1. Octorara Area School District 2014-2015 Budget Presentation December 09, 2013

2. Octorara Area School District 2012-13 Review 2013-14 Update 2014-15 Draft Budget 2

3. Octorara Area School District 2012-13 Review 3

4. 2012-13 Budget vs. Actual 4 BudgetActualVariance% Revenues45,564,53646,117,967553,431101.21 Expenses46,664,37544,276,6482,387,72794.88 Net(1,099,839)1,841,3192,941,158 Revenue Total Local32,449,12633,130,582681,456 Earned Income1,525,0002,184,113659,113 Total State11,897,72211,744,866(152,856) Bond Reimbursement740,000687,354(52,646) PA Accountability0120,294 Social Security Reimb.721,000663,511(57,489) Retirement Reimb.1,168,0001,133,216(34,784) Tuition70,00026,179(43,821) Total Federal1,217,6881,238,48920,801 Med Assist – ACCESS Reimb.220,000268,77448,774 Title I847,688823,853(23,835) Major Line Items

5. 2012-13 District Revenue Breakdown 5

6. 2012-13 Local Revenue Breakdown 6

7. Selected Local Revenue History 7

8. State Revenues 8

9. 2012-13 Expense Summary BudgetActual Variance Fav/(Unfav) Salaries$18,930,094$18,270,660$659,434 Outsourced Facilities Supervisor Position, Lower Sub Costs, Less movement on scale Benefits$7,569,667$6,802,150$767,517 Lower Health Care Costs, Soc. Sec., Ret. Outside Services$3,927,349$4,003,795($76,446) Outsourced Facilities Supervisor Position Repairs/Maint. Services$934,200$739,450$194,750 Repairs/Maint., Lower Elec., Equip. Rental Trans/Ins/Tuit/Charter$6,829,406$6,556,208$273,198 Lower Charter School Enrollments Supplies$1,432,497$1,298,515$133,982 Supplies, Diesel Fuel, Natural Gas, Capital$340,500$321,380$19,120 Dues/Fees/Interest$3,325,063$2,954,491$370,572 Budgetary Reserve not used / Refinanced 2008 Bond Fund Trans/Principle$3,375,600$3,330,000$45,600 Refinanced 2008 Bond $46,664,376$44,276,648$2,387,727 9

10. Salary History 10

11. Required Health Care Premium History JulyAugSeptOctNovDecJanFebMarAprMayJune Total Claims 2007-08125,662155,158136,69772,382314,496142,374154,855156,865191,785153,187105,242100,4151,809,118 2008-09138,017154,536179,266197,349112,362171,333163,946127,176130,016157,056149,241249,8911,930,189 2009-10210,312199,979387,660269,845233,779327,650173,159166,326177,709173,201183,685214,2612,717,566 2010-11295,022207,814172,910172,384177,774212,662156,411240,869233,482167,544216,282405,9772,659,130 2011-12159,715353,869173,042181,337188,531185,511179,597190,868202,832171,487132,966240,4582,360,212 2012-13163,938144,581187,274129,059178,849181,508267,891144,066171,179207,599257,640178,7212,212,305 2013-14205,665179,340154,368490,034188,5001,217,907 11 Does not include Stop Loss Premiums & Admin Fees

12. Claims History 12

13. Selected General Fund Expenditures 13

14. Assigned Fund Balance Rollforward 14 Type of Reserve 2010 -11 Designation 2011 -12 Budget 2011 -12 Assignments 2012-13 Budget 2012-13 Assignments 2013-14 Budget Total Assigned Fringe Benefit$75,000($132,750)$439,991$0$331,149$0$846,140 PSERS$261,600($475,000)$475,000($250,000)$450,000($250,000)$1,094,800 Extraordinary Building/Grounds Repairs$75,000$0 $210,330$0$312,890 Extraordinary Utility Costs i.e. Electric$0($20,000)$20,000$0 $20,000 Transportation - Fuel$0 $20,000 Improvements in Technology$0($40,000)$40,000$0 ($40,000)$0 Designated Reserve for Interest Expense Bond Issue$0($217,280)$217,280($304,589)$304,589($224,553)$588,036 Designated Reserve for H.S. Project$204,000($325,000)$325,000($545,250)$545,250($325,000)$1,090,500 Current Year Assignments$615,600($1,210,030)$1,517,271($1,099,839)$1,841,318($839,553)$3,972,366 Total Assigned Fund Balance$2,663,360$1,453,330$2,970,601$1,870,762$4,811,919$3,972,366

15. Fund Balance Summary 15 Type of Reserve 2010 -11 Designation 2011 -12 Budget 2011 -12 Assignments 2012-13 Budget 2012-13 Assignments 2013-14 Budget Total Assigned Current Year Assignments$615,600($1,210,030)$1,517,271($1,099,839)$1,841,318($839,553)$3,972,366 Total Assigned Fund Balance$2,663,360$1,453,330$2,970,601$1,870,762$4,811,919$3,972,366 Total Unassigned Fund Balance3,642,161 3,574,717 3,568,0603,354,417 Y/E Audited Fund Balance$6,305,521$5,095,491$6,545,318$5,445,479$8,379,978$7,326,782

16. Octorara Area School District 2013-14 Outlook 16

17. Projected Variances from Approved Budget 17 RevenueBudgetEstimateVariance EIT$1,600,000$1,900,000$300,000 Expense Debt Service$6,091,088$5,959,635$131,453 Budgetary Reserve$250,000$0$250,000

18. Octorara Area School District 2014-15 Draft Budget 18

19. 19 Items to Consider: 1. Act 1 Index 2. State Funding 3. Retirement Rates 4. Affordable Care Act 5. Capital Improvements Octorara Area School District

20. 20 Base Index 2.1%

21. 21 1,018,358,424273,736,547 78.8121.19

22. 22

23. PSERS Retirement Rate History & Projections Fiscal YearRate 2008-094.76 – Actual 2009-104.78 – Actual 2010-115.64 – Actual – Original 8.22 2011-128.65 –Actual 2012-1312.36 – Actual 2013-1416.93 – Actual 2014-15 21.40 – Certified 2015-1625.80 – Projected 2016-1728.30 – Projected 23

24. Octorara Area School Dist Projected PSERS Contribution Fiscal**EmployersTotalState ShareOASD Net YearSalaries Contrib. RateContrib.(50%)CostIncrease 2007-0817,699,6807.13%1,236,178605,496630,682 155,434 2008-0919,040,6454.76%884,286501,654382,632(248,050) 2009-1019,827,4154.78%924,765475,782448,98366,351 2010-1119,746,8195.64%1,093,029556,276536,75387,770 2011-1218,663,6178.65%1,576,968788,484 251,731 2012-1318,270,66012.36%2,197,1061,098,553 310,069 2013-1419,019,21216.93%3,219,9531,609,976 511,423 2014-1519,214,93021.40%4,111,9952,055,998 446,021 1.00% 2015-1619,407,07925.80%5,007,0262,503,513 447,516 1.00% 2016-1719,601,15028.30%5,547,1252,773,563 270,050

25. Octorara Area School District On the Horizon Affordable Care Act PCORI (Patient-Center Outcomes Reach Institute Fees) Fees to finance comparative effectiveness research. $1 per covered life in 2014, $2 in 2015. (2014 - $730, 2015 - $1,460) Reinsurance Fees – Health insurance issuers and self-funded group health plans must pay fees to a transitional reinsurance program for the first three years of health insurance exchange operation (2014-2016). $5.25/month ($63/yr.) x average number of covered lives. ($45,990 / Yr.) Excise Tax (Cadillac Tax) – 40% excise tax on employers for the value of health insurance benefits exceeding established thresholds. For individual coverage - $10,200, family coverage $27,500. 25

26. 2014-15 vs. 2013-14 Expense Summary 2014-15 Budget2013-14 Budget Variance Salaries$19,214,930$19,019,212$195,717 Includes Athletics & Security Benefits$9,315,198$8,565,997$749,200 Retirement Rate 21.40% vs. 16.93% $889K Outside Services$4,250,458$3,977,803$272,655 Repairs/Maint. Services$797,375$851,100($53,725) Electric Projection ($73K) Trans/Ins/Tuit/Charter$6,091,056$6,281,930($190,874) Vocational/Technical ($154K), Charter School Tuition ($150K). Supplies$1,584,828$1,542,653$42,175 Capital$445,175$448,816($3,641) Dues/Fees/Interest$3,110,308$3,254,680($144,372) Bond Interest ($125K) Fund Trans/Principle$3,425,600$3,550,600($125,000) Fund Transfer Eliminated ($230K), Bond Principal $125K $48,234,927$47,492,791$742,135 26

27. Questions 27