Solanco School District Preliminary 2015-16 Budget January 26, 2015

Solanco Post-Recession: Where we are today is the result of significant efforts It has taken multiple efforts on multiple fronts by our staff and departments...it has enabled us to maintain solid student program offerings....and in some cases expand them. It required, and requires, on-going and difficult decisions by the board, administration, support and professional staff .....all within their roles and departments It required and requires an informed and supportive community. Post Recession, we are not out of the woods; the district has sustained a solid core of educational programs for our students via a supportive community, inclusive of staff culture and dedication, and Board direction to continually strive for improved educational opportunities and outcomes. This Budget reflects a realistic and grounded expectation of low and modest economic growth, with continued expenditure growth pressures.

2015-16 Budget Planning Objective: To improve, maintain, and sustain educational program opportunities for our students and community Includes: A proposed 2.5% tax rate increase to offset a 21% mandated Pension increase, and a portion of anticipated Special Education growth....this increase will require board action, and PDE approval, to exceed the Act 1 cap of 2.3% It utilizes anticipated modest EIT growth, and continues to leverage expenditures within operations to balance the budget It anticipates a modest anticipated increase in Basic Ed funding (1.3%)......beyond that the total State Budget Process is looking at a $2.5 Billion structural deficit Options Matter: As proposed, the Preliminary Budget will provide the Board with tax rate options at Final budget in June, which otherwise will be lost

Recap: Recessional Years and Fiscal Reality; Follow the Money

NOTE: For Pension: For Every $1 NOTE: For Pension: For Every $1.00 the Board Must Spend, The State Provides 50 Cents.

Pension Reserve Draw downs: Allocated to phase out FY 2018 – Bottom Line; 3 more Years Pension Rate Projections Pension Reserve   Fiscal Year Pension Rate as a Percent of Payroll *Increase as a Percent of Payroll Increase as a % of the Actual Rate $ 1,500,000 Beginning Balance Actual 2010-11 5.64% Planned Used Remaining 2011-12 8.65% 3.01% 53.4% $ 400,000 $ - $ 1,500,000 2012-13 12.36% 3.71% 42.9% $ 300,000 $ 1,200,000 2013-14 16.93% 4.57% 37.0% $ 300,000 $ 900,000 2014-15 21.40% 4.47% 26.4% $ 300,000 $ 300,000 $ 600,000 Estimated 2015-16 25.84% 4.44% 20.7% $ 300,000 Projected 2016-17 29.27% 3.43% 13.3% $ - 2017-18 30.25% 0.98% 3.3% 2018-19 31.28% 1.03% 3.4% 2011-12 thru 2013-14 is actual; 2014-15 thru 2017 is as Planned for the Budget 2019-20 32.08% 0.80% 2.6% * Gross Budget Impact; Local Share is 50%

Board has no control over: Earned Income Tax Collections; The Rate of the tax; or the Underlying Economy creating Growth or Loss of Funds. Property Assessment; the Underlying Environments impacting growth of the base; Township, County and State Laws (appeals, re-assessment (2017), development, codes, zoning). Continued barrage of State Mandates applied with either none, temporary, or partial state funding. The Act 1 Index and the indices measured.

Board Authority: Non-Mandated Expenditures And Property Tax Rate within the Act 1 Cap (2.3%) PDE will need to approve Use of Exceptions (Pension) to exceed the Cap at 2.5%

2.3% [Solanco Act 1 Cap] times 39% [Solanco Property tax as a % of total Budget] = .90% Meaning, on the Revenue side, board authority for “control” is Less than 1% of the total budget. So, if a budget cost grows at or greater than 1% of the total budget....

Proposed Increase Covers Pension

For Four out of last Five years, the PA Act 1 Base has been less than 2%

January 26, 2015 Solanco School District Proposed Preliminary Budget Summaries for 2015-16 (22 Months in advance of FY Closure) Submitted as per PA Requirements under Act 1 of 2006 State Revenues unknown until mid-June or later; generally provided by the state after board final adoption

Budget Process & Key Dates File Budget with PDE; PDE must Certify and rule on request for Exception(s) use by March 25th March 3rd; Governor’s Budget address; Basic & Special Education funding proposed April 15th Certification of slot money Revenues to off-set Property taxes Late April, Budget review and advertise a Preliminary Final 2015-16 Budget Early June, receive final County Assessment numbers and Adopt a Final 2015-16 Budget June 30?.....State Adopts its Budget...Generally too late for us to adjust

Questions?