001Good evening. Good evening. So you can thank Dr. Myers for our clear display. We have our projectors now, much clearer and properly colored. Thanks for taking care of that. Here we are for April 27th for most up-to-date regarding the 26-27 budget. The we are 6 weeks out approximately. I guess 6 and 1/2 weeks out from our planned final budget adoption, which is June 15th. We are I think kind of well on target to meet that mark. So we look at the timeline here. April 27th our next official meeting with budget is May 11th, which time we would need to adopt a proposed final budget, which is non-binding. It's sort of a marker in time of where we are at that point because it must be approved 30 days before the adoption of the final budget.
002May 11th to June 15th keeps us on that timeline. We do have a scheduled budget finance meeting on May 18th to follow up if we need to from this meeting and that's just for the conversation between now and May 11th whether we will need that meeting or not. Some history along with just present factors. Just a quick history over the last six five budgets plus this one that we are working on. Look at the numbers as of today and that's total budgeted expenses. I'm looking at total expense increase and year-over-year percentage increases. Just kind of driving home that what we have we have forced very very modest increases to kind of rein in our costs over the years. You do see that 5% increase in expenditures. Some of that in 22-23 was still some of
003that federal funding. So some of those increases are related to that including that we had last year we did a technology infrastructure upgrade using federal funds, but those still end up on our expenditure base. So you know, outside of the 22-23 we've seen Well, let's go 23-24 going forward looking at 2.2 as the highest increases of expenditures. That is not easy to do. We know that story here in this room. You know, that coupled with this slide that we see every year in every presentation is looking at what our ability is as a local unit to raise revenue, knowing that about 70% of it all comes from local taxes. You know, with that, 20% 20% coming from the state, the majority of it coming from local taxes. This is our ability to raise revenue, looking
004at the actual index as the maximum for this year. You know, coupling that with the with the amount of increases that we are We're playing a challenging game of math all the time, right? Even if we keep those increases at very low percentages, I think in most of our household, if we could keep expenses down to a 2.2% increase, we'd sign up for that any given year, knowing what increases really look like. Um and our ability to generate taxes, although that percentage increase might stay 3.1 or 3.5, um because that's only half 70%, it it really does not amount to being able to keep up with certain inflationary costs, and uh secondly, you know, if we were not having have not been successful in recent years of finding uh savings beyond what a kind of
005roll over budget successful budget might look like. Just some more historical information. Proud of our ability to maintain costs in recent years. Looking at some of the time frames change because, you know, sometimes different time frames make different sense. Uh looking back to 2018, from '18 to '26, the total percentage of increase in taxes for Quakertown area 7.65% that's the total cumulative increase for the Burks cumulative increase was 15.84% we know on the front of that we had a 0% instead you know that that certainly a lot we have saved about half of what the rest of the county has done in terms of the rate of change for the state of the cumulative percentage of change over that time and then ranking them we are 14 out of 17 and always I should say
006always but I almost always exclude Reading from those cumulative rankings their income tax collection in the county Reading's funding so vastly different than ours. Um it really doesn't really doesn't apply. Um and then also just with me at that work from the mill standpoint the 2026 mills to 32.24 the Burks average is 34.1 that puts us at a perfect rank of 11. We've gone from 7 to 11 over 17 year time so it's the second highest to be 11. Just to you know show that we are and I think this board boards before this board are proud of the ability to um you know ensure that we are seeing cost increases that are limited. Um that How do we do that? You know it's been really challenging and again I changed the time frame there
007you know that post 2023 post 2023 is when all that federal funding the SR funding was gone you're looking at an average of 1.6% since then but then go back to here's where I jump time frames a little bit we go back to 2019 which why 2019 because to 23 that's kind of when staffing was all all wonky and for various reasons of the ways we needed to implement school and also we had some federal one-time funding for that so looking back to 19 we had a 10% decrease in teaching staff 8% increase in administration Um in addition to some increases across all employment categories. Um we had last year civil contract negotiations. Um you know, that were that were beneficial. And then close really sale and make sure that those kind of big buckets
008of things that we have been able to control over that time. Um again with that kind of taking 2020 2023 out of that equation uh to maintain those low increase percentage increases compared to our peers. Um this is just reiterating what we had shown in on March 2nd meeting. Um kind of looking at deficits at that time based on the various points of potential tax increase including uh 3.5 max and 2.1 to 2.8 with that cost of living adjustment which is the number that um applies to some of the increases that others receive in terms of our social security side. So, um this is just a moment in time of where we were on March 2nd. So, since that time looking at changes in expenditures and revenues um in this example uh and this is
009the way I typically do it. I count down from a deficit. So, a reduction in expenses look like a positive or increase in expenditures um or revenue could look like a negative. It just it all ends up leading to reduction about to change in the percent. So, anything that reduces the deficit looks like a positive and then adds to the deficit and that will turn into a negative just for the purpose of this. Um we do have an EIT earned income tax increase estimated of 140,000. That was a um benefit since March 2nd. There's also real estate tax updated set values that will equate to approximately $11,000. Uh when we're doing transportation, we had uh the plan is to There was already one reduced run for next year. We're looking for efficiencies through our uh
010mapping system. Uh working with the First Connecticut Union team, they believe that there's a second run that we can eliminate. Uh so, one and we talked about these kind of different places with the board that it's two total on this year and next year we're looking at changing. So, that's an additional 60,000 since the last time we were presented with numbers. Um We are looking for the 2026-2027 school year to return to the 0.55 uh FTE special education supervisor from 0.7 to return to where we were previously. That's an FTE that kind of worked out um mutually. Uh we have some projected custodial staffing adjustments that will total this look to total this under 70,000 uh in total annual costs. Um we have when we look at all of our open positions when we have
011them, we need to replace in full. We currently have um 16 periods requested for health and PE. We have a vacancy there. Uh those 16 uh essentially split evenly into two buildings that the periods we need to cut need to cover and um you know, where one teacher equals a full FTE essentially equals seven in the way our schedule works. By adding four, that gets us to 18ers eight requests to 16. And what is it? 18? There is absolutely lost time of a period or so because of walking between the two buildings. That's just a four uh which um actually 0.5 there really should be more like 0.55 cuz it would be like 0.53 and change. Um but the numbers are all still the same. Um and while that number may look lower than you
012would think to go from a 0.55, um you know, 1.55 that anything 0.5 or greater gets benefits, but also some of the With all of our vacant positions, we had already in various of the numbers prior to March 2nd or even in that next line when we go back to the top of the column, some of that changed between the expected salary to a new or newish salary prior to calculating the other savings lines. So, that's why it might not look like quite as much as you would think. It's It's accounted for elsewhere. So, the probability 0.55 of the numbers was pretty accurate. The some professional staffing replacements, various positions that we are we know of more recently since March 2nd, the changes the projected changes from expected salary projected salary to new hire salary,
013plus we always budget with two-party insurance for kind of a whole group knowing that some will go in different directions and in different directions for all of the singles and for our family and those who opted out, which all carried a price tag to them. We're going to have to do levels to include six different variations that every could be. We've We've had success just only budgeting for two-party. Same for all sheets out. Um there is a planned food service transfer of 51,000 and with some shifting of some duties around, we could not do that transfer from general fund to the food service, which resulted in over 50 almost $50,000 reduced expense. The health benefits rate updates, the Berks County School Districts Health Trust recently approved the executive board and and brought a recommendation to
014the full board and the full board approved some changes for the 2026-2027 school year. They were projecting The big picture with that is that health care cost amounts to I mean, that's just um some related services, some related to pharmaceuticals, some related to large cases, uh very expensive cases throughout the county. Uh we belong to the health trust because the idea is that a small district like us with, you know, the employees are on our health benefits, that um any one illness or treatment would change our rates from year to year. The health trust would try to try to smooth that out over time with uh larger number of much larger groups. That being said, health costs across the and the country are skyrocketing. Um our health trust needs to replenish the fund balance because
015the the fund balance is dipped uh below 1.75 months and the uh the charter calls for 2.75 months. In addition to plan for increased costs into the future, uh there's some plan changes that were approved uh including uh some different co-pays for all different categories for everyone who's covered in the insurance. There is a $28,000 um stabilization fee that we would be planning to pay in 25-26. Um with um with 26-20 25-26 uh budgetary funds, you can see where that lands us. I think we're really close to zero on our on our latest projections. Um there's a 12,000 give or take each way. Add 28,000 to that, we'll see where we land very close to zero for this year. Um in addition to that, the health trust was originally projecting what was in our previous
016March 3rd was a 15.99% increase. This represents the difference between the 15.99% increase and a 14.72% increase, which was what was approved by the health trust just last Wednesday. So that's actually a reduction of 15,000 expected cost. And then the last piece in there is this budget that is presented here tonight also accounts for if there's a need to hire one more elementary teacher. We have We've moved over the last year we've moved some sections around with especially third, fourth, and fifth grades where we have four sections when Poplin feasible and possible between Greenbrier and uh Presidential Elementary. We have maximized all those benefits currently with our current enrollments. Um We have, you know, the only grade level we currently have that even fits within that range that we we've kind of established the four
017sections in first grade. You know, in previous years the board had had no interest in moving 10 or so first graders into the building. Um so right now the status quo we would like to need another kindergarten teacher if enrollment increases to our typical level. Right now enrollment is about 20 students behind where it typically is at this point. Um we have now 60 students in some form of the process of enrolling. Typically by the first week of May we have 80. And then we see about 20 more come in and then 15 18 more come in over the course of the summer. You know, is that just people waiting to register? We really don't know. You know, and and while I well we encourage folks to register really it's like kindergarten is no different
018than adding a kid. You can register you get the certificate 5 days later. So the urgency is you know, when it comes to the idea of a third bathroom. Um So once we we monitor that and once we get that 80 number, you know, we would we'd want to recommend hiring that position and making it the fifth section. It would be more than 20 per average than it was four. And we know that more would trigger that but it's five and 15 you have that did cover it. So, this projection currently includes that position. That is the $170,000 of new resources. All that being said, that changes the bottom line from the March 2nd projections by $424,000 or $468, reduces those deficits um by that much. I kind of ran through all those line items
019pretty quickly. Are there any Are there any questions at this point specific to any of those line items? Um Those are all recommendations at this point because they are within in the realm of what we we believe we can do it in a fiction. Challenging ones sometimes are those of replacing teachers where you try to budget real, you know, close to starting at step one and that just hits hard sometimes in the process, but again, you look at some averages over several of those positions and we hope to get pretty close to that including benefits, which are a major problem. Okay, um half-time PE position. Would that be a new hire for half-time PE? PE new hire for half-time. Okay. Yes. It's currently a a vacancy in the uh folks that have PE. Uh with
020the transportation, what is the earliest kids are getting on the bus now? And how will that affect next year? What would be the earliest they would be You know, I don't have the time in top of my head that we what they were recommending did not change the earliest time. It's more just about running routes in a more logistic you know, logistically sound way where our routes despite We got on with the CIAL and Transfinder as the program way too late last summer to really run everything. So, they're all everything is currently based off of older routes from almost 16 years ago and different iterations over the time. So, cutting that one won't make kids be on the bus for No. No. I mean, that that should not cause additional time on the bus. We've
021seen what changes, you know, transformation throughout the years in the country with a little bit of a hiccup. You know, we're raised by that. Uh starting the year, I think we should be I think you know, I think we should be better off uh beside you know, with some changes. Any other line item questions? So, this states, you know, just sort of that top line and bottom line of what we're looking at look at the chart of you're looking at those um potential tax increases that would be recommended from the administration, and then the surplus deficit numbers based off of everything you just saw. Uh so, we see, you know, And obviously, we always think of numbers here tenths of a percent. Any number is possible within of you know, between either negative to two
022um 3.5%. Anything's possible, but these give us some markers uh to look at. Um a 3.5% actual index uh increase based off of these numbers would leave us with a $91,919 surplus. At 3.1%, $524 surplus. And you can you can see the rest where, you know, it it works its way down to a highly deficit as we get down to 13.8. Um you know, anything We're going to we're going to go over that because certainly, the board has asked us to go, you know, whatever the board directs us to do, we'll do our best to get there. Obviously, the recommendation falls in this range with 6 weeks to go. It's a lot to look at up on that screen. Um, you know, this is something we'll email out and share afterwards and and be publicly
023available. The top, uh, almost half is what we what I ran through in those line item changes. Um, you know, each each line item change. Then there is in the middle you're looking at some planned fund balance use. We had a planned fund balance use of committed a fund balance IT infrastructure specifically for phone upgrade this summer, uh, which is made necessary because of end of end of life service. Um, the one-year cost we were planning at to be 150 and the one-year cost is only going to be about 50, 10,000. Uh, launched great work done by Mr. Hoffman, our director of technology. Uh, that will, uh, be a new system at a cost of $30,000 in 22 annual for services. So, many of of these IT services that we installed to end their costs,
024but for us that'll be that's a significant benefit to maintain that IT uh, maintain the the remainder of the 150 of the annual IT infrastructure commitment. We have been and continue to plan here to commit higher $25,000 of fund balance to the committed fund balance specifically for the tech infrastructure. Um, going back to that 22-23 when we did the, uh, full what we call tech, uh, data infrastructure upgrade with a plan of going 6 to 7 years having to that overhaul again. That's what we're always trying to build up towards. Um, and then the bottom part you see the fund balance. You know, that will be various uh fund balance accounts. And on the bottom row you have the percent of expenditures in that 5% 8% allowed range for uncommitted um the you'll see how
025that percentage changes based off of uh where you know, where that bottom line should be associated with tax increase potentially from this current budget. Um you know, the challenge of fund balance is that even if you only have a 1% increase of 2% increase of um operating budget expenditures in any given year anytime there is an increase the fund balance stays the same and that percentage of overall operating budget goes down just by nature of the percentage being you know, so if you're not increasing that fund balance proportionally the percentage compared to goes down even if you haven't spent it and your fund balance is expensive. So, it's just something to be mindful of when you look at the fund balance. Um And we've talked about I think uh various times over the last year
026year and a half specifically that a part of the financial health of the district with the review as borrowers for their ability to borrow money is specifically to ensure that we um pass balanced budgets. Of course we have to pass balanced budgets. Of course we pass the surplus budgets because you know, instead of having to use your fund balance that's one sign of health. The second sign of health is your level of fund balance. You know, so those are those are two components there. Um you know, I do think this projection puts us in a place to continue on that path of improved financial health. And um you know, even more so than previous years we have much less impact on the student experience this year than we talked about in previous years. So, Yeah,
027and that's There's slide to look at up on that screen. This It just kind of paints You know, you can see this is sort of a summary of all Not all of the many of the M's spreadsheets. Everyone or We'll send it out. It's just I people look at there. We presented a version of this in March where on the left is what our fund balance um line looks like in February of 2025. Um that yellow line at that point is the fund balance uh with some assumption. These assumptions only account for very, very small increases of overall assessed value, but they account for tax increases based on our current scenario. They don't account for new uh tax properties. What we saw at that point our fund balance Now, given everything staying same, you know,
028we would have exhausted itself in 2027. Uh we were presented things similar to this uh with just some slight changes from when we were first starting in March where now we have two projections. Now, again, the red line is the bottom line and the purple line uh that represent the fund balance. Uh the red line is that 2.8% which showed in the lower range. Uh uh the potential tax increase in the purple is with the index 3.5%. Um with the uh the revenues being blue and I guess you know what color that is, maybe or purple um depending on whether that is 2.8 or 3.5, and then the expenditures with uh projected annual increases being blue. So, all this being said, it still presents a negative image, but yet the change from exhausting our fund
029balance to now looking at sometime in late 2029 or 2030, which is a huge change of direction in short period of time. Um where all these other background will change. The hopeful continued growth of overall assessed value is one piece of that for sure. Um One thing is just notable to say is that all of the conversations out of Harrisburg right now are that well, this year we we will see uh in in certain built into there is a pretty reasonable increase of um school funding, but after this year we should expect it to be very meager for future years because the state government is currently operating at a structural deficit, where they are overspending their revenues. So, without without new revenue sources, they're going to have to reduce expenditures this Um and education is
030a in the environment of the state budget. So, if they reduce expenditures, they're going to reduce education for sure. So, that'll be one time where it is, you know, it's better to to not be state funded, but um in the end we know our our story always uh leads to us being primarily going to be funded by the This is uh a projection. This does not account for homestead homestead. If you have a homestead farm city, you're actually increasing your assessed value in this, but with without that, this is what any what each of those tax increase levels mean annually for the average assessed value of a residential property here in Quakertown. Those are just residential properties, but the average assessed value, which is not market value, is 122 thousand. So, for that average property,
031annual increase of 3.5% is $37.89 per year. 2.8 is $110.31. And then we have a monthly increase that you can see in the right column. On our website under the school board budget finance committee meeting, and at that link you can find the property tax estimator where you can put in your own assessed property value and you know what there's a link on there to find from the Worcester website, and it can show you what the projected total taxes are based off the valuation and then what the increases are annually or monthly. And then we can calculate the annual percentage. That just leads to our current, as of May the 27th, the administration's recommendation in that we move forward to May 11th with the proposed final budget with a 3.1% increase, which would leave us
032at a $520 surplus. Um the Uh the that is the recommendation at this time. Um everything can change, you know, between now and then, but that's the way this works. It's actually between now and and June 15th, but we only have something on our agenda that gets approved in the proposed final budget. Um you know, I think if there's this is the best option for us to continue on a path of of strong financial health while also, um you know, maintaining our costs. Again, we're looking at two per- 2.2% increase of costs year over year costs for this year, which you know, I consider in terms of our job being stewards of financial dollars a success. You know, if not feel like a success in terms of the local community you're holding and the need
033of the family's taxes, that's an unfortunate position that this most local home owner government is placing on the system of funding in Pennsylvania. It's a pretty similar to ours. So, I don't success does not always feel that good. But, to know that we can project 2.2% increase in we've done a good job of trying to control costs. How we have to pay for that is not necessarily the best situation, but if you were to visit Pennsylvania right now, Is there Are there any questions about how we got to this number or why we're recommending this number right now? I'll leave you with next steps. The next steps are board member feedback that you ever have this night tonight or if you think about it over time between now and I say May 7th because, you
034know, we're going to there's something that comes up in your private conversations with any one of us and you want to see something different when we get to May 11th. You can communicate that to the rest of the board and get it on the agenda for May 18th. Um all of that is I there's no need to rush something that last moment to the agenda because it's only it's non-binding. Um at this point that will be the administration's recommendation on May 11th on the agenda. That is by design for motion and then discussion at that point. Um if necessary, that be a conversation you can have part of the May 11th conversation if you need a May 18th budget budget finance committee meeting. And whether we do or we don't, we get a final budget
035adoption on June 15th either as is the recommendation and proposed final budget or with changes that were discussed between now and then. >> So, any questions now? I'm happy to do my best to answer them. If there are any questions between now and any of these examples, points in time, please let me know whether it's one in the public or the board, anyone online. I'm happy with the progress we've made to get to this point. Um and I think that I think there is certainly room for change in good and bad direction between now and June 15th. We're going to hope that the changes are in good direction. And if that were to happen because of some, you know, new revenue sources or because of reduced expenses that do not impact the student experience, then
036there's a chance we could update that recommendation. But as of now, that remains the recommendation. Thank you, Mr. Chairman. Thank you, Bethany, for all your work. All things considered. Um Do any board members have any questions now? If you do between now and May 11th, please make sure you get them to Christian so that they can be addressed. Any questions or comments now? As it's, you know, our standard protocol, if you have a question, you just want to see where it goes, just let me know. And then if it's something that we're going to kind of get to a larger discussion, I'll send it out to the whole board with the notes. We're going to provide the documentation. Yes, can you send it to me? I'm not sure. You can make it a short night.
037It was pretty, you know, pretty cut and dry from Christian's perspective, so Okay. Well, I guess I'll look for a motion to adjourn at this point if there are no questions in the moment.