BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT March 14, 2007 Pocantico Hills PTA Meeting

BUDGETARY OVERVIEW OF 2007-2008 BUDGET

DEVELOPMENT

March 14, 2007Pocantico Hills PTA Meeting

2007-2008 SCHOOL BUDGET

A school budget is a financial plan created to support the operation of the school system and the delivery of the educational program.

The budget process begins in November with a workshop with the staff.

2007-2008 SCHOOL BUDGETSignificant Budgetary Considerations

1. Impact of Tax Certiorari Claims/Settlements

2. Changes in Assessed Valuation3. Transportation

1. BOCES and purchase of replacement buses, or Bid for new service

4. Incarcerated Youth1. Increase in allocation/increase in

resulting state aid

2007-2008 SCHOOL BUDGETSignificant Budgetary Considerations5. Health Insurance Increases6. Salary Increases7. Retirement Cost Increases8. Workers Compensation/Liability

Insurance Cost Increases9. High School Tuition Increases

2007-2008 March 6, Draft # 1 Budget$22,284,194

The Initial Draft Budget provides for: Budget to Budget Increase of 9.28% Projected Tax Rate Increase:

With Tax Certiorari Claims:Greenburgh 18.72%

Mt. Pleasant 18.20% Without Tax Certiorari Claims:

Greenburgh 7.50%

Mt. Pleasant 7.03%

2007-2008 March 12 Draft # 2 Budget$21,830,565

Draft # 2 Budget dated March 12, 2007 provides for: Budget to Budget Increase of 7.05% Projected Tax Rate Increase:

With Tax Certiorari Claims:Greenburgh

16.34%

Mt. Pleasant15.83%

Without Tax Certiorari Claims:Greenburgh

5.35%

Mt. Pleasant4.88%

2007-2008 March 12 Draft # 3 Budget$22,041,265

Draft # 3 Budget dated March 12, 2007 provides for: Budget to Budget Increase of 8.09% Projected Tax Rate Increase:

With Tax Certiorari Claims:Greenburgh

17.09%

Mt. Pleasant16.57%

Without Tax Certiorari Claims:Greenburgh

6.02%

Mt. Pleasant5.55%

WHERE EVERY REVENUE DOLLAR COMES FROM 2007-08

$22,041,265

Property Taxes

78.90%

State Aid15.59%

Community Service1.83%

Fund Balance2.00%

Other 1.39%

Interest0.29%

Tax Rate Comparison 2007-2008 Budget Development

School True Value Taxes onDistrict Tax Rate $500,000 Index

1 19.08 $9,540 2.6910 15.75 $7,875 2.2220 14.64 $7,320 2.0630 12.46 $6,230 1.7540 10.56 $5,280 1.4945 8.78 $4,390 1.24

Pocantico 7.10 $3,550 1.00

Tax Certiorari and Assessment Changes A Tax Certiorari Change Comes About as a Result of

a Commercial Property Owner Claim That Their Property Assessment is Too High, and Therefore Their Tax Bill is Too High.

Court Ordered Judgments to Reduce The Assessment of A Commercial Property, Plus Refunds of Taxes Overpaid in Prior Years Affects the School Tax Rate Negatively.

In 2006-2007 the District Settled Cases Originating in 2000 and 2001.

The Board of Education Hired a Defense Team to Address These Tax Certiorari Claims Saving the School District Hundreds of Thousands of Dollars

Assessed Valuation

Mt. Pleasant Greenburgh

2003-04 16,715,484 41,933,416

2004-05 16,631,073 41,723,576

2005-06 16,248,572 40,879,798

2006-07 15,870,156 40,827,504

2007-08 est. 15,274,065 35,001,691

06-07/07-08

Change (596,091) (5,825,813)

Tax Rate Impact: 11.22% 11.17%

Assessed Valuation Mt. PleasantBefore Changes Affecting 2007-2008

Mt Pleasant

15,200,000

15,400,000

15,600,000

15,800,00016,000,000

16,200,000

16,400,000

16,600,000

16,800,000

2003-04 2004-05 2005-2006

2006-2007

2007-2008

Mt Pleasant

Assessed Valuation Mt. PleasantAfter Tax Certiorari Claim Settlements

Decrease of $596,091

Mt Pleasant

14,500,000

15,000,000

15,500,000

16,000,000

16,500,000

17,000,000

2003-04 2004-05 2005-2006

2006-2007

2007-2008

Mt Pleasant

Assessed Valuation – Greenburgh Before Changes Affecting 2007-2008

Greenburgh

39,000,000

39,500,000

40,000,000

40,500,000

41,000,000

41,500,000

42,000,000

42,500,000

2003-04 2004-05 2005-2006

2006-2007

2007-2008

Greenburgh

Assessed Valuation – GreenburghAfter Tax Certiorari Claim Settlements

Decrease of $5,825,813

Greenburgh

30,000,000

32,000,000

34,000,000

36,000,000

38,000,000

40,000,000

42,000,000

44,000,000

2003-04 2004-05 2005-2006

2006-2007

2007-2008

Greenburgh

Contingency Budgets

Single revote: Upon the defeat of the original proposed school budget, a district may resubmit the original budget, submit a revised budget, or adopt a contingency budget. If the voters fail to approve the budget upon the second vote, the district must adopt a contingency budget. Expanded definition: Interscholastic athletics, field trips, other extracurricular activities, and related transportation expenses are contingent expenses.

Contingency Budgets

Administrative cap: The administrative component of a contingency budget will be limited to the lesser of: 1) the percentage of the administrative component in the prior year’s budget or 2) the percentage of the administrative component in the last defeated proposed budget. Cap on total spending: Total spending under a contingency budget may not increase by more than 120 % of national CPI or 4.00%, whichever is lower. For 2007-08 the cap is 3.84 %.

2007-2008 Contingency Budget

How the contingency/austerity budget cap is calculated:

2006-2007 Adopted Budget $19,916,971 Less Debt Service $

( 489,309) Adjusted Base Year Budget $19,427,662

2007-2008 Contingency Budget

How the maximum contingency/austerity budget cap is calculated:

Adjusted Base Year Budget $19,427,662 Adjusted Budget x 120% of CPI 3.84%

$20,173,684 Debt Service $ 538,175 Growth Related Expenditures $ 726,925 Maximum Contingency Budget $21,438,784 Required Budgetary Cuts $ 602,481 Projected Tax Rate Increase:

Greenburgh: 15.91%Mt. Pleasant: 15.40%

Possible Areas of Expense Reduction

Summer Camp/Swim Program Student Supplies Community Use of Buildings and Grounds Certain Equipment Software Staff Technology Overtime Field Trips

Tax Rate Table

BUDGET AMOUNT IMPACT ON TAX RATE$ 100,000 .67%

$ 148,000 1.00%

$ 250,000 1.68%

$ 500,000 3.35%

$ 770,000 5.16%

$ 1,000,000 6.73%

2007-2008 Budget Questions/Answers

1. How was this school budget prepared differently from prior years?

This year the district the is seeking input from the community prior to the Board’s adoption of the budget on April 10, 2007.

2. How much will the budget and tax rate increase?

The budget to budget to increase is projected to be 8.09%.

The projected tax rate increase for Greenburgh is 17.09%, and the tax rate increase for Mt. Pleasant is projected to be 16.57%.


3. Why is the projected tax rate increase so high?

The reason that the projected tax rates are so high is because of a sudden and significant drop in the district’s assessed valuation of 5,825,813 in Greenburgh, and 596,091 in Mt. Pleasant.

The district’s assessed valuation is part of the formula that divides the property tax levy among all residents and commercial properties in the district. As the assessed valuation drops, the rate that tax payers will pay increases, even if there is no change in the amount that the school district spends.


3. Why is the projected tax rate increase so high? Continued

For example, if there were no change to the district’s assessed valuation, then the projected tax rate for Greenburgh would be 6.02%, and for Mt. Pleasant would be 5.55%.

So, if the school budget did not increase at all, and if revenue was exactly the same as it was in the last year, the tax rate increase would still be approximately 11% as result of the decrease in the district’s assessed valuation.


4. Why has the assessed valuation of the district decreased?

The assessed valuation of the district decreases primarily as a result of tax certiorari claims, and settlements.


5. How much would need to be cut from the budget to have a zero % tax rate increase?

A cut of approximately $150,000 in the budget is equivalent to a 1% decrease in the tax rate. Therefore, $1,650,000 would need to be cut from the budget to achieve a zero percent tax rate increase.


6. What is a tax certiorari claim?

A tax certiorari change comes about as a result of a commercial property owner claim that their property assessment is too high, and therefore their tax bill is too high.

Court ordered judgments reduce the assessment of a commercial property, plus provide for refunds to the commercial property owner for the taxes they have overpaid in prior years.


6. What is a tax certiorari claim?

In 2006-2007 the District Settled Cases Originating in 2000 and 2001.

The Board of Education Hired a Defense Team to Address These Tax Certiorari Claims Saving the School District Hundreds of Thousands of Dollars


7. How much has the budget increased over 2006-2007, and what areas have expenditures increased in the most?

The largest increase in the budget is brought about by increases in the cost of tuition for our high school students.

Salary and health insurance, worker compensation and social security increases, contractual increases and the increased cost of the incarcerated youth program are the major forces in the overall budget increase of $1,645,888.

Please note that the incarcerated youth program generates revenues completely offsetting the program cost, therefore no tax rate increase is associated with this program.


8. How much discretion does the School Board have over the reducing the draft budget?

Approximately 94.5% of the budget would be considered to reflect mandated costs.

Approximately 5.5% would be non mandated. Some of the non mandated items include instructional and non instructional equipment, salaries, technology, textbooks, instructional supplies, summer day camp, after school program, and community swim program.


9. How does the district plan to inform the community about the budget?

The district has prepared a communication plan which can be found on the district’s website www.pocanticohills.org.

Budget presentations will be made at each budget workshop to ensure that a resident missing one or more budget work sessions will not miss part of the description of the budget. A

The district’s administration will make two PTA presentations, one to solicit input before the budget is approved, and one after the budget is approved by the board. All PowerPoint presentation and other documentation will be posted to the district’s website. Budget presentations will also be provided to the teaching staff, students, and school foundation.


10. What will happen if the community does not approve the school budget on May 15, 2007?

State law provides that the Board of Education can if it wishes resubmit the same or a different budget to the community for approval once. If it is disapproved by the community again, or the Board of Education decides not to resubmit the budget, the school district will operate on a contingency budget basis.


11. What is a Contingency budget, how does it affect the school district, and what will the tax rate increase be under a Contingency budget?

Under a contingency budget State law places a spending cap on the budget, with a few exceptions for debt costs, costs associated with enrollment growth etc. The spending cap for 2007-2008 will be 3.84%

Therefore, under a contingency budget the Board of Education would need to reduce the budget by $602,481.


11. What is a Contingency budget, how does it affect the school district, and what will the tax rate increase be under a Contingency budget? Continued

On a Contingency budget the tax rate increase projected for Greenburgh is 15.91%, and for Mt. Pleasant it is 15.40%.

Possible Areas of Expense ReductionUnder a Contingency Budget Summer Camp/Swim Program Student Supplies Community Use of Buildings and Grounds Certain Equipment Software Staff Technology Overtime Field Trips


12. What are the key dates remaining in the budget development process?

March 26, 2007 Board of Education Meeting

April 10, 2007 Board of Education Meeting – Adoption of Proposed Budget

April 16, 2007 Last Day to File Petitions for Board of Education and Propositions


12. What are the key dates remaining in the budget development process? Continued

April 18, 2007 PTA Budget Presentation April 25, 2007 PTA Meet the Candidates

Night May 7, 2007 Budget Hearing May 15, 2007 Budget Vote 6:00a.m. –

9:00 P.M. School Library

BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT

Documents

BUDGETARY OVERVIEW OF 2007-2008 BUDGET DEVELOPMENT March 14, 2007 Pocantico Hills PTA Meeting