1. Budget Work Session January 7, 2016

2. The Finance Committee is recommending the following:  The Board authorize the intent to adopt the Proposed Preliminary Budget for 2016-17 and the intent to apply for Act 1 Exceptions to the Pennsylvania Department of Education (PDE) and authorize administration to advertise the intent. (Formal adoption to occur at the January 26, 2016 Board Meeting) 2

3.  Flexibility  Early Action  Uncertainty of 2015-16 State Budget  Uncertainty of 2016-17 State Budget 3

4.  The initial run of the 2016-17 general fund draft budget indicates the following: ◦ Administrative discussions during budget justification sessions resulted in the following draft budget: “Draft” Revenues$91,557,372 “Draft” Expenditures$98,390,262 “Draft” Deficit$ 6,832,890  The draft budget includes a tax increase of.5309 mills, for a total millage rate of 22.6556 mills; the maximum allowed by the Act 1 index of 2.4%. 4

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6. 6 2016-17 Act 1 Index set by PDE at 2.4%. Translates to additional millage of.5309 mills or $1,620,040 in real estate tax revenue available to balance the 2016-17 budget. Local revenue was based on past history and four months of current history. (98% Real Estate Tax collection rate and increase valuation) State subsides budgeted at the 2014-15 level. Continuation of state’s reimbursement of 50% of the costs of employer share of social security and retirement. Federal revenues were budgeted at the 2015-16 level. Other revenues includes using $903,324 of the PSERS Rate Stabilization Committed Fund Balance. State revenues will be revisited once the Governor's 2016-17 budget becomes fully known on February 9, 2016. Overall revenues are increasing by $2,138,000 over the total budgeted for 2015-16.

8.  Salaries are projected to increase $1,012,681. Budgeted salaries include recently approved Collective Bargaining Agreements.  Benefit costs are projected to increase by $3,168,413 ◦ Health Benefits - $1,063,427 ◦ Retirement - $1,997,000  Pupil Personnel budget (excluding salary and benefits) has an increase of $481,436.  Support Services budget (excluding salary and benefits) has a decrease of $187,852.  Debt Service budget has an increase of $1,376,150.  Transfers Out budget has a decrease of $4,298,445. 8

9. ◦ PSERS contribution is increasing by $1,997,000, net effect $998,500 after state reimbursement. ◦ District’s share for 2016-17 was budgeted at 29.69%, up from the 2015-16 rate of 25.84%. ◦ PSERS contributions are projected to grow in future years as follows: 9 YEAREMPLOYER PERCENTAGE PERCENT CHANGE 2015-201625.84%20.75% 2016-201729.69%14.90% 2017-201830.62%3.13% 2018-201931.56%3.07%

10.  Curriculum Initiative Fund and Technology Funds - Transfers to these funds are budgeted at $2,741,122 ◦ Curriculum - $910,800 ◦ Technology - $1,830,322  Capital Reserve (Ongoing maintenance) – Transfer to the Capital Projects fund was budgeted at $773,732.  Budgetary Reserve-Contingency for Personnel includes positions from 2015-16 that were not filled, or are reoccurring as well as new staffing requests for 2016-17. Additional time is needed to review these requests in more detail. 10

11.  Health Care Benefits  Utilities  Fuel  Capital Improvement Costs  Anticipated Retirements  Revised Estimates  Additional Revenue  Act 1 Exceptions  Use of Fund Balance 11

12.  Special Education Expenditures - $708,281 Equates to.2257 Mills or 1.02%  Retirement Contributions - $1,391,227 Equates to.4370 Mills of 1.975%  Combined $2,099,508 Equates to.6627 Mills or 2.995% above the Act 1 Index of 2.4% (5.395% Total) 12

13. 13 Category Unaudited 2014-15 Fund Balance Used in 2015-16 or Not Available Available Use of Fund Balance 2016-17 Committed for Capital Projects$ 5,021,679($ 978,068)$ 4,043,611 Committed for Facility Initiatives$ 4,488,139($ 4,473,498)$ 14,641 Committed for Curriculum Initiatives$ 90,201 Committed for Technology Initiatives$ -0- Committed for Retirement Escrow$ 3,501,864($ 1,171,005)$ 2,330,859 Committed for ERIP & Comp Absences$ 557,803($ 557,803)$ -0- Unassigned$ 7,700,947($ 219,899)$ 7,481,048 Total$21,360,633($ 7,400,273)$13,960,360

14. THANK YOU! 14