2018-2019 Preliminary Budget February 12, 2018

Budget Time Line February 2, 2018 Deadline for Board to give public notice of intent to adopt preliminary budget (10 days in advance of adoption)   February 5, 2018 Finance Committee Meeting - MDLKC, 7:00 PM Long Range Plan for Facilities Elementary Attendance Areas  February 12, 2018 Review and adopt the preliminary 2017-2018 budget and tentative tax rates February 19, 2018 Submit proposed tax increase to PDE    March 5, 2018 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 30.5542 Mills Appropriation of Fund Balance $714,330 Budget Deliberations Finance Committee Meetings First Monday of Every Month Next Meeting – March 5, 2018 Open to the Public Governor’s Commonwealth Budget Presentation – February 6, 2018 Act 1 Index of 2.4% No referendum exceptions are required

Proposed Tax Increase

Average Residential Tax Increase

Expenditures

Expenditures Total Expenses - $86,337,497

Expenditures Total Expenses - $86,337,497

Budget Development Foundation Salaries Collective Bargaining Agreement – Kennett Education Association – Expires June 30, 2021 Act 93 Agreement – Expires June 30, 2020 All Other Employees – Act 1 Index to 3% Maximum New Positions 1 Professional Employee - Assignment TBA No Retirements No Furloughs/Outsourcing

Budget Development Foundation Benefits Medical/Prescription/Dental Insurance Medical First Look Renewal – 2.5% Budget – 0% Prescription First Look Renewal – 1.26% Pennsylvania School Employees Retirement Contribution Rate Certified by PSERS – 33.43% Increase of 2.6% Vision, Life, and Disability Insurance Trend Analysis Worker’s Compensation SDIC Estimate

What’s New Proposed Teaching Positon School Resource Officer Budget Impact - $97,015 School Resource Officer Budget Impact - $60,000 CCIU Mental Health Services Budget Impact – $80,000 Middle School Football Budget Impact - $22,211 Schoology Budget Impact - $20,000 Distance Learning Budget Impact - $5,000 Title 1 Summer Program Transportation

Budget Development Foundation Allocations Instructional Buildings 2.4% 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 2017-18 BUDGET 2018-19 PRELIMINARY $ INC (DEC) % INC (DEC) Salaries $ 30,661,324 $ 31,406,345 $ 745,020 2.43% Employee Benefits 20,393,944 21,175,708 781,764 3.83% Purchased Prof. Svcs. 7,388,159 6,826,902 (661,257) (7.60%) Purchased Property Svcs. 1,126,123 1,195,192 69,069 6.13% Other Contracted Svcs. 13,815,793 14,658,451 842,658 6.10% Supplies 2,717,675 2,899,616 181,942 6.69% Equipment 580,096 626,152 46,056 7.94% Other Objects 1,738,245 1,619,131 (119,114) (6.85%) Other Financing Uses 5,790,000 5,930,000 140,000 2.42% TOTAL EXPENDITURES $ 84,211,359 $ 86,337,497 $ 2,026,138 2.52%

Expenditure Drivers Salaries (100) Benefits (200) Existing Salaries Impact - $745,021 2.43% Increase 1 New Teaching Position No Retirements Benefits (200) Pennsylvania School Employees Retirement System Impact - $592,894 (Net Impact After State Subsidy - $296,447) 5.99% Increase Medical Impact - $107,355 2.09% Increase Prescription Insurance Impact - $16,323 0.88% Increase

Benefits DESCRIPTION 2017-18 BUDGET 2018-19 PRELIMINARY $ INC (DEC) Life Insurance $ 27,354 $ 27,801 $ 447 1.63% Income Protection 61,652 62,566 $ 914 1.48% Vision 82,752 88,906 $ 6,154 7.44% Social Security 2,284,583 2,380,286 $ 95,703 4.19% Retirement 9,906,247 10,499,141 $ 592,894 5.99% Tuition 220,000 234,000 $ 14,000 6.36% Unemployment Comp. 38,319 38,487 $ 168 0.44% Workers Compensation 192,072 197,371 $ 5,299 2.76% Medical 5,131,230 5,238,585 $ 107,355 2.09% Dental 509,990 452,497 $ (57,493) (11.27%) Prescription 1,859,745 1,876,068 $ 16,323 0.88% Other Benefits 80,000 $ - 0.00% TOTAL ALL BENEFITS $ 20,393,944 $ 21,175,708 $ 781,764 3.83%

PSERS History/Projections Employer Contribution Rates

Expenditure Drivers Purchased Professional Services CCIU Marketplace Services/Other Special Education Services Impact – ($589,915) Purchased Property Services Duplication/Printing Services Impact - $45,000 Capital Improvements Impact - $25,000

Expenditure Drivers Other Contracted Services Charter School Tuition Impact - $200,000 Student Transportation Krapf Contract Impact - $120,681 Occupational Education CCIU Impact - $76,614 Approved Private School Tuition Impact - $100,000 Instructional Assistants CCRES Para Professionals Impact - $285,000

Expenditure Drivers Equipment Student Technology Impact - $50,000

Charter School Tuition Fast Facts Regular Education Tuition Rate - $12,400 Special Education Tuition Rate - $28,753 Traditional and Cyber Charter Schools Tuition Rates are Identical Current Enrollment Regular Education – 166 Special Education – 46 Avon Grove Charter School Total 2018-19 Budgeted Expense - $3,450,000

Revenues

Revenues Total Revenues - $86,337,497

Revenues Total Revenues - $86,337,497

Revenues – State 2017-18 2018-19 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) BASIC ED SUBSIDY $5,675,608 $5,651,932 (23,676) (0.42%) SPECIAL ED SUBSIDY 1,845,792 1,845,180 (612) (0.03%) TRANSPORTATION SUBSIDY 1,380,075 1,400,000 19,925 1.44% RENTAL & SINKING FUND 560,408 462,239 (98,169) (17.52%) HEALTH SERVICES 86,000 - 0.00% PROPERTY TAX REDUCTION ALLOCATION PA ACCOUNTABILITY GRANT READY TO LEARN BLOCK GRANT 400,617 SOCIAL SECURITY 1,142,291 1,190,143 47,852 4.19% RETIREMENT 4,900,874 5,249,570 348,696 7.11% TOTAL REVENUE FROM STATE SOURCES $15,991,665 $16,285,681 $294,016 1.84%

State Revenue Drivers Rental Fund (Debt) Payment Reimbursement Basic Education Adjusted to 2017-18 Allocation Impact – ($23,676) Student Transportation Impact - $19,925 Rental Fund (Debt) Payment Reimbursement Impact - ($98,169) Pennsylvania School Employees Retirement System State’s Obligation to Reimburse 50% of the Certified Contribution Rate Impact - $348,696

Revenues – Local 2017-18 2018-19 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) CURRENT REAL ESTATE $58,283,781 $59,769,283 $1,485,502 2.55% INTERIM REAL ESTATE 400,000 300,000 (100,000) (25.00%) PUBLIC UTILITY TAX 73,000 70,000 (3,000) (4.11%) EARNED INCOME 4,200,000 4,400,000 200,000 4.76% TRANSFER TAX 800,000 900,000 100,000 12.50% DELINQUENT TAX 1,775,000 - 0.00% EARNINGS ON INVESTMENTS 80,000 225,000 145,000 181.25% IDEA 565,257 535,001 (30,256) (5.35%) RENTALS/CONTRIBUTIONS/MISC. REVENUE 300,427 308,363 7,936 2.64% FUND BALANCE APPROPRIATION 714,330 TOTAL REVENUE FROM LOCAL SOURCES $67,191,795 $68,996,977 $1,805,182 2.69%

Local Revenue Drivers Real Estate Tax Interim Real Estate Tax Imposition of Increased Millage Rate Impact - $1,321,000 Growth of Assessment Base Impact - $164,502 Interim Real Estate Tax New Properties or Improvements to Existing Properties Impact – ($100,000) Earned Income Tax Collections Through Keystone Collections Group Impact - $200,000 Transfer Tax Residential Sales Impact - $100,000 Interest Earnings Investments Impact - $145,000

History and Forecast of the Act 1 Index

Maximum Tax Increase Calculation Percentage Mills Act 1 Index 2.4% 30.596 Allowable Exceptions Expenditure Value Retirement Contributions $0.00 .000 Special Education Expenditures Maximum Tax Increase with Exceptions

Where to go from here? Finance Committee Meetings 1st Monday of Each Month February - June Evaluate Commonwealth Budget Implications Governor’s Presentation on February 6, 2018 Potential Legislative Actions Capitalize on Retirements Track Enrollment and Class Sizes for Staffing Recommendations

QUESTIONS