1. Spring-Ford Area School District 2012/2013 Proposed Preliminary Budget
Presented December 5, 2011
12/7/2018

2. 2012/13 Proposed Preliminary Budget
The purpose of the Proposed Preliminary Budget Presentation tonight is to present the budget and allow for a minimum of 20 days for public inspection. The Proposed Preliminary Budget is required to be approved by January 25, Due to the Presidential primary election in April, an earlier presentation is required (1 month). The district is following the Act 1 timelines, and the purpose of tonight’s meeting is to determine if the district will need to have a voter referendum on the ballot. The district is making a commitment to stay within the state index and allowable exceptions.
12/7/2018

3. 2012/13 Proposed Preliminary Budget
2011/12
2012/13
Difference
Revenue
$123,111,623
$127,304,053
$4,192,430
Expense
$130,262,214
$7,150,591
Total Difference $
$ 2,958,161
Budget not Balanced
Allowable State Index of 1.7%
$ 1,860,000
Allowable PDE Exceptions of 1.93% (PDE Approval is Required)
$ 2,055,324
Allowable tax increase of 3.63%
$ 3,915,324
12/7/2018

4. 2012/13 Proposed Preliminary Budget
2011/12
2012/13
Difference
Revenue
$123,111,623
$127,304,053
$4,192,430
Expense
$130,262,214
$7,150,591
Total Difference $
($ 2,958,161)
Budget not Balanced
PDE requirement – Balance Budget
Additional Fund Balance from Fund Balance Reserve
$2,958,161
New Revenue Total
Balance Budget
12/7/2018

5. 2012/13 Revenue
Budget
2011/12
2012/13
Budget to Budget
Increase
2012/13 Percentage
of Total
Functions
Revenues
6000
Local
$96,936,883
$100,653,528
$3,716,645
77.27%
7000
State
$20,398,348
$22,065,133
$1,666,785
16.94%
8000
Federal
$1,309,342
$1,118,342
-$191,000
0.86%
9000
Other $0
0.00%
Fund Balance Appropriations
$4,467,050
$6,425,211
$1,958,161
4.93%
TOTAL
$123,111,623
$130,262,214
$7,150,591
100.00%
12/7/2018

6. History of Act 1 Index
School Districts capped at Base Index and with allowable exceptions.
Base Index is based on (ECI) Employer Cost Index + (SAWW) Statewide Average Weekly Wage
Allowable
Tax Increase
Year
Base Index
Value of Exceptions
Actual Tax Increase
2012/13
1.70%
1.93%
3.63%
TBD
2011/12
1.40%
3.4346%
4.8246%
3.23%
2010/11
2.90%
6.72%
9.62%
2.00%
2009/10
4.10%
2.02%
6.12%
3.95%
2008/09
4.40%
3.31%
7.71%
4.32%
2007/08
3.40%
2.18%
5.58%
4.27%
12/7/2018

7. 2012/13 Allowable Exceptions
PA Department of Education
2012/13
2011/12
Special Education
Expenditures
$ 821,388
$ 778,400
Retirement Contributions 8.65% to 12.36%
(42.89 Percent increase)
$ 1,233,936
$ 837,108
3. Debt
Health Care – Related Benefits
No Longer Available
$ 1,252,933
Total Exceptions
$ 2,055,324
$ 2,868,441
Millage Conversion
State Tax Index Total Allowable without Voter Referendum
1.93% % %
3.4346% % %
Actual Tax Increase
TBD
3.23%
12/7/2018

8. 2012/13 Revenue Changes Local - Exelon Last Year of 5 Year Agreement
($ 104,172)
Local - EIT
$ 200,000
Local - Real Estate Transfer Taxes
($ 100,000)
Local – Delinquencies on Taxes
$ 250,000
Local - Increase in Real Estate Taxes (7.07%)
$ 3,510,000
Local Total Changes
$3,716,645
12/7/2018

9. Increase in State Funds
2012/13 Revenue Changes
State - Basic Instructional Subsidy – No increase
$ 0
State - Special Education – 3 year without
Increase
State - Social Security – ½ back from State
$706,690
State – Transportation Reduction due to MVAR
($ 165,000)
State – Retirement - ½ back from State
$ 1,018,938
State – Other Miscellaneous
$ 314,033
Increase in State Funds
$1,666,785
12/7/2018

10. 2012/13 Revenue Changes Federal – Stimulus IDEA Funds – Completed
($ 141,000)
Federal – Medical Access Funds
($ 50,000)
Designated Fund Balance
- $4,467,050 to $6,425,211
($2,958,161 Required to Balance Budget)
$ 1,958,161
Total Revenue Increase
$7,150,591
12/7/2018

11. 2012/13 Expense Budget Budget 2012/2013 2011/2012 Budget to Budget
Budget
2012/2013
2011/2012
Budget to Budget
Increase
2012/13
Percentage
of Total
Expenditures
Salaries
$58,445,745
$56,256,601
$2,189,144
44.87%
Employee Benefits
$27,151,839
$25,011,300
$2,140,539
20.84%
Professional Services
$4,633,944
$4,841,588
-$207,644
3.56%
Property Services
$5,977,323
$5,190,902
$786,421
4.59%
Contracted Services
$12,948,050
$12,310,158
$637,892
9.94%
Supplies/Books
$4,003,864
$3,481,517
$522,347
3.07%
Property/Equipment
$436,017
$427,492
$8,525
0.33%
Other Objects
$6,884,059
$6,837,509
$46,550
5.28%
Other Financing
$9,781,373
$8,754,556
$1,026,817
7.51%
TOTAL
$130,262,214
$123,111,623
$7,150,591
100.00%
12/7/2018

12. 2012/13 Expenses Changes Salary
All Personnel Salaries for 1,000+ Employees plus 4.6 FTE new employees at a cost of $355,423
$2,189,144
Benefits - Retirement $2,214,784; Soc. Sec. $227,968; Health Care $197,610; Prescription ($162,075); Tuition ($153,346)
$2,140,539
Purchase Professional Services
$ 153,405
Books – Curriculum Plan
$ 550,000
Other Educational Schools Outside Spring-Ford-
APS $389,046; Voc. Tech $114,910; Alternative Schools $100,000; Other Public Schools $101,100
$ 637,892
400 Objects – Jani King Outsourcing previously under 300 objects
$ 786,421
Debt Financing – Elimination of assistances for Debt Fund
$ 1,000,000
Total Expense Changes
$7,150,591
12/7/2018

13. 2012/13 Budget Highlights
Fiscal Reality – The 2011/12 Budget reflected significant budget reductions due to revenue shortfalls. Adjustment in prior years to maintain fiscal reality of revenues losses due to the economy will continue with the 2012/13 budget. The 2011/12 major reductions were the result of state cuts of 2 million and federal support of 2 years of stimulus funding of 800,000 each year. The local economy is causing the total revenues received in the past to be short by 2.5 million a year. The 2011/12 budget reflected a 2.4 million decrease from the 2010/11 budget, even though expenses in the past increased on average 7 million dollars.
Basic Education Subsidy – Estimated funding to be the same as 2011/12. Severe funding cuts (2.1 Million) in state revenue in 2011/12 had been cut back to the amount received in 2008/09. The Commonwealth ‘Costing Out Study’ showed Spring-Ford’s adequacy funding is underfunded by 10.5 million when considering factors such as special education students, ESL, poverty students, and geographic region. 
12/7/2018

14. 2012/13 Budget Highlights
Special Education –Estimated funding to be the same as 2011/12. No funding increase since 2009/10 (same for the last 3 years). Overall program cost for 2012/13 is an estimated increase of 10.2%, or 2.2 million increase. These costs continue to outpace inflation rate due to high costs of PT, OPT, Speech and other related services as outlined by the student’s IEP.
Local Economy – The major revenue source of the district is based on assessment values and losses continue to be a threat to the fiscal climate of the school district, requiring a reevaluation of expenditures. The district is plague with past and on-going assessment appeals of over 50 commercial properties. Recently the district settled with SmithKline reflecting an annual loss of 1.6 million plus payments of 6.5 million in back taxes. In addition Real Estate Transfers, Interim Real Estate Taxes, and Interest on investments, continue to be sluggish.
12/7/2018

15. 2012/13 Budget Highlights
Benefits – Increase of 2.1 Million is related to PSERS retirement and slight reductions to Tuition and Prescription costs. After experiencing costs increase due to high health care claims of 28.1% in 2010/11 and 18.7% in 2011/12, the district finally received a more favorable rate of 6.14% in 2012/13.
No Program Cuts are included in the 2012/13 Proposed Preliminary Budget.
Recent Survey Responses – Indicated stakeholders of the district expect high standards for both Educational and after school Co-Curricular activities, however with no new tax increase. This creates a fiscal challenge especially if the state and federal government continues to underfund districts. The adage of ‘do more with less’ will continue to be evaluated based on the district’s Strategic Plans (currently under review) and funding availability.
12/7/2018

16. Spring-Ford’s PSERS Pension Dilemma Due to underfunded future retirement costs and increased to multiplier
PSERS Rates
% = $ 958,477
% = $2,214,784
% = $1,596,303
% = $1,714,641
12/7/2018

17. Proposed Preliminary Budget Vote Moves the Budget Process Forward
December/January June 2012
Proposed Preliminary Final Budget
Additional time allows for the following:
Updated State Revenue, Local Tax Considerations, Other Budgets (MCIU, WMCTC, APS, Alternative Ed, etc.), On-going District Budget Evaluation, etc.
Important Dates
December 5– Board to approve the advertising of the Proposed Preliminary Budget for public inspection
January 17 – Adoption of Preliminary 2012/13 Budget
January 25 – State deadline to adopt Proposed Preliminary Budget
January State deadline to file exceptions with PDE
12/7/2018