Financial Projections for 2006-2007


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Financial Projections for 2006-2007

  1. 1. Financial Projections for 2006-2007 Northport-East Northport School District December, 2005
  2. 2. The Many Meetings for Public Input and Review from Now through May <ul><li>Mon Dec 19 Sup’t presents Financial Projections for 2006-2007. </li></ul><ul><li>Mon Jan 9 Board provides budget direction to the Superintendent. </li></ul><ul><li>Mon Mar 6 Sup’t presents the Proposed Budget for 2006-2007, </li></ul><ul><li>within the Board’s Jan 9 guidelines. </li></ul><ul><li>Mon Mar 20 The Board reviews the Proposed Budget. </li></ul><ul><li>Mon Mar 27 The Board reviews the Proposed Budget. </li></ul><ul><li>Mon Apr 3 The Board conducts a Preliminary Public Hearing on </li></ul><ul><li>the Proposed Budget. </li></ul><ul><li>Mon Apr 17 The Board reviews the public comment from the </li></ul><ul><li>hearing on the Proposed Budget and finalizes the </li></ul><ul><li>budget that will be put up for a vote. </li></ul><ul><li>Mon May 8 The Board conducts a Public Hearing on the finalized </li></ul><ul><li>Proposed Budget. </li></ul><ul><li>Tue May 16 Annual Budget Vote and Election of Trustees. </li></ul>
  3. 3. FINANCIAL PROJECTIONS, NOT PROPOSED BUDGET <ul><li>The state aid situation could change. </li></ul><ul><li>General economic conditions could change. </li></ul><ul><li>Staffing projections may change due to refinements. </li></ul><ul><li>The assessed value could change. </li></ul>Given the constraints of projecting the 2006-2007 costs at this very early date, the Superintendent believes that the data included within this document are as accurate as possible and adequate for the purpose of preliminary planning.
  4. 4. DEVELOPMENT OF THE PROJECTIONS <ul><li>Work started in October </li></ul><ul><li>The Superintendent directed staff to develop initial budget projections to meet these objectives: </li></ul><ul><ul><li>Meet all federal, state, and local requirements. </li></ul></ul><ul><ul><li>Continue current educational program. </li></ul></ul><ul><ul><li>Continue current level of support services. </li></ul></ul>
  5. 5. KEY ASSUMPTIONS <ul><li>Educational Program. The same as this year. </li></ul><ul><li>Enrollment. Used BOCES enrollment projections, which estimate growth next year from 6,521 pupils to 6,605 pupils, an increase of 84 pupils, or 1.3%. (The enrollment projections are presented in Appendix F.) </li></ul><ul><li>Facilities. Projections based on continuing to operate nine K-12 school buildings, plus the Laurel Avenue School for pre-k special education, child care, community service, central office and other district programs, as well as rental space. </li></ul><ul><li>Inflation. Used current figures from the BLS, which indicate inflation running in the area of 4.5% in the NY area. </li></ul><ul><li>Staffing Guidelines. The assumption was made that the guidelines for teacher staffing will be the same in 2006-2007 as those used in 2005-2006. </li></ul>
  6. 6. STAFFING LEVELS <ul><li>Staffing Levels </li></ul><ul><ul><li>Teaching Staff. There will be an estimated increase of 5.0 teaching positions K-12, or about 0.8% to accommodate the 1.3% growth in enrollment. The financial projections also include funding for 2.0 contingency/unallocated teaching positions to be used in the event of unanticipated enrollment growth. </li></ul></ul>
  7. 7. PROJECTED EXPENSES <ul><li>Staffing Levels, continued </li></ul><ul><ul><li>Support staff. No change is anticipated. However, NCLB and SED requirements may cause some teacher aide positions to be eliminated and replaced with teaching assistant positions. </li></ul></ul><ul><ul><li>Administrative staff. No change is projected. Over the past 15 years, have experienced a 35% reduction in service. </li></ul></ul>
  8. 8. ADMINISTRATIVE STAFF Students per Administrator The ratio of students to administrators has increased 54%. DOWN 18% UP 27% Change 205 32 6605 2005-06 133 39 5205 1990-91 Students Per Admin # Administrators # Students
  9. 9. PROJECTED EXPENSES <ul><li>A. Personnel – Salaries </li></ul><ul><li>1. Continuing contracts. The members of the administrative bargaining unit are scheduled to receive a 3.9% increase, and the members of the clerical unit are scheduled to receive an increase of 3.75% + $600. Funds for these increases have been included in the projections. </li></ul><ul><li>2. Open contracts. The exact salary allocation for the Custodial, Maintenance and Grounds Unit, the United Teachers of Northport, and the Teacher Aide unit cannot be projected until the completion of collective bargaining. Funds have been included in the projections for possible settlements. </li></ul>
  10. 10. PROJECTED EXPENSES, continued <ul><li>B. Personnel – Benefits </li></ul><ul><li>The cost of staff benefits is projected to increase by 11.86% or $2,885,697. The increase is due primarily to: </li></ul><ul><ul><li>the state Teachers Retirement System rate increase from 7.97% to 9% of payroll (an increase of $901,584); </li></ul></ul><ul><ul><li>an increase in health insurance costs of approximately 14.5% ($1,657,933). </li></ul></ul>
  11. 11. PROJECTED EXPENSES, continued <ul><li>C. Supplies, Materials, Textbooks and Field Trips </li></ul><ul><li>It is projected that these funds will increase by $23,133, or 0.91%. (This covers the cost of the increased enrollment and the cost to continue the current level of service.) </li></ul>
  12. 12. PROJECTED EXPENSES, continued <ul><li>D. Equipment </li></ul><ul><li>The allocation for equipment in the financial projections is the same as the amount budgeted for the 2005-2006 school year, namely, $155,399. There was no equipment in 2004-2005 and very limited equipment in 2005-2006. This infrastructure issue needs to be addressed as soon as the Board feels it is possible. The estimated need for next year for high priority equipment is $1,040,895, which is $885,496 higher than the 05-06 allocation. </li></ul>Therefore, providing two projections: Projection 1. Same program, including continuation of severely reduced equipment allocation. Projection 2 . Same as Projection 1, but with a “normal” equipment allocation, which would include the items the staff has determined are high priority.
  13. 13. PROJECTED EXPENSES, continued <ul><li>E. Other Services </li></ul><ul><li>1. Contract Services </li></ul><ul><li>Includes contracted repairs, postage, copier rental cost, consultants, contracted security, professional fees (attorneys, auditors, and architects) and similar services purchased by the district. It is projected that the cost of the current level of contract services will increase overall by approximately $85,317, or 2.20%. This includes $40,000 to fund the new internal auditor function required by new legal requirements. </li></ul>
  14. 14. PROJECTED EXPENSES, continued <ul><li>E. Other Services, Continued </li></ul><ul><li>2. Utilities </li></ul><ul><li>It is projected that the cost of electricity, fuel, water and telephone will increase overall by $311,371, or 13.58%. </li></ul><ul><li>3. Contract Transportation </li></ul><ul><li>The cost of contracts with outside firms to provide pupil transportation for our children is projected to increase by 7.16% ($338,494). (Across Long Island, bids are coming in above inflation because of increased fuel, insurance and labor costs.) </li></ul>
  15. 15. PROJECTED EXPENSES, continued <ul><li>E. Other Services, Continued </li></ul><ul><li>4. Insurance </li></ul><ul><li>It is projected that the current appropriation for property and casualty insurance will need to be increased by 13.9% ($84,514) to continue the current level of insurance coverage. </li></ul><ul><li>5. Community Support </li></ul><ul><li>It is projected that the district will continue to support the YDA and The Place at the same level as this year, totaling $105,250 ($32,000 for the YDA and $73,250 for The Place). </li></ul>
  16. 16. PROJECTED EXPENSES, continued <ul><li>E. Other Services, Continued </li></ul><ul><li>6. Tuition/Health Payments </li></ul><ul><li>A 5.98% increase ($33,627) is projected to cover the cost of outside placements, and health charges for district residents attending schools outside our district. </li></ul><ul><li>7. BOCES Services </li></ul><ul><li>At this early stage of the process, BOCES has not estimated its increase for next year. As a rough estimate, a 6.0% increase has been projected. In addition, funds have been added for a projected increase of five students to attend BOCES programs for the 2006-2007 school year. </li></ul>
  17. 17. PROJECTED EXPENSES, continued <ul><li>F. Debt Service </li></ul><ul><li>1. Long-Term Debt Service </li></ul><ul><li>Long-term debt service (principal and interest payments for bond issues and Employee Retirement System amortization) will increase by $273,949. </li></ul><ul><li>2. Short-Term Debt Service </li></ul><ul><li>Short-term debt service, which includes interest on tax anticipation notes, is projected to increase by approximately $432,177 (34.77%). </li></ul>
  18. 18. PROJECTED EXPENSES, continued <ul><li>G. Interfund Transfers </li></ul><ul><li>1. Capital Reserve Fund </li></ul><ul><li>Payment nine of ten for $500,000 is in the projection. </li></ul><ul><li>2. Summer Special Education Program </li></ul><ul><li>School district’s mandated portion of this required program is in the projection ($237,730). </li></ul>
  19. 19. PROJECTED REVENUE <ul><li>A. Revenue </li></ul><ul><li>1. State Aid . No estimates from Albany of state aid yet. Assumption: no change. </li></ul><ul><li>2. Carry Forward Balance . Projected at $1,600,000. </li></ul><ul><li>3. Other income . Projected to remain constant with the exception of a projected increase in interest income of $375,000, and projected increases in community services program fees. </li></ul>
  20. 20. PROJECTED ASSESSED VALUE <ul><li>B. Assessed Value </li></ul><ul><li>Projected to remain the same as this year. At this early stage of the process, it is difficult to anticipate whether next year the assessed value will increase, remain unchanged, or decrease. The net change will depend upon the amount of (a) increases in assessed value due to construction, and (b) decreases resulting from reassessment. In these projections, the assumption was made that the assessed value will remain at $81,176,439. </li></ul>
  21. 21. PROJECTED BUDGET INCREASE 7.39% Projection 2. Same as Projection 1, except restore equipment allocation to more normal level (purchasing only those items that are deemed to be high priority to maintain a quality program). Estimated increase to equipment allocation: $885,496. Projected Budget: $129,604,121 6.65% Projection 1. Same program as 2005-2006, including reduced equipment allocation. Projected Budget: $128,718,625 Projected Budget Increase
  22. 22. PROJECTION 1 (base projection) is about 2% over current inflation rate of 4.5%. Here are the increases driving that. $ 2,687,714 $ 4,000,022 TOTAL $57,150 $84,514 Insurance $73,970 $273,949 Long Term Debt $125,609 $338,494 Transportation $208,228 $311,371 Utilities $376,250 $432,177 TAN's $702,654 $901,584 State TRS $1,143,853 $1,657,933 Health Insurance Amount of Increase ABOVE the 4.5% Inflation Rate Total Projected 2006-07 Increase Area
  23. 23. PROJECTED TAX RATE <ul><li>Because these projections are based on the assumption that state aid will not increase, the estimated tax rate increase will be a bit higher (about 1.3%) than the spending increase. If additional state aid is forthcoming, the tax rate increase will be lower. </li></ul>8.74% 7.39% Projection 2. Equipment as Requested/Recommended 7.91% 6.65% Projection 1. Equipment at Same Reduced Level as 2005-2006 Estimated Tax Rate Increase Projected Budget Increase
  24. 24. Our School Taxes Are the Lowest in the Town of Huntington $1,792.56 $1,732.80 $1,608.68 $1,445.80 $1,396.20 $ 539.88 $ 272.56 Amount HIGHER than NEN 34% $ 7,059.56 176.489 G 33% $ 6,999.80 174.995 F 31% $ 6,875.68 171.892 E 27% $ 6,712.80 167.820 D 27% $ 6,663.20 166.580 C 10% $ 5,806.88 145.172 B 5% $ 5,539.56 138.489 A $ 5,267.00 131.675 Npt – East Npt Percent HIGHER than NEN School Tax on House with Average Assessment of $4,000 05-06 Tax Rate Town of Huntington School Districts
  25. 25. How Much MORE in School Taxes Homeowners in Other Huntington Districts Pay Each Year – for the IDENTICAL HOUSE Town of Huntington School Districts
  26. 26. How Does Our Spending Compare <ul><li>Some LI Districts that spend approximately (within $500) what we spend per pupil: </li></ul><ul><ul><li>Amityville, Bay Shore, Connetquot, Deer Park, East Rockaway, Hauppauge, Longwood, Middle Country, West Hempstead </li></ul></ul><ul><li>Some LI Districts that spend between $1,000 and $3,000 more per pupil than we spend: </li></ul><ul><ul><li>Carle Place, Great Neck, Hempstead, Hewlett-Woodmere, Huntington, Malverne, Plainview-Old Bethpage, South Country, Wyandanch </li></ul></ul><ul><li>Some LI Districts that spend more than $3,000 more per pupil than we spend: </li></ul><ul><ul><li>East Williston, Island Park, Great Neck, Jericho, Locust Valley, Manhasset, Mineola, Lawrence, Port Jefferson, North Shore, Syosset </li></ul></ul>If we were to spend $3,000 more per pupil, our budget would be $19.8 million higher. That equates to 264 more teaching positions.
  27. 27. Student Accomplishments Admissions to Best Colleges % Regents Diploma AP/IB Program Scholarship Money
  28. 28. SUMMARY <ul><li>This year’s projection ( Projection 2 , with the higher equipment allocation) is 4.5 percentage points lower than last year’s projection, demonstrating that last year’s predictions of easing financial pressures were accurate. </li></ul><ul><li>The projection ( Projection 2 , with the higher equipment amount) is also almost two percentage points (1.93, to be exact) lower than the budget increase approved by the voters in June, 2005. </li></ul><ul><li>The Superintendent and staff stand ready to provide any assistance the Board would like as the Board contemplates what direction to provide to the staff on January 9. </li></ul>
  29. 29. The Next Steps <ul><li>The Board will be reviewing and considering these financial projections. </li></ul><ul><li>The Board is scheduled to provide budget direction to the staff at the next Board meeting on Monday, January 9. </li></ul><ul><li>Based on the Board direction given on January 9, the staff will develop a budget and propose it to the Board on March 6. </li></ul>