This presentation is from the Borough of State College's 2018 Budget Proposal.

1. 2018 OPERATING BUDGET | OCTOBER 20, 2017
2018 OPERATING BUDGET
Review of Executive Summary, Debt Management, and
Pension
October 20, 2017

2. 2018 OPERATING BUDGET | OCTOBER 20, 2017
Executive Summary
• The 2018 Proposed Budget is balanced with current revenues.
• The General Fund includes recurring revenues of $27,181,218
and expenses of $27,341,703, and will use $160,485 of excess
unreserved, undesignated fund balance. This use of excess
fund balance is dedicated for one-time, non-recurring
expenses.
• The 2018 Budget proposes no tax rate increases.

3. 2018 OPERATING BUDGET | OCTOBER 20, 2017
DEBT MANAGEMENT
• Legal Debt Limits
• Governed by Pennsylvania Local Government Unit Debt Act
• Two types of debt: Electoral and Non-electoral
• Non-electoral = Three-year average net revenues x 250% (“borrowing
base”)
• 2014-2016 Borrowing Base Limit: $89,464,443
• Current Indebtedness: $39,999,208
• Remaining Capacity $49,465,235
Pg. 39-47

4. 2018 OPERATING BUDGET | OCTOBER 20, 2017
DEBT MANAGEMENT
• Local Debt Policy
• Policy limits
• 10% of General Fund Revenue for Local Debt
• 2% of General Fund Revenue for Regional Debt
• Local Debt: 5.6% of General Fund Revenue
• Regional Debt: 0.9% of General Fund Revenue
Pg. 39-47

5. 2018 OPERATING BUDGET | OCTOBER 20, 2017
DEBT MANAGEMENT
• 2018 Debt Service Requirements ($6,684,215)
• Local Debt (General Fund) $1,446,209
• Regional Debt (General Fund) 247,009
• Parking Fund (Parking Fund) 1,954,813
• Redevelopment Authority (RDA) 36,184
• Post-Issuance Compliance Procedures
• Federal law requires continuing disclosure when Borough issues
tax-exempt bonds, notes or other obligations
• The Finance Director is the official responsible for compliance
• Annual report of financial and operating data including Annual Audit
Pg. 39-47

6. 2018 OPERATING BUDGET | OCTOBER 20, 2017
PENSION PLANS–OVERVIEW
• The Borough has two defined benefit (DB) pension plans and one defined
contribution (DC) plan.
• The General Government Employees Pension Plan is a cost sharing multi-
employer defined benefit plan that covers all full-time Borough (hired on or
before January 1, 2011) and CRCOG employees (hired on or before January 1,
2013) other than police officers. Employees in this Plan contribute 4% of their
salary, and the Borough receives Pension State Aid for every active employee in
this Plan.
• The Police Pension Plan is a defined benefit pension plan that covers all full-
time Borough police officers. Employees in this Plan contribute 5% of their
salary, and the Borough receives Pension State Aid for every active employee in
this Plan.
• Other general government full-time employees are covered by the General
Government Employees Defined Contribution Plan. Employees in this
Plan contribute 4.5% of their salary, and the Borough/CRCOG receives
Pension State Aid for every active employee in this Plan.

7. 2018 OPERATING BUDGET | OCTOBER 20, 2017
PENSION PLANS–GOVERNANCE
PLAN SPONSOR Borough Council
CHIEF ADMINISTRATIVE
OFFICER
Borough Manager
INVESTMENT COMMITTEE
(DB PLANS ONLY)
Pension Advisory Boards
TRUSTEES (DB Plans only)
Borough Manager
Assistant Borough Manager
Director of Human Resources
INDEPENDENT ADVISORS
Voya Financial Advisors (DC Plan)
Conrad Siegel Investment Advisors,
Inc. (DB Plans)
CUSTODIAN ICMA Retirement Corp. (ICMA-RC)

8. 2018 OPERATING BUDGET | OCTOBER 20, 2017
PENSION PLANS–INVESTMENT MGMT
• The General Government Employees and Police Pension
Plans are governed by an Investment Policy Statement which is
intended to ensure that investment-related decisions are made in a
prudent manner. Conrad Siegel Investment Advisors, Inc. has
served as investment advisor under a flat, fixed fee agreement
since 2014.
• Participants in the General Government Employees Defined
Contribution Plan make their own investment decisions based
upon a menu of options supplied by ICMA-RC. Voya Financial
Advisors was hired in 2017 to serve as independent financial
advisor and co-fiduciary under a flat, fixed fee agreement.

9. 2018 OPERATING BUDGET | OCTOBER 20, 2017
PENSION PLANS SUMMARY
General Government
Defined Benefit Pension
Plan
General Government
Defined Contribution
Pension Plan
Police Pension Plan
Inactive members 131 5 58
Active members 112 52 51
TOTAL Plan Members 243 57 109
Assumed Rate of Return 8% n/a 8%
Net Pension Liability 21% ($7,531,213) n/a 13% ($4,748,266)
Fiduciary Net Position 79% n/a 87%

10. 2018 OPERATING BUDGET | OCTOBER 20, 2017
DEFINED BENEFIT PENSION PLANS
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
2012 2013 2014 2015 2016 2017* 2018**
Defined Benefit Plan Contributions
Employee State Aid Borough

11. 2018 OPERATING BUDGET | OCTOBER 20, 2017
DEFINED CONTRIBUTION PENSION PLAN
$-
$50,000
$100,000
$150,000
$200,000
$250,000
2012 2013 2014 2015 2016 2017* 2018**
Defined Contribution Plan Contributions
Employee State Aid Borough

12. 2018 OPERATING BUDGET | OCTOBER 20, 2017
2018 BUDGET CALENDAR
Agenda Item Date
Budget Transmittal to Council October 16, 2017
Review of Executive Summary, Debt Management,
and Pension
October 20, 2017
Review of Receipts, Finance, Tax, Information
Technology, and Insurance Reserve
November 6, 2017
Review of Administration, Parking, and Regional Programs November 8, 2017
Review of Public Works Department November 13, 2017
Review of Public Works Department (continued)
and Capital Improvements
November 14, 2017
Review of Planning and Neighborhood and
Community Services Departments
November 20, 2017
Review of Police Department November 21, 2017
Public Hearing and Council Review December 4, 2017
Council Discussion December 5, 2017
Final Wrap Up December 11, 2017
Adoption December 18, 2017