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Fund balance of $20.1 million earmarked for future projects

| Wednesday, Dec. 5, 2012, 9:02 p.m.

The $9 million set aside for future capital projects could serve as a partial downpayment for any upcoming major construction project in the West Jefferson Hills School District, board members said.

As district officials and architects meet to outline a blueprint for the future of West Jefferson Hills facilities — which they say likely will include either a large renovation project or the building of a new high school — they also are reviewing the district's finances and how any large construction project could affect local real estate taxes, said board Vice President Shauna D'Alessandro, who serves as chairwoman of the finance committee.

“We're thinking ahead,” she said.

Any construction project or high school renovation/building is in the “beginning stages,” D'Alessandro said. For the last several years, though, money has been placed into a reserve to help fund future construction, among other anticipated needs, she said.

A healthy fund balance — which has grown in the last five years from $6.3 to $20.1 million — includes, $9 million set aside for future capital projects, $4.5 million for future retirement expenditures, $3 million for post-retirement and $1 million for health insurance contributions.

Board members in October agreed to add $3.5 million from the district's fund balance to the already committed $14 million. The district's committed funds now total $17.5 million. There is $2.63 million in uncommitted reserve funds in West Jefferson Hills.

Residents who attended a meeting last month, which was intended to help district officials draft a facilities master plan, said they want more information on the West Jefferson Hills' financial situation and how upgrading facilities will affect their taxes.

“I'm interested in the numbers,” parent Patti Duda said. “I think that as a community, we're entitled to see these numbers.”

District architect Ryan Pierce said the district is in a good financial state for new construction or renovations.

“We've been very well managed fiscally.... compared to many of the districts that I work in, we're positioned to handle these problems,” Pierce told the nearly 100 residents in attendance at the question-and-answer-style meeting.

Residents at the meeting— nearly in unison — said they might support a tax increase for new or renovated district facilities, but it “depends on how much” they would have to pay.

District officials at the meeting had no answer to that question, but have since begun doing research to determine how any construction project, including a renovation of Thomas Jefferson High School or the construction of a new high school, D'Alessandro said.

Director of finance Tracy Harris is researching what other area school districts have spent on a high school renovation or new building project and what bond options are available for West Jefferson Hills — if the district were to use the $9 million fund balance to front the cost, D'Alessandro said. Then, she is looking to see what impact such a project could have on residents' tax rates, and also, how new facilities could help to improve the resale value of a home.

“I look at it as a down payment on a house,” D'Alessandro said. “We have to know (how it will affect taxes) before I would vote to fund any construction. I want these numbers.”

Once these numbers are totalled, they will be available on the district's website, www.wjhsd.net.

West Jefferson Hills school officials have not raised the district's tax rate of 21.08 mills since the 2008-09 school year and there are only six of the 42 school districts in Allegheny County with a lower tax rate, D'Alessandro said. Yet, during the last five years, there has been a surplus to the district's budget at the end of each fiscal year of between $1.2 and $3.6 million, records show. The 2012-13 West Jefferson Hills budget is $37.8 million.

The surplus in funds can be attributed to several “one-time” savings in the district, including refinancing of bonds at lower investment rates, switching delinquent tax collectors to successfully begin collection of unpaid tax dollars and bringing staffing for special education in-house, D'Alessandro said.

A collection rate of 96 percent on real estate taxes also helps, she said.

Any one-time savings are not used to help balance the district's budget and instead are placed into the reserve for future expenses.

“It's not good business to use a one-time windfall. It puts you behind the eight-ball,” D'Alessandro said.

District officials also stick to the budget they have outlined at the beginning of the year, D'Alessandro said. Any request for a purchase is met with the question: “Is it in the budget?”

So far, the growing reserve fund has not been tapped into. Yet, two parts of the district's reserve: capital projects and pension contributions for teachers, likely will be used in the next five years.

“If the pension situation is not addressed by our legislation, we will wipe that money out very quickly,” D'Alessandro said.

The projected employer contribution rates for the Pennsylvania School Employees' Retirement System — payments outlined by the state for teachers pensions — is set to increase by 16.75 percent in the fiscal year of 2013-14.

And that will be costly for all districts statewide.

“There's a method to this all,” D'Alessandro said. “We know that we have future liabilities.”

Stephanie Hacke is a staff writer for Trib Total Media. She can be reached at 412-388-5818 or shacke@tribweb.com.

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