"The goal is to project out five years and say, 'We want enough money in the fund balance to carry us out on a five-year time horizon,'" Hauber said. "As the fund balance is drawn down, the desire is to hit year 5 at zero; in other words, to remain totally sustainable through year 5."
Hauber said revenue for the PCSD General Fund comes from local, state and federal sources. Local sources include property tax, which is a basic levy set by the state Legislature, a voted leeway levy and a board local levy. In year 1, school year 2013-2014, those local sources were projected to bring the school district $42,758,672, but in fact brought in only $42,118,367, nearly $650,000 less than expected.
State revenue is "dollars that make it to the school district from decisions made in the state Legislature." That money was projected to total $2,980,778 in year 1 and actually totaled just under at $2,975,075, while Federal sources were projected to total $1,128,246 and ended up coming in at $1,049,289.
However, Park City School District Board of Education president Maurice "Moe" Hickey said they should see a significant increase in state revenue sources due to growth in the number of students in the district by just about 200.
"In January alone, we received 54 new students, so we won't get revenue for them this year but the next," he said. "If they are not counted in the October head count, we have to wait until the following year to count them."
Other revenues for the district are raised through property taxes, which increase by 1 percent every year, according to the five-year plan, as well as an unknown tax increase.
The five-year plan's goal is to build up school district funds to cover expenses fully through year 5, but according to projections, the district will face a deficiency of $4.
Hauber said there are two ways the school board plans to fix that: by reducing expenditures and increasing revenues. He added that in 2012, the PSCD school board did both by reducing the budget and approving a tax increase of $4 million.
Hickey said another tax increase may not be needed this year, but it is always something the school board must consider in order to increase revenue.
"A tax increase is always on the table, and while there is no need for one this year, it is something we have to look at as we move forward," he said. "We made it out of the legislature without too much harm this year, so we don't need another tax increase as of right now."
Expenditures include health insurance, retirement and supply cost increases as well as compensation and additional budget considerations. Health insurance costs are steadily increasing, and Hauber said that is due to the institution of the Affordable Care Act on January 1, 2015, which puts projections for health cost increases at $383,773 in year 3.
"Our employees have employer-mandated healthcare, so that increase in costs is our best guess as to how many additional employees will be offered insurance under the Affordable Care Act, which the district would be responsible to pay for," he said.
Projections for year 2 show a potential deficit of $1,383,584, but Hauber said the numbers are always changing. According to a spreadsheet put together by Hauber and the school board, they assume a 1 percent growth in revenues every year as well as a retirement rate increase of 2 percent, a health insurance increase of 4.4 percent per annum with premium contribution and an operations increase of 8 percent per annum.
"As the fund balance builds up, a portion goes into what is called a 'rainy day fund,'" Hauber said. "As the overall balance builds, the rainy day fund builds also, but the recommended two-month operating expense is also directly related to the expenses of that year."
He added that as the expenses grow, the recommended balance for rainy day funds also grows. If the general fund experiences a deficiency, to the rainy day fund will have that deficiency plus a little bit more because of the two-month operating expense fund.
That projected rainy day fund deficit by year 5, school year 2017-2018, is just over $11 million. The numbers may loom large, but Hauber said the school board is taking all programs and needs of the district into consideration.
"This is something we started looking at last year, and we will always be monitoring it and looking at where the tax rates are coming in at," Hickey said. "We spent a lot of time at the Capitol lobbying not to have bills passed that would cost us, so we are in pretty good shape right now. We have an accurate handle on where we are at currently, but we will always be looking at growth, which increases revenues."
Another set of projections will be presented at next week's March 18 PSCD Board of Education meeting at the district office at 4 p.m. The projection tool is available for public use at www.boarddocs.com/ut/pcsd/Board.nsf/public.