Overview on Financial Status

Presented to: Maine Endwell CSD

Presented on: February 9, 2017

Presented by: Kathy Blackman, C.P.A.

Controller, Central Business Office

Tonight’s topics• Projections 2016-17 updated

• Status of Reserves• Repair Reserve

• Overview of Executive Proposal

• Long Range Plan• Assumptions including State Aid

• Tax Levy Limit Calculation

• Review of Benefits

Projection of 2016-20172016-2017

Projected Revenues $49,994,191

Projected Expenditures $49,434,326

Projected Operating Surplus $ 358,584

Projected Gain in Total Fund Balance $ 358,584

Note: This projection is expected to be refined as additional information on such things as staffing changes, boces services, tuition costs and utilities become available.

16-17 projected fund balance changes from January – if any

• Projected fund balance decreased from last month primarily due to increases in special education costs for placements and related services.

Projection of 2016-2017 fund balance

6/30/2016 6/30/2017

Restricted Fund Balance $6,578,821 $7,138,549

Assigned Appropriated Fund Balance

$250,000 $250,000

Assigned Encumbrances $201,371 $0

Unassigned Fund Balance $1,926,518 $1,926,745

TOTAL FUND BALANCE $8,956,710 $9,315,294

In the 2016-2017 projection, the Reserves or Restricted Fund Balance is funded by a net of $559,727. This includes potential funding to the capital or repair reserve in the amount of $700,000, use of the retirement Contribution Reserve ($100,000), Tax Certiorari ($39,998), and EBALR ($2,618) and a small amount of interest earnings.

STATUS OF RESERVESBalance 6/30/16

Projected Funding (use) in 2016-2017

Retirement Contribution Reserve $ 2,395,906 ($ 100,000)

Tax Certiorari Reserve $ 524,022 ($ 39,998)

Unemployment Insurance Reserve $ 97,471 $0

Capital Reserve $ 1,245,766 $700,000

Employee Benefit Accrued Liability Reserve (EBLAR) $ 2,315,657 ($ 2,618)

TOTAL RESERVES $ 6,578,822 $557,384

Repair Reserve6/30/2016 Balance: $-0- (Does not currently exist)It is recommended that the District consider the establishment of a Repair Reserve.

◦ Is established by the BOE resolution

◦ Funded by voter referendum

◦ To use in non-emergent situations, a public hearing is required; however, no public vote is required

◦ For payment of non-reoccurring maintenance costs:

◦ Items identified on Building Condition Survey that cannot wait until the next capital project

◦ Tennis Courts

◦ Track Resurfacing

Recommended Funding: up to $1,000,000 over 3 years

Overview of Executive Proposal

2016-17 2017-18 Increase %

Foundation Aid $13,381,858 $13,769,016 $387,158 2.89%

Building Aid $5,711,993 $5,727,514 $15,521 0.27%

Expense Driven Aid $6,076,344 $6,048,623 ($27,721) (0.46%)

Total Aid $25,170,195 $25,545,153 $374,958 1.49%

ME’s property wealth as compared to the state increased by a higher percentage thereby increasing the district’s CWR. The increase is causing decreases in the district’s aid ratios. This resulted in a reduction in the building aid and expense driven aids. These aid would have been higher without this change.

The Combined Wealth Ratio (CWR) compares district wealth, both property and income, to the State average wealth. This measure is updated annually.

Assumptions in the long range projection

Revenues:

•Foundation Aid would increase 2.89% in 2017-18 and 2% each year thereafter

•Expenditure Driven State Aid (excluding Building Aid) would increase 2% each year, except for 17-18 which would decrease of (0.46%)

•The tax levy limit is 0.89% in 17-18

•The tax levy is projected to be 2% in 18-19 and beyond

Expenditures:

•Staff is based on current staff of record, including open positions

•Health Insurance is projected at an estimated 11.28% increase in 17-18 and increase to a lesser degree in the next 3 years

•Teacher Retirement System costs are projected at 9.8% increase then a slight increase after that, while the Employee Retirement System costs are projected to be relatively flat

•The average expenditure increase overall is projected at 3.61% per year

Long Term projection: 2/3/2017Based on 2016-17 Projection of Fund Balance

2016-17 2017-18 2018-19 2019-20 2020-21

Tax Levy % 1.28% 0.89% 2.00% 2.00% 2.00%

FoundationAid %

1.31% 2.89% 2.00% 2.00% 2.00%

BeginningFund Balance $8,956,710 $9,315,294 $8,412,147 $6,225,939 $2,866,465

Operating Surplus/ (Deficit)

$358,584 $(903,147) $(2,186,208) $(3,359,474) $(4,378,003)

Ending Fund Balance $9,315,294 $8,412,147 $6,225,939 $2,866,465 $(1,511,538)

Long Term projection: 2/3/2017Based on 2016-17 Projection of Fund Balance

(5,000,000)

(4,000,000)

(3,000,000)

(2,000,000)

(1,000,000)

0

1,000,000

2016-2017 2017-2018 2018-2019 2019-2020 2020-2021

Operating Surplus/Deficit

Tax Levy Limit CalculationStep 1

• Prior Year Tax Levy

Step 2• Tax Base Growth Factor

Step 3 •PILOTS 2016-17

Step 4 •Exclusions 2016-17 (Capital Levy & Torts)

Step 5• Allowable Growth Factor

Step 6• Available Carryover

Step 7• PILOTS 2017-18

Step 8• Exclusions 2017-18 (Capital Levy, Pensions & Torts)

Result• Maximum Allowable Levy Limit

12

STEPS

Step 1 Prior Tax Levy $ 23,237,142

Step 2 x Tax Base Growth Factor 1.0006

$ 23,251,084

Step 3 + PILOTS current year $ 124,501

Step 4 - Exclusion: Capital Levy, current year $ (1,255,002)

$ 22,120,583

Step 5 x Allowable Growth Factor 1.26%

$ 22,399,303

Step 6 + Available Carryover -0-

Step 7 - PILOTS next year $ (129,118)

TAX LEVY LIMIT $ 22,270,185

Step 8 + Exclusion: Capital Levy, next year $ 1,173,127

MAXIMUM ALLOWABLE LEVY LIMIT $ 23,443,312

13

Tax Levy Limit Calculation

STEPS

Step 1 Prior Tax Levy $ 23,237,142

Step 2 x Tax Base Growth Factor 1.0006

$ 23,251,084

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Tax Levy Limit Calculation – Step 2

Tax Base Growth Factor • Determined by the NYS Department of Taxation and Finance• Represents the bricks and mortar development in the district

• ME is primarily residential• The past 5 years the district has had very little change in the assessed

values, indicating there has been no marked development/growth in the district.

15

Tax Levy Limit Calculation – Step 5

Allowable Growth Factor • Determined by the Bureau of Labor Statistics• Consumer Price Index (CPI) is the monthly data on changes in the process

paid by consumers for certain goods and services. This measures is recalculated to produce the annual CPI used in the tax levy limit calculation.

• This is the lower of CPI or 2%. It has not been 2% since 2012-13.• 2013-14 2.00%• 2014-15 1.46%• 2015-16 1.62%• 2016-17 0.12%• 2017-18 1.26%

Maximum allowable levy LIMIT Maximum Tax Levy Increase without “Super Majority”

2017-18 Maximum Allowable Tax Levy*

$23,443,312

2016-17 Tax Levy $23,237,142

Maximum increase in Tax Levy to remain under Tax Levy Limit

$ 206,170

Percentage Increase 0.89%

*Without voter approval in excess of 60%

16

ME Variables impacting levy limit

Tax Base Growth Factor

Allowable Growth Factor

Capital Levy

PILOTS

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Review of Benefits2016-17 Budget - Expenditures

Salaries, $18,586,497,

37%

BOCES, $6,834,674,

14%

Debt Service,

$7,120,811, 14%

Benefits, $13,212,189,

27%

Other Expenditures, $3,973,667,

8%

2016-17 Budget

Review of Benefits2016-17 Budget - Expenditures

Retirement Contributions,

$2,281,423, 17%

Social Security, $1,462,766, 11%

Health & Dental, $9,191,000, 70%

Other, $277,000,

2%

Benefits

Health/Dental Insurance

accounts for over 18% of the annual

budget

Health Insurance

Active Employees – BTDHIC*

• Excellus BlueCross BlueShield

• Indemnity Plan

• Preferred Provider Organization (PPO)

Retirees

• Hartford Insurance

• Medicare Advantage Plan

*BTDHIC – Broome Tioga Delaware Health Insurance Consortium

Health Insurance

70%

80%

90%

100%

110%

120%

130%

140%

150%

Maine Endwell CSD vs. BTDHIC Loss Ratio(Claims / Contributions)

District Loss Ratio Consortium Loss Ratio

The Loss Ratio measures the difference between premiums and paid claims. The optimal loss ratio runs in the 93% to 95% range. This allows premium dollars to cover the claim and administrative expenses.

Health Insurance

The Plan Performance illustrates the result of net contributions by the district vs. paid claims and administrative costs. Net contribution includes the annual paid premiums less any surplus distribution received by the district.

-$2,500,000

-$2,000,000

-$1,500,000

-$1,000,000

-$500,000

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

Plan Performance

Plan Performance

Health Insurance

This graph illustrates Maine Endwell CSD’s paid premiums to the Consortium vs. claims paid on behalf of the District dating back to the beginning of the 2012/13 plan year.

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Premiums vs. Claims

Paid Premium Paid Claims

Health Insurance

This graph takes the data from the previous exhibit and “normalizes” claim costs by removing large dollar claimant effect and calculating a a three month claim cost average. This provides a more accurate representation of the loss of premium vs. the loss of claim experience applicable to the Medicare population.

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Premiums vs. Normalized Claims

Paid Premium Normalized Claims

Health Insurance

This graph looks at the average cost per contract dating back to the 2012/13 plan year.

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

Average Cost per Contract

Maine Endwell CSD BTD Consortium

Health InsuranceKaiser Family Foundation –and-

Health Research & Education Trust

• Annual Survey conducted to provide current information about employer-sponsored health benefits for private and nonfederal public employers with three or more employees

• Information provided reflects employer-sponsored health benefits in 2016

• 18th annual survey conducted

Health Insurance

Kaiser Family Foundation –and-Health Research & Education Trust

Employer Health

Benefits

• Premiums for family coverage have increased 20% since 2011 and 58% since 2006

• On average covered workers contribute 18% of the premium for single coverage and 30% of the premium for family coverage. Dollar amounts average $1,129 for single coverage & $5,277 for family coverage

• Less than 1% of subscribers are in a conventional indemnity plan

• Average annual deductible is $1,221 for covered workers

First Look at 2017-2018 Budget

Questions?