main content starts hereMulti-Year Financial Plan

Assistant Superintendent for Business Christopher Ruberti presented a Multi-Year Financial Plan at the Dec. 3 Board of Education meeting.

What did the last five years look like?

  • 2013-14 (Including GEA restoration)
    • Revenue: $43,769,533
    • Expenses: $43,664,911
    • Net position: $104,622
  • 2014-15 (Including GEA restoration)
    • Revenue: $44,830,657
    • Expenses: $44,310,166
    • Net position: $520,491
  • 2015-16 (Including GEA restoration)
    • Revenue: $46,278,285
    • Expenses: $45,825,780
    • Net position: $452,505
  • 2016-17 (Including GEA restoration)
    • Revenue: $46,744,421
    • Expenses: $46,867,973
    • Net position: (-$123,552)
  • 2017-18
    • Revenue: $49,737,774
    • Expenses: $50,579,983
    • Net position: (-$842,209)
  • 2018-19 Projected
    • Revenue: $51,400,000
    • Expenses: $52,250,000
    • Net position: (-$850,000)

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Votality of Major Budget Components

District Expenses

TRS

  • 2013-14
    • Dollar Change: $881,896
    • Percent Change: 42.28%
  • 2014-15
    • Dollar Change: $61,385
    • Percent Change: 2.07%
  • 2015-16
    • Dollar Change: (-$543,969)
    • Percent Change: (-17.96%)
  • 2016-17
    • Dollar Change: (-$182,327)
    • Percent Change: (-7.34%)
  • 2017-18
    • Dollar Change: (-$277,747)
    • Percent Change: (-12.06%)
  • 2018-19
    • Dollar Change: $254,982
    • Percent Change: 12.59%

Health Insurance

  • 2013-14
    • Dollar Change: $591,258
    • Percent Change: 13.57%
  • 2014-15
    • Dollar Change: $265,374
    • Percent Change: 5.36%
  • 2015-16
    • Dollar Change: $155,175
    • Percent Change: 2.98%
  • 2016-17
    • Dollar Change: $179,357
    • Percent Change: 3.34%
  • 2017-18
    • Dollar Change: $580,823
    • Percent Change: 10.47%
  • 2018-19
    • Dollar Change: $637,476
    • Percent Change: 10.40%

Health Insurance

Why is there such a large increase in health insurance costs?

There are two main components:

  • Medical costs: The medical portion of the district’s costs is almost $5 million in 2018-19, approximately 70 percent of the overall cost of health insurance. Medical rates have been relatively stable for the past five years, averaging 4 to 5 percent per year.
  • Prescription drug costs (self-insured): Prescription costs are about $2 million in the 2018-19 budget, approximately 30 percent of the overall cost of health insurance. Prescription rates have been much more volatile over recent years. The past two years have seen increases of 23.7 percent and 30 percent, while three of the prior five years there were 0 percent increases.

Prescription Costs

“Wouldn’t it be better if the District were not self-insured for prescription drug costs?”

Although costs have increased significantly the past two years, the district has had very low rates prior to that by being self-insured for prescription drugs. The information below is related to other districts in CASHIC (Capital Area School Health Insurance Consortium), but rates are also below the average for other school districts. The rates are for individual coverage.

  • 2016-17
    • Low rate: $121.97
    • High rate: $247.65
    • Average rate: $176.53
    • Mohon rate: $109.21
    • Percent below average rate: 38 percent
  • 2018-19
    • Low rate: $121.97
    • High rate: $297.34
    • Average rate: $212.79
    • Mohon rate: $174.20
    • Percent below average rate: 18 percent
Generic Drugs, CanaRx (MohonMeds) and Mail Order

The District is currently effectively using these lower cost options, but we can still improve. Increased use will result in small savings (1 to 2 percent), but will not significantly impact the large premium increases we have seen the past two years.

Specialty/Name Brand Drugs

A small number of prescriptions can have a major impact on cost. For example, last year six prescriptions cost a total of $300,000 for the year, over 15 percent of the total for all prescriptions.

“True” Revenues

Taxes (Without Capital Exclusion of Building Aid)

  • 2013-14 (GEA Restoration)
    • Dollar Change: $517,263
    • Percent Change: 2.25%
  • 2014-15 (GEA Restoration)
    • Dollar Change: $461,837
    • Percent Change: 1.93%
  • 2015-16 (GEA Restoration)
    • Dollar Change: $489,256
    • Percent Change: 2.00%
  • 2016-17 (GEA Restoration)
    • Dollar Change: $170,000
    • Percent Change: 0.72%
  • 2017-18
    • Dollar Change: $525,000
    • Percent Change: 2.07%
  • 2018-19
    • Dollar Change: $625,000
    • Percent Change: 2.42%

State Aid (Without Capital Exclusion or Building Aid)

  • 2013-14 (GEA Restoration)
    • Dollar Change: $307,000
    • Percent Change: 2.21%
  • 2014-15 (GEA Restoration)
    • Dollar Change: $996,000
    • Percent Change: 7.02%
  • 2015-16 (GEA Restoration)
    • Dollar Change: $1,375,000
    • Percent Change: 9.05%
  • 2016-17 (GEA Restoration)
    • Dollar Change: $709,000
    • Percent Change: 4.28%
  • 2017-18
    • Dollar Change: $339,000
    • Percent Change: 1.96%
  • 2018-19
    • Dollar Change: $364,000
    • Percent Change: 2.07%

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State Aid: A Deeper Look

  • 2013-14
    • Year-to-year changes
      • Total Dollar: $307,000
      • Percent: 2.21 percent
    • Major Components
      • GEA Restoration: $375,000
      • Foundation Aid Increase: $37,000
  • 2014-15
    • Year-to-year changes
      • Total Dollar: $996,000
      • Percent: 7.02 percent
    • Major Components
      • GEA Restoration: $770,000
      • Foundation Aid Increase: $177,000
  • 2015-16
    • Year-to-year changes
      • Total Dollar: $1,375,000
      • Percent: 9.05 percent
    • Major Components
      • GEA Restoration: $1,170,000
      • Foundation Aid Increase: $46,000
  • 2016-17
    • Year-to-year changes
      • Total Dollar: $709,000
      • Percent: 4.28 percent
    • Major Components
      • GEA Restoration: $660,000
      • Foundation Aid Increase: $75,000
  • 2017-18
    • Average increase in foundation aid in the past two years is 2.7 percent
    • Year-to-year changes
      • Total Dollar: $339,000
      • Percent: 1.96 percent
    • Major Components
      • GEA Restoration: $0
      • Foundation Aid Increase: $353,000
  • 2018-19
    • Average increase in foundation aid in the past two years is 2.7 percent
    • Year-to-year changes
      • Total Dollar: $364,000
      • Percent: 2.07 percent
    • Major Components
      • GEA Restoration: $0
      • Foundation Aid Increase: $351,000

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Foundation Aid History

  • 2012-13
    • Foundation Aid Received: $12,561,189
    • Full Phase-in Formula Foundation Aid: $16,981,128
    • Amount Underfunded: $4,419,939
  • 2013-14
    • Foundation Aid Received: $12,598,712
    • Full Phase-in Formula Foundation Aid: $16,861,887
    • Amount Underfunded: $4,263,175
  • 2014-15
    • Foundation Aid Received: $12,775,793
    • Full Phase-in Formula Foundation Aid: $16,707,342
    • Amount Underfunded: $3,931,549
  • 2015-16
    • Foundation Aid Received: $12,822,430
    • Full Phase-in Formula Foundation Aid: $15,709,052
    • Amount Underfunded: $2,886,622
  • 2016-17
    • Foundation Aid Received: $12,898,380
    • Full Phase-in Formula Foundation Aid: $15,341,231
    • Amount Underfunded: $2,442,851
  • 2017-18
    • Foundation Aid Received: $13,251,691
    • Full Phase-in Formula Foundation Aid: $15,717,416
    • Amount Underfunded: $2,465,725
  • 2018-19
    • Foundation Aid Received: $13,602,225
    • Full Phase-in Formula Foundation Aid: $16,701,859
    • Amount Underfunded: $3,099,634
  • Average Underfunded: $3,358,499

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Looking Forward: Assumptions

Projected Average Expenses

  • TRS Contract Salaries (Admin, Teacher, TA): Increase 2.75 percent per year.
  • ERS Contract Salaries (Transportation, Facilities, Other Support Staff): Increase 2.75 percent per year.
  • Pensions: Increase 2.75 percent per year due to salary increases, contributions rate flat.
  • Utilities: Increase 2 percent per year.
  • Special Education Placements: Increase 2 percent per year.
  • BOCES: Increase 3 percent per year.
  • Health Insurance: Increase 7.5 percent per year.
  • Other Insurance and Benefits: Increase 2.5 percent per year.

Projected Average Revenue

  • Tax Levy: Will increase by 2.5 percent per year based on growth factors only
  • State Aid: 2.7 percent increase per year in Foundation Aid and 2 percent for expense-driven aids (transportation, excess cost and BOCES)
  • Rental: 2 percent increase per year, based on use of space and current rental agreements.
  • Other: All other revenues will increase by 1 percent per year.

Current Assumptions

Total revenue increases by approximately 2.3 percent while expenses increase by about 3 percent per year. This creates a wider gap each year.

  • 2018-19
    • Revenue: $51,400,000
    • Expenses: $52,250,000
    • Net position: (-$850,000)
  • 2019-20
    • Revenue: $52,465,000
    • Expenses: $53,815,000
    • Net position: (-$1,350,000)
  • 2020-2021
    • Revenue: $53,775,000
    • Expenses: $55,440,000
    • Net position: (-$1,665,000)
  • 2021-22
    • Revenue: $55,015,000
    • Expenses: $57,130,000
    • Net position: (-$2,115,000)
  • 2022-23
    • Revenue: $56,285,000
    • Expenses: $58,800,000
    • Net position: (-$2,615,000)
  • 2023-24
    • Revenue: $58,762,000
    • Expenses: $59,200,000
    • Net position: (-$3,215,000)

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What if…

Revenue: …the tax levy average increase was 3 percent per year instead of 2.5 percent and the Foundation Aid average increase was 3.5 percent per year instead of 2.7 percent?

Expenses: …health insurance increased by an average of 5 percent per year instead of 7.5 percent and pension contributions remained flat instead of increasing an average of 2.75 percent per year?

These are not predictions of future aid, tax revenue or expenses, but simply illustrate the impact of changing assumptions.

  • 2018-19
    • Revenue: $51,400,000
    • Expenses: $52,250,000
    • Net position: (-$850,000)
  • 2019-20
    • Revenue: $52,575,000
    • Expenses: $53,560,000
    • Net position: (-$985,000)
  • 2020-21
    • Revenue: $54,135,000
    • Expenses: $54,900,000
    • Net position: (-$765,000)
  • 2021-22
    • Revenue: $55,640,000
    • Expenses: $56,290,000
    • Net position: (-$650,000)
  • 2022-23
    • Revenue: $57,190,000
    • Expenses: $57,720,000
    • Net position: (-$530,000)
  • 2023-24
    • Revenue: $58,762,000
    • Expenses: $59,200,000
    • Net position: (-$438,000)

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What would the next five years look like with full Foundation Aid?

This scenario looks at if the district was given close to Full Foundation Adi for the next five years.

  • 2019-20
    • Original Assumptions: (-$1,350,000)
    • Full Foundation Aid: $3,000,000
    • Change in Net Position: $1,650,000
  • 2020-21
    • Original Assumptions: (-$1,665,000)
    • Full Foundation Aid: $3,000,000
    • Change in Net Position: $1,335,000
  • 2021-22
    • Original Assumptions: (-$2,115,000)
    • Full Foundation Aid: $3,000,000
    • Change in Net Position: $885,000
  • 2022-23
    • Original Assumptions: (-$2,615,000)
    • Full Foundation Aid: $3,000,000
    • Change in Net Position: $385,000
  • 2023-24
    • Original Assumptions: (-$3,215,000)
    • Full Foundation Aid: $3,000,000
    • Change in Net Position: (-$215,000)

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What we know and don’t know for 2019-2020

Major Revenue Factors

  • Tax Levy: We have both growth factors, state and local, and they total 3.14 percent, the largest increase we have had in the tax cap era.
  • State Aid: We will not know state aid until later in the budget season. Our average increase in Foundation Aid has been 2.7 percent the past two years.

Major Expense Factors

  • TRS: The rate range has been released and will be a decrease from last year. It is estimated to be between 8.5 percent and 9.5 percent, down from 10.63 percent in 2018-19.
  • Health Insurance: We know that prescription costs have continued to rise, but will not have final rates until February/March.

Reserves

The district has continued to use reserves and fund balance to try and smooth the volatility of various budget factors. Use of reserves will be discussed throughout the budget process.

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Where do we go from here?

Advocate

We MUST advocate with legislators to fully fund Foundation Aid
Advocate the tax levy limit calculation uses a true 2 percent regardless of the CPI (four of the past six years have been below 2 percent.)

Apply for Grants

We must continue to apply for competitive grants.

Operate Efficiently

We must continue to work with other districts to share ideas and find savings and continue to explore cost savings for health insurance through work with CASHIC and our bargaining units.

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