Octorara Area School District 2016-2017 Final Budget June 20th 2016

2016-2017 Budget Development September – Finance Committee review of transportation services efficiencies and services for budgeting purposes November – Act 1 index announced 3% increase for Octorara Area School District December – Local audit of 2014-2015 notified by Auditor of a deficit of ($240,000) and the reliance on one time savings to balance future budgets December – Preliminary budget presented includes total expenditures of $52,405,603, a 3.3% increase over 2015-2016 and 3% tax increase December – Board passes resolution to stay at the Act 1 index of 3% January – Finance Committee approves the professional services for an efficiency study January – Proposal to introduce budget reduction strategy of $420,000 We started the 2016-2017 Budget Process way back in September. Knowing that we would be dealing with another proposed budget deficit we started looking at some of our more costly budget items, looking for some efficiencies or services we could curtail if needed. We started with transportation. Then in November we were notified that our Act 1 index is 3% This is the amount that our tax rate can increase without pursuing a referendum or act 1 index exceptions. In December we heard the results of our Local Audit for 2014-2015. Our auditor presented our 2014-2015 financial statements showing that we ended the year with a deficit of $240,000. Our Auditor also pointed out to us that we have been using one time savings to help balance our budgets that are not sustainable and the we needed to address this in the 2016-2017, just one of the reasons for proposing budget reduction strategies. Also in December the Board saw the first version of the 2016-2017 budget. This budget included a 3% tax increase and a total of $52,405,603 in expenditures resulting in a deficit of $2,005,997. This budget didn’t include any increases in state revenues. The Board also passed a resolution stating that any tax increase would be at or below the Act 1 3% tax increase and that the District would not apply for exceptions to the Act 1 tax increase. In January the Finance Committee approved an agreement with two efficiency experts to review our operations and make efficiency recommendations. We are reviewing some of their recommendation now. Also in January the Administration proposed that we introduce $420,000 in budget reduction strategy to help deal with the preliminary budget deficit of $2,005,997

2016-2017 Budget Development March – Budget reduction strategy to choose from totals $5.7 million and includes the elimination or reduction of transportation, technology, kindergarten, athletics and positions March – Review of debt service $340,000 one time savings in 2016- 2017 budget savings, infrastructure report and impact on future budgets for capital fund expenditures April – Budget reduction strategy to include in the budget is refined to $637,800 May – Budget reduction strategy revised to $537,800 May – State revenue estimated to be $486,313 using the new funding formula added to 2016-2017 budget June – Final budget reduction stretegy $512,800 ($537,800 reduced by $25,000 for traffic control) June – Final budget reduction strategy is incorporated into expenditures resulting in final expenditures of $51,893,407 a 2.3% increase over 2015-2016 In March the Board was give a list of budget reduction strategy totaling approximately $5.7 million in reductions to debate over the remainder of the budget process. Also in March we identified another one time savings in our debt service of $340,000 that will be used to reduce the deficit in 2016-2017. We also discussed reviewed our debt service and possible new borrowings or refinancing of current debt to address capital needs in the future. This summer we will finalize an infrastructure report identifying those needs for planning purposes. In April the Board and Administration refined the budget reduction strategy to $637,800 in reductions and again in May reduced that amount further to $537,800. Finally in June the budget reduction strategy was further reduced to $512,800. Resulting in a final budget with expenditures of $51,893,407, which is a 2.3% increase over 2015-2016 expenditures and a 3% Act 1 tax increase.

2016-17 Final General Fund Budget Summary Total Revenues $50,886,587 General Fund Budget Document Total Expenditures $51,893,470 Deficit ($1,006,883) Anticipated Budget Results Budget Contingency $350,000 Debt Service Savings $340,000 Anticipated Use of Fund Balance ($316,883) All of this results in a resolution you will vote on tonight with total expenditures in the amount of $51,893,470 and total revenues, including a 3% Act 1 tax increase of $50,886,587 resulting in a deficit of ($1,006,883) However, we anticipate only using $316,883 of fund balance at year end because our budget will include a $350,000 contingency, needed only for an emergency and a full years worth of debt service even thought we will have a one time savings of debt service next year in the amount of $340,000.

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