78.43 State 50% Local 40% 30% 20% 10% 0% 2009-10 2010-11 2011-12 2012-2013 2013-2014 58

Total Revenue History Budget vs. Actual Total Revenue History Budget Actual 100,000,000 90,000,000 80,000,000 70,000,000 2008-09 2009-10 2010-11 2011-12 2012-2013 2013-2014 Budget 81,981,517 85,234,284 86,538,449 86,183,076 89,207,881 91,391,819 Actual 80,530,480 83,217,587 84,600,588 86,687,143 89,207,881 91,391,819 59

 EXPENDITURES AS OF FEBRUARY 11, 2013 60

Enrollment Projections PERKIOMEN VALLEY SCHOOL DISTRICT ENROLLMENT HISTORY AND PROJECTIONS October 2012 LAST TEN YEARS ACTUAL-PROJECTED TEN YEARS TOTAL CHANGE TOTAL W/KDG FROM YEAR BIRTHS KDG 1 2 3 4 5 6 7 8 9 10 11 12 STUDENT@50% PRIOR YR 2003-04 501 396 479 422 450 407 403 356 387 361 380 328 307 282 4958 4760 #REF! 2004-05 467 396 450 493 443 462 416 415 374 383 367 378 322 290 5189 4991 231 2005-06 474 413 464 439 484 433 452 411 413 358 378 353 359 303 5260 5054 71 2006-07 486 412 457 467 443 495 436 472 426 412 367 390 353 362 5492 5286 232 2007-08 566 392 461 448 468 437 498 447 483 437 434 378 379 344 5606 5410 114 2008-09 525 419 428 478 462 468 438 496 459 484 436 435 375 369 5747 5538 141 2009-10 531 451 468 449 489 465 475 449 504 452 493 420 416 361 5892 5667 145 2010-11 513 366 474 461 453 493 474 494 454 507 439 489 410 397 5911 5728 19 2011-12 525 376 426 469 454 440 484 451 479 446 496 433 474 403 5831 5643 -80 2012-13 515 357 424 427 453 448 456 488 455 476 457 496 424 461 5822 5644 -9 P R O J E C T E D 2013-14 490 383 400 427 430 452 451 461 495 452 480 455 484 411 5781 5590 -41 2014-15 450 352 429 402 429 429 456 457 469 492 456 478 444 468 5761 5585 -20 2015-16 440 344 394 432 405 429 432 461 464 465 496 454 466 430 5672 5500 -89 2016-17 414 * 324 386 397 435 404 432 437 468 461 469 494 442 451 5600 5438 -72 2017-18 414 * 324 363 388 399 434 407 437 444 465 464 467 482 428 5503 5341 -97 2018-19 414 * 324 363 365 390 399 437 412 444 441 469 462 456 466 5428 5266 -75 2019-20 414 * 324 363 365 367 390 402 443 419 441 445 467 451 441 5316 5154 -113 2020-21 414 * 324 363 365 367 367 393 406 449 416 444 443 455 437 5229 5067 -87 2021-22 414 * 324 363 365 367 367 369 397 413 446 419 442 432 441 5146 4984 -83 2022-23 414 * 324 363 365 367 367 369 374 404 410 450 417 431 418 5059 4897 -86 SOURCES AND NOTES: 1. Live birth numbers were supplied by the Division of Health Statistics, Pa. Department of Health, Harrisburg. (2011 -Prelim) (Oct 2012) 2. Live births listed are recorded from calendar year information five years prior to the school year listed on the left. 3. Live birth numbers with an asterisk were estimated from the average of the previous six years of known data. 4. Enrollment data are from the monthly enrollment reports given to the Board (October 2012) 5. Enrollment projections are based upon the cohort survival method using the prior nine years to calculate survival rate. * Data not available…assumed to remain consistent 61

Areas of adjustments for the 2013-14 budget year (From December 2012)  The list is a quick review of items on the expenditure side of the 2013-14 budget that were increased over the 2012-13 budget figures: Salary increases for staff $1,557,488 1. Proposed new Staffing $ 305,801 2. Other benefits increase (non-health/script) $ 639,474 3. PSERS increase for rate increase $ 2,509,789 4. Professional Substitute costs $ 165,000 5. Debt Service increase per schedule $ 684,000 6. Transportation increase by contract $ 229,000 7. Charter School tuitions $ 300,000 8. Tax collector increase (County- Del RE) $ 75,000 9. 10. Increased Legal for Spec Ed $ 50,000 Quick Summary of increase $ 6,515,552 62

Adjustments from January 14, 2013 presentation for Expenditures  The following items have been adjusted on the expenditures side of the budget since the January 14, 2013: Reduction in Debt Service for two refundings ($ 543,497) 1. Salary & Benefits (recalculation) ($ 1,552,340) 2. Total adjustments to Expenditures for Tonight’s presentation ($2,095,837) 63

Proposed New Staff  The following positions (salary and benes) are proposed and listed below. These positions do not currently exist in the 2012-13 budget and are included in salary and benefit budget figures presented for 13-14 T echnology has 2 positions 1 FT Level I desktop position (based on current salary estimates) $ 68,138 1 TECH TOSA at Master’s Step 1 (based on current estimates) $ 79,221 Special Ed has 2 positions 2 FT Additional Learning Support at HS (current estimates at $79,221 X 2) $158,442 T otal estimated NEW salaries and benefits $305,801 64

Other Benefits  Items to include in these line items include increased FICA (7.65% of increase in salaries), Disability, Worker’s comp, Unemployment comp, ERIP benefits, Dental and Vision increases  Total increased combined is $639,474 65

Expenditure Assumptions from current through 2015 ‐ 16 fiscal • One expenditure will change in a known way from year to year and that is PSERS – PSERS increase from 12.36% to 16.93% (36.97% increase rate to rate only) for 2013 ‐ 14** – PSERS increase from 16.93% to 21.25% (25.52% increase rate to rate only) for 2014 ‐ 15 – PSERS increase from 21.25% to 25.56% (20.28% increase) for 2015 ‐ 16 ** Governor has proposed to change rate with CAPS adjustments 66

PSERS Impact for 13 ‐ 14 (as shown) • The PSERS (Pennsylvania School Employee Retirement System) employer rate is being increased from 12.36% to 16.93% ** • This is a 36.97% increase for budget year 13 ‐ 14 • The total dollar impact on the expenditure side is $2,394,431 INCREASE ** Governor has proposed to change rate with CAPS adjustments 67

PSERS Impact for 13 ‐ 14 (as shown) • The Governor has proposed that there be a “tailored collar” placed onto the PSERS rates capping the increase per year at 2.5% (resulting rate would be 14.68%)** • Previous collar was placed at 4.5% per year increase (rate is at 16.93%) • We will keep the 16.93% until further notice ** Governor has proposed to change rate with CAPS adjustments 68

Debt Service (NEW) • The PV Debt Service was schedule to be $ 10,286,820 for the 2013 ‐ 14 fiscal year ( in December presentation) • We experienced 2 very successful refundings (Series 2013 and Series A of 2013) • The net result is that the district has actually saved $1,298,886 between the two issues 69

Debt Service (NEW) • There were several options to address these savings. – Use all savings during 13 ‐ 14 fiscal budget planning – Use savings to equal 12 ‐ 13 Debt Service expense of $9,602,609 for 13 ‐ 14 – Use savings to equal 14 ‐ 15 Debt Service $9,743,323 – Use savings in any other combination 70

Debt Service (NEW) • Refunding Options ‐ A – Use of all savings from both issues on 13 ‐ 14 budget – Would help to reduce deficit by $1,298,881 – Real problem is that it sets PV up for our own “Fiscal Cliff” as 13 ‐ 14 budget figure would be $8,987,934 – That would create a huge hole in the 14 ‐ 15 budget as payments are scheduled to increase by $775,000 – Finance Committee in agreement not to use in this manner 71

Debt Service (NEW) • Refunding Options ‐ B – Use savings from refundings only to the extent that we maintain the 13 ‐ 14 Debt Service payment at the current 12 ‐ 13 payment $9,602,269 – Remaining savings get placed into Debt Service Fund to offset future expenditures $768,206 – Fixes only one year 13 ‐ 14 and then need to use for 14 ‐ 15 moving forward 72

Debt Service (NEW) • Refunding Options ‐ C – Use savings from refundings to level payments for Debt Service for BOTH the 13 ‐ 14 and 14 ‐ 15 fiscal year at the 14 ‐ 15 fiscal year rate of $9,743,323 – Fixes rate for 2 years for level expenditures – Still adds $543,497 to Debt Service Fund for future uses – The best use of available refunding options and recommended for action in 13 ‐ 14 budget 73

Salary and Benefits adjustments • The Business Office performed a very labor intensive process that compared actuals, budget and forecast projections from 2011 ‐ 12 through 2013 ‐ 14 projected fiscal years • Remember that we always consider our budget process in 3 year increments – Last year’s (11 ‐ 12) results, Current year (12 ‐ 13) and Next year’s (13 ‐ 14) budget 74

Salary and Benefits adjustments • This review of the “True Up” costs has shown that we could reduce our initial 13 ‐ 14 projected expenditures by a combined total of $1,552,340 • Combination of factors go into this figure which include trend being below budget, movement of personnel below anticipated ranges, negotiations and hiring personnel below (or above) set budget amount during year • Results in an adjustment of 2.42% of Salary and Benefits budget 75

Transportation increases  Contract calls for 2% increase overall on all bus runs  Total increase for Transportation is $229,000 which maintains current busing without critical analysis of bus service at this time  Remember that the new agreement created a minimum floor (2%) and maximum ceiling (3%) base on Act 1 Index 76

Increased Tuition for Charter Schools  Charter Schools are basically unfunded mandates for public schools at this time  Total costs are based on PDE 363 (state form) which lists Perkiomen Valley School District Tuition rates at $10,328.07 for Regular Ed and $21,348.49 for Special Ed  There is need to increase due to increased participation (budgeted for 50 in 11-12 now at 74 for 12-13)  Total cost is now over $1.1 million dollars so we need to add a total budget increase of $300,000 to existing budget figure  We are currently reviewing legislation that has changed the base PDE 363 figures and what that impact may be 77

Fees paid to Delinquent Real Estate Tax Collectors (Montgomery County)  Montgomery County is insisting the district pay a 5% commission fee that had been previously waived in the past ($75,000)  District has decided to continue to utilize Portnoff (since 2009) as our collection agent but we are still required to pay a 5% commission fee to the County  We believe Portnoff’s collection rate far exceeds the previous collection rates from the County and this efficiency means quicker turnaround of cash for the district that more than pays for the 5% addition 78

Fees paid to Delinquent Real Estate Tax Collectors (Montgomery County)  Please remember that there is no fee paid to Portnoff from the District for this service  Taxpayers pay the entire cost of this process during their settlements  This is a pure add to our budget with no additional services provided  Challenge in future may happen due to court intervention and/or direction 79

Insurances  The BUXMONT Health Insurance success has been immediate in our first year  We have been provided rates that show no increase which certainly helps considering our trend has been 11% per year over the past couple of years  Our self-funded prescription group SEPaST is also successful with an even rate as well  This is a positive for PV for 13-14 moving forward 80

Other Expenditures to note  Building budgets have been created with a per student allotment and enrollment projections per 9 year survival method information  Standard Cost per pupil for Elementary is $170/student  Standard Cost per pupil for Middle School is $245/student  Standard Cost per pupil for High School is $288/student  The actual rate per pupil remains the same as the 12-13 budget only the enrollment changes 81

Other Expenditures to note  Operations Department is held flat for 13-14 as proposed  We continue to benefit from consortium enterprises in electric, fuel oil, heating oil, natural gas and various supplies through the MCIU  The Operations Department has been reviewed by Mr. Clemmer, Mrs. Hurd and Mr. Weaver and is deemed to be proper in its allotment so there are no recommended changes in expenditures at this time 82

Other Expenditures to note  Technology Department continues to look at different ways to look at the technology needs of the district  Important projects being discussed continue to be wireless (functionality and efficiency), service and maintaining and upgrading computers throughout the district  Funding and staffing are key elements to this conversation  Technology has been held even 12-13 = 13-14  Further presentations will help to clarify 83

Other Expenditures to note  Special Education Department continues to review the effectiveness of programs and program alternatives  Careful consideration is being given to current costs and where additional needs may happen  We have taken back various programs back in-house over the past several years for savings  Further presentations will help to clarify 84

PROPOSED 2013-14 GENERAL FUND EXPENDITURES (as of February 11, 2013) Budget Budget Budget Budget Budget FYE 09-10 FYE 10-11 FYE 11-12 FYE 12-13 FYE 13-14 Salary $41,040,447 $41,553,904 $43,189,152 $43,408,158 $ 44,179,855 Benefits 13,967,830 15,026,177 15,053,189 $17,175,006 $ 19,972,264 PSERS $ 7,545,715 Debt 9,931,274 10,118,389 9,499,876 $ 9,602,269 $ 9,743,323 R&M, Trans Utilities 13,804,314 13,776,314 12,880,803 $13,355,180 $ 13,584,180 FF&E/T 4,127,144 3,982,649 3,848,373 $ 3,841,054 $ 4,321,760 Other 3,863,275 3,170,016 2,868,257 $ 2,826,214 $ 2,826,214 T otal $86,734,284 $87,627,449 $87,339,650 $90,207,881 $ 94,627,596 1.03% (.33%) 3.28% 4.90% 85

Proposed 2013-14 General Fund Expenditures Proposed as of February 11, 2013 FF&E/Tuitions, Other, $4,321,760 $2,826,214 Salaries R&M, Trans, 4.56% 2.98% Utilities, Benefits $13,584,180 Debt 14.36% R&M, Trans, Utilities FF&E/Tuitions Debt Other $ 9,743,323 10.30% Salaries, $44,179,855, 46.69% Benefits, Total Salaries and Benefits = 67.80% $19,972,264 21.11% 86

TONIGHT’S BOTTOM LINE February 11, 2013 Total Budgeted Sources $ 91,391,819 Total Budgeted Uses ($94,627,596) Total Gross Shortfall ($ 3,235,777) Recommend Use of GF Balance -- TBD-- Net Shortfall with FB use ($ 3,235,777) 87

SHORTFALL AS OF FEBRUARY 11, 2013 REVENUES $91,391,819 SHORTFALL IS $3,235,777 Shortfall EXPENDITURES $ 94,627,596 86 88 90 92 94 96 98 MILLIONS 88

TONIGHT’S BOTTOM LINE February 11, 2013 Calculation for Real Estate Tax increase Total Net Shortfall as of February 11, 2013 ($3,235,777) One mill estimated to equal $2,049,500* Equals total millage equivalent increase of 1.58 mills to 30.82 mills This is a 5.399% increase over 12-13 tax bill *Value of a Mill is estimated as of January 2013 89

PRELIMINARY BUDGET TAX RATES FOR 2013-14 FISCAL YEAR The tax rates associated with this proposal are: Real Estate Tax 30.82 mills (Partial Payment Plan Offered for Homestead/Farmstead Approved Properties only) Sec 679 Per Capita Tax $ 5.00 Act 511 Per Capita Tax $10.00 Occupation Assessment Tax 0 mills Act 511 Wage Tax 1.4% to 1.65% (.9% to school district- net varies to municipality) Real Estate Transfer Tax 1% (.5% to school district and .5% to municipality) 90

Impact of tonight’s presentation on taxpayers February 11, 2013 Assessed Current Proposed Annual Monthly Value 0.02924 0.03082 Increase Increase 150,000.00 4,386.00 4,622.82 236.82 19.74 180,000.00 5,263.20 5,547.39 284.19 23.68 225,000.00 6,579.00 6,934.23 355.23 29.60 280,000.00 8,187.20 8,629.27 442.07 36.84 325,000.00 9,503.00 10,016.11 513.11 42.76 380,000.00 11,111.20 11,711.15 599.95 50.00 91

TONIGHT’S BOTTOM LINE February 11, 2013 Net “true shortfall” presented Net shortfall as presented ($ 3,235,777 ) Minus Act 1 Index at 2.0% $ 1,192,700 Net true shortfall for strategic purposes ($ 2,043,077) To be eliminated by recognizing more revenues or reducing expenditures 92

Constant Review and Alternative Options Considered  Things we need to review to help eliminate deficit  Use of General Fund Balance  Review of possible retirements  Further reductions or revenue enhancements if possible  Exclusions- if palatable 93

Current Fund Balance Fund Balance (Audited) as of June 30, 2012 $ 6,231,175 This would be split between: Unreserved/Undesignated $ 4,838,230 Reserved for PSERS $ 1,000,000 Prepaid Items $ 392,945 Combined Total as of June 30, 2012 $ 6,231,175 94

Current Fund Balance for 13-14 Amount available after use for 12-13 fiscal The final approved General Fund Budget for 2012-13 used $1,000,000 in Unreserved Funding to help create a balanced budget Therefore, the Current Fund Balance available for 13-14 consideration is split as follows: Estimated Unreserved** $ 3,838,230 PSERS Reserved $ 1,000,000 Prepaid Items $ 392,945 Estimated Fund Balance $ 5,231,175 **Unreserved amount is about 4.24% of proposed 2013-14 budgeted expenditures

Recent Fund Balance History 8,000,000 7,000,000 6,000,000 5,000,000 PSERS Reserved 4,000,000 Unreserved 3,000,000 2,000,000 1,000,000 0 6/30/07 6/30/08 6/30/09 6/30/10 6/30/11 6/30/12

More Fund Balance Discussion Budgeted Use of Available Fund Balance 1,600,000 (Reserved and Unreserved) 1,400,000 1,200,000 1,000,000 800,000 600,000 400,000 200,000 - 6/30/2007 6/30/2008 6/30/2009 6/30/2010 6/30/2011 6/30/2012 6/30/2013 Budgeted 1,002,245 307,500 1,000,000 1,500,000 1,068,000 1,155,500 1,000,000 97

Unreserved Fund Balance as a % of Expenditures Unreserved Fund Balance as a % of Expenditures 8,000,000 7.90% 6.78% 7,000,000 7.49% 5.44% 5.62% 5.54% 6,000,000 5,000,000 4.24% 4,000,000 3,000,000 Fund Balance 2,000,000 1,000,000 - 98

Fund balance recommendation 13-14  A general discussion on the use of Fund Balance needs to take place for direction  Historically speaking, the Board/Finance Committee typically has provide for direction by the time of Proposed Preliminary Budget approval  Discussion is welcomed at any time 99

Wise Use of Fund Balance  We must carefully evaluate all issues pertaining to Fund Balance use  It is a one time use of money and will create an automatic shortage the following budget year  The trend has been to use Fund Balance under tightening economic strains or to meet Act 1 Index