Greater Latrobe School District aims to forgo tax millage rate hike
The Greater Latrobe school board is eyeing the 2014-15 budget with hopes that the district can remain financially stable.
The board has the option to raise the cap on the tax millage rate if members adopt a resolution by Jan. 30, but business administrator Dan Watson said he and the finance committee were not expecting that to be necessary.
With the cap, the district can still increase the millage, but no higher than 2.08 mills, which would raise $696,800 in revenues, Watson said during a preliminary budget presentation last week.
If the board chooses to request an increase on the millage cap, it would have to pass a preliminary budget by February.
Watson said he and the finance committee believe the district is financially stable enough to forgo that option.
“Our recommendation is to adopt the resolution and operate within the index,” he said. “We believe we'll be able to do that and be fine. We'll continue to evaluate all the operating expenses, and we'll continue to review potential revenue funding sources.”
While the overall budget is projected to have a $1.2 million increase in revenue, a shortfall of $719,860 is projected for 2014-15, after accounting for increases in state retirement benefit funds, known as the Public School Employee Retirement System, Watson said.
The retirement fund increases are projected at about half of the overall budget expenses, he said.
Over the next 10 years, the district's contribution obligation will increase, but officials are trying to take steps to anticipate that steady rise, he said.
“It's important to note that while it may appear that our budget is increasing, we're doing some things strategically to help to control costs, to generate revenue, so we're not as negatively impacted by that large increase as we might have been,” he said. State and federal funding amounts have not yet been determined, but Watson said he assumed figures similar to current funding for this preliminary projection.
The school district's revenues will carry increases from local taxes, however.
Watson projects a local revenue increase for 2014-15 of about $407,058, including $114,667 in real estate tax and $150,000 in earned income tax.
The earned income tax is now withheld by employers, which allowed for better collections, Watson said.
“Maybe some individuals who have slipped through the cracks before are no longer doing that, so that generates additional revenue for the school district,” he said, adding that this is most likely a one-time increase.
School board member Michael Zorch asked Watson about the state of the district's fund balance.
The administrator said the district has about $3.5 million in the fund balance, of which about $2.5 million is undesignated funds, but he does not recommend using that to cover shortfalls from annual expenses.
“That's one-time money: Once you spend it, it's gone,” he said. “If you utilize it for recurring costs like salaries, benefits, etc., those expenses are there year after year after year; that revenue is gone.”
In other business, auditor Barb Terek reported to the board that the 2013 audit had no deficiencies or noncompliance.
“We didn't have to make any modifications for your financial statements to be in accordance with commonly accepted accounting principals,” said Terek of Greensburg-based Horner, Wible and Terek.
The 2013 balances ended with $265,000 less than budgeted in expenditures and $865,000 more in expected revenues.
Watson said that was partially because of gifts like those from the Greater Latrobe Partners in Education Foundation and the McFeely-Rogers Foundation.
Stacey Federoff is a staff writer for Trib Total Media. She can be reached at 724-836-6660 or email@example.com.