001e e e [Music] good evening and welcome to the March 10th 2025 School Board budget Workshop one we'll begin as always with a salute to the flag again Welcome to our first budget workshop for the 2025 2026 fiscal year as you can see from tonight's agenda this budget Workshop is the first of two workshops tonight we will concentrate on the revenue 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 an informational opportunity for budget development for the 2025 2026 fiscal year there will be no votes on the budget at this meeting so at this time now I will turn it over to Art mcdonell our business manager for tonight's presentation thank you president
002kork so tonight uh in the workshop we're going to be focusing mostly on the revenue side of the budget and as we have done traditionally and then in April uh during the second budget Workshop we'll focus on the expenditure side of the budget and we'll look at Staffing so timeline for uh the budget you've seen this slide several times this is uh marching towards June where we're going to approve a final budget at our last board meeting so here we are in March and April is when you'll see the proposed final budget and June the final budget we have uh filed for exceptions and we are waiting to hear back from the state so that's part of the budget timeline as well one of the Hallmarks uh that we built into this particular budget scenario
003that you see on slide three so a little bit of tweaking as we go forward we'll make some adjustments if there's significant things that are happening obviously in the budget uh either up or down we will bring them to you uh either at this Workshop or a finance committee meeting currently uh if you Orient yourself in this slide you're looking from left to right at an untreated budget from a revenue perspective in column B and then as you move to the right you're seeing some additional monies for the Act One index at 4% which is that line three that 5.8 million and as you move to the right again you're seeing act one plus the exception Revenue that we've projected and that's that 6 million uh basically .8 million that's impacting the deficit and that
004brings us currently down to about $4.6 million deficit next page is the summary that we looked at when we approv the uh preliminary budget back in January and you'll note that the anticipated spending on line five is what we're showing you in the summary it's not the entirety of the budget the contingency fund which is the $3 million that appears on lines 9 through 11 are is also part of what you authorized in January so it becomes part of the authorized spending but we don't put it in the summary of anticipated spending because when we look at those summaries typically we're applying a tax revenue to that and we don't want to be applying a tax rate uh as potential revenue on top of a contingency amount so you're actually reducing the authorized spending and
005evaluate it based on what you think the anticipated spending is going to be so again still at 4.6 million uh deficit on line six the development of the budget you've seen this slide before um we've talked about this just as recently as a little bit ago and finance about the $6 million that we've included as a capital funds transfer in the budget and we've done that for a couple years we haven't really gotten to that level yet of 6 million uh We've budgeted 6 million in the past we've reduced the number down to 5 million we've only been able to produce about 5 million as an average over the last couple years and I have a slide in the packet tonight uh that talks about that we've looked at projected professional staffing additions that are
006included in the budget and at this point we're at the first look for Health Care uh at Medical 8% and dental at 8% now we will see a second look prior to our next budget Workshop in April so if we see some kind of adjustment that needs to be made there you'll see that in the budget Workshop in April little bit of a reduction of P employer contribution rate down to 34% uh and that allowed us to adjust this budget by 275,000 uh to the good so we reduce the deficit by that amount so budgeted Revenue collection and where do you want to be well you want to be uh north of 100% if possible and we are there uh and have been for the last couple years you can see in 23 24 we
007were at 102.6 breaking down down that summary on the previous slide you kind of see uh where the majority of the money comes from as a percentage and you see that one unusual year uh where we got a federal bump uh from covid but you can see the breaks down breakdown of those percentages and uh the you can see the highest amount uh being the state and that's because and we can talk about this later in the in the workshop but when we look at the state budget and the governor's propos proposed budget often we look at at uh what's you know been the norm as far as what we're getting in funding it's just recently just in the actually in the current year and next year where we're seeing some significant increases in state
008funding so uh we budgeted a lower number and ended up getting a little bit additional uh during the year which is helpful total revenue budget for 25 26 at 183.2 million this is the breakdown no surprise here that the local Revenue is the majority of what makes up our total revenue uh we're not a school district that gets a lot of State funding even though uh we get you know a little over 15% of our budget come from the state it's not a significant number when you look at the overall budget and federal uh again you can see the small percentage there are federal breaking down the numbers of that 183 million for 25 is 26 so you're going to see these slides throughout the presentation this type of format and you'll see it again
009uh when we look at the expenditure side of the budget so to orient you we're looking at um 24 25 the Year we're in now what the budget is what we're projecting uh for the current year as far as Revenue what we're proposing in the 2526 budget the variance between the proposed and the projected so uh our our practice has been here to look at where we think we're going to end up in the year not what we budgeted during the year as opposed uh you know as a bump up against what we're looking at for next year so projection of this year compared to proposed for next year that's what you're seeing in column D in dollars and then in column e is a percentage and we'll get into uh in the next couple
010slides the detail of those amounts starting with local Revenue at 53.8 you can see the majority of this again no surprise is coming from real estate taxes and you can see the other breakdown there of delinquent uh and transfer and uh per attacks included in here are the assumptions that we use in our budget uh for revenue and these are been pretty consistent allows us to uh not see a lot of fluctuations when you're talking about revenue on this uh and especially in local uh we talk a lot about variable revenue and not balancing the budget on variable Revenue uh because it's variable so uh it's up and down and you'll see in a slide coming up what how that really fluctuates so building the base Budget on the real estate tax side of it
011uh makes a lot of sense so we take the current County assessment numbers we add some growth in there we look at appeals which we'll talk about this evening uh and we wrap that up together and say what's the projection going forward again untreated unless we're talking about a tax increase like in the summary we showed you at the beginning the other items that are on here they're variable uh we're looking at typically a seven-year average for those in some cases uh we look at a three-year actual actual uh and then we smooth that out so in interims and delinquents have three years and a lot of the other ones have uh seven years earnings we look at a cash flow projection and then we apply an interest rate to that cash flow projection uh
012we're still uh projecting 4% uh there's a possibility that that could be impacted going forward if we see that we're trending down uh we may adjust that but right now we're not so we're going to leave that at 4% and you can see the other averages as you go down through there again they're they're not significant numbers on slide 12 again this is a format you're going to see in a lot of different uh slides as far as the breakdown of this and the comparison of it so again budget in projection the current year in 2425 in A and B proposed in C and then the variances in the two columns to the right and you can see the breakdown of those and you can see the variances uh over in column D of what
013that looks like compared to proposed so I'm just going to pick one out that jumps out uh 6,500 earning on investment it's a variable uh Revenue amount so we budgeted in the current year 4 million so we're trending at 6 million right now that's what we project at the end of the year and we talked about this um at finance a couple times when we look at the actual monthly financials you can see earnings are trending a little higher uh we're still projecting that to be at 4 million uh because we think there's going to it's been coming down a little bit but you can see the difference between where we are in projection and what we're proposing we'll continue to look at that because I think that's an area that possibly can produce some
014um extra Revenue going forward so if we see that we're trending a little higher than anticipated as far as far as cash flow and return we may adjust that number in the 2526 interims are really a function of what's Happening uh in between the taxable year as far as increased assessments typically due to either remodeling or adding you know adding things on a particular property so those interims again see a smoothing because we look at averages you can see a little bit of a variance there and then delinquent taxes is just a function of uh what we're projecting as an as a um seven-year [Music] average next slide is historical and you'll see this in each breakdown when we look at the different levels of Revenue so we're going back to 2122 and you can
015see 22 23 23 24 is actual numbers so you get a look at those three years and then you look at our projection for 2425 the current year and then what we're proposing and you can kind of see a comparison there what's happening in those particular numbers uh what's obviously pretty glaring is if again earnings on investments if you look at what we where we were in 2122 and where we ended actual uh in 23 24 uh quite a significant change uh in those numbers slide 14 is something we put in a couple years ago just to show you uh really the variable nature of variable Revenue so if you go back to 1819 uh and you pick out a couple of those local variable Revenue amounts U interest income interims delinquents transfer tax those
016are all variable Revenue items um and you can see how they change in each of these years and whether they're over or under the one that's pretty I wouldn't say easy to project but it's easier to project would be the property tax because you're really just looking at assessed value you're putting in a little bit of growth you're applying it to whatever the millage is and you're looking at appeals so in years where we have a little more growth or a little less or we have an impact of appeals that we didn't anticipate either positively or negatively it kind of affects the property tax number but for the most part we don't see uh big swings in those numbers so just to orient it for each year locals on top and then State and then
017Federal so kind of the way it appears on the budget to thousands are local 7,000 are State and then 8, thousands are federal this is a slide we started looking at a number of years ago when we saw a significant downturn in the economy back in 2008 and you can kind of see um how variable revenue is impacted by that so we looked at interest earnings transfer tax to linqu with inm same ones I mentioned on the previous slide and you can kind of see the variability just just by looking at these bar graphs of those numbers and again when it's a positive variance it's great when it's a negative variance uh that you don't anticipate it's tough to uh balance your budget on those types of things this is a summary slide of that
018previous one so just taking all those bars and smashing them together and look at the impact of that in summary form and you can kind of see the up and down nature of variable Revenue going back to 2008 this is a slide I borrowed from the IU uh just to show you what's happening with assessment growth in Chester County goes back to 2014 and they have some Hallmark things happening that are impacting those assessed values and uh if you go out to the edge of this on the right hand side and starting in 2022 you can kind of see what's been happening with assessment growth in Chester County it's been uh negative so it's seeing a negative impact of interest rate hikes decline in commercial markets assessment appeals so that's impacting obviously the entire assessed
019growth in Chester County including um Tradin we're impacted by that as well there was a time uh several years ago when Chester County um had kind of the unique label of being the only County in Pennsylania had continued growth since its Inception that stopped about six or seven years ago uh we're starting to see growth again and um you'll see in this particular graph again something I borrowed the slide from the Intermediate Unit uh you'll see where we are down at the bottom there with assessment growth as a percentage of change so from 2007 to 20125 we've grown uh 8% so not as significant as you'd think um but again there used to be um growth every year and it when um if I go back 15 16 177 years we used to have a
020growth factor of about 1.25% pretty regularly every year on assessment growth now we're down to about half a percent so what does that mean really um impacting the the amount of Revenue that comes in the district from a tax increase so when we have appeals uh either residential commercial that are represented on this particular slide uh you can see residentials in in blue there the small bars and Commercial is the purple bars and then the cumulative loss from that is the green bar so um each year you know when you see a reduction in assess value that repeats itself each year and the the impact of that uh obviously grows exponentially so you can see uh by the ctive loss and what we're estimating for 24 25 it's pretty significant uh change due to uh
021assessment appeals so what we've done uh is an attempt to recoup some of that by looking at uh sales per the board policy that we passed a number of years ago looking at sales of properties and then bumping that up against what's currently on the books as an assessment and if it um if it reaches a certain dollar amount and we then appeal it if it makes sense to do so we consult with the tax attorney uh to do that and they we appeal those So currently Uh current gain is what you're seeing on that blue similar to like an assessment loss we're seeing a gain in that blue bar and then the cumulative gain is the purple bar so again it's not as big a number as what we've lost in appeals but it's
022certainly an impact uh to the budget uh overall at 1.3 million all right so that kind of completes the local uh portion and we're going to move on to State now uh the state budget again at 28.6 million that we saw on a previous slide the majority of what is coming back to us is retirement which uh for those that don't know we have a it's pretty much a formulaic uh reimbursement by the state of 50% so on the expense side of our budget you'll see uh twice that amount pretty much as a retirement expense and the same goes for Social Security at the bottom of this slide at 2.9 Million so the the combination of those two things the state is still uh re reimbursing us at 50% there hasn't been any proposal uh
023in the current budget um or I should say the proposed budget for 25 26 from the state to rechange that uh 50% so we're still building that into the budget um they've talked about it in previous years but it has not uh happened yet so that's a good thing uh basic Ed funding and special ed funding we'll talk about in more detail uh all these actually when we get into the proposed budget from the governor some of the assumptions that we use uh in state budgets a little bit different uh than what we use in local rather than uh focus on averages which would really not be applicable with the state budget because it's all over the place we we usually look at what we're getting in the current year and say okay we we
024believe that this hold harmless that the state has had is going to continue we've heard that again this year so we're putting in what we're getting in the current year actual along with um either um what we see as a projection if we know from the state we're going to get X we will put that in the bond schedule obviously that's something that's already established that's not difficult to budget and then we look at what happened in the last year so the only thing we really don't include that we have gotten consistently is a contingency amount that we get paid uh from the state for special educ special education expenses uh it's not a significant ific number I think the last time it was like 150,000 um so we've gotten that luckily but it's not
025a guaranteed amount we have to file for that based on our expenses and that's really something that possibly could go away in the future also on the slide is the federal assumptions again based on Awards uh we will build those in if we know them and then medical access that's something that is a pool of money at the state level from those students that we serve and families that are ma eligible and we build a fund at the state level that we draw down on so we have the ability to impact what we draw down each year and we budget based on that slide 23 is the state revenue and the variances again same orientation of this slide that we saw on the local side and you'll look at budget again for the current year
026the projection for the current year the proposed and then the variances not significant uh variances mostly because we're proposing uh what we're getting and if we if there's a difference it's only because we haven't gotten the money yet we're anticipating getting the money so those variances most likely will fall away um but we're you know the the retirement and Social Security is based on what we think the salary is going to be so that's always different because our salary never rends up exactly what we're budgeting but the other numbers uh if we're proposing a different number uh we'll talk about that in a little bit on the governor's Slide the governor's budget slide why it's a different number next slide again uh just looking at actual history compared to where we are and you can
027kind of see trends of what's Happening uh in that we see some significant uh increases in basic aded subsidy and that's a result of the governor's budget last year going from 4 million in 2122 up to 5.4 million in 2324 and up to 5.5 in the current year on the federal side smaller dollars but based on Title One title two and title three programs and you can see some numbers in there for U things like the cares act um that you know is not is not continuing uh it stops in 2324 and then what we've drawn down uh in medical access that I mentioned earlier so basic Ed subsidy for a long time for those folks who have been following either board members or others uh you'll recall that we pretty consistent uh subsidy each
028year and it wasn't really growing until recently so you can see some pretty significant bumps starting right around uh post pandemic for the last three or four or five years same with special education uh expenditures and subsidy um I have another slide in here I think it's the next one that shows you a little bit of the Gap but we talked about every year the big disparity between what we spend in special ed and what the state's willing to give us as a subsidy and that little tiny gray bar at the bottom is is what we're getting in subsidy and that big blue bar is what we're spending in expenses so right now um the last actual year that we buttoned up in November 23 24 33.4 million in special ed expenses pretty significant number
029uh State giving us back about 2.7 million so just to give you a finer point on what this looks like over a 10year period on slide 28 you can kind of see the difference so if you look over on the right hand side the that that $15 million is the average Gap that we're seeing in each of those years um pretty significant number and uh when you're looking going back to 145 to 23 24 Transportation uh is another subsidy we get from the state and it's been uh fairly flat over the last 3 four years uh it was really based at one time well it still is based on a formula it's just that they have not funded it to the level that when you apply the formula across the state that everybody gets the
030same amount formul Lally that they got in the past so they've kind of flattened it out saying we're only going to fund it at this level regardless of what the calculations come in at so we're still um you know pretty pretty far short of where we are expense wise we're spending 8 million we're getting a little over a million back uh that's not expected to change and I have that on a slide coming up one of the biggest pieces um of our well one of the largest expenses on the expense side and then of course I talked about earlier the revenue side that 50% is from the state reement system that we pay in for all employees in the district not just teachers so every employee of the district pays into piecers and you know
031the three-legged stool that we talk about that funds peers is the employee contribution the state contribution and then what the fund gains in interest income kind of what we do when we invest so those are the three things that fund that system and we got a little bit of a break I mentioned earlier that 275,000 that we reduced the budget so we're down to 34% in the 25 26 year and then these are the projections that come out each year in December from the State Retirement Board of what the rates for employer contributions are going to look like going forward so we pay that percentage of every employee that's in the system we pay that into that fund and then we get 50% of that expense back so you can see the net rate obviously
032is just 50% of the rate that's in the First Column and then what comes back is really just half of that so the budget impact is half of that amount so we're getting back pretty much the same amount not all salaries that we pay are P eligible so there is a little bit of a difference when you look at the straightup salary number compared to the expense calculation all right Governor's budget that he released uh back in early February little bit disappointing from the perspective of the proposed increase to the basic head subsid it was a much bigger number last year only 75 million as a proposed increase uh that's formula driven so that s SW means studed wait studed waiting so based on enrollment uh what do we think is going to be driven
033out by the formula for us that's a little over 75,000 or 1.3% that was a much bigger number last year you can see uh smallest proposed increase in basic Ed substan in the last 10 years so a little bit disappointing and just like last year uh we really are not eligible for any kind of adequacy or tax Equity formula driven money uh that goes to I think probably about 120 schools in Pennsylvania we are not one of them uh because of U really the aid ratio and the affluent U nature of how they calculate the The Waiting of that through the market value Aid ratio special ed uh still at the 1314 distribution level hard to believe but um they are proposing 40 million increase to districts again driven out by that student weighted formula
034and for us that's a possibility of it going up by 38,000 and that's about 1.48% there is a proposed student-based allocation of about almost 480 million and if that would happen we'd get an additional 431,000 um I have not heard anything coming out of the state either from the legislative uh group that uh from the assoc iation or really what the likelihood of that is of happening but I'll continue to keep my ear to the ground if I hear that that is a possibility that's another lever that we can pull on the budget to increase our Revenue calculations and possibly incre or decrease the deficit Transportation still anticipated to be the same amount so we will again build that in as we had in the past which is the previous year number and then the
035ready to learn block grant again for the um year at $199,600 as an assessed value reduction so everybody that's in uh the homestead Farmstead exclusion so I encourage anybody that has not filed for that to do so at the county level to get that tax break from The Gaming revenue there's a proposal again to set a charter a Cyber Charter tuition rate of 8,000 it didn't get any traction last year uh they're not anticipating that it's going to get any this year either but it is in the proposed budget by the governor 125 million for Improvement Grants for school facilities 100 million for State reimbursement for Universal free breakfast same as last year uh 100 million in physical and mental health grants and that's um plus another 11 million from pccd so obviously we'll look
036at those and if we if they do come to fruition in the budget we will look at those and if we are eligible we will apply for those 40 million in student teacher stien program so a continuation of that 7.5 million education or Prof professional development all in the governor's proposed budget what's not in the budget uh no Cyber Charter reimbursement so still not a um any kind of addition of that cost again brick and mortar different than Cyber Charter still no planc con funding so even though they said you know they support plancon they're not putting any money into to fund it there's no proposal out there for a minimum teacher salary this year the past scholarships are not in and eitc expansion is also not in the governor's budget again that doesn't mean
037it won't happen uh as legislation talks about those things they could get added in or they could be proposed as part of a budget or a school code change or whatever comes out of the Omnibus Bill so we'll continue to look at that as we have more information get closer we'll report out we looked at this last year um I think maybe the second year we looked at was charer school cost it really was for the longest time as you can kind of see by this graph a big part of our budget it jumped during covid and uh we thought at that time it would come down and it did uh but we saw it bump back up in 23 24 so the combination of this uh particular graph you can kind of see cyber
038regular and cyber special ed and then brick and mortar special ed and brick and mortar regular so the the combination or the the level of those have changed based on the enrollment uh and obviously the tuition R so one of the things about you know Cyber Charter and Charter Schools it's the tuition ratees impacted by what we're doing here uh not what they're doing there and that's part of what they're talking about in Harrisburg so if you look at 34 you can kind of see you know why we're why we would see an increase of expenses but again only if we have the enrollment so on the next slide uh if the numbers of enrollment go up uh then you're going to see you know obviously a commensurate increase in the expense and if our
039tuition rate is increasing and the students are increasing you're kind of getting a compound effect of those two things which imp impact the total expenses so right now we're again estimating where we're going to into the year the reason we don't know that number is because it it's so volatile during the year it goes up and down uh but right now it's at about 45 students same type of analysis here on slide 36 that shows kind of the disparity or the gap between what we spend in Charter tuition and the pension costs Rel related to that and then where would the money come from because there's no charter school funding so what are we getting uh how are we paying for that well the assumption is we're paying it from our basic Ed funding and
040you can see the 10-year gap between those two things pretty significant at 4 million 4.1 [Music] million U put a put this fund balance slide in really just for informational purposes but also to um give the board a little bit of comfort in that we have a uh designated or committed amount on line two for capital projects so what we talk about as far as a transfer goes that if it turns out any year that you want to transfer more than what's being produced in the general fund you have the ability to do that because you've committed at least uh one year in the budget of funding and you could pick away at that uh if you don't make those numbers at the end of the budget year this fund balance number has been pretty
041consistent uh overall if you look at the graph on 38 you can kind of see uh we haven't really increased our fund balance in the general fund uh obviously by Design because we're moving money to the capital fund uh but in recent years when we've really got uh the uh kind of the veil pulled away on what Moody and how they rate things uh now they've told us that well we were actually look at your general fund fund balance we want to really want to see that grow every year so now we're taking kind of a different look at that rather than making it a zero or a negative in the general fund we're leaving money in there to produce a little bit of a positive um increase in the general fund so it doesn't
042impact what you see on line 30 on slide 39 which is a reduction of the percentage of fund balance compared to your budget so we're trying to you know manage that a little bit more than we have in the past and uh being more conscious of that now that we know that Moody's is actually you know giving us a certain percentage of the rating based on that that Moody's rating obviously helps us uh we don't have to carry bond insurance and it also helps us obviously if we don't have to carry insurance it's less expense and then when when investors look at those numbers they look at our AAA rating that actually generates some interest and allows us to have a better bond issue when we get to that point slide 40 uh contributions from
043the general fund I mentioned this earlier so if you look at um going back five years I know it includes two U Co impact years but right now we're about an average of 5 million that's what we moved in the last two fiscal years so we're hoping that we're going to be able to make the budget number this year six million uh and then we talked about earlier the funding of these uh two two large projects that we have going on in the capital Fund in addition to the infrastructure projects getting us up to uh either a close to 8 million or an excess of that going approaching 12 and then hopefully seeing a swap out of that uh transfer with the annual operating expense of the new elementary school this graph um extremely hard
044to read numbers wise but I leave it in here just to give you an idea um you know what what's happening in the capital fund and where all those sources and uses are coming from so you see um kind of what we're moving from the general fund and what and the makeup of that uh with what we do in a bond issue and how uh in the past we've mixed those two things together to pay for that expense and then you can see overall what's happening to the capital uh fund fund balance itself the next slide a little easier to read uh and see where we've been with our Capital expenditures and then uh what's happening in the general fund so even though we're able to produce a surplus in the general fund that allows
045us to fund those Capital expenditures overall an entity-wide uh we're still seeing deficits overall and those deficits are um plugged by what we can do on the bond issue side so we produce a certain amount of money like we did about a year ago when we issued bonds and we had that 40 million to be able to buoy the capital fund uh and pay for the athletic fields project and infrastructure projects projection model that we put in each year uh looking ahead again untreated with any new tax revenue and obviously it's producing similar deficits to what we're looking at in the current year the expenditures are uh smoothed out basically so it's really just giving you an idea of what is what the potential impact would be to um not increasing taxes now you know
046we only have 33.8 million in the fund balance so it wouldn't take very long to deplete that fund balance um you'd be there in about two and a half years but this obviously is not the plan this is just showing you what an untreated on the revenue side looks like the next slide is just the assumptions for that again we're assuming 4% return on investment which may or may not occur 45 slide goes in uh every time we talk about the budget this is the potential or the authorization we hope from the state uh once they tell us what our exception revenue is we know we have the 4% that's Act One index we're waiting to hear back from the state on whether the referendum exception is going to be accepted at 66 % in
047total that 4.66% produces about 6.8 million of Revenue and then you can see the resulting millage increase in column Z the ifos has been doing projections for a couple years now on where they think the Act One index is going and I think it's interesting to look at what they said a year ago and then where it is because it's not always consistent sometimes it's less and sometimes it's more but it is consistent that it's going down so they're saying that the index from the 25 26 year that we're currently talking about this evening is at 4% they are projecting and they did project a year ago that it was going to go down it's just going to go down by a smaller amount than they originally said what does that mean um does it
048mean it's going to come true they've been pretty close um they projected it was going to be 4% a year ago and it was 4% so I'd say that's pretty close but so if you follow along at what really what it means is that uh it's going to be a little more difficult to be able to build the base uh with a smaller Act One index and you you've also kind of seen that the exception Revenue that we have is non-existent on the Pacer side so really it's only the special ed exception that is possible now that only comes from a calculation of what the difference is in two actual years so you're only going to see an exception if your expenses increase but but you don't really want your expenses to increase because you
049have to have a tax rate to be able to pay for that so it's kind of like a a circle that really you don't want to get into you don't want to hope for more expenses so you have a difference but that's how it's really calculated and it's really supposed to be exception to pay over and above in other words the Act One IND shouldn't pay for those increases in special ed it should be coming from the exception Revenue to be able to cover that all right impact for act one and tax rates right now for us at 4.66% on the far left hand side of this slide at the top and it just really just shows you what each tenth of a percent means uh as Revenue so each reduction of a tenth tenth
050of a percent you can see the difference there and then also uh you see the impact um to the homeowner in the far column this is based on the average it's bottom of SL it says based on average assessment of a te home at 265,000 and change with an average tax bill of 7,518 that's comes straight out of the calculation of the assessed value what the bill is currently 48 is just a historical slide that shows you where we have been and also looks at the exceptions that the board had approved again this is not exceptions eligible for this is only exceptions that the board approved in June so there were other years where we're eligible we did not take those exceptions all right I put in a couple slides uh to show you kind
051of comparison of where we fall with other districts in Chester County and some others we've included uh like Laura Maran and rner on some of these slides and you know we've talked about uh earned income tax we don't have an earned income tax here we don't have any plans to do an earned income tax next year here uh we do know the Easttown Township has approved one that's in place uh we aren't getting any of that money um there hasn't I don't believe there's been any decision in Tradition yet on EIT so again for an EIT to be effective here and we we see it in our budget calendar each year at the beginning of the year you kind of see the the steps that we'd have to go through to go that it goes
052back to November or you have to have starting meetings and then you have to you know advertise have a referendum has to be voted on and then there's a whole process for that so we're already passed that for next year but we will again talk about it next year it'll be on the budget calendar again this slide really just is showing you the average taxes paid by uh districts in Chester County and others like rer lower Maran and those districts that have an earned income tax are in red and those that donor in blue and you can see we're fourth uh with those other districts and I would say um you know comparatively a grve is not really I would say a comparable District to te uh Great Valley is a little closer but we
053they have a different kind of commercial Corridor than we have here uh so they have a little bit they're leaning more on Commercial taxes than than residential and they have a little bit different makeup but um I'd say overall we're the lowest uh of those of those districts that don't have uh with the exception of Great Valley in dollars what does that bring in for those other schools again this is Chester County earned income tax collections uh the one the one school that's not on here that does have an earned income tax doesn't get collected by the same collector uh it's actually gets collected at Lancaster County uh so that's why it's not on here it's OCTA so uh Keystone Collections that does theit for the rest of the county those numbers are represented here
054fairly significant number numbers what do we compare to um as the third largest District we would be uh probably it's interesting to look at Westchester and Downingtown when you think of the size of the budget of those two schools in Downingtown being larger but Westchester having higher earned income it just shows you that uh what's you know the earnings in those areas are larger so uh we've talked about that number being a pretty significant number for us and those districts that have that earned income tax like on that previous slide their average tax bills are Lower equalized Mills state uses this as a calculation uh and funding for us for basic Ed subsidy so it's important and it's really the tax effort that's put forth by the taxpayers in the district to be able to
055fund the district so we're um at an equalized level that's at the bottom of this list and Radner and lower Marin are on here too and um the Chester County average is at 20.09.2011 on an even playing field and what comes out to the millage rate is something that's fairly low for us uh comparatively this slide we put in a couple years ago just to show you what um in dollars te residents pay and we looked at a 10-year period again we're no surprise we're down at the lower end of that because we have a low lower equalized millage rate uh so we'd have a lower tax bill and a lower payout B based on an average assessed value home in The District budget and year end projection for the current year we looked at
056this at the last finance committee meeting has not changed but it does have a positive U you know positive outcome here if you look at the budget imbalance on line 11 uh we started out with a deficit uh when we started the budget year approved budget at 1.6 million and we've moved that about 2.8 million to the good so we're projecting now a surplus and then again that's with a $5 million uh Capital fund transfer so if we were to end the year today we would be able to make a $6 million transfer and still have 165,000 a change left in the general fund budget I'm not proposing that but we'll continue to look at that as we go forward we won't be able to know those numbers really till we get closer to fall
057September October when we start talking about the amount we can move to the capital fund the property tax rent rebate program that we talked about last year still uh an impact it got a little bit of a bump last year so I think it's important that we put this slide in here to show what is available uh for those folks that are eligible uh I do have uh the website or the link at the bottom uh if anybody wants to use this as a reference uh to go out and take a look at that but uh it's been in place for uh quite a number of years and it's they're now putting uh increased limits in there for uh those folks that are eligible key dates coming up for us after tonight uh would be
058the second budget workshop on April 7th and then the proposed final Budget on April 28th and then the final budget uh in June so it's coming fairly quickly and uh we'll continue to work to reduce the deficit and bring you things uh in future meetings most likely at Finance but again we'll put uh that into action at the next budget workshop and show you the results of those that completes my formal presentation I certainly welcome your questions thank you Mr McDonald for that detailed presentation I will turn to the board on either side here and ask if folks have questions yes Miss Pichon a description on page 11 and 12 under revenue from IU Ida federal funds just describe that acronym um I always just say Ida I don't know do you know individuals with
059disability Education Act there you go we abbreviate a lot of these because that wouldn't fit on there but we can certainly put a little key at the bottom you have on some of the pages but not all some I do yes and acronyms and I are like thank you yes Miss a um yes since this is the revenue part of the uh budget Workshop is there any opportunity to uh increase the rental rates uh for our the uh facilities that we rent uh to different uh organizations um the the outside rentals facilities use yeah we're we're actually um there's some adjustments on the table that I think are going to come at the next policy committee meeting so uh again not overall but we haven't adjusted the labor rates uh so we're adjusting those for
060the new contractual amounts and then we're bumping up some of the other rates so yeah we'll see increases for that yes Dr Allen um I know that we probably don't know the answer to this but it's regarding the idea the disability funding um and with the um I'm not sure if that funding that Federal funding comes from the Department of Education do we know that um because I I would just want to know in your circles are there any discussions about the impact because this budget is really based on although it's a half of 1% um of federal funds I would imagine that that half of 1% is the idea funds is that correct that's on I think when you say 1% do you mean the half it's like 50. 55 wait it's on page
06112 let's see here's 12 right so the Ida money is actually passed through uh it comes from the feds but it's given to the intermediate units and then it comes to us from the Intermediate Unit so so actually on our category it's local Revenue not federal revenue not not that it couldn't be impacted by something happening at the federal level but it doesn't come directly from the feds to us um that you see on on slide 12 the 6800 code okay so on page eight though it's uh 0.55% of federal funding is a total revenue is that the same or is that different um that's a different number so if I go to okay if you go ahead in the packet to where the federal revenue is if I can find [Music] it while you're
062looking that up just some some little bit of background and context um there's a the issue in terms of federal funding is it can be handled separately from the question of which department would be responsible for administering that funding they they could set up a funding stream that's administered to a different department um in fact the idea was passed in 1975 and the Department of Education was not created until 1979 um so there had been a combined health education and Welfare Department before that the title one funding started back in ' 65 well before there was Department of Education so the federal department that would be responsible for promulgating that funding is a separate question from the amount of the funding itself and how that gets distributed is it would just be speculative at this
063point because we don't know how that whole conversation's going to play out that actually answers my question right so on slide 25 that that million5 if you look on the total there you can see in this the column C the proposed number is that million five so not related to the ID amount but you can see the majority of that million comes from the ma pool that I talked about that that we um of the students we serve that are May Medical access eligible that produces an amount of money that we can pull together at the state and then draw down as we see fit so we kind of control were're drawing down that's really the majority of that Federal money so if it wasn't for that the the percentage would be even smaller got
064it thank you yes Miss TTI uh just regarding that correct me if I'm wrong but the students who receive that it's based on disability not on income uh yes uh I answer my other a couple questions one is a quick one I think parking Revenue it's a small amount but it goes down by $99,000 for our proposed did you say parking yeah okay the high our fees haven't changed have they um I think it's based on the number of spaces and how they work their they have kind of a a methodology that they apply to that so they have I think a little bit of discretion on how that is impacted so I think that 310 probably just comes directly from the calculation and the 350 is also directly from the calculation so it's what's
065it's what's available on Spaces yeah I I was looking at line the 6700 parking Revenue though that's I just wondered why oh I'm sorry I'm looking on the wrong line oh yeah I see it there so projection at 63 um it went from 54 to 63 to 5 4 announ it's back up to 63 so um under the assumptions if I go back to that slide um it shouldn't it should be just a sale of all available passes so right that's a number that would come from the high school so we can check it but they would give us that number based on the number passes they're going to sell I just right thought that they can all right right they can control the number they sell though they're a popular yeah uh also then
066on page nine can you just um again explain I think you may have said this but just for my clarification in terms of uh in column B the projection for uh local Revenue 500,000 and then the proposed is less than that that uh by 3/4 of a million doar that's based on a formula over the years or well it's a combination so on the on page 11 is all are all the assumptions so it looks at you know obviously the biggest part of that is what the current real estate number is so it would look at that number um and again you're you're talking about a projection that and a proposed that's untreated so it doesn't have any tax revenue in it so it wouldn't apply any additional growth or anything of that number uh
067as far as a millage increase it would only apply the growth to the current assessment and then deduct off any appeals and then all the other averages that you see there are impacted into that number so if the seven-year actual or three-year actual drops that number down then the calculation goes down so you're looking back seven years and the volatility of that affects the averages and then that affects the total okay thank you uh and then the last thing on page 34 the special ed just um the charter school expenses I know this is not something that we can do anything about but I think it's good to point out that if a charter school is offering a regular Ed position uh education to a child from our district we're paying $16 16,9 67 and
068if it's a special ed education it's 43,7 24 and that means any kind of special ed correct it doesn't matter what services the child is getting it's just if they have an i Bas on right it's based on the school identifying that child a special ed now I'll tell you that two two years ago we looked at um the kids that were there and identified special ed and we uh actually agreed with that identification that we they would be special ed students here in the district as well so we wanted to see you know if there was any kind of disparity there now that was a couple years ago I don't I don't think we've done it uh lately but we could um but yes it's what we would pay for any special ed um
069identification at those schools uh yes I guess my point being though that at times if you for instance have a speech IEP you might have three sessions a week or two sessions a week for half an hour and if you are in a self-contained classroom for a more severe Aid your our expenses would be a whole lot more and yet they're lumped together when they're in a charter environment right I think you're getting to the really the point of what the biggest concern is that for districts that have these high tuition rates that it's not really related to expenses of the out in that particular school that's what they're you know discussing now in Harrisburg and a way to you know have some kind of a little more fairness involved in that really changing the
070whole calculation of how tuition's calculated and and what schools would pay for those particular students right thank [Music] you yes Miss Pani well uh to uh conclude with that those remarks it might be uh it would be a good idea if you would uh update your analysis from several uh years ago did you say it was uh what 2022 I just I just remember it being a couple years ago I don't remember what fiscal year but it was it was not a lot it was not a long time ago that we did not a long time do do you think there might be a um difference that might I mean have we can look we'll look at it again we'll look at it and Report out at the next budget Workshop that would be Uh
071I that would be helpful because there's been a lot of conversation M every budget year in at the state for that one thing that we could advocate for which we have advocated for uh Charter funding reform charter school refunding report so thank you very much I'd appreciate that yes Dr Adin so along along those lines so if our Charter tuition for education is about6 $166,000 if it were reduced to 8,000 in our total Cyber Charter um expenses are around 400,000 I'm just trying to get an idea that would if that rate were to be applied for our Cyber Charter students we would save on the order of 200,000 C seem I just you know 8,000 times what the 13 kids M so four 105 something like that I mean if we're we we're talking it's
072only the they're proposing that regular Ed rate now I think the numbers changed in other years when they've proposed it but it just never really got I think it was 9500 last year or something like that but um it would be only on the regular ed student side right right so because we pay I'm looking at 23 24 we paid 800,000 and about half maybe a little less than half with just looking at the 13 kids that we're estimating for okay what slide is that oh sorry um that's a combination of slide 32 which has the Cyber tuition rate of 8,000 and then the the what we pay in tuition's on 34 and then the enrollments on 35 right so actually be it's closer to 250 9,000 but yeah so it'd be 32 time 9
073117 change something like that something like that um okay so it's just I like do m in my head but what's that yeah that the what the 20 think 270,000 um but but it would be a savings yes absolutely so I'm just wondering you know what on on what order because I think it's it's helpful to look at the the actual numbers and one thing for example it always strikes me that the special education but for the Governor's proposed budget they're proposing a $40 million in proposed increase to districts with the student weighted formula for the whole state and our budget is $33 million so when you divide that among 500 districts I mean it just is I think it's helpful to have these sort of backpocket numbers that when you hear numbers that sound
074large when they're um distributed over 500 districts it's not not so large um and you were saying you didn't think there's that big a push for the the Cyber Charter flat tuition I understand the state auditor just came out with a report that that recommended a task force and pointed out the the increase in the fund balance of the five Charter Schools um studied which was over $300 million um so I I'm I'm thinking but there was sort of a task force proposed so maybe not next year but maybe in the future um there might be some some some movement but you're not thinking you're not hearing anything that in the wake give that report that people are on board with well what we've talked about um at least in the the business officials organization
075is supporting that idea that came out from the I think pass it is as well so there's support from the state associations to do that uh and it's not often that you know either of those organizations are gung-ho about more audits but it makes a lot of sense and I think it would uh reveal some things that I think would be helpful to for this for legislators to use when they they they make these decisions okay all right that's that's helpful um let me think if there's anything else I wanted to ask oh so the um with the proposed student B based allocation of the 476 million so that's um that's in in the budget but in the governor's budget but not I guess speculative I guess so in terms of of add considering something
076in our budget we would we I guess they we they don't have to pass the state doesn't have to pass its budget before we have to pass ours is there a point where we you think that might be worth including or or thinking about including or would we wait until you know that actually came to fruition before we would think about putting it in the budget that's a good question I I think it's a little too early to tell based on the you know a month has passed since the budget came out I really uh I'm on the um Statewide committee the legislative committee at the association level and we do talk about it but they haven't heard anything about it yet because they just started the meetings just really last week and digging into
077this kind of thing so uh I think I'll hear some things this week and as we get closer to talking about you know proposed final budget and the final budget I'll get a better feel for whether this is coming or not or whether it's getting support thank you so seeing no additional comments or questions now from the board uh we'll start with the public comment or questions the public I'm sorry 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 up to the microphone stay your name and Township of residents and then we'll end comment with the last person in line anybody has a comment good evening Cindy boldi Trad this
078is a little off um I asked this question a few years back and I got a no I'm going to try again would the te School Board consider changing the three installment plan to four for property tax the chapter 15 which I looked up uh says you have to have three installments or they're required but the school board has the power to add more this would help residents who are on a fixed income that have paid for their house there's such a thing as house Rich cash poor um I've had neighbors who refinanced reverse mortgage credit card there's even been a foreclosure on my street lifelong agewise medical expenses death of a spouse can ruin anyone's Financial plans uh 2023 census and East Town said seniors 3.7 live in poverty two different towns of 4%
079I'm asking the school board to have a discussion maybe a vote four plan payment plan to help people people in this Township townships thank you thank you for that comment I I mean I'll ask now I mean if we have any information on whether that's a possibility or not I haven't looked at it for a couple years um last time we looked at it it there's still the same amount you'd have to pay and actually they the installment would be earlier if you had four rather than three um still the same amount of time before it goes to delinquent it's just squeezed into um four same time period I guess is what I'm saying so you can't extend beyond you can't extend the time period to allow them to pay so you still pay the
080same amount it just would be earlier uh the first one would come earlier so it's possibility but um last time we looked at it didn't make a lot of sense from that perspective but we can look at it again okay thank you we any other comments from the public okay seeing none we'll go back to the board any comments or questions from the board okay I don't see any additional ones uh thank you again uh Mr McDonald for the presentation and for answering all of our questions and thank you the board for asking all the questions I think it a productive uh productive discussion and one of two so we'll be we'll be back here to talk more about our budget at our second budget Workshop speaking of which future meetings our budget Workshop to
081is going to be on Monday April 7th 2025 7:30 p.m. again here at kast stoga so with that I think we are done in our first budget Workshop is a returned thank you