1. Elementary Parish and School Financial Update Secretariat for Education Department for Catholic Schools 2005-2006

2. Background Information Why the Policies for Financing Elementary Schools were needed.

3. Consolidated Operating (Deficit)/Surplus Parishes with Schools Millions of Dollars

4. Funding as % of School Expenses (91-92) Pittsburgh and U.S. Catholic Schools

5. Median Tuition Rates (1990-91) Pittsburgh and U.S. Catholic

6. Policy Summary n Basic Funding Formula – Tuition60% – Subsidy 25% – Development/Fundraising10% – Other5% n All parishes give 10% minimum (35% maximum) of income n No borrowing to finance operating deficits

7. The following positive trends have occurred since the new policies were promulgated in May of 1995.

8. Elementary School Funding Tuition as a % of School Expense

9. Elementary Tuition Rate History

10. Elementary School Funding Parish Subsidy as a % of School Expense

11. Fund Raising/Donations as a % of School Expense

12. Diocese of Pittsburgh: Funding as % of School Expenses 1991-92 and 2004-05

13. Consolidated Operating (Deficit)/Surplus Parishes with Schools Millions of Dollars

14. Tuition as a % of School Expense Pittsburgh and US Catholic Average

15. In the last few years, however, negative financial trends have re- emerged.

16. Subsidy as a % of Parish Income (Parishes with Schools)

17. Consolidated Operating (Deficit)/Surplus Parishes with Schools Millions of Dollars

18. Parish Borrowing to Fund Operational Expense

19. Health Insurance Rates

20. Utility History and Projection Parishes with Schools (Millions) Gas is expected to increase about 50% and electric at least 15%.

21. Negative demographic trends also have an impact on school finances

22. Catholic PK to 8 Enrollment History (Thousands) A large portion of this decline is in the City of Pittsburgh. City public schools have experienced similar or greater declines than city Catholic schools.

23. Public PK to 8 Enrollment History (Allegheny, Beaver, Butler, Lawrence, Washington) Decline between 1999-2000 and 2003-04 was 6,300 students or 2.3%. Projected decline to 2013-204 is over 39,000 or 14.5%.

24. Public PK to 8 Enrollment History (Allegheny County) Decline between 1999-2000 and 2003-04 was 5,300 students or 3.0%. Projected decline to 2013-204 is over 26,000 or 16%.

25. K-8 Market Share (Allegheny, Beaver, Butler, Lawrence and Washington Counties)

26. There have been some recent positive trends that need to be enhanced and continued

27. Diocesan Tuition Assistance

28. Outside Funding Sources Catholic Schools

29. Critical Parish/School Task Force Appointed February 2005

30. Critical Parishes/Schools n About 30 parishes with schools are in critical financial condition. n About 10 parishes without schools are in critical financial condition

31. Critical Parishes/Schools: Next Steps 1.Individual meetings will be held with diocesan staff to thoroughly review operations and budget assumptions 2.School and parish budgets must be balanced and include a reasonable amount of debt service for re-paying accumulated debt 3.Parish subsidy may need to be significantly reduced or even temporarily eliminated in order to balance the parish budget

32. Critical Parishes/Schools: Next Steps 4.No borrowing of funds for operations will be permitted 5.All bills need to be paid including employee benefits/insurance. Any residual debt will be included as an expense in the following year’s operating budget with tuition increased accordingly.

33. Critical Parishes/Schools: Next Steps 6.Expense reductions, including staff and programs, need to implemented 7.Tuition will be set at the rates needed and may require significant increases.

34. Critical Parishes/Schools: Next Steps 8.Viable enrollment goals with registration deadlines will be set 9.Elementary school grant funds will decrease necessitating a reduction in grants

35. Checklist for All Schools To Remain Financially Viable 1.Establish a balanced school budget: a. Project a reasonable enrollment b. Include only the amount of subsidy the parish can afford c. Determine a reasonable amount of fund raising based on history d. Include your (reduced) elementary grant

36. Checklist for All Schools To Remain Financially Viable e. Add any liabilities from previous school year (e.g. unpaid bills, advanced tuition used) f. Include accurate expense amounts for utilities, benefits and insurance. g. Critically examine staffing levels each year in relation to enrollment and adjust.

37. Checklist for All Schools To Remain Financially Viable h. Reduce expense, including staff, where possible. i. Increase tuition in order to balance. 2.Pay all insurance bills (primarily employee benefits) on time and in full. 3.Encourage parents to apply for aid.

38. Checklist for All Schools To Remain Financially Viable 4.Do not re-enroll families with unpaid tuition balances unless funding is secured to pay the balance in full. 5.Share financial information with parents via letters and meetings. 6.Call diocesan staff for assistance and support.

39. Goals for Quality Education n Faith Formation/Catholic Identity n Academic Excellence n Support from Parents and Community n Financial Stability

40. Questions