NEW BETHLEHEM – During their monthly meeting on Monday, Jan. 8, members of the Redbank Valley School Board received a five-year projection for the financial condition of the school district.
“The five-year projected budget represents costs and revenues based on the actual spending and revenue that was released in the 2016-17 annual financial report that the district sends to the state Department of Education,” Redbank Valley School District superintendent Michael Drzewiecki said following the meeting, adding that the plan also represents projected spending as of December 2017 for the current school year. “Based on the costs and revenues of prior years, we are projecting future budgets to facilitate fiscal planning for the future.”
The information was presented by district business manager Stephanie Smith and Drzewiecki based on yearly increases of 3 percent for salaries, 5.85 percent for healthcare benefits, 2.2 percent for charter, private and vo-tech school tuitions, 2.2 percent for transportation expenses and a set amount for retirement benefits from Public School Employees’ Retirement System (PSERS) and other pertinent item-specific increases across the board. The projected budgets, Smith said, include no rate increase in local property taxes and an unchanging rate of state and federal financial support from 2018 through 2023.
“We have set this up so we are able to easily put in different scenarios and see what their results will be,” she explained of the five-year plan, noting that with the exception of the PSERS information, all other figures are estimates and not set in stone. “Mike [Drzewiecki] and I went over every single line item and these are the assumptions that we made.”
With each year resulting in deficit spending, district officials pointed out that the projected budgets will have to be balanced using money from the $6.2 million general fund balance.
According to the five-year plan, the projected budget for the 2018-19 school year is $18,756,964 with an approximate $1.2 million deficit. This leaves a fund balance of $5,051,543. Following this trend, the projected budget for the 2021-2022 school year is $20,776,760. With a projected deficit of $2,632,950 and a starting fund balance of $1,091,593, the district is left with a depleted fund balance and an overall deficit of $1,541,357.
“At some point, following the pattern of the five-year projected budget, if we continue the same pattern, the fund balance will be depleted and this will no longer be an option for balancing the budget,” Drzewiecki recently said, explaining that the district will have to continue to explore fiscal strategies to increase revenue, decrease spending or a combination of both to balance the budget.
Following the presentation and a recommendation from Drzewiecki, board president Chad Shaffer asked for volunteers to serve on a financial committee.
The purpose of the active financial committee, according to Drzewiecki, is to “develop long-term fiscal planning strategies to ensure [the district] can continue to provide the resources for a strong learning community.”
Reminding the board that budgeting can finally be affected by a number of variables, Smith said that local real estate revenue “definitely affects the bottom line.”
“It’s very important for the district to continue to look at our budgets and our actuals to stay on top of the changes and make informed business decisions,” she said.