File photo
The Council Rock School District has a lot of work to do before they have a balanced budget, and thankfully they have a few months.
At Thursday evening’s a finance committee meeting, Director of Business Administration Robert Reinhart told the public and school board members that the preliminary 2016-2017 spending plan has a $14 million gap that needs to be filled. The preliminary $232 million budget has higher expenses with reduced revenues, similar to the issue Council Rock dealt with last year.
“Really, when you look at it, this is the starting point,” Reinhart said.
The budget’s largest chunk is $177 million in salaries and benefits for employees. The number has increased due to scheduled pay increases and increases in benefits, including prescription cost increases.
Reinhart said the budget he presented Thursday night is using state funding numbers based on the 2014-2015 budget. In the preliminary budget, Council Rock would receive about $26 million from the state and $1.7 million from the federal government.
PlanCon money owned to Council Rock has not come through despite being approved and is not placed in the early budget.
The district expects to see increases of $787,000 for their cost owed to the Middle Bucks Institute of Technology, $305,400 more in debt service and $700,800 increase for transportation, among various other increases, Reinhart said. He added that retirements are expected to lead to a $1.3 million one-time savings for the district.
To prepare for the upcoming upgrade to Holland Middle School and construction of a new building at the Newtown Middle School site, Council Rock has worked to refinance and cut down their debt service. Through various methods, the district has saved $15 million in existing debt it would have owed over the coming years, Reinhart said.
The district can finance up to $110 million to complete the middle schools project without increasing taxes by a large amount, Reinhart said. He added the projects will take advantage of “historically low” interest rates.
In the months leading up to May and June, large budget deficits are not uncommon for school districts as they plan their spending for the next year. A school board must approve a balanced budget before July 1.
Reinhart and Superintendent Dr. Robert Fraser have begun meeting with district department heads to see how the $14 million deficit can be chipped away.
“It will certainly be a team effort to identify to see what the appropriate area of the reductions are,” Fraser said.
The school board could vote, and will likely have to, to use a portion of their reserve funds to pay down any deficit that remains come their final vote.
Reinhart said during the meeting that a 2.76 mill tax increase, which is the maximum allowed by Act 1, would pull in an additional $3.4 million in revenue for Council Rock.
Earlier this year, Council Rock did not file an Act 1 exemption that could have allowed the school board to raise taxes above the Act 1 limit of 2.76 mills.
The next budget meeting will take place on April 14 at 6:30 p.m. at the Chancellor Center in Newtown Borough.
