Avon Grove School Board
Committee of the Whole- Budget Work Session
May 28, 2019
Members of the Committee of the Whole- Budget Work Session include Ms Tracy Lisi (Chair), Mr John Auerbach, Mr Charles Beatty, Mr Jeff Billig, Mr Rick Dumont, Mr Herman Engel, Ms Lynn Weber, Mr Bill Wood, and Ms Bonnie Wolff. All attended the meeting except Mr Beatty.
This meeting is the final budget working session for the 2019-2020 budget. The budget is scheduled to be approved on June 6th.
The presentation for this meeting can be found at the link below:
The meeting began with Mr Dan Carsley, the Chief Financial Officer of the school district presenting changes in the proposed budget from the April meeting. Total revenue for the proposed budget is $91,979,180 based on a 3.0% tax increase; total expenditures are $98,134,333 with a deficiency in revenues of $6,155,153. The $6 million deficiency will be addressed by deducting $1,590,330 from the retirement fund and $1,137,623 from the unassigned fund balance (i.e. savings). The remaining $3,427,200 is not really a deficit but the transfer of money to other funds. Mr Carsley noted that additional money (vs what was presented at the April meeting) needed to be allocated to the medical insurance budget because expenses for the last 2 months were higher than expected.
When comparing the proposed 2019-2020 budget to last year’s budget, there is a 1.27% increase in expenditures. For a house with a median assessed value ($169,600), taxes will increase by $146.46 with $92.33 of the increase used to pay for the debt incurred by the planned facilities project.
It was noted that in the proposed budget $719,797 has been saved by the restructuring of administrator/teacher positions and attrition due to retirement and resignations. Mr Auerbach noted that these savings are not permanent, since the positions may be filled in 2020. Ms Weber questioned if the revenue (~$400,000) from Jennersville Hospital is included in the budget and noted that this money will need to be paid back to hospital if they are successful in gaining non-profit status. Ms Weber also asked where the interest on the borrowed money is being allocated. Note: the school district is receiving 2.5% interest on money borrowed at 3.38% interest rate. Mr Carsley responded that it is being rolled into the capital project fund.
Board members were asked if they plan to support the proposed budget. Mr Dumont, Mr Auerbach, and Ms Lynn stated that they do not plan to support the proposed budget. They are concerned with the amount of money ($127 million) being borrowed for the new facilities project and whether the community, particularly retirees will be able to afford it. Taxes are increasing by $149 this year for a median-assessed house. If we assume similar tax increases for the next 5 years to pay for the borrowing needed for the new facilities, the retirement fund, and school operations, taxes on a median house will likely increase by $900 or more/year at the end of the 5th year. If money is needed for the schools for any other reasons, it will be difficult to find the revenue unless taxes are increases above the Act 1 limit based on exceptions.
Mr Billig, Mr Engel, Ms Wolff, Mr Wood, Ms Lisi stated they did support the budget.
During the discussion, Mr Billig seemed to want to focus only on this year’s budget and couldn’t understand why Mr Dumont, Mr Auerbach, and Ms Lynn wouldn’t support this year’s budget since the amount of money being borrowed is the same whether the new facilities cost $127million or $102million dollars. Mr Dumont, Mr Auerbach, and Ms Lynn seem to take a longer view by looking at the tax increases necessary to support the facility project over the next 5 years. It is the cumulative effect of tax increase after tax increase that has them concerned for the community. Borrowing $22 million less than the projected $127million would be a significant savings and still provide adequate funds to address deficiencies in the facilities.
Mr Carsley proposed that the $500 paid to a Senior volunteer who works the maximum allowed hours be increased to $600 so that after taxes the Senior volunteer will net $500. There are currently 72 Senior volunteers in the program and the proposed increase will be covered by the $100,000 allocated to the program in the budget. The Board agreed to Mr Carsley’s proposal.
Approval of the Final Budget is scheduled for June 6th.