Proposed Final Budget Presentation (May 11, 2015) Selinsgrove Area School District

GENERAL FUND FINANCIAL STATEMENT (Current financial position) Actual Budget Projected Beginning Balance$ 8,082,703$ 7,846,270$ 8,757,776 Revenues$ 37,944,959$ 39,026,090$ 39,183,741 Expenditures$ 35,919,886$ 39,371,589$ 38,130,917 Surplus/(Deficit)$ 2,025,073$ (345,499)$ 1,052,824 Transfer out to Capital Reserve $ (1,350,000)$ (600,000) Transfer out to Debt Service $ (400,000) Ending Balance$ 8,757,776$ 7,500,771$ 8,810,600 2

BUDGET SAVINGS (Current Yr.) Adopted budget balance $(345,500) Personnel Salary Savings (2.5%) $ 269,000 Fringes/Benefit Savings $ 98,000 Medical insurance savings $ 436,000 Transportation savings $ 128,000 Facilities budget savings $ 76,000 All other department savings (net) $ 14,000 Revenues over budget $ 182,000 Not using budgetary reserve $ 195,000 Total Savings (projected surplus) 2.7% $1.05 million 3

TOTAL FUND BALANCES AT Designations (“buckets”) Balance Restricted - Special Ed ACCESS $ 348,981 Nonspendable - Inventory of Supplies $ 32,709 Nonspendable – Prepaid Expenses $ 67,547 Committed – Retiree Healthcare $ 2,318,334 Committed - Future PSERS Expenses $ 3,214,716 Committed – Educational Resources $ 306,389 Unassigned Balance $ 2,521,924 (6.3% of budget) TOTAL GENERAL FUND RESERVES $ 8,810,600 (23.1% of budget) DEBT SERVICE FUND RESERVES $ 1,871,228 CAPITAL RESERVE FUND RESERVES $ 1,855,910 TOTAL ALL GOV’T FUNDS RESERVES $ 12,537,738 4

FUTURE CAPITAL RESERVE PROJECTS – Importance of maintaining a healthy Capital Reserve Fund ProjectAmountProject start date Intermediate school roof project $ 251,700 Summer 2015 Middle school addition (total cost of $818,000 balance from food service ) $ 344,000 Summer 2015 High school bleacher replacement $ 163,100 Summer 2015 Football field turf replacement (total cost of $313,000) $ 247,300 as needed 5 Other expenses: annual summer maintenance projects for carpeting, paving, vehicle replacement, roof restoration. Middle school HVAC system replacement, Intermediate school building controls upgrade (possible performance contract), stadium track surface replacement, renovation of science labs at MS & HS. Fund used to offset any unforeseen major equipment replacement.

BUDGET SUMMARY FLOW OF FUNDS – GENERAL FUND Beginning Fund Balance$ 8,810,600 Revenues (without tax increase) $39,807,709 Expenditures $41,475,773 Deficit ( $1,668,064) Transfer in from Educational Resources Reserve $ 125,000 Transfer in from PSERS Reserve $ 321,472 Adj Deficit before tax increase ( $1,221,592) Proposed 1.58 mills (2.5%) Act 1 allowable tax increase $392,666 Operating Deficit to be covered from unassigned fund balance ( $828,926) Ending Fund Balance $ 7,535,202 6

REVENUE HIGHLIGHTS Moderately growing local economy 1.58 mill real estate tax increase (2.5%) and a 0.6% growth in the overall real estate base Earned Income Tax collections budgeted with a 3% increase from proj collections Basic education subsidy level funding (state funding is uncertain at this point) (Gov. proposal 6.6% increase) Special education subsidy level funding Accountability Block Grant level funding Increase in Keystone Literacy Grant Year 4 funding of $93,000 (four year total grant funds of $2.98 million) 7

REVENUE BY SOURCE 8 $24.4 M $14.2 M $1.6 M State averages: Local 54%, State 41%, Federal 3%, Other 2%

HISTORICAL REVENUES BY SOURCE 9 millions local state federal

EXPENDITURE HIGHLIGHTS Six teacher retirements at end of 14/15 school year (replacing all positions) 2.5 new teaching positions in budget – 5 th grade, MS math, part-time HS gifted Salary increases per personnel contracts – teachers 4.5% salary plus 1.65% steps, administrators 3.5%, classified 4.5% PSERS rate increase from 21.40% to 25.84% Medical insurance premium increase of 3.8% Building and technology budgets level funded (5th year at reduced funding) 10

EXPENDITURE HIGHLIGHTS Transfer out to debt service fund reduced by $400,000 (debt service reserves to be used) Capital reserve transfer of $96,000 reflects Jackson- Penn rental income New Middle school math textbook series ($125,000) New part-time PIMS coordinator (shared service) Total budget of $41.48 million – overall increase of $2.1 million or 5.3% from 14/15 original budget 11

MAJOR EXPENDITURE INCREASES EXPENSEINCREASE FROM Budget EMPLOYER SHR OF RETIREMENT EXP $ 1,022, % EMPLOYEE SALARY/WAGES$ 749, % OTHER EMPLOYEE BENEFITS$ 145, % SUN TECH CONTRIBUTIONS$ 110, % 12

EXPENDITURE ANALYSIS 13 Personnel costs, student tuition, transportation, utilities, debt service Supplies, textbooks, equipment,repairs, travel

HISTORICAL USE OF FUNDS 14 Personnel costs make up 75% of total budget

FUTURE BUDGET CONCERNS Modest economic recovery producing inadequate local and state revenue growth Act 1 index will remain low Uncertainty at the state level (supportive Governor but reluctant legislature) New basic education funding formula Shift away from property tax towards less predictable income and sales taxes Teacher contract ends next year 6/30/16 Unfunded Pension system - PSERS rate increases to reach 32% of payroll 15

PROJECTED PSERS RATE 16 Fiscal Year

NET PSERS COST TO DISTRICT 10 Year Analysis 17

FUTURE BUDGET PROJECTIONS 18

GENERAL FUND PROJECTED ENDING FUND BALANCE 19

PROPOSED FINAL BUDGET SUMMARY “THE BOTTOM LINE” REVENUES (with 1.58 mill real est incr) $40,200,375 EXPENSES ($41,475,773) USE OF FUND BALANCE ($125,000 FROM EDUCATIONAL RESOURCES, $321,472 FROM PSERS, & $828,926 UNASSIGNED) $ 1,275,398 MILLAGE INCREASE % INCREASE % TOTAL MILLS 1 mill = $248,500 in revenue INCREASE TO AVG HOMEOWNER Homestead/Farmstead credit $133 $43 ($3.59 per month) 20

PRESENTATION SUMMARY (POINTS TO REMEMBER) Financial reserves (fund balance) – very strong position in the short term State funding is uncertain (new funding formula, tax shift away from real estate) Significant budget challenges remain for the future – PSERS, Healthcare, teacher contract Importance of long-term budgeting decisions and forecasting 21