School. District Expenditure Forecast

Transcription

1 Katonah-Lewisboro School District through Presented to the Board of Education December 2013

2 Katonah Lewisboro School District Board of Education President Vice President Board Trustees Mr. Charles Day Ms. Marjorie Schiff Ms. Janet Harckham Mr. Jeff Holbrook Mr. Richard Stone Ms. Stephanie Tobin Dr. Peter Treyz District Clerk District Treasurer Payroll Ms. Kimberly A. Monzon Ms. Danelle Placella Ms. Margaret Taylor District Administration Superintendent Dr. Paul Kreutzer Assistant Superintendent for Business Assistant Superintendent for Curriculum Assistant Superintendent for Human Resources School Business Administrator Mr. Michael D. Jumper Ms. Alice Cronin Mr. Harry LeFevre Ms. Lee H. Lew Katonah-Lewisboro School District i

3 Table of Contents Introduction. Pages 1-2 Enrollment Projections... Pages 3-5 Staff Projections Pages 6-7 Categorical History and Pages 8-9 Special Education.... Pages Technology.. Pages Debt Service.... Pages Operations and Maintenance Pages Transportation..... Pages Benefits..... Pages Administration and Supervision of Schools.... Pages Tax Cap Supplement.. Pages Katonah-Lewisboro School District ii

4 Introduction This expenditure forecast is intended to assist the Board of Education, the Administration, and the public in anticipating possible expenses that need to be considered during the budgetary process, both this year and in upcoming years. A number of years ago, the Finance Committee was charged with developing an expenditure forecasting tool. The product of their efforts is this document, which provides the Board of Education, Administration and community with an overview of how expenditures may vary over a period of time based upon collective bargaining agreements, anticipated equipment purchases, necessary facilities repairs, student enrollment projections and a number of other factors. In order to fully appreciate the use of the accompanying information, it is very important to recognize and understand the assumptions used to develop these forecasts and to understand their limitations. We strongly urge the reader to read this introduction before reviewing the financial data so that misinterpretations can be avoided. Understandings: This report is a projection of expenditures only. This is NOT a budget forecast. A supplement related to how the tax cap may impact future budgets has been added. Other than this one supplement, the data included in this report does NOT include revenue forecasts, property assessment estimates, estimates of tax revenues, or tax equalization rates. Increases in spending alone cannot predict the increase in the tax rate among our four taxing areas. The tax rate is based not only upon expenditures, but upon state aid, prospective assessments, application of fund balance, other sources of revenue, and, of course, the tax equalization rates. In past years, the District has seen modest increases in the budget that have resulted in a decrease in the tax rate for some and an increase in the tax rate for others. Again, there is no tax rate predictive value in these projections. There are variables that are independent of the District that could greatly impact the District s budget and forecasts: changes in legislation, the apportionment of state aid, BOCES reimbursement aid, the possible continued reauthorization of IDEA money (for students with disabilities), changes to pension contributions, social security, health insurance (a January 1, 2014 change to the NYS Health Insurance Plan will reduce our health insurance costs dramatically), etc. beyond that which are anticipated. The expenditure forecasts presented here have not gone through the traditional budget process. This is a very important point to be recognized. Under normal circumstances, budget requests begin with the classroom teachers and are then filtered by school-level administration. From the school and department level, the Superintendent and Assistant Superintendents review budget requests in conjunction with the school administrators. (Continued on next page) Katonah-Lewisboro School District Page 1

5 Further refinements are made to the budget. The next step involves the review of the budget with the Board of Education. At the end of this process, after balancing District needs and trying to develop a budget that will also garner public support, the Superintendent s Budget is then presented to the Board of Education for public review. The expenditure forecasts that follow did not go through that filtering and balancing process. Major Assumptions: Enrollment is declining. Enrollment projections for through assume Full Day Kindergarten. Projected expenses include expenses associated with the implementation of Full Day Kindergarten. Forecast assumes staffing patterns for carried forward with the exception of known staffing modifications related to the budget (Projected reductions in force relative to an anticipated decline in elementary enrollments have been factored in). Staffing levels for may change after the budget development process is complete. Estimates are based on operating 4 elementary schools. Expenses would be decreased by approximately $1.7 million per year if the Board decides to operate a 3 elementary school model. Salary calculations are based on actual projections, which utilize information from collective bargaining agreements. Benefits, which are factors of salary, have been estimated based on projected salaries. These benefits include Social Security and retirement contributions. The Social Security tax cap and employer percentage on TRS/ERS contributions have been adjusted throughout this forecast. Health insurance benefits were projected forward using an increase of 3.00% per year. (a January 1, 2014 change to the NYS Health Insurance Plan has impacted our projections dramatically) Debt forecast assumes the bus replacement schedule continues, adding an average of $1 million to debt per year. Projections factor-in known certified staff retirements at the end of the school year. Projections include continued computer replacements which maintains our current technology status. Supplies have been increased by 1% to 2% per annum depending on the various supplies in question. In many cases, downward adjustments were made based on average actual expenses over the past 5 years. Contractual expenses have been increased by 1% to 5% depending on the various vendors in question. Consideration was given to prior years actual expenses. Forecast assumes the District contribution related to the Teachers Retirement System will increase by 7.69% in , and then remain flat through Projected contributions are compounded by salary modifications. Forecast assumes the District contribution related to the Employees Retirement System will decrease by 4.56% in , decrease by 4.78% in and then remain flat through Projected contributions are compounded by salary modifications. Salary projections include step and lane adjustments as per current collective bargaining agreements. Katonah-Lewisboro School District Page 2

6 Enrollment Projections The District utilizes the services of a demographer to assist in the projection of future enrollment. Enrollment projections for the District are developed using a cohort survival method. This method compares the change in the size of a grade, plus or minus, from school year to school year beginning with the kindergarten entry class for each year. The change for the cohort from year to year is translated to a fraction or percent of change. To forecast a change in enrollment, an average of a group of years, generally five or six, is determined. This average is applied to the succeeding class to forecast the next and future years. The estimated size of the incoming kindergarten class is a critical factor in this method. Our demographer utilizes birth data (secured through the Department of Health) to provide estimated kindergarten enrollments for future years. Enrollment projections for through assume Full Day Kindergarten. Enrollment projections are one of the critical factors in developing a budget. The number of students enrolled coupled with local policy and program decisions are fundamental to the financial direction of the District. Overall, the forecast suggests a decrease in our Kindergarten through Grade 12 enrollment. Depending on where the changes occur over the thirteen grades, the projected numbers may or may not change staffing requirements. It is important to note that enrollment changes have been factored into staffing data. Local policy decisions relating to class size and electives, along with state mandates, will likely have a greater impact upon staffing levels. Katonah-Lewisboro School District Page 3

7 Actual Actual Actual Actual Actual Current Projected Projected Projected Projected Grade KDG First Second Third Fourth Fifth Ungraded Elementary Sixth Seventh Eighth Middle School Ninth Tenth Eleventh Twelfth Ungraded High School District Enrollment Projections for through assume full day Kindergarten Katonah-Lewisboro School District Page 4

8 Enrollment History, Current Enrollment and Projected Enrollment through Actual Current Projected District Pupils Elementary Middle School High School Year Katonah-Lewisboro School District Page 5

9 Staffing Projections The graph on the following page displays staffing from through Our projection going forward assumes relatively stable staffing levels. A more in-depth analysis will be completed when the budget is created. If enrollment tracks as expected, staffing in all areas of the District should stabilize or decrease. With enrollment stabilized, other than minor variations from year-to-year in response to normal distribution of students across all grades, staffing is expected to remain fairly constant. Should there be changes in programs or policies during the forecast period, staffing requirements will need to be addressed. Assumptions: Actual staffing numbers and enrollment figures were used for the current school year, and are used each year in the annual budget development process. Existing parameters, including class size guidelines, contractual obligations, instructional programs, and school schedules, were used. Any changes to these parameters would result in changes to the projections. Special education teachers and support staff projections are based on individual student needs. Forecast assumes that teachers and administrators who have previously announced their retirement effective June 30, 2014 will be replaced by less expensive staff. Forecast assumes Full Day Kindergarten. Projected reductions in force relative to an anticipated decline in elementary enrollments have been included. Estimates are based on operating 4 elementary schools. Staffing levels will decrease in various areas by approximately 13 Full Time Equivalents (in addition to what is presented in this report) if a 3-elementary school model is decided upon. Katonah-Lewisboro School District Page 6

10 Staffing Projection Full Time Equivalents * Special Area Subject Teachers: Art, P.E./Health, Home & Careers, Library, Music/Theatre, Business/Technology ** Counselors and Academic Coaches: Guidance Counselors, Learning Center, Instructional Technology *** District Operations Support Staff: Superintendent's Office, Business Office, Curriculum Office, Human Resources Office, Special Services Office, Technology Office **** Special Education Support Staff and Other Building Support Staff: Special Education Teaching Assistants and Teacher Aides, Physical Therapists, General Education Teaching Assistants, Nurses, Computer Lab Aides and Analyst Katonah-Lewisboro School District Page 7

11 Categorical History and The Categorical History and presents a summary of the total budget with actual expenditures from through and the current budget for , with a forecast for fiscal , , and This table is organized so that all salary expenses appear in one section. The balance of the categories covers all non-salary items. The forecast period is projected to have annual growth rates ranging between 0.23% and 1.92%. More detailed projections for individual categories of expenditures follow. Katonah-Lewisboro School District Page 8

12 Total Budget: Categorical History & ACTUAL EXPENDITURES Actual Actual Actual Actual Actual Category Staff Salaries $ 58,536,575 $ 58,059,311 $ 56,638,431 $ 56,147,880 $ 56,029,107 Special Education $ 3,324,663 $ 3,311,360 $ 3,626,542 $ 3,667,448 $ 3,658,381 Technology $ 1,349,838 $ 1,153,973 $ 1,044,609 $ 1,231,215 $ 1,291,488 Debt Service $ 7,154,941 $ 7,219,322 $ 6,806,451 $ 6,462,793 $ 6,565,079 Operations $ 3,164,623 $ 2,950,606 $ 3,755,161 $ 3,054,302 $ 4,457,565 Transportation $ 1,180,032 $ 957,984 $ 1,119,298 $ 1,206,850 $ 1,947,159 Benefits $ 24,188,210 $ 26,441,744 $ 28,666,645 $ 28,493,108 $ 27,845,387 Administration $ 3,073,478 $ 3,254,375 $ 2,688,930 $ 2,448,361 $ 3,036,016 Instruction $ 2,913,252 $ 2,545,595 $ 2,265,607 $ 2,393,827 $ 2,560,623 Total $ 104,885,612 $ 105,894,270 $ 106,611,674 $ 105,105,784 $ 107,390,805 Interfund Transfer AP Farm Athletic Fields ** and/or Capital $ - $ 144,412 $ 533,387 $ 8,372,263 $ 1,237,761 Escrow Transfer * Refunding bonds $ - $ - $ - $ 6,479,286 CURRENT & PROJECTED Budget Projected Projected Projected Projected Category Staff Salaries $ 57,520,996 $ 58,333,948 $ 59,390,701 $ 60,467,039 $ 61,563,328 Special Education $ 3,434,747 $ 3,759,345 $ 3,846,302 $ 3,935,625 $ 4,027,390 Technology $ 1,516,515 $ 1,592,896 $ 1,615,873 $ 1,639,186 $ 1,662,840 Debt Service $ 6,444,650 $ 6,584,694 $ 5,528,121 $ 2,954,028 $ 2,924,470 Operations $ 3,582,963 $ 3,651,410 $ 3,760,550 $ 4,074,015 $ 4,192,000 Transportation $ 1,197,319 $ 1,189,218 $ 1,232,543 $ 1,277,780 $ 1,325,020 Benefits $ 34,963,797 $ 32,223,303 $ 32,735,110 $ 33,400,735 $ 34,134,180 Administration $ 2,866,851 $ 2,903,337 $ 2,956,320 $ 3,005,047 $ 3,054,596 Instruction $ 3,351,705 $ 3,009,067 $ 3,058,269 $ 3,108,302 $ 3,159,180 Total $ 114,879,543 $ 113,247,218 $ 114,123,789 $ 113,861,757 $ 116,043,004 * In the District utilized refunding bonds to refinance debt **Inter-fund transfers associated with the construction of the AP Farm Athletic Fields as well as the transfer of funds approved by the voters of the community (May 15, 2012) to be utilized to replace roofs and boilers Katonah-Lewisboro School District Page 9

13 Special Education The Special Education program strives to provide a comprehensive educational experience for students with disabilities, ages three to twenty-one. The program provides assistance and services to students identified as disabled under provisions of Education Law by the Committee on Special Education for school-aged children, ages 5-21 years of age, and by the Committee on Preschool Special Education for preschool children, ages 3-5 years of age. Each student classified as disabled has an Individualized Education Plan that is developed to provide an appropriate educational program and related services in the least restrictive environment. Most school-age children may receive their program and services within the district, although some students receive their education outof-district in a BOCES program. Some students are educated at a State Education Department approved day program, with the fewest educated at a residential school or at home. Many preschoolers with disabilities are provided itinerant services in their home or at their current preschool. Others may receive their services in an integrated special education program or a selfcontained special education program. On October 2, 2013, the enrollment of the District s school-age students with disabilities was 492 (compared to 502 in 2012, 540 in 2011, 587 in 2010, 591 in 2009 and 574 in 2008). This represents approximately 13% (compared to 14.2% in 2012, 15.1% in 2011, 15.6% in 2010, 15.3% in 2009) of the K-12 enrollment. The October 2013 count of preschool students with disabilities was 37 (as compared to 39 in 2012, 44 in 2011, 56 in 2010 and 68 in 2009). Ninety-three percent (93%) of school-age students with disabilities are educated in district programs, with the remaining seven percent (7%) in out-of-district programs (33 students). A professional staff that includes 38.0 FTE special education teachers, 1.0 teacher of the deaf and hearing impaired, 6.0 FTE speech and language therapists, 6.0 FTE school psychologists, 6.0 FTE social workers, 2.0 occupational therapists and a 1.0 FTE physical therapist serve the district population of students with disabilities. In addition, the District employs a number of teaching assistants, teacher aides, and contracts with a part-time speech and language therapist, a teacher of the visually impaired, an occupational therapist, and Board Certified Behavior Analysts (BCBA s). The administrative team includes a 1.0 FTE director, 2.0 FTE special education supervisors and a 1.0 FTE CSE/CPSE Chairperson. Thirty-nine (39) students with disabilities completed their secondary education in June Twenty-two (22) with Regents diplomas, eleven (11) with local diplomas and six (6) with Individualized Educational Program (IEP) diplomas. Katonah-Lewisboro School District Page 10

14 SPECIAL EDUCATION HISTORY Actual Actual Actual Actual Actual Equipment 11,916 13, Contract Expense 3,255,406 3,233,389 3,578,852 3,583,631 3,618,192 Supplies & Materials 57,341 64,924 47,690 83,817 40,189 Total Non-Personnel $ 3,324,663 $ 3,311,360 $ 3,626,542 $ 3,667,448 $ 3,658,381 Salaries 7,790,422 7,840,174 8,272,394 8,241,558 7,979,057 Total Expenditures $ 11,115,085 $ 11,151,534 $ 11,898,936 $ 11,909,006 $ 11,637,438 CURRENT & PROJECTED Budget Projected Projected Projected Projected Equipment 3,000 3,000 3,030 3,060 3,091 Contract Expense 3,394,252 3,718,350 3,804,698 3,893,402 3,984,539 Supplies & Materials 37,495 37,995 38,574 39,162 39,760 Total Non-Personnel $ 3,434,747 $ 3,759,345 $ 3,846,302 $ 3,935,624 $ 4,027,390 Salaries 8,103,414 8,516,998 8,673,325 8,832,544 8,994,708 Total Expenditures $ 11,538,161 $ 12,276,343 $ 12,519,627 $ 12,768,168 $ 13,022,098 Katonah-Lewisboro School District Page 11

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16 Technology The mission of the technology program at Katonah-Lewisboro School District is to implement and support dynamic and reliable technology services in a rapidly advancing technological and global economy for students, teachers and staff. Technology services are integral to learning in the 21st century, data analysis, access to information, and to facilitate collaboration and communication. Regular evaluation of the use of technology systems throughout the District reinforces the need for sustaining current levels of technology, as well as providing professional development and support services that will meet educational and administrative goals. Reducing the cost of ownership without compromising the educational needs of the end users is a necessary part of this effort. A staff of seven (six employees and one BOCES technician) provides leadership and technical support for a network system consisting of approximately 1,600 client devices over 25 servers. There are 11 computer labs in the District. Two Computer Aides provide support to students and teachers. John Jay High School and John Jay Middle School have ubiquitous wireless access that supports wireless technology. Each elementary school has ubiquitous wireless access that supports each building s wireless laptops. Professional development is coordinated by the Professional Development Team and the Director of Technology along with the Southern Westchester BOCES Lower Hudson Regional Information Center. This professional development is provided as part of the comprehensive training offered during staff development days and workshops throughout the year. The Director of Technology provides an overview of several vital applications for teachers during new teacher orientation. The Office of Technology supports approximately 30 program-specific software titles for students. The Office of Technology maintains the software and fulfills the data requirements for the following management applications: Student Management, Special Education, Curriculum Planning, Library Management, Food Service, Transportation, Nursing, Operations & Maintenance, Business Office systems, Security systems and State reporting. The Office of Technology maintains a VOIP phone network with approximately 650 classroom and office phones, and fax machines. Pilots for the integration of wireless technology are in place utilizing ipads (at IMES) and Chromebooks (at MPES). A majority of teachers have received ipads for their professional use. A Mac mini server has been placed in every building. A BYOD (Bring Your Own Device) wireless network has been installed at the High School and is available to all JJHS students. The District purchases the majority of its technology equipment through BOCES and thereby receives approximately 36% of the cost returned as BOCES aid. Part of this process includes steps to insure the most competitive prices for the equipment and services. Katonah-Lewisboro School District Page 13

17 TECHNOLOGY HISTORY Actual Actual Actual Actual Actual Equipment 5,816 3,149-1,593 16,869 Contract Expense 1,150,168 1,014, ,830 1,090,079 1,098,751 Supplies & Materials 193, , , , ,868 Total Non-Personnel $ 1,349,838 $ 1,153,973 $ 1,044,609 $ 1,231,215 $ 1,291,488 Salaries 1,066, , , , ,898 Total Expenditures $ 2,416,374 $ 1,894,210 $ 1,716,091 $ 1,918,457 $ 1,953,386 CURRENT & PROJECTED Budget Projected Projected Projected Projected Equipment 40,000 40,000 40,400 40,804 41,212 Contract Expense 1,306,344 1,345,753 1,365,834 1,386,216 1,406,902 Supplies & Materials 170, , , , ,726 Total Non-Personnel $ 1,516,515 $ 1,592,896 $ 1,615,873 $ 1,639,186 $ 1,662,840 Salaries 718, , , , ,426 Total Expenditures $ 2,235,151 $ 2,348,878 $ 2,386,382 $ 2,424,508 $ 2,463,266 Katonah-Lewisboro School District Page 14

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19 Debt Service Debt service accounts for the payment of interest and principal on the District s debt. Katonah-Lewisboro Schools utilizes four types of debt instruments. To finance capital acquisitions and construction, long-term serial bonds are issued. For assets with a shorter useful life, such as buses, and minor repairs and renovations to buildings, bond anticipation notes are used. Maturity for these issues is five years. Tax anticipation notes are short-term obligations issued at the beginning of a fiscal year in anticipation of the receipt of real property tax revenues. They are used to fund the District s expenditures for the first three months of the year and are repaid as soon as tax revenues are received. Installment purchase obligations traditionally finance the purchase of copiers, printing, and mailing equipment over a multi-year period. Short-term interest rates are projected to increase slightly. Moody s Investors Services continues to assign the District with a credit rating of Aa2. The District s outstanding serial bonds totaled $29,335,000 as of June 30, The District continues to benefit from the advanced refunding bond sale of December Savings are approximately $70,000 annually. During the school year the District once again refinanced some of it s of serial bonds resulting in additional savings of approximately $50,000 annually. The District had $1,182,000 in bond anticipation notes as of June 30, Continuation of the bus replacement program will require approximately $1.0 million in new issues in through the end of this projection. There is generally a one year period of time between when debt is first issued and when the first principal and interest payment is due. As you will see a significant amount of debt is satisfied beginning and continuing through Katonah-Lewisboro School District Page 16

20 DEBT SERVICE HISTORY Actual Actual Actual Actual Actual Construction Bond/BAN Principal 4,355,000 4,505,000 4,560,000 4,540,000 4,785,000 Construction Bond/BAN Interest 2,047,675 1,877,015 1,697,665 1,524,444 1,224,108 Construction Bond Total 6,402,675 6,382,015 6,257,665 6,064,444 6,009,108 School Bus Principal 473, , , , ,000 School Bus Interest 50,723 35,238 15,383 6,155 13,735 School Bus Total 523, , , , ,735 Other Principal 206, , , ,132 80,055 Other Interest 21,584 13,138 5,584 6,063 1,180 Other Total 228, , , ,195 81,235 Total Expenditures $ 7,154,940 $ 7,219,322 $ 6,806,451 $ 6,462,794 $ 6,565,078 $6,479,286 ** CURRENT & PROJECTED **Escrow Transfer Budget Projected Projected Projected Projected Construction Bond/BAN Principal 4,945,000 5,165,000 4,315,000 1,655,000 1,720,000 Construction Bond/BAN Interest 1,044, , , , ,294 Construction Bond Total 5,989,208 6,009,475 4,937,206 2,151,072 2,156,294 School Bus Principal 395, , , , ,400 School Bus Interest 8,070 10,819 26,514 38,556 48,776 School Bus Total 403, , , , ,176 Other Principal 52, Other Interest Other Total 52, Total Expenditures $ 6,444,650 $ 6,584,694 $ 5,528,120 $ 2,954,028 $ 2,924,470 Katonah-Lewisboro School District Page 17

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22 Operations and Maintenance Operations and Maintenance covers custodial, maintenance, grounds and warehouse services for the District s six schools and District Office. Custodial services provide for the daily cleaning, minor repairs and necessary services to maintain an optimal learning environment. The maintenance staff provides care for all mechanical and electrical systems as well as upkeep of all grounds and fields in the District. The warehouse is the central receiving and delivery location for the majority of equipment. In addition, central printing services including mail and delivery services are provided by the warehouse staff. The Operations and Maintenance Department's needs expressed in this document were developed based on priorities and groupings of projects that are essential to the safe operation of the schools and to preserve the capital assets of the District. An inter-fund transfer to the capital fund in the amount of $200,000 is included for and This amount is increased to $400,000 in and These funds will be utilized to address regular upkeep and maintenance of district systems and building component needs. The Operations and Maintenance budget is influenced by a number of variables including the following: The number of personnel necessary to service and maintain buildings and grounds 3.0 FTE groundskeepers care for seven sites and athletic fields on over 173 acres FTE custodial workers, and 6.0 FTE maintenance workers clean and maintain 658,960 square feet of buildings 4.0 FTE office staff consisting of a Director, Assistant Director, secretary and data clerk 2.0 FTE print shop/warehouse/courier More than 5,300 building use events were supported by the department in Ongoing training and cross-training of department employees is provided The replacement of aging custodial equipment and implementation of more sustainable cleaning practices The need to replace mechanical and electrical equipment The need to maintain a sound preventive maintenance program Emergencies can and do change priorities immediately including vandalism, equipment failure, weather-related damage, newly discovered health-related or safety issues Utility costs are an unpredictable area for budgeting and subject to wide variation, but we continue to target ways to reduce energy costs. The Energy Performance Contract, if approved, will have a positive effect on energy usage. There are continuous changes in regulatory mandates, resulting in additional equipment and more extensive testing, reporting and associated administrative time Katonah-Lewisboro School District Page 19

23 OPERATIONS & MAINTENANCE HISTORY Actual Actual Actual Actual Actual Equipment 32,165 13,647-22,915 25,299 Contract Expense 2,562,929 2,558,818 3,366,651 2,608,935 4,042,304 Supplies & Materials 569, , , , ,961 Total Non-Personnel $ 3,164,623 $ 2,950,606 $ 3,755,161 $ 3,054,302 $ 4,457,564 Salaries 4,062,819 4,049,977 4,007,411 3,967,233 3,831,468 Total Expenditures $ 7,227,442 $ 7,000,583 $ 7,762,572 $ 7,021,535 $ 8,289,032 CURRENT & PROJECTED Budget Projected Projected Projected Projected Equipment 60,000 15,000 15,150 15,302 15,454 Contract Expense 3,119,863 3,118,460 3,219,698 3,525,143 3,634,989 Supplies & Materials 403, , , , ,557 Total Non-Personnel $ 3,582,963 $ 3,651,410 $ 3,760,550 $ 4,074,015 $ 4,192,000 Salaries 3,844,733 3,927,613 3,996,472 4,066,539 4,137,835 Total Expenditures $ 7,427,696 $ 7,579,023 $ 7,757,022 $ 8,140,554 $ 8,329,835 During the school year, the Board of Education commissioned an audit of the Operations and Maintenance Department. The report demonstrated that the District's Operations and Maintenance Department is very efficient. Recommended staffing increases have not been factored into this forecast Katonah-Lewisboro School District Page 20

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25 Transportation The Transportation Department is charged with providing safe busing service for approximately 3,700 students to and from school each day as well as to and from approved athletic and instructional events. This service is provided in accordance with policies established by the Board of Education and NYS regulations. Current policy permits students attending District schools in grades K-5 to walk up to one-half mile, and for students in grades 6-12, up to one mile to a school or bus stop. Regulations require that students attending private or parochial school must be provided transportation to schools within 15 miles of their home and up to 50 miles in the case of special education students. Wages for salaried employees are included within the staffing projections in this report, while the bus replacement schedule is covered under the debt service section of this report. The Transportation budget is influenced by a number of variables including the following: this year the District provides transportation service to 58 different locations in accordance with regulations the District currently has a fleet of 90 vehicles, 43 of which are 78-passenger buses and 42 are passengers vans or suburban-type buses, and 5 wheelchair-accessible vans during the school year the district fleet logged 1,264,070 miles there are 209 students being transported to non-public schools this year there are currently 32 special education students transported to out-of-district schools all buses are maintained by a staff of six mechanics in a garage attached to Katonah Elementary School all transportation staff members are required to attend two mandatory refresher training courses each year Projections assume: current mileage limits established by Board policy will continue price of fuels has vacillated significantly and will continue to place pressure on future budgets the same level of programs will be offered to students the operating times of the schools will remain the same-three-tiered system the level of services provided to students (after school late runs, athletic program, field trips) will remain the same the number of out-of-district placements (special education or private/parochial) will remain stable the school boundaries established by Board policy for four elementary schools will remain the same there will be no dramatic increases in fleet insurance costs Katonah-Lewisboro School District Page 22

26 TRANSPORTATION HISTORY Actual Actual Actual Actual Actual Equipment 29, , , ,035 Contract Expense 279, , , , ,924 Supplies & Materials 870, , , , ,200 Total Non-Personnel $ 1,180,032 $ 957,984 $ 1,119,298 $ 1,206,850 $ 1,947,159 Salaries 3,736,559 3,803,514 3,701,147 3,637,941 3,569,465 Total Expenditures $ 4,916,591 $ 4,761,498 $ 4,820,445 $ 4,844,791 $ 5,516,624 CURRENT & PROJECTED Budget Projected Projected Projected Projected Equipment 2,000 17,000 17,170 17,342 17,515 Contract Expense 231, , , , ,925 Supplies & Materials 963, ,500 1,003,680 1,044,677 1,087,580 Total Non-Personnel $ 1,197,319 $ 1,189,218 $ 1,232,543 $ 1,277,780 $ 1,325,020 Salaries 3,764,343 3,817,545 3,881,835 3,947,226 4,013,736 Total Expenditures $ 4,961,662 $ 5,006,763 $ 5,114,378 $ 5,225,006 $ 5,338,756 Expenses for transportation are a reflection of changes in public school enrollment and the number of special education and non-public school students that must be serviced in accordance with the Education Law. With the district s public school enrollment forecasted to stabilize/decrease, and assuming non-public school and special education service requirements remain about the same, staffing needs for transportation should level off. It must be noted - in the District returned to a three-tiered transportation system. In addition, in the District purchased buses directly from the General Fund rather than utilizing BANS Katonah-Lewisboro School District Page 23

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28 Benefits Benefits consist of obligations of the District that exist due to federal and state requirements and the outcome of collective bargaining with three recognized employee associations. Social Security and state retirement costs are based on a percentage of salaries. Although the Social Security employer tax rate is currently stable, state retirement system contribution rates are not. Both the Teachers Retirement System (TRS) and Employees Retirement System (ERS) are once vacillating significantly. This projection anticipates that the employer contribution rate associated with both retirement systems will change as follows: (These estimates are completely speculative on our part. NYS has not published estimates beyond ) Forecast assumes the District contribution related to the Teachers Retirement System will increase by 7.69% in , and then remain flat through Projected contributions are compounded by salary modifications. Forecast assumes the District contribution related to the Employees Retirement System will decrease by 4.56% in , decrease by 4.78% in and then remain flat through Projected contributions are compounded by salary modifications. Health insurance benefits is a budget category that is increasing faster than the rate of inflation. In this case, costs are not salary driven, but rather driven by the ever increasing cost of health care. For this forecast, the rate of growth is estimated at 3.0%. This number will likely be refined further as the school budget is developed. As of January 1, 2014, the Katonah- Lewisboro School District will no longer be self-insured. During the school year the Board of Education utilized the services of a health insurance consultant to assist in the evaluation of the current prescription drug plan. In October 2012 a new Pharmacy Benefit Manager was selected. This modification saved the District approximately $300,000 per year. The consultant continued their work; and during the spring and summer of 2013, all of our labor associations agreed to switch from a self-insured plan to a premium based plan. A January 1, 2014 change to the NYS Health Insurance Plan has impacted our projections dramatically. Teachers, support staff, and administrators all pay a share of the cost of their health insurance. Katonah-Lewisboro School District Page 25

29 BENEFITS HISTORY Actual Actual Actual Actual Actual NY State Retirement 4,559,511 3,952,344 5,703,261 6,812,190 7,599,341 Social Security 4,442,390 4,352,937 4,149,229 4,054,840 3,989,600 Required Insurances 732,886 1,116,296 1,084,598 1,050, ,663 Health Related Insurance 13,062,321 15,264,277 15,556,687 15,206,054 13,449,087 Retirement/Leave 1,391,102 1,755,890 2,172,870 1,369,879 1,875,696 Total Expenditures $ 24,188,210 $ 26,441,744 $ 28,666,645 $ 28,493,108 $ 27,845,387 CURRENT & PROJECTED Budget Projected Projected Projected Projected NY State Retirement 10,321,954 10,938,516 10,916,755 11,031,378 11,147,388 Social Security 4,260,959 4,342,769 4,426,150 4,511,132 4,646,466 Required Insurances 1,041,652 1,131,200 1,146,925 1,165,708 1,187,417 Health Related Insurance 17,864,352 14,690,554 15,122,215 15,566,645 16,024,222 Retirement/Leave 1,474,880 1,120,264 1,123,065 1,125,872 1,128,687 Total Expenditures $ 34,963,797 $ 32,223,303 $ 32,735,110 $ 33,400,735 $ 34,134,180 Katonah-Lewisboro School District Page 26

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31 Administration & Supervision of Schools (includes administrators, clerical staff, nurses, school monitors, etc.) Administration and supervision of schools combines the operation of all schools, site supervision, the District Office, and the Business Office. At the school level, this category includes staff not specifically assigned to the instructional program. This would include principals and assistant principals, secretaries, clerks, monitors, nurses etc. and also hourly wages for certain employees. All schools have the same general model for school management: administration, clerical support, nurse services, and student supervision. District elementary schools each have a principal and an assistant principal, two clerical staff, one full-time nurse, along with monitors that provide supervision of the cafeteria and playground areas. The High School and Middle School have similar models but expanded staff in all categories. At the district level, Central Administration consists of the Superintendent, Assistant Superintendent for Human Resources, Assistant Superintendent for Business, Assistant Superintendent for Instruction, and School Business Administrator plus two clerical personnel. The Human Resources Office consists of two support staff and the Business Office consists of seven support staff. Other than the cost of personnel, the largest expense is for contract services. Examples of items in this area include BOCES administrative charges, legal and auditing fees, tax certiorari judgments, general liability insurance, and fees associated with payroll, personnel, and accounting systems software. Katonah-Lewisboro School District Page 28

32 ADMINISTRATION & SUPERVISION OF SCHOOLS HISTORY Actual Actual Actual Actual Actual Equipment ,136 Contract Expense 2,867,163 3,077,878 2,540,064 2,308,482 2,847,430 Supplies & Materials 204, , , , ,450 Total Non-Personnel $ 3,071,682 $ 3,254,375 $ 2,688,930 $ 2,448,361 $ 3,036,016 Salaries 7,961,848 7,140,839 6,902,905 6,735,027 6,440,896 Total Expenditures $ 11,033,530 $ 10,395,214 $ 9,591,835 $ 9,183,388 $ 9,476,912 CURRENT & PROJECTED Budget Projected Projected Projected Projected Equipment - - 5,000 5,050 5,100 Contract Expense 2,678,138 2,714,624 2,759,927 2,805,885 2,852,625 Supplies & Materials 188, , , , ,870 Total Non-Personnel $ 2,866,851 $ 2,903,337 $ 2,956,320 $ 3,005,047 $ 3,054,595 Salaries 6,704,252 7,229,381 7,381,642 7,537,205 7,696,143 Total Expenditures $ 9,571,103 $ 10,132,718 $ 10,337,962 $ 10,542,252 $ 10,750,738 This category includes administration and supervision of the District. It includes staff in school building offices, the District Office, Business Office, and Human Resources Office. At the school level, this category includes staff not specifically assigned to the instructional program. This would include principals and assistant principals, secretaries, clerks, monitors, nurses etc. and also hourly wages for certain employees. Contract expense includes BOCES administrative charges, some insurance expense, contracts for payroll, personnel and accounting computer software and other purchased services such as legal and auditing services. Operations and maintenance and transportation administrators are not included here, but are in their specific functions. Katonah-Lewisboro School District Page 29

33 Administration & Supervision of Schools 12,000,000 ACTUAL CURRENT PROJECTED 10,000,000 8,000,000 Dollars 6,000,000 4,000,000 2,000,000 0 School Year Equipment Contract Expense Supplies & Materials Salaries Total Expense Equipment allowances for office equipment Contract Expense cost for maintenance of equipment, BOCES administrative charges, insurance and professional services Supplies & Materials supplies and materials used in school offices and central offices Salaries salaries of staff, hourly expense for monitors and associated overtime expense Total reflects all expenses associated with the administration and supervision of schools Katonah-Lewisboro School District Page 30

34 Tax Cap Supplement In June 2011, the New York State Legislature enacted a property tax cap that seeks to limit the annual increase in the tax levies of local governments and school districts. The legislation provides school districts with a formula, determined by New York State, to calculate each municipal entity s tax levy limit. Commonly referred to as a 2% cap, this phrase is actually a misnomer, as the individual calculations showed in the first year to produce tax caps below and above 2%, depending on a variety of formula factors. A budget at the cap or below requires the same simple majority (50% plus one vote) that all school district budgets have needed in years past for passage. A Board of Education, at its discretion, also has the ability to present a budget increase above the allowable cap. Passage of a budget above the cap requires a 60% super-majority for budget passage. As it did for the budget, the Board of Education of Katonah-Lewisboro has publicly taken the position that it will not attempt to propose a budget in excess of the cap for ; and furthermore will present a budget with a 0% increase. There were multiple reasons cited for this, but the two most significant were the following: Evidence provided by our Finance Committee that our community is already paying a significantly higher percentage of their income in property taxes than all other Westchester districts. The Board of Education is committed to controlling the growth of annual expenditures to a level that is at the tax levy cap or below. The difference between the prospective growth of our expenditure budget and the growth of our tax levy under the cap is our structural deficit. That structural deficit is the amount we must cut every year to stay at the tax cap. The graph on the accompanying page demonstrates how the rate of growth of the expenditure budget compares to the rate of growth of the revenue budget. Based upon the expenditure forecast outlined in this FACE report and our estimates for revenue growth under the cap, it is estimated that the district will be in a balanced budget (expenses to revenues for through with a slight structural deficit projected in the fiscal year. Unanticipated increases in health care, and/or retirement system contributions (not to mention other expenditure increases) could impact this projection. With the cooperation of our labor associations, changes in our healthcare providers, and strong performance in the State s retirement system investments our forecast for balanced expenditure and revenue budgets is good. Katonah-Lewisboro School District Page 31

35 $116,150,000 $115,650,000 Expenditure Projection Compared to Tax Cap Projection 116,043, ,001,574 $115,150,000 $114,650,000 Rev and Exp Balanced $114,150,000 $113,650,000 Rev and Exp Balanced Rev and Exp Balanced Revenue Forecast $113,150,000 Rev and Exp Balanced $112,650,000 $112,150,000 $111,650, Modifications in our Collective Bargaining Agreement coupled with declining debt and health care changes Have helped to bring our projected revenues under the tax cap in-line with our forecasted expenditures *Assumes CPI at 1.6% for 2013 and 2% for all successive years Katonah-Lewisboro School District Page 32