2017-2018 Preliminary Budget January 23, 2017

Budget Time Line February 3, 2017 Deadline for Board to give public notice of intent to adopt preliminary budget (10 days in advance of adoption)   February 6, 2017 Finance Committee Meeting - MDLKC, 7:00 PM Long Range Plan for Facilities February 13, 2017 Review and adopt the preliminary 2017-2018 budget and tentative tax rates February 19, 2017 Submit proposed tax increase to PDE March 6, 2017 Finance Committee Meeting – MDLKC, 7:00 PM Commonwealth Budget State Revenues Revised Long Range Plan for Technology

Mission Statement The Mission of the Kennett Consolidated School District is to provide a quality education that increases the achievement of every student in order for all to become successful and thoughtful contributors to society.

Summary

Preliminary Budget Proposed Real Estate Tax Increase 2.79% Increase 30.0540 Mills Appropriation of Fund Balance $714,330 Begin Process of Budget Deliberations Finance Committee Meetings First Monday of Every Month Next Meeting – February 6, 2017 Open to the Public Governor’s Commonwealth Budget Presentation – February 7, 2017 Modified Act 1 Index of 2.9% No referendum exceptions are required

Proposed Tax Increase

Average Residential Tax Increase

Expenditures

Expenditures Total Expenses - $84,510,237

Expenditures Total Expenses - $84,510,237

Budget Development Foundation Salaries Collective Bargaining Agreement – Kennett Education Association Act 93 Agreement – Expires June 30, 2017 All Other Employees – Act 1 Index to 3% Maximum New Positions TBA No Dedicated Funds No Retirements No Furloughs/Outsourcing

Budget Development Foundation Benefits Medical/Prescription/Dental Insurance First Look Projections Medical – 1.69% Prescription – 1.45% Pennsylvania School Employees Retirement Contribution Rate Certified by PSERS – 32.57% Increase of 9% Vision, Life, and Disability Insurance Trend Analysis Worker’s Compensation SDIC Estimate

Budget Development Foundation Allocations Instructional Buildings 2.5% Increase Department Allocations Special Education CCIU Projection Student Transportation Krapf Bus Company Agreement Annual Consumer Price Index or Minimum 2% Occupational Education CCIU Tuition Formula Paraprofessionals CCRES Agreement Act 1 Index Charter School Tuition Current Enrollment x Tuition Rates x Act 1 Index) Debt Service No Change

Expenditures DESCRIPTION 2016-17 BUDGET 2017-18 PRELIMINARY $ INC (DEC) % INC (DEC) Salaries $ 29,835,752 $ 30,752,303 $ 916,551 3.07% Employee Benefits 19,343,825 20,601,843 1,258,018 6.50% Purchased Prof. Svcs. 7,171,363 7,388,159 216,796 3.02% Purchased Property Svcs. 1,822,913 1,869,016 46,103 2.53% Other Contracted Svcs. 13,550,811 13,815,793 264,982 1.96% Supplies 2,045,177 1,974,782 (70,395) -3.44% Equipment 493,570 580,096 86,526 17.53% Other Objects 1,854,953 1,738,245 (116,708) -6.29% Other Financing Uses 5,675,000 5,790,000 115,000 2.03% TOTAL EXPENDITURES $ 81,793,364 $ 84,510,237 $ 2,716,873 3.32%

Expenditure Drivers Salaries Benefits Existing Salaries Impact - $916,551 3.07% Increase No New Positions No Retirements Benefits Pennsylvania School Employees Retirement System Impact - $948,409 (Net Impact After State Subsidy- $474,204) 10.55% Medical Impact - $141,751 2.76% Prescription Insurance Impact - $62,149 3.41%

Benefits DESCRIPTION 2016-17 BUDGET 2017-18 PRELIMINARY $ INC (DEC) Life Insurance $ 26,646 $ 27,354 $ 708 2.66% Income Protection 60,021 61,651 $ 1,630 2.72% Vision 77,694 82,580 $ 4,886 6.29% Social Security 2,249,015 2,291,543 $ 42,528 1.89% Retirement 8,987,471 9,935,880 $ 948,409 10.55% Tuition 220,000 $ - 0.00% Unemployment Comp. 38,868 38,319 $ (549) -1.41% Workers Compensation 190,011 192,481 $ 2,470 1.30% Medical 5,137,114 5,278,865 $ 141,751 2.76% Dental 455,150 509,186 $ 54,036 11.87% Prescription 1,821,835 1,883,984 $ 62,149 3.41% Other Benefits 80,000 TOTAL ALL BENEFITS $ 19,343,825 $ 20,601,843 $ 1,258,018 6.50%

PSERS History/Projections Employer Contribution Rates

PSERS History/Projections Employer Contribution Rates

Expenditure Drivers Purchased Professional Services CCIU Marketplace Services/Other Special Education Services Impact - $105,531 Curriculum Professional Development Math in Focus Impact – $28,650 Purchased Property Services Capital Improvement Impact - $25,000 Other Contracted Services Charter School Tuition Impact - $250,000 Equipment Student Technology Impact - $50,000 Student Transportation Special Education Replacement Vehicle

Charter School Tuition Fast Facts Regular Education Tuition Rate - $11,575 Special Education Tuition Rate - $27,737 Traditional and Cyber Charter Schools Tuition Rates are Identical Current Enrollment Regular Education – 165 Special Education – 46 Avon Grove Charter School Total 2017-18 Budgeted Expense - $3,250,000

Revenues

Revenues Total Revenues - $84,510,237

Revenues Total Revenues - $84,510,237

Revenues – State 2016-17 2017-18 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) BASIC ED SUBSIDY $5,591,325 $5,553,319 ($38,006) -0.68% SPECIAL ED SUBSIDY 1,787,505 - 0.00% TRANSPORTATION SUBSIDY 1,440,000 1,500,000 60,000 4.17% RENTAL & SINKING FUND 560,408 HEALTH SERVICES 86,000 PROPERTY TAX REDUCTION ALLOCATION 1,457,389 PA ACCOUNTABILITY GRANT READY TO LEARN BLOCK GRANT 304,781 400,617 95,836 31.44% SOCIAL SECURITY 1,141,898 1,145,771 3,873 0.34% RETIREMENT 4,524,093 4,915,690 391,597 8.66% TOTAL REVENUE FROM STATE SOURCES $16,893,399 $17,406,699 $513,300 3.04%

State Revenue Drivers Read to Learn Basic Education Adjusted to 2016-17 Allocation Impact – ($38,006) Student Transportation Impact - $60,000 Read to Learn Impact - $95,836 Pennsylvania School Employees Retirement System State’s Obligation to Reimburse 50% of the Certified Contribution Rate Impact - $391,597

Revenues – Local 2016-17 2017-18 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) CURRENT REAL ESTATE $55,516,376 $57,168,052 $1,651,676 2.98% INTERIM REAL ESTATE 400,000 - 0.00% PUBLIC UTILITY TAX 73,000 EARNED INCOME 4,000,000 4,200,000 200,000 5.00% TRANSFER TAX 725,000 800,000 75,000 10.34% DELINQUENT TAX 1,725,000 1,775,000 50,000 2.90% EARNINGS ON INVESTMENTS 50,142 80,000 29,858 59.55% IDEA 565,257 RENTALS/CONTRIBUTIONS/MISC. REVENUE 285,181 300,000 14,819 5.20% FUND BALANCE APPROPRIATION 714,330 TOTAL REVENUE FROM LOCAL SOURCES $64,054,286 $66,075,639 $2,021,353 3.16%

Local Revenue Drivers Real Estate Tax Earned Income Tax Transfer Tax Imposition of Increased Millage Rate Impact - $1,535,375 Growth of Assessment Base Impact - $116,301 Earned Income Tax Collections Through Keystone Collections Group Impact - $200,000 Transfer Tax Residential Sales Impact - $75,000 Delinquent Real Estate Tax Liens Filed with Chester County Tax Claim Bureau Impact - $50,000 Interest Earnings Investments Impact - $29,858

History and Forecast of the Act 1 Index Qualified for Weighted Act 1 Index – Effective 2017-18

Maximum Tax Increase Calculation Percentage Mills Modified Act 1 Index 2.9% 30.0887 Allowable Exceptions Expenditure Value Retirement Contributions $ 316,979 .1624 Special Education Expenditures $ 42,589 .0218 Maximum Tax Increase with Exceptions 3.5% 30.2729

Chester County School Districts Comparison of Assessment Growth Percent Change Assessment Growth Valuation at Kennett's Millage Rate Avon Grove 1,732,036,108 1,906,176,326 10.1% 174,140,218 $ 5,091,999 Coatesville 2,711,310,056 2,917,158,576 7.6% 205,848,520 $ 6,019,175 Downingtown 4,835,004,847 5,418,944,499 12.1% 583,939,652 $ 17,074,863 Kennett 2,030,291,064 2,021,416,348 -0.4% -8,874,716 $ (259,504) Octorara 636,320,890 679,171,222 6.7% 42,850,332 $ 1,252,978 Owen J Roberts 2,218,009,018 2,345,759,905 5.8% 127,750,887 $ 3,735,538 Oxford 1,093,224,724 1,146,601,339 4.9% 53,376,615 $ 1,560,775 Phoenixville 1,919,191,624 2,046,811,154 6.6% 127,619,530 $ 3,731,697 Twin Valley 611,805,451 673,450,210 61,644,759 $ 1,802,542 Unionville Chadds Ford 1,860,335,210 1,942,481,910 4.4% 82,146,700 $ 2,402,035 West Chester 7,530,971,464 7,824,511,310 3.9% 293,539,846 $ 8,583,340 Great Valley 3,346,634,677 3,643,060,581 8.9% 296,425,904 $ 8,667,731 Tredyffrin Easttown 4,791,973,415 4,914,912,097 2.6% 122,938,682 $ 3,594,825 Springford 114,705,700 116,292,740 1.4% 1,587,040 $ 46,406 Totals 35,431,814,248 37,596,748,217 6.1%

Where to go from here? Finance Committee Meetings 1st Monday of Each Month March - June Evaluate Commonwealth Budget Implications Governor’s Presentation on February 7, 2017 Potential Legislative Actions Capitalize on Retirements Track Enrollment and Class Sizes for Staffing Recommendations