Palmerton district hopes to avoid tax increase

Four months before Palmerton Area School District’s board of directors votes on a final 2018-19 budget, its administration is optimistic there will not be a need for a property tax increase.

During a budget workshop Tuesday night, Palmerton business manager Ryan Kish said Palmerton’s fund balance, projected to be at least $7.8 million at the end of the current school year, can cover the deficit, currently estimated at $2.27 million.

“We’re still very early in this process and numbers are going to change before our next presentation in May, but we’re confident we can recommend no property tax increase in this budget,” Kish said.

“We’re in a strong financial position thanks to past decisions by the board and their commitment to three years of tax increases at the state’s Act 1 index.”

Palmerton raised taxes by 2.25 percent for 2017-18.

The district’s 2018-19 revenue is estimated to be $30.52 million, while its expenditures are projected at $32.79 million.

Contractual salaries are set to increase $328,000 and benefits $188,000.

“Those are estimates without knowing how the teachers contract is going to play out,” Kish said.

Any retroactive payments to teachers, Superintendent Scot Engler said, would come out of the district’s fund balance.

In other highlights of the budget presentation, Kish said Palmerton’s tuition reimbursement requests have dropped 33 percent, while pension contributions are set to rise 9 percent.

Discretionary spending is projected to rise by $26,000. Expenses in that area include $45,000 for new band uniforms, books at the elementary schools, a football sled, play clock and a new scoreboard for the high school gymnasium.

While the scoreboard was initially budgeted at $8,000, Engler said a neighboring school district recently spent $23,000, so that figure could increase.

“We do have a contract with St. Luke’s where they give money toward purchases of this nature at $5,000 per year,” Engler said. “We may also have surplus funds from our project to redo the gymnasium floor so that may all wash out.”

Kish said the district is also set to see savings from new Internet contracts.

Another budget presentation is scheduled for May 1, with final budget adoption slated for June 19.

Board faces decision on van

A 2009 district van has paint coming off it, according to district officials, leaving the board with several options.

Painting the 10-year-old van is estimated at $5,000, while purchasing a new van would cost $22,533 after a trade-in.

“The mileage is not high on the van, probably around 30,000,” Engler said, “but the new van would come with additional safety features such as a backup camera and backup horns.

“That is a benefit from our perspective.”

Director Sherry Haas said she’d hate to see the district get rid of a vehicle with only 30,000 miles on it.

Fellow board member Earl Paules suggested using the district’s two newer vans to make long-distance trips and keep the older van for shorter rides.

In good shape

Board members questioned Kish on whether using the fund balance to offset any deficit in the 2018-19 budget would leave too little cushion for any emergency expenditures.

“It’s always a balancing act, but we’ve had good returns the past four years and that has set us up in good shape,” he said. “With the turmoil at the state level, we have let the fund balance get a little higher in recent years so we can run the district if the state doesn’t pass its budget for a lengthy amount of time.”

Engler said the district is in good shape with its capital expenditures.

Palmerton is currently in the midst of a renovation project and addition to its junior high school.

“We were fortunate to have a $26 million project and only add six years to our existing loans,” Engler said.

“After this project, we’re largely good for probably the next 20 years in terms of really big-ticket items. As it stands now, after the project, we are figuring to be $1.9 million to the good with our capital reserve fund.”