Spring Cove School District2014/15Budget Workshop

April 28, 2014

Spring Cove School District

Agenda for the evening:

Review the Current Proposed BudgetReview of Act 1 Index/ExceptionsComments/Discussions

Spring Cove School District

Budget Timeline

District must adopt a Proposed Final Budget by May 30, 2014 and a Final Budget by June 30,2014.

Board Meetings to Follow

May 12, 2014 - Special Meeting, Committee of the WholeMay 19, 2014 - Regular Board, Proposed BudgetJune 16, 2014 - Special Meeting, Committee of the WholeJune 23, 2014 - Regular Board, Final Budget

Spring Cove School District

Major Budget FactorsExpenditure Side• Salaries & Wages• Benefits – Retirement and Healthcare• Salaries/benefits reflect Life Skills, K4, and attrition savings

• Debt – Interest and Principal

Revenue Side• Federal• Governor's Budget – Basic Education Funding• Ready to Learn Block Grant

• Local Effort

Spring Cove School District

Current Proposed Budgeted Expenditures

Instruction $13,519,881Support Services $ 6,955,022Operation of Non-Instructional Services $ 380,132Facilities Acq/Construction/Improvements $ 41,500Financing/Budgetary Reserve $ 2,795,556

Total Expenditures $23,692,091

Increase from 2013/14 $ 1,036,633

Spring Cove School District

42.02%

22.18%3.86%

3.05%

10.19%

4.82%1.33%

5.58%6.97%

Expense Summary

SalariesBenefitsPurchased Prof & TechPurchased Property SvsOther Purchased ServiceSuppliesEquipmentInterest, Dues, FeesOther Financing Uses

Spring Cove School District

K4 Program Estimated 2014/15 Costs(4 Classrooms)

Personnel – Salaries $203,908Personnel – Benefits $128,562Supplies $ 7,600Property$ 16,000

Total Cost $356,070

Less: Ready to Learn Allocation ($273,461)Less: Est. Savings from Life Skills ($152,716)

Remaining Savings ($70,107)

Spring Cove School District

Retirement

2014/15 Retirement - percentage change from 16.93% to 21.4% (4.47% increase)

Total increased retirement cost for the 2014/15 year:$494,000 (271,000) Less State Reimbursement$223,000 Net Increase

2015/16, 2016/17, and 2017/18 retirement contribution rates are projected to increase to 25.84%, 29.27%, and 30.25% respectively.

Spring Cove School District

Projected Retirement Increases(salaries frozen beyond 2014/15)

2015/16 $448,000 (4.44% increase)

2016/17 $782,000 (7.87% cumulative)

2017/18 $877,000 (8.85% cumulative)

Spring Cove School District

Healthcare Format of Coverage• Administrators and Teachers – An IRS qualified high-deductible

plan with deductibles of $1,250 and $2,500. Every dollar paid up to the deductible.

• Support Staff – Non-qualified plan with a deductible of $2,000 and $4,000. Copays do apply to this plan.

• Employees working more than 1,274 hours.• Employees pay $600 per year.• Combined annual premium is $1,876,000• Premium increase at 4% is $73,000• Includes PPACA (“Obamacare”) fee of $25,000

Spring Cove School District

Debt Service

2009 Series Bonds Refinancing: Net PV savings of $101,683

Debt Service will increase by $202,000 in 2014/15 and then level off going forward

Debt & interest payments for the 2014/15 year:$1,983,971 ( 234,047) Less State Reimbursement$1,749,924 Net Cost

Spring Cove School District

Special Education Legislative Update

With an additional $20 million proposed in the budget for special education, the Senate and House are gearing up to discuss Senate Bill 1316 (sponsored by Sen. Pat Browne) and House Bill 2138 (sponsored by Rep. Bernie O’Neil), which implements the recommendations of the Special Education Funding Commission and proposes a formula for the distribution of NEW special education dollars.

The bill also proposes a new charter school special education tuition calculation that is based more upon the actual costs of charter school special education students instead of on the special education costs of each resident school district.

Spring Cove School District

Special Education Costs

• The cost of providing for the needs of a Special Education student in fulfilling their Individual Education Plan (IEP) continues to carry a cost significantly higher than that for the cost of a regular education student.

PDE-363 Calculation• Regular Education Student $ 7,901.16• Special Education Student $15,747.28

Spring Cove School District

Cyber Charter Schools

Current enrollment and costs:

Regular Education 24 students $ 189,628Special Education 4 Students $ 62,989Total Cost $ 252,617

Spring Cove Cyber – 18 students – down from 25 in 2012/13.

Spring Cove School District

Athletic Program Costs

• Athletic Fund Costs-Net $ 20,562• General Fund Athletic Costs $ 318,510

• Total Program Cost $ 339,072

• Percentage of General Fund Budget -- 1.34%

Spring Cove School District

Act 1 Index

Act 1 Index for Spring Cove SD in 2014-15 is 2.8%A 2.8% tax increase would generate approximately

$239,000 of additional tax revenue and cost the average homeowner approximately $35 more

Millage increase at 2.8% is 3.16 millsAssessed value growth would increase tax revenue by an

additional $130,000

Spring Cove School District

Exceptions to the Index

Debt Service ExceptionTo Consider: For the purpose of liquidating debt prior to Act 1. In

all cases, the equivalent amount of tax increase is eliminated after the debt is liquidated. Current debt service payments extend through 2025.

Pension ExceptionTo Consider: The law recognizes increases in required

contributions to PSERS as exceptional.

Spring Cove School District

Exceptions to the Index

Debt Service Exception of approximately $201,000, which equates to 2.66 mills

Pension Exception of approximately $141,000, which equates to 1.87 mills Net increase of $223,000 - $141,000 = $82,000

Total millage increase available to the District with index and exceptions is 7.69 mills (6.8% increase) and would cost the average homeowner $84 more

Total new revenue of $711,000 at maximum increase

Spring Cove School District

Property Tax Collection Rates(5-year historical)

2007/08 – 92.7%2008/09 – 93.7%2009/10 – 94.5%2010/11 – 93.1%2011/12 – 92.6%

Average – 93.3%

Spring Cove School District

Millage History

Year Millage Increase Percentage2010/11 108.375 3.00 2.8%2011/12 108.375 0.00 0.0%2012/13 110.865 2.49 2.3%2013/14 112.865 2.00 1.8%2014/15 120.555* 7.69 6.8%

5yr Average 112.207 3.036 2.7%

Spring Cove School District

Spring Cove School District

REVENUES

2013/14 2014/15 2014/15APPROVED PROPOSED INC/(DEC) OVERBUDGET BUDGET 2013/14

LOCAL 10,109,673 11,635,810 1,526,137STATE 11,328,186 11,597,848 269,662FEDERAL 855,832 569,000 (286,832)TOTAL 22,293,691 23,802,658 1,508,967

Spring Cove School District

Federal Revenues

• Reduced Title II funding by $114,000 based on current year allocations. More information to come next month…

• Reduced Medical Access by $95,000 due to changes in rules.

Spring Cove School District

State Revenues

• State Funding – each school district will receive the same amount of Basic Education Funding it received in 2013/14. Spring Cove’s allocation is $7,421,433

• Ready to Learn – the Governor's Budget proposes $341 million in total funding, including $241 million in new Ready to Learn funding added to existing Accountability Block Grant of $100 million.

• Increases in State Revenue by its share of PSERS, Social Security, and Debt Service only.

Spring Cove School District

Ready to Learn Block Grant

• Each school district will receive an amount equal to its 2013/14 PA Accountability Grant allocation, plus a “Student-Focused Funding Supplement”

• Spring Cove’s allocation consists of $113,085 Accountability Grant and $273,461 Ready to Learn; Total of $386,546

• There is still uncertainty concerning this funding and many restrictions attached to it.

Spring Cove School District

Local Funding

• Property Tax at the Current Millage $8,555,023• Transfer to Capital Reverse $ 151,585• Earned Income Tax $1,116,482• Other taxes, Per Cap etc. $ 736,743• Other, pass thru etc. $ 390,738• Est. Life Skills Tuition from other LEAs $ 255,000

• Act 1 Index $ 239,511• Referendum Exceptions $ 342,313

Spring Cove School District

Budget Summary

• Revenues $ 23,802,658• Expenditures 23,032,091 Budgetary Reserve 660,000• Total Expenditures _23,692,091

• Net Surplus $ 110,567

Spring Cove School District

Funds of the District(as of June 30, 2013)

• Cafeteria Fund $ 339,051• Athletic/Activities Fund $ 96,322• Capital Projects Fund $ 97,388• General Fund $ 7,602,282

Spring Cove School District

General Fund Balance (as of June 30, 2013)

• Restricted -- $ 102,992

• Assigned -- $1,974,576 -- Long Term Debt

$ 750,000 -- Capital Projects$3,275,000 -- Capital Projects*

• Unassigned -- $3,374,714$ 849,714*

• Committed -- $ 400,000 -- Employee Benefits$1,000,000 -- Fiscal Stabilization

*Assigned $2,525,000 to Capital Projects in January ‘14

Spring Cove School District

Contact your State Representatives(links to PASBO website)

• Send a quick letter to your Senator• Send a quick letter to your House member