1. 2016 – 2017 General Fund Preliminary Budget Presentation January 6, 2016

2. CBAC M EMBERS 2 Members Ben RostAmy Roberts Mike EgglestonMark Atherholt Dave GautreauJim Tezak Kimberley CrowleyMichelle Benner Toni Quattrone

3. 2016-2017 ACT 1 T IMELINE  January 6, 2016 – present the 16-17 Proposed Preliminary Budget  January 8, 2016 – publish notice of intent to adopt 15-16 Preliminary Budget (must be at least 10 days prior to adoption)  January 21, 2016 – adopt 16-17 Preliminary Budget (Board Meeting)  January 27, 2016 - PDE deadline to adopt 16-17 Preliminary Budget 3

4. 2016-2017 ACT 1 T IMELINE  February 11, 2016 – deadline to file with PDE for approval of requested exceptions  February 26, 2016 – deadline to submit referendum question  Voter approval for tax increase in excess of Index and exceptions  May 26, 2016 – district approval of 16-17 Final Budget  June 30, 2016 – PDE deadline for 16-17 Final Budget approval 4

5. 16-17 B UDGET O BJECTIVES & A SSUMPTIONS  The state budget impact is unknown. PASD is forced to make assumptions as follows  State subsidies are assumed to show no increase from 14-15 levels due to the uncertainty at the state level.  Estimates were used for an increase in PSERS and Social Security based on historical increases  Preserve PASD programming and educational goals 5

6. 16-17 B UDGET O BJECTIVES & A SSUMPTIONS  Debt Service  There is a $10 million bond issue included in the Preliminary Budget to fund the ELC/SLEP projects. This issue adds $350,000 to the budget assuming the interest rate range we have received in the past (.25- 3%).  A refinancing opportunity exists in 2016-2017 that will be explored with the district’s financial advisor, PFM.  The debt service line item for 16/17 is projected to be $10,241,497 or 11.47% of the preliminary budget. 6

7. Preliminary Budget vs Actual Budget Tax Increases YearPreliminary BudgetFinal Budget 15-163.77%0% 14-153.98%.87% 13-147.15%1.42% 12-135.08%1.66% 11-124.43%2.66% 10-116.96%2.54% 7

8. PSERS I MPACT 8 Year ACT 1 Index PASD Tax Increase PSERS Rate Projection % PSERS Increase Net PSERS Expense Net $ Increase 10-112.9%2.54%5.64%21.29%$862,177 11-121.4%2.66%8.65%53.37%$1,320,775$458,598 12-131.7%1.66%12.36%42.89%$1,892,758$571,983 13-141.7%1.42%16.93%36.97%$2,660,847$768,089 14-152.1%.87%21.40%26.40%$3,394,211$733,364 15-161.9%0%25.84%20.75%$4,298,147$903,936 16-172.4%?30.03%16.22%$5,026,704$728,557 17-18??30.25%3.35% 18-19??31.28%3.40% 19-20??32.08%2.56%  PSERS increase The employer contribution rate increases from 25.84% (15-16) to 30.03% (16-17). That is a 16.22% year over year increase. This increase raises the district’s net cost $728,557

9. R EVENUE H IGHLIGHTS  The only increase in state subsidies is an estimated increase for PSERS.  The assessed value in the district is slowly growing (around 1%).  For the purpose of the Preliminary Budget, assume that Real Estate Taxes increase at the ACT 1 Index of 2.4%.  Local revenue shows an increase of $526,595 due to increases in EIT and Occupation Tax and an increase in Interim Taxes. These increases are due to new construction and new residents.  The revenue budget is $750,000 less than the expenditure budget due to a planned withdrawal of a portion of the PSERS reserve per the plan approved in the 15-16 budget discussions. The plan for PSERS reserve drawdown will be reviewed prior to final budget approval and can be modified at the discretion of the Board. 9

10. 2016-2017 R EVENUE 10 14/15 Actual15/16 Budget 14-15 to 15-16 % change16/17 Prelim 15-16 to 16-17 % Change 14-15 to 16-17 % Change Local Revenue Property Taxes54,637,28056,751,8273.87%58,081,6722.34%6.30% Interim Taxes258,969350,00035.15%500,00042.85%93.07% Public Utility Tax74,68975,000.41%75,000.41% Per/Person/Per Capita123,210142,00015.25%142,00015.25% Earned Income Tax6,242,7136,350,0001.72%6,650,0004.72%6.52% Occupation Tax1,028,9471,176,94514.38%1,260,0007.06%22.45% RE Transfer Taxes797,7061,200,00050.43%1,050,000(12.5%)31.63% Delinquent Taxes2,207,9662,292,5003.83%2,300,000.33%4.17% Interest Income48,93550,0002.18%45,000(10.0%)(8.04%) School Revenue38,80862,00059.76%62,00059.76% IDEA Revenue529,713550,0003.83%535,000(2.73%)1.0% School Rentals105,683132,50025.37%132,50025.37%

11. 2016-2017 R EVENUE C ONT ’ D 11 14/15 Actual15/16 Budget 14-15 to 15-16 % change16/17 Prelim 15-16 to 16-17 % Change 14-15 to 16-17 % Change PCEF Contributions147,918225,00052.11%225,000 Tuition110,096150,00036.24%125,000(16.67%)13.54% Misc Revenue347,005275,000(20.75%)450,00063.63%29.68% State Revenue*14,019,52313,820,432(1.42%)14,995,4328.50%6.96% Federal Revenue592,770670,00013.03%680,0001.49%14.71% Total Revenue81,310,92984,273,20487,314,604 Usage of PSERS reserve500,000850,00070.0%750,000(11.76%)50.0% *The increase in state revenue for 16-17 is due to the large increase in PSERS funding and a small increase in Social Security funding.

12. E XPENDITURE H IGHLIGHTS  There are 12.4 proposed new positions (3 Middle School,.4 High School, 9 positions (4 teachers & 5 aides) in Special Education). Additionally, there are 16 coaches and 7 play/spring show proposed new positions.  There is a 2% increase in medical rates. This will be reviewed throughout the budget process.  PSERS increases from 25.84% to 30.03% - a 16.22% year over year increase.  Vo Tech tuition continues to decrease.  Supplies have increased due to enrollment.  There is a $10 million issue for ELC/SLEP ($350,000). There is a refunding opportunity in the 2016 calendar year but since the savings are unknown it is not included in the budget at this time. 12

13. 2016-2017 E XPENDITURES 13 14/15 Actual15/16 Budget 14-15 to 15-16 % change16/17 Prelim 15-16 to 16-17 % Change 14-15 to 16-17 % Change Salaries32,489,12033,352,9262.66%34,771,0794.25%7.02% Benefits Employee Benefits5,961,8267,695,80329.08%7,110,427(7.61%)19.27% Social Security2,420,3862,523,4274.25%2,570,2621.86%6.19% PSERS6,587,8318,463,60328.47%9,920,71617.22%50.59% Contracted Services3,135,3002,982,635(4.87%)3,388,72013.61%8.09% Professional Services2,052,7891,807,606(11.94%)1,898,4955.0%(7.51%) Other Purchased Svs Tuition7,646,8487,634,000(.16%)7,944,0004.06%3.89% Vo-tech Tuition2,182,6191,702,291(22.01%)1,429,730(16.0%)(34.49%) Transportation4,455,7204,161,168(6.61%)4,624,20011.13%3.78% Other Purchased Svs548,235457,502(16.55%)526,05214.98%(4.05%)

14. 2016-2017 E XPENDITURES C ONT ’ D 14 14/15 Actual15/16 Budget 14-15 to 15-16 % change16/17 Prelim 15-16 to 16-17 % Change 14-15 to 16-17 % Change Supplies1,962,1972,131,8118.64%2,280,0907.0%16.20% Equipment902,142810,363(10.17%)813,100.3%(9.87%) Debt Services9,968,4759,806,230(1.63%)10,241,4974.43%2.74% Fund Transfers872,631469,887(46.15%)414,887(11.70%(52.46%) Transfer to Library533,742544,4172.0%544,4172.0% Other Dues & Fees75,11679,5355.89%64,515(19.01%)(14.11%) Budgetary Reserve500,000750,00050.0% Total Expenditures81,794,97785,123,20489,292,187

15. 16-17 P RELIMINARY B UDGET S UMMARY 15 Total Expenditures$89,292,187 Revenue & Reserves Total Revenue$87,314,604 Use of PSERS Reserve$750,000 Use of Fund Balance $1,227,583 Total Revenue & Reserves$89,292,187 The total revenue above includes an increase in real estate taxes of 2.4% (ACT 1 Index). The remaining funds needed would come from reserves.

16. Budget Meetings February 16, 2016 – Contracted Services, Professional Services, Vo-Tech, Activities & Athletics (CBAC), Nuisance Taxes March 3, 2016 – PSERS, SLEP, Technology, Debt Service, Marketing (CBAC) March 15, 2016 – Medical Benefits, Public Library, AP Testing (CBAC) April 19, 2016 – Staffing, 5 Year Projection, Funding Reserves, State Revenue, Long-term Capital Planning (CBAC) May 10, 2016 – If necessary May 26, 2016 – Pass 16-17 Final Budget 16