1. Octorara Area School District
Final Budget
June 20th 2016

2. Budget Development
September – Finance Committee review of transportation services efficiencies and services for budgeting purposes November – Act 1 index announced 3% increase for Octorara Area School District December – Local audit of notified by Auditor of a deficit of ($240,000) and the reliance on one time savings to balance future budgets December – Preliminary budget presented includes total expenditures of $52,405,603, a 3.3% increase over and 3% tax increase December – Board passes resolution to stay at the Act 1 index of 3% January – Finance Committee approves the professional services for an efficiency study January – Proposal to introduce budget reduction strategy of $420,000
We started the Budget Process way back in September. Knowing that we would be dealing with another proposed budget deficit we started looking at some of our more costly budget items, looking for some efficiencies or services we could curtail if needed. We started with transportation.
Then in November we were notified that our Act 1 index is 3% This is the amount that our tax rate can increase without pursuing a referendum or act 1 index exceptions.
In December we heard the results of our Local Audit for Our auditor presented our financial statements showing that we ended the year with a deficit of $240,000. Our Auditor also pointed out to us that we have been using one time savings to help balance our budgets that are not sustainable and the we needed to address this in the , just one of the reasons for proposing budget reduction strategies.
Also in December the Board saw the first version of the budget. This budget included a 3% tax increase and a total of $52,405,603 in expenditures resulting in a deficit of $2,005,997. This budget didn’t include any increases in state revenues. The Board also passed a resolution stating that any tax increase would be at or below the Act 1 3% tax increase and that the District would not apply for exceptions to the Act 1 tax increase.
In January the Finance Committee approved an agreement with two efficiency experts to review our operations and make efficiency recommendations. We are reviewing some of their recommendation now.
Also in January the Administration proposed that we introduce $420,000 in budget reduction strategy to help deal with the preliminary budget deficit of $2,005,997

3. Budget Development
March – Budget reduction strategy to choose from totals $5.7 million and includes the elimination or reduction of transportation, technology, kindergarten, athletics and positions March – Review of debt service $340,000 one time savings in budget savings, infrastructure report and impact on future budgets for capital fund expenditures April – Budget reduction strategy to include in the budget is refined to $637,800 May – Budget reduction strategy revised to $537,800 May – State revenue estimated to be $486,313 using the new funding formula added to budget June – Final budget reduction stretegy $512,800 ($537,800 reduced by $25,000 for traffic control) June – Final budget reduction strategy is incorporated into expenditures resulting in final expenditures of $51,893,407 a 2.3% increase over
In March the Board was give a list of budget reduction strategy totaling approximately $5.7 million in reductions to debate over the remainder of the budget process. Also in March we identified another one time savings in our debt service of $340,000 that will be used to reduce the deficit in We also discussed reviewed our debt service and possible new borrowings or refinancing of current debt to address capital needs in the future. This summer we will finalize an infrastructure report identifying those needs for planning purposes.
In April the Board and Administration refined the budget reduction strategy to $637,800 in reductions and again in May reduced that amount further to $537,800.
Finally in June the budget reduction strategy was further reduced to $512,800. Resulting in a final budget with expenditures of $51,893,407, which is a 2.3% increase over expenditures and a 3% Act 1 tax increase.

4. 2016-17 Final General Fund Budget Summary
Total Revenues
$50,886,587
General Fund Budget Document
Total Expenditures
$51,893,470
Deficit
($1,006,883)
Anticipated Budget Results
Budget Contingency
$350,000
Debt Service Savings
$340,000
Anticipated Use of Fund Balance
($316,883)
All of this results in a resolution you will vote on tonight with total expenditures in the amount of $51,893,470 and total revenues, including a 3% Act 1 tax increase of $50,886,587 resulting in a deficit of ($1,006,883) However, we anticipate only using $316,883 of fund balance at year end because our budget will include a $350,000 contingency, needed only for an emergency and a full years worth of debt service even thought we will have a one time savings of debt service next year in the amount of $340,000.

5. Questions