2015-16 Proposed Final Budget Presentation (May 11, 2015)

Selinsgrove Area School District

GENERAL FUND FINANCIAL STATEMENT(Current financial position)

2013-14 Actual

2014-15 Budget

2014-15 Projected

Beginning Balance

$ 8,082,703 $ 7,846,270 $ 8,757,776

Revenues $ 37,944,959 $ 39,026,090 $ 39,183,741

Expenditures $ 35,919,886 $ 39,371,589 $ 38,130,917

Surplus/(Deficit) $ 2,025,073 $ (345,499) $ 1,052,824

Transfer out to Capital Reserve

$ (1,350,000)

$ (600,000)

Transfer out to Debt Service

$ (400,000)

Ending Balance $ 8,757,776 $ 7,500,771 $ 8,810,600

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2014-15 BUDGET SAVINGS (Current Yr.)

Adopted budget balance $(345,500) Personnel Salary Savings (2.5%) $ 269,000 Fringes/Benefit Savings $ 98,000 Medical insurance savings $ 436,000 Transportation savings $ 128,000 Facilities budget savings $ 76,000 All other department savings (net) $ 14,000 Revenues over budget $ 182,000 Not using budgetary reserve $ 195,000Total Savings (projected surplus) 2.7% $1.05 million

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TOTAL FUND BALANCES AT 6-30-15

Designations (“buckets”) Balance

Restricted - Special Ed ACCESS $ 348,981

Nonspendable - Inventory of Supplies

$ 32,709

Nonspendable – Prepaid Expenses $ 67,547

Committed – Retiree Healthcare $ 2,318,334

Committed - Future PSERS Expenses

$ 3,214,716

Committed – Educational Resources

$ 306,389

Unassigned Balance $ 2,521,924 (6.3% of budget)

TOTAL GENERAL FUND RESERVES $ 8,810,600 (23.1% of budget)

DEBT SERVICE FUND RESERVES $ 1,871,228

CAPITAL RESERVE FUND RESERVES $ 1,855,910

TOTAL ALL GOV’T FUNDS RESERVES

$ 12,537,738

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FUTURE CAPITAL RESERVE PROJECTS – Importance of maintaining a healthy Capital Reserve Fund

Project Amount Project start date

Intermediate school roof project

$ 251,700 Summer 2015

Middle school addition (total cost of $818,000 balance from food service)

$ 344,000 Summer 2015

High school bleacher replacement

$ 163,100 Summer 2015

Football field turf replacement (total cost of $313,000)

$ 247,300 as needed

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Other expenses: annual summer maintenance projects for carpeting, paving, vehicle replacement, roof restoration. Middle school HVAC system replacement, Intermediate school building controls upgrade (possible performance contract), stadium track surface replacement, renovation of science labs at MS & HS . Fund used to offset any unforeseen major equipment replacement.

2015-16 BUDGET SUMMARY FLOW OF FUNDS – GENERAL FUND

Beginning Fund Balance $ 8,810,600

Revenues (without tax increase) $39,807,709

Expenditures $41,475,773

Deficit ( $1,668,064)

Transfer in from Educational Resources Reserve

$ 125,000

Transfer in from PSERS Reserve

$ 321,472

Adj Deficit before tax increase

( $1,221,592)

Proposed 1.58 mills (2.5%) Act 1 allowable tax increase

$392,666

Operating Deficit to be covered from unassigned fund balance

( $828,926)

Ending Fund Balance $ 7,535,202

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REVENUE HIGHLIGHTS

Moderately growing local economy 1.58 mill real estate tax increase (2.5%) and a 0.6%

growth in the overall real estate base Earned Income Tax collections budgeted with a 3%

increase from proj 14-15 collections Basic education subsidy level funding (state funding

is uncertain at this point) (Gov. proposal 6.6% increase)

Special education subsidy level funding Accountability Block Grant level funding Increase in Keystone Literacy Grant Year 4 funding of

$93,000 (four year total grant funds of $2.98 million)

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2015-16 REVENUE BY SOURCE

LOCAL61%

STATE35%

FEDERAL4%

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$24.4 M

$14.2 M

$1.6 M

State averages: Local 54%, State 41%, Federal 3%, Other 2%

HISTORICAL REVENUES BY SOURCE

$-

$5

$10

$15

$20

$25

11-12 12-13 13-14 14-15 15-16

9

millions

local

state

federal

EXPENDITURE HIGHLIGHTS

Six teacher retirements at end of 14/15 school year (replacing all positions)

2.5 new teaching positions in budget – 5th grade, MS math, part-time HS gifted

Salary increases per personnel contracts – teachers 4.5% salary plus 1.65% steps, administrators 3.5%, classified 4.5%

PSERS rate increase from 21.40% to 25.84% Medical insurance premium increase of 3.8% Building and technology budgets level funded (5th year at reduced

funding)

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EXPENDITURE HIGHLIGHTS

Transfer out to debt service fund reduced by $400,000 (debt service reserves to be used)

Capital reserve transfer of $96,000 reflects Jackson-Penn rental income

New Middle school math textbook series ($125,000)

New part-time PIMS coordinator (shared service)

Total budget of $41.48 million – overall increase of $2.1 million or 5.3% from 14/15 original budget

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MAJOR EXPENDITURE INCREASES

EXPENSE INCREASE FROM 14-15 Budget

EMPLOYER SHR OF RETIREMENT EXP

$ 1,022,992 25.7%

EMPLOYEE SALARY/WAGES $ 749,580 4.1%

OTHER EMPLOYEE BENEFITS $ 145,000 2.3%

SUN TECH CONTRIBUTIONS $ 110,172 12.1%

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2015-16 EXPENDITURE ANALYSIS

Contractual/ Fixed97%

Discretionary3%

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Personnel costs, student tuition, transportation, utilities, debt service

Supplies, textbooks, equipment ,repairs, travel

HISTORICAL USE OF FUNDS

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Personnel costs make up 75% of total budget

$-

$5,000,000

$10,000,000

$15,000,000

$20,000,000

11-12 12-13 13-14 14-15 15-16

Wages/ Salaries

Fringes/ Benefits

Professional Svcs

Property Svcs

Purchased Svcs

Supplies

Equipment

Debt Service

Transfers Out

FUTURE BUDGET CONCERNS Modest economic recovery producing

inadequate local and state revenue growth Act 1 index will remain low Uncertainty at the state level (supportive

Governor but reluctant legislature) New basic education funding formula Shift away from property tax towards less

predictable income and sales taxes Teacher contract ends next year 6/30/16 Unfunded Pension system - PSERS rate

increases to reach 32% of payroll

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PROJECTED PSERS RATE

4.785.64

8.6512.36

16.93

21.4025.84

29.6930.6231.56 32.23

0

5

10

15

20

25

30

35

09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18 18-19 19-20

Employer % Rate

PSERS Rate

16Fiscal Year

NET PSERS COST TO DISTRICT10 Year Analysis

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FUTURE BUDGET PROJECTIONS

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GENERAL FUND PROJECTED ENDING FUND BALANCE

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PROPOSED FINAL BUDGET SUMMARY“THE BOTTOM LINE”

REVENUES (with 1.58 mill real est incr)

$40,200,375

EXPENSES ($41,475,773)

USE OF FUND BALANCE ($125,000 FROM EDUCATIONAL RESOURCES, $321,472 FROM PSERS, & $828,926 UNASSIGNED)

$ 1,275,398

MILLAGE INCREASE% INCREASE

1.58 2.5%

TOTAL MILLS 1 mill = $248,500 in revenue

64.99

INCREASE TO AVG HOMEOWNERHomestead/Farmstead credit $133

$43 ($3.59 per month)

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PRESENTATION SUMMARY (POINTS TO REMEMBER)

Financial reserves (fund balance) – very strong position in the short term

State funding is uncertain (new funding formula, tax shift away from real estate)

Significant budget challenges remain for the future – PSERS, Healthcare, teacher contract

Importance of long-term budgeting decisions and forecasting

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