Bethel Park School District finished last fiscal year with a $3.4 million surplus, but some board members worry the district won’t be able to stay in the black much longer after the board cut the property tax rate by more than 8% for this fiscal year.
Auditors from the district’s auditing firm, Cypher and Cypher of Canonsburg, presented at the school board’s committee meeting Oct. 15 an early report of how the district fared financially during the 2018-19 fiscal year, which ended June 30. The auditors will submit a more detailed audit report in January, but because of some board members’ concerns about the district’s financial footing in light of the tax cut, school officials asked Cypher and Cypher to present an earlier report.
The district finished the year with nearly $88 million in revenue and about $83.6 million in expenses. After the district set aside $578,000 for capital projects and $353,000 for tax appeals, the district had a net surplus of about $3.4 million.
In reserve or savings accounts, the district has about $9.5 million in its capital projects fund, which is reserved for building improvements. Bethel Park also has $25 million in its general fund reserve, but most of that money is earmarked for future retiree benefits. The district has $4.5 million in unassigned reserves, which can be used for unexpected expenses and to bridge budget shortfalls.
The district is projected to use most of that unassigned reserve to balance the 2019-20 budget, since a sharply divided board decided in June to cut the property tax rate from 22.8763 mills to 21 mills. The tax cut is expected to reduce revenue by about $4.7 million.
“This is a good rearview picture, but it doesn’t tell us where we’re going,” said Director Barry Christenson. “What matters is what we can expect in the next five years.”
Christenson, who voted against the tax cut along with directors Pam Dobos and Ken Nagel, expressed concern the district would deplete its fund balance to pay for the tax cut and the deficits would continue for several years, because state law restricts school districts’ ability to raise taxes over a certain amount.
“You will have to watch that very carefully,” said Steven Cypher of Cypher and Cypher.
However, the district’s fund balance has climbed steadily in the past decade, Cypher said. Bethel Park’s total reserves, which includes the capital fund, was just under $15 million in 2010 and it’s just under $35 million now.
“This is not an extreme amount to make up, because the fund balance has been steadily increasing,” said Director Jim Means.
The board could decide to tap into money it set aside for future retiree benefits to balance the budget. The district has been reducing staff levels through attrition for the past several years, so future pension and health insurance obligations might be lower than previously thought.
In another matter, resident Kimberly Turner told the board district workers should have acted more swiftly to cover up graffiti that appeared over the weekend on the dugouts at one of the district’s softball fields. The graffiti included swastikas and other offensive symbols. Turner said her daughter’s softball team had to see that graffiti when they used the field for practice a few days after the vandalism was discovered.
Director Jim Means said he would introduce a motion at the regular meeting Oct. 22 to rename the district’s winter recess, Christmas recess. He said Christmas is a federal holiday, so Christmas should be reflected in the district’s calendar.
Other board members expressed concern renaming winter break would exclude non-Christians in the school. Plus, Christmas recess might not be entirely accurate anyway, since winter break does not only include Christmas, but several days before and after Dec. 25 to include all of Hanukkah this year, Kwanzaa, New Years Day and other holidays.