001[music] meeting order. Roll call, please. Roll call. Miss Nyman >> here. >> Miss Scott. >> Mr. Brad Uptogrove >> here. >> Mr. Roger Upgroo >> here. >> Mr. Mr. Zawada >> here. >> Mr. Broofphy, Miss Dirof >> present, >> Miss Kratz >> here, >> Mr. Penella >> here. >> Seven of nine pledge allegiance to the flag of the United States of America and to the republic for it stands. One nation under God, indivisible with liberty and justice for all. us to >> brings us to public comment number one. Mr. Emmy just pushed the button. Great. Yes, sir. >> John Amy, New Hover Township. Um really looking forward to the discussion tonight on both the budget and um how we're trending during the year. Um really excited to what I what I've seen in the presentation
002so far. Um and and and see loving to seeing the two loving to see the two years of budget forecasting that you know I I agree that it's extremely important that you actually get the budgeting forecasting right not just in not just in making sure you don't spend too much but actually also making sure you don't overestimate what your costs are. Because you may it may look good, for example, to see a $15 million project come in at $9 million, but you can actually look at that in a constrained environment as actually being a bad thing because that $6 million you either could have used for something else or for uh or you could have you could have said we could have gotten by with $6 million fewer and maybe wouldn't have to tax the
003district as much. So, I'm really excited to see the transparency and I'm especially excited to see the beginnings of budget attached to goals because money is just there to facilitate the strategy. So, I'm really really looking forward to this conversation. Couple things I'd like to to see. Hopefully, we'll get that in the presentation tonight. Um, as far as the how we're trending for the year. Um hopefully you're going to go into a little bit of depth on the explanation for the two big drivers for why we actually budgeted for a deficit but are actually trending towards a favorable variance at the end of the year and that's the um $ 1.5 million fewer expenditures uh fewer expenditures and salaries. Um want to know what that impact means. Does that mean you hired fewer teachers? Is
004there another reason for that? also like to learn a little bit more about the reductions you got back because of prior year refunds which is usually I don't you don't usually see that be such a percentage of your budget that looks like 1% of the overall budget when normally it's about.3 point4 so I want to find out um why [clears throat] we were build you know why we build for stuff the previous years that ended up being less expensive was it because you got some grants that helped you reduce that were you overcharged for things just want to learn a little bit more about it though. But in general, really excited to see and I guess the last thing I would love to see about see discussed tonight in a little bit more detail is
005um when you're talking about the two-year budget tonight, what are your plans for the uncertainty um that's coming out of both our federal and our state governments as far as monies that you expect from the federal and the state government going forward the next couple of years? I know it looked like you planned for it in the first part of the budget. second part of the budget looks like you're making assumptions that we're going to go back to normal and um just want to know what your thinking behind that is and hopefully you've done some scenario planning in case we still have that kind of uncertainty going forward. Oh, and finally, last thing, loving to see that budget transfers to fund balances are actually out appearing as line items because I know in the last
006several years, we've had somewhere between 20 $25 million that was transferred out of the operating funds into the capital reserve funds and that was never really in the past never really voted on and never really made clear in the discussion. So, I'm really really happy to see that because that lets us decide, do we need to do that? That's a lot of money to take out of operating expenses. How are we planning for that? Thank you. [clears throat] All right. Well, good evening everyone and welcome to our finance committee meeting for November. Uh this evening we do have some discussion and information to share with the board and with our community. We have two items. We want to first dive into a little bit of outlook on budget forecasting as Mr. Amy, our speaker shared
007with you tonight. done some forecasting um for some of the future, some discussion points that we want to lead with uh the board and then uh give you a uh little snapshot of our current 2526 budget uh as it does exist now and answering some of those questions that I think were were brought up by our speaker or relative to this. So, I'm going to turn things over to Mr. Lent to drive us through the two presentations that we do have for you this evening. And um uh we have a lot of information. Feel free to stop and ask questions if there's something needs to be explained. Uh this needs to be conversational. Um and that's what a committee meeting is really driven to be. Okay, Mr. Lent. >> Thank you, Dr. David. So to
008begin with, just wanted to make sure we all have a common understanding as we look at budget forecasting. Uh we're starting to look at the 2627 budget um to identify how budget and spending aligns to what you know we see as the needs in the district. Um but it is a process. So I you will use the analogy this is kind of the first step of that process. Um as we develop the budget in particular for this year we still do not have our final allocations from the state for 25 to 26 budget. So when we talk about revenues and projections, there's some limitations based upon not having current year data to be able to then translate into the um upcoming budget year data. The other piece is that as we wind down from the
009spending and grants that we received during the pandemic, um we're transitioning those to the general fund and we're trying to identify um funding sources that we may continue to get. Some of those are linked to the state budget such as PCCD which is used for safety, security and mental health. Um but you know the what we have tonight is a good road map ahead to share with you about um what we see in the budget and uh on the next slide we'll talk about some of the considerations in more detail. So we're going through this process to get a baseline to make strategic decisions for the district. Also with forecasting, it can continue to be built out that over time we look at multiple years of a forecast to be able to ascertain our overall
010financial condition. Decisions we make with regards to tax increases or adding expenditures can increase us in subsequent budgets, and we need to understand how those factor into a one-year budget that has to be approved by the board. Uh finally, we're under act one. So that limits our ability to levy taxes um and comply with regulations. And this is a great step to understand if it seems doable for us to develop a budget that is within the act one index. The next consideration is revenue is a driver of what we can spend as a district. Um driving those revenues predominantly are local revenues. So, real estate taxes, earned income taxes, real estate transfer taxes, uh fees. Other drivers are state revenues, um and those include subsidies that we get traditionally, but [clears throat] also the ready
011tolearn block grant, which is how the state is driving out additional funds to the district. When they drive out those funds, those have specific uses that we have to apply them to. So, it's not unrestricted in a sense. Um and again um that's driven um to a disadvantage in this forecast because we don't have the numbers for the current year budget. And then the final piece is our federal revenues um for for title IDA for special education. Um we have to consider those as revenue sources uh within the budget. On the expenditure side, personal and benefits really drives our overall costs as a district. Um, in particular, costs associated with the benefits, um, such as benefits and health care can, um, increase well above what we may increase taxes and well above what the act
012one index is. Um, the pension rate has stabilized. um and also for personnel were tied into contractual agreements um that are already in place that drive those increases in those agreements. Second major pressure is special education costs. So we have those costs for our students as well as tuition costs and in particular charter tuition costs that uh more often than not are um build to us for special education. Um and that's a higher rate that we pay to those charter schools. So that's a big driver because um students that enroll, we pay off of our special education cost rate to those charter schools um as part of the state formula. And that's an absolute. So what that means is that those increase exponentially for us because students that you know enroll in charter schools um
013are identified as special education and that's a higher bill for us to pay. That's almost a $30,000 bill uh for those um students regardless of whether it's a brickandmortar charter or a cyber charter school. um other pressures so transportation we have a contractual agreement that agreement I'll talk later is tied to the actto index also the cost for utility supplies have increased with inflation and then finally on the expenditure piece our debt service obligations as well as desire to allocate funds specifically and strategically for capital projects. Final consideration fund balance. So part of our stability and credit strength in particular during this state budget impass our ability to pay bills has been tied to that fund balance. Uh that also is a stability for us to generate interest on both the generating general operating budget
014as well as on the capital reserve budget um to increase those funds. And again we've seen that play out during this state budget impass for cash flow. And so, um, we've seen that that's a benefit to maintain a strong fund balance, um, to be able to continue to pay bills. So I want to first identify some trends that I looked back at prior years of data and want to give a perspective that factor into this forecast because what I'm going to go through leads to a recommendation to align the revenue projections with some historical history of what's actually been received as revenue. Um, so when we look at earned income tax, um, that's been paid by the district. Um, recent data actuals indicate that that's around a $10 million number for the sake of discussion.
015Um, our budget for this year was 8.5 million. So when you look at these, and I'm going to go through a couple other slides, you know, with the indication that that has been a $10 million actual line item, um, that's the basis for what we put into the budget. um in consideration of any significant changes to what's generating that revenue. So for example, if we were um clearly headed in an adverse economic direction, um we might want to adjust that number down based upon the actuals. If we had reason to believe that that number would significantly increase, we'd want to adjust it significantly upward. Um but from the budget of eight and a half million for 56 what you'll see in the forecast is that that's been adjusted to represent the actual you know revenue
016number for the district um based upon that trend. >> Yeah. >> I haven't been able to um actually identify it. I think some of it related to delays that were put into effect with filing um during the pandemic and how those revenues flow because earned income is actually filed on a quarterly basis. Um but then it's filed quarterly with the EIT office where your business is and then transmitted to where you live. So that I think that's some of that problem um you know with it but I do see that as a outlier year when we look at the most two current years of trends. Good question. Delinquent real estate tax. Uh similarly we've seen that be pretty consistent at a million dollars if not slightly more. Our 2526 budget had $600,000 in there for
017uh delinquent real estate tax number. Uh [clears throat] again, this is um based upon a history, a number that we can align to reflect the revenue that we anticipate, but also we want to be cautious with this that we don't just take the highest number um but that it's aligned to what we expect to receive for delinquent revenue and also knowing that you know if there is any tax increase next year and everything stayed the same, the delinquent balance is going to go up probably by that that percentage of what that increase is. interest income. So, [clears throat] as we've increased our fund balance, uh interest income has grown. Um that in particular has been seen in the pandemic. Um coming out of that with interest rates rising as well as your fund balance. Um
018so that number in the most recent year is 3.6 million. The prior year 4.2 the year before that $2.5 million. The 2526 budget um has 1.25 million in it for uh expected revenue from interest. Again um based upon the historical trend that number can be um adjusted um reasonably and also um adjusted that we consider that there may be some downward movements in interest rates in the environment. Um but that um we can still adjust the number to account for um what we see as to a fund balance and generated interest for that number. [snorts] >> Yep. So in the savings accounts um and I think may have gotten this answer before. Are we protected as a school district compared to an individual with FDIC if the bank were to go down? >> That's a
019great question. So um we are protected with the principle that we invest. Um there's actually a requirement called collateralization that the banks actually have to maintain direct cash for the cash that we invest in them where we're not protected as an any investor is in an interest rate environment if liquid funds rates move down. But that's one of the strategies that we can take advantage of and build out our investments knowing that you know we have funds that are available but we don't spend immediately. So when you think of a school year uh you start to get property tax revenue in August and September. So you can spend current funds, potentially go longer term and lock in CDs or other investments that are completely safe to leverage the interest rate because if you just leave
020your money at a floating interest rate, if the market dips, you're going to see this number dip within the budget. And so you want to hedge against that to keep that as a line item stable so that you know it doesn't have a significant decrease due to the rate environment. So, if we're using some of our fund balance, we may have to use some of that to keep afloat till we get money in. Wouldn't that make your interest rate drop because you don't have the money there to get interest on it? >> It would make for what we're um expending drop, >> right? >> Um what we're fortunate is that we rely on local revenues and so those come in as essentially new money or new deposits. um that's what we would spend first and
021then it's really later in the year is when you end up spending um whatever reserves are there. >> Yeah. But this shutdown wasn't back when we were getting tax money in. >> So we just have to ride out July and early August every school year because we don't have tax payments coming in. Once those start to come in, that funds the overall cash flow for the district. So, it doesn't necessarily lead us to dip into to to fund balance. The change now is that with not receiving state funding, that funding hasn't been received to be deposited to earn interest. Um, but that would all be shorter term of an investment because it's coming in during the year and you're going to plan to spend it later in the year for the budget. So all the
022money we have in CDs and all that that's going to stay there. We're not going to have to use any of that. >> Yeah, we haven't we haven't had to access any of that at this point in time >> so far. >> But if we do, then our interest rate will drop. Correct. Because we won't be getting that interest from the bonds. >> Yes. If you if if we had to come to the point to cash out CDs, we would lose that interest rate that may have been locked up that was a higher rate than what we have now. what we go back is when you know things were settled or received the cash, we'd lock in another um you know rate which would as you say be lower um but wouldn't be necessarily substantial
023at this point in time based upon the rate environment. >> How much longer do you feel we have before we have to cash any in? Uh I don't >> nothing is settled from the state and the federal. >> Yeah, I don't see us needing to access um any stabilized investments um up through the very end of the fiscal year where we start to make um some significant payments um in May. >> Thank you. So when we talk about the budget projection and state funding um I spoke about the state allocating to us grant funding. This comes out of um what's called adequacy funding which was the result of court ruling that stated that the state had not adequately funded school districts across the state. Um what the state has to now address is when they
024pass a budget that they include funding that then gets distributed to districts um in an ad on an adequate basis. Uh we have a significant gap um this um court case and our gap is 13.3 million and so so far we've received 1.4 million towards that gap 11.8 8 remains. And so what's important is that we're now talking about an upcoming budget year without knowing our current state funding situation. And so if that adequacy funding that ends up getting passed is significant, that impacts this projection. If it's less than you know it has been in the past, that also changes this projection as a whole because that funding hasn't been received. The other piece is that the adequacy funding ties to factors such as your full day enrollment um your overall enrollment demographics and so
025from year to year the funding can have variations based upon changes to the student population. >> So are we are we expecting that well it's no longer 13 million 11 million. Are we are we expecting that in like one lump sum or is that always going to just trickle in? It's always going to trickle in, but it's always dependent upon the budget because essentially what is allocated to this larger pot, if you think of it like dividing a pizza or pie, is that the money gets allocated and then gets driven out based upon your data as to what you're underfunded, what your population is. And so there's no real way to know until there's a budget how much is allocated, and then how it gets allocated. because if districts have significant increases in enrollment, that
026can um give a larger percentage of the pie and that would take away from our share. So, it's really a moving target. Um it's on a year-by-year basis and until the budget's passed, you don't know it. So, even when you know a normal year we would pass a budget, a number like this is still in question. And so, we try to make a determination based upon data what's reasonable. Um but it is kind of a moving target. >> Yeah, it's a good it's a good question. Two years ago, the ruling said and and the court ruling and the court said yes that that many districts across the state have not been funded in an adequate way. They gave no timeline. They gave no map and roadmap of how to go about and do this. So
027essentially it said yes state you need to do this but didn't direct them in any other way to go ahead and do that. So initially in the first year there were payments we received Boyertown received about $ 1.5 million in adequacy funding. Um to date we've received no other funding um for that and there's really no plan nor nor roadmap. So that this becomes a um component to which um you know and you've heard districts um campaigning to to the state and to its need for you know required funding and such. um to date it it becomes the question as to do you or do you not um you know uh budget this and for this in any particular way. Um you're going to hear Mr. Lens's um you know recommendations moving forward with this
028that we will not um be budgeting for this um until we see that there's uh you know some sort of design as to how this is going to be properly funded um to be able to do that but it is a significant piece. How many districts across out of 700 districts about 300 of those a little under 50% of the districts um would receive some type of funding. um in a way and again it's a variable like Mr. Lent said it shifts each and every year because the formula is dependent upon a number of different factors and enrollment's one of those that drives it and and and so forth. So um you know this is kind of an estimated number. It's not a static number. That number would shift with even within Boyertown from from
029year to year as it is. So, it's a a bit of an unknown that kind of sits out there on top of our already current budget impass that exists. >> So, basically, this was one in a court case. So, I would imagine for us to figure out a payment plan, the school districts are going to have to go back and sue the state again or the education department. >> Yes. >> Possibly in a class action suit. >> Yeah. It's actually a tougher nup because if you put all the cards on the table, there are districts that have been overfunded as part of this because they've seen declines in enrollment and based upon how funding was ruled out in prior to this. It was based upon need drawing a line and saying districts that are, you
030know, so much for a market value or personal income ratio there. So really to wreck it all up, um there's a lot of different moving pieces there. Many of those districts that are in that case don't have a tax base, um have a declining population, and there's the other factor that this the state doesn't want to just pull that from them to give it to districts that have been traditionally underfunded. >> So in other words, we got to do something with the three billion before Shapiro spends it all. So playing this out to the revenue forecast. So looking at 2627, anything that's a state revenue that isn't a calculation is flatfunded. We don't have any basis otherwise. That said, we get reimbursement from the state for pension costs and social security at a percentage. I
031can calculate those because as salary go up it's going to be that percentage of what salaries are. So that's incorporated into here because you know that's an offset to those additional expenditures. When we look at federal funding, I've kept that consistent at this point in time, in particular for title funding, but again, um, that could change, but that seemed like a reasonable estimate at this time when I built out expenditures that we'll see in the next piece and I aligned the revenues that I started with to, you know, this is what our actuals really are. We should budget closer to those actuals. The budget looks like it can sustain a balanced budget or a nearly balanced budget at this point off of a 2% property tax increase. And so from a revenue forecast, if you
032zone in on what I have in the green box, you can see part of how that's happening is we have uh close to um a $2.4 4 million dollar change on local revenue budgets because the history for earned income taxes, real estate transfer taxes, interest, and delinquent real estate taxes is much higher than what we've been budgeting. So, you know, for an example, um our actuals are um you know, really trending um much higher than what we budgeted for this year. And so if we adjust to not only reflect our current actuals but the historical actuals that we've had, we kind of come to what's reasonable for a budget number. So what you'll see is I talked about like earned income being over 10 million. At this time I just put $10 million in there
033because it seems like a safe estimate that reflects the actual number um but adjusts that revenue. And what's important to note is there's only one time that we can do an adjustment to revenues that we see that benefit play out on the revenue bottom line. So when you come to the table next year, you'll have some revenue growth in those, but we won't have a swing like this based upon how we budgeted previously. So that's important to note that that's what's really driving the the 2% number. uh when we look at the expenditures which will be the next part is that we've adjusted those local revenues and most particularly the interest income to be more representative of our actual interest. That's really a a one time a one-year adjustment. So I just want to be
034clear that that that's what that's what's driving this to be less than your historic budget increases is that when you adjust those revenues to be more aligned to the actuals, it drives more revenue into the budget. >> [snorts] >> So overall, because of [clears throat] that d driving, we're going from a budget for this year that had $148.8 million of revenue to a budget of 156.8 million of revenue. And the property tax increase within the budget um is driving a little under $2 million of that. >> [snorts] >> expenditures. So expenditures at this point are projections. Um but we can make some pretty good projection assumptions. The first is our contracts are settled. So we've incorporated teacher salaries that align to the contractual percentages. Um, we also in discussion with the administration um are proposing
035four new full-time positions for professional staff and an estimated cost for those including benefits is included in these numbers. Uh we also have the support staff increase in the budget as well as at this point a placeholder um you know should we move down the line of further adjusting um support staff salaries to market. [clears throat] health insurance increase. It's a 10% increase right now. Um I was at our health insurance trust meeting last week. We're going to get more details as we get into the new year on that. Um but that potentially has some movement on either side of it, but is a pretty reasonable assumption at this point in time. Um our contract for Trent. Yeah. timing. >> We used to have our health insurance come in and give us a talk and
036tell us how our money was being allocated out there, what things we're going for. Um, are we going to start doing that again? >> I was that was that was when you were with Pik. [sighs] >> Yeah, I think I don't remember. >> I'll do some research and follow up back. If not them, I certainly can. Um, I get reports. I can look to put something together. But yeah, they used to come in and they used to say this is going out for medical and it it would divvy out what medical like heart attacks or cancer or whatever and it would show us how proportionate everything was. >> Yeah, we have the information so no doubt we can get you something as an update. >> Um transportation contract. So that contract ties to the adjusted
037act one index. So that means that the base index across the state is 3 and a half%. Our index gets adjusted um because of our demographics. So that's 4.1%. So that contract is built into this projected budget at 4.1%. Uh tuition for students was increased by 5%. Again, there's no way we would know our actual student enrollment. There's also no way we know what tuition placement costs, including charter schools, would be. Um, but it's a reasonable estimate at this point in time. Anything that was discretionary, supplies, uh, service contracts, equipment at this point is in the budget at 3%, but that's definitely a number that we will refine as we go through the budgets and align them to a zerobased approach. Also, specifically within the budget, we know that things come up every year that
038we can't anticipate. Um, and so there's a specific line item in here for a $500,000 budget reserve. um that potentially can be spent in a year, potentially may not be spent. Um the final piece is that built into these numbers and aligned to the revenues is a $3.3 million transfer to the capital reserve. I think it's important that those two bottom numbers be stated so we have a common understanding. We understand what we have for unexpected expenditures and also what our target is to transfer to capital reserve because that really will drive out that funding projection and updates on projects that go into that forecast for future years. When we [clears throat] look at our key forecasted expenditures and these are key so these are like the big drivers in the budgets. um salaries and
039and benefits as a whole, $102 million. Um that's a 1.3% change from the prior year budget. And I state that because the actuals, and we'll get to that um a little later tonight, um don't support a budget um of 101 million that we have for this year based upon the numbers that we're seeing with um you know, actual staff, where their salaries and hourly rates are placed and also the benefit costs. purchase services, which includes um uh tuitions, um other contracted services. Um that's a 3.7% change of an increase from the prior year. That's 34.6 million. And supplies and equipment, a 3% change. That's just shy of $ 8.8 million of your budget. And so, you know, these are [clears throat] the key items. Um on the next page, I'll get into the the overall
040items, but those are really your drivers with most particularly salaries and benefits um being such a substantial part of this overall budget as it is for most school districts. So expenditure forecast. So we have actuals, they're still subject to audit. Um but so far for this year, for this prior year, um salaries and benefits are totaling 87.1 million. Um there potentially are adjustments that will get made during audit with regards to classifications. Um but your budget for this year was $101 million for those. Um so um in looking at additional costs when we again align the budget to represent to the actuals and and actual data and then consider our actual um you know fully staffed rate because we always have positions that are open during a a school year. Um that's where that number
041that number lands as a whole. um professional services. Um when we look at those as um as actuals um those actually come in a little higher than what was budgeted for this year um on the actual basis. Um and again those include any contracted services for staff that work in our buildings in particular um as well as um intermediate unit services. Um you know but so overall that category increases by 3.7%. Um then we look at uh supplies and equipment. Um that's a 3% increase. And then we come down to debt service and transfers. And that's a large increase because what you see there is the addition of funds for capital reserve [clears throat] and the identification of a budgetary reserve of $500,000. So our total expenditures for next year's budget are 156.9 million. The
042prior year we were 150 million.6. And so what we see is when we align to actually state to what our expenditures are, including the capital reserve transfer that's historically been in place and we align the revenues to the actual history for local revenues in particular, we come pretty close to a balanced budget at this point in time with a 2% tax increase. And so of course we have a deficit going into this. Uh but we know that there's some uncertainty around the numbers. Um so this can be worked through. Um also we do have the the capital reserve transfer and the budget reserve transfer in there. So we potentially could adjust those as need be. Um but it seems at this point from the information we have um it a 2% tax increase um would
043be approximately the increase we would need to balance the budget. [clears throat] Just finally some of the accomplishments. So this budget clearly identifies what we anticipate to have to capital reserve. Gives us a budgetary reserve for unex anticipated expenditures. um inserts four new full-time equivalents for professional staff into the budget. And then finally, I can't stress enough, it's really coming together easier this year than in future years or prior years because we're aligning revenues to where they actually are. And we're aligning expenditures to where they actually are based upon what we're seeing hit, which is really how we get to having an identified capital reserve transfer dollar in the budget and uh budgetary reserve. I can move on and um Miss Moyer can move us to an update for this year's budget which um supports
044the assumptions in here and will give you a sense of this year's budget. So this year we've seen that local revenues are trending higher than projected and I purposely identified that in the prior presentation so you could see that trend is not just a single year trend. It's been a trend in how we've been budgeting. Our expenditures year-to- date remain favorable in many categories. Um we've come back to the board with budget transfers, but none of it has um been to the point where budgets are significantly under as a whole where they need to be. We've really aligned budgets to where the spending is taking place. Um for this year, uh the district's projecting positive year balance of 4.3 million. The state budget could impact that with additional revenue or potentially less revenue for that
045at this point in time. Our key drivers for revenues are really that revenues month-to- date for the year 47.4 million. If you look at where they should be monthto date and we've had that question um come from the board that's above budget by about $2.6 million and that's driven by the revenues that are coming in which are local tax revenues at this point in time. It's not state um revenues for that. So overall, even without a state budget, without any anticipation of new revenue in here, overall our revenues are favorable to what was budgeted at 149 million. When we look at expenditures, we can clearly see that significant variances that expenditures are under budget for salaries and benefits um as well as a category for um refunding prior year costs. So, what that is is
046that if we were to receive uh bills from the prior year after we've closed the prior year, um they would go to a prior year category because we wouldn't want a bill to come in and skew the expenditures for the current year. So, it's a best practice of accounting that um those expenditures would go to this. Um this is um pretty well funded from a budget and we haven't seen um significant prior year expenditures. Um so, that's a large variance on here. Um and so overall expenditures um are projected from what we have in place now and and what we can foresee to be under budget by about $4 million. So our projected um budget for the year um has 149 million in total revenues, 146 million in total expenditures. Um, so that's a delta
047to the positive of two and a half million. Um, our annual budget had a proposed deficit of fund balance of 1.7 million. Um, and so when we account for that, we get to a $4 million variance number because we're coming out of having a deficit budget and into a budget that as of now is projected to be positive 2 and a.5 million. [clears throat] >> One question. >> Sure. So, you're not concerned about the outlier that was 2023 when you brought in 2.2 million under what you're budgeting the 10 million for now with the um earned income. And that's and that's because of the I guess 2.5 million you believe we're going to have extra this year. >> Yeah, I've asked uh the collector to get me the data and the the dispersements for that
048year. um and they're in the process of it. But at this point, I don't see where it could have been that low and then jumped the next year because the other side would be, well, what explained the jump? You'd have to have had significant more income being earned, a significant change in a population that was reporting earned income tax, and the the census numbers um you know, for wages don't support that. >> Okay. Do you think um mainly now because of the numbers we dealt with them for three years but now since uh you are here and Mr. Dr. David Eiser us the zero balance you know starting from a zero balance is making a big difference because that's how I always ran my businesses was a zero balance but it seemed like before we
049were working down instead of up. I think what's contributing to it is that I mean I've met with everybody or if I haven't met with them I'm either meeting with them tomorrow or next week you know about their budget. Um but I I think going back to looking at the history is an important part of this because that's really where it's come from right because it's not about the one-year piece. um you know from a zero balance piece I mean again um there's potentially you know more data that we can utilize as part of that process and getting a better handle on what actual expenditures are. So I don't um I don't want to portray that we're necessarily all there yet. Um but I think from having a more acute sense to to the budget
050and the numbers um has allowed us to bring forward to you this data to say this is what our comfort level is with it. >> Anybody else any questions? This brings us to our second public comment period. Mr. Army, >> next meeting. I apologize. >> Any any other questions from the board in regards to projections? Anything with regard to this year? Hopefully, we answer some of the questions. Obviously, the impass continues. there's been mixed messaging coming out from it as to uh settlement of uh I think one of the key things and I think Mr. Doff you were kind of asking this was that you know we get we through [clears throat] the taxing formula in Pennsylvania we receive a large portion of our revenue through um through uh property tax and our collection rates
051are tremendous. We're at 98% collection rates here in Boyertown. So, it's a it's a it's community that that truly does support the efforts of of funding a school district. Um many of those monies are collected as Mr. Lent said. Um you know, August, September are large uh collection periods for that. So that sustainability for us to continue through a good portion of this school year based on that without having to dip into any reserves is pretty key. And that's you're starting to see some articles come out on some other school districts where that's not the case where their funding sources from the state are approximately 50% of their revenue. um versus our school district which is 75% local 20 to 25% from from state and federal. So that maintenance um of maintaining and paying our
052bills and continuing business as usual has allowed us to do that through through the support of our our our local tax. Um you know there will come that time if the impass continues like Mr. Lince said later in this fiscal year. Um but we're not there yet. And um you know we do hope that that that impass can be corrected and and settled uh very soon. >> There's been talk for years, so I don't know if it's going to come about yet or not, but they're talking about reassessing in Burks County. How could that throw Sure. So that would definitely throw uncertainty uh with regards to the assessments. Um school districts do have the ability that when an assessment is complete, they would adjust their millillage and they could only adjust it so that the
053revenue is within a certain percentage of what it was previously. So what we would be doing is working backwards to say if this is our new tax base for assessment um and this is where it's landed what millillage do we need to sustain the revenue in the budget that said I've been through assessment processes um in particular for commercial properties um that's a significant movement because it does involve um legal representation and very often multiple years. And so what can happen then is that um payments can be made in protest, what's called and if they're made in protest um then we have to kind of keep them in a reserve uh for those properties. And if there is a settlement that um indicates a refund, those funds get refunded to them and very often happens
054three to five years down the line. And so that's why you kind of keep those separate than your regular cash, but also could have a revenue hit because if you learn three years later a property is now at a much lower assessment, then that's something we have to adjust for in the budget and it's after the fact of the assessment process. Okay. All right. Well, that concludes our discussion. I think one of the key factors to this and what Mr. Lent has helped us with thus far since coming in as as u with his organization as our interim CFO has been to um key in on um making sure we're as accurate as we can be with presenting to you on both the revenue and the expenditure side. um so that we can bring as
055accurate and as forecasted a budget to you. The goal is here to bring a balanced budget to you. Obviously, we work inside an act one environment. Goal is to never go beyond and take exceptions which we do not expect to do. And you can see we're well below the act one threshold index of 3.5 that um has the ability for for Boyertown to raise taxes down down to a 2% and bring you in very very close to a balance ballot balance budget right now. And again we're we're early in November. We have many many more months to refine this. Um you saw some of the things that we had uh included in this some of the discussions that still need to take place um as to the desire of the board for what it wants
056to transfer. Um, some of the positions you saw in there are highly dependent upon some of the steps that may or may not go forward when it comes to all day kindergarten program and some of the forecasting that we need to do inside of that to be responsible to the if and when or not. Um, so there there certainly are adjustments down the road and um you're going to be presented um you know after the holiday season with a more refined and updated version of of this similar budget to give give you some some more accurate information. Uh hopefully the the state will have gotten their their budget uh in line and and hopefully provided by that point in time. So that should give us some more accurate uh information moving forward as well as
057we were making some forecasted decisions based on some of the implications to what we expect this budget to be in inside of 2526. So thank you Mr. Lent for for your discussion and information this evening. The um the next finance committee date uh is February the 10th, 2026 and that will be um held here at 6 p.m. in the education center. >> I also would like to thank Mr. Lent for your presentation. Um it was very inspirational and it's glad to see that we're very we're in very secured grounds compared to a lot of school districts. So at this point I'd like to adjourn the meeting and we'll wait for this is not a committee >> meeting ajourned. Thank you very much. [music]