Budget Recommendation Kenmore-Town of Tonawanda UFSD Board of Education Meeting April 9, 2013

Major Impact Items  State Aid Uncertainty  Asset Sale Reduction – Green Acres  Reduction in Fund Balance/Reserve use  Property Tax Cap  Reduction of Tax Base  Contractual increases  Retirement System Contribution Increases  Focus District Designation  Disproportionality Designation  Annual Professional Performance Review  Possible sequestration legislation

Budget Review  Philosophy: No further harm to programs  No educational programs are cut  No extra-curricular programs are cut  No athletic programs are cut  Continues Multiple Pathways: Project Lead the Way, Project Gateway, Big Picture School, Career & Technical Education and International Baccalaureate Program  Class size guidelines remain at current levels

Class Size Comparison Avg. Size of 5Ken-Ton GradeLarge DistrictsClass Size LevelIn Erie County*Guidelines K *Excludes Buffalo City Schools

Summary Results for Audit of Additional Adults in K-8 Classrooms Percentage of Classrooms by Grade Level K-56-8K-8 At least one additional adult for a portion of the day 82.0%72.5%78% At least one additional adult for 50% of the day 47.5%24.4%37.1% At least two additional adults in the room for a portion of the day 17.5%29.0%22.7%

Developments Since 3/26/13 Budget Work Session  New York State budget passed  Estimated school district aid runs received  Notified of special aid from Assemblyman Schimminger amounting to $50,000  Allowed for a revenue increase of $725,000  Remaining deficit eliminated  Reduces the use of Unappropriated Fund Balance  Eliminates 1 of the 3-section waivers

State Aid Comparison In Millions of Dollars Approximately the same aid as

State Aid Comparison In Millions of Dollars $8.1 Million reduction since

Changes in Budget Since 3/26/13 ItemNotes Structural Deficit Reduction? Amount State Aid Adjustments Basic Aid N+$800,000 BOCES Aid N-$75,000 Other State Aid Special Aid from Assemblyman Schimminger N+$50,000 Reduce Use of Unappropriated Fund Balance N-$150,000 Eliminate 1 of the 3-section waivers N-$55,000

Changes in Budget Since 3/26/13 ItemNotes Structural Deficit Reduction? Amount Salary Reductions-TRS Benefit reduction related to salary reductions Y+$9,539 Salary Reductions-FICA Benefit reduction related to salary reductions Y+$4,551 Salary Reductions-Health Ins. Benefit reduction related to salary reductions Y+$14,000 TOTAL CHANGES SINCE 3/26/13(Deficit Reduction)-$541,912

Current Budget Status: Deficit Reduction Progress

Recommended Budget Summary ItemAmount Budget$149,015,111 Budget Increase$1,238,495 Budget to Budget % Increase0.84% Tax Levy$75,249,941 Tax Levy Increase$3,350,513 Tax Levy % Increase4.66% Tax Rate$45.20 Tax Rate Increase$2.01 Tax Rate % Increase4.66% Instructional Staff Position Reductions17 Support Staff Position Reductions24 Fund Balance and Reserve Use$10,727,571 Increase on $100,000 Full-Market Value House$95

Historical Budget % Increase Avg. = 3.00%

Use of Fund Balance and Reserves

Other Considerations: TRS Pension Smoothing Option  “Stable” rate option for a period of 7 years  The rate is 14% for  May be adjusted up to 2% in Years 3 and 5  The difference between the stable rate and the actuarial rate will be paid back with interest  The difference with interest for Years 1-5 starts to be paid back in Year 6 (for 5 years) in addition to the stable rate

Other Considerations: TRS Pension Smoothing Option  Return to the actuarial rate in Year 8  The difference with interest for Years 6-7 starts to be paid back in Year 8 (for 5 years) in addition to the actuarial rate and the continuing payments for Years 1-5  While it may save money in the first year, the total amount paid in the long run will be more due to the interest payments  In essence, it “kicks the can down the road” and is not recommended

Other Considerations: Sequestration  The effects of the federal sequestration legislation are not yet known  The general fund budget has not been increased for sequestration  If accommodations must be made, the 2014 year-end fund balance will be adjusted for the school year  The structure of the budget allows for dealing with this eventuality

On the Horizon:  NRG-Huntley approached the County, Town, and School District to renegotiate its PILOT (Payment In-Lieu-Of Taxes) agreement beginning in  This could result in significant revenue loss in the school year  Beginning in , our Tax Cap percentage increase will be significantly lower

Questions?