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2014-15 BUDGET PROCESS

April 14 Summary

A week after reviewing three different lists of gap-closing possibilities, the Perkiomen Valley School Board met again and reviewed the 2014-15 proposed budget in greater detail.

Business administrator Jim Weaver presented the latest overview of next year’s spending plan. Local revenue growth is very slight, and no increase in state funding has been included in next year’s projections due to the uncertainty of Gov. Corbett’s proposed budget. Federal funding is estimated to drop.

On the expense side, the biggest impact to the budget remains the contributions made to the Pennsylvania School Employees Retirement System (PSERS). The employer contribution rate is set to climb from 16.93 to 21.40 percent next year, resulting in a $1.7 million increase to the budget. This increase alone exceeds what the district is able to raise through the Act 1 index of 2.5 percent.

While the Governor has proposed “collars” to ease the spikes in contribution costs, Mr. Weaver noted that this approach could create problems in later years. Budget projections have not included the proposed “collars” since it is uncertain whether or not they will be enacted.

Other areas of change for next year’s budget include salary and health insurance increases, and increases in special education, transportation. Modifications to existing employee positions are also being considered.

Overall, the district’s revenues total $92,967,692 and the expenditures total $96,275,716, resulting in a shortfall of $3,308,024. A 5.36-percent tax increase would be required to close the gap, an amount that is over the Act 1 index of 2.5-percent.

Mr. Weaver noted that in the past, the district has used money from its fund balance to assist with budgetary challenges and, as a result, the existing fund balance of $3,390,537 is low. The state recommends setting aside 5 to 8 percent of expenditures in the fund balance, and the district’s fund balance represents approximately 2.47 percent of next year’s expenditures.

Another option that can be considered is the use of exclusions for costs that exceed the rate of inflation. The district has been approved by the state to use exclusions of $2.1 million, which would enable the district to raise taxes to 5.884 percent without a referendum.

The district will continue to review proposed cuts and revenue enhancers that were brought forward at the April 7 meeting as a way to close the gap, and monitor for staff retirements. The next budget presentation will take place at the May 5 work session and the Board will adopt a preliminary proposed budget at that time. Final budget adoption is tentatively scheduled for June 9.

     April 7 Summary

As part of the 2014-15 budget process, Perkiomen Valley School Board members had the opportunity to review a variety of options for reducing expenditures and enhancing revenues during the April 7 work session.

The options were presented as a way to help close the approximately $3.4 million gap that exists between expenditures and revenues. Jim Weaver, Business Administrator, noted that since the last budget presentation was made in February, some adjustments have been made to the expenditure side of the budget that resulted in a decrease to the projected shortfall. Those adjustments included savings recognized from recent bond refundings, a teaching position that will be eliminated through retirement/attrition, an increase in the district’s tuition to North Montco Technical Career Center, and an increase in health/prescription benefits through the Bucks and Montgomery Healthcare Consortium.

While the shortfall is smaller than it was in February, a 5.46-percent tax increase would still be necessary to close the gap. This is above the 2.5-percent index mandated by Act 1. Districts may only exceed the index if they receive exclusions from the state or if they seek approval from voters.

Superintendent Dr. Clifford Rogers and Mr. Weaver then shared three different “gap-closing possibility” lists (all lists are available by clicking on the link to the presentation in the chart below). The first list included reductions and adjustments that would have a minimal impact on the district’s programs, would reduce the shortfall to approximately $2.7 million, and would require a 4.4-percent tax increase to balance the budget.

The second list included reductions and adjustments that would have some impact on the district’s ability to deliver programs, would reduce the shortfall to approximately $1.1 million, and would require a tax increase of 2.5 percent. The third list, characterized as having a harmful impact on the district’s ability to deliver programs, would reduce the shortfall entirely and require no tax increase.

Board members discussed aspects of the various proposed cuts, but made no final decisions. In addition to discussing the items on the “gap-closing possibility” lists, some Board members brought forward suggestions made by community members via an online survey.

The Board will discuss the items again in greater detail at the April 14 meeting, once additional details have been provided by the administration. A full budget presentation will also take place at this meeting. 

Important Dates in the 2014-2015 Budget Process
Date Meeting Topic Click on Link to View Presentation
November 11, 2013 School Board Meeting Review of 2014-15 revenues Presentation
December 9, 2013 School Board Meeting Comprehensive budget presentation for 2014-15
Click here for a summary of the discussion
Presentation
January 13, 2014 School Board Meeting Presentation of 2014-15 Proposed Preliminary Budget
Click here for a summary of the discussion
Presentation
February 10, 2014 School Board Meeting Budget presentation and Board votes to adopt proposed preliminary budget
Click here for a summary of the discussion
Presentation

PDE-2028 Preliminary General Fund Budget
April 7, 2014 School Board Work Session Budget presentation Presentation
April 14, 2014 School Board Meeting Budget presentation Presentation
May 5, 2014 School Board Work Session Budget presentation and Board votes to adopt proposed final budget N/A
June 19, 2014 School Board Meeting Board approves final budget for 2014-15 N/A

Additional Budget Information:
For more information about the budget and the budgeting process, contact:

Jim Weaver
Business Administrator
jweaver@pvsd.org

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