2017-2018 Budget Forum 6:30 P.M., May 25, 2017

This Evening’s Agenda 2016-2017 Budget vs. 2017-2018 Preliminary Budget Changes to: Estimated Revenues Appropriations Taxes/Homestead/Farmstead Historic Perspective Forecasts Questions - budget@crsd.org

Preliminary Budget Update

Targeted Use of Fund Balance Preliminary Budget – Use of Fund Balance $ (4,436,538) Targeted Use of Fund Balance: Unreserved/Undesignated $ (4,000,000) Future Education Initiatives (207,976) Total (4,207,976) Additional Reductions $ (228,562)

Changes in Estimated Revenues Local Revenues, Budget page F3 Current Real Estate Taxes - $4,672,600 Earned Income Taxes - $200,000 Realty Transfer Taxes - $350,000 Earnings on Investments - $500,000

Changes in Estimated Revenues (continued) State Revenues, Budget page F-3 Basic Education increase $269,851 Transportation Subsidy decrease $(200,000) State Share of Employer Retirement Contribution increased by $1,525,831 Federal Revenues (not received through the Intermediate Unit) Budget page F-3 Adjusted to reflect most recent information $1,453,000 ACCESS Funds Reduced by $(312,418) to $900,000

2017-2018 Real Estate Tax Estimated Revenue Calculation, Budget page F-4 2016 Budgeted Assessed Value $ 1,280,245,370 Less: Act 153 Properties (3,083,590) Adjusted Taxable Assessed Value 1,277,161,780 Collection Rate 97.20% Value of One Mil (Assessed Value X Collection Rate/1,000) 1,241,401 Proposed Millage Rate 120.71 Revenue Prior to Act 153 Property Revenue 149,849,515 Revenue Generated from Act 153 Properties 246,834 Rounding (4,381) Total Real Estate Tax Revenue Prior to Tax Relief Reduction 150,091,968 Less: Gaming Revenue 5,525,912 $ 144,566,056 2017 Real estate assessed value increased by $8,980,090 to $1,280,245,370 or 0.71%. This equates to an additional $1,027,973 in current real estate tax revenue without increasing the 2017 mil rate of 117.77.

2017-2018 Preliminary Budget 2.5% Property Tax Mill Increase(Act 1 Index = 2.50%) : 117.77 mils to 121.71 or 2.94 mils 2016-2017 Median Homestead Assessed Value of 38,520 equate to $113.25 increase. Assessed Value Increase in Taxes $ 20,000 $ 58.80 30,000 88.20 38,520 113.25 40,000 117.60 50,000 147.00 60,000 176.40 70,000 205.80 80,000 235.20 90,000 264.60 100,000 294.00

2017-2018 Homestead Farmstead Rebate State Allocation $5,584,992.63 Remaining Funds, 2016-2017 54,809.44 Total Funds Available $5,639,802.07 Homesteads 20,016 Farmsteads 47 Total 20,063 Reduction for Each Homestead and Farmstead $281.10 Fiscal Year Homestead/Farmstead Reduction Annual Increase (Decrease) 2008-2009 274.71 2009-2010 252.39 (22.32) 2010-2011 279.03 26.64 2011-2012 245.27 (33.76) 2012-2013 281.10 35.83 2013-2014 249.36 (31.74) 2014-2015 259.60 10.24 2015-2016 264.75 5.15 2016-2017 273.82 9.07 2017-2018 7.28

Changes in Appropriations 2016-2017 Budget 2017-2018 Preliminary Budget Variance Salaries FTE Amount % Change CREA 839.60 $ 81,422,816 843.60 $ 81,231,245 4.00 $ (191,571) -0.24% CRESPA 447.40 15,427,220 454.73 15,963,497 7.33 536,277 3.48% Administration 44.00 6,097,303 45.00 6,282,754 1.00 185,451 3.04% Clerical 6.40 419,891 415,726 - (4,165) -0.99% Other 5,379,563 5,772,573 393,010 7.31% Total Salaries 1,337.40 108,746,793 1,349.73 109,665,795 12.33 919,002 0.85%   Employee Benefits Healthcare 21,495,028 23,378,480 1,883,452 8.76% Dental 1,601,592 1,560,945 (40,647) -2.54% Vision 104,442 108,741 4,299 4.12% 403 (b) Contributions 116,358 100,000 (16,358) -14.06% Flex Contributions 138,500 138,000 (500) -0.36% Life Insurance 162,188 161,402 (786) -0.48% Disability 100,389 130,302 29,913 29.80% Social Security 8,013,364 8,024,204 10,840 0.14% Retirement 32,590,763 35,648,563 3,057,800 9.38% Tuition Reimbursement 0.00% Unemployment 271,344 274,044 2,700 1.00% Worker's Compensation 543,698 548,264 4,566 0.84% Total Employee Benefits 65,237,666 70,172,945 4,935,279 7.57% Total Salaries and Benefits 173,984,459 179,838,740 5,854,281 3.36% 300-900 Objects 52,557,477 53,926,603 1,369,126 2.61% Total Budget $226,541,936 $233,765,343 $7,223,407 3.19%

Preliminary Budget Update – Selected 300-900 Objects

Why must we increase the mil rate the full 2.50%? Maintaining the educational program of the District at the 2016-2017 levels. Slow the reduction of our existing fund balance. Continue to fund the annual capital expenditures of the District at $3 million annually. Financial uncertainty at the state level Elimination of Property Taxes State budget deficit without any long-term solutions

Beginning Fund Balance Increase (Decrease) In Fund Balance Financial History Year Beginning Fund Balance Revenues Expenditures Fund Transfers Increase (Decrease) In Fund Balance Ending Fund Balance 2010-2011 $26,376,726 $ 195,837,757 $ 194,277,845 $1,559,912 $27,936,638 2011-2012 27,936,638 195,576,225 194,083,327 1,492,898 29,429,536 2012-2013 202,011,272 199,329,334 4,009,054 (1) (1,327,116) 28,102,420 2013-2014 207,988,082 204,111,975 2,931,534 (2) 944,573 29,046,993 2014-2015 215,779,441 209,730,036 5,531,453 (3) 517,952 29,564,945 2015-2016 216,348,750 216,886,321 4,000,000 (4) (4,537,571) 25,027,374 Transfer includes $440,000 contribution to bond refunding. Transfer includes $600,000 contribution to bond refunding. Transfer includes $650,000 contribution to bond refunding and $1,000,000 transfer to self-insurance fund. Transfer includes $1,000,000 contribution to bond refunding. Year Mil Rate Increase (Decrease) % Change 2010-2011 110.68 2011-2012 0.00 0.00% 2012-2013 112.56 1.88 1.70% 2013-2014 114.02 1.46 1.30% 2014-2015 114.72 0.70 0.61% 2015-2016 115.01 0.29 0.25% 2016-2017 117.77 2.76 2.40%

Where have we been? We faced financial challenges in the 2011-2012 and 2016-2017 Budgets. $14.2 Million and $14.0 Million Deficits respectively. Staff Reductions: Other savings affecting staffing: Aramark contract reduction $468,000 – Staff duties are adjusted 2011-2012 2016-2017 Total Administrative (4.00) (1.00) (5.00) Professional (42.00) (15.70) (57.70) Support (19.00) (23.44) (42.44) (65.00) (40.14) (105.14)

Where have we been? (Continued) District budget increased from $199.3 million in 2010-2011 to $226.5 million in 2016-2017. An increase of $27. 2 million or 13.68% over the seven years. $23.8 million of that increase was retirement. The employer’s contribution rate went from 8.65% to 30.03% The additional $3.4 million included all other cost centers, including salaries, healthcare and other employee benefits, operations of our facilities, student transportation, instructional materials and debt service.

Summary of Financial Forecast Year Description/ Closing Begin Fund Balance Revenues Expenditures Fund Transfers Increase (Decrease) In Fund Balance Ending Fund Balance % Tax Increase 2016-2017 Budget 25,027,374 222,205,072 226,541,936 3,000,000 (7,336,864) 17,690,510 2.40% Projected 224,427,123 224,277,754 (2,850,631) 22,176,743 2017-2018 231,303,891 31,237,936 (2,934,045) 19,242,698 2.50% 2018-2019 No Closings 237,136,368 236,627,840 (2,491,472) 16,751,226 Middle School 236,944,428 234,879,104 (934,676) 18,308,022 Middle School and Elementary 236,864,955 234,182,502 (317,547) 18,925,151

Next Steps in the Approval Process June 1 Finance Committee Meeting Discuss changes to the Final Budget Feedback from Board Members June 15 Board Meeting Adoption of Final 20717-2018 Budget

Questions - budget@crsd.org

Middle School Project Financing

Capital Planning – Middle School Projects Over the past six years, we have been managing our existing debt to minimize the budgetary impact of the large capital expenditures needed at the middle school level. Refinanced bond issues when appropriate and utilized the savings to reduce our future debt costs; over $15.5 million in reduced debt service; Contributed financially from the general fund to reduce the amount of the refunding bond issues to further reduce future debt service. Maintain a “AA” credit rating and strong name in the municipal bond market to reduce the cost of our debt; Took advantage of the historically low interest rates in the municipal bond market. Thus we are able to finance the $105 million middle school projects and only increase taxes by under 0.75 mils over three years. We have also been able to structure our debt to allow for future borrowing additional capital needs.