March 23 2015 boe budget workshop updated

HALF HOLLOW HILLS SCHOOL DISTRICT of Huntington and Babylon

2015-16 Proposed Budget March 23, 2015 Budget Workshop Updated as of March 20, 2015

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

2

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

3

Kindergarten Enrollments 800 Blue bar represents actual kindergarten registrations as of March 20, 2015

700 600 500

466

475 418

421

446

435

408

373

400 300

200 100 0 2013-14

2014-15

2015-16

Demographic projection

March 23, 2015 Board Meeting

2016-17

2017-18

Actual/Estimated

4

Twelfth Grade Enrollments Blue bar is estimated and represents 2014-15 school year eleventh graders

1,100 1,000 900

889 832

877

815

896 840

851 806

800 700

600 500 400

300 200 100 0 2013-14

2014-15

2015-16

Demographic projection

March 23, 2015 Board Meeting

2016-17

2017-18

Actual/Estimated 5

Declining Enrollment Trend 1,000 900 800 700 600 500 400 300

200 100 0 2013-14

2014-15

2015-16

Seniors

2016-17

2017-18

Kindergarteners

Figures used are actuals for 2013-14 and 2014-15 and demographic projections for 2015-16 and forward.

March 23, 2015 Board Meeting

6

Total Enrollments – 1954 through 2014 14,000

12,000

10,000

8,000

6,000

4,000

2,000

-

March 23, 2015 Board Meeting

7

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

8

Elementary Staffing Projections 2014-15 ACTUAL

2015-16 PROJECTION

140 Total Sections Grades K-5

137 Projected Total Sections Grades K-5

Actual kindergarten enrollment as of 3/20/2015 = 421

Kindergarten registration still in process Kindergarten enrollments: Demographer projection = 446 Actual as of 3/20/2015 = 373

March 23, 2015 Board Meeting

9

Secondary Staffing Projections GENERAL EDUCATION

Net reduction of one sixth grade class due to smaller enrollments moving up from elementary level.

Scheduling of students in Grades 7 through 12 adequately met by existing staff.

March 23, 2015 Board Meeting

SPECIAL EDUCATION

Addition of 6.2 full time equivalent special education teachers as a result of: • Meeting requirements set forth in Individualized Educational Plans • Scheduling of special education classes

10

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

11

Healthcare Expenses • Unlike most other districts, HHH employees contribute to the cost of healthcare commensurate with their salary • Most employees follow this contribution schedule:  Under $60,000 = 15% of premium  Between $60,000 and $100,000 = 20% of premium  Over $100,000 = 25% of premium March 23, 2015 Board Meeting

12

Healthcare Expenses • Districts required to meet the mandates of the Affordable Care Act, the full financial impact of which is still yet to be determined • Affordable Care Act key concepts:    

Individual healthcare plan only Minimal essential coverage Affordability Full time status (30+ hours of service/week)

March 23, 2015 Board Meeting

13

Healthcare Expenses • District offers two different healthcare programs:  New York State Health Insurance Program (NYSHIP)/Empire Plan Approximately 1,900 participants (actives and retirees)

 HIP/Emblem Health Approximately 65 participants (actives and retirees)

March 23, 2015 Board Meeting

14

Healthcare Expenses • NYSHIP/Empire  2015 plan year represents second year of the Empire Plan’s full conversion to a self-funded plan.  Department of Civil Service governs the Plan and develops “premium equivalent” rates  Plan year = traditional calendar year  District required to estimate projected rate increases for last six months of following school year March 23, 2015 Board Meeting

15

Healthcare Expenses • HIP/Emblem Health  Lower out-of-pocket costs with each use, but higher overall premiums  Plan year = traditional calendar year  District required to estimate projected rate increases for last six months of following school year

March 23, 2015 Board Meeting

16

Budgeting for the Healthcare “Unknown” 2015

2016

These healthcare premiums we DON’T know…

Healthcare School district budgets cross two premiums set for a calendar year calendar years These healthcare premiums we know…

March 23, 2015 Board Meeting

17

EMPLOYEE BENEFITS Healthcare budgeting unpredictability is caused by‌

Known vs unknown premium increases

Individual vs family plan mix

New vs exiting participants

Empire/NYSHIP vs HIP/Emblem Health mix

March 23, 2015 Board Meeting

18

Healthcare Expenses NYSHIP/Empire Healthcare Premium Increases 16% 14% 12% 10%

Year 1 of selffunded plan

8%

6%

Year 2 of selffunded plan

4% 2% 0% 2009

2010

2011 Family Plan

March 23, 2015 Board Meeting

2012

2013

2014

Individual Plan 19

2015

Healthcare Expenses HIP/Emblem Health Healthcare Premium Increases 16%

About 30% of participants migrated to lower cost NYSHIP/Empire Plan

14% 12% 10% 8%

6% 4% 2% 0% 2009

2010

2011 Family Plan

March 23, 2015 Board Meeting

2012

2013

2014

Individual Plan 20

2015

EMPLOYEE BENEFITS HISTORY OF HEALTHCARE EXPENSES 28,000,000

10% 23,000,000

10%

-1%

2%

5%

7%

18,000,000

13,000,000

8,000,000

3,000,000

(2,000,000)

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

21

2015-16 EST

Pension Expenses - TRS • The New York State Teachers’ Retirement System (TRS) is charged with administering the plan as provided by law • Membership in this System is mandatory and automatic for all full-time teachers and administrators • Contribution rates as a percent of salary are established by TRS and automatically deducted from a District’s State Aid • One contribution rate is set each year for all districts March 23, 2015 Board Meeting

22

History of TRS Contribution Rates 25%

20%

1978-79 21.4% 15%

10%

5%

2015-16 13.5%

2002-03 0.4%

0%

March 23, 2015 Board Meeting

23

History of TRS Rates - Increases/Decreases 125%

2003-04 123% year-over-year rate increase

105% 85%

2004-05 year-over-year rate increase was actually 600%

65% 45%

2014-15 2013-14 8% 38% 2015-16 year-over-year rate year-over-year rate -23% increase increase year-over-year rate decrease

25% 5% -15% -35%

1979-80 5% year-over-year rate increase

-55% -75% March 23, 2015 Board Meeting

2002-03 -70% year-over-year rate decrease 24

EMPLOYEE BENEFITS HISTORY OF TRS EXPENSES 18,000,000 16,000,000

8%

-16%

14,000,000

36% 12,000,000

8% 10,000,000

28%

8,000,000

48% 6,000,000 4,000,000 2,000,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

25

2015-16 EST

Pension Expenses - ERS • New York State and Local Retirement System comprises two different retirement systems: Employees’ Retirement System (ERS) & Police and Fire Retirement System • Membership in ERS must be offered to employees in nonteaching positions (clerical, custodial, bus drivers, paras, etc.)

• The New York State Comptroller is the administrative head of the System • Contribution rates as a percent of salary are established by ERS and vary based on when the employee joined the retirement system (i.e. which retirement tier the employee is in) • ERS fiscal year is April 1st through March 31st March 23, 2015 Board Meeting

26

History of ERS Contribution Rates 22% 20%

18%

1978 19.8%

16%

2016 18.2%

14% 12%

10% 8% 6% 4%

1991 0.3%

2% 0%

March 23, 2015 Board Meeting

27

History of ERS Rates - Increases/Decreases 300% 250% 200% 150%

100% 50% 0% -50% -100% March 23, 2015 Board Meeting

28

EMPLOYEE BENEFITS HISTORY OF ERS EXPENSES 6,000,000

4%

5,000,000

9%

1%

12% 4,000,000

43%

3,000,000

54% 2,000,000

1,000,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

29

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF SOCIAL SECURITY EXPENSES 10,000,000

9,000,000

-2%

4%

2%

8%

4%

0%

8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

30

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF WORKERS’ COMPENSATION EXPENSES 1,200,000

8%

-14%

31%

1,000,000

-10% 50%

800,000

-10%

600,000

400,000

200,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

31

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF LIFE INSURANCE EXPENSES 600,000

500,000

3%

-1%

-3%

-2%

8%

1%

400,000

300,000

200,000

100,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

32

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF UNEMPLOYMENT EXPENSES 400,000 350,000 300,000

-60%

104% 250,000

-8%

200,000

127%

33% 150,000

-26%

100,000 50,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

33

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF DENTAL EXPENSES 1,000,000

8%

800,000

6%

3%

2%

4%

2%

600,000

400,000

200,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

34

2015-16 EST

EMPLOYEE BENEFITS HISTORY OF OPTICAL EXPENSES 35,000

30,000

-1% -10% -5%

25,000

20%

-5%

10%

20,000

15,000

10,000

5,000

2009-10

2010-11

March 23, 2015 Board Meeting

2011-12

2012-13

2013-14

2014-15 EST

35

2015-16 EST

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

36

Understanding the PTLC

March 23, 2015 Board Meeting

37

Understanding the PTLC Sample School District HHH Merrick

Reported PTLC %*

PTL as a % of Total Budget

2.42% 2.40%

2014-15 Tax Levy 2015-16 Tax Levy Total $ increase Total Budget $ 190,898,714 $ 195,518,463 $ 4,619,749 $ 234,216,849 $ 37,726,907 $ 38,632,353 $ 905,446 $ 45,801,563

William Floyd Three Village

2.95% 2.93%

$ $

93,886,348 $ 139,633,941 $

96,655,995 $ 143,725,215 $

2,769,647 $ 223,943,389 4,091,274 $ 188,060,556

42% 74%

Commack Center Moriches

1.30% 1.30%

$ $

130,689,787 $ 21,357,417 $

132,388,754 $ 21,635,063 $

1,698,967 $ 183,223,817 277,646 $ 40,486,398

71% 53%

Longwood Elwood

4.08% 4.08%

$ $

127,312,951 $ 42,669,999 $

132,507,319 $ 44,410,935 $

5,194,368 $ 222,500,000 1,740,936 $ 58,634,724

57% 73%

East Northport Deer Park Jericho

1.62% 1.69% 1.69%

$ $ $

138,623,167 $ 66,524,186 $ 106,811,992 $

140,868,862 $ 67,648,445 $ 108,617,115 $

2,245,695 $ 159,109,341 1,124,259 $ 105,929,364 1,805,123 $ 119,572,384

87% 63% 89%

Hauppauge Valley Stream 30

0.37% 0.34%

$ $

81,191,357 $ 26,591,233 $

81,491,765 $ 26,681,643 $

300,408 $ 104,437,521 90,410 $ 33,348,021

78% 80%

* PTLC = Property Tax Levy Cap March 23, 2015 Board Meeting

38

82% 82%

Understanding the PTLC Sample School District HHH Merrick

Reported PTLC %*

PTL as a % of Total Budget

2.42% 2.40%

2014-15 Tax Levy 2015-16 Tax Levy Total $ increase Total Budget $ 190,898,714 $ 195,518,463 $ 4,619,749 $ 234,216,849 $ 37,726,907 $ 38,632,353 $ 905,446 $ 45,801,563

William Floyd Three Village

2.95% 2.93%

$ $

93,886,348 $ 139,633,941 $

96,655,995 $ 143,725,215 $

2,769,647 $ 223,943,389 4,091,274 $ 188,060,556

42% 74%

Commack Center Moriches

1.30% 1.30%

$ $

130,689,787 $ 21,357,417 $

132,388,754 $ 21,635,063 $

1,698,967 $ 183,223,817 277,646 $ 40,486,398

71% 53%

Longwood Elwood

4.08% 4.08%

$ $

127,312,951 $ 42,669,999 $

132,507,319 $ 44,410,935 $

5,194,368 $ 222,500,000 1,740,936 $ 58,634,724

57% 73%

East Northport Deer Park Jericho

1.62% 1.69% 1.69%

$ $ $

138,623,167 $ 66,524,186 $ 106,811,992 $

140,868,862 $ 67,648,445 $ 108,617,115 $

2,245,695 $ 159,109,341 1,124,259 $ 105,929,364 1,805,123 $ 119,572,384

87% 63% 89%

Hauppauge Valley Stream 30

0.37% 0.34%

$ $

81,191,357 $ 26,591,233 $

81,491,765 $ 26,681,643 $

300,408 $ 104,437,521 90,410 $ 33,348,021

78% 80%

* PTLC = Property Tax Levy Cap March 23, 2015 Board Meeting

39

82% 82%

Understanding the PTLC Sample School District HHH Merrick

Reported PTLC %*

PTL as a % of Total Budget

2.42% 2.40%

2014-15 Tax Levy 2015-16 Tax Levy Total $ increase Total Budget $ 190,898,714 $ 195,518,463 $ 4,619,749 $ 234,216,849 $ 37,726,907 $ 38,632,353 $ 905,446 $ 45,801,563

William Floyd Three Village

2.95% 2.93%

$ $

93,886,348 $ 139,633,941 $

96,655,995 $ 143,725,215 $

2,769,647 $ 223,943,389 4,091,274 $ 188,060,556

42% 74%

Commack Center Moriches

1.30% 1.30%

$ $

130,689,787 $ 21,357,417 $

132,388,754 $ 21,635,063 $

1,698,967 $ 183,223,817 277,646 $ 40,486,398

71% 53%

Longwood Elwood

4.08% 4.08%

$ $

127,312,951 $ 42,669,999 $

132,507,319 $ 44,410,935 $

5,194,368 $ 222,500,000 1,740,936 $ 58,634,724

57% 73%

East Northport Deer Park Jericho

1.62% 1.69% 1.69%

$ $ $

138,623,167 $ 66,524,186 $ 106,811,992 $

140,868,862 $ 67,648,445 $ 108,617,115 $

2,245,695 $ 159,109,341 1,124,259 $ 105,929,364 1,805,123 $ 119,572,384

87% 63% 89%

Hauppauge Valley Stream 30

0.37% 0.34%

$ $

81,191,357 $ 26,591,233 $

81,491,765 $ 26,681,643 $

300,408 $ 104,437,521 90,410 $ 33,348,021

78% 80%

* PTLC = Property Tax Levy Cap March 23, 2015 Board Meeting

40

82% 82%

Understanding the PTLC Sample School District HHH Merrick

Reported PTLC %*

PTL as a % of Total Budget

2.42% 2.40%

2014-15 Tax Levy 2015-16 Tax Levy Total $ increase Total Budget $ 190,898,714 $ 195,518,463 $ 4,619,749 $ 234,216,849 $ 37,726,907 $ 38,632,353 $ 905,446 $ 45,801,563

William Floyd Three Village

2.95% 2.93%

$ $

93,886,348 $ 139,633,941 $

96,655,995 $ 143,725,215 $

2,769,647 $ 223,943,389 4,091,274 $ 188,060,556

42% 74%

Commack Center Moriches

1.30% 1.30%

$ $

130,689,787 $ 21,357,417 $

132,388,754 $ 21,635,063 $

1,698,967 $ 183,223,817 277,646 $ 40,486,398

71% 53%

Longwood Elwood

4.08% 4.08%

$ $

127,312,951 $ 42,669,999 $

132,507,319 $ 44,410,935 $

5,194,368 $ 222,500,000 1,740,936 $ 58,634,724

57% 73%

East Northport Deer Park Jericho

1.62% 1.69% 1.69%

$ $ $

138,623,167 $ 66,524,186 $ 106,811,992 $

140,868,862 $ 67,648,445 $ 108,617,115 $

2,245,695 $ 159,109,341 1,124,259 $ 105,929,364 1,805,123 $ 119,572,384

87% 63% 89%

Hauppauge Valley Stream 30

0.37% 0.34%

$ $

81,191,357 $ 26,591,233 $

81,491,765 $ 26,681,643 $

300,408 $ 104,437,521 90,410 $ 33,348,021

78% 80%

* PTLC = Property Tax Levy Cap March 23, 2015 Board Meeting

41

82% 82%

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

42

State Aid Update • Assembly released their one-house proposal:

Good Idea

Impact to HHH

Foundation Aid formula which actually “runs” as originally intended

Focus only on low wealth districts

Full restoration to the GEA

Focus on high needs students (low graduation rates, high free/reduced meal percentages, high ENL populations, low combined wealth ratios) and growing enrollment

Fund ENL mandates

Focus on high needs/low wealth districts

March 23, 2015 Board Meeting

43

2015-16 Proposed Budget – Discussion Areas Student Enrollments

Staffing

Property Tax Levy Cap

Employee Benefits

State Aid

Transfer to Capital

March 23, 2015 Board Meeting

44

1

High School West Tennis Courts

2

High School West Auditorium Partition Doors

3

High School East Chiller and Cooling Tower

March 23, 2015 Board Meeting

Projected “Transfer to Capital” budget line of $1.4 million

2015-16 Capital Projects

45

2015-16 Capital Projects • High School East Chiller and Cooling Tower  Existing system…  Provides for air conditioning seven months out of the year (April through October)  Consists of two chiller units (one which has been abandoned and the other which runs inefficiently) and an inefficient cooling tower (which serves to expel heat from the system) which is beyond its useful life and requires excessive maintenance

 New system includes…  Replacing one antiquated and non-functioning chiller  Refurbishing second chiller  Replacing cooling tower

March 23, 2015 Board Meeting

46