2018-19 Budget Schedule
Board Meeting At Solanco High School
December 18, 2017
Tim Shrom
1
2018-19 Budget process
• 4 separate votes are required --- if the school district has not adopted an opt out resolution
• December/January/February• 1. Adopt Proposed Preliminary Budget (Target January 8)
• 2. Adopt Preliminary Budget (Target February 5)
• May/June• 3. Adopt Proposed Final Budget (30 days before step 4) [target April 23]
• 4. Adopt Final Budget (Target June 4)
2
Act 1 Timeline for 2018-2019 Budget Process
• January 26, 2018 – preliminary budget public display or opt out• School district deadline to either:
• (1) make 2018-2019 Proposed Preliminary Budget on form PDE-2028 available for public inspection (public display) pursuant to resolution; or
• (2) adopt opt out resolution pursuant to Section 311(d)(1) stating district will not raise the rate of any tax by more than index
• (110 days prior to primary election – and for public display 20 days prior to preliminary budget adoption)
• Recommending January the 8th
3
Act 1 Timeline for 2018-2019 Budget Process
• February 14, 2018 – Preliminary Budget• School district deadline to adopt Preliminary Budget on form PDE-2028
unless opt out resolution was adopted
• Recommending February 5th
• February 19, 2018• School district deadline to submit to Department of Education Preliminary
Budget and related proposed tax rate increases (PDE-2028, including Real Estate Tax Rate Report)
4
Act 1 Timeline for 2018-2019 Budget Process
• March 1, 2018 – file referendum exception request• School district deadline to request approval from Department of Education
for referendum exceptions (Referendum Exception Application)
• March 21, 2018• Department of Education deadline to rule on school district request for
referendum exception.
5
Act 1 Timeline for 2018-2019 Budget Process
• April 15, 2018• Secretary of Budget certifies total amount of slot money revenue in Property
Tax Relief Fund and Property Tax Relief Reserve Fund and total amount available for distribution.
• May/June of 2018• School district consider final and future budget and long term financial
planning steps, including: (1) fund transfer to capital reserve fund or other budget category transfers, and (2) general fund balance designation for particular future needs.
6
Act 1 Timeline for 2018-2019 Budget Process
• May 1, 2018 • Slot money notice
• Department of Education notifies school districts of slot money allocation amount. This amount is used in calculating the homestead exclusion amount for tax bills.
• County homestead report• County assessment office provides each school district a certified report of homestead
and farmstead properties
• May 15, 2018 – primary election
• May -- regular school board meeting• School district appoint tax collector for direct collection of real estate taxes as
required by School Code
7
Act 1 Timeline for 2018-2019 Budget Process
• May 31, 2018• School district deadline to adopt resolution declining slot money and
allowing voter decision.
• School district deadline to report to, and file certified copy with, the Department of Community and Economic Development
• School district deadline to adopt Proposed Final Budget (Resolution Authorizing Proposed Final Budget Display and Advertising –– and to submit to PDE Certification of Use of PDE-2028)
• Recommending April 23rd preliminary adoption for Final budget
8
Act 1 Timeline for 2018-2019 Budget Process
• June 10, 2018 – budget public display (and at least 20 days prior to final budget adoption) • School district deadline to make Proposed Final Budget on form PDE-2028
available for public inspection (public display). Recommending April 23
• June 30, 2018 – Final Budget• School district deadline to adopt Final Budget on form PDE-2028 (Final
Budget for General Fund Approval Resolution. Recommending June 4
• School district deadline to adopt resolution implementing homestead/farmstead exclusion
• School district deadline to adopt Annual Tax Levy Resolution
9
Act 1 Timeline for 2018-2019 Budget Process
• July 1, 2018 – Issue tax bills• July 15, 2018
• School District deadline to submit Final budget to Department of Education.. OR... No later than 15 days after adoption of the budget ( Adoption on June 4th -- plus 15 days for example)
• Show compliance with 8% Fund balance Cap• If referendum exceptions are used, file Certification of utilization
• August 23, 2018• Department of Education pays school district 50% of slot money allocation
• October 25, 2018• Department of Education pays school district 50% of slot money allocation.
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Start all over again for 2019-20!!!
• September 30, 2018• Department of Education deadline to notify school districts of applicable
base index or adjusted index; and of next year budget process timeline.
• November 6, 2018 --- General election• Who gets elected---Matters!
• Homestead Constitutional voter approval—
• Tax relief and Tax reform how accomplished will matter
11
Recommended Solanco 2018-19 Budget Calendar – With Budget Updates as needed1. January 8th 2018 - Advertise and Adopt Resolution for preliminary
2018-19 Budget1. Apply for Exceptions to provide options for June Budget decisions
2. February 5th 2018 - Adopt Preliminary Budget ---File for Exceptions is recommended
3. April 23, 2018 – Resolution to adopt Preliminary Final 2018-19 budget
4. June 4th 2018 – Resolutions to adopt the 2018-19 budget, utilize some, all or no exceptions, and set final millage.
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Budget Discussion and Selected Items
Expenditures
• Special Education
• Pension
• Health Care
• Wages and Staffing
• Project completion and Capitalization for M & O infrastructure
Revenues
• Millage conversion
• Earned income Tax
• State Budget -- and Basic Ed and Special Education funding
13
Revenues
14
Millage Conversion for Reassessment• Data show 2017 values actually declined since June 2017 to
November 2017 – attributed to the work on, and focus on reassessment---2018 Values = 27.1% increase to $2.4 B
15
2018 2017 Increase %
Bart Twp $210,778,300 $169,131,700 24.6%
Colerain Twp $294,821,400 $234,613,400 25.7%
Drumore Twp $217,303,400 $183,583,600 18.4%
East Drumore Twp $324,069,300 $250,324,900 29.5%
Eden Twp $150,489,300 $121,709,100 23.6%
Fulton Twp $227,607,700 $177,809,400 28.0%
Little Britain Twp $324,774,200 $251,366,700 29.2%
Providence Twp $482,820,300 $370,331,900 30.4%
Quarryville Boro $194,648,300 $150,291,300 29.5%
Totals: $2,427,312,200 $1,909,162,000 27.1%
2018 = November 9 cutoff County data from county
2017 = November 8 cut-off
Solanco Reassessment Numbers
Millage conversion: From 12.8109 to 10.1347
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2017-18 re-cap
Assessment July 1, 2017 for 2017-18
Budget 1,915,000,000 2,420,682,167
Multiplied times millage 12.8109 24,532,874 Multiplied times NEW millage 10.1347 24,532,888
Multiplied times Collection rate 97.2% 23,845,953 Multiplied times Collection rate 97.2% 23,845,967$
Less Slot funds 545,938 23,300,015 Less Slot funds 545,938 23,300,029
Budgeted 2017-18 6111 property tax 23,300,103 Budgeted 2017-18 6111 property tax 23,300,103
Variance/ Rounding (88) Variance/ Rounding (74)
Assessment extrapolated July 1, 2017 for 2018-19
millage conversion
ConversionProof 2017-18: Proof 2018-19:
Millage Conversion and Preliminary Budget
• January 8th 2018 preliminary budget will be utilizing the new 2018 assessment values (i.e. valid for January 1 County and Municipal tax duplicates.....and for July 1, 2018 for School Districts) and the revised millage at 10.1347.
• Final Millage will NOT be set until the June 4, 2018 Meeting• Based on State Revenue
• Based on revised assessments
• Based on use of all, some or no exceptions.
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Earned Income Tax
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EIT: FY
Audit
2007 5,679,011
2008 6,623,118 944,107 16.62%
2009 6,203,344 (419,774) -6.34%
2010 4,756,179 (1,447,165) -23.33%
2011 4,888,591 132,412 2.78%
2012 5,772,632 884,041 18.08%
2013 7,016,102 1,243,470 21.54%
2014 6,728,477 (287,625) -4.10%
2015 7,046,945 318,468 4.73%
2016 7,212,916 165,971 2.36%
2017 7,297,915$ 84,999 1.18%
2018** 7,420,500 122,585 1.50%
** Budget
Audited EIT: Solanco SD FY
6,623,118
4,756,179
6,728,477
7,046,945
7,212,916
$7,297,915 7,420,500
R² = 0.43
4,000,000
4,500,000
5,000,000
5,500,000
6,000,000
6,500,000
7,000,000
7,500,000
8,000,000
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018**
FY A
ud
it o
r *E
stim
ate
Solanco SD Earned Income Tax at 1.18%: FY Audit
State Budget 2017-18...From November of 2017—there is some good news....• $100 M Increase in BEF or 1.7% all to the new formula (approx. $453
M in the new vs the total of $5.995 B)
• $25 M increase in SEF or 2.3% all to the new formula (approx. $88.8 M in the new formula vs the total $1.122 B)
• Pension Growth will be Approx. $125 M statewide assuming approx. $14 B in base salary statewide
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State Final Budget ‘Plan’—67% of the $2.243B hole filled with a borrowing• $1.5 billion in borrowing against (or monetizing) the Tobacco
Settlement Fund
• $300 million in one-time transfers
• $200+ million in gaming expansion
• $3 million in fireworks tax
• $10 million in sales tax application to 3P online vendors
• $30 million in capping CNIT net operating losses
• $200 million transfer from the PA Professional Liability Joint Underwriting Association
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Mandated Special Education
Growth in baseline cost and placements. Board Share up $1.9 M or 68.5% of spend---State Share drops from 30.8% to 24.3%
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6,291,184
6,949,027 7,089,596
8,420,491
9,157,890
2,189,957 2,227,676
615,808 542,742 576,202
576,926 669,831
4,323,437
6,260,383
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
$10,000,000
12/13 13/14 14/15 15/16 16/17
Gross SpecialEducationExpenditures
Special EducationSubsidy
IDEA Revenue
Net Special EducationCost
State Mandated Pension – Solanco – Cumulative $3.35 million in Local funds---$7.7 Million Budget
22
109,674
323,017
368,464
485,994 470,403
539,593 534,626
407,075
98,900
-
100,000
200,000
300,000
400,000
500,000
600,000
2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19
*NET Annual Pension $ Increase:Solanco SD Local share
Pension Look Ahead--- Five year projection to 2023 represents $740 Million increase at a static Payroll statewide
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FY*% of
Payroll
Yr over Yr
Increase as
equated to
a % of
PYRL
% Rate of
increase
2016-17 30.03% 3.85% 16.2%
2017-18 32.57% 2.54% 8.5%
2018-19 33.43% 0.86% 2.6%
2019-20 34.79% 1.36% 4.1%
2020-21 35.26% 0.47% 1.4%
2021-22 35.68% 0.42% 1.2%
2022-23 36.32% 0.64% 1.8%
Pension Projections Looking Ahead
* all rates for FY ending 2020 and beyond are
subject to change by PSERS board, GA
mandate, subsequent legislation, and/or
combinations thereof.
Health Care• Approx. $776 K increase in claims yr over yr (2016 to 2017) or $391 K
over 2015• 2016-17 - Run out from HA to Aetna Jan 1 conversion....Run out from HA RX
to ESI carve out July 1 conversion—Claims are claims...when paid matters• A $5.61 M total 2017 spend-----Total spend was $5.66 M in 2011
• Increase in fixed costs -- trades off for risk shifts to both H S A HDHC plans as well as increase in Specific Reinsurance coverages • More predictable &/or stable, yet still provide up-side reward with down-side
limits• Admin fees increases but traded off carve out Rx with Rebates which
exceeded Admin cost growth
• HC data analytics assisting with determining fixed cost / chronic baseline growth vs shock claims and single acute incidents• Fully expect continued ROI with analytics over time to guide health care
outcomes for employees as well as cost minimization in medical and Rx arenas
24
Wages and Staffing
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$20,877,868
$21,472,883
$21,165,171
$20,802,736
$21,133,400
$20,968,016
$21,598,482 $21,674,777
$20,200,000
$20,400,000
$20,600,000
$20,800,000
$21,000,000
$21,200,000
$21,400,000
$21,600,000
$21,800,000
2010 2011 2012 2013 2014 2015 2016 2017 Est.
GF AUDITED PAYROLL: FY ending
Project Updates --• Phase I Smith Middle---In process...Close out is late Fall of 2018
• Current borrowing at 2.08% rate lock.....investments at 1% and growing
• Phase II Swift / Clermont---- Bid the spring of 2018• Close out does not occur until late fall of 2019
• Investigating cash needs (any borrowings) within prior debt capacity• Review Fed positions in first quarter of 2018---3 rate increase in 2017...for 2018?
• Borrowing may or may not make sense in light of investment yields vs interest carrying cost.....meaning....
• May want to defer borrowing and “pay ourselves” and invest ---- wait until cash flow dictates the need and pay off any second borrowing first
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Next Step and Questions
• January 8, 2018---- Preliminary Budget Resolution and Advertise• Must advertise at least ten days in advance
• Budget must be available for at least 20 days in advance
• Adoption of preliminary budget at February 5th, 2018 board meeting
• Questions?
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