FCASD 2016-2017 Proposed Final Budget
The 2016-2017 Fox Chapel Area School District proposed final budget calls for budgetary expenditures of $94,912,020. The increase in expenditures over the previous year’s final budget is projected at $2,173,166 or 2.3 percent. The proposed final millage rate for 2016-2017 is 18.9822 mills. This will be an increase of 0.3539 mills, or a 1.9 percent increase in millage rate. The allowable increase under Act 1, the Taxpayer Relief Act, for 2016-2017 is 2.4 percent. It is estimated that this increase will generate an additional $1.1 million to fund the district. One mill will equal approximately $3.3 million.
The School Board approved the 2016-2017 proposed final budget at its regular business meeting May 9, 2016. The Board will discuss the proposed final budget June 6 and June 13 during its meetings. The Board is expected to pass a final 2016-2017 budget at its meeting on June 13. Residents are invited to attend the Board meetings which will be held on June 6 in the O’Hara Elementary School auditorium and June 13 in the high school large group instruction room. Both meetings begin at 7 p.m.
The 2016-2017 proposed final budget reflects the following:
— Salary line items are expected to increase 1.8 percent from last year’s budget. The district anticipates a reduction of overall professional staff by eight teachers due to retirements. Despite this reduction in staff, programs and services for students will remain at their current levels.
— Premium rate costs for medical insurance will increase by 2.25 percent, yet overall costs are projected to decrease by .018 percent. This decrease is the result of fewer employees being covered under district plans and a switch in medical programs being offered to a few employee groups.
— The school district’s contribution rate paid to the Public School Employees’ Retirement System (PSERS) will increase from 25.84 percent to 30.04 percent. The school district will be contributing $13,474,001 to PSERS in 2016-2017, compared to $9,332,761 in 2015-2016 – a 44.4 percent increase in cost to the district. The PSERS trustees determine the contribution rate increase annually.
— Equipment and computer purchases for the district are projected to cost $2,290,053. This is a 26.3 percent increase. These items will allow the district to keep pace with a one-to-one technology initiative for Dorseyville Middle School students, purchase additional laptops for students at the high school, and to replace aging computers and laptops for staff.
—Transportation costs are increasing due to additional routes and busses needed to support routes for special education placements, as well as A.W. Beattie Career Center scheduling changes.
— Costs for English as a Second Language (ESL), special education services for physical therapy, and tuition for charter school and other outside agencies continue to rise. The estimated increase for these expenditures is $570,125 or 15 percent.
The 2016-2017 proposed final budget is endorsed by the district’s Resource Planning Committee, a group of residents with financial and management backgrounds that provide additional expertise to the School Board on financial matters.
PSERS and Future Challenges
The district will continue to face difficult budget years in the near future. It is estimated that under the current rate structure proposed for funding the state retirement system (PSERS), the district will pay out nearly $71 million over the next seven years. These unprecedented increases – combined with the limitations on increasing tax rates imposed under Act 1 – have necessitated the district to prepare for shortfalls in the budget.
The district currently has committed fund balance reserves of $12 million to cover the anticipated PSERS increases. The district will need to utilize $2,027,659 of these funds in 2016-2017 to “bridge” the gap in funding for PSERS and will continue to use committed fund balance reserves until the tax rates can keep pace and fund these costs. The district continues to reduce payroll costs through attrition and by implementing new instructional and administrative strategies to make the district more efficient and cost effective.
In addition, the district is preparing for future capital improvements and maintains a reserve to help fund these capital projects. The district issued bonds during 2013 and currently has a remaining balance of $14 million to fund ongoing renovations at the high school, as well as to pay for a portion of the renovations at the middle school. The Board and administration were able to achieve significant savings on the 2013 bond issue as a result of historically-low market interest rates.
By implementing sound financial strategies to manage expenditures and anticipate revenue shortfalls, the district’s future financial health continues to be stronger than many in the commonwealth. However, the district continues to plan for future shortfalls through long-range budget forecasts.
Gaming Funds Distribution*
On May 9, 2016, the Pennsylvania Department of Education provided the Fox Chapel Area School District with the amount of the district’s share of gaming funds available for distribution. The proposed final budget includes a distribution of $1,468,886. The method of distributing these funds, as prescribed by Act 1, the Taxpayer Relief Act, will be via the implementation of the homestead exclusion. Under this provision, any property in the school district that was approved by Allegheny County as a homestead will have the lesser of its taxable value, or an estimated $9,878 of its taxable value, excluded for the purpose of calculating current school district real estate taxes for the 2016 tax year. The owners of the 7,848 properties in the district that qualified for the homestead exclusion will receive the equivalent of a $187.51 reduction in their property taxes. Property owners who currently do not have an approved homestead exclusion will have the opportunity to apply again when the district sends out letters to those homeowners in December 2016.
*Allegheny County has certified that there are 7,848 properties in the Fox Chapel Area School District that qualify for the homestead exclusion. If that number is adjusted by the county to include more or less properties, it could affect the amount of the final reduction.