Pelham Union Free School District Discussion of Budget

Pelham Union Free School District Discussion of Budget Assumptions Board of Education Meeting November 29, 2016

Budget Development Process �Budgets are built from the bottom up Schools/departments submit funding requests to Superintendent weighs and prioritizes requests Superintendent proposes preliminary budget to BOE weighs - prioritizes - approves a final budget to be presented to the community �Community votes to approve

Budget = 3 -Step Resourcing Plan �Step 1 What is the program? Class size parameters Program offerings: core subjects, enrichment, “specials”, extra-curricular activities �Step 2 How much will it cost? How many children and teachers? Status of labor contracts? Other costs? �Step 3 How will you pay for it? Real property taxes and non-property tax revenue

Budgets are Estimates!!! �Budget formulated 16 -18 months prior to end of next fiscal year �Lots of unknown – and unknowable – items Laws and mandates do change State aid will change (politics, “earmarks”) Economic and political environments do change Enrollment & demand for special education services will change

The Big Picture � 2016 -17 Budget $70, 938, 000 � 2016 -17 Property Tax Levy 59, 254, 100 � 2016 -17 Other Revenues 2016 -17 State Aid Appropriated Fund Balance 2016 -17 Misc. Receipts 11, 683, 900 6, 922, 266 2, 587, 454 2, 174, 180

Moving the Dial � 1% of Budget = $710, 000 � 1% of Tax Levy = 600, 000 � Average Pelham residential assessment � Average school tax levy (pre-STAR) 809, 909 15, 647 � Impact of 1% change in levy for average residential property $156

The Money is in the People �Salary and Benefits = �Debt service �Facilities contracted services �Non-salary special education �Utilities �Student transportation �Essential administrative costs 78. 6% of budget 4. 7% of budget 3. 0% of budget 1. 7% of budget 1. 6% of budget 1. 5% of budget 1. 1% of budget

What We Know Today �TRS contribution rate 9. 5 -10. 5% �ERS contribution rate 15. 3% �CPI to 10/31/16 (12 months) 1. 6% �Teacher contract settlement 0. 75% �Custodial contract settlement 2. 5% �Property tax base growth factor (towns) 0. 21 -0. 36%

What We Don’t Know �Enrollment projections �Health insurance premium increase �State Aid (non-election year) �Administrators/Clerical Contracts �Transportation contract (going out to bid) �CPI through December 31 �District property tax growth factor �BOCES administrative charges �Weather!!

Other Programming Needs �HS enrollment growth (32 students) �Increase in students with social/emotional issues �Facilities: capital improvements, major repairs �Special Education needs �Technology: instruction and infrastructure �Bridge program

Under Consideration �Foreign Language in Elementary School (FLES) �Staff development (ELA) – elementary school �Increased Social/Emotional support – HS �Mathematics - HS �Fine and Performing Arts �Academic Intervention Services �Central Office/Business Office Reorganization �NO DECISIONS HAVE BEEN MADE

The Buildings Goals: 1. To provide a safe, clean environment for students and staff that supports the delivery of the instructional program, and 2. To maintain and preserve those facilities in a cost-effective manner for future generations of Pelham students

Estimating Methodology Teaching � Enrollment Projections + Unassigned � Teaching supplies – per pupil allocation based on 3 years actual use � � Allowance for new textbooks? Staff turnover (retirement) savings Special Education tuitions – current IEPs + allowance Utilities � Heating costs (last 3 years, adjusted by degree days) � Electrical consumption (kwh last 3 years) Revenues � State aid � Sales tax � Private Tuition students � NYC Tuition students � Special Education students Governor’s proposal 3 year average, consider County projection 3 year average x current rate 3 year average actual students

Planned Surplus and Fund Balance 2016 -17 budget �Contains 2. 3% contingency funds (planned surplus) on expenditure side �Revenue from appropriated fund balance = 3. 7% of budget �Deficit financing use of fund balance �Annual need to replenish revenues (appropriated fund balance) What is the right amount of fund balance?

Using Reserves to Finance Operations - FUND BALANCE the “melting ice cube” approach to budgeting. . .

Fund Balance Goals 1. Gradually reduce reserves to sensible, sustainable levels, consistent with long-term financial stability of organization 2. Decrease reliance on planned surplus and fund balance – gradually 3. Avoid future catastrophic “revenue hole” that can only be resolved by increasing taxes or cutting the educational programs