March 26, 2014

Antietam

School District

&

Exeter Township School District

Projected Merged Budget

2016-17 & 2017-18

1

Exeter Township School District

2015-2016 2016-2017 2017-2018

Projected Revenue 69,486,393 71,787,292 73,893,496

Projected Expenditures 71,508,238 75,090,217 77,666,196

Revenue Less Exp (2,021,845) (3,302,925) (3,772,700)

Fund Balance Beg of Year 13,303,002 11,281,157 7,978,232

Increase (Decrease) (2,021,845) (3,302,925) (3,772,700)

Fund Balance End of Year 11,281,157 7,978,232 4,205,532

BUDGET SUMMARY

2

Antietam School District

2015-2016 2016-2017 2017-2018

Projected Revenue 16,251,499 16,739,982 17,157,720

Projected Expenditures 16,951,299 17,726,628 18,254,108

Revenue Less Exp (699,800) (986,646) (1,096,388)

Fund Balance Beg of Year 3,970,015 3,270,215 2,283,569

Increase (Decrease) (699,800) (986,646) (1,096,388)

Fund Balance End of Year 3,270,215 2,283,569 1,187,181

BUDGET SUMMARY

3

BUDGET SUMMARY Merged District

2016-2017 2017-2018

Projected Revenue 88,527,274 91,051,216

Projected Expenditures 92,816,845 95,920,304

Revenue Less Exp (4,289,571) (4,869,088)

Revenue Adjustments (1,026,782) (1,034,078)

Expenditure Adjustments (749,732) (749,732)

Revenue Less Exp Adjustments (277,050) (284,346)

Net Revenue Less Exp (4,566,621) (5,153,434)

Fund Balance Beg of Year 14,551,372 9,984,751

Increase (Decrease) (4,566,621) (5,153,434)

Fund Balance End of Year 9,984,751 4,831,317 4

REVENUE ASSUMPTIONS

Local Revenues Real Estate Taxes increased by the projected adjusted

index of 3% each year Loss of revenue reducing ASD millage to ETSD rate Minimal, if any, increases based on trend data State Revenues Social Security & Retirement driven by wages and

contribution rates Flat funded

Federal Revenues Flat funded

5

Exeter Township School District

2015-2016 2016-2017 2017-2018

Assessed Value 1,399,820,252 1,402,619,893 1,405,425,133

Millage 32.5753 33.5526 34.6598

Real Estate Tax 42,239,000 43,645,000 45,232,000

Antietam School District

2015-2016 2016-2017 2017-2018

Assessed Value 261,416,994 261,865,288 262,277,301

Millage 36.5900 37.6800 38.8100

Real Estate Tax 8,630,985 8,917,730 9,236,820

REAL ESTATE TAXES

6

REAL ESTATE TAXES ASD Assessed Value at ETSD Millage Rate

2016-2017 2017-2018

Assessed Value 261,865,288 262,277,301

Millage 33.5526 34.6598

Real Estate Tax 7,890,948 8,202,742

Incr/(Decr) (1,026,782) (1,034,078)

Merged Real Estate Taxes

2016-2017 2017-2018

Assessed Value 1,664,485,181 1,667,702,434

Millage 33.5526 34.6598

Real Estate Tax 51,535,948 53,434,742

7

General Fund Expense Assumptions: Projections through 2017-2018

Combined District On-going Cost Savings and Increases

Projections through 2017-2018 Wage increase 2% to 2.5%

Attritional Savings: $175k per year

Benefits: HC 9%; PSERs 21.4% to 30.25%; All Other 2% to 2.5%

Supplies, Equipment, Purchased Services 1.9% to 2.5% inflationary factor

Special Education Contracted Services, Tuition 2.5% increase based on trend

Fuel & Utilities 3.5% per year

Insurance 5% per year

Replacement Textbooks 2% per year

Technology Planned cycle of equipment replacement

Debt Service Per payment schedule

Major Repairs & Improvements- Use of general fund commitments or funded with capital project funds

Combined District On-going Cost Savings and Increases ASD EA assumes ETEA contract salary

schedule and benefits

Eliminate staff based on school configuration ; efficient class sizes; school building closures; duplicate administrative and support services.

Increase in Unemployment Compensation

Potential increase in staff due to larger student population in ETSD high school, and more students being transported as well as larger transportation fleet.

Transportation vehicle and operating cost increases due to transporting a portion of ASD students due to school configuration and ETSDs established transportation practices.

Technology cost increases due to additional licensing/maint/renewal, and SHS one-to-one laptop initiative.

Curriculum Addl textbook costs

Building Operation cost savings resulting from closing buildings

Other Included Costs Music Equipment

8

Combined School Districts Exeter Township School District & Antietam School District

Close

480

Close

510

600

360

570 570

1620

225

600 675

500

700 625

900

700

1550

0

200

400

600

800

1000

1200

1400

1600

1800

MP Primary Mt. PennElem K-5

Jkwld Lorane K-5 Owatin K-5 Reiffton K-5 AJHSH 6-8 EJH 6-8 ESH 9-12

Enrollment Projections: Source Civic Research Alliance Report

Combined School District Configuration 2016-2017 Enrollment = 4709

Enrollment Decline of 312 students from 2013-14

Projected Enrollment

Building Capacity

9

Teacher Contract Changes in a Combined School District ASD to assume ETSD Contract 2016-2017

Teacher Salary Schedule Based on ETSD 2015-16 Contract Schedule compared to 2012-13 ASD schedule with 2% escalation factor per year through 2015-16. 91 ASD Teachers to assume ETSD Salary Schedule

Incremental Wage Increase based on Salary Schedule in 16-17 $435,606

Net Wage related cost increase in FICA and Retirement in 16-17 $ 72,942

Other Benefit enhancements for ASD teachers EXFLEX, Retirement Pay $104,400

Potential Column Movement for ASD staff to M15, M60 $ 87,559

TOTAL $700,507

Note: Impact of status/bargaining unit changes of support personnel are not included in this analysis.

10

Staffing Changes in a Combined School District

Eliminate Positions 28.5 FTEs (Full Time Equivalents) (General fund positions only)

Total Cost Savings $2,366,027 Note: The teaching staff reduction figure is a compromise between proposals discussed by Superintendents which ranged from 5 to 27 staff cuts. The average cost savings per teacher is $95,301; 12 cuts saves $1,143,616.. Appropriate staffing will depend upon schedules and anticipated class size. Other positions to be eliminated are the result of (2) school building closures, and duplicate administrative and support services. (Changes to food service staff are not included in the analysis .)

Teachers 12

Buildings & Grounds 4.5

Business Office Staff/Child Accounting 3

Principals 2

Elementary Building Secretaries 2

Superintendent 1

Business Manager 1

Buildings & Grounds Supervisor 1

Superintendent's Secretary 1

Health Assistant 1

28.5

11

Staffing Changes in a Combined School District

Add Position 2 FTE Recommended by ASD and ETSD

Total Cost of Recommended Positions $166,901

Unemployment Compensation Cost Increase 2 Years $366,834

Bus Driver wage and benefit costs will increase due to an increase in routes and driver hours but for purposes of this analysis the additional costs related to transportation were aggregated.

Assistant Principal HighSchool 1

Transportation Secretary/Sub Driver 1

12

Staffing Changes in a Combined School District

Add Positions 4 FTEs Recommendation proposed by ETSD; rejected by ASD

Total Cost of Recommended Positions $339,460

(Not included in Combined District costs)

Special Ed Supervisor (elem/middle/hs) 1

Student Support/Alt Ed Supervisor 1

Security Support 1

Bus Mechanic 1

13

Combined School District Transportation Operations Increased Costs

I. Three-Tier school schedules 9-12; 6-8; K-5

I. Capital Investment: QTY Total

Bus Purchase Cost - 78 Passenger school bus 99,000$ Each 3 297,000$

Wheel Chair Lift Equipped Buses 107,000$ Each 1 107,000$

54 Passenger Buses for Additional Non-Public Transp.

Boundary Requirements

expand when Antietam

7-12 are transported 82,000$ Each 2 164,000$

Add'l Two-way radios 330$ Each 12 3,960$

Total New Vehicle Cost 571,960$

Option to Lease Additional Buses - Annual Payments - 5 yr term; 4.5% 130,300$ (1)

II. Operating Cost:

Additional Regular Routes per day 295.00$ Per Day 3 160,185$

Additional Special Needs Wheel Chair Lift Equipped bus 295.00$ Per Day 1 53,395$

Additional Non-Public Transportation Requirements 295.00$ Per Day 2 106,790$

Add'l Staff - (1) Mechanic Included with Staffing

- (1) Secretary/ Spare Driver Included with Staffing

Additional hours - more square miles to cover on route 60,000$

( 25 vehicles; 30 min; 181 days = 2308 hours

Additional Mileage Fuel - Antietam 5 square miles; 46k miles 17,300$

Total Additional Operating Cost 397,670$ (2)

V. Transportation Subsidy; FICA & Retirement State Reimbursement Increase 170,998$ (3)

Net Increase in General Fund Expense (1) + (2) - (3) 356,972$

Exeter Township SD/Antietam SD Merger Study

Estimate of Transportation Costs

Based on Projected 2016-2017 Costs

14

Combined School District Ongoing Increased or Reduced Costs

Technology & Other

Technology Licensing, Maintenance, and Renewal $91,426

Senior High School One-to-One Initiative to include ASD 9-12 students (annual

lease pymt.) $46,200

Musical Instrument Lease $20,000

Facility Operations

Closing Mt.Penn Primary Center and Jacksonwald Elementary will reduce utility, telecommunication, copier rental, repair & maintenance, and cleaning supply costs. Reduction in staff reflected in staffing changes.

Estimated reduction in costs ($141,438)

15

One Time Costs

Consultant - 2 Years $ 224,640

Technology $ 209,800

Textbooks $ 153,000

Library Books $ 30,000

Moving Expense $ 100,000

Furniture and Other Bldg Accommodations $ 25,000

Total One Time Costs $ 742,440

16

Other Budget Impact Items to Consider in a Combined School District

Compensated Absences

Benefit Waiver

Available Real Estate for lease or sale

Professional Development Costs

Charter School enrollment increase and tuition costs

Textbook purchase costs for schedule changes

Subsidy changes due to combined aide ratio

Funding from state toward implementation of merger

Legal Fees

Unassigned fund balance limitation of 8% of budgeted expenditures will apply in a combined school district

Fund Balance Commitments

Capital Project and Capital Reserve Funds

17

Adjustments CombinedProjection Projection Projection Projection Projection Projection Projection Projection Projection Projection

DESCRIPTION 2015-2016 2016-2017 2017-2018 2015-2016 2016-2017 2017-2018 2016-2017 2017-2018 2016-2017 2017-2018REVENUE

Assessed Value 1,399,820,252 1,402,619,893 1,405,425,133 261,416,994 261,865,288 262,277,301 1,664,485,181 1,667,702,434 Local Sources

Millage 32.5753 33.5526 34.6598 36.5900 37.6800 38.8100 33.5526 34.6598

Real Estate Tax 42,239,000 43,645,000 45,232,000 8,630,985 8,917,730 9,236,820 (1,026,782) (1,034,078) 51,535,948 53,434,742 Interim Real Estate Tax 50,060 51,040 51,040 10,000 10,000 10,000 61,040 61,040 Occupational Priviledge Tax 80,100 80,100 80,100 - - - 80,100 80,100 Realty Transfer Tax 407,726 413,841 420,049 65,650 66,307 66,970 480,148 487,019 Earned Income Tax 3,599,807 3,684,807 3,771,807 757,500 765,075 772,726 4,449,882 4,544,533 Mercantile Tax 574,998 583,623 592,377 - - - 583,623 592,377 Delinquent Real Estate Tax 1,255,200 1,258,200 1,261,200 365,000 365,000 365,000 1,623,200 1,626,200 Interest Income 80,000 80,000 80,000 12,000 12,000 12,000 92,000 92,000 Tuition 77,490 77,490 77,490 45,000 45,000 45,000 122,490 122,490 IU Federal funds 653,291 666,356 679,684 181,854 181,854 181,854 848,210 861,538 Misc Other Local Sources 476,700 510,950 551,262 125,500 125,500 125,500 636,450 676,762

Total Local Sources 49,494,371 51,051,408 52,797,009 10,193,489 10,488,466 10,815,870 (1,026,782) (1,034,078) 60,513,092 62,578,801 3% 3% 3% 3% 3% 3%

State Sources

Basic Instructional Subsidy 8,142,874 8,142,874 8,142,874 3,124,782 3,124,782 3,124,782 11,267,656 11,267,656 Special Education Subsidy 1,775,959 1,775,959 1,775,959 495,797 495,797 495,797 2,271,756 2,271,756 Transportation Subsidy 965,690 965,690 965,690 113,000 113,000 113,000 1,078,690 1,078,690 Property Tax Reduction 1,360,000 1,360,000 1,360,000 456,000 456,000 456,000 1,816,000 1,816,000 Rental & Sinking Fund Payments 1,485,787 1,490,121 1,490,121 98,402 98,339 98,360 1,588,460 1,588,481 Revenue for FICA Payments 1,192,850 1,230,875 1,269,875 333,692 342,799 352,165 1,573,674 1,622,040 Revenue for Retirement Payments 4,154,603 4,856,106 5,177,709 1,127,137 1,311,599 1,392,546 6,167,705 6,570,255 Accountability & EAP Grants 180,893 180,893 180,893 50,000 50,000 50,000 230,893 230,893 Misc. Other State Subsidies 206,039 206,039 206,039 65,200 65,200 65,200 271,239 271,239

Total State Sources 19,464,695 20,208,557 20,569,160 5,864,010 6,057,516 6,147,850 - 26,266,073 26,717,010 4% 2% 3% 1% 4% 2%

Federal Sources 525,327 525,327 525,327 194,000 194,000 194,000 719,327 719,327 Other Financing Sources 2,000 2,000 2,000 - - 2,000 2,000

Projected Revenue 69,486,393 71,787,292 73,893,496 16,251,499 16,739,982 17,157,720 (1,026,782) (1,034,078) 87,500,492 90,017,138 3% 3% 3% 2% 3% 3%

Exeter Township School District Antietam School District Adjustments Combined

One Time/ Upfront Costs

Proj Summ Index Tax Inc 18

Adjustments CombinedProjection Projection Projection Projection Projection Projection Projection Projection Projection Projection

DESCRIPTION 2015-2016 2016-2017 2017-2018 2015-2016 2016-2017 2017-2018 2016-2017 2017-2018 2016-2017 2017-2018

Exeter Township School District Antietam School District Adjustments Combined

One Time/ Upfront Costs

EXPENDITURES

Salaries 30,336,200 31,303,260 32,295,080 7,393,193 7,594,977 7,802,473 (850,809) (850,809) 38,047,428 39,246,744 3% 3% 3% 3% 3% 3%

Benefits 19,085,178 21,160,715 22,581,023 4,550,745 5,037,701 5,363,527 (272,083) (272,083) 25,926,333 27,672,467 11% 7% 11% 6% 11% 7%

Non-Payroll Expendtures:

300 - Professional & Technical Serv. 2,324,402 2,365,020 2,422,010 523,848 536,944 550,368 2,901,964 2,972,378 324,640 400 - Purchased Property Services 1,778,206 1,830,358 1,884,090 545,900 562,277 579,145 (54,338) (54,338) 2,338,297 2,408,897 500 - Other Purchased Services 5,049,631 5,178,933 5,311,619 1,560,589 1,607,407 1,655,629 37,776 37,776 6,824,116 7,005,024 600 - Supplies, Books, Heat/AC, Fuel 2,339,295 2,402,202 2,466,863 483,313 495,396 507,781 239,422 239,422 3,137,020 3,214,066 183,000 700 - Property 820,035 895,911 907,062 35,000 35,000 35,000 930,911 942,062 234,800 800 - Dues, Interest, Claims 5,342,690 5,338,049 5,316,122 633,711 611,926 585,185 5,949,975 5,901,307 900 - Principal Payment, Reserve 4,349,601 4,463,769 4,478,327 1,225,000 1,245,000 1,175,000 150,300 150,300 5,859,069 5,803,627 430 - Major Maintenance 4,000 4,000 4,000 - 4,000 4,000 450 - Bldg Renovations - - - - 750/760 - Major Improvements 79,000 148,000 - - 148,000 - 900 - Transfer to Capital Reserve

Projected Expenditures 71,508,238 75,090,217 77,666,196 16,951,299 17,726,628 18,254,108 (749,732) (749,732) 92,067,113 95,170,572 742,440

5% 3% 5% 3% 5% 3% Revenue Less Exp (2,021,845) (3,302,925) (3,772,700) (699,800) (986,646) (1,096,388) (277,050) (284,346) (4,566,621) (5,153,434) (742,440)

Fund Balance Beg of Year 13,303,002 11,281,157 7,978,232 3,970,015 3,270,215 2,283,569 14,551,372 9,984,751 Fund Balance End of Year 11,281,157 7,978,232 4,205,532 3,270,215 2,283,569 1,187,181 (277,050) (284,346) 9,984,751 4,831,317

Proj Summ Index Tax Inc 19