Southmoreland deficit-reduction plan includes no tax increase
As work continues on Southmoreland School District's 2013-14 budget, the potential deficit continues to be sliced.
For now, the district's plan doesn't include a tax increase.
During a special board meeting Thursday, Bill McNamee, interim business manager, said the deficit stands at a little more than $600,000. The district initially faced a $1.6 million deficit. At the board's March 7 meeting, he said the figure was reduced to $1.2 million.
McNamee explained Thursday that several factors have led to the recent reductions:
• Four district teachers have accepted the early retirement incentive, resulting in a savings of a little more than $300,000. The board approved an amendment to its early retirement incentive motion during its March 14 meeting by removing the requirement that a minimum of six teachers had to take the offer for early retirement to be enacted.
• The increase in medical insurance won't be as high as expected — chopping another $127,000 off the expenditures list.
• Adjustments were made in utilities, saving about $128,000.
“We looked at utilities more in line with what their actual usage was versus what we had originally projected,” McNamee said.
Other miscellaneous adjustments reduced the deficit by another $2,300.
Superintendent John Molnar reminded board members that work will continue before a final budget is passed.
“We still have some things we will be looking at on the expense side,” Molnar said.
The board will have another budget meeting but didn't set a date, opting instead to choose a date at its April 4 meeting.
Former business manager Bill Porter explained to the board how past early retirement incentive packages helped the district, resulting in more money in the fund balance.
Porter presented a $4,160,000 net increase in the fund balance after the incentives were added.
Since the 2006-07 fiscal year, 41 teachers accepted the package, and only 25 were replaced.
He also lauded the district Thursday for basically breaking even, despite $1.9 million in revenues that were lost because of the closing of the Sony plant. The closing resulted in a $900,000 shortfall in revenues and the loss of $1 million in state subsidies.
“You broke even because we made a decision to put ERIs (early retirement incentives) out and control costs and downsize,” Porter said.
“A school district loses $1.9 million in revenue and breaks even — that's pretty outstanding.”
Paul Paterra is a staff editor for Trib Total Media. He can be reached at 724-887-6101 or firstname.lastname@example.org.