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Gateway School District General Fund Budget

Gateway School District General Fund Budget. Final Summary Budget Information for the 2014-2015 Fiscal Year As of June 30, 2014. Summary of Final Total Revenues for 2014-2015. Projected Final Total Revenues for the 2014-2015 fiscal year of $68,403,000.

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Gateway School District General Fund Budget

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  1. Gateway School District General Fund Budget Final Summary Budget Information for the 2014-2015 Fiscal Year As of June 30, 2014

  2. Summary of Final Total Revenues for 2014-2015 • Projected Final Total Revenues for the 2014-2015 fiscal year of $68,403,000. • (***Projected Final Total Revenues DON’T include any real estate tax increase ($0) for the 2014-2015 fiscal year.***) • Increaseof $631,000 or .93% over the 2013-2014 fiscal year budgeted Total Revenues.

  3. Summary of Final Total Expenditures for 2014-2015 • Projected Final Total Expenditures for the 2014-2015 fiscal year of $70,180,000. • Increaseof $2,408,000 or 3.55% over the 2013-2014 fiscal year budgeted Total Expenditures.

  4. Net Final Budgetary Shortfall or Deficit for 2014-2015 • Increase in Revenues of $631,000 + • Increase in Expenditures of $2,408,000 = • Net Projected Final Total Budget Shortfall or Deficit for the 2014-2015 fiscal year of ($1,777,000).

  5. Direct District Impact of Final State Budget for 2014-2015 • NO Increase$0 in Basic Education Subsidy in the State budget. • Increase of $35,827 in Special Education Subsidy – (NOT Included in the 2014-2015 fiscal year Budget due to the District approving the Budget before the approval of the State budget).

  6. Direct District Impact of Final State Budget for 2014-2015 • New State grant called the Ready to Learn Block Grant (RLBG) was created for the 2014-2015 fiscal year. • Collapses the Accountability Block Grant ($130,950) into the RLBG and adds a Student-Focused Funding Supplement ($165,165) to create the RLBG. • For the District: $130,950 + $165,165 = $296,115 for the RLBG. • The Student-Focused Funding Supplement is new money and requires new expenditures; therefore, it DOES NOT provide any relief to the District’s current revenue shortfall for the 2014-2015 fiscal year.

  7. State Retirement Changes – No Changes for 2014-2015 • No changes to the Pennsylvania School Employees Retirement System (PSERS) were adopted & enacted by the State. • (***ALL Changes to PSERS must first be approved by the State Legislature.***) • Thus, no changes formally enacted and effective as of 7/1/14 for the 2014-2015 fiscal year.

  8. State Retirement Changes – No Changes for 2014-2015 • NO reduction in the 2014-2015 fiscal year employer contribution rate by a reduction in the pension collars of (2.25%) to reduce the overall rate from 21.40% to 19.15%. (Thus, 21.40% utilized in the 2014-2015 fiscal year Budget.) • Current net effect (Expenditures Less State 50% Reimbursement Subsidy) in the 2014-2015 fiscal year Budget is an increase in pension expenditures of $778,259to PSERS.

  9. Final Revenue and Expenditure Issues for 2014-2015 • Reduction in Current Real Estate Tax revenues (Loss of $914,001). • Actual Increases of 5.75% for PPO & 5.75% for HMO in employer medical insurance expenditures. • Increase of 4.47% (from 16.93% to 21.40%) in required employer retirement benefit expenditures to PSERS.

  10. Composition of Major Revenue Categories for 2014-2015 • Local – 74% of the Final 2014-2015 Budget. • State – 25% of the Final 2014-2015 Budget. • Federal - 1% of the Final 2014-2015 Budget. • FLAT or very Little Revenue Growth Projected in the 2014-2015 fiscal year Budget.

  11. Major Types of Local Revenue Categories for 2014-2015 • Current Real Estate Tax (Largest). • Current Earned Income Tax. • Delinquent Real Estate Tax. • Mercantile Tax. • Deed Transfer Tax. • Local Services Tax. • Delinquent Earned Income Tax.

  12. Major Types of State Revenue Categories for 2014-2015 • Basic Education Subsidy (Largest). • Retirement Reimbursement Subsidy – 50%. • Special Education Subsidy. • Property Tax Reduction Allocation. • SS & FICA Reimbursement Subsidy – 50%. • Transportation Reimbursement Subsidy. • Debt Service Reimbursement Subsidy. • Accountability Block Grant.

  13. Major Types of Federal Revenue Categories for 2014-2015 • IDEA Funds (Largest)- Passed Through the AIU#3. • Title I Funds - Passed Through PDE. • Title II Funds - Passed Through PDE. • ACCESS Funds - Passed Through PDE. • Title III Funds - Passed Through PDE.

  14. Top Ten Revenues for 2014-2015 • 1. Current Real Estate Taxes - $42,328,491 • 2. Basic Education Subsidy - $6,996,248 • 3. Current Earned Income Taxes - $3,745,000 • 4. Retirement Reimburse. Subsidy - $3,424,152 • 5. Special Education Subsidy - $1,941,712 • 6. Delinquent Real Estate Taxes - $1,490,000 • 7. State Property Tax Reduction - $1,459,741 • 8. SS & FICA Reimburse. Subsidy - $1,230,292 • 9. Mercantile Taxes - $1,209,000 • 10. Transportation Reimb. Subsidy - $1,175,000

  15. Top Ten Expenditures for 2014-2015 • 1. All Employee Wages & Salaries - $31,997,292 • 2. Retirement Expenditures - $6,848,304 • 3. Health Insurance Expenditures - $6,100,000 • 4. Transportation Expenditures - $4,243,000 • 5. Bond Debt Service Expenditures - $4,002,150 • 6. Charter & Cyber School Expenditures - $3,600,000 • 7. Special Education Expenditures (Other) - $2,740,000 • 8. SS & FICA Expenditures - $2,460,584 • 9. Technology Expenditures (All) - $1,356,000 • 10. Utility Expenditures - $1,024,000

  16. Final Total Personnel & Employee Benefit Expenditures for 2014-2015 • Projected Final Personnel Wage & Salary Expenditures = 45.5% of the 2014-2015 fiscal year Budget. • Projected Final Employee Benefits Expenditures = 23.3% of the 2014-2015 fiscal year Budget. • Projected Final Total Gross Employee Expenditures = 68.8% of the Total 2014-2015 fiscal year Budget.

  17. Projection of Ending Total Fund Balance at 6/30/14 for 2013-2014 • Beginning Fund Balance as of 7/1/13 $11,669,241 • Less: 1. C/Y Real Estate Tax Refunds ($ 713,377) • 2. C/Y & P/Y Refunds – Westinghouse Property ($ 469,805) • 3. Transportation Expenditures for Additional • Fuel, Additional Routes, & Homeless • Students ($ To Be Determined) • 4. Other Expenditures ($ To Be Determined) • Add: 1. No Major Increases to List at this Time. $ 0 • Net Projected Decrease for 2013-2014 Fiscal Year ($1,183,182) • Projected Ending Fund Balance as of 6/30/14 $10,486,059

  18. Composition of Projected Ending Fund Balance at 6/30/14 for 2013-2014 • Unassigned Fund Balance $4,137,271 • Nonspendable Fund Balance $ 681,274 • Committed Fund Balance $5,667,514 • Projected Total Fund Balance$10,486,059

  19. Components of Fund Balance • Unassigned Fund Balance: Portion that is immediately available to be utilized for identified purposes such as balancing the Budget & making transfers to other funds. • Nonspendable Fund Balance: Portion that offsets the amount of Prepaid Expenditures on the District’s balance sheet & is not available for expenditure. • Committed Fund Balance: Portion that is not immediately available due to official designation by the Board for specific purposes through a formal Board resolution. Can be designated by the Board for different purposes or classified back to Unassigned Fund Balance through an additional formal Board resolution. Designations Currently Include: 1. Future employer health insurance increases; 2. Future employer pension cost increases; & 3. Future capital repair project expenditures for District school buildings.

  20. Projection of Total Fund Balance at 6/30/15 for 2014-2015 • Projected Fund Balance as of 7/1/14 $10,486,059 • Less: Utilization to Balance the ($ 1,777,000) • 2014-2015 fiscal year Budget • Projected Fund Balance as of 6/30/15 $ 8,709,059 • The Projected Total Ending Fund Balance Represents 12.41% of the Final 2014-2015 fiscal year Budget. • (NOTE: The Unassigned Fund Balance portion of the Total Ending Fund Balance is projected to be 3.36% of the 2014-2015 fiscal year budgeted expenditures which is in compliance with 24 PS 6-688 or less than 8% in a fiscal year when the real estate tax millage rate is increased by the District.)

  21. What if Only Two Budget Line Items Didn’t Change for 2014-2015? • Utilization of Fund Balance ($1,777,000) • Add: Net Increase in PSERS $ 778,259 Expenditures. • Add: Net Decrease in Current Year $ 914,001 Real Estate Tax Revenue. • Adjusted Utilization of Fund Balance ($ 84,740) for the 2014-2015 fiscal year if the PSERS Rate & Current Year Real Estate Tax Revenues Didn’t Change.

  22. Gateway School District General Fund Budget Final Real Estate Tax Millage Rate & Other Budget Information for the 2014-2015 Fiscal Year As of June 30, 2014

  23. What is Millage? • Millage is a tax rate applied to a real estate property’s assessed valuation for the purpose of revenue generation by a taxing body such as the District. • Each mill represents $1 of tax assessment per $1,000 of assessed property value. • A mill is derived from the root word mill, which means “thousand.” • Thus, one mill is one part per thousand or 0.1% which can also be expressed as .001 for calculation purposes.

  24. Gateway School District Real Estate Tax Millage Rate for 2014-2015 • At 18.8919 Mills in the 2014-2015 fiscal year, GSD has the 18th LowestMillage Rate out of 42 school districts in Allegheny County. • McKeesport Area School District – Lowest in Allegheny County at 15.70 Mills. • Wilkinsburg Area School District – Highest in Allegheny County at 32.63 Mills.

  25. Neighboring Allegheny County School District Real Estate Tax Millage Rates for 2014-2015 • Gateway School District – 18.8919 Mills • Plum Borough School Dist. – 18.7580 Mills • Penn Hills School District – 24.1540 Mills • Woodland Hills School Dist. – 22.400 Mills • East Allegheny School Dist. – 27.540 Mills

  26. Effects of Allegheny County Real Estate Reassessment in 2014-2015 • Real estate assessment values for properties located in Monroeville and Pitcairn CONTINUE to decrease in value and owner appeals will CONTINUE to occur in the 2014-2015 fiscal year. • Current year and prior year real estate tax refunds will CONTINUE to have a negative effect on current year real estate tax revenue as well as prior year real estate tax refund expenditures which will ultimately effect the District’s Fund Balance.

  27. District Real Estate Assessment Issues for 2014-2015 • The current total assessed value of the District’s real estate properties CONTINUE to decrease each month. • The number of taxpayer appeals CONTINUE to occur and the successful taxpayer appeals further decrease the total assessed real estate value of the District. • Thus, the District’s calculation of real estate tax revenue for the 2014-2015 fiscal year has factored in an adjustment for the continuation of successful taxpayer appeals. • In addition, new taxpayer appeals will probably CONTINUE to be initiated during the 2014-2015 fiscal year which CAN NOT be quantified by the District.

  28. Continued Decline of District Total Real Estate Assessed Values • 6/14/13 Total Value $2,499,750,315 • 7/19/13 Total Value $2,463,880,115 • 8/23/13 Total Value $2,461,222,715 • 9/27/13 Total Value $2,453,451,165 • 11/8/13 Total Value $2,453,099,915 • 11/12/13 Total Value $2,447,304,616 • 12/13/13 Total Value $2,445,921,916 • 1/15/14 Total Value $2,451,626,716 (Certified Value from Allegheny County) • 1/24/14 Total Value $2,449,255,916 • 2/21/14 Total Value $2,442,479,716 • 3/28/14 Total Value $2,438,104,566 • 4/4/14 Total Value $2,438,038,066 • 4/28/14 Total Value $2,437,550,241 • 5/2/14 Total Value $2,432,476,041 • 5/9/14 Total Value $2,432,411,041 • 5/23/14 Total Value $2,432,411,041 • 5/30/14 Total Value $2,418,463,341 • From 6/14/13 to 5/30/14, the Total Real Estate Assessed Value of the District continued to Decrease by ($81,286,974) or (3.25%). • District utilized a ($36,000,000) adjustment leaving a balance of ($45,286,974) unanticipated for the 2013-2014 fiscal year.

  29. Assessed Value Adjustment for Taxpayer Real Estate Appeals in 2014-2015 • District has utilized an adjustment of $5,000,000 for current taxpayer real estate appeals which MAY require the District to issue a refund or return current year revenue collected by the District to the taxpayers during the 2014-2015 fiscal year after a successful appeal.

  30. Primary Reason for the Decline in District Total Real Estate Assessed Values for 2014-2015 • Successful and Pending Taxpayer Real Estate Assessment Appeals! • Thus, the District’s real estate tax millage rate was set TOO LOW for the 2013-2014 fiscal year and is TOO LOW for the 2014-2015 fiscal year without any additional increases to equalize the real estate tax revenues back to the original calculated amounts for the 2013-2014 fiscal year.

  31. Analysis of Real Estate Tax Revenue at 6/30/14 for 2013-2014 • Amount Originally Budgeted $43,242,492 • Less: Amount Collected ($42,530,854) • Add: Refunds to Taxpayers $ 1,240,933 • Balance to be Collected $ 1,952,571 • Less: Future Delinquents ($ 1,623,757) • Amount Never to be Collected $ 328,814 • Percentage Never to be Collected 0.76%

  32. Correct Millage Rate for 2013-2014 • Utilizing a $86,286,974 decrease in the District’s total assessed value in calculating the revenue for the 2013-2014 fiscal year, the correctly adjusted millage rate would have been 19.2855 Mills. • District’s rank would have changed from the 17th to the 19th Lowest Millage Rate in Allegheny County. • Represents an increase of .3936 Mills over the 18.8919 mills previously set for the 2013-2014 fiscal year.

  33. 2.5% Index - Equivalent in Mills • The District was permitted to increase the millage rate by up to a 2.5% (Index) for the 2014-2015 fiscal year. • Current Millage: 18.8919 Mills • Multiplied by 2.5% Index: X .025 • Max Increase in Millage of: .4722Mills • Thus, the maximum amount the Real Estate Tax Millage Rate COULD have been for the 2014-2015 Fiscal Year is 18.8919 Mills + .4722 Mills = 19.3641 Mills. • ***NO INCREASE IN THE MILLAGE RATE WAS UTILIZED TO BALANCE THE DISTRICT’S BUDGET FOR THE 2014-2015 FISCAL YEAR.***

  34. Comparison of 2013-2014 to Maximum Real Estate Tax Millage Rate FOR 2014-2015 • 2013-2014 Millage Rate: 18.8919 Mills • 2014-2015 Maximum Millage Rate: 19.3641 Mills • Maximum Increase of (.4722 Mills) in the Millage Rate. • Maximum Increase of (2.5%) in the Millage Rate. • ***NO increase in the real estate tax millage rate was included in the Final Budget for the 2014-2015 fiscal year. A full increase of 2.5% would have yielded a net amount of approximately $1,094,508.***

  35. Monroeville: Based on median taxable value of $107,700. At Maximum 2.5% Index = $50.86/YEAR. At Maximum 2.5% Index = $4.24/MONTH. Pitcairn: Based on median taxable value of $35,000. At Maximum 2.5% Index = $16.53/YEAR. At Maximum 2.5% Index = $1.38/MONTH. $ Amount of Real Estate Tax Maximum Millage Increase Per Resident Available for 2014-2015

  36. Assessment Value for 2014-2015 • Allegheny County formally issued new certified real estate assessment values via a CD on 1/15/14 for properties located in Monroeville and Pitcairn to be utilized by the District for the preliminary real estate tax calculations required in the 2014-2015 fiscal year Budget. • Allegheny County issued a CD to the District as of 4/28/14 with the eligible homestead properties to receive property tax relief for the 2014-2015 fiscal year. • District compared the total 1/15/14 & 4/28/14 real estate assessment values and millage rate calculations to the value and millage rate calculations performed on the available summary assessment values per the Allegheny County website.

  37. Homestead Exclusion for 2014-2015 • The 2013-2014 fiscal year amount was initially projected to be in the District’s 2014-2015 fiscal year Budget. • State determined (on April 15, 2014) gaming revenues were available for distribution to the school districts during the 2014-2015 fiscal year. • PDE certified and officially released the actual distribution amount to the District on May 1, 2014 in the amount of $1,459,741.27 for the 2014-2015 fiscal year. An increase of only $487.84 from the 2013-2014 fiscal year. • The 2014-2015 fiscal year will be the 7th year in a row for the District to receive and to distribute a State gaming revenue distribution. • Impact of the distribution is revenue neutral in the District’s 2014-2015 fiscal year Budget.

  38. Homestead Exclusion for 2014-2015 • $174.63 per eligible homestead property in both Monroeville & Pitcairn for the 2014-2015 fiscal year. Monroeville Pitcairn .4722 Mill Increase $ 50.86 $ 16.53 Less: Exclusion ($174.63)($174.63) Net Credit Effect ($123.77) ($158.10)

  39. Budget Process for 2014-2015 • A not to exceed Index (2.5%) resolution was previously adopted by the Board on January 22, 2014 for the 2014-2015 fiscal year. • Thus, referendum exceptions were not requested and were not utilized by the District for the 2014-2015 fiscal year to further increase the millage rate above the 2.5% Index rate. • The Proposed Final 2014-2015 General Fund Budget was adopted by the Board on May 21, 2014. The Budget was displayed and continues to be displayed via the PDE-2028 on the District’s website at www.gatewayk12.org • Various detailed Excel spread sheets were also displayed and continue to be displayed on the District’s website at www.gatewayk12.org • Thus, the Pre-Act 1 budget timeline was followed by the District through final Budget adoption by the Board on June 25, 2014.

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