Methacton School District Board of School Directors
March 2015 ..........................................................................Vol. 1, No. 3
In our last update we mentioned challenges with the budget for the next fiscal year. This month we would like to provide some detail on the budget and its status.
The approved budget for 2014-15, our current year, is $99,557,372. This budget includes all existing departments, functions, and buildings.
The Finance Committee is working on the 2015-16 budget with the administration in the monthly finance meetings. The committee has recommended, and the full board has approved, if necessary, a maximum tax increase of 1.9%, or approximately $1.3 million, as permitted by the Act 1 index,
The 2015-16 budget continues to be developed with a status as of March 23, 2015 as follows:
Total Expenditures: $102,108,194 (100%)
Total Revenues: $100,294,831
Maximum allowable Tax Increase (Act 1): $1,300,000
Net Present Shortfall: $513,363 (.5%)
The Finance Committee is working on a stretch goal of reducing costs to minimize any tax increase in the 2015-2016 fiscal year.
Major Budget Areas
The graphs below show the major components of the annual budget. Salaries and benefits are the largest components; almost all of the components (96%) are either fixed costs or contractually driven.
PSERS (Pennsylvania School Employee's Retirement System) continues to affect school operating budgets in Methacton and other PA public school districts. Payments and amounts paid to this fund are mandated by the state. The state normally reimburses 50% of our payment (which we include as revenue). Payments are determined as a percent of salaries and the percent has been growing dramatically in recent years.
In 2001-02 the percent of salaries to be paid was 1.09%
In 2014-15 the percent of salaries to be paid is 21.40%
In 2015-16 the projected percent of salaries is 25.84%
A net increase from 2014-15 to 2015-16 of: $2,028,000 (before state reimbursement)
Total current projected 2015-2016 funding for salaries/benefits and pensions is: $65,050,724, or 63.7% of total expenditures.
See more about PSERS at http://www.psers.state.pa.us
Debt Service, while not increasing significantly from this year to next, remains a significant portion of the overall budget. While the Fields Project adds a modest amount to this total ($150,000), most of the debt is owed for past construction projects. Significant new and additional remodels or new construction costs would have a significant impact on debt as a portion of the operating budget.
This is a top level summary of the current and planned budgets. More detail will be available as the numbers are refined. You can learn more at the Finance Committee meetings held monthly and by visiting the Methacton website.
The districts revenues (yearly growth, not including a tax increase) for the 2015-2016 budget are expected to only slightly increase (approximately 1% - 1.5%) and at this time it is expected that future budgets over the next several years will follow the same pattern.
The district believes that the structure of the revenue components for future years is expected to remain the same.
3-Year Budget Outlook
The budget outlook for the fiscal year 2016/2017 through 2019/2020 indicates the district has significant challenges ahead. The projected deficits, before any Act 1 tax increase, are projected to be as follows:
2016-2017 $2.9 million
2017-2018 $4.8 million
2018-2019 $6.7 million
2019-2020 $8.8 million
These projections assume an approximate 4% historic rate of growth in expenses and approximately 1-1.5% growth plus projected Act 1 maximum tax increases in revenues over the four year period.
This is a top level summary of the current and planned budgets. More detail will be available as the numbers are refined. You can learn more at the Finance Committee meetings held monthly, and by visiting the Methacton website
March 24 School Board Meeting Video
March 11 School Board Meeting Video
February 24 School Board Meeting Video
February 3 School Board Meeting Video
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