Derry Area board cuts tax hike to half mill
DERRY -- Derry Area School District property owners can expect a tax hike of a half mill instead of 1.75 mills in the coming school year thanks to some additional funding and cost savings the district has realized.
Those favorable financial changes occurred between the school board's April budget review and last week's special meeting, where the board adopted a tentative spending plan of nearly $31.9 million and a proposed real estate levy of 75 mills for the 2012-13 year.
Joe Koluder, administrative assistant for business affairs, told the board last Thursday one of the primary factors behind the tax savings was the district's successful application for a $964,250 Keystones to Opportunity literacy grant. The federal grant, channeled through the state Department of Education, helped provide a net boost of more than $800,000 in the district's 2012-13 revenues and the portion of its fund balance to be spent, for a new projected total of $31,898,270.
According to Koluder's revised budget report, trimming the property tax hike by 1.25 mills should reduce receipts from the tax by about $162,000.
According to Koluder, the half-mill increase will cost the average residential property owner in the district an extra $11.74 per year.
Koluder explained the Keystones to Opportunity grant also will cover some salary costs and software investments that otherwise would have come from the general fund. A secondary English teacher is to be reassigned as a literacy coach, with the instructor's $64,241 salary and benefits paid for through the grant.
Derry Area still will need to draw about $1.5 million from its fund balance to meet expenses. That would leave a remaining fund balance of nearly $3.5 million, of which $1.1 million has been committed toward a sharp increase expected in employee retirement costs.
Total planned expenditures would increase by about $1.4 million, or 4.8 percent, from the district's 2011-12 budget.
Koluder said the district also has benefited from the fact that costs for employee health insurance, obtained through a consortium, came in lower than had been expected. Costs are going up by 7.2 percent, not the 10 percent that was anticipated, resulting in a savings of about $77,000, he said.
Though it wasn't reflected in the tentative budget, Koluder added that the district has obtained a price of just over $3 per gallon for diesel fuel through the Westmoreland Intermediate Unit Joint Purchasing Consortium. He said that should cut another $25,000 from planned 2012-13 expenditures since that fuel price initially was budgeted at $3.50 per gallon.
The tentative budget will be on display in the district business office, with adoption of a final version planned for the board's June 28 meeting.
"We'll continue to work on the budget between now and June 28," Koluder said, noting that adoption of the state's budget and its education funding for local districts will have the largest remaining impact on Derry Area's spending plan.
Providing that plan is approved before the board's June 28 meeting, "We'll make any changes that are reflected in the final state budget," he said.
In other business, the school board awarded contracts for improvements at its high school athletic field.
"We haven't done any work on the stadium for over 40 years," board President Dave Krinock said.
Sturdisteel Company of Waco, Texas, will receive $204,500 to replace the current aging press box with a new prefabricated steel structure that will be wired for digital access. Mashan Inc. of Home, Indiana County, will handle related electrical work at a cost of $613,672.
Also, Vasco Sports Contractors of Massillon, Ohio, will recondition the stadium's all-weather track at a cost of $49,953.
Krinock noted the track improvement is about three years overdue.
To fund the work, he said the district will draw upon capital improvement funds that were boosted by recent savings of $1.2 million, resulting from refinancing of bonds issued in 2002 and 2008.
At the end of the current school year, he said, the district expects to have about $2.7 million in its capital fund.
Krinock said improvement of the district's tennis courts are the next priority for capital spending.