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2013-2014 Budget Update

2013-2014 Budget Update. Norwood-Norfolk Central School March 19, 2013. We Have a Gap. Projected Revenue Budget: $ 19,039,662 Reserves: $ 476,854 Appropriated Fund Balance: $ 505,000

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2013-2014 Budget Update

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  1. 2013-2014 Budget Update Norwood-Norfolk Central School March 19, 2013

  2. We Have a Gap • Projected Revenue Budget: $ 19,039,662 • Reserves: $ 476,854 • Appropriated Fund Balance: $ 505,000 • Projected Expenditure Budget: $(20,629,647) • Budget GAP 2/12/2013 $( 608,131) Revenue budget includes 2% increase in tax levy See handout for detail

  3. pending Changes • Salaries $102,301 • Benefits $ 79,575 • Boces Services ($ 5,155) • Boces Special Education Tuition ($501,142) • Utilities ($ 30,385) TOTAL REDUCTIONS: ($ 354,806) Note: Benefit increase includes a $31,816 reduction in grants due to sequestration See handout for detail

  4. Revenue Changes • Building Aid ($46,315) • Decrease due to interest rate recalibration statute • Interest rate changed from 4.5% to 2.375% • We are currently in the process of filing a waiver TOTAL REDUCTIONS: ($ 46,315) See handout for detail

  5. Budget Gap • Projected Revenue Budget: $ 18,993,347 • Reserves: $ 476,854 • Appropriated Fund Balance: $ 505,000 • Projected Expenditure Budget: $(20,274,841) • Current Budget GAP $( 299,640) Revenue budget includes 2% increase in tax levy See handout for detail

  6. How Do We Balance the Budget? What is Next? • Use reserves and fund balance • Reduce spending • Increase tax levy

  7. How Do We Balance the Budget? Spending reduction options: To close the current GAP: • We would need to eliminate 5 full time equivalent positions

  8. How Do We Balance the Budget? Spending reduction options: 1. Employer Contribution Stabilization Program • Current program signed into law August of 2010 • This option allows us to amortize a portion of our annual pension costs. • Amortized amounts are paid in equal annual installments over a ten-year period. • Interest is charged at a rate – determined by comptroller • Amounts can be prepaid at any time • Our maximum amortization for 2013-2014 is $166,691

  9. How Do We Balance the Budget? What is Next? Other options: Increase revenue • Revisit use of reserves and fund balance • Reduce spending • Revisit tax levy increase

  10. How Do We Balance the Budget? Other Options: 1. Consider a tax levy increase above 2% • Our current tax levy limit is 4.14 % • Additional .5% increase would raise $29,700 • Additional 1% increase would raise $59,401 • Additional 1.5% increase would raise $89,101 • Additional 2% increase would raise $118,802 • Additional 2.14% increase would raise $127,062 • A 4.14% tax increase requires a 50% + 1 voter approval. See handout for tax levy limit calculation

  11. How Do We Balance the Budget? Other Options: 2. Utilize Debt Service Reserve Funds • Debt service reserve is primarily comprised of unspent funds from capital projects • You can only use the reserve to pay outstanding interest and principal • Flexible option • Current balance is $282,700

  12. How Do We Balance the Budget? Other Options: 3. Increase utilization of current appropriated reserve funds • Retirement Contribution Reserve $344,807 • Worker’s Compensation Reserve $ 84,662 • Unemployment Insurance Reserve $ 47,385 • TOTAL Current Reserve Allocation: $476,854

  13. How Do We Balance the Budget? Other Options: 4. Increase appropriated fund balance beyond current amount of $505,000

  14. How Do We Balance the Budget? Prioritize your options: • Reduce staff and eliminate programs • Amortize employee’s retirement expense • Increase the tax levy above 2% • Apply debt service reserve funds • Increase current reserve contribution • Increase appropriated fund balance contribution

  15. Gap-Filling Choices: 2013-14 Budget Forced Matrix Grid • 1. Staff reductions • Amortize ERS expenses • Increase taxes above 2% limit • Apply debt reserve • 5. Reserve contribution • 6. Fund balance contribution

  16. What is still unknown? • Expense changes: • Utilities • Revenue changes: • Will we receive additional funding from the Legislative proposal? • Building aid waiver – if approved, add the $46,315 reduction

  17. Board Budget Work Session March 26, 2013 • We will review the Forced Choice Matrix results and prioritize what options will fill the GAP • We will decide the $ amount for each option to close the GAP

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