Budget PresentationFinal Review, Taxes, & 5-Year Projection

March 27th, 20176:00 P.M.

Meeting Agenda• 2017-18 Budget Status• Six Year Projections (to show w/o debt service)

• Uniform assumptions• 2% tax increase• 3% tax increase• 0% tax increase

• PASBO Conference Update• Berks Health Trust Update

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2017-18 Budget Summary

2017-18 Initial Budget

2017-18 Current Budget

Revenues 31,188,373 31,284,106

Expenditures 33,414,310 33,161,040

Revenues over Expenditures (2,225,937) (1,876,934)

Beginning Fund Balance (Projected) 8,549,271 8,890,478

Ending Fund Balance 6,323,334 7,013,5443

2017-18 Operating Budget Summary

2017-18 Budget

Revenues 31,284,106

Expenditures 31,675,440

Revenues over Expenditures (391,334)

• New Reductions/Additions• State revenue based on

Governor’s budget• $48k in basic ed. subsidy• $19k in special ed. subsidy

• Unlikely that transportation subsidy reduction will occur based on lack of interest from the legislature.

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Forecasted Revenue Assumptions

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• Local Revenue Increases (other than R/E taxes)• 2% - interims, per capita, EIT, IDEA, rentals, donations, tuitions• 1% - all others including transfer taxes, delinquents, interest, gate receipts

• State Revenue Increases• 1% - basic education, special education, transportation, property tax rebate• Social security and PSERS increased based on 50% of expenditure• All others flat funded

• Federal Revenue Increases• 1% for Title I and Title II • Could change based on federal budget (elimination of Title II)• All Access revenues removed

Forecasted Expenditure Assumptions

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• Salaries (aggregate average increases)• 3.5% - medical opt out (based on assumed increase in medical benefits)• 2.8% - professional staff, LT subs • 2.5% - admin, technical, clerical, maintenance, custodial• 1% - co-curricular, coaches• Includes reduction 1 of FTE per year based on enrollment trends

• Benefits (aggregate average increases)• 7% - medical and RX• 2% - life insurance, LTD, vision, dental, tuition reimbursement• Social security, PSERS, unemployment, and workers comp % of salaries

• Peak PSERS rate – 36.4% in 21-22• Average rate – 35.17%

Forecasted Expenditure Assumptions

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• Professional Services• 3% - regular and special education services• 2% - business services, event/game official services • 1% - other services

• Property Services• 2% - repair and maintenance services• 1% - lawn care, snow, trash, rentals

• Other Services• 3% - tuitions (charter, private)• 2% - transportation, insurance, advertising, BCTC

Forecasted Expenditure Assumptions

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• Supplies• 3% - gasoline and diesel• 2% - fuel oil• 1% - natural gas, electric• .5% - other supplies

• Equipment – no increase• Includes $200k/year for construction project contingency• Ongoing maintenance items included in property services

• Budgetary reserve – flat $200k per year• Dues, Fees, Debt Service

• 2% - dues/fees• Debt service based on existing payoff schedule for principal and interest

Specific Projection Assumptions

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• Three scenarios• 2% R/E tax increase, 3% increase, or

0% increase• Each scenario includes a .1% increase

for interims and assessment changes• Adjustments to fund balance and

potential construction projects after debt is retired for each scenario

• Attempt to budget $1.5mm for projects starting in 22-23

Construction Projects

Elementary Intermediate/Middle School High School

• Intercom, clock, and phone upgrade

• Rubber gym floor replacement

• Building envelope• Windows

• Building envelope• Replace hot water heaters• Intercom/Clock upgrade• Condensing boilers• Auditorium renovations• Stadium (lights and

replacement)• Scoreboards

• Chiller replacement• Air handler upgrades• Phone upgrade• Blacktop repair• Grease trap

replacement• Building envelope• Soccer field lights• Scoreboards

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Fund Balance

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• Use of fund balance questions• Amount to draw down from

committed fund balance for PSERS employer rate increases?

• Categories and amounts of assigned fund balance?

• Creation of a capital reserve fund to move money for future capital expenditures?

• Change in allowable fund balance amounts?

• Current 8% cap to unassigned• Possible caps to total fund balance?

Fund Balance Designation

Projected Y/E 16-17

Committed 1,663,000

Assigned 6,306,000

Unassigned 921,478

PASBO Conference Updates

• Property Tax Elimination• Current count at almost 30 no-votes • Other potential options

• Changes based on age and income level for seniors

• State Budget • Increases to basic and special ed.

appear solid• Transportation subsidy decreases less

than likely• Concerns from legislature• Method of changes to formula – 2 years in

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Berks Health Trust Update• Current not-to-exceed rate – 7.5%

• Budgeted 7%• Expected final rate in May

• RX Request for Proposal• Health trust awarded new Pharmacy Benefit Manager RFP to Express Scripts

(administered through Mercer)• Potential $3.9mm in savings to the trust

• Stop loss insurance renewal • Stop loss coverage insurance for high claims over $350k/year• 12 claims in the consortium• 67% increase in coverage with laser (removal) of 4 highest claimants• Approx. 230% increase without laser

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Upcoming Meetings

• Upcoming meetings• April 3, 2017 – Regular Board Meeting• May 1, 2017 – Regular Board Meeting

• Approval of the proposed final budget• Adjustments can still be made

• June 5, 2017 – Regular Board Meeting• Approval of the final budget

• June 19, 2017 – Regular Board Meeting

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