Budget Q (Minus the A)

Here's a series of budget questions posed by one of our indefatigable commenters.

Will answers ever be found? Perhaps we'll know tonight at 7:30 when the monthly business meeting of the Court of Emperor William I is held.

Jon has left a new comment on your post "George Mount Retiring":

This belongs further down, but below are some Budget Thoughts & Questions, based on looking at the 4/8/09 Powerpoint presentation in the 2009-2010 Budget Links.

Revenues

1. Overall, budgeted revenues are up $124k over last year ($18,895k vs. $18,771k).

2. Where’s the extra revenue coming from? The Federal government.

3. Local revenues are down $211k ($11,962k vs. $12,173k).

4. State revenues are essentially flat (+2k, $5,553k vs. $5,551k).

5. Federal revenues are up $332k ($1,231k vs. $899k).

6. Why are Local revenues down $211k?

Even thought the millage rate stays the same as last year (187.3 mils), this budget assumes a $102k reduction in Real Estate Tax revenues ($10,617k vs. $10,719k). That and a $147.5k (50%) drop in Investment Earnings ($147.5k vs. $295k) overwhelm a $67k increase ($102k vs. 35k) in “Rentals”.

Question: How is this near-tripling of Rental revenue going to be achieved?

7. Why are State revenues flat (+2k)?

A $338k increase in basic education funding ($3,265k vs. $2,926k) is virtually wiped out by the loss of a $102k EAP Grant for Tutoring, and a $201k drop in Extra Grant funding ($530k vs. $329k).

Question: Why did we lose this $303k in grant funding? Hopefully it wasn’t from prior cuts in grant writing resources.

8. Why are Federal revenues up (+$331k)?

Mostly from a $297k increase in 21st Century Grant funding ($919k vs. $622k).

Question: Isn’t this grant funding targeted to certain programs, and not for basic education, so it doesn't necessarily replace lost Local & State revenue?

9. Conclusions: Overall revenues are up, but mostly from higher Federal 21st Century Grant funding. But this grant funding is likely "earmarked" for certain programs, so it doesn't necessarily replace lost Local & State revenue. That means overall basic education revenues look down.


Expenses

1. Overall, expenses are down $988k ($18,895k vs. 19,883k).

2. Where are the expenses dropping?

The 6 areas with changes > $50k are:

a. 1200 (Special Programs) is down $429k ($3,454k vs. $3,883k). Salaries are up $223k ($1,211k vs. $988k), but “Purchased Professional & Technical Services” dropped a whopping $694k ($1,205k vs. $1,899k).

Questions: What makes up these Purchased Professional & Technical Services? Why such a drastic drop?Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?

b. 1300 (Vocational Education) is down $81k ($758k vs. $839k), mostly from an $89k drop in “Other Purchased Services ($537k vs. $626k).

Question: Is this from Morrisville’s reduced Tech School share under the funding formula this year?

c. 2100 (Support Services) is down $119k. Salaries are up $56k ($419k vs. $363k), but “Purchased Professional & Technical Services” dropped $176.5k (from $182k to $5.5k, a 97% drop).

Questions: Again, what makes up these Purchased Professional & Technical Services? Why such a drastic drop? Is something being deferred until next year? Why? Was something pricey bought last year that isn't being bought this year?

d. 2300 (Administration) is down $208k, mostly from a $164k drop in Salaries ($495k vs. $659k), and a $21k drop in Benefits ($148k vs. $169k).

Question: Is this from the loss of Kate Taylor and Karen Huggins, and not replacing Asst. Principals? If so, I just hope this 3.5 mil savings is worth it in the long run.

e. 2600 (Maintenance) is down $112k ($1,622k vs. $1,734k, mostly from reduced Purchased Property Services (-$53k) and reduced Supplies (-$59k).

Question: Is this from not having to maintain MR Reiter as much? If so, it isn’t that big of a drop in overall maintenance spending (< 1.9 mils, < 6.5% drop in Maint. budget, but 1 out of 3 buildings is 33.3%, and MR Reiter’s 47,397 ft2 is 20% of the combined 237,689 ft2 of all 3 buildings). At < 1.9 mils, it’s certainly not the FORTUNE Bill Hellmann said we’d save.

f. 5100 (Debt Service) is up $67k ($997k vs. $930k).

Questions: Does this year's installment on paying off the $2.5 million in Bond Defeasement Expenses Hellmann didn't tell anybody about factor into this? Otherwise, why is Debt Sevice up when most of the bond money was defeased – didn’t that drastically reduce the debt?

3. Conclusions: reduced Administration and Maintenance cut expenses by $320k, about 1/3rd of the total $988k drop in expenses. Special Programs, Vocational Education, and Support Services dropped a combined $629k. Salaries are generally still rising, so a concern is that the cuts are coming from items that effect educational delivery.

Other Misc. Comments

1. p.6 --> some of the bar graph heights look wrong, based on other data in the presentation. For example, the 2008-09 Local Revenue is $12.17 million, but the bar height is over $14 million. State Revenues for 2008-09 ($5.551 million) and 2009-10 ($5.553 million) are virtually the same, but the bar is significantly higher for 2009-10.

2. p. 14 - Note that starting in 2005-06, everybody's property tax assessment was increased by a factor of 4, and the corresponding tax millage rate was reduced by a factor of 4. So if you really want to compare apples-to-apples on millage rates, you need to divide the years prior to 2005-06 by 4 - or multiply 2005-06 on by 4. Otherwise, some might be tempted to think that Sandy Gibson is really a hero because she presided over an astonishingly drastic cut in school taxes.

3. p. 38 - Looks like last year’s budget was helped by depleting the Fund Balance by $1.112 million (from $2.793 million to $1.681 million). Assuming 1 tax mil is about $60k, without this depletion of the Fund Balance, it looks like there would have been a 19 mil (~10%) tax increase last year.

So last year, the 2 main things the board did to balance the budget/hold the line on taxes were:

a. Get a ~$1+ million one-shot-deal from defeasing most of the bond money (at a long-term cost of $2.5 million);

b. Dip into the piggy bank to the tune of $1.112 million - money that was left to them by those evil "prior boards".

The budget projections from 2010-13 show the Fund Balance being further depleted by $1.456 million by 2013, all the way down to a mere $225k.

4. p. 38 - these budget figures show a Real Estate Tax collection rate of 93.5% throughout, but the earlier slides all seem based on a 94% collection rate (see p. 5). Why the difference? Which figure is right/more accurate?

Bristol Twp: New Business

From the BCCT.

Board backs KOZ designation
A drug distribution company promises to pay the school district a minimum of $195,000 a year if it’s approved.
By JOAN HELLYER
STAFF WRITER

The Bristol Township school board is backing Express Scripts’ effort to have its new distribution center site designated a Keystone Opportunity Zone.

The board unanimously threw its support behind the proposal Monday night after representatives of the pharmaceutical company promised it would pay the school district a minimum $195,000 a year in lieu of taxes.

That’s about $15,000 more than what the school district receives in tax revenue from the site off Route 413 near I-95, board solicitor David Truelove said.

The drug distribution company wants to move next year from its current location in Bensalem into the 241,000 square-foot building off Rittenhouse Circle in Bristol Township that formerly housed Jones New York. The KOZ designation would provide the company with tax relief through 2020.

The township council threw its support behind the proposal last week. The company still needs to secure county and state approval for the site to receive the KOZ designation.

A KOZ generally allows companies to pay no property taxes on future development, but Express Scripts representatives promised the annual payment.

The company also would consider paying more if the property’s assessment called for taxes in excess of $195,000, said Paul Acker, Express Scripts senior director of operations and project manager.

If the designation is approved, Express Scripts will hire at least 60 new employees, company officials said.

The new hires would be a mix of pharmacists, pharmaceutical technicians, data entry and shipping department workers, Acker said.

Trying to calm board concerns before the vote, the company representative said he didn’t expect Express Scripts to pack up and leave Bristol Township once its KOZ designation expires.

“We don’t want to do that,” Acker said.

Stay in School

From the BCCT.

Dropouts tell at-risk students to stay in school
By: JOAN HELLYER
Bucks County Courier Times

Daniel Harris feels he had a life-changing moment Monday as he listened to area residents talk about the challenges they’ve faced since they dropped out of school.

“I need to step up my game. No more bad grades,” said Daniel, 15, a student at the Benjamin Franklin Freshman Academy, after listening to the speakers with the “Stay in School for Success!” campaign.

“I don’t want to be like that when I grow up,” said Katie Morrisey, 15, a freshman at the academy.

They were among more than two dozen Bristol Township freshmen at risk academically who were invited to listen to the speakers, school representatives said.

Each speaker left school for a different reason: John Simmons did not return to Bristol Township’s Harry S Truman High School in 2007 after he was arrested. Michon Darnell left Truman after putting a job before her studies. Lindsey Sierra dropped out of Pennsbury High School a year ago while battling a drug addition and going through rehab.

Each regrets dropping out. They now are pursuing their high school GED through the Pennsylvania CareerLink Bucks County Youth Center in the Bucks County Office Center off Veterans Highway in Bristol Township.

All are planning to go to college or secure a steady well-paying job once they receive their GED.

A high school diploma or the equivalency will improve a person’s earning ability by about $3 per hour compared with someone who has dropped out, according to CareerLink statistics. Plus, it likely will reduce the amount of time a person will be unemployed during their working years, campaign organizers said.

The speakers also includ- ed Oklahoma native Ken Perry who is working through CareerLink to secure gainful employment. All four said: Stay in school.

“I know it sounds corny, but staying in school will probably be the best decision you’ll ever make,” Lindsey, 17, said.

The workforce investment boards of Bucks, Chester and Delaware counties and Regional Career Education Partnership partners are sponsoring the Stay in School effort.

The project also includes an online resource guide to services for dropouts in the greater Philadelphia area. There will be a “Re-Engaging Disconnected Youth Symposium” at Bucks County Technical High School on Friday. The brain-storming session is for community and faith-based organizations serving students at risk of not finishing school.

The initiative is necessary, even in Bucks County, where the dropout rate is generally less than 1 percent, because those who have dropped out are seeking resources in greater numbers, organizers said.

Dropouts cost the state on average $32,000 per person during their lifetime in welfare, food stamps, Medicare and other costs, officials said.

The biggest setback is a lack of well-paying jobs. Plus, dropouts miss out on the many social memories from the high school years, said Lindsey, who would have gone to her senior prom and graduated from Pennsbury this year had she stayed in school. “It’s really upsetting not being there,” she said.