Budget FAQ 1. What are the keydrivers of the budget?
1. What are the key
drivers of the budget?
costs, including salaries, benefits and debt service continue to be key drivers
of the budget, accounting for about 75% of expenditures. Salaries and benefits
are determined through a collective bargaining agreement between the District
and its employees. Debt service refers to the District’s outstanding
obligations on bonds used to finance school construction projects.
2. How has the budget
been impacted by the rising costs of mandates like pensions and special
have had a dramatic impact on the budget. Shortfalls in state funding of PSERS
(state pension program) have forced local school districts to make up the
difference using local tax revenues. Districts are required to contribute at a
rate more than 16% higher than last year -- well beyond the established
inflationary index. Additionally, the cost of providing appropriate special
education services continues to increase while state support remains virtually
unchanged. Since 2005, the District's special education budget has increased
from about $15M to nearly $30M. At the same time, state contributions for
special education are only a portion of that, and have only increased from
$4.6M to $5.2M. A growing list of additional unfunded/underfunded mandates
include state standardized testing, school health programs and training,
transportation services, PA Core compliance, staff development and Act 82.
3. How much funding
does the District receive from the state?
2016-2017 DASD expects to receive about $46M from the state. About $13M
of this is reimbursement of PSERS contributions. The amount received from
state sources accounts for about 22% of the District’s total 2016-2017 budget,
leaving 78% of the funding for the District’s budget to fall mostly on local
4. What are the
District’s primary revenue sources?
school districts in PA must rely on property taxes as their primary source of
revenue. In Downingtown, all property tax revenue accounts for 68% of total
revenue sources. As discussed above, state revenue sources account for
22% of total revenue. The remaining sources of revenue include earned
income tax, other local sources, and federal grant funding.
5. What is a fund
balance and why is it important for the District to maintain?
balance is a measure of net financial assets, which is similar but not
identical to equity or accumulated savings. The fund balance is equal to
financial assets less financial liabilities.
common misconception is that fund balance is a cash account, and therefore
corresponds to the district's bank balance. As stated above, fund balance
represents the fund's total assets minus its liabilities (what a fund has minus
what it owes). Cash is an asset, but it usually is not a fund's only asset. The
fund may also have liabilities, such as an accounts payable amount due a
supplier that could result in a decrease in fund cash when they are paid.
A district with an appropriate fund balance can:
avoid excessive short term borrowing thereby avoiding associated interest
- accumulate sufficient assets to make designated purchases or cover unforeseen
- demonstrate financial stability and therefore preserve or enhance its bond
rating, thereby lowering debt issuance costs.
The most commonly asked question regarding fund balance is how large should it
be? Perhaps the best answer would be: "an amount sufficient that short
term borrowing for cash flow could be avoided and would also allow the district
to set aside sufficient assets to realize its longer range goals."*
* Governmental Accounting Standards Board (gasb.org)
6. What is the
District's current fund balance and what is it being used for?
District maintains an unassigned general fund balance of 8% of budgeted
expenditures which is about $16.9M of the 2016-2017 budget. The 8% is an amount
that is allowed by law. In addition the District has assigned fund
balances for future PSERS increases and Health care claims of about $7.6M.
The District maintains about $25M in a capital reserve fund for
rating agency purposes that allows us to maintain a Aaa bond rating (the highest
rating available) which significantly lowers the District’s cost of
capital. The District has also established a Debt Service fund with about
$33.9M which will be used to pay a portion of existing debt service over the
next seven years. The District also maintains a Capital Projects fund of
about $77 million that is used to fund facilities construction, renovation, and
improvements; and is also used to fund capital equipment purchases including
technology equipment and devices. $8M to $10M of these types of capital
expenditures is projected to be charged to this fund each year going
7. Why would a
District not spend all of the funds it has budgeted in a given year?
the year, the District makes every effort to reduce expenditures and realize
cost savings. The District does not spend budgeted funds if needs change
and spending is not necessary. Remaining funds become part of a “fund
balance,” reflecting efforts taken by the District to manage its finances in a
responsible manner, with an eye on future needs. This fund balance helps to
fund the types of future expenditures discussed above.
8. What is the
breakdown of how the budget is spent?
47% of the budget is spent on regular instructional programs and 18% is spent
on special education and other instructional programs. 16% is spent on
instructional and administrative support services. 7% goes towards
facilities maintenance, 5% towards student transportation, and 5% for debt
service. 2% is spent on extra-curricular and co-curricular activities.
The total salaries and benefits included in each of these areas accounts for
70% of the budget.
9. How does the
Downingtown’s 0% tax increase compare to other districts in Chester County?
Property Tax increases
| Downingtown|| 0.0%|
| Phoenixville|| 0.9%|
| Oxford|| 1.0%|
| Coatesville|| 2.1%|
| Kennett|| 2.4%|
| Unionville|| 2.7%|
J. Roberts|| 2.8%|
| Octorara|| 3.0%|
| Tred-Easttown |
10. What variables
must a district consider when preparing its budget? What resources are used to
make informed decisions on projected costs?
year school districts prepare budgets that are an estimation of expenses for
the following school year. In Pennsylvania, budgets are prepared almost a year
in advance of implementation and must take into account numerous variables like
enrollment changes, staffing needs, state budgets (which often aren't
determined until late in the budget cycle), the local real estate market and
transfer tax revenues, special education costs, facilities planning and
emergency needs (winter weather, repairs, etc.), among other factors. Using
data and guidance obtained from numerous sources, including its financial
advisor, insurance broker, health insurance advisor, energy consultant, various
local and state purchasing consortiums and internal staff, the District makes a
best estimate as to its projected costs.
11. What are some of
the distinctive programs and services the District offers?
DASD experience is defined by the extensive opportunities we provide our
students and the extraordinary level of service we share with our families and
community. The District’s budget is able to support one of the strongest
academic programs in the region and state. Among the distinctive programs
and services that DASD offers are:
- International Baccalaureate Program
- Advanced Placement Program
- Career Pathways Program at STEM Academy
- Elementary world language program (Rosetta Stone)
- One-to-one computing at 6th grade center, middle schools, STEM
Academy and soon to be implemented in DHS East and DHS West high schools.
- Post-secondary partnerships
- Enhanced summer enrichment programs in partnership with the Downingtown
Community Education Foundation
- Camp Success, elementary summer enrichment program for grades k-2
- Extensive elementary music and arts instruction and performance programs
- Extensive field trips to support curriculum at all levels
- After-school programs at all levels
- Extensive array of clubs and athletics
- Drama program at all levels
- Community service programs
- Travel experiences
- Speaker programs
- Internship program
- Television studios in all buildings
are committed to providing high-quality special education services and proud of
our reputation for doing so. Families move into the District specifically to
receive these services. The learning environment is considered to be highly
inclusive for students with special needs.
Level of Service
- Enhanced academic support services at all buildings (literacy and math
- Enhanced holistic support services at all buildings (counselors, psychologists,
- Extensive health service programs (wellness council)
- Healthy youth development program in partnership with “Communities That Cares”
Events of Significance
- Newsweek Magazine’s Top High Schools in the US
- US News and World Reports Best High Schools Rankings
- The Washington Post America’s Most Challenging Schools
- Philadelphia Magazine Top High Schools in Pennsylvania
- Main Line Today Top High Schools in Pennsylvania
- Pittsburgh Business Trimes Top High Schools in Pennsylvania
- International Baccalaureate World School
- Apple School of Distinction
- District Administrators Magazine District of Distinction
- GreatSchools.org rating of 10 out of 10
- Niche.com Best School Districts in PA