A few dozen people turned out Wednesday evening for a forum on the proposed 2012-2013 budget hosted by the Council Rock School District.
Robert Reinhart, the district’s director of business administration, provided an overview of the budget and offered details about the process.
Last month, the school board that would increase taxes by 1.7 percent, which is the maximum allowed by the state’s Act I Index.
According to Reinhart, the administration has since been able to trim expenditures by $900,000. However, Reinhart said he is still recommending the tax increase so the district can adequately position itself for future contribution increases required by the Pennsylvania School Employees Retirement System (PSERS).
Reinhart said the district’s PSERS contributions, which have gone up $3.85 million over last year, are solely responsible for the budget increase.
“Should the retirement contribution have stayed the same, our 2012-2013 expenditures would have been down $800,000,” Reinhart said.
In 2012-2011, the district paid 8.65 percent of its payroll to the state-run defined benefit retirement plan. The required contribution in 2012-13 will increase to more than 12 percent of the district’s total payroll. Employees also contribute 7.5 percent to the fund.
Reinhart stressed that the district has no control over the funding mechanism or rates paid. “That is at the state level,” he said.
The district’s contribution responsibilities are only going up over the next few years, Reinhart added. By 2016-2017, Council Rock will be responsible for contributing 26 percent of its payroll – nearly $28 million – to the PSERS fund.
But the administration said careful planning and fiscal prudence should allow the district to manage the increases without a devastating impact on taxes or services.
“Council Rock is well poised to handle this over the next two to three years,” Superintendent Mark Klein said. While the district is “more solvent” and “in better shape” than most districts, Klein said PSERS increases will require a continued effort to control spending elsewhere.
According to Reinhart, the district will use $2.35 million of its fund balance in 2012-2013, bringing the fund balance from $27.9 million in 2011-2012 down to an estimated $25.9 million.
Klein said it would be imprudent to spend significant amounts of the fund balance on recurring expenses. "It’s like using your savings account to pay for your mortgage," he said, adding the more the district uses its fund balance to pay for recurring expenses, the less ability it has to adequately handle those expenses over the long term.
The $900,000 trimmed from the budget since late April includes staffing reductions and changes. Holland Middle School will loose 8.6 professional staff due to changes and transfers, not layoffs, district officials stressed.
The administration will provide an overview of the budget during tonight's school board meeting, which begins at 7:30 p.m. at the
By state law, the district must pass a final budget by June 30.