Board of Trustees/SuperintendentPlanning Meeting

Financial ServicesFY 2015-2016

Budget Update

Lancaster County School DistrictJanuary 23-24, 2015

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Capital FundingOptions:1. General Obligation Bonds - Require a referendum and voter approval.

2. 8% General Obligation Bonds - District can issue up to 8% of the county assessment value currently estimated at $23,860,852. We will have outstanding 8% debt at year end of $8,560,000 and an estimated LEAP Payment due next year of $4,331,562 leaving available an estimated $10,969,290 that could be issued to meet our Capital Plan and other capital needs. Does not require a referendum or voter approval.

3. Special legislation for $.01 sales tax – This would require special local legislation to assess a $.01 sales tax for construction or bond payments for up to 30 years. Cannot have a school tax authorized by special legislation and the county 7 year capital projects tax at the same time. Would likely be successfully challenged in court as unconstitutional, based on the 2013 Supreme Court decision.

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Capital Funding (Cont)

4.Equipment Acquisition Lease – used to spread cost out over several years and limit the amount of 8% funding encumbered each year to the annual payment amount only. Similar to the LEAP installment debt we have now but applies to equipment purchases. In our annual 8% bond issuance we would include necessary funding to make the annual payment on the Equipment Acquisition Lease.

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Governor’s Budget Proposal

FY 2015-2016

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State Budget Timeline

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Governor’s Budget - Highlights

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Governor’s Budget - Highlights

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Governor’s Budget - Highlights

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Governor’s Budget - Highlights

Based on Four Pillars:1)Fair and Simple Funding – Continue simplifying funding by eliminating lottery fund streams for K-5 and 6-8 programs and distribute funding through the EFA.

2)Emphasizing Reading – Proposing an additional $10m in recurring support for reading to double the state’s reading coaches and to provide for professional development.

3)Access to Educational Technology – Budget contains a 2nd year of $29.3m for technology initiatives.

4)High-Quality Public School Choice – Budget supports full EFA funding for Charter Schools and also provides EIA funding of $11.8m.

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Governor’s Budget - Highlights

Teacher Quality and Recruitment:Focus on –

1)Homegrown Teacher Initiative

2)Enhanced Student Loan Repayment

3)Rural Educator Salary Supplement

4)Graduate Degrees for Career Educators

5)Teacher Mentors

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Governor’s Budget - HighlightsDetails:1)Consolidate funding streams (Lottery gone) and increase BSC from $2,120 to $2,200.

2)Double Reading Coaches and provide for professional development.

3)Fund Read to Success program with $.9m in recurring support.

4)Maintain $29m in Lottery funds for Technology.

5)Increase EIA professional development to $4m for recurring support to technology.

6)Additional $2m for career and technology equipment.

7)$11m in recurring support for growth in the Public Charter School District.

8)$2.8m to support development and expansion of the virtual education program.

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Governor’s Budget - HighlightsDetails Cont:9)Establish a Rural Teacher Recruiting initiative with $1.5m and sustain funding by closing the NBC incentive to new entrants as the NBC stipend phases-out.

10)Fully fund new career readiness assessments $4.2m and fund the new teacher evaluation system department $3m.

11)A one-time $10m allocation from the Capital Reserve Fund for the lease or purchase of school buses.

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Governor’s Budget

Governor’s Budget-Tony’s Graph inserted for comparison

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Budget ProjectionsFY 2015-2016

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Budget Projections

FY 14-15 mid-year budget revisions will be presented to the School Board for approval on February 17, 2015 at the regular board meeting.

Any year-end deficit for this year will be

covered from our undesignated general fund

equity.

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Budget Projections Undesignated General Fund Equity

Beginning total equity 7/01/14 $18,653,099Assigned for Encumbrances & pre-paid expenses -32,952Assigned for use in FY 14-15 budget -2,772,134Estimated unassigned balance 7/01/14 $15,848,013Available for FY 15-16 Budget -1,488,013Recommended minimum unassigned balance 7/01/14 $14,360,000

NOTE:

Undesignated equity should ideally cover three months of average expenditures. Two months of expenditures is a good target to maintain. The recommended minimum balance above of $14,360,000 is 1.425 times one month’s average expenditures over the twelve months (estimated at $10,076,977).

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Budget Projections FY 15-16

General Fund Estimated Changes in Revenues

Local Taxes/State Tax Reimbursements: GO mill value (less residential) w/ no growth in mill value

$139,044 x 1.00 x 149.50 mills (no millage increase) $20,787,078 Fee-In-Lieu/ Half-year Vehicle/ Delinquent/ Penalties (decreased) 5,102,454 Sales Tax Reimbursement for residential property (0.00% est growth) 8,377,879 Other State Tax Reimbursements (no change) 5,279,184 Other Local Revenues 950,600 Less Prior Year budget local revenues -40,496,477 Less Prior Year GF Equity budgeted -2,772,134 _______

Net Decrease in Local Revenues -$2,771,416

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Budget Projections FY 15-16

State Revenue: EFA Revised for 45-Day Count (BSC of $2,120) $26,887,248 EFA Increase for FY 16 estimated growth (150 students) 318,000 Other State Revenues –EIA, Fringe, Misc 15,296,048 Less Prior Year Budget -41,140,969

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Net Increase in State Revenues $1,360,327

Total anticipated Decrease in All Revenues -$1,411,089

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Budget Projections FY 15-16

Possible Increase in Local Millage:

Local millage could be increased by the CPI factor of ???% (estimated) plus a population growth factor estimate of ???% (estimated) as calculated below:

FY 15 Millage X (CPI + Population Growth) = State Allowable 149.50 X 3.34% (Estimated) = 5.00 mills

County Millage Limit = 5.00 mills Maximum Millage Increase 5.00 mills

Value of a mill (excluding residential) is estimated at $139,044.Increase of 5.0 mills for a total of 154.50 mills would generate an estimated additional $695,220 in local tax revenue.

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Millage Increase Limitations

The millage rate limitations on the previous page may be suspended and further increased by a 2/3 vote of the membership of the local governing body for the following purposes:

Deficiency of the preceding year.

Catastrophic event such as natural disaster, severe weather, act of God or act of terrorism, fire, war, or riot.

Compliance with a court order or decree.

Taxpayer closure that decreases by 10% or more the amount of revenue payable to the taxing jurisdiction in the preceding year.

Compliance with a Regulation or Statute enacted that does not provide an appropriation for compliance.

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Budget Projections FY 15-16

Budget Assumptions:

Increase in payroll for 1 step. No anticipated raise in salary schedules.Increase in Employer Retirement cost estimated

by .30%.Increase in Employer Insurance cost by 5%.

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General Fund Estimated Changes in Expenditures -Salaries & Fringe:

Teachers step increase $1,146,567Teachers estimated 0% raise 0 Classified step increase 236,099Classified estimated 0% raise 0Admin step increase 104,554Admin estimated 0% raise 0Hourly step Increase 65,991Hourly estimated 0% raise 0Supplement step increase 19,778Supplement estimated 0% raise 0

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Budget Projections FY 15-16

Budget Projections FY 15-16

G/F Estimated Changes in Expenditures cont:Additional Salaries from Special Revenue $ 300,000 Increase in Discovery School Funding 7,510Utilities estimated 2% increase 61,500Cleaning contract estimated 2% increase 47,000Increase in routine maintenance 20,000

Total Increase in Expenditures $2,008,999

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Budget Reduction Process FY 15-16

Current Deficit -$3,420,088

Possible Considerations: Five mill tax increase 672,290Use general fund equity 1,488,013Growth in mill value by 1% 194,964Base Student Cost increased to $2,200 530,859

(Net of Lottery Funds Cut $444,450)

Net Deficit -$533,962

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Budget Process

FY 2015-2016

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Budget Preparation Guide(Handout)

This handout contains selected sections from the budget guide used by the principals to develop their budgets. It includes:

• About the Process• FY 15-16 Budget Calendar• The Budget Presentation Schedule-Schools• Proposed funding allocation standards • Proposed school allocation • Proposed staffing allocations• Proposed staffing allocation standards• School enrollment projections

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The End

I’ll be glad to answer any questions you may have.

Thank You!

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