Proposed Final Budget Presentation (May 13, 2013) Selinsgrove Area School District

GENERAL FUND FINANCIAL STATEMENT (Current financial position) Actual Budget Projected Beginning Balance$ 5,161,975$ 6,142,492 Revenues$ 35,197,954$ 36,434,472$ 36,433,017 Expenditures$ 34,217,437$ 36,434,472$ 35,764,863 Surplus/(Deficit)$ 980,517$ 0$ 668,154 Ending Balance$ 6,142,492 $ 6,810,646 2

BUDGET SAVINGS (Current Yr.) Adopted budget balance $ 0 Personnel Salary Savings $ 52,000 Fringes/Benefit Savings $ 31,000 Medical insurance savings $ 140,000 Unemployment comp savings $ 103,000 Savings in facilities budget $ 77,000 Savings in building budgets $ 30,000 All other department savings $ 55,000 Not using budgetary reserve $ 180,000 Total Savings (projected surplus) $ 668,000 3

TOTAL FUND BALANCES AT Designations (“buckets”) Restricted - Special Ed ACCESS $ 266,345 Nonspendable - Inventory of Supplies $ 28,611 Nonspendable – Prepaid Expenses $ 123,389 Committed – Retiree Healthcare $ 2,318,334 Committed - Future PSERS Expenses $ 1,494,691 Committed - Intermediate School Roof $ 50,000 Unassigned Balance $ 2,529,276 (7.1% of budget) TOTAL GENERAL FUND RESERVES $ 6,810,646 (19.1% of budget) (2.2 months worth of reserves) DEBT SERVICE FUND RESERVES $ 1,865,521 CAPITAL RESERVE FUND $ 570,106 4

BUDGET HOW IT WAS BALANCED Initial Deficit (without tax increase) ($802,500) Not filling 2 teacher retirements next year $ 220,000 Filling 2 teacher retirements next year (lower step) $ 73,000 Medical/Dental insurance savings $ 225,000 Reduction in unemployment comp $ 101,000 Reduction in facilities budget $ 66,000 Reduction in other support departments $ 31,000 Reduction in federal grant expenses $ 93,000 Increase in special education expenses $ (127,000) Increase in security budget $ ( 24,000) Increase in EIT and real est taxes (base growth) $ 105,000 Increase in basic education subsidy $ 148,000 5

BUDGET HOW IT WAS BALANCED Reduction in other state revenue $ (57,000) Reduction in federal revenue $ (370,000) Total Net Budget Reductions $ 484,000 Preliminary Budget Deficit $ ( 802,500) Revised Budget Deficit $ ( 318,500) Proposed 1.3 mill tax increase $ 318,500 (Act 1 index 2.2%) Proposed final budget balance $ 0 6

BUDGET SUMMARY FLOW OF FUNDS – GENERAL FUND Beginning Balance …………………………...$6,810,646 Revenues…………………………..…$37,475,655 Expenses…………………………....($37,475,655) Budget Balance………………….. $ 0 Ending Balance………………………………....$6,810,646 7

REVENUE HIGHLIGHTS Moderately growing local economy 1.3 mill real estate tax increase – 2.2% and a 0.5% growth in the overall real estate base Earned Income Tax collection budgeted with a 3% increase from proj collections Basic education subsidy increase of 2.1% Special education subsidy level funding Accountability Block Grant level funding Reduction in federal funding (Keystone Literacy Grant & Title I) 8

INCOME BY SOURCE 9 $22.6 M $13.1 M $1.7 M State averages: Local 54%, State 41%, Federal 3%, Other 2%

HISTORICAL REVENUES BY SOURCE 10 millions State funding less than what it was in 10-11

EXPENDITURE HIGHLIGHTS Four teacher retirements at end of 12/13 – not replacing 2 positions in 13/14 Salary increases per personnel contracts – teachers 3% salary plus 3% steps, administrators 3.5%, classified 3% PSERS rate increase from 12.36% to 16.93% Medical insurance premium increase of 11% Building and technology budgets level funded (3 rd year at reduced funding) 11

EXPENDITURE HIGHLIGHTS Facility budget level funded (utility savings reflected) Transfer out to debt service fund reduced by $150,000 Capital reserve transfer of $80,000 reflects Jackson- Penn rental income Total overall budget of $37.5 million – overall increase of $1 million or 2.9% from original 12/13 budget and $1.7 million or 4.8% from 12/13 projected budget 12

MAJOR EXPENDITURE INCREASES EXPENSEINCREASE FROM EMPLOYER SHR OF RETIREMENT EXP $ 910,000 EMPLOYEE SALARY/WAGES$ 655,000 MEDICAL INSURANCE$ 358,000 13

EXPENDITURE ANALYSIS 14 Personnel costs, student tuition, transportation, utilities, debt service Supplies, textbooks, equipment,repairs, travel

HISTORICAL USE OF FUNDS 15 Personnel costs make up 74% of total budget

PER PUPIL SPENDING ANALYSIS 16

FUTURE BUDGET CONCERNS Modest economic recovery producing inadequate local and state revenue growth Act 1 index will remain low Limited state subsidy increases Reductions in federal revenue (sequestration) PSERS rate increases to reach 30% Teacher contract increases over the next 3 years New Federal Healthcare Legislation (increase costs and administrative burden) 17

PROJECTED PSERS RATE 18 Fiscal Year

NET PSERS COST TO DISTRICT 10 Year Analysis 19

FUTURE BUDGET PROJECTIONS Beginning Balance $ 6,142,492$ 6,810,646 $ 6,664,088 Revenues $ 36,433,017$ 37,475,655$ 39,037,848$ 40,351,490 Expenditures $ 35,764,863$ 37,475,655$ 39,184,406$ 41,300,477 Operating Deficit $ 668,154 $ 0( $ 146,558)($ 948,987) Ending Balance $ 6,810,646 $ 6,664,088$ 5,715, Assumptions: Act 1 index real estate tax increases and no allowable exceptions Modest growth in the local economy starting in Basic Ed funding increase of 2.1% in and then 3% in and Salary and wage increases per contracts (teachers 3.9% in 14-15, 4.5% in 15-16) PSERS rates of 12.36% in 12-13, 16.93% in 13-14, 21.31% in 14-15, and 25.80% in 15-16

THREE YEAR BUDGET SAVINGS: Actions taken to restructure Expenses budget reductions - $2,475,000 (salary freeze all personnel; not replacing 8 teacher retirements, 1 administrative position and 3 classified positions; reducing building & dept. budgets, refinance bonds) additional budget reductions - $1,349,000 (eliminated 20 teaching positions, reduced administrative pay increase, further cuts in building & dept. budgets, refinance bonds, strategic use of federal funds – KTO grant) additional budget reductions - $345,000 (not replacing 2 teacher retirements, eliminating indemnity medical insurance plan) TOTAL 3-YR CUMULATIVE SAVINGS $9.85 MILLION 21

FUTURE BUDGET PROJECTIONS 22

GENERAL FUND PROJECTED ENDING FUND BALANCE 23

PROPOSED FINAL BUDGET SUMMARY “THE BOTTOM LINE” REVENUES $37,475,655 EXPENSES ($37,475,655) BALANCE $0 MILLAGE INCREASE % INCREASE % TOTAL MILLS 1 mill = $245,000 in revenue INCREASE TO AVG HOMEOWNER Homestead/Farmstead credit $133 $35 ($2.92 per month) 24

PRESENTATION SUMMARY (POINTS TO REMEMBER) Public education funding has stabilized Significant budget challenges remain for the future – PSERS, Healthcare, teacher contract increases NEW FISCAL REALITY Importance of long-term budgeting decisions and forecasting 25