001That was the boss. Okay, we'll call this meeting to order and I'll start with by turning on my microphone. We'll call this meeting to order and we will start with the pledge of alleg allegiance. Aliance to the flag of the United States of America and to the republic for it stands nationy andice for all. Okay. Good evening and welcome to this evening's finance committee meeting. Do I have a motion and a second to approve the minutes from our April 8th finance committee meeting? Second. Motion by Dr. G. Seconded by Mr. McBain. All those in favor say I. I. Any opposed? Motion carries. Okay. for our items that are for recommendation for work session and action. Am I turning this over to you, Mr. Linderman? It's up to you. I'd be happy to. There you go.
002I was waiting for the crowd to come in for the budget presentation, so I was going to go slow, but uh we're good. Okay. Um you have a a a a resolution for which the North Pen Cheer Association to do the small games a chance. they have to apply for that through the county. So, we recommend approval for that or moving it on to the agenda. Okay. Do I have a motion and a second? So, moved. Second. Motion by Mr. Rash, seconded by Mr. Fusco. Any questions or comments? So, I have a question about that because they're technically their own um entity. So, why do we need to do anything? Well, they're tech Well, Go ahead, Kyle. Sure. Uh just a number of years ago the treasur's office started um utilizing an interpretation of the
003small games of chance act that these organizations that are run the activities the organizations that they benefit need to recognize them and their benefit to the school district for example. So this is not um the board or the district taking ownership of the organization. It's merely recognizing that they are an organization whose activities benefit the district. Okay. And and technically in in accounting lingo, they are a component unit of the school district. I mean, they're they are only in existence because of you. So, it's that part I get. So, but that but but again, we had to do this for our when I was in Great Valley, every time one of our organizations wanted to do those 5050 5050s or I call them ripoffs. That's what they call them. They and they rip them off
004and you win or not. So, or they So, they do that. It's just a It's pretty pretty typical. Okay. Okay. Thank you for that question and thank you for um thank you Mr. Summers for that explanation. Um and we app certainly do appreciate the work of our booster clubs to support our students. Um all those in favor say I. I. I. Any opposed? Motion carries. Budget transfers. uh you you'll see two budget transfers and I'll have to take the blame for the March budget transfers which you already looked at in March and I forgot to put on the March action meeting. So uh my bad if you want me to if you want this to be my last meeting it can be. Oh wait a minute it is. So but um so I I apologize
005and um so we have them both on there. Um they're both pretty typical. They're getting a little larger because some of the technology things we're buying and and stuff like that are in there. That's why they're you see them see them be a little bigger. My guess is next months will be even larger because you're going to see that that intermediate unit charge we talked about uh at the special finance meeting will come. So uh that's it. So can we do a motion and combine B and C for the month? So so a motion um and a second to approve the budget transfers for both March. Motion by Mrs. Stole seconded by Mr. Fusco. All those in favor say I. I. Any opposed. Motion carries. Review of liquid propane, gas, and filling station maintenance and
006bids. We didn't. My computer's stuck. But u this is to approve the propane for next year for the bus fleet. And uh if I could get to the There we go. If it helps, Mr. Linderman, I'm having the same issue. Yeah, me too. I wonder if something's wrong with Board Docs right now. All right. Yeah, I have it open. I I have it open. If it's somebody wants to look off my computer, I got it open, but it's not showing me the attachment that I want to open. But anyway, I have the attachment if that Yeah, me too. Here, why don't I take this over? You can't You can't attach. Yeah. See, I I got the the bit. Oh, here. Wait. Make room. Just use my computer. There you go. Why don't you keep yours?
007Okay. Look at Look at this teamwork though. This is great. Thank you very much. It's only It's working sort of. There we go. There we go. Oh, he got it. I got it. I got it. Finally. Finally. That's what it t that's what it needed. It just needed us all to be moving around. Okay, we're all set, Mr. Lman. So we are we recommend the the approval of of the um the bid to uh for the tank removal and the um the the L the LPG L yeah LPG tank. So uh as listed there. So if anybody has any questions I uh Go ahead. You have to do the bid for Yeah. So, we'll we'll do the motion um to put to move this forward to our next meeting. Um any a motion and a
008second, please. So, moved. Second. So, so moved by Mr. Rash, seconded by uh Mrs. Rnik. Um any comments or questions? Kathy. Hi. So, m Mr. Linderman the this for the for the buses the the the liquid propane does does it have flexibility in terms of as we bring more on board like is there any synergy like cost reductions or this is a fixed well as my understanding is this is a fixed cost and it doesn't matter how many buses we add they will still honor this cost okay and normally they'll um they'll honor the cost it it does look a little I I any opposed Motion carries. 202526 real estate tax installment payments and penalty amounts. Um I I guess every year you you approve the the installment um schedule which which we have listed
009there. And again it's not coming up, but I do have that one printed out. So uh um you your installments go basically the the last day of the month, six installments for the year. Um, so we're recommending no change to that. Uh, you do have also in there to approve the penalty amount for one of the few that do that low amount. You're, it was a good thing with code pay you on time. Really kind of charges you the rest of you that pay on time because you're taking some money out of there to to help them. But it's up to you. Just I just point that out that most schools are still at 10%. Yeah. Okay. Do I have a motion and a second to move this forward to our next meeting? So moved
010by Mrs. Mc Merry, seconded by Second Mr. McBain. Any questions or comments? I I just make sure I understand the motion. Um, is the motion to keep it at what it is or is the motion to move to 10 just to keep it? You would have to physically tell us and change your your thing. I Stephen made an estimate about $120,000 you're you're kind of losing in delinquent tax payments which if you want to look at it from the 96% of the people that pay on time um you're giving a benefit to the people that don't pay on time and that that was okay for a while but uh up to you. I mean I'll just put this out there that I mean given the 123,000 that we that could be generated from Mr. Scrocky's
011estimate. I mean, I do feel like we've five years out from COVID. We've, you know, I think tried to be as, you know, considerate to people who were recovering from CO. I think it's reasonable for us to be aligned with other districts and be at 10%. Um just some thoughts for others to consider um because of the amount that we're losing and trying to be responsible with increased cost of things and everything. And I'm sorry. And if we did make a change, when exactly would that go into effect? This year. Immediately this year. July 1 bill. Yes. Yeah. I'm not sure I'm comfortable making it a change time that we would have to make the change. I'm asking that question to say next year it would be at this time but then it would be
012the same thing. Do you know what I mean? Right. We can lay the groundwork for you. You can and I could note we we could note this to Tara that next year when you come you discussed this last year. I I just bring it up as a something for you to think about for the future. There's certainly an option in between, right, Mr. Linderman? if we wanted to phase it in to 8.75 and then 10% next year. So, you know, do it in two steps if you wanted to. It's entirely board prerogative. You can absolutely. I I pull districts, but I'm not in favor of this year for sure. Too much. It merits more discussion and analysis. So, I think having Steve's estimates is great, but I don't I would love to have maybe a
013more formal presentation on the matter and what how many people are would possibly um be forced to pay. I I think we need to have a little bit more discussion is where I'm I'm at with it, Mr. Rash. And one thing I'd like to see in that discussion is who's impacted by the uh change. Um and I that would be my biggest question. Thank you, Mrs. Redley. Go first. Mrs. Stole. Um, sure. I guess um because we have the more installments. It used to be that you had to pay either for the early um discount, you had to pay by August 31st, right? And then you had to pay by October 31st to be flat, right? And then if you didn't pay by December 31st, you got the 10% penalty, right? So now we have
014six installments. Yeah. Six installments. And if you're late with one install, if you're late with installment one, two, three, or four, then you're only penalized on an installment that you're late for. But if you've paid all five installments on time and then paid the last one late, you get penalized. That that's actually in the law. That's actually in act one. When they allowed installments, they delineated that that you would be penalized for for the whole thing, the full amount if you're on late on the last payment. Yeah. Okay. I mean, I I saw that happened where I came from, too. You had one or two this year. Maybe just one this year that happened, too. Uh, but, you know, right. Yeah, because that person emailed us. That's when I found that out. Okay. So, is
015there any benefit to making it less installments too while we're at it? Um going back to the something for discussion next year and we I talked about it in the office in our office about doing it this year is changing your installment timing a little bit. Um might mean changing your budget adoption. uh some schools where I came from being one, we would make sure our budget was approved in early June and the bills were out before June 15th and the first installment was the 15th of the month every every month then. So that December 15th was the last installment was due. Um so that there was at least you know two weeks or more if somebody missed their payment alto together that they they could get told this this person got missed and got
016leaned right because once you're missed and we don't know it until you know it comes out and failure for us to receive your your your for a tax collector or us to receive your your payment in the mail is not a reason that that waves you any penalties. It's kind of like the IRS saying, "Well, well, I mailed it, but you just the IRS just didn't get it. They're not going to let you go." Uh that it's the same kind of rulings in the tax code for us for payments that that kind of govern the IRS. Interesting. Okay. Thank you. May I? Yes. Uh so um with regards to this, if I'm reading this right, uh levying the 7 and a half as opposed to the 10% will result in approximately $120,000 reduction, which I
017understand was Dr. G's point. So if we are going to be looking at doing this next year, um per what Mrs. Ramage said we it would behoove us to have a deeper discussion, but also I think we would need to start communicating to those that might be impacted sooner than later. So I don't want I I would re recommend that we're not here next May having the same discussion. And the big part of it is um to Mr. McBain's point, the change management, right, that we haven't told people that this is going to happen. So, it would be great if we could sort of put it in their upcoming like the last three not notifications they get or something for, you know, the six installments. Maybe the last three that says FYI, starting in July,
018if we decide to do anything starting in July, you know, it's going to go back to the 10%. I don't know if that's possible. I think I'm just trying to problem solve. Yeah, it's it's hard because we I think there's a list here of installment payments for this year and you only had 687 people pay by installment out of your 24,000. Yeah. So, if you notified them, they're they're that's a much smaller percentage of people that are delinquent and paying the 7%. My guess is on on those 99% of them are paying without a delinquent. Can you vote on it? Can we discuss and vote on it earlier? Sending something fully out to every every taxpayer saying it's going from seven and a half to 10%. Um, you know, the best you can do is
019probably include it in a very early budget discussion next February or so and start kind of doing it then. So, I think discussing it as is, we can try to make sure that this happens in February or March on our new CFO and her coming in. Maybe we want to also roll this into a larger review of how the tax bills are sent out. Like we'll do a discussion and a review of all of that earlier in the year. Work with her to then establish the timeline for when this could be added to a And I think I think that's a great advance. That's a great idea. And just remember that very few people pay the penalty. Most people pay on time, get a discount or most people are paying at net and there's no
020assurance that the same people, we're talking about the same people year on year. So sending it to, you know, 480 people this year may not be the same 400. I mean, so at the end of the day, you send it to all you you follow a process to give them and socialize to the entire population what might be coming. All right. Thank you. I think it's on the second. Okay. So, we have a motion and a second. All those in favor say I. I. Any opposed? Motion carries. Okay. Burkheimer earned income tax. This is just to take to add uh your new CFO and your new accounting supervisor as the kind of points of contact. Right now it's I believe uh myself and and Sandy um are the two points of contacts from Burkheimer. So
021this will convert them like next week and then they get all the notices and there's you have to do this by by the earned income tax. Okay. Do I have a motion and a second to move this item forward? So moved. U motion by Mrs. Stole, seconded by Mr. Fusco. Um, thank you so much for your service and thank you for helping us with this transition. I Yeah, we appreciate that. Um, any questions or comments? All in favor? I. Any opposed? Motion carries. My budget. Okay. Now, what we've all been waiting for, the 2025 2026 budget update. Bill, you can let everybody else in that's waiting for this to come in. Uh so not much has changed. We've made some adjustments um to your to your budget. Go on to the next slide. Tonight what
022what we need we're going to give you a quick budget summary and like I said not much has changed since April. We'll try and point out what has point out the potential tax impact. and we've asked a couple times and got kind of crickets here, but we're going to need some direction on the tax uh rate for your you you will need to approve your preliminary final budget next week and then in June you will approve your final budget. So that's that's what we need tonight is a little discussion on that. The next so changed Steve's quote there a little bit. So, uh, on budgeting, uh, next slide, this is the budget comparison, and this is the the act actually what your budget looks like. It's about an 8.1% 8.15% increase. It's a little bit
023inflated. We told you that last month. It's got a $10 million um, transfer to the capital project fund from your fund balance. So, you don't have a corresponding revenue for that that's coming out of your fund balance. So your budget would be 348,735,000 about an 18 thou $18,700,000 increase including the 10 million. So it's uh 8.15% increase. The next slide just simply shows if you didn't have the 10 million in there. about a 5% increase for for what what we will call um your working budget from one year to the next that didn't include the uh um capital improvement fund. The act one index, this is a chart of of the act one index. Last last year it was 5.3%. This coming year it's 4%. So that's the most you would be legally allowed to
024increase your your taxes. Uh and you did vote on that um way back was when Mr. Shroy was here to say you would stay within that limit. Uh the trend over the next couple years is kind of stagnant or decreasing. So uh that's done by the uh the state has a uh an office of financial something or other that they uh uh the governor's office put in place many years ago to to do estimates on this. So the estimates for the act one index over the next several years are are there too. Your revenue breakdown most of your revenue comes from local local sources mostly taxes real estate taxes transfer taxes. Um uh it's a little bit of investment revenue. state you have basic subsidy, special ed subsidy. Included in the state subsidy is also
025uh you get a reimbursement for retirement and social security paid for your on behalf of your employees and you have a very small sliver of federal funding there and that's mainly your your uh title one and two and whatever the other federal programs you have. Um the next slide, this is your tax base history. You can you you see if you go back to the left around 2008 910 you had kind of a a little bit of up and then it started to go down. It was stagnant. Um talk about that you had some increases over the years. Uh right now it's sort of leveled out, but I will tell you that uh if any drop in property values could trigger more tax appeals by homeowners and business owners. And that could then relate back
026to that 2000. What we all saw in 2010 and 11 were a great number of tax appeals that kind of reduced our tax base. A lot of a lot of schools uh actually saw a reduction in their tax base. So just to keep yourself even, you had to have a tax increase even if you didn't want one because your tax base went down. Not happening now. You have a small increase this year. Uh so but uh just depends on how the housing values go. Uh this is your investment earnings. We talked about this before. You you you're less than last year but much better than your budget. Interest rates now are last year this time were anywhere for that the school was getting were anywhere from five and a and a half to five and
027a quarter percent. Now they're four and a half to four and a quarter percent. A little stagnant the past couple months but depends on what the feds do in the next uh next time they meet. We we'll see that could could uh lower you a little bit more too. Your spending breakdown no surprise most of your threearters of your budget is salaries and benefits. Um, that's shouldn't be a big surprise to to to all of you. The uh, you know, debt's a little 4%. I'll tell you, you have a very small debt pie. You know, 10% is not out of the question is what a lot of districts have in the 8 to 10% range. Uh, you will probably have to close in on that before you're done your building project because you're going to
028have to put some debt in place to, you know, you can save all the money you want, but it's kind of hard to buy a house with with your passbook savings account. So uh uh these are the expenditure drivers. I think I went over these before. Um so we did talk about utilities and and uh talked about electric and and gas. We talked about the transportation. Um we talked about the charter schools which which are stagnant or maybe a little less, but the tuition rate is going up and salaries and benefits. They're kind of tied right into your contracts. Uh the next couple slides talk about retirement expenses. This is actually dollar amount of t retirement expenses and you know we we we all keep that 2010 and actually earlier is even less uh when
029the retirement rate was was kind of I will call it artificially depressed uh and had us paying next to nothing. There was a time when the retirement system was was fully funded. That was back in in the year like 1999, 2000, 2001. Then the governor gave all of us employees a great increase in our pension uh benefit that they calculated on. And then next year they gave a big cola to everybody that was retired and then the next year the economy started to go down and the the investments started to tank. Um so this that's why it it went up. This is to get them back to to a uh fully funded uh scenario. This is a percentage of your budget. You can see it's stagnating. So the the rates have not gone up dramatically.
030Uh so the percentage of your budget that as relates to retirement for your employees uh actually gone down for uh next year. The next slide and I know it's very hard to read these. I should have made these bigger but it kind of these are the retirement rates. Your employer rate. So next year your the employer share of a retirement that you will pay on every employee that is on retirement is 33.9%. It was actually projected to be a little over 34. So it's less than what the uh uh pasers actuaries projected but uh but still pretty high and they re they recalculate the outy years then too. So you can see the them them going up. this um again this actually could get impacted by what happens with the with the market because the
031pension monies are invested kind of in the stock market and and in equities and things like that. So they you know a big drop could mean uh some things happen to that in next year's actuarial re uh uh projection which comes out in December for them. Uh the fund bounce side I talked about this last month a couple times so I won't talk about it again. Same with the next the fund balance slide and the fund balance percentage. Couple charts here. We have your your tax tax rates. You are the fifth lowest in the county out of 20 schools in McGomery County. I guess there's 21, but I don't think they count Bren Athen as as as a school. So, uh, your your, um, not the lowest, but again, not not near even the average.
032Um, your bond rating is is next. I I a couple more things to follow up on the bond rating. One thing I failed to mention last month when I told you the bond rating is when you get a bond rating that's that's double A1 or higher, which is triple AAA, those those two are kind of natural bond ratings. Number one, you don't have to buy insurance for your bonds, which saves you a ton of money. Number two, your bonds become more attractive to buyers. So, you can actually offer them up at a lesser rate. So, a bond that may be paying somebody 4% because they have a an A1 rating, not a double A1 rating, might only cost you 3%. So, that impacts your debt service. So, it's not unusual to to be say this
033this bond rating over the life of your high school project will save you hundreds of thousands if not millions of dollars to maintain this rating. So it's my last parting kind of remember Chuck said that so try and remember that but so it's good the bond rating is good keep it up. Uh this is your per pupil expense compared to everybody in the McGomery County Intermediate Unit. So it's it's basically just your total budget divided by your total number of of of students and uh you are at the low end of of that too. You're you're 16th out of 21 districts in in your per pupil spending. The next charts just to get these off of forecast five. There are that's our data analytic program that that you have here. So this kind of shows
034shows your your uh the state average, the regional average, the peer average, and then the um your your district average. So the focus district would be um North Penn special ed. Same same type thing. You uh are lower on the low end of per pupil here, which is is pretty good. So, uh, and then the the the chart that we'll need a little direction on is your tax scenarios. So, right now, you can do if you did did a if you did a no no tax increase, that means that tomorrow Dr. Bower and and I would have to figure out how to cut eight and a half million dollars from the budget. uh 1% same a little bit different 2% 3% 4% you're actually in the in the in the black a little bit but
035um I think I said this last month I'd recommend you consider going to the act one index because you have a lot of debt coming on board and this will help you you can actually um designate this toward fund balance and toward debt in the future so um again I'm I'm going to pause here and hope there's more discussion than than we've had. Um just to give some more specifics to the I think it was an early slide about the projected act one index. We don't know until the time comes but it was all the way back on slide six. Um the most recent projections are there you go. Um for this year of course we know it to be 4% for 2627 it's 3.6. 6 3.2 then 3.1 in 26 27 27 28 and
0362829 respectively. So um yeah these updated figures are less than what you're seeing here. So 4.0 3.6 3.2 3.1. So just to give you a perspective on where act one is and we all know about the high school project and the debt that we are taking on. So, so just to help frame our discussion, we need to give you direction on where we're leaning towards on that tax rate. Um, so that by May 15th, we can adopt the proposed final budget. So, that's our timeline. So, now um and I'll you could although it's closer than my sorry you could say one thing for May 15th and say another for June whatever. So, um I can't remember the date because it's I called AMT after my time. So, um uh but so, uh but you you
037could do one one rate now and then say, "Okay, well, we want to do something else June the uh Okay. So, we have between now and the 15th to kind of have a discussion, maybe use some of that time tonight and then um we'll adopt the proposed final budget on the 15th of May and then we will adopt the final budget on June 18th. Right. So, any questions or comments from the presentation? Mrs. Stole. Um yeah, so I would say um this year in particular, we have some more concerns of not only taking on the um big high school project, but also not knowing how much money will be coming from the state because they don't know how much they're coming getting from the federal government. So because of that in particular, I'm a little
038bit more concerned that we make sure that we have enough in our budget so that we're not stuck should the state not come through or the federal government not come through with their funding that they're supposed to give us. And unfortunately, we won't know because the state's supposed to have their fund, their budget done, I think the end of June and the state and the federal government has theirs done in September. So, we won't even know for months if we're going to get the funding that we're supposed to be getting. The past couple years, and it I'm going to talk about it when we talk about our projections on in the reports, but the past couple years, you've you've received more money from the state than than you ended up projecting because it got better.
039Um, I I I was at a conference last week and I heard the Pasbo Pennsylvania Association School Business Official Executive Director who used to be a lobbyist and pretty heavy into there talk about that this may be the first year it will probably be the same if not less than what the governor proposed. So, the past couple years it's been more. You've benefited from that. Not a lot, but you've benefited. Uh but this this could be a year where they did not have big increases in there because there's other things to deal with the uh you know they they have the the equity formula that they've been dealing with uh uh trying to give to these kind of poor and rural and school districts. I don't think we've ever had this situation before wondering if
040the state's going to get their money from the federal government. No. No. And that's another thing too. That's absolutely you're you're correct. And yeah, I mean, so even though we don't get as much from the federal government, the money from the state and and you know, the state, if they say their budget is adopted early, that means it was adopted June 30th, right? Yeah. I didn't realize the state gets 53% of their money from the federal government. 53%. Just as we talk about our outlook and what we haveformationally now to move on in the future. Um looking at that slide, I think it's the ninth slide on investment earnings. You know, we've enjoyed a tremendous amount of investment earnings over the last say four or five years. Um but certainly we have to admit that
041there's been an awful lot of volatility in the market and there's been an awful lot of uh trends that we didn't see coming certainly. Um and so that gives me a little bit of pause because um I'm not sure we can count on in uh the coming years the same types of returns of four million six. So that start possibly to shrink. But um I have a specific question. Um it's on I think it's slide 15 for clarification. Um, so when you when the first line where it's inventory and prepaid items, are those pre any of those prep preaid items part of the high school project? No. Okay. This is all general fund. Okay. Um, money. So when we do the budget for next year, will we see prepaid items or long lead items included
042in any of this at all? or the high school project will be a completely separate presentation as part of the budget for transparency and understanding. And I don't even know if that question can be answered now. It sort of can. I mean, I can tell you that this the only thing in your general fund budget that you're seeing tonight that will be impacted by the high school project next year is whatever additional debt you add and the payment repayment of that debt. So, you know, we have new debt this year. You did the 10 million, you know, that's factored in for next year. whatever new debt you do next year and and you'll have to do new debt for the for the high school project that will have to be laid in as a as
043a line item. So whether it be you know it's probably going to have to be more than 10 million next year it's going to have to be you know 30 $40 million whatever you need I mean for your next phase but u and again I maybe that's a premature question Dr. Bower, but how that budget um is integrated into the overall budget so we can see the whole picture across the district. Just Okay. Thank you. It will be its own separate budget is what I want is what is what I meant meant. I I understand that part of it, but in somehow I think it needs to be also presented as part of this particularly when we're looking at act one index information and um helping us as a board to make a decision. It's
044been quite some time since we had our financial adviserss come in and show the full modeling of it. So, we could certainly get that updated and have presentation at a finance meeting. Yeah, that's actually a great idea. PFM will do a great presentation on showing you. They'll work with Bill and they'll here's what the project cost here's what the budget is and they will say here's what what your cost will be here's what their taxes and I think stability for this district as we're undergoing this project is imperative uh not just for our taxpayers but also for our students and staff. So I am um in favor of a 4% increase. Thank you. And I appreciate the the presentation this evening. And I think we've talked a lot about the volatility and the concerns, but
045I think to counter that, some of the things that we put in place through this budget is that we budget conservatively. Our costs have been re reviewed and considered and are still coming in lower than um county average. um our bond rating, our long-term planning um are all things that have helped to are helping to kind of lay the groundwork um to kind of keep keep us going and keep the projects and everything um that we need moving forward despite um some potential challenges. So um I too lean towards the 4%. Any other comments or questions? And do we need to take action on this just to move it forward to the next? Okay. So, do I have a Yes. Sorry. Um, is it what would be between three and 4% like what would 3.75
046be in terms of um has would it be possible to get that calculation in terms of what what could be in between three? Well, to be a uh I had that it's in the office, but by the time I'd go, I can just calculate it out again. Yeah, I think three is that at 3.75. Yeah. But what what would the increase per house I'm wondering what the increase per household would be clear and Dr. G does bring up a good point that some of our other meetings too or in the past at finance committee meetings where when we're considering this we do al also look at the cost per household. So maybe we could do that for our June meeting. Well we do have that on the right hand May meeting. Sorry. Thank you. We
047do have that on the right hand side there. That's the average. Yeah. I mean I I have I have the slide up for the per household. I'm wondering about the per household increase between 3 and 4%. If it were be likeund I have $174.38 at 3.5 3.75 and 3.75 is where we are net net zero or is that 3.8 I was just going to clarify for those watching at home, those average homestead increases, that's a yearly increase. That's not like a monthly increase so we're clear. Yeah, that's a yearly increase. So the 4% would be $15. Okay. I'm I'm wondering what um um Mrs. Rnick was just saying. what what would it be to be at net zero? So, just uh I was using the 3.75 and I'm not the CFO or business administrator, but
048my math is pretty strong and I have us um if we did 3.75 just as a you know a measuring stick here, we would be roughly 200,000 in the red. In the red. Yeah. So, it's somewhere in between those two numbers, the four and the 3.7. I think it's a little over 38. Just don't have it here. And I'm so because I think verbal math um is kind of difficult especially to to convey to our community. Would it be make sense at our next meeting that we do we take the different the the we take we remove the items above three and we look at three 3.5 3.75 3.85 and four. Um, and so we really get into um into the greater the granular detail at that meeting. Mr. Rush, I I would like to
049point out this is a nice chart and and we're using this as the baseline, but this baseline has a lot of assumptions based into it. It has our real estate income based into it. It has our uh it has our interest rates baked into it. It has our economy uh staying on a good track baked into it. Uh it has all these things baked into it. And what I think when Tim made his point and u Kathy made her point is we don't really have a good feel what's going to happen with federal funds. We don't have a good feel for what's going to happen with state funds. We don't know. We're in. Uh so looking at this chart and saying we're we're going to only charge 3.75 because it's net zero. It it really
050is uh uh one biggest assumption and and it may be our best assumption at this point in time, but it isn't it isn't reality. It isn't going to be reality six months from now. And that's why I would agree with the 4% I would great summary. Thank you. I would just count it that the um homestead exemption is supposed to be bigger this year, too, I think. Right. I'm getting to that. That's the next That's the next thing. Right. So, that will help um offset the tax increase because it's a pretty substantial increase in game. Thank Thank you. Um Mrs. stole I also just want to comment that you know my questions around whether it's three and a half or 3.75 you know I think I'm not asking those questions in order to make assumptions
051but that it is our job to ask questions and to be fiscally responsible to the taxpayers and to to say well what would it be so that you know maybe we could make it a little bit less because um to a single mom who's trying to make it $20 or $30 can make a difference in your grocery bill. So, it's our job to ask questions. Um, and in the end, we may end up at 4% or we may end up at 3% or 3 and a half%, but it's important that we ask these questions because the discussion and coming this should be a hard discussion. We're talking about raising people's taxes, so it should be something that we um wrestle with a little bit um so that we can all hear each other's perspectives. So,
052I appreciate everyone's perspective. One one other point I'd like to make. I believe that we're a very fiscally conservative uh responsible board and administration. And I believe if everything turns out on on a positive for the school board, that would mean next year we would raise rates less for the taxpayers uh if things became clearer to the board. Uh so I I think it gives us room to juggle. Thank you. And the index is indicating one way or the other we're probably going to be less. So yeah. So just also keeping in mind too that we have a couple more meetings to work through that. Um do I have a motion and a second to move um this forward for placement on the May 15th action agenda? Second. Motion by Mr. McBain, seconded by Mr.
053Fusco. All in favor? I I. Any opposed? Motion carries. And just just to be clear, uh, next month we will come forward with, you know, 3.5, 3.65, 3.75 just to give you more refined difference. Not next month, right? You mean next week? Next week. Yeah. Well, but in between May and June adoption of the final to keep it in number. Uh, so I wrote a little note for the new CFO to bring you a menu of of list and this idea that we can change our mind come June. We can, but my understanding is it's not a particularly good practice that really May is the number we ought to stick with as I recall Mr. Skaraki kind of telling us many many times in it depends on on which way you're going. If you're going
054down, it's a good practice. If you're going up, it's a bad practice. But I totally agree, Mr. Linderman, with what Mr. Fusco said because we are working toward a goal and what um Dr. G mentioned about granularity and we're drill down on the area percentages that we're in. We do not unless god forbid there be something substantial, change our direction. So we are consistent with what we're doing and we're building our basis and knowledge to come to a good decision. Correct. We don't want to do anything erratic. Perfect. Thank you. Ju just so you know for for next week then um we will be bringing a budget document the state change before it becomes a public document which doesn't have to be public the next day. It has to be public 20 days before you
055adopt it. So, so you have a, you know, you you you have the business office has a little bit of time if if you don't if 4%'s not the number you want, if you want something else to make that change and uh and publish it and be ready for you for for June. Perfect. Thank you. Okay, moving on to ourformational items. Um the 2025 2026 gaming funds um distribution. Okay. the the uh we we did get noticed. Dr. Bower got noticed uh the other g aiming funds are are up about $713,000. So it's a little over 9% from from the current year. The uh so this year's exclusion if you have the homestead, if you if you're a qualified homestead, it's not everybody, but if you or qualified homestead, you you get a $314 reduction
056on your taxes for 2425. Uh for for 202526, it's a little over $342. So, it's it's uh about $28 more per homestead. So, again, um back to I think it was Mr. Rosh's comments that those numbers that we showed on the right didn't include the $28 reduction that they will all have for additional homestead um money coming from the state. So, this is the money from the gaming funds distribution that they set up many years ago. And uh uh I'm happy to say over the past couple years they finally given given increases. It was always a little little thorn in my saddle that they gave you this one big increase or big number when it first came out and then for the next seemed like 15 20 years. It stayed the same because they were
057funding everything else that the act allowed them to fund before they started giving more money to the taxpayers. Um, so that's the gaming funds. That's justformational. This will be rolled in. You will see this in the budget document that is brought to you for next week uh as a as a number. That number won't change um well, it may change, but it will only change by pennies as we get notifications from the county on people who were we have to pull off because they're now not qualified or something. And we do that right up to the end. Perfect. Thank you. Any questions for Mr. Linderman on this? Okay, moving on to the nextformational item update from our student representatives. Uh, nothing about finance, but something that is happening in the school is there's a bunch
058of elections going on for there's one for SGA, there's one for NHS, there's a bunch going on, but like that's just something new. Is there something big happening on Saturday? Maybe not with you. Senior prompt. There is senior prompt. Thank you. Thank you. Thank you for your update. Um financial reports, Mr. Linderman. Okay. Um the first report are the the projections and you can see we're we uh for 2425 you actually budgeted a deficit of 185,000. Um, for 2425 you actually budgeted a deficit of 185,000. We already know knew that you were getting an extra million in basic ed funding. Now compared to the year before for 2324 you actually got a million7 more. So it's kind of coming down. Um, and now that we've completed nine months of the year, uh, investment revenue, we've
059talked about that. It's going to be roughly exceeding budget by a little over four million. Real estate taxes are strong. Um going to talk about the transfer tax which I was a little worried about till we got today's transfer tax and I'll tell you about that in a second. Um so we're projecting a positive variance for the year of of about $12 million. Most of that coming from revenues 8.6 million and you heard about uh 70% of that what it was and about 3.9 coming from unspent budgeted expenditures. So, um, that's the projections for that. The, uh, you have your financial reports. Next, just interrupting if you have a question. I'll just keep rolling and unless somebody interrupts. I don't mind it. So, we're about 3% higher than we were last year through March. Um,
060we are at 21 million. It's not that 21 trillion or whatever that number is. I I went in to correct that number. I'll correct that. It's 20 21,750,000 is what you and 88 86 was what you ended last year. Uh which was 8 8 900,000 higher than the year before. Um next year we're budgeting 22.9 million and we we believe that's still a good number. realy transfer tax um collections were were a little higher in March uh than they than they had been in the in the prior months. uh sales have been strong and um we we the the comment and um we we the the comment I made there that even with with housing sales being slow we we're still expecting to to meet meet the budget but uh this year we got a
061or this month we got a $657,000 reality transfer tax of which more than half of that was for an apartment complex and just tell me it's Talminson. So, u one of one of the apartment complexes there sold for 70 some 73 million I think it was. So, u we got 365,000 for just one one sale. So, that actually from the the loan that the general fund gave them during COVID so that they could continue to pay their people even though nobody was here. uh and uh community ed, which is much smaller now because a lot of that stuff has been divvied out, is still doing well and with a balance uh short-term capital project. I will call your attention to a new fangled report. It's got two new columns in it. Uh Bill Bill added
062a couple columns there. one's one column is for the kind of status of the project and one column is for the the school and when the project is complete the next month we will drop it off to try and keep things a little cleaner with it. So uh done budget reserve really didn't change much from last month. We will uh probably see some change in that next month when we have to pay the the IU uh transportation bill and you have the right to know stuff. So I kind of flew through that. I'll take any questions. If not, um any questions on the financial report? Any questions on the financial reports? Okay, seeing that we will move on um to public comment and I'll go ahead and start reading the statement if there's anyone here
063wants to make public comment. Individuals attending this meeting and intending to speak to the committee should be aware that they are being recorded. In order to meet the requirements of Pennsylvania Sunshine Law, it is necessary to record the names of all citizens who speak to the committee during the meeting. To asssure compliance with this requirement, it is essential that those planning to address the committee state. I guess that's not going to be on a SNAP program. So, you got to get real with this stuff. I'm going to say it. Stop spending money you don't have. Everybody got that? Stop spending money you don't have. Oh, everybody's face looks like they're really concentrating. I'm glad about that. Okay, stop spending money. I'm like one of those weather alerts for the tornadoes comes across on the TV.
064They're ruining my show, man. I can't I can't uh see what I'm going to do now. Hey, let's do the new one. There's a couple of people in the back room there going to design things. Hey, you bought any copper? Copper? Yeah, it's $4 a pound aluminum steel. You'll be lucky if you can get it. They have no idea. And you know what, Mr. Summers would probably say, "Well, that's one of those coatour things. We didn't have any control over it, and we just can't seem to get the supply, so you'll be hanging out like laundry waiting to dry." You have no no make them sign a thing that they'll complete it and they'll eat the tariff. I just bought a set of tires. I'll give you a little example. Lucky me. I had one.
065But when you got an all-wheel drive, you know, they got to be all the same tires. You can't just buy one. You can't buy two. Got to have four. I unloaded $1,000 for Yokohama. Look, I got the finances to be able to do this stuff. I'm sure some of the uh hardpressed taxpayers in Lansdale would find that a little difficult, you know. And then, oh, don't forget the students. Yeah, the defaulted student loans. They're coming into play. And I'm sure that the 94,000 people that live in Montgome, not Montgomery Township, in uh North Penn School District, Oh, I'm sure that every single child that in the last 10 years is right up to snuff on paying his student loans. I'd like to see those numbers. Those parents are furious now because they thought Biden would
066give him a free pass. Get out of jail card. Thank you. Thank you, Mr. Patchel. Uh Jason near Lansdale. Um going to kind of pick up where uh Mr. Patel left off regard regarding expenditures. Uh but just a couple things to file. You guys are talking about state budgeting and how it's related to federal grants to the states or federal budget. You realize the federal government doesn't have a plethora of money. We're deficit spending now. So all that money comes from everybody in this room and everybody who pays taxes. So it's going there and coming back and and somehow we're we're going to some squeeze all this money to to pay all these bills that we can't afford. So you the thing that we need to do is reduce expenditure. And I know you guys
067say, well, we're the fourth lowest or fifth lowest in the the county in the county, but there's there's economy of scale. This is the largest school district in Montgomery County, right? It shouldn't cost as much. You you you have you have uh a higher concentration of taxpaying taxpayers in order to to fund your your uh your operation. The problem is is that your operation is costing too much money. So what could you cut and and have little effect on education? Number one thing, and we we've talked about this before, is the health care center. I keep hearing that, oh, somehow we made a million dollars or spent a million dollars less because of the healthcare center. yet is is there quantitative numbers that show that or is this just projections based upon uh how claims
068would have been should something else have happened? Meaning they're they're they're sales points. They're not actual numbers. And I ran the numbers on this and it's not that difficult. I mean 20 2023 uh we spent we had $29 million in in insurance premium. 29.6 million in insurance premium. By 2023, we're at 32.7. The whole purpose of the health care center was to drive down our insurance premium. The idea was less people using insurance to uh do their their general care would reduce the the claims and therefore reduce our premiums. Our premiums haven't gone down. Our premiums have gone up. So what what what are we why are we spending this additional money? We are going to now spend $772,000 this year on the healthcare center and and welcome in the tech center people for a
069fee. We're going to charge them I don't know how many thousands and we're going to pay another 150,000 to to to have them come and use this. I what what are we doing? We we are we are spending money on things that are that aren't beneficial in terms of cost reduction. We are spending things with the idea or at least the plan was it was going to reduce cost and it has not. So why won't you actually adjust address that? Thank you Mr. Linder. Dr. Bowerer, would you like to respond to the healthcare center item in particular? um to answer the same claims inaccurate claims about the healthcare center uh that have been made over the years um Mr. Linderman actually put together a nice synopsis uh because he took a look at the healthcare
070center just to offer kind of a third party opinion on the matter and um I'll read directly from his analysis if you don't mind Mr. Linderman. Uh there have been questions over the past several meetings regarding cost of the healthcare center versus the financial benefit. We'll attempt to describe the correlation between these costs and the avoided costs of our employees who utilize the healthcare center. The center runs through a contract with Marathon Health. The company provides medical personnel in the center and access to lowcost lab work prescriptions for routine visits and diagnosis. The goal of the center is to reduce costs to our health care plan by one targeted prevention and wellness, two, reduced absenteeism of our employees, three, managing our pharmacy costs, and for collaboration with specialists. The cost of the center is approximately
071$500,000 per year through our contract with Marathon for uh the physicians assistants, the nurse practitioners, and the medical assistants. The savings comes in the form of cost avoidance with regular office visits and urgent care visits. The average over is $500 per visit when an employee or their dependent utilizes these services. In the first full year of a health care of the health care center's existence, we avoided over $1.1 million in claims. And since we are self-funded for these claims, it is a direct savings to the bottom line. We anticipate as more and more staff utilize the center, these cost avoidances will rise as they have in other schools that have healthcare centers in the state. The rate we have budgeted for healthcare premiums for 2526 is based on a trending model which incorporates multi-year experience.
072So our one-year experience has not made a tremendous impact in terms of those projections yet. Future years will include more years of data and eventually help in the long-term trends. We'll have final numbers for this year obviously coming up here very soon. But um that that's the analysis. And in regards to North Monco, which I have said a few times, Mr. LIR 48% of the budget at North Monco is paid by North Pen School District. They are also a part of um the insurance uh model where they're self-insured. So we pay directly 48% of their health care costs. So if they save on their health care costs, the North Pen School District saves as a result. So uh there's the response. Um but we're saving over $500 a visit for primary care or urgent care
073at the healthcare center. appreciate that analysis and appreciate you sharing that. So just in summary of our items that will be moving forward to our meeting um our next meeting on May 15th, the small games of chance resolute.