 SOUTH
FAYETTE PRESENTS PROPOSED PRELIMINARY BUDGET AND OUTLINES MORE
THAN $1.8 MILLION IN POSSIBLE CUTS TO BALANCE BUDGET
At the November 20
meeting of the South Fayette Board of School Directors, the
Proposed Preliminary District Operating Budget was presented for
the 2008-2009 school year. This comprehensive overview, that
summarized information presented by building principals and
department heads presented to the Board in October, included
additional detail regarding revenue projections, as well as a
preliminary plan for balancing the budget as required by law.
Initial
expenditures outlined by the building principals and department
heads that would be necessary to continue the educational
standards of the District and programs as they currently exist
would have resulted in a more than $3.4 million deficit based on
current revenue estimates for 2008-2009. To achieve a balanced
budget, a combination of a tax increase, spending cuts and
revenue-generating ideas were presented.
In recent years,
the District’s budget has faced the challenge of beginning
each year with a budget deficit, due to the decision of the
School Board to use more than $2 million in fund balance to
balance the 2006-2007 budget. That year, the Board increased
millage by .9 mills, not the 1.5 mill increase that was
recommended by the Business Office to meet the long-term needs
of the District.
At the meeting,
Superintendent Dr. Linda Hippert and Director of Finance George
Safin detailed revenue sources – 77.78% from local sources
(83.27% of which is from current residential real estate taxes),
21.39% from the Commonwealth of Pennsylvania, 0.83% from Federal
sources. They also presented a historical review of this revenue
that detailed a steady decline in federal funding and a slight
increase in state funding that has not kept pace with the
growing enrollment and building needs.
The presentation
took a historical look back at factors that have influenced the
budget over the past several years. Since 2002, South Fayette
has seen a 19% increase in special education enrollment and a
17.5% increase in overall enrollment in all buildings. Student
activity costs have seen a 51.5% rise with the addition of 18
new athletic teams and middle school and elementary arts
programs. Utility costs have had a powerful impact on the budget
with a 228.9% increase in diesel costs, a 20.3% increase in
electricity, a 27.8% increase in natural gas, and a 59.7%
increase in water costs.
Rising enrollment
has necessitated several building projects over the past several
years and South Fayette’s debt service has increased from
$2,574,112 to $4,140,464 as a result. Reflected in these costs
are the completion of the new High School, the Middle School
Addition/Renovation, Elementary Renovation, Stadium (Admin
Offices, Football/Soccer Fields, Softball Field/Fieldhouse), as
well as the renovations to existing structures on the acquired
Army base property adjacent to campus to accommodate the bus
garage. Since 2002, the Board of School Directors has also
completed the Army Base property acquisition (22 acres), the
Nagel property purchase (9.2 acres), and the Iagnemma property
purchase (6.9 acres).
A close look at
expenditures also revealed that very little of the District’s
operating costs, less than 19% of the overall expenditures, is
discretionary with the rest consisting of fixed costs such as
salaries, benefits, utilities and debt service.
The District budget
included funds for “as needed” items
such as maintenance items, athletic expenditures, and salaries
and benefits for teachers who may need to be hired as a result
of higher than anticipated enrollment or a specific need for a
special education student. This is a standard and necessary
practice as this District has no means of spending money not
allocated in the final approved budget. At the end of each year,
monies not spent become part of the fund balance moving forward.
To add perspective
to the situation of the District, the presentation offered a
look at other schools in the area. A comparison of 2005
statistics (the most recent available from the PA Department of
Education) finds South Fayette ($56.8 million) ranked closely
with Chartiers Valley ($53.8 million), South Park ($56.7
million) and Peters Township ($58.9 million) with regard to debt
service. Upper St. Clair has a debt service of $73.2 million, Mt
Lebanon has $77.4 million and Canon McMillan has more than $97.3
million. Pine Richland, a district experiencing similar growth
to that of South Fayette, currently has a debt service of more
than $104.1 million.
The revenue
estimated for the Proposed Preliminary budget was $28,975,450
and initial expenditures were proposed at $32,433,507, leaving a
-$3,458,057 deficit as the result of operations, with an
available fund balance of $1,406,256. A three-pronged approach
to balancing the budget without totally depleting the fund
balance was outlined.
To bridge this
expanding gap, a series of difficult cuts and creative
revenue-generating methods were proposed in the balanced
Proposed Preliminary Budget. To begin, a tax increase of 1.18
mills would generate an additional $956,905.66 in revenues. This
is the amount permitted by the PA Department of Education
through Act 1 without seeking further exceptions or going to
public referendum.
A list of more than
65 items that could be removed from the budget was presented
along with the resulting consequences to students, the
curriculum and the long-term budget. Included among these items
were eight proposed new teaching positions, a school
psychologist, band instruments, standardized testing (other than
the PSSA which is at no cost to the District), after-school
activity busses, 2 new busses, field trips (other than
competitions), mobile carts and new computers for students and
staff (part of standard rotation to keep updated and working
technology in the District), all athletic uniforms scheduled to
be replaced as part of the standard rotation, library books, the
District contribution to the spring musical performance, weight
equipment, classroom furniture to outfit new classrooms needed
in the middle school and elementary, and the elimination of the
Middle School Athletic Program. In all, these items would
eliminate $1,889,686 in expenditures.
A possible activity
fee for students participating in school athletics and clubs
could also generate additional revenue of $81,250. Other
suggestions for generating revenue would be a minimal charge for
community groups to use District facilities – they are
currently used free of charge and any fee would be used only to
differ staff and utility costs of having the facility in use on
evenings and weekends. The administration will also examine the
current use of the fitness center and determine if a minimal
increase in rates or a reduction of hours would be feasible to
offset costs associated with offering this service to the
community. Last year, the Board approved the formation of a
Revenue Generating Committee who have also been asked to offer
any suggestions for increasing revenue for the District.
By removing the
outlined items and producing the additional revenue from the
activity fee, the 2008-2009 Proposed Preliminary Budget would
still show a deficit of more than $530,000 that could be taken
from existing fund balance to have the required balanced budget.
The majority of the funds to be taken from fund balance comprise
the contingency or “as needed” items in the budget that will
likely not be spent.
Over the next
several months, the Board will examine these issues and look
closely at the influence on class size and the overall education
of students in South Fayette. The complete budget presentation
is available online at www.southfayette.org and suggestions or
comments can be sent regarding this budget to budget@southfayette.org.
The Board of School
Directors must adopt a Preliminary Budget at the January 22
meeting, followed by the Proposed Final Budget at the May 20
meeting. A balanced 2008-2009 Final Budget must be passed by the
Board before June 30, 2008. Each month, the budget will be
listed as a discussion item on the Board agenda. Meetings of the
Board of School Directors take place on the third and fourth
Tuesdays of the month at 7 p.m. in the High School Conference
Center. |
'Tis
the Season
