Williamsville Central School District November 2016 1. Financial Analysis of 2015-16 Audit 2. Review of Historical Budget Reductions Dr. Scott Martzloff Mr. Thomas Maturski Superintendent Assistant Superintendent

Overview of Financial Summary The District’s audit reviewed the six major funds and the student extra-classroom accounts: General Fund Special Aid Capital Projects School lunch Debt service Community Education This review concentrates on the General Fund and addresses: Revenues, Expenditures Balance Sheet (Assets, Liabilities, and Fund Balance) Change in Fund Balance

Revenue and Expenditures Explanation of Major Changes between June 30, 2016 vs. June 30, 2015: Revenue-Increase in Tax Levy +$1.9m, State aid +$2.6m Expense-Increase $4.5m instructional staffing, $6.9m transfer to capital fund due to voter authorization. Expense –Decrease $-1.5m employee benefits. Reference – audit pages 16, 50 and 51.

Balance Sheet Usage of Fund Balance: Capital reserve – Increase $1.8m, funding for school building capital projects. Reference - Audit pages 14 and 40.

Changes in Fund Balance and Reserves Reference – Audit p. 14, 40, 41

Financial Analysis of 2016 Audit Change in Total Assets Positive – Operation cash balance remains stable Positive – Restrictive cash (reserves) increases $2.0 million Positive – Asset to liability ratio: Decreased from 20.76% to 17.10% Decrease attributed to NYS Retirement System Impact of Audit on District Budgeting and Planning Positive – Stable financial position means that current instructional and support programs are fully funded Positive – Potential exists to reallocate certain budget areas to support increased expenses for current instructional and support programs. Negative – Rising expenses without equal increases in revenue will decrease future fund balance that negatively impact budget additions, capital reserve funding/future capital projects. Negative – Revenue increases will be limited to the tax levy and state aid Tax cap will result in approximately $2.75 million State Aid may provide $600,000

Impact on 2017-18 Budget Development Total revenues were higher than budget by $2.0m The higher than budget amount was mainly from sales tax revenue and State Aid. A review of the current 2016-17 budget performance is required to determine whether these two categories may be increased for the 2017-18 budget. Total expenses were under budget District must analyze the 2016-17 budget and reallocate identified expense budgets where available. Savings were received from energy, fuel, and favorable retirement system payments. Potential budget reallocation may assist in future budget planning if these areas continue to show budget savings.

Historical Budget Reductions Human Resources – Salary and benefits = 96.83% of total net budget increases for the ten year report period. Total $41,577,650. Average $4,157,765! Program – Minimal program increases over ten year period, + $1,225,471. Average $122,547! Support – Minimal increases for operational areas contained in the section. Facility operations (heating and building maintenance), bus transportation (fuel, route changes), +$1,356,786. Average $135,679! Other – Net reductions of – $249,003. (materials and supplies). Essentially, average increase is $0!

Historical Budget Reductions and their impact on 2017-18 Budget Planning 1. Greater uncertainty of State Aid revenue 2. Continuation of new tax levy revenue due to the CPI increase 3. Negligible other revenue sources 4. Review/reallocation of current budget to offset some increases 5. Recognize the need to fund program continuation expenses, (HR) 6. Budget increases need to consider the compounding effect for the future 7. Consider the potential of an economic downturn 8. Realization that there will be new state mandates that will negatively impact budgets

Next Steps Upcoming Budget Development Information: Review the updated Long Range Financial Plan Review of the Fund Balance and Reserve Plan

Appendix – Fund Balance Definitions Definition of Assigned Reserves: Have been formally assigned for use by the Board of Education for a specific purpose Appropriated Fund Balance – Revenue allocation to balance budgets Encumbrances – Prior year purchase orders that will be paid in the following fiscal year Definition of Unassigned Fund Balance: Funds that are not classified or committed for future use Unassigned fund balance – New York State limits school districts to a maximum of 4% of their budget

Appendix – Fund Balance Definitions Definition of Restricted Reserves: Funds deposited in these accounts are legally restricted to support expenses that are within their assigned category Insurance – Payments for uninsured losses Unemployment – Benefit claims Tax Certiorari – Article 7 refunds Capital (Building and Bus) Proposition ballot vote required Workers compensation - Self-funded workers compensation claims Repair – Board authorized repair reserve expenses (public hearing) Employee benefit and accrued liability – Accrued employee payments for sick time payable at retirement Employee Retirement system (ERS) – Payments made to New York State