1. FISCAL CONSTRAINTS & CHALLENGES PRESENTED TO THE BOARD OF EDUCATION DECEMBER 9, 2014 1 Rye City School District

2. TAX CAP ENROLLMENT GROWTH RETIREMENT SYSTEM CONTRIBUTIONS HEALTH INSURANCE PREMIUMS COLLECTIVE BARGAINING UNIT PROVISIONS CONTINUED TESTING AND REPORTING REQUIREMENTS (APPR) PROGRESSING TECHNOLOGY FACILITY NEEDS AND CONCERNS STATE AID AND OTHER NON-TAX REVENUES FUND BALANCE UTILIZATION 2 Rye City School District Overview- Budget Drivers

3. Property Tax Cap, how does it work… Chap 97 of the Laws of 2011 3 2015-16 marks the fourth year of the law limiting a District’s ability to increase the tax levy, it does not apply to individual tax bills or rates It is an eight-step formula re-calculated each year Two key factors: growth in the tax base (if any), and the rate of inflation (cannot be greater than 2%)

4. Property Tax Cap, how does it work… 4 Voters still approve the General Fund’s expenditure budget:  Option 1: Propose a budget that meets or is below the “allowable tax levy prescribed by law” (Requires a simple majority; 50% + 1 voter approval)  Option 2: Propose a budget that is above the “allowable tax levy prescribed by law” (Requires a “super majority;” 60% voter approval +1)

5. Property Tax Cap, how does it work… 5 Prior Year Tax Levy x Assessment Growth Factor + Current PILOTs - Exemptions x Lower of CPI or 2% - Next Year’s PILOTs + Carryover + Exemptions = Allowable Tax Levy for Next Year (may not = 2%)

6. Property Tax Cap, how does it work… COST EXEMPTIONS 6 Increases resulting from voter-approved capital expenditures Increases that exceed two percentage points for state- mandated employer contribution rates for TRS and ERS Currently INCREASING STUDENT ENROLLMENT – IS NOT AN ALLOWABLE COST EXEMPTION

7. STUDENT ENROLLMENT 7

8. 8 Soaring enrollment at the HS… since 2005/06, enrollment has increased by 35% up from 745 to 1011 students RYE HIGH SCHOOL

9. 9 Employer Retirement Contribution Rates Although rates are beginning to decrease, they remain at levels that are more than double of what they were six years ago…

10. 10 Employer Retirement Contribution Costs

11. Annual Health Benefit Expense 2009- Current 11

12. 2014/15 General Fund Budget 12

13. Status of Collective Bargaining 13 Salaries and Benefit costs make up 80% of the 2014/15 budget Contracts for FOUR of the five collective bargaining units are CURRENTLY in negotiations that will impact 2015/16. The Board considers salary costs and all benefit expenses, for employees and retirees, in its Total Cost of Compensation projections during negotiations.

14. 14 Additional FACTORS that IMPACT future Budgets Tax Certiorari Refunds Mandated Testing, Reporting APPR and Training/Support RTI Technology Plan Requirements Debt Service Changes Non-Tax Revenues

15. Facility Needs & Concerns 15 Equipment Preventative Maintenance Plans Items identified in the Building Condition Survey, Annual Visual Inspection & 5-Year Facility Plan Review utility usage and systems to promote energy cost savings and improved heating comfort in schools

16. 2015/16 Budget analysis and preparation continues… 16 February 2015- PRESENTATION 2015-16 Superintendent’s Proposed Budget to Board of Education March 10, 2015- Board Discussion about Budget March 24, 2015 - Budget Hearing I - Open Topics Forum April 21, 2015 - Budget Adoption May 5, 2015 – Budget Hearing II May 19, 2015 - Budget Vote/Trustee Election