saratoga springs school district budget details

7/29/2019 Saratoga Springs School District Budget Details

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2013-14 BUDGETSaratoga Springs City

Schools

March 5, 2013

Kurt Jaeger, MBA, CPAAssistant Superintendent Business


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3/6/2013 2:45 PM 2

Todays Agenda

Budget Calendar

Annual Meeting

Financial Condition of District

Budget Development Highlights

Revenues & Expenditures

Capital Financing

Cost Containment


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+Early in the processSubject to change

State budget not finalized

Program decisions not finalized


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3/6/2013 2:45 PM 4

2013-14Budget

Calendar

January-February Budget Development

March 1 Property Tax Cap Filing

March 5 Overview

March 12 Transportation and Facilities

March 19 Instructional Program

March 26 Finalize Decisions and adopt BondResolutions

April 9 Adopt Budget and Tax Report Card

April 10 Submit Property Tax Report Card

May 1 Board Petitions Due to District Clerk

May 14 Hearing

May 21 Annual Meeting


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3/6/2013 2:45 PM 5

May 21st Annual Meeting (Vote)

Overview this evening

Budget Vote

Three openings

Election of Board of Education Candidates

Presentation March 12

Bus Bond Proposition

Presentation March 12

Capital Construction Proposition


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3/6/2013 2:45 PM 6

Proposition OneBus Bond

Cyclical replacement of older

buses/vehicles with high mileage.

Seven 66 passenger buses ($764K)

Three 24 passenger buses with theavailability of 3 wheelchairs on each

bus ($186K)

Eligible for transportation aid (45.2%)

In depth presentation on March 12th.

Bond Resolution on March 26th


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+ Proposition 2:

Capital Construction

Estimated amount $3.24 Million

Financing: $1,000,000 Capital Reserve Fund (voter approval)

Bonds issued for remainder of project cost

Eligible for building aid (70.5%)

In depth presentation March 12th.

Bond resolution vote March 26th3/6/2013 2:45 PM

7


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+

Financial Condition ofDistrict


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+ Financial Condition of District:

Standard &Poors LongTerm Rating

March 15, 2010 AA+/Stable

Reaffirmed December 2, 2011AA+/Stable

Criteria

Diverse regionalemployment base

Strong wealth andincome ofcommunity

Healthy operationsresulting in strongfinances

Discussionof

operations

Balanced budgets;operating surpluses

Modest tax increases

Strong fund balances andreserves

Low debt burden


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+$10.3M

$3.0M

$5.3M

$348K $470K

$3.0M

Retirement

Contributions

Tax Certiorari Employee

Benefits

Debt Workers'

Compensation

Capital Reserve

General Fund Reserves as of June 30, 2012


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POST RETIREMENT HEALTH INSURANCEGASB 45

Employee Age Timeline

l_________________________l___________l_________________________________l45 55 62 80

Hire Current Retirement LifeAge Age Age Expectancy

Goal: Match all health insurance costs with years of service.

Considerations: 1. Project cash requirements for future benefits until death.

2. Recalculate projected benefits to present value.3. Allocate present value to employment period (past service already

rendered and anticipated future service.)4. Estimate annual required contribution to fund over 30 year period.5. Original intent to fund annually.6. Continuing to pay as you go requires greater percentage of budget in

upcoming years.


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POST RETIREMENT HEALTH INSURANCE

Annual Requirements to Fund Over 30 Year Period

Annual Cumulative

Fiscal Year Required Pay As Net Unfunded

Ending Contribution You Go Obligation

6/30/2012 9,640,539 5,248,582 22,843,696

6/30/2011 9,508,526 5,324,907 18,451,739

6/30/2010 11,952,457 4,896,456 14,268,120

Funding (Overall) Status

Unfunded Accrued Liability as of June 30, 2012 123,339,009

Insights

1. Office of State Comptroller (OSC) proposed legislation to provide for the funding of

these obligations via the creation of trust funds to be administered by OSC.

As of June 30, 2010, the Board of Education had designated $11.4 Million of

unreserved fund balance for this purpose (post retirement health insurance.)

2. The legislation proposed by the OSC has not been enacted into law. The Board

of Education is evaluating the option of using these funds, over a multi-year period,

to sustain the academic programs of the district by lowering the tax levy.


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+Message:

Retiree Health

Insurance

Reserves


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Budget DevelopmentHighlights:


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Budget Development Highlights:

Three year

financialprojection

Initial costcontainmenttargets

Identificationof majorfactors driving

increasesRetirement SystemCosts ($2.3M)

Health InsuranceCosts ($1.7M)

StructuralDeficits

Defined

Difficulty managing

Betteralignment ofbudgets withactual costs

Budgetarycontainment

Differentiatedtimeline forbudgetarysubsidies

Fund balance-shortertimeframe

Reserves-longertimeframe

Single use-unlessreplenished


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+

-15,000,000

-10,000,000

-5,000,000

0

5,000,000

10,000,000

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Saratoga Springs City School District Unmanaged Operating Surplus/Deficit


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+

REVENUES


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What are the real caps?

Contingency

budget capstax levy at prior

year level

Growth in

personal incomecaps state aid

increases

Sequestrationcaps federal

grants

Economicdownturn capsassessments andinterest income


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+

Tax Levy

limit =4.813%

TRSCapital

Expenditure


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FIVE YEAR TAX LEVY HISTORY

SARATOGA SPRINGS CITY SCHOOL DISTRICT

Actual

District Per-Cent

Tax levy Change Comment

Next Year

2013-14 75,483,250 3.90% Modeling per February 4, 2013 Committee Meeting

Historical

2012-13 72,649,904 2.56% 4 year average from 2009-10 to 2012-13 was 1.27%.

2011-12 70,839,370 0.00%

2010-11 70,839,370 2.50%

2009-10 69,111,581 0.00% 2009-10 was the first levy adopted after the

major economic downturn.

2008-09 69,111,581 3.97%


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$27,000,000

$28,000,000

$29,000,000

$30,000,000

$31,000,000

$32,000,000

$33,000,000

2009-10 2010-11 2011-12 2012-13 (Est.) 2013-14 (Est.)

Millions

School Year

STATE AID PRIOR TO TAX CAP (2012-13)


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+Compare:

Revenues

State Aid

(47%)

Tax Levy

(49%)

Other

(4%)

Revenues

State Aid

(24.3%)

Tax Levy

(67.5%)

Other

(8.2%)

1991-1992 2013-3014


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State Aid Highlights:2013-14 Reductions

Building Aid

Transportation Aid

Private Excess Cost Aid 2012-13 ConcernsPotential

Building Aid

Reduction

State Aid anticipated to decrease

nearly $1.2 million.

24


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+How does NYSED see our district?

How will this impact future state aid?

Combined Wealth Ratio

Full Value Ratio Component

AGI Ratio Component


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0

0.25

0.5

0.75

1

1.25

1.5

NYS Saratoga

Springs

2011-12 COMBINED WEALTH RATIOS


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0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4

NYS

Saratoga Springs

FULL VALUE RATIO

Full Value


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0.9 1 1.1 1.2

NYS

Saratoga Springs

AGI RATIO

Income


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(000's) (000's) (000's)2012-2013 2013-14

E stimated E stimated Increase

Account Revenues Revenues (Decrease)

STATE AID

TOTAL STATE AID 28,268 27,112 (1,156)

FUND B ALANCE DESIGNATIONS

From Capital Reserve - 1,000 1,000

From Reserve for Tax Reduction 261 261 -

From Retirement Contribution Reserve 1,750 1,000 (750)

From Reserve for Debt 348 - (348)

From Unreserved Fund Balance 5,338 5,888 550

7,697 8,149 452

OTHER RECEIPTS

Total Other Receipts 1,117 1,055 (62)

SCHOOL PROPERTY TAX LEVY (3.9% Model) 72,650 75,483 2,833

TOTAL REVENUE 109,732 111,799 2,067

2013 - 2014 PROPOSED BUDGET

PROJECTED GENERAL FUND REVENUES

MARCH 5, 2013 BUDGET PRE SENTATION


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$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 (Est.)

Dollars

School Year

Expended Reserves and Fund Balance


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+

EXPENDITURES


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+Projected 2013-14

Expenditures

Instruction (48.3%)

Benefits (30.5%)

Plant (6.7%)

Debt (6.3%)

Transportation

(3.9%)

General Support

(4.3%)


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(000's) (000's) (000's)

2012-2013 2013-14

Estimated Estimated Increase

Budget Budget (Decrease)

Instruction

Administration & Improvement 4,088 3,888 (200)

Teaching-Regular School 31,027 30,778 (249)

Programs for Children with Disabiliti 9,039 8,798 (241)

Occupational Education 3,419 3,237 (182)

Teaching-Special Schools 293 246 (47)

Instructional Media 3,348 3,320 (28)

Pupil Services 4,238 4,464 226

Total Instructional Costs 55,452 54,731 (721)

Employee Benefits 30,518 34,517 3,999Plant Operation Maintenance 7,927 7,569 (358)

Debt Service 7,293 7,167 (126)

Pupil Transportation 4,444 4,371 (73)

Interfund Transfers- Special Aid 100 115 15

Interfund Transfers- School Lunch 0 100 100

Interfund Transfers- Capital Fund 1,000 1,000

General Support

Board of Education 34 27 (7)

Central Administration 421 265 (156)

Finance Department 1,028 1,025 (3)Staff Costs 990 842 (148)

Special Items 1,374 1,333 (41)

Community Services 152 156 4

Total General Support 3,999 3,648 (351)

Total Expenditures 109,733 113,218 3,485

Total Revenues 111,799

Cost Containment Needed to Reach 3.9% Levy Growth 1,419

ESTIMATED EXPENDITURE SUMMARY 2013-14

(After Budgetary Containment; Prior to Cost Containment)

March 5, 2013 Budget Presentation


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Employee Benefits

Retirement System Cost Drivers

Health Insurance

Sustainability

Affordable Care Act

3/6/2013 2:45 PM 34


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+Drivers of Retirement Contributions by

Public Employers

Investment returns Not reaching the stratospheric values of the nineties

Not reaching interest rates of the nineties

Demographic make-up of the workforce Ratio of active workers to retirees

Average age of the workforce

The older the workforce and the greater number of retirees, thehigher contribution rate to cover reserves to pay these future

liabilities.


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Members vs. Retirees (TRS-Statewide)

As of June 30 Members Retirees

1960 99,555 10,796

1980 203,330 46,812

2000 224,986 100,839

2009 280,338 139,297

2011 280,435 141,633


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+ Retirement System Insights:

New York State

Creation of Tiers 5 and 6

Governors Proposal-Level 12.5% Employer Contribution Rates (ECR) funding

option

Not law or approved by systems

State systems reported to be well-funded

Nationally

Concern about funding adequacy of pensions

GASB 67 and 68 Pension Accounting and Financial Reporting (Effective 2014-

15)

Funding status to be reported on local financial statements

For financial statement reporting purposes only one acceptable actuarial

method acceptable for measuring adequacy of funding

(Financial Statements) Entry Age Normal Method

(NYSTRS) Aggregate Cost Method

Potential to cause upward pressure on ECR


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Illustration Only

Potential Impact of Rising Health Insurance

Assume: Salary increases of 2%

Health insurance increases of 9%

YEAR SALARY H.I.

1 $40,000 $14,000

2 $40,800 $15,260

3 $41,616 $16,633

4 $42,448 $18,130

5 $43,297 $19,7626 $44,163 $21,541

7 $45,046 $23,479

8 $45,947 $25,593

9 $46,866 $27,896

10 $47,804 $30,407

11 $48,760 $33,143

12 $49,735 $36,126

13 $50,730 $39,377

14 $51,744 $42,921

15 $52,779 $46,784

16 $53,835 $50,995

17 $54,911 $55,584

18 $56,010 $60,587

19 $57,130 $66,040

20 $58,272 $71,983


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$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

POTENTIAL IMPACT OF RISING HEALTH INSURANCE COST

SALARY

H.I.

Year


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AffordableCare Act

PharmaceuticalIndustry Fee

Medical DeviceManufacturer Fee

ComparativeEffectiveness Research

Fee

Tax on high earnersand unearned income

ACA Insurance Fee

ACA Reinsurance Fee

High Cost(Luxury/Cadillac)Tax


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+

Traditional health plans notsustainable? Cadillac Tax =

extremely serious peril

Consider alternative planstructures to awaken

patients to costs

Concern over costs: Cost is someone elses problem.

Its covered by insurance.

Consider CollaborativeHealth Initiatives around

the state

Health InsuranceInsights


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CAPITAL FINANCING


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$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

$4,500,000

$5,000,000

$5,500,000

$6,000,000

$6,500,000

$7,000,000$7,500,000

2013-20142014-2015

2015-2016 2016-2017 2017-20182018-2019

2019-20202020-2021

2021-20222022-2023

DebtServicePayment

School Year

SARATOGA SPRINGS CITY SCHOOL DISTRICT

10 Year Debt Service Payment Summary Schedule


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+Chapter 97 Projects:

For projects with a Commissioner Approval Date (CAD)

on or after 7/1/11, changes the earliest Building Aid can

start from:

Later of CAD + 18 months or notification of contract

signing(SA-139 receipt) to

Later of CAD+18 months or the date on which both the final

Certificate of substantial completion and a complete final

cost report are on file at SED

Building Aid will not begin if SA-139 not received in time tobe included in Nov 15th frozen data base (used for

Governors budget).


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Receipt$ are delayedfor years

Paid over assumedamortization period

Expenditures andrevenues are not

matched up

Presumably state aidwill be paid,

eventually

Insights onBuilding Aid


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3/6/2013 2:45 PM 46

Additional discussion, questions or

comments?

Next-Cost Containment.


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Governor Cuomo photo: http://nycccapitalregion.files.wordpress.com/2011/04/9008935-large.jpg

Citations:

saratoga springs school district budget details

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