Upper Merion Area School District Finance Committee Presentation April 18, 2016

2016-17 Proposed Final Budget -Additional Staffing- -0% Real Estate Tax Increase- Revenues $90,578,384 Expenditures $93,360,130 Use of PSERS Stabilization Fund ($289,474) Adjusted Expenditures $93,070,656 Revenues Over (Under) Expenses ($2,492,273)

Expenditures 300’s – Appraisal Services, Legal Services, Tax Collector Salaries & Commissions. Technology Services, Special Education, Early Intervention.

Revenues 300’s – Appraisal Services, Legal Services, Tax Collector Salaries & Commissions. Technology Services, Special Education, Early Intervention.

Realty Transfer Tax 2015-16 2016-17 $ Change % Change $1,277,810 $0 0.00% Typical Realty Transfer Taxes generate $100,000/ month or $1,200,000/ year. 2014-15 Realty Transfer Taxes = $1,553,225 A. $600,000– Attributed to 6 specific transactions. B. $950,000 – Considered Typical Realty Transfer Tax for 2014-15 2015-16 – Approximately $2.5M through March 2016 A. $1,600,000 attributed to 8 specific transactions. B. $900,000 considered typical realty transfer tax for 2015-16 4. History 2010-11 - $936,690; 2011-12 - $1,357,714 2012-13 - $913,575; 2013-14 - $2,039,151 2014-15 - $1,553,225

Current Real Estate Taxes Budget Actual Variance 2011-12 $64,859,737 $64,710,548 ($149,189) 2012-13 $64,556,661 $65,286,864 $730,203 2013-14 $66,966,730 $65,341,604 ($1,625,126) 2014-15 $68,642,021 $67,954,363 ($687,658) 2015-16 YTD $71,981,082 $70,321,145 ($1,659,937)

Fund Balance June 30, 2015 Fund Balance $14,600,000 2015-16 Net Income $3,200,000 2015-16 Budgeted Transfer to Capital Reserve ($700,000) 2015-16 Fund Balance Spend ($400,000) 2015-16 Transfer to Capital Reserve ($2,000,000) June 30, 2016 Fund Balance $14,700,000

Fund Balance Assigned Fund Balance $8,000,000 Unassigned Fund Balance $6,700,000 June 30, 2016 Fund Balance $14,700,000

Use of Fund Balance Fund Balance June 30, 2016 $ 16,000,000 $ 16,000,000 Budget Year Shortfall 2016-17 $ (2,000,000) Fund Balance June 30, 2017 $ 14,000,000 Budget Year Shortfall 2017-18 $ (2,000,000) Total Shortfall 2017-18 $ (4,000,000) Tax Increase 2017-18 $ 2,000,000 Net Budget Shortfall 2017-18 $ (2,000,000) Fund Balance June 30, 2018 $ 12,000,000

Use of Fund Balance Fund Balance June 30, 2018 $ 12,000,000 $ 12,000,000 Budget Year Shortfall 2018-19 $ (2,000,000) Total Shortfall 2018-19 $ (4,000,000) Tax Increase 2018-19 $ 2,000,000 Net Budget Shortfall 2018-19 $ (2,000,000) Fund Balance June 30, 2019 $ 10,000,000 Budget Year Shortfall 2019-20 $ (2,000,000) Total Shortfall 2019-20 $ (4,000,000) Tax Increase 2019-20 $ 2,000,000 Net Budget Shortfall 2019-20 $ (2,000,000) Fund Balance June 30, 2020 $ 8,000,000

Excel Forecast Model

Long Term implications of forgoing $2.5M in Revenue in 2016-17 $2,492,273 2017-18 2018-19 2019-20 2020-21 5 years $12,461,265 2021-22 $2,492,273 2022-23 2023-24 2024-25 2025-26 10 years $24,922,730

Proposed Final Budget Options Real Estate Tax Option $ Increase % increase Increase/ 100,000 Assessed Value No Increase $0 0.00% Act 1 Index $1,705,449 2.37% $45 Exceptions (Retirement) $571,762 0.79% $15 Total $2,277,211 3.16% $60

Recommendation Act 1 Index Plus Exceptions necessary to support contractual and mandated increases in expenditures. Additional increases in recurring revenues and decreases in recurring expenditures to be used for Academic and Operational Needs. Additional Assessed Value from Redevelopment to be used for staffing of Additional School and other projected growth.

Academic & Operational Needs Special Education Elementary– Learning Support Teacher High School - Emotional Support Teacher Middle School – 2 Teachers - Co-Teaching Model & Emotional Support Student Services Psychologist 2 Early Intervention Aides Secondary High School – 0.4 Health & Phys Ed High School – English/ Social Studies Teacher Middle School - Instructional Coach

Academic & Operational Needs Elementary – Professional & Suport Elementary – 1.3 ESL Teachers - Increasing numbers of ESL Students Elementary – 0.5 Reading Specialist Elementary – 0.2 Music Teacher District 0.5 Security Guard Technology Systems Specialist Educational Computer Aide Technology Certifications Grant Writer

Discussion & Questions

Potential Adjustments to Budget: Elimination of Budgetary Reserve - $250,000 Elimination of Assessment Appeal Losses - $100,000 Elimination of Real Estate Advisor Fees - $200,000 Elimination of Capital Equipment Line Item - $50,000 Elimination of Transfer to Capital Reserve for busses - $500,000 Subtotal - $1,100,000 Budget Shortfall - $2,492,273 Budget Eliminations - $1,100,000 Remaining Shortfall - $1,392,273 = .37Mills = 1.95% millage increase

Long Term implications of forgoing $1.1M in Revenue in 2016-17 $1,100,000 2017-18 2018-19 2019-20 2020-21 5 years $5,500,000 2021-22 $1,100,000 2022-23 2023-24 2024-25 2025-26 10 years $11,000,000

Additional Potential Adjustments to Budget: 10% cut to building budgets - $75,000 10% cut to supplies - $125,000 Personnel - $1,192,273 ~14 positions or combination of positions and programs Subtotal – 1,392,273 Subtotal from previous list - $1,100,000 Total Adjustment to Budget - $2,492,273 Budget Shortfall - $2,492,273 Budget Eliminations - $2,492,273 Remaining Shortfall - $0

Current Redevelopment 2016 Ifly Pet Smart King of Prussia Mall Expansion Fed Ex Distribution Center Village at Valley Forge Apartment Complex #1 – 363 Units Retail – 250,000 square feet

Current Redevelopment 2017 - 2018 Apartment Complex – Bridgeview – 250 Unit Townhomes – Bridgeview – 335 Units Apartment Complex – Moore Rd – 248 Units Apartment Complex – Vandenburg – 311 Units Village at Valley Forge Apartment Complex #2 – 339 Units Apartment Complex #3 – 276 Units Stacked Townhomes – 132 Units Age Restricted Apartments – 232 Units