Early discussions on the preliminary budget for the Daniel Boone Area School District include the need for a 3.2-percent tax increase.
The potential tax hike was predicted in June 2017 by school board members.
Increasing taxes from the current 30.2 mills to 31.17 mills for 2018-19 would yield new revenue of $1,034,000, said Chief Financial Officer Loren Small.
He said that amount of new revenue would reduce the projected $4.4 million deficit.
However, $4.4 million is $2 million more than the deficit that was projected last spring for the 2018-19 budget.
Board members said in June that they had reviewed and analyzed varying financial figures in different five-year budgets since the beginning of May.
“The projected five-year budget shows that the fund balance goes negative in three years,” board member David Rathgeb said in June.
He added: “I caution that the current version of that budget has no increase in salaries at all, and no health care increases. It’s unreasonable to assume no increases in the next four years.”
“If we don’t (increase taxes now – June 2017), we leave them (future board) very little options. Budgets build upon each other,” Rathgeb said.
Several motions were made in June to increase the millage to the state’s Act 1 index of 3.2 percent, which would yield more than $1 million in revenue.
Those motions failed and the board voted 5-3 June 19 to increase taxes from 29.70 mills to 30.2 mills, which yielded $500,000 of new revenue.
The cost per every $100,000 of assessed property value increased from $2,970 to $3,020, an additional $50.
Small said at the Jan. 11 Finance Committee meeting that the 2018-19 deficit would be reduced by using $3.3 million of the district’s $5 million fund balance.
That leaves a $1.7 million fund balance.
The administration presented the district’s first budget draft at the Jan. 11 meeting.
It was attended by committee Chairman Michael D. Wolfe, and by committee members Jeffrey Scott and Beverly Albright. Committee members Aaron Durso and Bucky Scott were absent.
It was also attended by board members Steven Miller and Rathgeb.
The preliminary budget has revenue estimated at $55 million. Expenses are estimated at $59,396,000, resulting in a $4.4 million deficit.
The board is expected to approve a preliminary budget on Jan. 22 with a proposed millage rate increase and fund balance transfer that would balance the budget.
Board members have until June 30 to reduce expenses, increase revenues, reduce the tax increase amount, and approve a final balanced budget.
Small also noted that the 2018-19 school year is the final year of the current teachers’ contract.
“It is not realistic to expect no increase (to salaries), and not having anything in there is short-changing the expenses,” Small said. “Salaries (for 243 teachers), PSERs (public school employees retirement), and insurance are the biggest costs.”
Scott and Albright rejected the idea of increasing teachers’ salaries in the preliminary budget.
“If we post it on the (district) website, they may hold us to it,” said Albright, adding, “and if we footnote it, it may change.”
Other large expenses are a $100,000, one-year renewal cost for the current elementary math series, new High School band uniforms (cost not disclosed) to replace the approximate 12-year-old uniforms, and $600,000 to replace the “very outdated” and “ancient” social studies textbooks for kindergarten to eighth grade.
Facilities expenses are “based on the assumption that BEC (Birdsboro Elementary Center) will close (in June),” said Rob Hurley, assistant to the superintendent.
The board is expected to vote Jan. 22 on a motion to pay $73,655 to determine the renovation costs at Birdsboro Elementary Center.
Hurley said technology expenses include upgrading the district’s wireless system, firewall and web filter replacement, as well as the district’s first $105,000 lease payment for the iPads.
“There is a lot of antiquated technology, similar to the textbooks,” said Business Manager Kathleen Haines, adding, “No one has included BEC being open.”
The budget includes adding $1.5 million to the current $500,000 capital reserve fund, which was established in 2017.
Small said money would have to be borrowed to renovate Birdsboro Elementary Center and keep it operational after June.
“Our newer buildings are getting older – there is stadium maintenance, roofs, lot repaving,” said Small, adding, “we need that $500,000” for the other district buildings.
“We need to start figuring out where to cut,” said Scott, adding, “Everyone needs to see this so they know what we’re up against.”
Wolfe said last year that the only expenses that could be cut are half-day kindergarten, transportation, and extra-curriculars.
