001Good evening and welcome to the April 7, 2025 school board budget workshop 2. We'll begin as always with a salute to the flag. Again, welcome to our second budget workshop for the 2025 2026 fiscal year. As you can see from tonight's agenda, this budget workshop is the last of two workshops. Tonight, we will concentrate on the expenses side of the budget. After the presentation, we will first take questions from the board. Then there will be an opportunity for public comment before returning to the board. This is anformational opportunity for budget development for the 202526 fiscal year. There will be no votes on the budget at this meeting. At this time, I will turn it over to our panel, which consists of Art McDonald, our business manager, Dr. Wendy Tol, and Dr. Anthony Stevenson for tonight's
002presentation. Thank you, President Contorsk. We're going to begin with the timeline for the budget. Uh we're at the second budget workshop. As president mentioned, this is our final budget workshop and we will be presenting to the board at the end of this month, April 28th, with a proposed final budget. So, what you're seeing this evening most likely will be what we're presenting on the 28th. If there is any opportunity for any adjustments, uh, we will make those and present those on the 28th. But right now, what you're going to be seeing is where we are with the budget as of today. So, budget scenarios that you've seen in the past. Uh, this slide uh, probably pretty familiar to you. If you orient yourself from left to right, you're looking at a budget with no treatment
003uh of tax revenue in column B and the act one index in column C applied to the deficit of that 11 million brings us down to the 5.3 that's on line five. And then the column D is the act one tax increase along with the ref referendum exception revenue which brings us down to a deficit currently of about 4.33 million. We did hear last week that PTE has approved our referendum exceptions for for special ed. So the slide that's included in your packet has been adjusted to reflect what the state has approved. So the board authority will reflect that particular amount that you see on this slide. And then when we get to the tax millage slide, I'll give you a little more detail about that referendum exception. Next slide is the summary of the
004budget that you vote on at meetings, the preliminary, the proposed final, and the final. It includes what we often call the operational side of the budget or what not including the contingency amount. So the amounts on this particular slide that we call anticipated spending, that operating piece of the budget is on line five highlighted in yellow, that 194,476,000 number, that's what we anticipate spending. What the board votes on is the authorized spending. So what doesn't include, it does not include the items that you see in the budgetary reserve and contingency amount on lines 9, 10, and 11. What that gives the board the ability to do is have some flexibility during the budget year to handle any kind of unforeseen circumstances, hence the word contingency. And it also uh gives the advantage of not having
005to reopen the budget during the year and then vote on any kind of increase that may be impacted by whatever you're trying to deal with in that particular budget year. In the past, uh we've had amounts in the contingency for capital transfer. We're not doing that this year. Here we have the capital funds transfer in the anticipated spending number and that number is 6 million. Uh and that's reflected on the budget development which is the next slide. So some of the things that when we've gone over this slide quite a few times so I'm not going to go through it in its entirety but there is a change uh because we did meet with our health care consultant recently and we got a sec second look uh on the budget for healthcare and unfortunately that
006number went up between the first and the second look. So it went from that 8% to 14%. So uh we didn't we didn't add anything to the budget uh but we didn't also take anything out. So, we're not going to be able to reduce it based on that particular uh piece of the budget. Uh good news is the RX, the prescription side of that stayed flat. Uh and the dental is still at 8%. So, two good things, but the medical piece is the larger piece of our healthcare expense during the year. So, there is a little bit uh of a bigger number as we look forward. Next slide. Uh I'm going to turn it over to Dr. Wendy Tol and she's going to go through some enrollment and some professional staffing numbers. Thank you. Good
007evening. So before we get into the um projected staffing for next year, just to provide some context, you'll see on this slide is our October 1st enrollment his enrollment history. It provides that historic look um on district enrollment going back all the way to 1975. You'll see that over the years there was a period of time when enrollment declined and then in the late 1990s started to climb back up again to where we are in the last few years which seems to be what our demog what our demographer has called a leveling out at a higher level. Of note is the fact that last year's senior class was quite large. You may remember at graduation. So, while you might notice a slight decrease in enrollment this year, I think it's important to note that it
008is not due to a smaller number of students at the younger grades, but rather the graduation of an exceptionally large class last year. This next slide provides an overview of our current staffing compared to our projected budgeted need for next year. On the next slide, I'll provide a breakdown of a more a breakdown of the need in a more detailed fashion. As you know, eight of these 15.6 net positions that are indicated on this slide are required to staff the new elementary and middle school STEM special. Three positions are special education which are driven by case load limits. Two positions are elementary reading specialists who as you know we plan to use for additional direct instruction and assessment purposes. 1.0 FTE is allotted for an additional EL teachers split between the middle school and the
009high school due to increased enrollment in this particular program. There are two FTE for school psychologists and one FTE for a mental health specialist. As we continue to address the mental health and well-being of our students, an additional 0.2 for nursing services will be split between the elementary and middle school levels. And finally, we expect a slight core classroom increase at the elementary level, likely in kindergarten, necessitating an additional.5 FTE. now turn it over to Dr. Stevenson to give you a broader look at the staffing summary. Um good afternoon members of the board. Um as Dr. Tol talked about the um numbers in the teaching staff as you see on this chart. Um in addition um for our administrations um there is no changes for our supervisor confidential. Um there's a one addition for a
010possible increase that we um are looking to um may need in athletics. Um for our secretarial um column there is a reduction for a possible reduction of 0.8 for um a proposed reduction that we are looking at for the custodial. Um there would be a um for next year's budget would be a increase of three. one that would cover the needs for the new athletic fields and two floaters that would reduce the cost that would currently um are occurring from outside vendors. And I hope by those two um additional um floaters would um reduce that need for the outside cost there for our maintenance. Um there's an additional two um one for the um athletic field needs and the other one is currently um security that covers construction site and as we continue to evaluate
011that position um it will be assessed and possibly reassigned in the budget when that job need changes comes up. Um security stays the same. Um no changes. Food services no change. health nurse um health room nurses a 0.59 increase um regular ed and special ed these are the positions of those folks who have um when there we changed for paras to be um outside contractors we made these are people who had um in the 20 um early 2000s when we they selected to stay Um these are people these reductions are due to retirements in the regular ed um 1.08 and in special ed um 2.1 and that brings us um for a total of 793.8 which is an increase of 18.08. Okay. Thank you Dr. Stevenson and Dr. Tol. So, we're up to slide 10,
012and I'm just going to say briefly that there's going to be a lot of uh duplicate information in the packet as far as the numbers and different breakdown of the budget. Some of it's going to be uh just spreadsheet kind of looking data and know it's going to be, you know, some graphs and things like that. So, some of these are really justformational to get you a better idea of what you're looking at as far as the numbers go, but we'll look at the numbers a little bit further as we get along in the presentation. uh to start we usually look at it holistically on the expense side. This really slide just shows you how much of the budget we're spending uh as a percentage of the total. It doesn't include what we would move
013to the capital fund. So this is pre- capital fund transfer. So since we've kind of transitioned away from what I mentioned earlier which is budgeting the capital transfer and contingency and now we have it as part of anticipated spending we'll have to kind of evaluate when we're you know measuring things from year to year and and really kind of make a distinction between the years that we included the capital fund transfer in a slide and when we didn't so it doesn't skew what you're looking at. But this particular slide does not include that capital funds transfer. So we don't want to be at 100% when we're looking at this particular side because we want to have some leeway in moving that money to the to the capital fund. So in the last two years we
014moved at 5 million. Prior year we moved 6 million. We're trying to get to a larger number as we go forward for the elementary school. So this is the year when we have a larger tax increase as you recall. So this is going to be probably a key year in looking at what happens at the end of this fiscal year as far as what our base is going to be that we can move to the capital fund. Uh act one isn't projected to go up as high as it had been. So this is the year when it had been a higher number. U and that's really when we're have to generate that additional monies at the end of the year to be able to move to the capital fund. This particular slide, this historical slide
015shows you with the capital fund transfer. So, this is the holistic all-in number for this particular budget uh slide. It's showing you in a recap of the numbers the last two years, but you can see obviously what it's doing. It's trending up. Typically, our budget goes up by an average of about 6% every year. So, this is um you know to be expected this particular graph. Next slide is looking at across the county uh and and others as I like to add in a couple other uh school districts that were off compared. So um you can see we're right where we have been in the past in the middle of the pack uh as far as operational expenses per student. And this will you know even though it's older data it's 22 23 that's the
016the best data we can get is at this point it's kind of a year lag behind uh where the state has that information graphical representation of the total budget at 194,476 that I mentioned earlier. Uh clearly we're a people business. Majority of our budgets and salary and benefits uh debt service at 5% and then everything else at 32%. Next slide is just taking that same number and breaking it down a little further in smaller pieces and you can see how salary and benefits breakdown and then the rest of the breakdown of those particular operational areas and we will cover those uh in detail in some future slides. Next slide is a graphical representation of the budgeted piece. So at 40% what that looks like at 70 about 78 million how that breaks down. No surprise
017that a majority of our budget is our certificated staff members folks in the classroom and um those that are a member of that particular bargaining unit that you see designated there. And then I gave you some other breakdowns of those particular categories that we u see on this slide. All right, we'll spend a little bit of time on this slide. This is a driver slide that we uh have each year when we talk about what are the biggest impacts of the 2526 budget and really what's driving the increases. So, and then again to just to orient you on this particular slide, it's set up very similar to the rest of the slides in the packet. It starts with the 100 area or salaries and then it goes down from two to three to four and
018then down to 900. So salaries, benefits and then contracted services and the like. As we go down this particular slide, this is how this is oriented similar to the other slides you'll see in the packet. So contractual agreements in the 100 area. Obviously the biggest driver was the biggest part of our budget which is the instructional piece of that $5 million driver at $4.6 million. Uh you heard Dr. Tol mention earlier that 15.6 six additional staff is the largest not the largest part of that number but obviously this the collective bargaining agreement increases are the rest of that number and then you if you go across to the right you can see support staff is down a little bit and uh Dr. Stevenson talked about the change in supervisor confidential along with those contractual agreements.
019You're seeing an increase there. Not surprisingly, aids and paras are going down again because there's an offset in the use of contracted services for that number. So, as we continue to see attrition in those areas, you'll see the contracted services number have a commensorate increase. So benefit side of those contractual agreements I mentioned health care that's the increase for all the medical uh script catastrophic stop-loss vision and dental and it's a pretty significant number but that represents that 14% that we mentioned just for medical plus we see stop-loss increases each year dental at 8% as part of that number as well the 3 million you see under pers is again offset by uh what we talk about each time which is the state paying that 50%. So on the expense side, it's grossed up at
020100%. The revenues coming in at that 50% on the revenue side. So this really the net is really half of this particular number you're seeing there. Contracted and professional services. I broke it down in those particular categories of special ed, aids and subs and then everything else. Obviously the biggest increase is in contracted services and that's all the way across the district. So that comes from classroom contracted services, custodial, uh, anything that's contracted would be under that particular one. It's not necessarily either staffing either. It doesn't have to be somebody that comes every day. It could be a contract that's only for somebody doing a particular one thing like window window washing or carpet cleaning or something like that. So all that has to be budgeted in that particular contracted area. Other purchase services are
021for in the 500 area. and then tuition as well. So in special ed you're seeing an increase there at 155. It includes those areas. Busing is down um mostly because we're not using as much and we have some smaller buses that we're using which are a little less expensive. And again this is a budget uh for 2526 compared to what our projection is not what our budget is. So, where do we think we're going to end in the current year? And then what are the changes from 2526? Insurance, uh, not a big number, but it is a big increase percentage-wise overall for the insurance budget. Utilities, fuel, maintenance, and repairs overall district-wide. I'd group those together because it's going down by 120,000. And um under supplies, textbooks, computers, and equipment, you'll see some large increase
022there at 2.5 million compared to the rest of the areas that we're looking at. Textbooks at 1.7 and then computers at 325,000. Um I know I had a question about this earlier. I didn't know if um Dr. Tol if you want to put a little more color around the textbook number for me. Sure. So you all have heard from uh Dr. Morris over the last year and a half about our transition to the new steel standards and we are required now uh beginning in the 2526 school year to provide instruction that's aligned with those standards. Accordingly, we've had to look at some new resources uh and that's K through 8 that we've had to look at those resources. uh the committee that's been doing that has made their decision and um has begun working on
023uh building the curriculum with these new resources. Additionally, um we are at the point where we need to start thinking about transitioning from the math resource that we're currently using K through 8 into a new resource for a number of reasons. So Dr. Mull has begun that transition. uh education committee will hear more about that in May specifically, but he's looking to start to phase that in in grades five and six for next year. Thank you. All right, so the the rest of the slide is debt service going down by 230. Now, um we talked about again debt service and finance and we talked about possibly pushing it off until the 2526 year. Uh the reason this is going down, well two two reasons really. Um we're still hoping to be able to defer any
024debt service for the 2526 year. And then we also if you remember uh we we issued more in bonds than we anticipated doing. We issued 40 million. We really were on the 30 million end of that. So not only were anticipating a lower number uh hopefully uh that we would need to issue bonds for and then also deferring it. So again, you're you're looking at the 2526 budget compared to the projection. So there's going to be a slight decrease in that number. Athletics is uh up about 43,000 overall. Athletics is budgeted as part of the general fund budget, uh it is at the in the 900 area and it gets tr even though it's spent in a different fund. We budget as part of the general fund and then we transfer that money over to
025the athletic fund to cover those expenses. So just to give you a little more orientation of this particular driver slide on page 25 uh of the packet if you're in the variance column of that particular slide in column D you'll see that the total variances is about 12.7 million and that's what is on this particular slide as well. So we'll see that again as we move forward in the presentation. benefits graphically. Uh no surprise the majority of that number is berser and health insurance. Uh this is a slide we looked at uh in the last budget workshop but again it's expense and revenue related. So we usually have it in this workshop as well. 34% uh which is slightly lower uh than what we anticipated going into this budget uh preparation back in um I
026guess it was back in November uh of 2024 when we started this. So 13.49 million in the 2526 year and you can see it's still trending up. It's not um some would say it's flattening but obviously it's increasing so it's not flat. Uh so you may hear that you know past projections had it being flat in the years that we're currently looking at on this slide. It's not there yet and you can see the impact to the budget out on the far right as we go forward in those numbers. Healthcare expenditures again if you look at this particular graph you can see it's going down or leveling up or just slightly going up uh in the 23 24 year. Uh we're anticipating based on what we just talked about that it's going to be a
027higher number going forward. Uh but I will tell you countywide uh our school district compares very well to those folks and on an average if you look past back to the beginning of the act one years uh we're in a singledigit increase average which is pretty amazing considering uh it's been since 2006. We also looked at this special education slide last time we uh met and again just to show you the disparity between uh the special ed expend expenditures which is that larger bar that blue bar and then the subsidy uh from the state. So even though they've changed some of their funding models at the state you can see it's still uh not really comparing to where our expense is. So there's quite a quite a difference there. not surprising. Uh transportation expense also
028has the same type of graph. So we're looking at an expense that's funded by the state at basically a flat number over the last three years and they're giving us uh about a little over a million dollars and we're spending about 8 million. The charter school we talked about uh in the last budget workshop, but I put it in here again. We did make a an adjustment to one of the slides in here, so I thought it would be a good idea to go through them again. Uh we're seeing a little bit of a bump up in 23 24 and um I'm going to jump ahead just two slides to show you the enrollment. Um so our our charter school enrollment is not projected to go up, it's projected to go down. So we're anticipating
029the combination of things happening in that in the current year that we're in. One that overall expenses on slide 22 is going to go down and then the tuition rate. uh the state has finally uh made an adjustment to the way the tuition rate is calculated and uh now they're allowing us to break out uh special ed ADMs in that calculation. So what that's doing for us is reducing the amount of tuition we play pay for a special education student at charter school. So last time we presented this particular graph this the number that you see on slide 23 at the bottom was a higher number uh because they had just released that recalculation. And so I put that 40,146 in there. Uh it went down about $3,000. So pretty sign a little over $3,000.
030So pretty significant decrease. Um hopefully they'll continue to revise that calculation. Um I know both PASSA and Pasbo are active uh in the legislature and Harrisburg actively working to try to change the calculation for these charter school tuition costs. Again, a million dollars is a million dollars for us. It's not a small number. Uh but we're not suffering as much as some of the other school districts in this county and across the state, but we're definitely joining in that voice in Harrisburg. All right. Overall budget on slide 25. I mentioned this earlier. Same type of orientation breakdown 100 to salaries down to 900 in debt service in the eight and 900 categories. And then just to orient you, you got the budget in column A, where we think we're going to end up in column
031B. What we're talking about as a proposed budget for next year in column C, the variance and the drivers that I already talked about are in column D. And then the percentage of those drivers uh in column E. salaries or excuse me benefits that you see going up by 10%. Obviously a combination of what salaries are driving those because you have a grossed up BERS number and a grossed up um social security number that appears on in the 200 area and then I broke out PERS. So obviously that's going up by one the amount that's related to the salary and then also the amount of the increase in what we have to pay to the state. So those numbers are significant for those two reasons. Uh purchase professional services is going up by about 5.6%.
032We talked about that. Supplies is where the textbooks that uh Dr. Tol spoke of earlier and the computer number. So that's why that's a larger number and the other ones some of them being negative. So overall 7% and I mentioned earlier that our budget typically rides at about 6% at first blush. So when we're and when we haven't added um 15 and a half staff members uh in recent years, so that's really driving that other percent. So we're actually below 6% uh overall. So our budget is a little bit leaner in 2526 than it has been in past years. Historically, I put this in so you can get an idea of where we've been and where we're going. So going back to 2122 in column A and then going forward across that page and then
033the projection of 2425 not the budget. This does not include uh the capital funds transfer just to give you an idea. So it doesn't it doesn't skew the numbers by you know depending on what we moved over to the capital fund in any of those years. So that five million that we moved in the last two years does not appear there. projection model and we've looked at this um often uh over the years and this is untreated with new revenue. So obviously we have significant deficits if we look at those projection and the next slide shows you the assumptions that are part of that projection. So clearly we need new revenue to be able to balance our budget. Uh we on the next slide in the assumptions just a couple things I'll point out. uh
0342627 down on line three that's the last year of the teachers contract so the zero going out forward and um tenig which is on line four has two more years after the year we're talking about so when I say one more year I mean one more year for teachers after 2526 because we're starting with 20 26 27 on this particular chart so and then two more years after that in 10x03 um and then you can see admin and confidential agreements there that ending in all ending in 2028. We use um some pretty standard increases across the board. We've looked at these uh going back and they're kind of the trend of these particular areas and that's why we're budgeting at those particular percentages and that oh sorry and the teacher FTE number at the bottom
035is the is the current number at 547.6 six. Okay, where are we now in this current year? So, we're looking at this hasn't changed significantly this since the last time we looked at it, but we had a budget of 182 million. Uh you could see that in column A on the expense side. And we think we're going to come in lower than that. Uh so again, about 900,000 or lower at this point. We'll continue to adjust this each time we look at it in finance or at a board meeting if we're talking about the particular uh budget like we will at the end of this month. So we budgeted a deficit of about 1.6 million. We're trending obviously in the other direction. Uh in column C that variance is close to 2.8 million. So we're
036anticipating having uh some money left over at the end of the year. And again this includes the capital funds transfer that we budgeted. So, uh, if this, you know, bears out to be accurate, we'll have some additional monies that we can evaluate at the end of the year to be able to move to the capital fund. I put this slide in for fund balance just to give you an idea. We are this is justformational and what your commitments are. So, this is the current year audited fund balance number. fund balance uh now is more of a uh looking at a percentage more than a number at least for us because we're in the uh we're in the lane of you know issuing bonds and it's what Moody's looks at. So it's a concern uh that
037we have a dropping percentage of our budget and fund balance. Uh we may you know want to make some adjustments to that. I know we left about $750,000 in the general fund this year to be able to keep that percentage up. It went down slightly, not significantly as you can see here. Uh but we'll continue to evaluate that and look at it because we're in a multi-year uh bond issue uh situation right now. So we want to keep looking at that. This is um what we've been moving to the capital fund. So a couple years ago we moved 7 million and the last two years we moved five. So we're at an average a fiveyear average of a little over 5 million. Obviously, we want that to go up as we go forward and uh
038evaluate, you know, the need in addition to obviously operating the elementary school, we need to service the debt that goes along with that. Uh, you know, we have bids on the street right now for uh the elementary school. We had a pre-bid meeting. um don't want to turn this into a facilities committee meeting, but um we can't really know what the building's going to cost until the bids come in and we evaluate it and we make some decisions on alternates and the like. So, as we get further along in the process and we know that what that's going to cost, that'll give us a a lot more information on what we need to issue in bonds. And then that'll give us some more information on what the debt service costs are going to be for
039the new elementary school and the athletic fields project and the infrastructure numbers that we're going to talk about tomorrow night. U capital projects. Uh I put this in each time to just to give you a graphical representation of things that we've already discussed. Um, I put this um in this particular slide in a couple years ago at the recommendation of one of our board members and um there is a typo on the slide. I just noticed when I was looking at it earlier today. So the 2223 year does include uh the $5 million capital transfer. So that shouldn't be under column B. That should not be 166. It should be 161. And that's actually shown on a previous slide. Um, so that 161 should be that number. So, we'll fix that for the next time
040we show this. But really what it's just still unfortunately puts us in the red for that year. But really what it shows you is entitywide, meaning operating budget, athletic budget, capital fund budget, all those things together when we look at the expenses versus revenue, uh, we have a negative variance. And how can that be possible? Uh, when we have $34 million in fund balance, well, we issue bonds. That gives us cash that's pays for the deficit that you see in column E. All right, I talked about this earlier. The exception revenue that's on this particular slide in line four on line four there 945, uh006 numbers been uh approved by the state and that corresponding millage of860 has also been approved by the state. So the authority of the board is 4% plus the 66.
041So your authority to increase taxes for this year is 4.66%. Uh again estimated generating revenue at close to 6.8 million. Uh the mills are not estimated. That's what they would be as part of that increase. So when you look at this particular slide, the only thing that's really not known for sure is what that percentage or what that millage rate will generate uh in revenue. We make an estimate based on assessed assessments currently and then we build in growth and then we also look at appeals that have happened uh on you know from appeals coming at us and the ones that obviously were initiating. So we build those both in we look at a growth number and that's where we come up with that column B number. Uh we put this in here a couple
042years ago to to give the board an idea of what the changes of each uh click down of a tenth of a percent does uh in the reduction of revenue, the estimated revenue. So um from that 6.8 million at 4.66 66 down to zero. You can see not only what how it affects revenue, you can also see how it affects the uh TE homeowner with an average assessment currently of about $265,000 and you can see it at the bottom of that slide and an average tax bill of about $7,500 historically. I put this in there to see where we've been. And again, I'll just remind you this, not the exception columns here in CN D are not what the board was authorized in exceptions. It's just what they uh were willing to take in those
043particular years. All right. Average taxes paid by a residential taxpayer in Chester County and others. Same others that we looked at on a previous slide. Um so the there are some districts obviously in the county that have earned an income tax. were not one of them. They're represented on this slide with the red bars and the ones that do not have an earned income tax are represented by the blue bars in this particular slide. So, of the um districts that do not have an earned income, there's only two uh that are lower as far as an average tax rate than us. And one of them is Aventrove and the other one is Great Valley. And that's really Great Valley has been a lower and equalized mills. Having uh is just the difference because of their
044assessed value. It doesn't have to do with their tax rate. Uh and I'll explain that. I think I have an other slide in here that'll show that. All right. This is an IU slide that I borrowed from them just to show you the amount of money that comes in for those particular school districts for their earned income tax. Uh pretty significant numbers. And uh you can also see how much they grow uh each year uh without any really actions from from any of those boards. All right, this is the other slide I was mentioning. So uh equalized mills and why is this important and why is tax effort important and why do we look at it? So the state uh in their funding model uses this particular uh information to calculate how much funding we
045get and we've talked about this numerous times in the past but uh when you look at local tax effort uh and equalized mill uh they look at what the assessed value is and what the potential to produce revenue in the district is and what it actually is producing. So if you're an equal playing field or at a percentage they consider to be fully uh supported locally by local revenue, you get a value of one in this particular uh equalized mills. We're at about 83 at this percent and we've been bouncing around right around 80% for since they started using this. So what it basically means from the state is you're not getting a 100% of what they're putting out there as far as the funding piece that's driven by a formula. Now all their funding
046is not formulaically driven. It's only a piece of it. Uh it's most of the new money that's come in in the last two years is driven by that formula, that student weighted formula, but then it's also multiplied at the end by this particular effort. So any effort that's less than one is reduced to that number. So if you look at it holistically, you can say we're only really getting 83% of what we should be be getting from the state from that formulaic piece of that basic ed funding. Uh and you'll notice that we're at the bottom of this slide, almost at the bottom. Uh great valley has a lower equalized millage rate, but you can see that Arove does not. So even though they have a lower tax bill, it's really based on their assessment.
047It's not based on their equalized mills. Excuse me. So, taxes paid by a residential taxpayer in Chester County. Uh, this was looking at a 10-year analysis of what how much, you know, how much taxes are paid from an average taxpayer over a 10-year period. And you can see we're on the lower side of that. Again, Great Valley being a lower number, Westchester a little bit lower. So, assumes a value of 260 for all these. So, it equalizes that again, and it shows you what they paid over a 10-year period. So, we're on we're this is the side you want to be on as far as an impact to local taxpayer. This is the last side slide in the presentation except for upcoming dates. And we put this in here forformational purposes for those folks out
048there that may be eligible for this program. They made some changes uh in the last year to this program. There's more folks that are eligible now and um we have this information our website. The link is on here. So, I would encourage anybody that uh is eligible to please go check that out. Upcoming dates for us, we have a board meeting uh on the 28th to look at the proposed final budget and we have a date in June on the 9th to adopt the final budget. We'll have a couple finance committee meetings in there. Uh and of course, we'll have a board meeting in May. So, we'll have opportunities to discuss this budget again. But that concludes our presentation for this evening. and we certainly welcome your questions. Thank you, Mr. McDonald, for that uh
049detailed presentation. Always appreciate it as part of this budgeting process. I do have one question. Um and it just occurred to me here on the slide 41 that has the the taxes paid by residential taxpayers in Chester County. Is that just the property tax number? It does not it does not include taxes that a resident may be paying also as earned income tax. Correct. Correct. It's only property tax. Right. So So the column for example for Downing Town if you added in the earned income tax that somebody a resident was paying that that number would be much higher. Correct. From from that standpoint. Absolutely. Yes. Thank you. Okay. I'll turn to the rest of the board at least for now to see if there are any any questions about this part of the presentation. Yes,
050Dr. Hatinsky. Uh so I have a couple questions. Um so for for this year since we're um do for our projection I can't remember what page that is that we're um trending higher page 29 um for the the local revenue. There we go. Um and can you refresh us that 1.8 8 million. Is that mostly interest income? And I'm wondering whether you see any potential for increasing our revenue projection for next year. Are we at the point where the current projection is where we're what you feel comfortable projecting for next year? No, we each month we get additional information and there can be higher months than others and and transfer tax and if we get a bump in a month, I mean we we still, you know, look at a trend based on historical numbers,
051but if we see something bump, we will adjust this for our finance comm our next finance committee meeting. Okay. Um, so that's positive that we're we're uh you know in you know going to have more revenue than than anticipated and that's great with our whole all our capital projects. So um those are always on my mind. Um the next question I had was so with the special education costs being one of the drivers we had the 1.1 million uh on page five. Sorry I'm skipping around. um the 1.1 special education budget increase, but um we heard from Mrs. Roy earlier that that the expense for this year is going to be higher than anticipated. So, I was wondering if we will if that's been already incorporated into this budget or if we'll need to be
052revising that again on the expense side. I don't want to necessarily answer for Miss Roy, but um that's new information. So, we haven't gone back and made any adjustments to the 25 26 number based on that. If we think it's going to be a significant number, I think we should at least look at it, but again, we have a little bit to go before the end of the year. So, okay, good. Um and then, uh I I was wondering about with the textbooks. So that's a sounds like a bigger number this year. Is and I was looking back our expenses for supplies were more like $7 million. So is that sort of a one-time bump that we would expect, you know, that would be okay to come out of, you know, say some of it
053out of fund balance and moving forward that our supplies expenses would stay more in that $7 million range or Yeah. So certainly the alignment with steels, we would expect that this number would not be this large every year. It is a one-time expense as far as getting everybody reoriented to the new standards. And you know, there's probably some expenses in that number too related to establishing the steels or I'm sorry, the STEM um special materials and and things of that nature, equipment. So, those would all be um one-time expenses. You know, there would be the normal sort of replenishment of consumable supplies, but beyond that, I think that you could definitely count on this as being a one-time expense. Okay. Thank you. That's helpful. Uh that's I think what I had for the moment. Any
054additional questions from the board for now. Yes. Vice President TD. uh on page 25 um where we're talking about the different areas, the benefits. Um, this year we spent about $800,000 or we're projected to spend about $800,000 less than budgeted, but then we have a $1.7 million increase for next year. Is that's 10.2%. Is that based on this change in the medical? That's the majority of the difference, right? You're talking about the difference between the 800 and the 1.2 or Well, I just it's in the 200 line on page 25. Oh, right. Yeah, some of that is social security, too. So, it d so the social security expenses in 200. The only one I broke out was peers. So, you get a little bit of an increase just from social security. Social security because it's
055driven by the salary number. And remember, it's grossed up. Yes. So, it's really not that whole number. I just have to show it here because the state has to show it. you have to show it in this particular line but it's half of that piece. So if you go back reimburseed right so if you go back to the um the driver slide you can see the breakdown of that particular area and I did I did show you um the pie number compared to the healthcare number so that 1.7. So I'm trying to find it here. Page 16. We're already right here. Right. So that contractual agreement under benefits. If you if you don't include that 2.9, the difference really is that social security number that's buried in that plus the 1.3 million really for healthcare.
056For healthcare. Okay. So that's the while we're on page 16. Um, so the special education student services the $396,000. Can you talk about that? It going down. Yeah. Again, budget compared to projection, but projection being not including what we talked about in finance tonight. So that really could go away as a driver. It might be updated. Okay. Might be a different number when we look at that. Okay. And then back on page 25. Um, oh, you answered my question. I I had wondered about the supplies too. Uh, but that's the textbooks right in the 700. Just curious. We budgeted 607,000, spent 226, and now we're going to spend 204 next year. So, do we decide not to buy um some of that I think is a change in the category of a computer whether it's
057a new computer or replacement computer and then what it costs because if it costs a certain amount it has to be on the 700 line and if it's less it has to go on the 600 line. So there's actually computers in the supply line and they used to always be in the equipment line equipment, right? So we're we just talked about this morning of the fact that they're our computer budgets are a little wonky right now. So we're going to look at that number and see whether we think we need to make some adjustments there for next year because we're going to see some increased costs, we think. Okay. I was just trying to find other ways we could save more for $100,000. Understood. We were looking at that as well. Okay. Uh thank you.
058That's all. Any other comments or questions at this time? Okay. So with that, we will uh turn to the public. The board now invites members of the audience to comment on the presentation. As a reminder, public participation is for district residents and district taxpayers only. If you have comments or questions, please step to the microphone and state your name and township of residents. We will end comment with the last person in line. Hi there. Uh, my name is Julie Miseros. I'm a resident and taxpayer of True Township. Um, I don't know if this was addressed in the previous workshop. I wasn't here for that, but I wanted to know if you could comment briefly on some of the um, unfunded or underfunded mandates that come from the state that put downward pressure on school districts
059to have to put into, you know, programming and then have to fund figure out how to do that yourself. I don't do you want to jump in with anything? I mean, there's a ton of them, but maybe categories of them to make it easier. Think about some categories. Special education. I mentioned in this particular presentation tonight, a lot of that majority of that is mandated. So, you saw on that particular slide that there's quite a disparity between what our special ed expenses are and what we get from the state. uh woefully underfunded and that's a big one right there. Could you estimate about what percent you have to take on the burden of versus what the state will reimburse districtwide? I don't I don't have that information in front of me, but on that I'm
060not sure what number slide it was on, but there was there was also a um a slide in the last budget workshop that looked at a 10-year look of the disparity between special ed and funding. So, there's some information in the slides that are on the web from our March uh budget workshop as well. Thanks. And then on slide 20 of tonight's presentation, there's um there's a slide that that depicts the expenditures for special ed and the difference in the subsidy amount. Okay. Over the years, occasionally that's we've been asked to try to put a number on unfunded mandates and often we find often the exercise we have to make so many assumptions when we when we do that. I'm not sure the the answer is always meaningful, but we can look at large categories.
061Um certainly the Pasers pension the statutory benefits are uh a significant part. But by way of example of something that might just say come around is the steel sta uh standards that were uh outlined that are in effect next year. So we're starting testing uh according to these new standards and the instructional time that we had allocated were for the prior science standards. So not this is where putting a cost on it is challenging. We've already spent considerable pre uh professional time training teachers, engaging them in curricular revision, instructional changes, and those costs are kind of sunk because they're employees of ours anyway. But if you look, for example, we are adding eight STEM teachers for next year. and the revision of the science or the updating of the science materials being estimated at $1.7
062million. It's just a one-time expense is an example of how um an unfunded mandate in particular can cause a significant district expense. Okay. Thank you so much. And I appreciate the clarity and the transparency of all this. It's um for someone who's pretty new to it and kind of um just coming in cold, it's uh it's very helpful. Thank you. Cindy Burgoldi question actually from the question I had at the last budget meeting about uh is the installment payment plan on taxes. Is there any way to find out how many taxpayers actually use the installment plan versus paying out outright? Any rough idea? Um, I don't have that in front of me tonight. I can get that information. Okay. I'm curious. Sure. Um, actually Westchester School District has a four payment plan and there's a
063three payment plan, but it's spaced in Rner, Garnet Valley, and Rosemeat Tree Media. They pay August 31st, October 31st, and December 31st. Gives a little bit of a leeway. Um I I think it was during COVID uh the district uh didn't charge a penalty if you had until December to pay. I wonder if that would help. We're going through all kinds of things with the stock market and everything changes and I just wonder if we could pull something like that this year instead of something to think about. Yeah, it's something I mean we'll we'll we'll take it we'll take it under consideration. I mean I'm remembering what we did. Okay. During COVID I'm blanking on whether we were Yeah. authorized to do that by statute or not, but um it just would be a thought
064with a lot of people's retirement and everything up in air. Got it. Thank you. Thank you. Any other comments from the public? Okay, seeing none, I'll turn back to the board to see if we have any further discussion from the board or questions. Yes, Dr. Hinsky, always always have a comment. Um, so we we are getting toward our proposed final budget which will be voting on at the end of the month, which is does not bind us. It's, you know, a step along the way. Um, but we are getting to the point in the year where where we have more information in terms of, you know, there are not that many more things that are going to be coming in and drastically changing um the estimates and we're so we still have um a bigger
065gap than usual. Um, so I I'm I'm comforted by the textbook discussion in that that's a expense that's I think going to be going be built into next year's budget, but would not be as large going forward. So maybe that's a million dollars that that we can think of as a onetime um expense. And uh I guess then we're So maybe we're we're thinking of um more of a you three plus million dollar um expense, but I just I wonder um if the administration is thinking that there are other areas to squeeze here or is this um where we're going to end up and and how do we I address that that gap. All right. So, um I guess to answer your question, I agree with what you said um that there are things that
066from a policy perspective that are part of the budget that are one-time expenses. There are every year. So, if we wanted to talk about those things, it wouldn't just be textbooks. There' be a lot of other things in the budget that would be one-time expenses that you could commit fund balance to. Um, you have the commitments that are listed in here. So, you can see kind of what your, you know, what your ability is to be able to spend that fund balance money. We also talked about the fact that we don't necessarily want the fund balance to go down as a percentage of expenses because affects our Moody's rating and the like. So, um, in past years, we've taken the capital funds transfer and moved it, uh, lowered it and moved it into the contingency
067fund. Now, since we're, um, budgeting that in the anticipated spending number, you don't want to, or I would recommend you not reduce the authorized spending number. So, we still want the ability to transfer money at the end of the year, and we need that ceiling of authorized spending to be able to do that, but the deficit would be smaller if you made the capital funds transfer 5 million rather than 6 million and put it down under the contingency amount. We've done that in other years to get the number down. And we could do that again, right? But ultimately, as we've discussed, it really it really doesn't make a substantial difference because we do the capital transfer at the end of the year. So if if there weren't $6 million, then we wouldn't trans transfer $6
068million, right? We haven't really ended a year in a long time where we had a deficit net. So we we have the ability to transfer the money. We just want to make sure that if the board decides even at the end of the year if we don't have that excess revenue, the board can still decide to look at the fund balance and say, "Hey, we we earmarked, you know, $4 million or $6 million. Just recently we changed it to six." So, we can still move that money. We have the ability to do that. And that can be a transfer over to the capital fund to defer the cost of borrowing and offset those project costs. It just would be an impact to fund balance. But we do have that we do have that option still
069at the end of the year. And I I mentioned you know this year this 25 this 24 25 year where we anticipate you know a large this larger tax increase giving us something to be able to move over and above what we budgeted. So we're hoping to get to you know a six or seven million number in this current year which again that builds the base for the following year. number of things um under consideration as well. There will be some refinement of the expense numbers um without having to make cuts that would be impactful, but probably in the tune of hundreds of thousands, not millions of dollars. Um and we hope to have that as part of the proposed final budget. We're just trying to be certain before we take something out of the
070budget that it's truly we're truly able to do that. But as Mr. McDonald says, um, looking at the ability for us to contribute at the end of a year is ultimately probably going to be our bottom line concern moving forward as we wish to grow our capacity to fund the additional school. So there'll be additional ongoing work that takes place to make sure we are remaining underline uh you know under the budget as we at once it's been approved. There's also additional um refinements of facilities potentially to prioritize what facilities projects need to be included and what might be deferred to potentially alter um the bond uh proceeds that we need to bring in which could have an impact of course on our debt. uh that costs in an operating budget. So it it's not
071a simple um looking at that number, but we are looking at that number in anticipation of 2728 and being able to uh make those two lines meet in that year when we open the new school and have full day kindergarten. So, if we're not progressing along that fast enough, then we're going to have to have more challenging discussions about which programs to consider uh delivering differently or not delivering as we approach that time. But at this point, we hope to be able to fund those things based upon the revenues that have been provided. Yeah. Thank you. Any other questions or comments from the board? Yes, Mr. wrong. Yes. I thank you for that explanation. Uh I'd just like to uh add my my voice to the concerns about our, you know, ongoing fiscal uh situation.
072Um I appreciate that we have the the AAA bond rating and I think it behooves us all to to maintain that from a borrowing cost standpoint and an efficiency standpoint, but you know, there's red lights flashing, right? We've got, you know, ongoing deficits over, you know, many years, over many administrations. Um we've got a very large gap this year. Um and as you said the percentage of the fund balance as uh as a percentage of the total budget uh has been shrinking. So [Music] um it's it's a concern and it's something I think we need to uh have a little bit of extra diligence uh as we go forward into the next few years. Thank you. Any other comments from the board? Okay. Oh, Dr. Allen. Yeah. I'll just express um just make a comment
073related to the new school. Um and I am also concerned about our ability to continue to fund um our ongoing projects. And I think we've said in the finance meeting that we don't want to come to 2027 and hire 28 new teachers, but we have to start ramping up that process. And so it's going to require us to have additional funding to do that. So I'm just cognizant of, you know, all the added expenses because this is what our community wanted. Our community understands that, you know, we need an additional school that our kids need to be in full day uh kindergarten and we have to, you know, continue to make tougher decisions uh when we can in terms of making sure that we can pay for that and we don't leave, you know, um
074all the costs, you know, um after 2027. And so we I I just believe this is this is a tough year. It's a really tough year because like Cindy said, you know, the stock market is crazy and you know, it's it's a very challenging time for all of us, I imagine. Um but but we have to fund our projects and um and so I think, you know, we just have to stay um we have to stay on it. um and and not uh revert back in fear because uh these projects are projects that our community has said that they wanted and needed in our community. And so we just have to make these decisions to do what's best for our school district and not put us in a bind in the future, but spread it
075out, spread out the love. Um and so um so yeah, that's my comment. Thank you, Dr. Allen. Yes. Yes, Miss Picion. And to add to what Dr. Allen said, it's also the steels uh the expansion, you know, needed space for additional uh science and also our uh special education uh which has uh grown too. So uh there are a lot of things that uh this community that's why people move here for our schools and so uh that's the investment that we make. So, thank you for those comments, Dr. Allen. Anyone else? Okay, seeing none, I just want to thank again um our administration for providing the information for purposes of this budget workshop and the previous budget workshop as well. I think they are very useful for our community as they understand the the work
076that needs to go in every year for us to put together these budgets. So, uh with that, I believe that concludes our budget workshops for the year. We will continue to discuss the budget at future monthly board meetings and finance committee meetings. I believe we currently have two finance meetings before uh the end of the year and at least three board meetings. So uh with that, please be on the lookout for additional budget discussions and I will officially adjourn the meeting. Thank you all for coming.