South Middleton School Board Monday got its first close look at a proposed revenue strategy that calls for a 7.1-percent tax increase to reduce the projected budget deficit for 2017-2018 from $2.9 million to $1.65 million.
The strategy would use a combination of increases allowed under the Act 1 Index and two Act 1 exceptions to generate about $1.25 million in new revenue to offset the deficit, said Matthew Ulmer, district operations and business manager.
The board may vote on this strategy on May 15 when it considers the adoption of the proposed final budget for next school year. Final budget adoption is scheduled for June 19.
If approved, the strategy would hike the tax rate by a total of .6825 mills, from the current 9.5526 mills to a proposed 10.2351 mills. The average homeowner will pay an additional $146.74 in school taxes next year, Ulmer said. He said the average home in the district is assessed at $215,000.
The meeting Monday was used to outline the revenue strategy. Board meetings are scheduled for April 10, 18 and 24 to review expenditures and to discuss possible cuts and other changes to offset the remaining $1.65 million shortfall.
The April 10 meeting will be held at 7 p.m. in the Boiling Springs High School cafeteria and will touch on budget proposals for special education, technology, athletics and the maintenance department. On April 18, there will be separate presentations for each school building.
The district is in the process of moving its central office staff from the high school to a newly renovated administrative wing of the Iron Forge Elementary School. It is the possible the April 18 meeting could be held in the new board meeting room at Iron Forge. The location will be announced later.
Finally, staff on April 24 will present budget proposals for the business office, superintendent’s office and assistant superintendent’s office. All the proposed cuts and changes in expenditures will be compiled into one comprehensive list for the May 1 school board meeting, Ulmer said.
The hope is that any cuts or changes made would have a minimal impact on programs tied to instruction, Superintendent Al Moyer said. He said that while the revenue strategy has helped to reduce the deficit, there are plenty of challenges ahead that would require difficult decisions by the board.
“There are significant unknowns that are out there that should crystallize in coming weeks,” Moyer said. The board is involved in contract talks with the teachers’ union and a final number on the state subsidy has yet to be resolved.
Moyer urged the board to take action to rebuild the district fund balance, which provides a savings account administrators could draw from to cover emergencies or unanticipated expenses.
Fund balance can either be unassigned for general use or committed to a particular function or category of expense. The district has an unassigned fund balance of zero dollars when district policy calls for that line-item to equate to at least 3 percent of the total budget, Ulmer said.
He added, meanwhile, the district has a fund balance of $3,101,000 committed over the next five years to help pay down debt service. Under the current debt service payment structure, this committed fund balance will deplete itself completely by the end of the 2021-2022 year leaving the district with no fund balance.
This district does not want to go there, Ulmer said.