FCASD 2015-2016 Final Budget

The 2015-2016 Fox Chapel Area School District final budget calls for budgetary expenditures of $92,738,854. The increase in expenditures over the previous year's final budget is projected at $2,973,573 or 3.3 percent. The final millage rate for 2015-2016 is 18.6283 mills. This will keep the millage rate at its current level with no increase. One mill will equal approximately $3.4 million.

The School Board approved the 2015-2016 final budget at its regular business meeting May 11, 2015. The Board passed a final 2015-2016 budget at its regular business meeting on June 15.

The 2015-2016 final budget reflects the following:
— The total cost of all salary line items is expected to increase 0.8 percent from last year's budget. The district anticipates a reduction of overall professional staff due to retirements. This reduction in staff will have no effect on the programs being delivered.
— Premium rate costs for medical insurance will increase by 2.75 percent. Total costs for medical premiums, however, will decrease by 1.5 percent due to fewer employees being covered under district plans and a switch in medical programs being offered to several employee groups.
— The school district's contribution rate paid to the Public School Employees' Retirement System (PSERS) will increase from 21.4 percent to 25.84 percent. The school district will be contributing $11,336,076 to PSERS in 2015-2016, compared to $9,521,491 in 2014-2015 – a 19 percent increase in cost to the district. The PSERS trustees determine the contribution rate increase annually.
— Equipment and computer purchases for the district will cost $2,023,388 which represents a 23.2 percent increase. These items will allow the district to keep pace with a one-to-one technology initiative for Dorseyville Middle School students and to replace aging laptops for staff and students at all buildings.
— Costs for supplies, books, and software are increasing by 29 percent. New textbook adoptions, upgrades and additional software, and increasing expenses for classroom and office supplies are estimated to cost $2,893,889.
— Funds generated by the 2012 district Gala will be utilized during the 2015-2016 school year to fund initiatives in the art and music programs in the amount of $201,000.

The 2015-2016 final budget is endorsed by the district's Resource Planning Committee, a group of residents with financial and management backgrounds that provide additional expertise to the School Board on financial matters.

PSERS and Future Challenges

The district will continue to face difficult budget years in the near future. It is estimated that under the current rate structure proposed for funding the state retirement system (PSERS), the district will pay out nearly $70 million over the next eight years. These unprecedented increases – combined with the limitations on increasing tax rates imposed under Act 1 – have necessitated the district to prepare for shortfalls in the budget.

The district currently has committed fund balance reserves of $12 million to cover the anticipated PSERS increases. The district will need to utilize $852,924 of these funds in 2015-2016 to "bridge" the gap in funding for PSERS and will continue to use committed fund balance reserves until the tax rates can keep pace and fund these costs. The district continues to reduce payroll costs through attrition and implement new instructional and administrative strategies to make the district more efficient and cost effective.

In addition, the district is preparing for future capital improvements and maintains a reserve to help fund these capital projects. The district issued bonds during 2013 and currently has a remaining balance of $29 million to fund ongoing renovations at the high school, as well as to pay for a portion of the renovations at the middle school and three of the elementary schools over the next few years. The Board and administration were able to achieve significant savings on the 2013 bond issue as a result of historically-low market interest rates.

By implementing sound financial strategies to manage expenditures and anticipate revenue shortfalls, the district's future financial health continues to be stronger than many in the commonwealth. However, the district continues to plan for future shortfalls through long-range budget forecasts.

Gaming Funds Distribution*

As of May 6, 2015, the Pennsylvania Department of Education provided the Fox Chapel Area School District with an estimate of the district's share of gaming funds available for distribution. The final budget reflects a distribution of $1,465,702. The method of distributing these funds, as prescribed by Act 1, the Taxpayer Relief Act, will be via the implementation of the homestead exclusion. Under this provision, any property in the school district that was approved by Allegheny County as a homestead will have the lesser of its taxable value, or an estimated $9,960 of its taxable value, excluded for the purpose of calculating current school district real estate taxes for the 2015 tax year. The owners of the 7,914 properties in the district that qualified for the homestead exclusion will receive the equivalent of a $185.54 reduction in their property taxes. Property owners who currently do not have an approved homestead exclusion will have the opportunity to apply again when the district sends out letters to those homeowners in December 2015.

*Allegheny County has certified that there are 7,914 properties in the Fox Chapel Area School District that qualify for the homestead exclusion. If that number is adjusted by the county to include more or less properties, it could affect the amount of the final reduction.