Public Budget Presentation

1
Public Budget Presentation

• June 3 , 2002
• Lewis Plauny

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Presentation Agenda

• Current Draft Budget key numbers
• Explain Budgetary Reserve Fund Balance
• Major Revenue Expenditure Increases
• Our Continuing Budget Improvement Plan
• Insights on Grants Budget Problems
• Standard Poors Review
• Answer questions ask for decisions

3
Budget Draft Status

• 2001-2002 Budget 18,000,000
• 2002-2003 Budget approx. 19,500,000
• Increase of 1,500,000 or 8.3

4
Review of Budget Draft content

• 155 Page Board Document Itemizes all anticipated
  expenses and revenues
• Current Expenses are 18,221,995
• Current Revenues are 18,171,324
• Difference is -50,671
• Difference in millage equivalent is .28 mill
• 1.0 mill 2.6 tax increase
• .5 mill 1.3 tax increase

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How We Calculate Millage Equivalent

• In 2001-2002 the District collected
  6,901,236.09 in current real estate taxes.
• This was 90.4 of the levied taxes.
• Amount collected divided by 37.5 mills levied
  equals 184,032.96 dollars collected for each mill
  levied.

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Why We Should Think Millage Equivalent

• Proactive - To be fiscally responsible local
  Boards should fund Current RevenuesCurrent
  Expenditures and Think of all newly created
  budget costs in terms of millage increases
• Reactive - The State Federal govts are always
  one to three years behind (if) they fund school
  needs

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Millage Impacts

• Average 2001-2002 Real Estate Parcel is assessed
  at 27,340 (after Clean Green)
• One mill is 26.62 increase on the average
  parcel.

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Budgetary Reservefor 2002-2003

• A Budgetary Reserve is a non-itemized
  placeholder amount that is used to anticipate
  unforeseeable expenses during the budget year
  that must be recorded in the General Fund.
• Example a special needs student enrolls during
  the year and the district must pay his/her
  tuition
• Budgetary Reserve is approx. 198,000
• 198,000 is approx. 1 of a 19,500,000

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Beginning Fund Balancefor 2002-2003

• 2001-2002s budget total is 18,000,000
• The District budgets to a 7 ½ fund balance
• 7 ½ of 18,000,000 is 1,350,000
• Tentative Budget is approx. 19,500,000
• 7 ½ of 19,500,00 is 1,462,500

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2002-2003 BudgetExpenditure Increases

• Blue Cross (211 only) Increase2002-2003
  1,128,6712001-2002 1,071,400 57,271
• Salary (100s) Increases 2002-2003 9,554,058
  2001-2002 8,787,637 766,421

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2002-2003 BudgetSubsidy Increases

• ESBE Increase 128,755 (1) 0.69 mills
• Special Education Increase 46,959 (6.6)
  0.25 mills
• Retirement Rate Decrease ????? Decrease in name
  only 231,928 -1.26 mills

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Three Year Budget Improvement Plan

• Improving budgeting practices do not increase
  funding or decrease costs
• Improves the methods and procedures with which we
  create the budget
• Improves identifying costs and purchasing
  accountability

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A Balanced Educational Plan
Budget Plan
Expenditure Plan
Continuous Improvement Plan

• Increasing one side causes the other two sides to
  increase
• Decreasing one side causes the other two sides to
  decrease

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Electronic EquipmentDepreciation Philosophy

• A recommended Sustainability Guideline
• If you can not afford to replace it, you can
  not afford to maintain it
• If you can not afford to maintain it, you can
  not afford to buy it
• If you can not afford to train staff to use it
  properly, you can not afford to buy it

15
Grant Insights

• Funding allocations are determined primarily by
  the availability of funds at higher levels of
  government
• Funding for all grants will change and the
  funding changes will not always be positive
• Higher government levels do not have downward
  accountability

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Entitlement Type Grants

• Expect continuing State Federal support
• Example Title 1 for poor needy families
• Grant amounts controlled by State Federal
  funding allocations
• Funding will increase or decrease
• Allowable uses will change
• May be carefully used for continuing salaries
  and benefits

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Entitlement Type GrantsApplied for annually

• Social Security Reimbursement
• Retirement Reimbursement
• Building Debt Service Reimbursement
• Special Education
• Cafeteria Reimbursement
• Title 1 Poor and needy families and Reading
  First
• Title II (Part A) Improving Teacher Quality and
  (Part D) Enhancing Education Through Technology
• Title V Innovative Programs

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Competitive Type GrantsSunset type legislation

• Politically motivated (can occur midyear)
• Used to start but not continue support of
  Federal and State education initiatives
• Be thankful for them but,
• Only spend after you have received funds
• Use grant funds for non-recurring expenses
• Consider carefully future program maintenance
  costs

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Standard Poors Review

• Local-Source Revenue Per Student (Definition)
  Includes revenue for instruction, support
  services, and other operating purposes obtained
  from local sources including real estate property
  and other district-levied taxes, investment
  earnings, and tuition. Revenue is divided by
  total enrollment to determine per-student basis.

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Standard Poors ReviewMASD Key Factors

• Well below-average operations and maintenance
  expenditures per student
• Exceptionally above-average transportation
  expenditures per student
• Well below-average local-source revenue per
  student

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Standard Poors Quotes

• On a per-student basis, the districts
  operations and maintenance expenditures of 460
  are exceptionally below the state average of
  658, and lower than the peer group average.
  Statewide, only 6.0 of Pennsylvanias school
  districts report lower per-student operations and
  maintenance expenditures. Spending on operations
  and maintenance represents 6.8 of the districts
  operating expenditures, compared with the state
  average of 9.0. During the period examined, the
  districts per-student operations and maintenance
  expenditures have decreased by 7.2. This is
  counter to the state trend, which has increased,
  and counter to the peer trend, which has remained
  relatively unchanged over the same time period.

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Standard Poors Quotes

• Transportation expenditures of 814 per student
  are exceptionally above the state average of
  414, and higher than the peer group average.
  Statewide, only 1.2 of Pennsylvanias school
  districts spend more per student than the
  district. Spending on transportation represents
  12.1 of the districts operating expenditures,
  compared with the state average of 5.7. During
  the period examined, the districts per-student
  transportation expenditures have increased by
  17.4. This is greater than the state and peer
  increases over the same time period.

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Postponing Capital Expenditures

• Postponing real and needed costs is not
  budget cutting.
• The need does not go away.
• Not budgeting a need results in hidden deficit
  budgeting.
• The negative impact is even worse in future
  budgets.

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Inherent Structural Budget Deficienciesbuilt-i
n budget problems

• Employee Contracts, Benefits Services Cost
  Increases
• Proportionally Reduced State Federal Funding
• Decrease in State subsidies from 52 to 3x
• Hidden problems
• Work loads shifted from Federal and State staff
  to Local education staff
• Unfunded State Federal Mandates shift tax
  burden from Federal State tax levies to Local
  tax levies

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What we need to do

• Decide on any final budget changes
• Decide on a total final budget amount
• Decide the millage rate for next year
• Approve both items at Fridays meeting