For the second straight year, the South Fayette School Board adopted a budget without a tax increase.
Despite facing a $3.5 million deficit, the board unanimously voted during its June 26 meeting to keep the district’s real estate tax rate at 26.7 mills for the 2018-19 budget.
The back-to-back years without a tax increase came off the heels of almost automatic tax increases, as the board raised taxes nine of the prior 10 years in the district that has grown by 65 percent since 2005.
“Two years in a row,” said Todd Petrillo, a relieved board member.
A millage rate of 26.7 means South Fayette residents pay $2,670 in real estate tax for every $100,000 of assessed property value.
“We are pleased to be able to not raise taxes,” board member Leonard Fornella said. “Everybody worked hard on not raising taxes this year.”
With expenditures at $59.12 million and revenue at $55.62 million, the $3.5 million deficit will be pulled from the district’s $23.47 million fund balance, which is projected to be $19.96 million after next year. While the fund balance seems large, finance director Brian Tony said much of the money is assigned to future capital projects, pension costs and other post-employment benefits.
In past meetings, Tony has alluded to the business office’s ability to incrementally cut the budget and reduce the amount that is needed to be taken from the fund balance each year. For example, $2.33 million was projected to be pulled from the fund balance in 2017-18, but only about $407,000 is now projected to be taken out.
Throughout the budget process, Tony’s recommendation was to increase taxes up to the district’s allotted Act 1 Index of 3.1 percent to “keep all of the options on the table” before the board had to make a final decision. That would have increased the millage rate to 27.5277 mills.
Also during the meeting, the board decided how to pay off the district’s $4.33 million purchase of the Dimun Family Limited Partnership farmland. The board voted to take $1.5 million from the approximately $2 million left over from the high school construction project loan, which came in under budget, and apply it to the purchase of the farmland. The district will get a bond for the remaining $2.83 million for the 113.9 acres of farmland on Old Oakdale Road and off Battle Ridge Road will be paid through a bond.
The acquisition, which was approved in May, was made by the district for potential future expansion. The decision is similar to an early 1970s land purchase by the district of the Boch Farm, which was where the high school now sits.
The board voted 5-1 to finance a bond that would require only a .10-mill hit, which was the least aggressive option.
“You’re deferring any meaningful payment of that bond down for 12 years,” said Arik Quam, who voted against the measure. “We’re kicking the can a long way for something we’re buying today. Is that the right thing to do based on what we have in the fund account?”
“This is a land purchase that isn’t going to be used in the near future,” Fornella replied. “It’s a long-term purchase, so it’s more appropriate to finance that over 20 or 30 years than it is to pay it off all at one time.”
Board Vice President Paul Brinsky ended the meeting with an announcement that the district is considering hiring a second school resource officer.
“We have had discussions internally as a board and we are going to pursue a joint meeting with the township supervisors to discuss additional resources,” Brinsky said. “We want to make sure our campus is as safe as we can make it for the children.”