2013-2014 Preliminary Budget

2013-2014 Preliminary BudgetMarch 18, 2013

Previous Year’s Budget Reductions• Elimination of Teaching Positions

• Special Education/Two Elementary• Elimination of Administrative Position • Elimination of Technology Summer Workers• Reduction of Summer Maintenance Workers • Reduction of Capital Improvements• Energy Curtailment Programs• New Athletic/Band Fee• Reduction in Variable Debt• Elimination of Weekend Security• Reduction of Contracted Services

TOTAL REDUCTIONS $658,546

Budget Development Assumptions• No Salary Increases

• All Employees• No Change in Benefit Plans• No Furlough/Outsourcing • No Additional Programs• Two New Teaching Positions

• Elementary Sp. Ed., High School Social Studies• No Additional Allocations

• By Building• By Department

• No Additional Debt• No New Revenue Sources• No Additional State & Federal Revenue

• Except PSERS Retirement Reimbursement

Expenditures

Salaries41%

Benefits21%

SalariesBenefitsProf. Svcs.Property Svcs.Contracted Svcs.Supplies/EquipmentDebt Service

Expenditures2013-14

2012-13 PROPOSED

DESCRIPTION BUDGET BUDGET $ INC(DEC)% INC(DEC)

Salaries $ 30,415,980 $ 30,500,751 $ 84,771 0.28%

Employee Benefits 13,558,938 15,438,865 $ 1,879,927 13.86%

Purchased Prof. Svcs. 5,452,876 5,719,740 $ 266,864 4.89%

Purchased Property Svcs. 1,927,772 1,905,088 $ (22,684) -1.18%

Other Contracted Svcs. 10,054,668 10,393,738 $ 339,070 3.37%

Supplies 2,083,664 2,168,410 $ 84,746 4.07%

Equipment 447,175 438,190 $ (8,985) -2.01%

Other Objects 3,183,456 3,031,792 $ (151,664) -4.76%

Other Financing Uses 5,050,000 5,255,500 205,500 4.07%

TOTAL ALL OBJECTS $ 72,174,529 $ 74,852,074 $ 2,677,545 3.71%

PSERS History/Projections Employer Contribution Rates

1998-99

1999-00

2000-01

2001-02

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

2014-15

2015-16

2016-17

2017-18

2018-19

2019-20

2020-21

2021-220%

5%

10%

15%

20%

25%

30%

35%

6.04%4.61%

1.94%1.09%1.15%

3.77%4.23%4.69%

6.46%7.13%

4.76%4.78%5.64%

8.65%

12.36%

16.93%

21.31%

25.80%

28.30%29.15%

30.14%30.87%

30.76%30.93%

Expenditure Growth - Other• Special Education• Medical/Prescription Insurance• Technology Services• Charter School Tuition• Student Transportation Services• Legal Fees• Psychological Services

Revenues

78.3%

18.5%

1.5%1.7%

LocalStateFederalFund Balance

Revenues – Local

DESCRIPTION 2012-13 BUDGET 2013-14 BUDGET $ INC(DEC) % INC(DEC)

CURRENT REAL ESTATE $ 50,489,372 $ 52,155,883 $ 1,666,511 3.3%

INTERIM REAL ESTATE $ 300,000 $ 250,000 $ (50,000) -16.7%

PUBLIC UTILITY TAX $ 70,000 $ 70,000 $ - 0.0%

EARNED INCOME $ 3,400,000 $ 3,400,000 $ - 0.0%

TRANSFER TAX $ 700,000 $ 700,000 $ - 0.0%

DELINQUENT TAX $ 1,250,000 $ 1,250,000 $ - 0.0%

EARNINGS ON INVESTMENTS $ 101,328 $ 50,000 $ (51,328) -50.7%

IDEA $ 478,614 $ 565,257 $ 86,643 18.1%

RENTALS/FEES $ 150,018 $ 150,000 $ (18) 0.0%

MISCELLANEOUS $ 50,000 $ 50,041 $ 41

0.0%

FUND BALANCE APPROPRIATION $ 1,094,440 $ 1,243,112 $ 148,672 13.6%

$ 58,083,772 $ 59,884,293 $ 1,800,521 3.1%

Budget Crisis…why?

Revenues

Expenditures

Avon Grove

Coatesville

Dow

ningtown

Great Valley

Kennett

Octorara

Ow

en J. Roberts

Oxford

Phoenixville

Tred-Easttown

Unionville

West Chester

-$900,000

-$700,000

-$500,000

-$300,000

-$100,000

$100,000

$300,000

$500,000

$700,000

$900,0002010-11 Revenue from Changes in Tax Base

2011-12 Revenue from Changes in Tax Base

2012-13 Revenue from Changes in Tax Base

2013-14 Revenue from Change in Tax Base

Chester County Assessment Changes

CUMULATIVE IMPACT OF ASSESSMENT APPEALS SINCE 2010

KENNETT CONSOLIDATED SCHOOL DISTRICT

Annual Tax Assessment Hearing Results 2010 - 2013

Municipality Original Assessment Revised Assessment Assessment Reduction

KENNETT SQUARE BOROUGH $ 12,110,550 $ 7,655,465 $ 4,455,085

NEW GARDEN 221,065,824 169,415,179 51,650,645

EAST MARLBOROUGH 39,293,650 28,783,471 10,510,179

KENNETT 255,433,690 196,779,614 58,654,076

Total $ 527,903,714 $ 402,633,729 $ 125,269,985

Millage Rate 27.746

Lost Revenue $ 3,475,741

Net Real Estate Tax Lost - $2,350,717

Interim Taxes, Transfer Taxes, and Interest Revenue

2007 2013-14 Preliminary Budget0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

$3,935,501

$1,000,000

$2,935,000 Revenue Lost

SUMMARY

Real Estate Tax Rate History

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

0

5

10

15

20

25

30

19.349 20.237 20.873 21.57 21.9523.1423.953699999999924.778125.729326.7303 27.746

Millage Rate

Budget Shortfall $2,909,655

Tax Increase

Expenditure ReductionFund Balance

Real Estate Tax Millage Analysis*Budget Budget % Increase/

2012-13 2013-14 Increase (Decrease)

Fund Balance Appropriations

$0 26.7303 28.3901 1.66 6.21%

$1,058,826   26.7303   27.8415   1.11 4.16%

$1,094,440 26.7303 27.8230 1.09 4.09%

$1,243,112 26.7303 27.7460 1.02 3.80%

$2,000,000 26.7303 27.3538 0.62 2.33%

$2,326,344   26.7303   27.1847   0.45 1.70%

$2,500,000 26.7303 27.0947 0.36 1.36%

Proposed Tax Increase

Max Increase with Exceptions

Increase at Act 1 Index

* Net Value of a Mill - $1,929,883

Bottom Line• Proposed Real Estate Tax Increase

• 3.8% Increase• 27.7460 Mills

• Apply for Act 1 Exceptions• Special Education & PSERS

• Appropriation of Fund Balance• $1,243,112

• Begin Process of Budget Deliberations• Finance Committee Meetings

• First Monday of Every Month• Long Term Planning• Initiatives to Reduce Recurring Expenditures

Prepared Statements

Please hold questions to the end of all presentations

PROPOSED STATE EDUCATION BUDGET

PROPOSED STATE EDUCATION BUDGET

COMPARISON OF KCSD PROPOSED 2013-14 BUDGET TO GOVERNOR'S PROPOSED BUDGET

  KCSD GOVERNOR'S  

  2013-14 PROPOSED VARIANCE

ACCOUNT DESCRIPTION PROPOSED BUDGET INC(DEC)

BASIC ED SUBSIDY  $               4,944,283   $               5,110,050   $                  165,767 

CHARTER SCHOOLS  $                             -   $                             -   $                             - 

SPECIAL ED SUBSIDY  $               1,641,323   $               1,633,616   $                    (7,707)

EDUCATIONAL ASSISTANCE  $                             -   $                             -   $                             - 

TRANSPORTATION SUBSIDY  $               1,525,661   $               1,525,661   $                             - 

RENTAL & SINKING FUND  $                  462,000   $                  462,000   $                             - 

HEALTH SERVICES  $                    86,000   $                    86,000   $                             - 

PROPERTY TAX REDUCTION ALLOCATION  $               1,390,637   $               1,390,637   $                             - 

PA ACCOUNTABILITY GRANT  $                  128,446   $                  128,446   $                             - 

SOCIAL SECURITY  $               1,160,811   $               1,160,811   $                             - 

RETIREMENT  $               2,493,041   $               2,161,651   $                (331,390)

TOTAL REVENUE FROM STATE SOURCES $ 13,832,202 $ 13,658,872 $ (173,330)

RETIREMENT EXPENSE REDUCTION   $               5,151,821   $               4,467,143   $                  684,678 

NET CHANGE TO KCSD PRELIMINARY BUDGET $ 511,348

Millage Reduction Equivalent 0.26

Reduced Millage Requirement under Governor's Proposal 2.8%

• $1.0 Billion to School Districts over 4 years• Kennett’s Grant $1,829,390

• Year 1 – 2014-15 Grant Amount $365,878• 4 Targeted Uses

• School Safety• Ready by 3• Individualized Learning• STEM Initiatives

• Contingent on the Privatization of State Liquor Stores

Passport for Learning Block Grant

MIDDLE SCHOOL PROPERTY SUBDIVISION PLAN

Outsourcing DeliberationsTentative Time Line

• Custodial Staff• Presentation

• February 4, 2013• Alternative Proposals

• March 18, 2013• Committee Discussion

• April 1, 2013• Board Action

• April 6, 2013

• Instructional/Teaching Assistants

• Presentation • March 18, 2013

• Committee Discussion• May 6, 2013

• Board Action• May 13, 2013

Comments and QuestionsComments@kcsd.org

CUSTODIAL OUTSOURCING ALTERNATIVE PROPOSAL 1

REORGANIZATION

• Elimination of 6 night custodial positions• 2 employees by attrition• 4 employees by layoffs

• Reduce all remaining night custodial positions from 40 hours/week to 37.5 hours/week

• Reorganization of remaining day and night custodial staff to maximize performance and building coverage

• Total estimated savings - $356,104

Custodial Outsourcing Alternative Proposal 1

Reorganization

CUSTODIAL OUTSOURCING ALTERNATIVE PROPOSAL 2

SALARY AND BENEFIT REDUCTION

• Option 1• Reduction of custodial salaries by 6.5%• Major changes to existing healthcare plans for all custodial

and maintenance personnel (15% cost reduction)• Elimination of 2 positions through attrition

• Option 2• Reduction of custodial and maintenance salaries by 5.0%• Major changes to existing healthcare plans for all custodial

and maintenance personnel (15% cost reduction)• Elimination of 2 positions through attrition

• Total estimated savings - $330,000

Custodial Outsourcing Alternative Proposal 2

Salary and Benefit Reduction

INSTRUCTIONAL/TEACHING ASSISTANTS OUTSOURCING

ANALYSIS

Instructional/Teaching Assistants Outsourcing

Analysis• All staffing was based on equivalent existing employees’ hours and work schedule.

• All qualifications of contracted employees would meet or exceed the qualifications as dictated by the District and the Pennsylvania Department of Education.

• Two agencies have submitted proposals based on our solicitation.

• Lead time for transition to outsourcing arrangement is 60 days after award of contract.

Instructional/Teaching Assistants Outsourcing

Analysis

Emplo

yees

Market

Rates

Hold Harm

less R

ates

Rate Im

prove

ment

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$1,308,826

$681,999

$172,307 $1,369,805

$1,675,298 $1,716,228

SALARY BENEFITS PSERS/SS CONTRACTED

$2,163,132

Instructional/Teaching Assistants Outsourcing

Analysis

Market Rates Hold Harmless Rates

Rate Improvement$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

$900,000 $793,327

$487,834 $446,904

SAVINGSPatient Protection and Affordable Healthcare Act if applicable would reduce savings by an estimated $104,000

DISTRICT WIDE SALARY REDUCTION

All Employee Salary Reduction

$20,657,625

$2,987,516

$2,469,429

$1,942,182 $537,231 $179,7022013-2014 Budgeted Salaries

KEA KCESPA AdministrationCustodial/Maintenance Confidential Food Service

Total Salaries $28,773,685

All Employee Salary ReductionEmployee

Classification Average Per

Pay Reduction @ $450,000 (1.56%)

Average Per Pay

Reduction @ $1,000,000

(3.48%)

Average Per Pay

Reduction @ $1,500,000

(5.21%)

KEA $39 $87 $131

KCESPA $16 $37 $55

Administration $78 $174 $261

Maintenance/ Custodial

$24 $53 $79

Confidential $46 $103 $154

Food Service $18 $40 $60