2019-2020 Preliminary Budget February 11, 2019

Budget Timeline February 1, 2019 Deadline for Board to give public notice of intent to adopt preliminary budget (10 days in advance of adoption)   February 4, 2019 Finance Committee Meeting – MDLKC, 7:00 PM Long-Range Plan for Facilities February 11, 2019 Review and adopt preliminary 2019-2020 budget and tentative tax rates February 25, 2019 Submit proposed tax increase to PDE    March 4, 2019 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 31.1379 mills Appropriation of Fund Balance $714,330 Budget Deliberations Finance Committee Meetings First Monday of the month Next meeting – February 4, 2019 Open to the public Governor’s Commonwealth Budget Presentation – February 5, 2019 Act 1 Index of 2.3% No referendum exceptions are required

Proposed Tax Increase

Average Residential Tax Increase

Expenditures

Expenditures Total Expenses – $88,253,792

Expenditures Total Expenses – $88,253,792

Budget Development Foundation Salaries Collective Bargaining Agreement with Kennett Education Association – Expires June 30, 2021 Act 93 Agreement – Expires June 30, 2020 All other employees – Act 1 Index to 3% Maximum No new positions No retirements No furloughs/outsourcing

Budget Development Foundation Benefits Medical First Look Renewal – -0.65% Budget – 0% Prescription First Look Renewal – -6.36% Pennsylvania School Employees Retirement Contribution Rate Certified by PSERS – 34.29% Increase of 2.57% Vision, Life, and Disability Insurance Trend Analysis Worker’s Compensation SDIC Estimate

What’s New School Resource Officers Full-time Southern Chester County Regional Police Department Middle School, Bancroft Elementary, New Garden Elementary Part-Time Kennett Township Police Department Greenwood Budget Impact – $0 (Offset - Reduction of Contracted Security) Curriculum – English Language Arts Textbooks Budget Impact – $310,000 CCRES Aides Budget Impact – $253,000 Technology Equipment Budget Impact – $50,000 Facility Improvements Budget Impact – $25,000 Debt Service Budget Impact – $242,000

Budget Development Foundation Allocations Instructional Buildings 2.3% 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 new debt

Expenditures DESCRIPTION 2018-19 BUDGET 2019-20 PRELIMINARY $ INC (DEC) % INC(DEC) Salaries $ 31,211,567 $ 31,991,800 $ 780,233 2.50% Employee Benefits 21,013,177 21,451,670 438,493 2.09% Purchased Prof. Svcs. 6,873,902 6,772,218 (101,684) -1.48% Purchased Property Svcs. 1,404,662 1,463,397 58,735 4.18% Other Contracted Svcs. 14,658,451 14,900,080 241,629 1.65% Supplies 2,865,617 3,168,758 303,141 10.58% Equipment 626,152 708,887 82,735 13.21% Other Objects 1,619,131 1,781,982 162,851 10.06% Other Financing Uses 5,930,000 6,015,000 85,000 1.43% TOTAL EXPENDITURES $ 86,202,659 $ 88,253,792 $ 2,051,133 2.38%

Expenditure Drivers Salaries (100) Benefits (200) Existing Salaries Impact – $780,233 2.50% Increase Restore night custodians to 40hrs/week No new positions No retirements Benefits (200) Pennsylvania School Employees Retirement System Impact – $539,988 (Net Impact After State Subsidy – $269,990) 5.18% Increase Social Security Impact – $82,835 3.50% Increase Workers’ Compensation Impact – $36,533 23.96% Increase

Benefits DESCRIPTION 2018-19 BUDGET 2019-20 PRELIMINARY $ INC (DEC) Life Insurance $27,521 $28,178 $657 2.39% Income Protection 61,914 63,390 $ 1,476 2.38% Vision 88,377 84,904 $ (3,473) -3.93% Social Security 2,365,386 2,448,221 $ 82,835 3.50% Retirement 10,434,027 10,974,015 $ 539,988 5.18% Tuition 234,000 $ - 0.00% Unemployment Comp. 38,323 38,873 $ 550 1.44% Workers Compensation 152,485 189,018 $ 36,533 23.96% Medical 5,213,976 5,047,483 $ (166,493) -3.19% Dental 451,954 455,332 $ 3,378 0.75% Prescription 1,865,214 1,808,256 $ (56,958) -3.05% Other Benefits 80,000 TOTAL ALL BENEFITS $ 21,013,177 $ 21,451,670 $ 438,493 2.09%

PSERS History/Projections Employer Contribution Rates

Expenditure Drivers Purchased Professional Services CCIU Marketplace Services/Other Special Education Services Impact – $0 Purchased Property Services Capital Improvements Impact – $25,000

Expenditure Drivers Other Contracted Services Equipment Charter School Tuition Impact – $0 Student Transportation through Krapf Contract Impact – $64,633 Occupational Education through CCIU Impact – $173,496 Approved Private School Tuition Impact – ($71,504) Instructional Assistants through CCRES Impact – $253,132 Equipment Student Technology Impact – $50,000

Charter School Tuition Fast Facts Regular Education Tuition Rate – $13,062 Special Education Tuition Rate – $31,104 Traditional and Cyber Charter Schools Tuition rates are identical Current Enrollment Regular Education – 143 Special Education – 47 Avon Grove Charter School Total 2019-20 Budgeted Expense - $3,450,000

Revenues

Revenues Total Revenues - $88,253,792

Revenues Total Revenues - $88,253,792

Revenues – State 2018-19 2019-20 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) BASIC ED SUBSIDY $5,804,224 $5,798,182 (6,042) -0.10% SPECIAL ED SUBSIDY 1,880,469 1,875,489 (4,980) -0.26% TRANSPORTATION SUBSIDY 1,400,000 - 0.00% RENTAL & SINKING FUND 462,239 493,829 31,590 6.83% HEALTH SERVICES 86,000 PROPERTY TAX REDUCTION ALLOCATION 1,439,156 READY TO LEARN BLOCK GRANT 400,617 SOCIAL SECURITY 1,182,693 1,224,110 41,417 3.50% RETIREMENT 5,217,009 5,487,007 269,998 5.18% TOTAL REVENUE FROM STATE SOURCES $17,872,407 $18,204,390 $331,983 1.86%

State Revenue Drivers Rental Fund (Debt) Payment Reimbursement Basic Education Adjusted to 2018-19 Allocation Impact – ($6,042) Special Education Impact – ($4,980) Student Transportation Adjusted to 2017-18 Allocation Impact – $19,925 Rental Fund (Debt) Payment Reimbursement Adjusted to Accommodate Debt Schedule Impact – $31,590 Pennsylvania School Employees Retirement System State’s Obligation to Reimburse 50% of the Certified Contribution Rate Impact – $269,998

Revenues – Local 2018-19 2019-20 DESCRIPTION BUDGET PRELIMINARY $ INC (DEC) % INC (DEC) CURRENT REAL ESTATE $57,934,718 $59,491,769 $1,557,051 2.69% INTERIM REAL ESTATE 300,000 - 0.00% PUBLIC UTILITY TAX 70,000 64,500 (5,500) -7.86% EARNED INCOME 4,400,000 4,570,000 170,000 3.86% TRANSFER TAX 900,000 DELINQUENT TAX 1,775,000 EARNINGS ON INVESTMENTS 325,000 420,000 95,000 29.23% IDEA 535,002 500,000 (35,002) -6.54% RENTALS/CONTRIBUTIONS/MISC. REVENUE 308,363 FUND BALANCE APPROPRIATION 714,330 TOTAL REVENUE FROM LOCAL SOURCES $67,262,413 $69,043,962 $1,781,549 2.65%

Local Revenue Drivers Real Estate Tax Effect of increased millage rate Impact – $1,289,821 Growth of assessment base Impact – $267,230 Earned Income Tax through Keystone Collections Group Impact – $170,000 Interest Earnings from Investments Impact – $95,000 IDEA Funding through CCIU Impact – ($35,002)

Act 1 Index

Maximum Tax Increase Calculation Percentage Mills Modified Act 1 Index 2.30% 31.1482 Allowable Exceptions Retirement Contributions $ 13,574 0.0069 Special Education Expenditures $ - - Maximum Tax Increase with Exceptions 2.32% 31.1551

Where to go from here? Finance Committee Meetings First Monday – February through June Evaluate Commonwealth Budget Implications Governor’s Presentation on February 5, 2019 Potential Legislative Actions Capitalize on Retirements Track Enrollment and Class Sizes for Staffing Recommendations

QUESTIONS