Williamsville Central School District Long-Range Financial Plan and Reserve Plan Report December 2016 Prepared By: Thomas Maturski - Assistant Superintendent Scott G. Martzloff - Superintendent

Long-Range Financial Plan: Interpretation and Usage Insight into the impact of budget development decisions Reviews the critical internal and external factors that result in revenue and expense changes in future budget years Five-year forecast of revenue and expense budgets Information is at a point in time and will not be updated in the budget process

Balanced Budgeting Process Requirement New York State requires the Expense budget to equal the Revenue budget Each budget (fiscal year) must be approved by the Board of Education and the Community School districts must follow applicable State law regarding the budget process (ex. Tax cap, Public notice, Budget vote)

WCSD Budget Development Process Estimate Total Revenue Determine program increase amounts to sustain programs Review prior year budget expenditures Calculate difference between revenue and expense budgets Consider program enhancements Implement efficiencies and/or reallocate funds due to program needs Develop and discuss budget reduction options Update of budget information Include budget reductions in preliminary budget Discuss preliminary budget Approve preliminary budget and seek community approval

Revenue - Impact of Tax Cap Although there is no tax levy increase limit for the District exceeding the calculated Tax Cap/Tax Threshold limit requires super-majority voter approval (60%) A budget defeat allows only one revised budget vote If there are two budget vote defeats, there is a mandated 0% levy increase May 2016 – New York State Education Department There were 34 school districts throughout the state that proposed budgets that exceeded their tax cap limit. Eight of these budgets or 25% failed to be approved by their communities.

Revenue – (Impact tax Cap/Threshold Law)

Historical Changes

Long-Range Forecast - Revenue State Aid – New York State foundation aid is estimated to increase at approximately 2.0% each year or $600,000. Full restoration of the past GEA reduction occurred in 2016-17 = +$3,225,278. Sales Tax – An average increase of $50,000 is projected. Loss of purchasing power of the Canadian dollar appears to have impacted sales tax revenues Tax Levy – The tax levy is projected under the tax cap/threshold amount Average increase of 1.50% or $1.8 million for 2017-18 and 2018-19 Average increase of 2.00% or $2.4 million for 2018-19 and 2019-20 Appropriated Reserves - Decrease due to reductions in reserve balances in 2017-18. Reduced $150,000 in 2017-18 budget Fund Balance – No change in appropriation level for 2017-18 - $5,424,000 Reduced $124,000 by the year 2020-21

Human Resource Expense Drivers Salary increases per negotiated contracts - increases New York State Retirement system rate changes – decreases Health insurance (self-insured) – increase or decrease based on claims Workers compensation – employee safety/injury Social security payments (Federal law) – increase dependent on number of employees and rate changes Changes in staffing – retirements-decreases, instructional programs-increases

Human Resources - Expense Drivers

Long-Range Forecast - Expense Salary – The forecasted increase ranges from 2.50%-2.00%. Teacher and Employee Retirement Systems – A decrease of $525,000 over the time period of the plan. Health Insurance – No increase is included for 2017-18. Future increases are conservatively budgeted in 2018-19 at $1.2 million, 2019-20 at $1.3 million and 2020-21 at $1.7 million. Utilities – No change is made to any year of the forecast. Facilities – No increase or decreases are included to these budgets. Facility maintenance and improvements are highly dependent on the Repair Reserve. Transportation – Contract increases based on the Student Transportation of America agreement. Agreement expires at the end of the 2018-19 year. Other school districts have experienced major increases in transportation costs with new contracts.

2016-17 - Long-Range Plan Summary of Forecast 2017-18 2018-19 2019-20   2018-19 2019-20 2020-21 Expense Budget $ 186,049,402 $190,154,042 $ 193,858,860 $198,071,969 Revenue Budget $ 185,058,573 $187,241,654 $ 190,164,827 $193,221,963 Current Year Reductions Required $ (990,829) $ (2,912,388) $ (3,694,032) $ (4,850,006) Forecasted Balanced Budget Projected Budget Increases $ 3,033,796 1.66% $ 4,104,641 2.21% $ 3,704,817 1.95% $ 4,213,110 2.17%

Long-Range Plan - Financial Summary Revenue – No major increases in State aid are projected in the plan, Tax Levies issued under the Tax Cap. Expense – Reflects human resource increases between 2.5% and 2.0%. Stability in retirement system rates, increases in health insurance in future years. New Mandates – Mandates that could detrimentally increase expenses and if tied to State Aid they could negatively affect future district budgets and instructional programs. Other Considerations – Transportation contract expires in 2018-19. Fuel and utility increases may change based on world events. Interest rates may increase changing government programs as a result of the presidential election.

Long-Range Plan - Financial Summary Key Factors for Future Budget Development: Revenue budget dictates the expense reductions required to balance the budget Control of expense budget will continue to require to focus on Human Resource areas Potential for significant changes in other expense categories Continuation of a reduction reserve allocations to sustainable levels is critical to the district and its budget process

Long-Range Reserve Plan Ability to sustain/minimize program reductions Need for the District to maintain reserve balances for self- funded expenses Acknowledge that reserve balances will diminish and not be a viable revenue option at a future point in time Long-range reserve plan transitions the appropriated reserve amounts to sustainable levels

Conclusion: Long-Range Financial and Reserve Plan Reiterate that the plan is projected at a fixed point in time The plan should not be interpreted as a definite financial forecast The plan is a tool to assist in decision making for current and future budgets Future Long-Range Budgeting Goal: Revenue increases = expense increases = budget stabilization Creates Stability for the District’s Educational Programs