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F I S C A L C O N S T R A I N T S & C H A L L E N G E S P R E S E N T E D TO T H E B O A R D O F E D U C AT I O N

D E C E M B E R 9 , 2 0 1 4

Rye City School District

• TA X C A P • E N R O L L M E N T G R O W T H

• R E T I R E M E N T S Y S T E M C O N T R I B U T I O N S• H E A LT H I N S U R A N C E P R E M I U M S

• C O L L E C T I V E B A R G A I N I N G U N I T P R O V I S I O N S• C O N T I N U E D T E S T I N G A N D R E P O R T I N G R E Q U I R E M E N T S ( A P P R )

• P R O G R E S S I N G T E C H N O L O G Y • FA C I L I T Y N E E D S A N D C O N C E R N S

• S TAT E A I D A N D O T H E R N O N -TA X R E V E N U E S• F U N D B A L A N C E U T I L I Z AT I O N

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Rye City School DistrictOverview- Budget Drivers

Property Tax Cap, how does it work…Chap 97 of the Laws of 20113

2015-16 marks the fourth year of the law limiting a District’s ability to increase the tax levy, it does not apply to individual tax bills or rates

It is an eight-step formula re-calculated each year

Two key factors: growth in the tax base (if any), and the rate of inflation (cannot be greater than 2%)

Property Tax Cap, how does it work…4

Voters still approve the General Fund’s expenditure budget:

Option 1: Propose a budget that meets or is below the “allowable tax levy prescribed by law”• (Requires a simple majority; 50% + 1 voter approval)

Option 2: Propose a budget that is above the “allowable tax

levy prescribed by law”• (Requires a “super majority;” 60% voter approval +1)

Property Tax Cap, how does it work…5

Prior Year Tax Levy

x Assessment Growth Factor

+ Current PILOTs

- Exemptions

x Lower of CPI or 2%

- Next Year’s PILOTs

+ Carryover

+ Exemptions

= Allowable Tax Levy for Next Year (may not = 2%)

Property Tax Cap, how does it work… COST EXEMPTIONS

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Increases resulting from voter-approved capital expenditures

Increases that exceed two percentage points for state-mandated employer contribution rates for TRS and ERS

Currently INCREASING STUDENT ENROLLMENT – IS NOT AN ALLOWABLE COST EXEMPTION

STUDENT ENROLLMENT 7

05-0

6

06-0

7

07-0

8

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

13-1

4

14-1

5

Pro

jecte

d 1

5-1

6

2700

2800

2900

3000

3100

3200

3300

3400

2830 2878

2976 30203097

31753235

32103303

3344 3405

Total Enrollment 2005- Current

School Year

Stud

ent P

opul

ation

Student Enrollment has increase by 18.16% since 2005

8

05-0

6

06-0

7

07-0

8

08-0

9

09-1

0

10-1

1

11-1

2

12-1

3

13-1

4

14-

15

Pro

ject

ed 1

5-16

700

800

900

1000

1100

Enrollment for Grades 9-122005-Current

Total 9-12

Stud

ent

Popu

latio

n

Soaring enrollment at the HS… since 2005/06, enrollment has increased by 35% up from 745 to 1011 students

RYE HIGH SCHOOL

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Employer Retirement Contribution Rates

Although rates are beginning to decrease, they remain at levels that are more than double of what they were six years ago…

09-10 10-11 11-12 12-13 13-14 14-15 15-165

7

9

11

13

15

17

19

21

23

25

6.19

8.62

11.1111.84

16.2517.53

13.5

7.4

11.9

16.3

18.9

20.9 20.1

18.2

2009 - Current

TRS ERS

School Year

Perc

enta

ge

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Employer Retirement Contribution Costs

09-10 10-11 11-12 12-13 13-14 Estimated 14-15

Projected 15-16

ERS 413035 639881 889755 1219394 1185172 1105254 1419173

TRS 2189184 3287741 4036208 4322178 5351699 5665968 4845552

$800,000

$1,800,000

$2,800,000

$3,800,000

$4,800,000

$5,800,000

2009 - Current

Tota

l Ann

ual E

xpen

se

Annual Health Benefit Expense 2009- Current 11

09-10 10-11 11-12 12-13 13-14 Estimated 14-15

Projected 15-16

$6,337,972

$5,767,886

$6,399,838

$6,895,897

$7,346,446

$7,695,402

$8,272,557

Annual Related Expense

2014/15 General Fund Budget 12

INSTRUCTIONAL SALARIES; 34873424; 44%

NON-INSTRUCTIONAL SALARIES; 7643002; 10%TRS- MANDATED Teachers Retirement ; 5880000; 7%

ERS- MANDATED Employees Re-tirement; 1210000; 2%

ACTIVE/RETIREE HEALTH INSURANCE; 8999500; 11%

OTHER - BENEFITS; 3685520; 5%

School Budgets; 1278722; 2%

SPECIAL EDUCATION; 2772750; 3%

PROGRAM ADMIN & SUPPORT; 4052881; 5%

TECHNOLOGY; 1023430; 1%ATHLETICS; 342650; 0%

FACILITIES; 2418700; 3%TRANSFER TO CAPITAL & OTHER FUNDS; 863000; 1%

DEBT SERVICES; 4321621; 5%

Total Budget: $79,365,200

Status of Collective Bargaining13

Salaries and Benefit costs make up 80% of the 2014/15 budget

Contracts for FOUR of the five collective bargaining units are CURRENTLY in negotiations that will impact 2015/16.

The Board considers salary costs and all benefit expenses, for employees and retirees, in its Total Cost of Compensation projections during negotiations.

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Additional FACTORS that IMPACT future Budgets

Tax Certiorari RefundsMandated Testing, Reporting

APPR and Training/Support RTI Technology Plan RequirementsDebt Service Changes Non-Tax Revenues

Facility Needs & Concerns15

Equipment Preventative Maintenance Plans

Items identified in the Building Condition Survey, Annual Visual Inspection & 5-Year Facility Plan

Review utility usage and systems to promote energy cost savings and improved heating comfort in schools

2015/16 Budget analysis and preparation continues…16

February 2015- PRESENTATION 2015-16 Superintendent’s Proposed Budget to Board of Education

March 10, 2015- Board Discussion about Budget March 24, 2015 - Budget Hearing I - Open Topics Forum April 21, 2015 - Budget Adoption

May 5, 2015 – Budget Hearing II May 19, 2015 - Budget Vote/Trustee Election