central bucks school district finance committee notes ... · paul faulkner, member john gamble geri...

CENTRAL BUCKS SCHOOL DISTRICT Finance Committee Notes

March 18, 2015

The Finance Committee meeting was called to order at 7:10 p.m. by Jerel Wohl, Chairperson

PUBLIC COMMENT Three members of the public were present.

Review of Notes The February 18, 2015 Finance Committee meeting notes were accepted as presented.

INFORMATION/ DISCUSSION/ACTION ITEMS

Construction Debt Defeasance – John Frey, Director for Public Financial Management Inc. provided an overview of the plan to prepay outstanding construction debt. Since 2011 the school district has prepaid over $100 million on outstanding construction debt. Administration is providing another proposal to prepay an additional $40 million in construction debt. The proposal will yield $8.5 million in additional value by eliminating some interest payments through fiscal year 2028-2029. Currently, the school district has principal and interest payments remaining on outstanding debt of $206,574,571. After prepayment of debt, the district will have $158,030,679 remaining in principal and interest payments.

Funding for the $40M construction debt prepayment will come from $25M reserved over the past couple of years for debt payments, $9M from the general fund balance, and $6M anticipated as expected positive revenue and expense variance from the current year budget operations. This strategy will also reduce the general fund balance from approximately 6% to 3% of the budget. This will put the district in compliance with proposed legislation from Governor Wolf. The governor's proposal will disallow future real estate tax increases if a school district has a fund balance of 4% or greater.

Committee Members Present Other Board Members and Administrators Present Jerel Wohl, Chairperson Jim Duffy Paul Faulkner, Member John Gamble Geri McMullin, Member Joe Jagelka

Tyler TomlinsonKelly Unger

Dave Matyas, Business Administrator Dr. Dave Weitzel, Superintendent Dr. David Bolton, Assistant Superintendent Dr. Nancy Silvious, Assistant Superintendent

Committee Members Absent Suzanne Dailey, Staff Development Karl Funseth, Principal, Buckingham Elementary Jason Jaffe, Staff Development Richard Kratz, Curriculum Development Cheryl Leatherbarrow, Principal, Tamanend MS Alyssa Walloff, Staff Development

Savings from the debt prepayments have been used for five years to meet mandated increased costs of the state pension plan and to keep real estate tax increases to a minimum. The proposed $40 million debt prepayment will help the school district meet increased pension payments through the year 2029 with minimal real estate tax increases. Administration hopes to propose another round of debt prepayment in the spring of 2017 to further reduce principal and interest payments and to help offset health-care expenses that are rising faster than the Act 1 inflation index. Q: Are there any other school districts that are prepaying their construction debt? A: Yes, one other client of Public Financial Management is doing the same thing. PFM has

hundreds of school district and municipal clients across Pennsylvania. Q: Will PDE reimburse the school district for their share of the debt prepayment? A: Yes, school districts should receive a lump sum payments from PDE of approximately

$1,447,000. There is no timeline for when PDE would make that lump sum reimbursement.

Q: Why isn't administration recommending the option to prepay $45 million in construction

debt? A: A $45 million debt prepayment might stretch school district finances a little too thin. If the

school district took another $5 million out of the general fund balance, the fund balance would drop to approximately 1.3% of the budget.

The committee gave direction to administration and to PFM to continue with the process and involve the solicitor and bond counsel to prepare resolutions for the board to consider at a future meeting. 2015-16 Budget Update – Administration gave an overview of the current status of the 2015-16 general fund budget. Administration feels very comfortable recommending no millage increase for the new fiscal year. Revenues are anticipated to be higher by $2.6M compared to the preliminary budget. Governor Wolf is recommending a funding increase of approximately $1.5M for basic instructional subsidy and a half million dollars for special education subsidy. In addition, administration adjusted local revenues upward by approximately $600,000. Local revenues continue their upward three-year trend. Real estate taxes are projected to increase even without a millage increase due to increased taxable assessed value from new construction. Earned income taxes are also improving. The latest Bucks County unemployment rate is approximately 4.5%. With a declining unemployment rate, more people are entering the workforce and improving wage-based taxes. In addition, if the school board approves the $40M debt prepayment, it will reduce principal payments for the budget year by over $2M. Looking at the history of state revenues and if Governor Wolf's funding plan is adopted by the state legislature, then state revenues for the budget year will be roughly equivalent to the 2006-07 fiscal year which is good news after many years of declining state support. On the expenditure side of the budget, approximately $400,000 was added to the salary line and $235,000 was added to the benefit line of the budget to show the impact that the proposed elementary initiative would have on the budget.

Reviewing the principal and transfer budget line item area of the budget, principal payments on debt is expected to go down by approximately $2 million if the school board approves the construction debt prepayment. Recommended budget transfers include $5.3M for short-term capital projects such as roofing repairs, parking lot repairs, and HVAC equipment replacement which is an increase of $1M over the current year. It's also recommended to transfer $8.5M to the long-term capital fund to help cover projected costs for the Holicong Middle School and Unami Middle School renovation projects. This is an increase of approximately $5.3M over the current year funding amount. The long-term financial plan of the school district is to pay for renovations and capital projects with cash rather than incur borrowing costs and associated interest payments in the future. $1M is proposed as a transfer to the transportation capital account as part of the ongoing school bus replacement program. $12M is proposed as a transfer into the debt service fund which is an increase of $1.2M over the current year. The transfer into the debt service fund will help provide seed money for the next round of construction debt prepayment tentatively scheduled for the spring of 2017. No transfers are anticipated during the budget year for technology purchases. The technology capital fund currently has a balance of $4.9M and does not need any additional funding at this time. The 2015-16 technology plan calls for expenditures of approximately $2.1M including a new district wide telephone system. Initial estimates of a new phone system are significantly less than first anticipated. Funding for the technology capital fund will be reviewed again as part of the 2016-17 budget process at which time budget transfers could resume if funds are needed. $1M is proposed as a transfer into the other post-employment benefit fund to comply with GASB 34 requirements and $480,000 is proposed as a transfer into the self-insured healthcare contingency fund. If the school board adopts the proposed budget with no millage increase, the school district will have an average real estate millage increase of under 1% per year for the past five years. This is well below the general economic rate of inflation especially considering state pension costs have increased by 360% in the past five years and health-care costs continue to increase at rates at least double the rate of inflation. Q: Should the school district budget for the governor's proposed subsidy increase in light of

the letter state legislators sent out cautioning that the governor's numbers may not materialize?

A: Administration is also hearing from the governor's budget office that they feel very strongly that the governor's funding proposal will make its way through the legislative process. Even if the governors funding proposal is eliminated, implementation of the construction debt prepayment will reduce expenditures to allow for implementation of the elementary initiative and not increase the real estate millage rate.

Q: How many teaching positions are included in the budget to implement the elementary

initiative?

A: The elementary initiative will require the hiring of approximately 12 additional teaching positions. But, it is anticipated that the district will be able to reduce four teaching positions due to declining student enrollment. Therefore, the net impact of the elementary initiative on the budget will be about eight new teaching positions.

The committee directed administration to continue with the budget preparation process as proposed. Scoreboard Sponsorship – The committee continued its discussion of scoreboard sponsorship for the high school stadiums. The consensus of the committee was not to seek commercial advertisements for the scoreboards at this point in time. Elementary Initiative - Dr. Weitzel reviewed the initial plan for an elementary initiative that would provide additional enrichment for students at the elementary level. The proposal would develop an interdisciplinary, project-based special class (once per week) for students in grades 1-6 beginning in the 2015-2016 school year. This learning opportunity would be taught by an elementary certified teacher. In turn, this class would provide a fifth, 40-minute planning and preparation period for each classroom and full-time special education teacher; similar to the current special area classes – art, library, music, and physical education. Elementary teachers have less preparation time than their secondary counterparts. The additional preparation time each week will give teachers within each building a chance to collaborate and develop more integrated lesson plans between the subject areas. The purpose of this special class is to enrich students’ authentic learning experiences by building their skills in collaboration, critical and creative thinking, and communication to solve real world problems. Students will develop original ideas by applying their content knowledge to real world situations and problems that are age appropriate. The overarching goals of this instructional program include, but are not limited to:

Focusing on critical and creative thinking, communication, and collaboration to solve real problems.

Integrating the content of our elementary curriculum – science, technology, art/design, math, reading, and writing – to non-routine application of these curricular concepts.

Providing meaningful work that is developmentally appropriate and challenging. Helping young learners make sense of their world by learning how math, science, and art

are a daily part of our lives. Planning and conducting research, managing projects, solving problems, and making

informed decisions using appropriate digital tools and resources to gather, evaluate, and use information.

Increasing the use of CB’s educational technology upgrades, including enhanced WiFi access, updated interactive technology in all classrooms (Interactive White Boards), SMART software, teacher laptops, iPads in our K-2 classrooms.

If the school board school board approved hiring additional teachers and the approval of the overarching instructional goals, the next steps would be:

Formally identify the core team members to develop the curriculum. Core team members now include: David Bolton, Laura Enama, Richard Kratz, Alyssa

Walloff, Jason Jaffe, Suzanne Dailey, Pam Pensabene (PEN teacher/coordinator),

Stephanie Adler (teacher), Lindsay Smith (teacher), Cheryl Leatherbarrow middle school principal, and Karl Funseth elementary principal.

The core team would continue to gather information to support the overall program goals, and collect resources that can be used to write the curriculum/units of study.

Utilize the talents of the teachers we will hire to work with the core team to write the curriculum/units of study (summer 2015) with implementation in September 2015.

Q: Can the district afford to hire 12 new teachers for this enrichment program? A: Yes, the budget impact of the new teaching positions will probably be a total of eight new

positions due to the anticipated reduction of four teaching positions, through attrition, due to declining student enrollment. The total cost is anticipated to be $630,000 for salaries and benefits during the first year of implementation. The timing is good as the governor is proposing additional funding for school districts. The governor’s additional funding proposal requires school districts to use the additional funding to provide enriched instructional opportunities, additional remediation opportunities, or extended school year opportunities for students. The elementary initiative would meet the governor’s guidelines.

Q: Where will the extra 40 minutes per week come from to provide this additional classroom

instructional time? A: Each elementary subject area has a flexible amount of instructional time associated with it

each week as some lesson plans may take longer than others to master. The 40 minutes of additional enrichment time will come from some of these flexible minutes that each subject currently has built in each week.

Q: The timeline to start this program is this coming September. Is this too aggressive to

implement? A: No. Administration is already working to identify teachers to interview for these newly

created positions. The teachers would work over the summer with our staff and curriculum developers to have lessons plans ready for the start of the 2015-16 school year.

Q: What impact will this have on the current Elementary curriculum? A: The new program would enrich the students’ learning experience. This new class is an

extension of the current curriculum. Students will be asked to apply the curriculum information through real-world, unpredictable problems.

Q: Will this have an impact on class size at the Elementary level? A: No. This is an additional special and will have no impact on class sizes. Q: Mrs. Unger asked if the Elementary Program Initiative overview will be placed on our

website to let parents/families know that program design will be more fully explained at the School Board Curriculum Committee meeting held on Wednesday, April 15, 7:00 p.m. at the Administration Center?

A: Yes. We will post some information about the initiative on our website (and our Facebook page). The information will include some details about the program in advance of the April 15 Curriculum Committee meeting.

ADJOURNMENT The meeting adjourned at 8:40 p.m. The committee then held an executive session to discuss personnel items. Notes submitted by Dave Matyas, Business Administrator and Administrative Liaison to the Finance Committee

Central Bucks School DistrictFinance Committee

Administration Center – 20 Welden DriveMarch 18th, 2015 7:00 pm Projected time – 60 Minutes

Jerel Wohl, Chairperson Geri McMullin, MemberPaul Faulkner, MemberDave Matyas, Business Administrator Susan Vincent, Director of Finance

Agenda

Information Items

* These item(s) may be on the public board agenda. ~ These item(s) may require executive session.

Please note: Public comment should be limited to three minutes

1) Call to Order Chairperson Start Time

2) Public Comment Chairperson

3) Review of Prior Meeting Notes Chairperson/Committee Pages 1 - 5

4) Information / Discussion / Action Items

a. * Construction Debt Defeasance (pre-payment) 20 minutesJohn Frye, of PFM

Pages 6 – 9

b. * Budget Update 20 minutesDave Matyas

Pages 10 – 16

c. Scoreboard Sponsorship 5 minutesDave Matyas

Discussion

d. Elementary Initiative 20 minutesDr. Weitzel

Discussion

e. * Food Service Update 5 minutesDave Matyas

Pages 29 – 36

f. Scoreboard Sponsorship 5 minutesDave Matyas

Discussion

5) Adjournment Chairperson End Time

6) Next Meeting Date: April 22, 2015

* Treasurers Report Pages 17 – 21Other Funds Report Page 22* Investment Report Pages 23 – 27Payroll Expense Projections Page 28Tax Collection Projections Page 29Benefits Projections Page 30Article on School District’s Fund Balance Proposal by Governor Wolf Page 31Payroll Expense Projections Year Ending 2013-14 Page x

CENTRAL BUCKS SCHOOL DISTRICTFinance Committee Notes

February 18, 2015

The Finance Committee meeting was called to order at 8:35 p.m. by Jerel Wohl, Chairperson

PUBLIC COMMENTTwo members of the public were present.

Review of NotesThe November 19, 2014 Finance Committee meeting notes were accepted as presented.

INFORMATION/ DISCUSSION/ACTION ITEMS

Thompson Properties – Administration reviewed an assessment appeal settlement with Thompson Car Dealership. The district would refund them about $55,000 from past tax years, 2011-12 through 2014-15. The settlement would reduce their tax assessment moving forward which will cost the district about $16,000 in lost real estate tax revenues each year at the current millage rate of 124.1 mills. The settlement agreement has been reviewed by the solicitor and the district’s commercial appraiser. The Finance Committee recommended this item be placed on the Board agenda for consideration.

An update on the Regal Cinemas Assessment Appeal was also provided. The district is in the process of verifying their appraisal. If the district would accept their numbers, the district would owe Regal Cinemas approximately $1.8M in overpaid taxes from 2002 through 2014. Future real estate taxes would be reduced by approximately $150,000 per year. Regal Cinemas are currently paying about $350,000 per year in real estate taxes.

Q: Is the district using the solicitor and Liberty Valuations to develop another appraisal for the cinema property?

A: Yes, with an assessment appeal of this size another appraisal is being conducted to verify the owner’s figures.

GPS Tracking on School Buses – The district currently has a GPS system on our buses that piggybacks onto the two-way radio system. It allows minimal tracking of maybe 2 or 3 buses at a time. When the district had a Homeland Security audit, this was a feature that they felt had usefulness for safety and to help law

Committee Members Present Other Board Members and Administrators PresentJerel Wohl, Chairperson Jim DuffyPaul Faulkner, Member Kelly UngerGeri McMullin

Kelly UngerDave Matyas, Business Administrator Dr. Dave Weitzel, SuperintendentSusan Vincent, Director of Finance Dr. David Bolton, Assistant Superintendent

Dr. Nancy Silvious, Assistant SuperintendentCommittee Members AbsentGeri McMullin, Member

Finance Committee March 18, 2015 Page 1 of 31

enforcement in an emergency. The system that First Student uses is better. It can track every bus all of the time. The Zonar system that First Student uses is hardware installed on a bus that communicates the location of a bus in real time using the cellular network. This system works no matter where a bus travels for field trips or sport trips. The current two-way radio based system is limited to the signal area of our two-way radio antenna.

A really useful tool is to integrate CB and FS buses under one umbrella and follow every bus in real time. The Edutracker software would take the Zonar GPS data and integrates it into our existing bus routing software. The transportation department could see if a bus is following the assigned route or if the driver missed a turn. This is particularly helpful at the start of the school year when the drivers are least familiar with their routes and the dispatchers can help get them to the next stop.

With Zonar and Edutracker the district can see if a bus arrives at a stop on time, is speeding, or has left the depot late. All this allows us to better communicate with parents on the status of a bus.The initial cost of the system would be about $71,000 for hardware and software, and the districtwould incur about $83,000 per year in recurring expenses for Zonar cellular usage and software licensing.

Q: This system would track the route of all buses throughout the day and provide a turn-by-turn historical map of a school bus route?

A: Yes, this is an important feature to make sure drivers all following the established bus route for safety reasons.

Q: The system can follow a bus anywhere there is cellular service in real time?A: Yes.

Q: How would the system provide better customer service to parents? A: The existing routing software can draw a virtual fence around all bus depots to identify if a

bus has left late. This would then create a warning message on a dispatcher’s computer screen. The dispatcher would then send out a more timely text message to parents.

The committee directed administration to try to secure better pricing through First Student withtheir volume discounts as well as look for other pricing discounts through the district’s current cellular account.

Copier Replacement – At the November Finance Committee meeting administration discussed KDI’s proposal for an early termination to the current four year lease on Savin copiers. KDI proposed replacing them early with a new four-year lease with Canon copiers. The district has 5.5 months remaining on the current copier lease. Administration also sought a proposal from Canon Solutions America as they had previously supplied copiers to the district with a very good record of service.

At the November Finance Committee meeting, administration reviewed the cost differentials between KDI and Canon Solutions America. KDI’s proposal would cost about $200,000 less over a 48 month lease than Canon Solutions America. Administration had concerns about historical


maintenance issues and availability of parts. Therefore, the recommendation was to use Canon Solutions even with the higher costs.

KDI responded with an improved proposal adding 15 used copiers at no additional charge and would also post a performance bond for the copier maintenance contract. The performance bond would allow the district to choose another company to maintain the copiers after the first 12months of the new lease if the district was not happy with KDI’s maintenance performance in the future. The performance bond would also cover any difference in cost between KDI’s service and a new company up to $86,000 for the remaining lease term.

The solicitor weighed in on the performance bond proposed by KDI. The performance bond would give the district more leverage with KDI but collecting on the performance bond’s financial aspects could take constant documentation, allowances of time for KDI to take corrective action – with multiple iterations, and potentially require litigation to collect on the financial guarantee to cover any difference in costs with a new maintenance company.

Administration’s recommendation is to continue with the current KDI copier lease until it terminates in July 2015. Administration also requested the ability to add up to 23 small copiers, if needed, to bridge the district over to a new copier lease if there are maintenance issues on the current fleet of copiers.

The cost to add a basic copier to a building between now and the end of July is about $225 per month per copier for leasing and maintenance. (assume 20,000 copies made per month). The copiers would be sourced through Canon Solutions America using Co-Stars state cooperative purchasing contracts. The additional machines would only be used if the existing machines were unavailable due to maintenance issues.

The committee directed administration to place this item on the Board agenda for consideration.

Policy 616 - Administration continues to work through computer report design issues on proposed check payment reports. A new report format has been developed by taking information for the financial accounting software and loading the data into a spreadsheet for improved formatting. The major provision in the policy change is to have the Board approve payments prior to the checks being released to companies.

During most months, check approval is not an issue. But, in months where there may only be one school board meeting it could present a problem with making timely payments to companies. The intent is to continue to provide the board with detailed accounts payable information as checks are being processed.

In a month where there may only be one school board meeting, board members are asked to let administration know within five days if they have an issue with any of the pending payments. If no issues are raised within five days it will be assumed that checks can be sent out to companies to meet district obligations. If the School Board would like further enhancements to expenditure reports, they can be made as the process is refined.


The committee directed administration to place this policy on the Board agenda for first read.

Food Service -

Administration has been working with Aramark to determine if the middle school cafeterias could be reconfigured into food court style serving areas (like the high schools) rather than traditional serving lines. The one consistent request received from middle school students is to serve them faster so they have more time with their friends. Unfortunately, architectural reviews show load-bearing wall issues making the cost of a reconfiguration prohibitive. The district is looking at other ways to improve middle school serving speed by providing students with an alternative serving area along the cafeteria wall opposite of where the current serving lines are in each middle school. We will need to buy some refrigeration and warming equipment and coordinate with the facility department to bring in extra electricity, but it should be a more cost effective solution than our original thoughts. It should also provide middle school students more time to eat and socialize with their friends. The estimated cost of equipment is around $22,000 per middle school plus the cost of adding electricity to the new equipment area. As a part of the new Aramark contract, they agreed to invest about $240,000 in the CB food service program over a five year period. The middle school projects can be paid for using Aramark funding leaving the $800,000 food service capital fund intact. In addition, Aramark would like to install a Java City at the CB South concession stand across the hallway from the gym. It would be similar to the Java City currently at CB West. The estimated cost is in the $60,000 - $65,000 range and would be paid for by Aramark funding. Q: Is Aramark in favor of making these changes?A: Yes, the proposals will enhance food preparation efficiency, provide faster service, and

provide a wider variety of food to middle school students. The committee directed administration to bring these projects before the Board as they are ready to start. Scoreboards - Three companies have some interest in sponsoring a high school stadium scoreboard. Administration has had some discussions but can’t get any firm commitments toward sponsorship. The committee gave guidance, such as checking with other districts to see the levels of financial commitment companies may be providing, and perhaps checking with competitors as to their interest in sponsorships. The committee directed administration to provide a future update on sponsorship.


ADJOURNMENTThe meeting adjourned at 8:55 p.m.

Notes submitted by Dave Matyas, Business Administrator and Administrative Liaison to the Finance Committee


CENTRAL BUCKS SCHOOL DISTRICTSummary of Defeasance Options

Assumptions Principal Defeased $35,105,000- Use $40,000,000 of District cash to defease portions of the 2005, 2011A, 2011B, and 2011C Bonds Interest Escrowed to Call Date $7,732,439- Settlement of the defeasance occurs on or around June 1, 2015 Costs of Issuance $62,161- Structure the defeasance to realize an overall level obligation of net PSERS contributions and local effort Less: Escrow Earnings ($2,899,600)

Total Cash Contribution $40,000,000

OVERALL OBLIGATION SUMMARY

1 2 3 4 5 6 7 8 9 10Fiscal PSERS Gross Estimated Net PSERS Existing Less: New Total

Year Total Contribution Contribution State Contribution Local Defeased Local OverallEnding Salaries Rate [1] Amount Reimbursement Amount Effort Local Effort Effort Obligation

3.00% Growth [2 x 3] 50.00% [4-5] [7-8] [6+9]

6/30/2015 145,230,000 21.400% 31,079,220 15,539,610 15,539,610 22,562,805 22,562,805 38,102,4156/30/2016 149,586,900 25.840% 38,653,255 19,326,627 19,326,627 21,545,879 (2,075,142) 19,470,737 38,797,3646/30/2017 154,074,507 29.270% 45,097,608 22,548,804 22,548,804 21,725,440 (5,475,238) 16,250,202 38,799,0066/30/2018 158,696,742 30.250% 48,005,765 24,002,882 24,002,882 20,298,287 (5,504,590) 14,793,698 38,796,5806/30/2019 163,457,644 31.280% 51,129,551 25,564,776 25,564,776 17,281,054 (4,046,340) 13,234,714 38,799,4896/30/2020 168,361,374 32.080% 54,010,329 27,005,164 27,005,164 14,143,170 (2,349,483) 11,793,687 38,798,8516/30/2021 173,412,215 32.020% 55,526,591 27,763,296 27,763,296 10,855,541 (1,041,752) 9,813,790 37,577,0856/30/2022 178,614,581 32.010% 57,174,528 28,587,264 28,587,264 9,285,584 (1,041,752) 8,243,833 36,831,0976/30/2023 183,973,019 32.220% 59,276,107 29,638,053 29,638,053 9,346,667 (1,041,752) 8,304,915 37,942,9686/30/2024 189,492,209 32.300% 61,205,984 30,602,992 30,602,992 9,530,976 (1,332,685) 8,198,292 38,801,2846/30/2025 195,176,976 32.360% 63,159,269 31,579,635 31,579,635 9,700,405 (2,479,303) 7,221,102 38,800,7366/30/2026 201,032,285 32.430% 65,194,770 32,597,385 32,597,385 9,862,862 (3,661,785) 6,201,078 38,798,4636/30/2027 207,063,254 32.520% 67,336,970 33,668,485 33,668,485 10,023,876 (4,891,564) 5,132,312 38,800,7976/30/2028 213,275,151 32.600% 69,527,699 34,763,850 34,763,850 10,151,758 (6,115,885) 4,035,873 38,799,7226/30/2029 219,673,406 32.680% 71,789,269 35,894,634 35,894,634 10,260,266 (7,356,292) 2,903,974 38,798,608

TOTAL 2,701,120,264 838,166,914 419,083,457 419,083,457 206,574,571 (48,413,562) 158,161,010 577,244,467[1] Per PSERS projections on future contribution rates

DEFEASED BONDS SUMMARY

11 12 13 14 15 16 17 18Fiscal Existing 2005 Bonds 2011A Bonds 2011B Bonds 2011C Bonds Total Net

Year Local Defeased Defeased Defeased Defeased Defeased OverallEnding Effort Local Effort Local Effort Local Effort Local Effort Local Effort Local Effort

6/30/2015 22,562,805 22,562,8056/30/2016 21,545,879 685,195 274,096 475,755 640,096 2,075,142 19,470,7376/30/2017 21,725,440 2,641,405 274,096 475,755 2,083,981 5,475,238 16,250,2026/30/2018 20,298,287 2,469,763 475,755 2,559,071 5,504,590 14,793,6986/30/2019 17,281,054 1,337,426 2,189,744 519,170 4,046,340 13,234,7146/30/2020 14,143,170 521,797 1,308,517 519,170 2,349,483 11,793,6876/30/2021 10,855,541 160,453 362,129 519,170 1,041,752 9,813,7906/30/2022 9,285,584 160,453 362,129 519,170 1,041,752 8,243,8336/30/2023 9,346,667 160,453 362,129 519,170 1,041,752 8,304,9156/30/2024 9,530,976 382,432 431,083 519,170 1,332,685 8,198,2926/30/2025 9,700,405 429,241 1,530,893 519,170 2,479,303 7,221,1026/30/2026 9,862,862 2,842,544 300,071 519,170 3,661,785 6,201,0786/30/2027 10,023,876 1,265,421 3,626,143 4,891,564 5,132,3126/30/2028 10,151,758 2,340,112 3,775,773 6,115,885 4,035,8736/30/2029 10,260,266 3,516,263 3,840,028 7,356,292 2,903,974

TOTAL 206,574,571 3,326,600 9,012,754 15,395,760 20,678,448 48,413,562 158,161,010

OVERALL ILLUSTRATION

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Net PSERS Contribution Amount

New Local Effort

Existing Overall Obligation

Public Financial Management, Inc.


CENTRAL BUCKS SCHOOL DISTRICTSummary of Defeasance Options

Assumptions Principal Defeased $39,490,000- Use $45,000,000 of District cash to defease portions of the 2005, 2011A, 2011B, and 2011C Bonds Interest Escrowed to Call Date $8,713,841- Settlement of the defeasance occurs on or around June 1, 2015 Costs of Issuance $61,419- Structure the defeasance to realize an overall level obligation of net PSERS contributions and local effort Less: Escrow Earnings ($3,265,260)

Total Cash Contribution $45,000,000

OVERALL OBLIGATION SUMMARY

1 2 3 4 5 6 7 8 9 10Fiscal PSERS Gross Estimated Net PSERS Existing Less: New Total

Year Total Contribution Contribution State Contribution Local Defeased Local OverallEnding Salaries Rate [1] Amount Reimbursement Amount Effort Local Effort Effort Obligation

3.00% Growth [2 x 3] 50.00% [4-5] [7-8] [6+9]

6/30/2015 145,230,000 21.400% 31,079,220 15,539,610 15,539,610 22,562,805 22,562,805 38,102,4156/30/2016 149,586,900 25.840% 38,653,255 19,326,627 19,326,627 21,545,879 (2,582,271) 18,963,608 38,290,2366/30/2017 154,074,507 29.270% 45,097,608 22,548,804 22,548,804 21,725,440 (5,980,487) 15,744,953 38,293,7576/30/2018 158,696,742 30.250% 48,005,765 24,002,882 24,002,882 20,298,287 (6,010,241) 14,288,046 38,290,9286/30/2019 163,457,644 31.280% 51,129,551 25,564,776 25,564,776 17,281,054 (4,554,930) 12,726,124 38,290,9006/30/2020 168,361,374 32.080% 54,010,329 27,005,164 27,005,164 14,143,170 (2,858,861) 11,284,309 38,289,4746/30/2021 173,412,215 32.020% 55,526,591 27,763,296 27,763,296 10,855,541 (1,168,437) 9,687,104 37,450,4006/30/2022 178,614,581 32.010% 57,174,528 28,587,264 28,587,264 9,285,584 (1,168,437) 8,117,148 36,704,4116/30/2023 183,973,019 32.220% 59,276,107 29,638,053 29,638,053 9,346,667 (1,168,437) 8,178,230 37,816,2836/30/2024 189,492,209 32.300% 61,205,984 30,602,992 30,602,992 9,530,976 (1,843,540) 7,687,436 38,290,4286/30/2025 195,176,976 32.360% 63,159,269 31,579,635 31,579,635 9,700,405 (2,985,726) 6,714,679 38,294,3146/30/2026 201,032,285 32.430% 65,194,770 32,597,385 32,597,385 9,862,862 (4,167,009) 5,695,853 38,293,2386/30/2027 207,063,254 32.520% 67,336,970 33,668,485 33,668,485 10,023,876 (5,401,482) 4,622,394 38,290,8796/30/2028 213,275,151 32.600% 69,527,699 34,763,850 34,763,850 10,151,758 (6,623,341) 3,528,417 38,292,2676/30/2029 219,673,406 32.680% 71,789,269 35,894,634 35,894,634 10,260,266 (7,865,225) 2,395,041 38,289,676

TOTAL 2,701,120,264 838,166,914 419,083,457 419,083,457 206,574,571 (54,378,423) 152,196,149 571,279,606[1] Per PSERS projections on future contribution rates

DEFEASED BONDS SUMMARY

11 12 13 14 15 16 17 18Fiscal Existing 2005 Bonds 2011A Bonds 2011B Bonds 2011C Bonds Total Net

Year Local Defeased Defeased Defeased Defeased Defeased OverallEnding Effort Local Effort Local Effort Local Effort Local Effort Local Effort Local Effort

6/30/2015 22,562,805 22,562,8056/30/2016 21,545,879 1,011,114 294,702 625,341 651,113 2,582,271 18,963,6086/30/2017 21,725,440 2,641,405 294,702 625,341 2,419,038 5,980,487 15,744,9536/30/2018 20,298,287 2,702,697 748,473 2,559,071 6,010,241 14,288,0466/30/2019 17,281,054 1,351,662 2,684,098 519,170 4,554,930 12,726,1246/30/2020 14,143,170 536,032 1,803,660 519,170 2,858,861 11,284,3096/30/2021 10,855,541 174,688 474,579 519,170 1,168,437 9,687,1046/30/2022 9,285,584 174,688 474,579 519,170 1,168,437 8,117,1486/30/2023 9,346,667 174,688 474,579 519,170 1,168,437 8,178,2306/30/2024 9,530,976 396,668 927,703 519,170 1,843,540 7,687,4366/30/2025 9,700,405 443,476 2,023,080 519,170 2,985,726 6,714,6796/30/2026 9,862,862 3,141,492 506,347 519,170 4,167,009 5,695,8536/30/2027 10,023,876 1,775,339 3,626,143 5,401,482 4,622,3946/30/2028 10,151,758 2,847,568 3,775,773 6,623,341 3,528,4176/30/2029 10,260,266 4,025,196 3,840,028 7,865,225 2,395,041

TOTAL 206,574,571 3,652,520 9,685,496 20,015,884 21,024,523 54,378,423 152,196,149

OVERALL ILLUSTRATION

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

40,000,000

45,000,000

50,000,000

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029

Net PSERS Contribution Amount

New Local Effort

Existing Overall Obligation

Public Financial Management, Inc.


Source of Funds for Debt DefeasanceBank Amount

Fund 4 Debt Service TD Bank 7,000,000 PSDLAF (Full Flex) 8,000,000

TD Bank(GF Pending Transfer to Fund 4) 10,000,000 25,000,000

* Fund 1 Use of Fund Balance TD Bank 9,000,000

Fund 1 Expected Positive Rev/Exp Variance from 2014-2015 Operations (3M Rev + 3M Exps)

Various Banks 6,000,000

Total Defeasance Amount 40,000,000

* Fund Balance $18,024,326 approximately 6% of 2014-15 budget

Less Proposed use of Fund Balance $9,000,000Projected Fund Balance as of 6/30/2015 $9,024,326

% of 2014-15 General Fund Budget of $301,538,509 2.99%

We are recommending reducing the fund balance to a greater extent than normal due to anticipated PDE requirements that fund balances must be below 4% to qualify for a future real estate tax increase. No tax increase is recommended for 2015-16, but this will position the district to qualify for a tax increase, if needed, in future years.


Fiscal Year

Existing Local Effort June

30,2015

2005 Bonds Defeased

Local Effort

2011A Bonds Defeased

Local Effort

2011B Bonds Defeased

Local Effort

2011C Bonds Defeased

Local Effort

Total Principal and Interest Payments

After 2014-15 Defeasance. (per

PFM analysis 2-20-2015)

Debt Levels Pre-Defeasance (source

2008 bond fund official statement page

16)2014-15 22,562,805 22,562,805 28,618,7512015-16 21,545,879 685,195 274,096 475,755 640,096 19,470,737 28,490,1762016-17 21,725,440 2,641,405 274,096 475,755 2,083,981 16,250,203 28,490,8142017-18 20,298,287 0 2,469,763 475,755 2,559,071 14,793,698 28,477,7392018-19 17,281,054 1,337,426 2,189,744 519,170 13,234,714 28,415,1892019-20 14,143,170 521,797 1,308,517 519,170 11,793,686 28,408,3392020-21 10,855,541 160,453 362,129 519,170 9,813,789 28,362,1892021-22 9,285,584 160,453 362,129 519,170 8,243,832 28,361,2392022-23 9,346,667 160,453 362,129 519,170 8,304,915 27,814,2202023-24 9,530,976 382,432 431,083 519,170 8,198,291 27,717,1392024-25 9,700,405 429,241 1,530,893 519,170 7,221,101 27,456,0392025-26 9,862,862 2,842,544 300,071 519,170 6,201,077 1,601,4202026-27 10,023,876 1,265,421 3,626,143 5,132,312 1,599,4702027-28 10,151,758 2,340,112 3,775,773 4,035,873 -2028-29 10,260,266 3,516,263 3,840,028 2,903,975 -TOTAL $206,574,570 $3,326,600 $9,012,754 $15,395,756 $20,678,452 $158,161,008 $313,812,724

$22,

562,

805

$19,

470,

737

$16,

250,

203

$14,

793,

698

$13,

234,

714

$11,

793,

686

$9,8

13,7

89

$8,2

43,8

32

$8,3

04,9

15

$8,1

98,2

91

$7,2

21,1

01

$6,2

01,0

77

$5,1

32,3

12

$4,0

35,8

73

$2,9

03,9

75

2014-15, $28,618,751

2024-25, $27,456,039

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000Prere-e-Payment of Construction Debty

Comparison of Debt Structure Before Prerere-ee-payments ComparispCompppap on ofsoarisStarted in 2011

n of1 11 to

ebt Structure Before Prree aympppapppppf Defo ooooo Debt Structure After 2015 Pre

yyaymyrerere-

ents entsmeyyymyeee-Payment

Total Principal and Interest Payments After 2014-15 Defeasance. (per PFM analysis 2-20-2015)

Debt Levels Pre-Defeasance (source 2008 bond fund official statement page 16)


2015-16 Budget Status• We are very comfortable with recommending no millage increase for

2015-16.

• Revenues are higher than anticipated due to the Governor’s allocation of Basic and Special Ed. subsidies ($2M increase).

• (originally anticipated no increase in state funding).

• Local revenues continue to trend upward.

• Elementary Initiative to add a net of 8 new teachers will increase expenses by approximately $630,000 in salary and benefits.

• January 27th preliminary budget $308,267,740.

• March 24th proposed budget $310,896,013

• Another round of debt defeasance will cut 2015-16 principal and interest expenses by over $2M (adjusted long term capital transfers for Holicong and Unami renovations upward)

03/18/2015 i:\Budget\2015-16 Budget\2015-03-24 Budget Presentation


As of 2015-16 2014-15 2014-15 Budget to Budget to Budget Projection Budget

6111 CURRENT REAL ESTATE TAXES 209,327,280 207,694,432 206,851,191 1,632,848 0.79%

6112 INTERIM REAL ESTATE TAXES 2,000,000 1,995,000 1,543,922 5,000 0.25%

6113 PUBLIC UTILITY REALTY TAX 295,000 293,751 285,011 1,249 0.43%

6151 EARNED INCOME TAX 22,000,000 21,965,985 20,775,000 34,015 0.15%

6153 REAL ESTATE TRANSFER TAX 4,522,500 4,500,000 4,000,000 22,500 0.50%

6411 DELINQUENCIES ON REAL ESTATE TAXES 2,500,000 2,700,000 2,750,000 -200,000 -7.41%

6413 ACT 319 AND 515 AGREEMENT BREECHES 50,000 220,312 0 -170,312 -77.30%

6451 DELINQUENCIES ON EARNED INCOME TAXES 625,000 685,000 745,000 -60,000 -8.76%

6453 DELINQUENCIES PER CAPITA TAX 0 0 0 0 0.00%

6510 INTEREST EARNINGS, TEMP DEPOSITS 325,000 325,000 300,000 0 0.00%

6710 ADMISSIONS 215,000 211,000 165,000 4,000 1.90%

6740 REVENUES FROM FEES 100,000 80,000 100,000 20,000 25.00%

6790 TOTAL OTHER STUDENT ACTIVITIES 0 0 0 0 0.00%

6832 FEDERAL I.D.E.A. FUNDS FROM AN I.U. 2,100,000 2,100,000 1,963,000 0 0.00%

6910 RENTAL OF SCHOOL FACILITIES 50,000 48,500 70,000 1,500 3.09%

6920 DONATIONS, PRIVATE SOURCES 250,000 250,000 401,300 0 0.00%

6941 TUITION FOR EDUCATION SERVICES 40,000 40,000 37,200 0 0.00%

6943 COMMUNITY SCHOOL CONTINUING ED. 115,000 110,000 90,000 5,000 4.55%

6944 TUITION FOR INCARCERATED STUDENTS/LEA TUITION 325,000 325,000 272,800 0 0.00%

6960 SERVICES PROVIDED TO OTHER L.E.A.'S 3,500 5,000 6,500 -1,500 -30.00%

6980 COMMUNITY SERVICE ACTIVITIES CHILD CARE 2,685,000 2,635,000 2,460,000 50,000 1.90%

6981 COMMUNITY SCHOOL FUND RAISING 190,000 175,000 123,000 15,000 8.57%

6982 COMMUNITY SCHOOL AQUATICS 510,000 492,000 492,000 18,000 3.66%

6990 MISCELLANEOUS REVENUE 61,000 60,000 33,335 1,000 1.67%

Total Local Revenues 248,289,280 246,910,980 243,464,259 1,378,300 0.56%

2015-16 2014-15 2014-15 Budget to Budget to Budget Projection Budget

7110 BASIC INSTRUCTIONAL SUBSIDY 17,781,941 16,227,940 16,227,940 1,554,001 9.58%7140 CHARTER SCHOOL SUBSIDY 0 0 0 0 0.00%7160 TUITION FOR ORPHANS & CHILDREN 250,000 300,000 300,000 -50,000 -16.67%7210 HOMEBOUND INSTRUCTION 0 0 0 0 0.00%7230 ALTERNATIVE EDUCATION 0 0 0 0 0.00%7271 SPECIAL EDUC OF EXCEPT PUPILS 7,762,441 7,286,226 7,365,010 476,215 6.54%7290 OTHER STATE PROGRAM SUBSIDIES 100,000 127,000 127,000 -27,000 -21.26%7310 TRANSPORTATION REIMBURSEMENT 3,115,500 3,100,000 3,100,000 15,500 0.50%7320 RENTAL AND SINKING FUND REIMBURSEMENTS 1,138,659 1,175,000 1,175,000 -36,341 -3.09%7330 MEDICAL & DENTAL REIMBURSEMENT 364,619 375,000 375,000 -10,381 -2.77%7340 STATE PROPERTY TAX REDUCTION 6,026,215 6,026,215 6,026,215 0 0.00%7501 READY TO LEARN / ACCOUNTABILITY BLOCK GRANT 675,000 675,000 1,423,249 0 0.00%7502 DUAL ENROLLMENT GRANTS 0 0 0 0 0.00%7810 SOCIAL SECURITY REIMBURSEMENT 5,170,000 5,084,942 5,084,942 85,058 1.67%7820 RETIREMENT PAYMENTS REIMBURSEMENT 18,125,000 14,772,536 14,772,536 3,352,464 22.69%7920 MISCELLANEOUS STATE REVENUE 0 0 0 0 0.00%

Total State Revenues 60,509,375 55,149,859 55,976,892 5,359,516 9.72%


8513 IDEA, SECTION 619 0 0 0 0 0.00%8514 TITLE 1 411,298 411,298 411,298 0 0.00%8515 TITLE 2 221,660 221,660 221,660 0 0.00%8516 TITLE 3 18,400 18,400 18,400 0 0.00%8517 DRUG FREE SCHOOLS 0 0 0 0 0.00%8690 OTHER FEDERAL GRANTS 0 0 0 0 0.00%8701 ARRA - IDEA, PART B STIMULUS 0 0 0 0 0.00%8708 ARRA - STATE FISCAL STABILIZATION 0 0 0 0 0.00%8709 ARRA EDU JOBS 0 0 0 0 0.00%8810 MEDICAL ASSISTANCE REIMB. (ACCESS) 911,000 911,000 911,000 0 0.00%8820 ADMINISTRATIVE REIMB. FOR ACCESS 45,000 45,000 45,000 0 0.00%

Total Federal Revenues 1,607,358 1,607,358 1,607,358 0 0.00%


9320 TRANSFER FROM SPECIAL REVENUE 0 0 0 0 0.00%9370 TRANSFER FROM TRUST AND AGENCY 490,000 490,000 490,000 0 0.00%9400 SALE OF FIXED ASSETS 0 0 0 0 0.00%9990 INTERFUND TRANSFERS / FUND BALANCE 0 0 0 0 0.00%

Total Other Financing 490,000 490,000 490,000 0 0.00%

Total Yearly Revenue 310,896,013 304,158,197 301,538,509 6,737,816 2.22%

Other Financing Revenues - 9000's

State Revenues - 7000's

Local Revenues - 6000's

Revenue Budget Summary

Federal Revenues - 8000's

3/16/15 3:24 PM


Historical State Revenue for CBSD

03/18/2015 i:\Budget\2015-16 Budget\2015-01-27 Budget Presentation

$30,366,490

$29,424,486

$30,093,199

$30,549,501

$27,000,000

$27,500,000

$28,000,000

$28,500,000

$29,000,000

$29,500,000

$30,000,000

$30,500,000

$31,000,000

$31,500,000Total State Subsidies *


Budget Summary by Object:

2015-16 Proposed

Budget

% Increase 2014-15

Projected Actual to 2015-16 Budget

2014-15 Budgeted Expenses

2014-15 Projected

Actual Expenses

2014-15 Budget to

2014-15 Projected

Actual Variance

100 Payroll added elem initiative $407k 147,204,345 3.6% 140,746,522 142,058,074 1,311,552 200 Benefits added elem initiative $224k 74,542,493 8.3% 71,950,411 68,857,928 (3,092,483) 300 Professional Serv, IU, OT/PT 5,293,225 2.1% 5,524,476 5,183,626 (340,850) 400 Utilities, grounds, snow, alarms 7,093,578 4.8% 7,083,583 6,770,371 (313,212) 500 Transportation, Insur, Comm 19,845,756 1.8% 20,016,837 19,493,766 (523,071) 600 Supplies,diesel,gasoline,books 7,267,128 -0.1% 7,475,689 7,273,179 (202,510) 700 Equipment 906,878 26.6% 1,276,535 716,074 (560,461) 800* Interest, due, fees 6,629,945 -6.1% 7,071,526 7,064,207 (7,319) 900** Principal & Transfers 42,112,665 5.6% 40,363,890 39,883,890 (480,000)

TOTALS 310,896,013 4.6% 301,509,469 297,301,115 (4,208,354)

6,564,939 * Interest payments $432,376 decrease (assumes defeasance)

13,813,000 ** Principle payments on debt (decreased $2,075,000 over 14-15, assumes defeasance)

5,330,000 ** Transfers to Short Term Capital (+ $1M over 2014-15)

8,489,665

1,000,000 ** Transfers to transportation Capital ( no change over 2014-15)

12,000,000 ** Transfer to Debt Service Fund (increased by $1.2M over 14-15)

0 ** Transfer to Technology (reduce $2M due to high balances)

1,000,000 ** Transfer to OPEB (reduce $1M to gradually meet OPEB requirements)

480,000 ** Health Care Contingency (reduced by $260,000 over 2014-15)

$42,112,665

2015-16 Summary of the Expenditure Budget

The 2015-16 budget as of 3/18/2015 shows an increase of $2,628,273 compared to the preliminary budget. Most of the major category figures have some changes, but the interest category and transfer category show the most change.

** Summary of Principal and Transfers

** Transfers to Long Term Cap (+ $5,325,000 state subsidies, defeasance, & refining xxxbudget, one year technology reduction)


Act 1 Tax Index + Exceptions

December 1, 2014 1

with Allowable

Exceptions in Mills

CBSD Millage

Rate

Millage Increase

% Increase in the

Millage Rate

Status

2007-08 5.9 105.87 3.8 3.47% Actual2008-09 5.6 110.50 4.6 4.37% Actual2009-10 5.4 114.80 4.3 3.89% Actual2010-11 4.7 119.20 4.4 3.83% Actual2011-12 3.2 120.80 1.6 1.34% Actual2012-13 3.6 122.80 2.0 1.66% Actual2013-14 3.4 122.80 0.0 0.00% Actual2014-15 4.9 124.10 1.3 1.06% Actual2015-16 4.0 124.10 0.0 0.00% Proposed


Wolf seeks lower cap on schools' rainy day moneyWritten by Mary Wilson, Capitol Bureau Chief | Mar 16, 2015 4:56 PM

Comments : 0

Governor Tom Wolf wants to cut property taxes and keep them low, but not just by shoveling more state aid

toward school districts - his proposal would also attach more strings to their taxing power.

Right now, school districts are allowed to increase property taxes while hanging onto a certain amount of

surplus funding. Depending on their overall spending, school districts can keep eight to 12 percent of their

budget in reserve, even if they're not earmarking the money for some future expense.

Wolf's Budget Secretary Randy Albright said Monday that the administration wants to cap reserves at four

percent for all school districts, "meaning that if a district had more than four percent in fund balance, then

they would not be able to increase their local property taxes at all."

Republicans have criticized school districts for keeping rainy day funds while hiking property taxes, while school advocates have said districts are just trying to maintain

a cushion in tough times.

"If members of the General Assembly think that we should strengthen those restrictions further, that's a conversation that we're happy to have," said Albright, "but

that's where at least we would suggest starting the conversation."

An Associated Press analysis of school districts that stashed away extra money in the 2012-13 school year found that the four percent cap would affect more than 420

of the state's 500 school districts.

Published in State House Sound Bites

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