budget 2002-2003 montrose area public budget presentation june 3, 2002 lewis plauny

Budget 2002-2003Budget 2002-2003 Montrose AreaMontrose Area

Public Budget Public Budget PresentationPresentation

June 3 , 2002June 3 , 2002

Lewis PlaunyLewis Plauny


Presentation AgendaPresentation Agenda

Current “Draft Budget” key numbersCurrent “Draft Budget” key numbers Explain Budgetary Reserve & Fund Explain Budgetary Reserve & Fund

BalanceBalance Major Revenue & Expenditure IncreasesMajor Revenue & Expenditure Increases Our Continuing Budget Improvement Our Continuing Budget Improvement

PlanPlan Insights on Grants & Budget ProblemsInsights on Grants & Budget Problems Standard & Poors ReviewStandard & Poors Review Answer questions & ask for decisionsAnswer questions & ask for decisions


Budget Draft StatusBudget Draft Status

2001-2002 Budget $18,000,0002001-2002 Budget $18,000,000

2002-2003 Budget approx. $19,500,0002002-2003 Budget approx. $19,500,000

Increase ofIncrease of $ 1,500,000$ 1,500,000 oror 8.3%8.3%


Review of “Budget Draft” Review of “Budget Draft” contentcontent

155 Page Board Document Itemizes all 155 Page Board Document Itemizes all anticipated expenses and revenuesanticipated expenses and revenues

Current Expenses are $ 18,221,995Current Expenses are $ 18,221,995 Current Revenues are $ 18,171,324Current Revenues are $ 18,171,324 Difference is $ -50,671Difference is $ -50,671 Difference in millage equivalent is .28 Difference in millage equivalent is .28

millmill– 1.0 mill = 2.6 % tax increase1.0 mill = 2.6 % tax increase– .5 mill = 1.3 % tax increase.5 mill = 1.3 % tax increase


How We CalculateHow We Calculate “Millage Equivalent” “Millage Equivalent”

In 2001-2002 the District collectedIn 2001-2002 the District collected$ 6,901,236.09 in current real estate $ 6,901,236.09 in current real estate taxes.taxes.

This was 90.4% of the levied taxes.This was 90.4% of the levied taxes. Amount collected divided by 37.5 mills Amount collected divided by 37.5 mills

levied equals 184,032.96 dollars levied equals 184,032.96 dollars collected for each mill levied.collected for each mill levied.


Why We Should “Think”Why We Should “Think” “Millage Equivalent” “Millage Equivalent”

Proactive - To be “fiscally responsible” Proactive - To be “fiscally responsible” local Boards should fund “Current local Boards should fund “Current Revenues”=“Current Expenditures” Revenues”=“Current Expenditures” and “Think of all newly created budget and “Think of all newly created budget costs in terms of millage increases”costs in terms of millage increases”

Reactive - The State & Federal govts Reactive - The State & Federal govts are always one to three years behind are always one to three years behind (if) they fund school needs(if) they fund school needs


Millage ImpactsMillage Impacts

Average 2001-2002 Real Estate Average 2001-2002 Real Estate Parcel is assessed at 27,340 (after Parcel is assessed at 27,340 (after Clean & Green)Clean & Green)

One mill is $ 26.62 increase on the One mill is $ 26.62 increase on the average parcel.average parcel.


Budgetary ReserveBudgetary Reservefor 2002-2003for 2002-2003

A Budgetary Reserve is a “non-itemized A Budgetary Reserve is a “non-itemized placeholder amount” that is used to placeholder amount” that is used to anticipate unforeseeable expenses during the anticipate unforeseeable expenses during the budget year that budget year that “must” “must” be recorded in the be recorded in the General Fund.General Fund.– Example: a “special needs” student enrolls during Example: a “special needs” student enrolls during

the year and the district must pay his/her tuitionthe year and the district must pay his/her tuition Budgetary Reserve is approx. $ 198,000Budgetary Reserve is approx. $ 198,000 $ 198,000 is approx. 1% of a $ 19,500,000$ 198,000 is approx. 1% of a $ 19,500,000


Beginning Fund BalanceBeginning Fund Balancefor 2002-2003for 2002-2003

2001-2002’s budget total is $ 18,000,0002001-2002’s budget total is $ 18,000,000 The District budgets to a 7 ½ % fund The District budgets to a 7 ½ % fund

balancebalance 7 ½ % of $ 18,000,000 is $ 1,350,0007 ½ % of $ 18,000,000 is $ 1,350,000 Tentative Budget is approx. $ 19,500,000Tentative Budget is approx. $ 19,500,000 7 ½ % of $ 19,500,00 is $ 1,462,5007 ½ % of $ 19,500,00 is $ 1,462,500


2002-2003 Budget2002-2003 BudgetExpenditure IncreasesExpenditure Increases

Blue Cross (211 only) IncreaseBlue Cross (211 only) Increase2002-2003 $ 1,128,6712002-2003 $ 1,128,6712001-2002 $ 1,071,400 2001-2002 $ 1,071,400

57,271 57,271 Salary (100s) IncreasesSalary (100s) Increases

2002-2003 $ 9,554,058 2002-2003 $ 9,554,058 2001-2002 $ 8,787,637 2001-2002 $ 8,787,637

766,421 766,421


2002-2003 Budget2002-2003 BudgetSubsidy IncreasesSubsidy Increases

ESBE IncreaseESBE Increase$ 128,755 (1%) = 0.69 mills$ 128,755 (1%) = 0.69 mills

Special Education IncreaseSpecial Education Increase$ 46,959 (6.6%) = 0.25 mills$ 46,959 (6.6%) = 0.25 mills

Retirement Rate Decrease ?????Retirement Rate Decrease ?????Decrease in name onlyDecrease in name only$ 231,928 = -1.26 mills$ 231,928 = -1.26 mills


Three Year Budget Three Year Budget Improvement PlanImprovement Plan

Improving budgeting practices do not Improving budgeting practices do not increase funding or decrease costsincrease funding or decrease costs

Improves the methods and Improves the methods and procedures with which we create the procedures with which we create the budgetbudget

Improves identifying costs and Improves identifying costs and purchasing accountabilitypurchasing accountability


A Balanced Educational PlanA Balanced Educational Plan

Increasing one side causes the other two sides to increaseIncreasing one side causes the other two sides to increase Decreasing one side causes the other two sides to Decreasing one side causes the other two sides to

decreasedecrease

Continuous Improvement Plan

Expen

ditu

re P

lan Budget Plan


Electronic EquipmentElectronic EquipmentDepreciation PhilosophyDepreciation Philosophy

A recommended “Sustainability A recommended “Sustainability Guideline”Guideline”

– If you can not afford to “replace” it, you If you can not afford to “replace” it, you can not afford to “maintain” itcan not afford to “maintain” it

– If you can not afford to “maintain” it, you If you can not afford to “maintain” it, you can not afford to “buy” itcan not afford to “buy” it

– If you can not afford to “train staff to use it If you can not afford to “train staff to use it properly”, you can not afford to “buy” itproperly”, you can not afford to “buy” it


Grant InsightsGrant Insights

Funding allocations are determined Funding allocations are determined primarily by the availability of funds primarily by the availability of funds at higher levels of governmentat higher levels of government

Funding for all grants will change and Funding for all grants will change and the funding changes will not always the funding changes will not always be positivebe positive

Higher government levels do not Higher government levels do not have “downward” accountabilityhave “downward” accountability


Entitlement Type GrantsEntitlement Type Grants

Expect continuing State & Federal Expect continuing State & Federal supportsupport– Example: Title 1 for poor & needy familiesExample: Title 1 for poor & needy families

Grant amounts controlled by State & Grant amounts controlled by State & Federal funding allocationsFederal funding allocations– Funding will increase or decreaseFunding will increase or decrease– ““Allowable uses” will changeAllowable uses” will change

May be “carefully” used for continuing May be “carefully” used for continuing salaries and benefitssalaries and benefits


Entitlement Type GrantsEntitlement Type GrantsApplied for annuallyApplied for annually

1.1. Social Security ReimbursementSocial Security Reimbursement2.2. Retirement ReimbursementRetirement Reimbursement3.3. Building Debt Service ReimbursementBuilding Debt Service Reimbursement4.4. Special EducationSpecial Education5.5. Cafeteria ReimbursementCafeteria Reimbursement6.6. Title 1 – Poor and needy families and Title 1 – Poor and needy families and

Reading FirstReading First7.7. Title II – (Part A) Improving Teacher Title II – (Part A) Improving Teacher

Quality and (Part D) Enhancing Education Quality and (Part D) Enhancing Education Through TechnologyThrough Technology

8.8. Title V – Innovative ProgramsTitle V – Innovative Programs


Competitive Type GrantsCompetitive Type Grants“Sunset” type legislation“Sunset” type legislation

Politically motivated (can occur midyear)Politically motivated (can occur midyear) Used to “start” but not “continue” support Used to “start” but not “continue” support

of Federal and State education initiativesof Federal and State education initiatives Be thankful for them but,Be thankful for them but,

– Only spend after you have received fundsOnly spend after you have received funds– Use grant funds for non-recurring expensesUse grant funds for non-recurring expenses– Consider carefully future program Consider carefully future program

maintenance costsmaintenance costs


Standard & Poors ReviewStandard & Poors Review

Local-Source Revenue Per Student Local-Source Revenue Per Student (Definition) – Includes revenue for (Definition) – Includes revenue for instruction, support services, and other instruction, support services, and other operating purposes obtained from local operating purposes obtained from local sources including real estate property sources including real estate property and other district-levied taxes, and other district-levied taxes, investment earnings, and tuition. investment earnings, and tuition. Revenue is divided by total enrollment Revenue is divided by total enrollment to determine per-student basis.to determine per-student basis.


Standard & Poors ReviewStandard & Poors ReviewMASD Key FactorsMASD Key Factors

““Well below-average operations and Well below-average operations and maintenance expenditures per maintenance expenditures per student”student”

““Exceptionally above-average Exceptionally above-average transportation expenditures per transportation expenditures per student”student”

““Well below-average local-source Well below-average local-source revenue per student”revenue per student”


Standard & Poors QuotesStandard & Poors Quotes ““On a per-student basis, the district’s operations On a per-student basis, the district’s operations

and maintenance expenditures of $460 are and maintenance expenditures of $460 are exceptionally below the state average of $658, and exceptionally below the state average of $658, and lower than the peer group average. Statewide, only lower than the peer group average. Statewide, only 6.0% of Pennsylvania’s school districts report lower 6.0% of Pennsylvania’s school districts report lower per-student operations and maintenance per-student operations and maintenance expenditures. Spending on operations and expenditures. Spending on operations and maintenance represents 6.8% of the district’s maintenance represents 6.8% of the district’s operating expenditures, compared with the state operating expenditures, compared with the state average of 9.0%. During the period examined, the average of 9.0%. During the period examined, the district’s per-student operations and maintenance district’s per-student operations and maintenance expenditures have decreased by 7.2%. This is expenditures have decreased by 7.2%. This is counter to the state trend, which has increased, counter to the state trend, which has increased, and counter to the peer trend, which has remained and counter to the peer trend, which has remained relatively unchanged over the same time period.” relatively unchanged over the same time period.”


Standard & Poors QuotesStandard & Poors Quotes ““Transportation expenditures of $814 per student Transportation expenditures of $814 per student

are exceptionally above the state average of are exceptionally above the state average of $414, and higher than the peer group average. $414, and higher than the peer group average. Statewide, only 1.2% of Pennsylvania’s school Statewide, only 1.2% of Pennsylvania’s school districts spend more per student than the district. districts spend more per student than the district. Spending on transportation represents 12.1% of Spending on transportation represents 12.1% of the district’s operating expenditures, compared the district’s operating expenditures, compared with the state average of 5.7%. During the period with the state average of 5.7%. During the period examined, the district’s per-student examined, the district’s per-student transportation expenditures have increased by transportation expenditures have increased by 17.4%. This is greater than the state and peer 17.4%. This is greater than the state and peer increases over the same time period.” increases over the same time period.”


““Postponing” Capital Postponing” Capital ExpendituresExpenditures

Postponing “real” and “needed” Postponing “real” and “needed” costs is not “budget cutting”.costs is not “budget cutting”.

The “need” does not “go away”.The “need” does not “go away”. Not budgeting a “need” results in Not budgeting a “need” results in

“hidden deficit budgeting”.“hidden deficit budgeting”. The negative impact is even worse in The negative impact is even worse in

future budgets.future budgets.


““Inherent Structural Budget Inherent Structural Budget Deficiencies”Deficiencies”

“built-in” budget problems“built-in” budget problems

Employee Contracts, Benefits & Services Employee Contracts, Benefits & Services Cost IncreasesCost Increases

Proportionally Reduced State & Federal Proportionally Reduced State & Federal FundingFunding– Decrease in State subsidies from 52% to 3x%Decrease in State subsidies from 52% to 3x%

““Hidden” problemsHidden” problems– ““Work loads shifted” from Federal and State Work loads shifted” from Federal and State

staff to Local education staffstaff to Local education staff– Unfunded State & Federal Mandates“ shift tax Unfunded State & Federal Mandates“ shift tax

burden” from Federal & State tax levies to burden” from Federal & State tax levies to Local tax levies“Local tax levies“


What we need to doWhat we need to do

Decide on any final budget changesDecide on any final budget changes Decide on a total final budget amountDecide on a total final budget amount Decide the millage rate for next yearDecide the millage rate for next year Approve both items at Friday’s meetingApprove both items at Friday’s meeting

budget 2002-2003 montrose area public budget presentation june 3, 2002 lewis plauny

Documents