So I'd like to call the
February 28th, 20 2020 Finance Committee meeting to order
and announce that this meeting is being audio recorded.
Let's start with a roll call.
We'll go around the room for the in-person attendees
and then we'll go on to the webinar virtual attendees.
My name is Kathy Sicker, and I'm a board member.
Terry.
Terry Singer Board Member.
Regis Berwyn Administration.
Michele Board Secretary.
Cheryl Purcell Business Manager.
Stacy Winslow Superintendent.
Okay.
Now we'll go to the webinar attendees.
Hi. Kip Schor, Board member.
For Life in front of selfies of.
Go ahead.
There's Paul Latham. Citizen Advisor.
Yes, and go ahead, Brian.
Brian Costello for the senior advisor
for K.
And I believe
there's just one more Elizabeth.
Elizabeth Parris with Financial Advisors.
Okay, Thank you.
Okay.
The is my colleague Sherry Leo attending yet?
No. Okay.
Thank you.
Mm hmm.
K That seems to be everybody in person
and attending virtually.
May I have a motion to approve the summary minutes
from the Finance Committee meeting on February 24th, 20 2020.
So moved Capshaw second and Terry Singer.
Is there any discussion?
All those in favor say I. I.
All those opposed.
Okay.
The summary minutes are approved under unfinished business.
We do have the an update on the Milton Hershey Trust Fund.
We have Fulton Financial Advisors here.
There is an attachment to your agenda.
If you recall at the last meeting, we asked them to do a distribution
analysis stress test of the fund.
Just a very quick recap.
Last year we did a 7% distribution of the fund,
a one time kind of only increase because of the pandemic.
And our budget concerns.
We are due to go back to a 4% distribution.
We did have some conversation at the last Finance Committee of whether we should
consider a 5%.
So they are here today to present to us
what it would look like, the difference between
a four and a 5%.
So I can welcome Elizabeth Parish.
I'm not sure yet.
And Alex, Sherry is now on.
Thank you.
I wasn't able to join.
Thank you. Great. Thanks.
All right. You're welcome to start.
Okay.
Well, Kathy, thank you.
You gave a a wonderful introduction there.
And I think just in the interest of everybody on on the call
out a little bit to it before Liz gets into the numbers,
you know, as far as background history and maybe just giving it
a little bit of of context, because you're correct, you know,
we have been as trustee of the funds,
pretty much doing a 4% distribution out to the school district.
And it really was a function of trying to be a really prudent trustee
of these funds,
you know, helping the school district have the funds to do some things
they need to do and want to do, but then also investing in such a way
that we could ensure that the, you know, a 4%
payout will let the account grow.
And the nice thing about that is that the account grows every year.
Then you're getting 4% of a bigger account year after year.
And that's really our ultimate goal is and hopefully this fund continues to grow
and payout of 4%, but it's 4% of a bigger, bigger account each year.
And I think you know that
the school district has seen that the payment has gone up pretty regularly.
And the way we do it and the law that we're following
pretty much when it was put in place, gave some flexibility.
And I think that flexibility was based on
what the markets might be doing over time.
They tried to have it that they didn't have to change the law regularly.
So it's a 2% to 7% is kind of within the guidelines of the law.
And again, Fulton and other trustees look at that and say that given current
market situations, long term averages, the outlook for things
somewhere around that 4% is the right number
so that you don't have to invest in all stocks that would increase
your volatility and possibly have some really difficult years.
Kind of let you be a little more, you know, prudent in the investing
and do that payout.
So our range is 2 to 7%.
But I think you would talk
to most trustees and most folks that are doing investing,
they want to be somewhere around like a balanced or a growth allocation.
So you have a mix of both the safer fixed income
and the more volatile equities and then still be able to do a payout.
And that does come in around 4%.
So last year in discussions with you all as the beneficiaries,
it was helpful to hear you had some real financial concerns.
And I think about all of us, you know, a year or two years ago,
we really had a ton of uncertainty in front of all of us, was shut downs,
didn't know how long this was going to last.
We didn't know how soon the economy would come back.
And people will go back to their normal lives.
They still don't think we're there, you know,
go in all kinds of discussions for that.
But the one thing that Mike was able to share with us,
which really let us as trustee
make a decision, you know, does it make sense to increase the payment here?
And it did.
He showed us, you know, the the budget projection for revenue.
And I think it was Acts 511 funds.
You know, that line item,
you know, there were projections there of how far
that was going to go down, what kind of shortfall
that would all create for your current school year.
And it really made sense that a 7% withdrawal
for one year one won't cause lost investor portfolio any differently.
And that's really what a lot of this is about, is, you know, if we take 7%,
if you can show that you need 5% this year,
you know, what would the impact be on the portfolio?
Would this have to invest differently?
And I think that really is why we did the stress test
to prove that it would be prudent and okay to do a 7%,
but it wouldn't have a really huge impact on how we're investing
and it wouldn't have a huge impact
as we start looking out five, ten, you know, even more years than that.
So it sounds like your decision today is maybe to look at the revenue,
look at the numbers with us, but perhaps kind of to say,
you know, do you need the 5% in order to cover some revenue?
Cheryl was nice enough to share with us some things about the giant center.
You know, you have some uncertainties here.
So it could be we go back to four, but you come to us a month,
two months, six months from now and say, oh, wow, we thought
we were going to get this revenue.
We can show you that we're not.
And maybe when we increase, you know,
we do an increase or an adjustment at that point in order to make up for it.
So I'll kind of stop there and see if there's any questions before
Liz goes into the numbers.
This is Kathy Sicker. So
that is something that I'm not quite sure we were aware of.
We actually have to show that we need 5% to cover revenues.
And but if our
but you did say that one of those could be
the uncertainty with the pilot payment for the giant center.
Yeah, it could be any of them, Kathy.
And I think that's the part that you
you all as the investment committee didn't see because I worked with Mike on it.
But you know, he we talked about I have to go to a basic it's a trust committee.
It's the folks that look at these trusts are we can make some decisions
and they basically vote on you know so luckily, you know,
listen, I can't just arbitrarily move payments up and down.
You know, there's a real good process in place for Fulton.
And it's a group of people that I have to go to and show them the justification
for making a change to it, to a beneficiary's payments.
So that's what we used last year.
And you all kind of missed that process because Mike and I worked on it.
I took it to committee and it was it was very clear that you all needed the money.
So, yeah, we will have to show that the need is there.
Okay.
I yeah, that, that's, I think that's a pretty significant point
in these discussions because you know, in
2020, 2021 was in 21.
Yeah.
That was we knew the uncertainty was pretty obvious
but now we'd have to see where we are and
actually what our needs are going to be.
But it's not about expenses, it's about revenues.
Correct? That's correct. Yep.
But I think to Kathy, if you came up with an expense that was like a one time
very necessary, you know, again, we could take that to committee.
But I think the more important part is we're trying to to, like I said, keep
the portfolio invested in the proper way without too much risk
and be able to do a 4% for, you know, for a very long time, as long as that's what.
Market returns are showing. Okay. Yeah.
So I think it's worth showing the need,
you know, why would we want to go above four?
Because the longer we go above four, you know,
I think Liz can show the stress test, the longer we're above four.
It either means she has to invest differently,
which would mean taking on more risk, or it doesn't grow the account.
You know, you could take out.
Yeah, we could pay out more than four.
But then the account doesn't grow and the payment becomes almost stagnant.
End up with the same payment every year because 4% of the same size portfolio is
the same payment.
Right?
Right.
Well, I mean, I think what as we are talking about this, my head
automatically goes to the need
of not raising taxes.
So like if I don't know, is this a whole it's
a balancing act, right? So
and the need to possibly if we were going to bring staff back
we did an early retirement incentive and there's been conversations
of bringing them back because we we let them go,
you know, to fix our budget correctly for during the pandemic.
But to bring them back, that's a need.
Right. Right.
There is a need.
So what I was saying, you know, I think again,
I think then the question is,
if we were to keep the payment at seven or take it to five
this year, will your budget be able to sustain that in future years?
Because I don't think the plan will be to keep paying out the five or the seven.
So I think that would be then a question, as everybody is.
Yes, you could probably show the need this year
and be able to to do some of those things to cover an expense.
But then could the budget,
you know, support it from there on out if we go back to four.
Yeah. Okay.
Yeah. This is Terry Singer.
Just a question along the lines that Mrs.
Secours raising.
Where where would the uncommitted fund
balance come into the conversation or or wouldn't it?
We have a fine balance
of X millions of million dollars
that's not committed.
So we have a
one time need or an uncovered, you know,
an unfunded need.
To what extent would we be expected to tap the uncommitted fund balance?
It's just a question I'm raising, not looking for an answer right now.
You're
you, Terry.
You're saying to put the money back in that we took out.
I'm saying
if we have
financial needs, to what extent would we
that aren't covered through traditional revenue?
To what extent would we be expected to tap
into our uncommitted fund balance to address it.
As opposed.
To increasing the
percent drawdown of the fund of the
trust fund?
Okay. Just I don't know.
Yeah, we already did take money out of it, so.
Well, maybe just think about that for the future.
Okay.
Any other questions related to the presentation?
Or we can keep going.
Okay.
It doesn't look like there's any more questions right now.
So do you want to add anything?
Yeah, I would.
So this is in control of the presentation.
I do want to move to the page that shows
the 7% drawdown in one year and then 5%
the next year, because I think it's important
if you can justify the need for
an increased payment, say 5%.
So let's advance.
Earlier.
That was the pitch.
When we look at this,
we really want to focus in on the long term with the market value.
And when we look at the long term market value,
I think looking at the column that says 50th percentile is appropriate
because as you know with my experience every ten years,
the expected returns pretty much come in with what we expect.
They may be a few, you know, a quarter or two, a quarter
or maybe half a percent higher or lower than what we expected.
But they're pretty close.
And I think it's also important to understand
what some of our assumptions were.
They were laid out earlier, but what we would see in ten years
from today that the market value of this portfolio
would be 66 million, 300,000.
The distribution table below
that is elevated because I did not do the five year averaging.
So those those numbers are a little bit elevated
If we advance to the next page
and this is if we would resume the 4% next this coming year,
you can see that the market value in year
ten is about 67 million.
So the difference is not that significant, it's 700,000.
So if you can justify the need
for an additional increase percentage distribution this coming year,
the portfolio would not be harmed in the long term significantly.
So it can weather that one time draw at this point.
And I think that's the important thing to draw from this.
So to you, this is Kathy Zwicker.
$700,000 difference is
relatively insignificant
in your financial eyes,
if you can justify. So yeah.
That's what that's a 1%.
That's a difference of 1%.
Okay.
To us, that is not considered material.
Yeah,
well, this is this is good information because, you know,
inflation is at an all time high and it's the highest since
what?
I don't even know what year.
We can go back to the late seventies.
Early.
What was the Reagan administration when we had very high inflation?
Yeah.
I mean, mortgage interest rates aren't as high
as perhaps when inflation was high before, but
I don't know.
You know, there's there's a concern that
to get the revenue we need, we might need a tax increase.
So I think all of these things need to be weighed out and considered.
When we
looked at it earlier, I did speak with Sherry and Liz
just to plan and make sure I understood their presentation as well.
The difference between distribution next week and jump
in, if I'm wrong, just in rough numbers, 4% versus
5% next year is about $450,000.
You know, round numbers.
Once they do, the reality is that about where you're thinking was right.
So when we if we looked at the market value and I think Sherry
did the market value on Thursday or Friday of last week on
the projected payment,
if we would revert to the 4%
would be 1,830,000. Yep.
And that you can compare to what the 4% distribution
would have been this year had you not taken the 7%,
that would have been 1,750,000.
So there is an increase there.
If we do a
if we
would do the 5% distribution for the coming fiscal year,
that distribution would be 2,287,000.
So that difference then would be
is about $460,000 additional.
Okay.
This is Lindsay. True.
And I apologize.
I was a little late, so I missed the first part of it.
But so really since the 7% has already been
assumed for for this current year,
we're really looking at is it a 5% or 4% for next year?
What I'm hearing is the 5% without material impact
to the portfolio long term.
Could.
Replace the lost revenue
because we had been budgeting about a half a million dollars
for that pilot payment.
So that's kind of where that comes into play, that that extra percent
could replace that for the 2223 budget
and then go back to the normal 4%.
So I think what we had
discussed earlier, prior to when before you came in,
we will need to show a need
in the 20 to 23, be it a one time unexpected expense,
or that we do have a revenue shortfall coming in the 2223,
it won't be to really make up for anything that we did not get this year would be
how do we go forward and build our budget for 2223?
Also thinking about sustainability in prior years.
But am I correct in that for the 2223 year, we are not
it is not projected
to receive the full pilot payment Still, don't we still have one more
budget cycle that they're anticipating we won't receive that.
I don't think we have confirmation of that.
That's going
that will be part of the conversations that we'll need to have
and get a little bit more comfortable with, because, yes, that would be if we do
get confirmation that we are not going to get that pilot for another year,
then that would be something that they could take to their trust
committee and say here is a definite revenue shortfall.
Yeah,
thank you,
Cathy.
Other questions for. Us.
Any other questions?
If there's any questions with anybody on
line.
Well,
so this is all good in for I don't see any more questions about
this is all good information.
We were planning to make.
I think net in March will have clear
a clearer picture of where we are at with the year.
And then I know you would like us to try to make a decision by the end of March.
We have one more Finance committee meeting,
so this is just great information for us to chew over as we,
you know, need another four weeks.
Sure.
And I think with the timing, you know, last year we were able to get it done
in time to, you know, have the payment changed and updated.
But again, if you all end up having to adopt the 4%, but the need isn't showing.
Like I said, if the need shows up at a later meeting, certainly,
you know, get in touch with us and we could go to committee.
And if we have to go to the committee
in March, you know, there's there's some flexibility there.
I think last year we just all wanted to note
that seven was good, that then, you know, I think we all just want to kind of know
that you could go into your budget knowing that it was a definite.
But at the same time, there's nothing magical about the month of March.
So I guess my takeaway is it's 4% unless we change it to five.
I mean that it
because at the very beginning you said four 4% is the most prudent.
That's what most trustees use.
Yeah.
Yes, I think that's a good way to summarize it the way you just did.
Okay. Go into it with the four.
But if you show the need for a five, you know, certainly then it could go to five.
Yeah, I kind of like that plan.
Does that sound good? It's a four.
Unless we change it to a five by perhaps by March 31st.
Okay, Well, thank you very much.
I appreciate your time.
All right. Thank you all. Good luck with us.
Thank you. Thanks.
Thank you.
Okay, now we'll go on to new business.
We have a monthly update on the 2021 2022 general fund revenues and expenses.
There is an attach ment there.
Cheryl Purcell, do you want to go ahead and go over those?
Sure.
So looking at this meeting and thinking about knowing that we had the big decision
on the trust or what revenues really look like, So this,
this is these two documents, revenue expenses are typical
to what you would see,
and then we'll go a little bit further, deeper dive into some of the revenue areas
just to kind of see what we might be thinking.
And my takeaway from looking at the numbers is
we're well ahead of where we expected to be at this time.
The economy has rebounded,
I think faster and quicker than anybody might have expected.
And you can clearly see while it was a conservative
revenue budget, especially like in our local revenues,
we're already at 95% collected
as of the end of January where budget to actual which is higher.
Typically we are around 90%.
You can see on this sheet night 2021 is 91.5.
I did go back a couple other years pre-pandemic.
We're always in that low 90% collected as of this point,
which is typical primarily because the real estate taxes that are due
and turnover over for collection by the end of December.
So those really come in early and drive those collection rates.
So you're going to see the 90%.
You can see if you look at where I thought was most interesting,
the amusement tax, whereas prior year
we ended the year with 500,000, we're already over $1,000,000.
So the amusement, you know, Hershey entertainments are back in business
and we are getting funded for, you know, for local
economies that way
and people getting out and about and going to things.
The giant center is open.
The concerts again, we don't know about the pilot,
the payment in lieu of current taxes, that 291,000
that's line for the 291 is what we have gotten from the medical center.
And what we expect to get That payment typically comes in March.
Actually, I look back so which is why it shows zero current year to date.
But we will we are expecting the to 91 going back a few years.
What we're missing is the giant center of pilot payment,
and that is still there's still conversations going on.
I do not have a real good feel yet what where that's going to land
or where we go with it.
We'll keep having conversations with the township, with the ICD or
there's anybody here is anything We'll try and kind of nail that down
a little bit better. How to budget that line item.
I did review the ICD minutes from November
because they had a presentation from H&R and it sounds like
they're not anticipating that
there would be money left over for the pilot payments in 2022.
Sounded like they may still need to transfer money
and that the estimated profit is around 379,000.
So it looks like there probably isn't.
It takes about $1,000,000 to fulfill the pirates,
but that they wouldn't
really know until midyear 2022
what the revenue really do for the debt payments.
So we'll keep following this.
Hopefully we get some better guidance.
If not, then the best thing to do is conservative,
you know, budget conservatively and hope
for the best that it comes through.
We'll keep talking to members of the board
and see if they can give us any better feeling if
if that was a conservative estimate on their part.
And things are significantly different for them as well.
November things are.
I just see from the numbers from the amusement tax there they are cranking.
To see the amusement tax come back to that level
because we had actually reduced the anticipated for the budget
because we were worried that another wave could take everything out again.
Right.
So we only budgeted 750 and we're already over a million.
So it will be significantly above.
But you know, the actual
better than budget at the end of this year for that line item.
So yeah, that helps make up for the the lost revenue in other areas.
So that's pretty much it for local.
Again, we'll go into some other revenues
and then the one thing that we haven't
talked about, what we still can use for the second page so we've got the state
and the and I'll talk a little bit about the governor's budget.
We don't have a whole lot of control over the state budget,
federal.
You scroll down just a little bit there
you can see where we have cares to answer to at 2.2 million
we will have
cares act for the our best seller.
That's the third round of the cares.
We got $4.6 million, which is to be spent by September four.
So we're going to split that over two years.
So we expect to budget roughly 2.3 million.
So that 2.2 and 2.3, they'll still sort of wash.
So I would expect federal revenues to look pretty much the same.
And then again, that permanent fund transfer, that $3 million
that is the 7% that we are getting this year from the trust.
And that will be the number that is to be worked out.
Then with Fulton Advisors before we finalize
our budget.
Why were you able to that this document looks a little different.
Is this the new way of reporting the information?
Did you were you able to I know we meet to prepare the agenda. And
is this the way you like it?
Are you still working on it?
I think for revenues. I do like this.
I have a document that actually goes back 1928
and 1819, just because I wanted to kind of see pre-pandemic levels.
Yeah.
And again, the pre-pandemic and I can share that it's just way bigger.
And I wasn't sure how it was going to project for anyone on Zoom.
So I can share that document just so that everybody can.
Okay, I can post that with the finance documents so that you can see.
Yeah, I that's what I'm interested to because as we get
through this year to see if we're back to 2019 yet.
That's. Where we are
as we did like Lindsey said, change a lot of these numbers.
You did the.
Can you please.
Go back up to page.
One or
to go back.
And again, state changes a little bit,
but our our biggest source of income of revenue is local.
The the OR where am I now.
So the 46 million that were year to date collected
as of January 31 of 22 we had 46 million
collected as of one 3120
and 45 million collected as of one 3119 So we're definitely right.
Local revenues are back on track.
We can you say that again?
So as of January 31 of 19, we were at 45 million.
Okay, 31 of 20, we were at 46 million and we're at 46 million now.
Okay.
For just for local revenues, everything else gets a little bit.
State revenues are based on the reimbursement. Of.
Pizzas and Social Security, which that changes as your wage base
changes. And the federal looks very different
because of all the new federal cares money.
Again, I'll put this to our well, load this document in that finance section.
Okay, That will be good.
And I spent more time for this meeting really
looking at, you know, trying to get up to speed with everything.
But I really wanted to get my head wrapped around this,
the revenue sources and what revenues were happening.
We're still waiting for some budgets to come in.
And we'll take we'll start really taking a deeper dive into the expense side
in the month of March and come back for the March
Finance Committee with some budget expense numbers.
I spent more time on revenues.
Do you want to pull up the expense documents?
So I had a quick question.
This is Terry Singer.
The answer to fund you said it's a total of 4 million
something and you're going to split it between
this year and 20, 20.
Three and 24.
So there's the 2.2 on here is what, round two of the federal money.
Right?
And then round three, we actually received an allocation of 4.6 million.
We are planning to split.
That will take 2.3 roughly in the year
and 23 and then the rest of it in year end 24.
So none of that 4 million is reflected here at all.
None of that is in this budget now. Thank you.
The 2 million on the Esser two is that
I know what the Esser three I believe we have to submit the envelope
like kind of submit each round to receive the funding.
Is that the same with Esser two that we would have only collected
7% of that so far.
Yes. I think we kept it.
And I didn't go back to look at the grant.
It's when the grant was funded, when it was actually approved.
When we submit, we submit quarterly cash as needed.
So we will be submitting the next one beginning of.
April this. Quarter.
Because that's really kind of the chunk that was going to balance
things for this year. Okay.
And it's still the money will be expanded because it's all for salaries.
So it's salaries that were earmarked and being paid in this current year.
So we will get that money. It's just a timing.
So we'll will be able to pull all that revenue back into this current year.
Just for my
report for tonight's meeting, the amusement tax is back up to 1 million.
But what what was our best year total. For.
Your I guess, year to date for right now?
Actually, the 20 1819 year finished at 1.4.
That was the best.
Finished. Yes.
Okay.
So 630, 19 to 2019, actual was 1.4.
So if we're at 1 million now, where do you think we're going to end up?
Probably in that ballpark, actually, that was just over 1 million.
The number in 20 1819 was identical as of January 31.
So they were at a million then.
I would just assume we'll probably be at that 1.4.
Okay. Wow. Well, that's good. Yeah.
That's really good, because I always thought that it was like
by the time we got to January, February, the majority, we've
we had realized the majority of amusement tax because there's
just not like the park opens for springtime in the park, but
there's not as many
things that drive that you know, a third of it.
And that's completely, completely I guess we could I mean, we're
at least I would say if we're at 1,052,000, well,
at least end up at 1.3, I would assume that there's still a lot coming.
I think people are anxious to get out the amusement tax that as we get
the collections from the tax association, the numbers keep growing.
So I think people are just anxious to be out and about.
Maybe if we get some nice spring weather, who knows?
Does that include the parking money as well and that the amusement line?
No, we do not get the parking lot.
I no, we don't. That's how we got 50% of it.
I don't think so. Yeah, we do.
I don't think we do.
I'm not sure.
I think I'll, I'll confirm I, I thought parking was the same as the others,
but I think that, I.
Think that a separate line item.
Or is it in the amusement park.
It's a separate tax.
So I thought that we got, I thought that that money went
to the township and school district equally
the same way that it was never as much money,
obviously, as amusement tax because of the volume of things that were there.
But I can I will verify.
I think my understanding from what I was just told is
we do not get a share of that money, but I.
Kind of thought we didn't
I remember having that conversation that we don't get the parking money.
It's not part of the amusement tax.
It is it.
Is a separate tax.
As a separate tax.
But I thought for some reason we got some of that.
We should.
Ask. Yeah, we can ask, but I.
Cheryl, this is Terry Singer.
I'm just curious on mean delinquent real estate taxes. Yes.
Is there a cyclical nature to when there collected
that would explain
why we're at about a one third
of of the 600.
It is sort of cyclical and it depends
the taxes are turned over to the county in January.
Some of that has to do
I think we still have some year end and it's the same as last year.
That could have been receivables that go back to the prior year
that we need to look at and make sure that that's a clean number.
But it is.
You'll see collections increase a little bit and then we will have
a significant journal entry with year end
because we'll be carrying a lot of that into next year.
You know, just curious the interest income.
But there is none unfortunately.
So it was, but we estimated 150.
I thought that was a high estimate for everything else that was conserved.
So that was probably the one. Interest rates are pretty much zero. Right.
And they have been so that's that probably was hope wishful thinking maybe in that.
That's.
I, I expect that will keep
I would propose that we keep that down in next year's budget too.
I don't see them growing any any time soon.
Right.
Thank you.
Do we have about 20 minutes and we have a couple more things.
Do you want to.
Anything else with the revenues?
No, I don't do to pull up expenses quick.
And again, I didn't.
It's in here just to touch on it.
You can see where is revenues have
probably changed a little bit more expenses
really are trending the way that they've always trended.
It just there's there's more cyclical nature to the expenses, how they run.
You know I think the probably held back on some big expenses in prior year
but things are getting purchased now
and getting bought and paying salaries.
So there really I don't have anything to bring to you right now on expenses.
Nothing that's jarring me anyway.
But again, we'll come back at Mar with the more in depth on on expenses.
Do you know
where the charter school funding
like where that payment is that in special programs.
No right now and I'm not sure why and actually it's one thing Mr.
Berman and I are going to be working on is to get that allocated out.
But it's all in regular programs.
Okay.
But I did look at the total, I think year to date were over $1,000,000 already.
So we're
we're and we budgeted 800 to are already over budget on the tuition.
I think that was probably a low
estimate to on expenses just because that's been growing.
So I want to get that
allocated out better split that between special ed and regular ed.
So we have a pretty good feel.
We'll be.
Doing a little more analysis work on that.
Just to I want to see I like to see where what charters are really dry
and what fibers are really driving, You know, our numbers and number
of students, those kinds of things.
Sometimes you can, sometimes you don't.
You don't have a whole lot you can do to stop them.
You can offer our programs to the extent that we do and hope that they come back.
I was just curious to see if it had declined
because I wasn't sure, you know, the number of students obviously
during the height of the pandemic and and school, you know,
transitioned to virtual if we had brought those back.
And then for the students who are now
in fully virtual with Kayla, you know where that falls.
In. The line.
Themselves, that's something we're going to be working on.
So I want to make sure I bring back a good analysis of that, too,
so we can have a better projection for next year.
And in really see what the students are.
I put a fun, balanced
summary in there, which we talked about last month, really.
But again,
it's just something food for thought because we did take $1.2 million out of
funding the fund balance last year
and we had a decline in both our general fund and our cap reserve.
So just as we are having those conversations and deciding
what kind of revenues and how to project next year's budget,
just to keep our fund balances in mind, because this is really
has we really are looking at some of those cap reserve projects.
We're sitting on $6 million, which is basically our savings account.
What we have to spend on cap projects short of going for additional funding.
So again, this is just more things to keep in
mind as we continue down the budget path.
All right.
Next, just to get into a couple
deeper looks on some revenue areas.
And this is.
This is just a history, again, just to share a snapshot
as to where we have been with tax increases historically.
There's a lot. Of stuff on here nobody really needs to know.
But it's how the state comes up.
The state is the one that sets
the Act one index every year for all school districts.
So they will
tell us in the fall what the index will be for for the following year.
So the base index is what the state gives us.
And then the block below it, we're highlighted
and what's green is what we'll be deciding over the next couple of months.
But you can see where we've done zero tax increases for the last two years.
So it's just it's a snapshot back to 15, 16,
what our millage is now, where it's been
again, just a historical look to to it's been a very
respectful mind for tax increases to the taxpayers.
And, you know,
we've been able to do that with things like the trust and those things.
But just to keep that in mind.
Go ahead.
I wanted to look, the next one is
this is just a look at.
So if we look at 21, 22, what our county tax roll was, was a $2.1 billion.
That was the assessed value, taxable assessed value that we were able to budget
on. So the first column is the millage and where we were for 2122.
I did reach out to the county last week and got updated numbers.
I wanted to see if we had growth
or what we were looking at as far as when we start building the budget.
We can use the updated tax roll and that 2.1 billion it's
now so it's grown 8.65%.
I just kind of wanted to get an idea of what growth in this area was.
So .65.
So if we use that number as of now,
I can keep reaching out and getting updates,
but they'll give us a number at the end of the year.
But I kind of like to know where we're going as
as as we can build.
You know, that's that's built you know, that's baked in numbers for us.
So we get that.
So when you look back to the revenue page, the interim tax line,
that growth is, it will come in as interims.
So we do you know, we do get money on
in this current year for that growth.
And then looking at 2223, it's just a column.
So if we do 0%,
you can see what actually even with a 0% tax increase
because of the higher tax roll, you get more bottom line revenue.
And then 1%, I'd like to know
what a 1% tax increase does to our bottom line.
So a 1% tax increase will give us about $384,000, roughly.
Just again, things to keep in mind as we go through like, you know, what's
what's going to help us do to cover that, you know, budget deficit are.
Hopefully.
Not a deficit, but that'll help us, you know,
as we make those decisions on tax increase
base index and adjusted index
here in Derry Township, we do not going to adjust that index a lot of areas.
Let's put that all in there, though, Just a lot of areas in the state
do get an adjusted index which let them go higher than the base index.
Ours is is not any different.
So 3.4 is the max amount that would be
that we would go to.
So a 1% gives us
$383,000 in additional revenue.
And don't we always say that one staff person is roughly $100,000?
Roughly? Yes. Okay.
So that like that's 3.8 staff members
maybe.
Okay.
Yes, that's.
And then other if you come down just a little bit, the median says value.
So this was the median assessed value for the tax bills that went out July one.
This number comes from the county.
So for Derry Township, the median value is 161 three.
Again, just to kind of get an idea as to the impact on a taxpayer.
So you can see across a 1% tax increase
on that assessed value would be $30 and again jumps to the one, two, three.
But just to give you an idea of of what the impact to a taxpayer is.
Then you you did Derry township median assessed value
not Dauphin County, right Yes. Okay.
And that's a number that's provided by the county.
I was able to find that number tied back to some of the budget information
from last year, from an email actually from, Dauphin County, Texas.
Husband Right.
And I mean, I think sometimes our assessed values
are lower than what they're actually sell for, right?
I mean, oh, my gosh. Yes.
So they haven't they haven't reassessed in ages. So.
Yeah. So I wasn't sure about the results.
As far as I know,
most times that median
assessed value is significantly lower than what you think the average home is.
Yeah, Yeah. I think it's much.
That you can look at your assessed value and if you're twice that then you know
the increase is twice that you know it, it's just a, it's, it's a baseline.
Now it's a good information.
It's very good information.
Right.
There's a calculation that it's supposed to be
because the appeal period for your assessed value is every
like late spring through July.
If you want to upscale that.
And there's a special calculation because I know I've looked
like mine is very high for my neighborhood
because of things that were done
prior to me purchasing it.
And it's interesting to see that and trying to like
there's a very specific calculation that you can plug in
to where you should be and then it helps you determine if it's upward,
you know, where it is and in the scheme of things.
Well, and that's a good point
because I know a lot of times questions comes towards the district
as to my assessed value doesn't seem right.
It's too high,
but that is strictly a number that is set by the County Tax Assessment Office.
Now we have nothing to schools, districts, municipalities.
No one has anything to do with that other than the tax board.
So you're right.
It's it's a it's an appeal process.
It's I think it's August one that it has to be turned in by.
And then the appeal will go through the fall
and will be notified if there's a change in assessment.
And we saw a couple of ones that were challenged that were more,
you know, corporate owned properties over, you know, the last year or so,
because their revenues and runs weren't supporting that.
I do think I appreciate your sharing this is that,
you know, looking at the tax increase in median household is something
that I think really is the bottom line at least from my perspective.
And seeing that minimum 1% would be, you know, a $30
going all the way to the index would be 103.
It's important to frame it, I think, in that context
so that we really understand because there are so many other
pieces to the puzzle and, you know, looking at that and residential things,
I just
saw that, you know, like our Derry Township
residents tax or trash bills,
the new contract is an 89% increase.
And so it's like $215 more a year to pay for trash starting in April.
So I think factoring that in,
it suddenly can make any increase
that much more significant.
And this is.
These are things to think about because that's that's when you
any decision that's made that's in there's an impact and to keep that in mind
but you know bring it back and this just kind of helps.
Yeah.
With that conversation or you know as you wrestle with it in your minds
as to what to do.
And, you know, once we see kind of the bigger picture budget
come together.
So one thing I think I had to go
real I'll. Touch on this real quick.
I don't know if any of you saw any parts of the governor's budget.
This is a little.
He's.
Asking for 1.25.
I think he's this is his going out
budget
plans, but $1.25 billion in the education.
So nobody thinks we're going to get this.
So again, just sharing.
So if we were to get that, we would actually get $1.4 million.
But that's a almost 28% increase over last year.
We will not get that
typically pre-pandemic.
I know schools are, you know, pretty much averaging maybe 3% less.
I mean, I know at Hempfield we were less than 3%.
So even last year, looking back to last year, last year,
because the governor's budget did bring in more to education, because there was
federal dollars sitting at the state, what she pushed through the basic formula
of funding formula, we had about a 7% increase.
So the 2122 allocation was about a 7% increase over 2021.
So that might be a little more reasonable.
Maybe try and budget that in.
So again, we'll keep watching because that'll keep they'll keep
doing things up in Harrisburg and letting us know the changes
in if we don't hear anything, if they're not that far.
And by June I still would not put that 27% into that
into the budget because I can't see that that's going to happen.
Any any other questions on on that one.
I have one other topic I wanted to just throw out there as in talking to
this is sicker and Dr.
Windsor.
Just kind of trying to.
How to bring contracts forward and ideas for the board
and how to have better organized the
communication to the board with contracts and trying to develop something
is just something I've used in a prior district that I got from another district.
But it just kind of this would be monthly or bi monthly
or whenever we have a list of documents to attach,
it would tell you where it, how much it is.
It would let us know if it's
and if it's a new or renewal or if it's an added contract.
I don't have any examples to put here.
Now, but I would like to start sending this out
through the board briefs and the contracts would be attached to it.
They would still come through the business office.
We're still working on some looking at all of the procurement procedures
and how we do things.
So just trying to come up with a way to bring contracts
forward for board approval that's sort of summarizes
it somehow that we can track it a little bit easier on not easier,
but we want to make sure that we're we are watching these things
and that we know if there's a renewal cycle coming up or,
you know, we know who owns the you know, whose department owns this thing and
where to go back to
again to.
It's just a management tool.
I think it's great.
I love being organized and having a tracking system
and then keeping the board organized on what we're approving ahead of time.
And then also this, I think, you know,
in our discussions, you said it will
make department work
ahead on a contract and not maybe last minute. So
perhaps we can.
And that's that's some of the things we're looking at with the
procurement process and how we do things and what we need to be thinking of.
And I just I want to make that when things come through that
we fully vetted everything so that when it comes to the board
for approval, we know that, you know, we've gotten all the quotes, all. The.
All the pieces have really been looked at and vetted.
And if it's something that's significant, it's going to still go through
a finance, a general services.
However, we need to have those conversations prior
to bringing it forward.
And then when you see it on here and we've talked about that,
I know there's some aware, you know, some build up an awareness of
what's coming.
This is sort of a work in process.
Yeah. Do you anticipate starting this soon?
I would like to try it in March.
I do have a couple of contracts on my desk that if we get everything ironed out,
I can I can work with Michele and get everything through a board brief
and we can we can try this with just a small number
that make sure everybody's comfortable
and happy with your presentation.
That sounds great.
I'll let the board know tonight.
Okay.
Thank you for that.
Okay.
I think we have gone through the entire agenda.
We are now down to public comment.
I don't believe we do not have any attendees attending the committee,
so I may have a motion to adjourn
the Finance Committee at 556.
So you
have.
All those in favor.
Right, by others. Opposed.
Okay, The meeting is adjourned.
Thank you very much. See you later.