South Fayette School District educated about 200 more students in the 2017-18 school year than in the year before.
That’s not an unusual increase for South Fayette, which is one of the fastest-growing school districts in the state. South Fayette has grown 65 percent since 2005-06, causing the high school to be renovated and an Intermediate School to be built.
Due to ballooning enrollment numbers, the school board voted last month to purchase nearby farmland to brace for future campus development. The district purchased 113.9 acres, which is across the street from the middle school on Old Oakdale Road and off Battle Ridge Road, from the Dimun Family Limited Partnership for nearly $4.33 million.
“The idea is to secure the land so there is a growth path for the district,” board President Alan Vezzi said. “That’s why we made the move. We’re buying the future of the district. We’re guaranteeing future expansion and the capacity for the district to expand in the future.”
Vezzi said the acreage is more than the current campus takes up, and the purchase is to keep the district’s options open. He said the board may discuss selling some of the land to the township for a park.
“There’s more than enough acreage to build schools and put fields on it if the board chooses to do that in the future,” Vezzi said. “The first step was just getting the property purchased, and then we can start thinking about potential uses.”
The board discussed during its June 19 meeting how to pay for the purchase. Jamie Doyle, the district’s financial advisor from PFM Financial Advisors LLC, presented four bond payment options to the board. Doyle said her interest rate projections are usually “conservative,” as the board will not know the interest rate until the competitive internet auction.
The four options differ in how much of a millage hit the district takes per year and subsequently how quickly the amount is paid off. The first option pays off the debt in only 10 years but has a .45-mill per-year hit.
Increased enrollment could require more teachers at the district's four schools.
The next three options incrementally increase the payment time and decrease the millage impact. The last option, which Boyle said is what most school boards choose, is the least aggressive, as the board will face a .14-mill hit each year. Director of Finance Brian Tony said option four has a time frame of 19 years, only if the board doesn’t decide to refinance after five years, which he said is likely.
“Even though option four is a big interest impact,” Tony said, “I like it the best because we can refinance five or six years down the road and take a look to see where we are at that point. I like option four and option three. Anything more than that will hit us too hard on the millage.”
Board members Jennifer Iriti and Arik Quam both said they wanted to choose the first option, which pays off the debt the fastest but with a larger per-year millage increase.
“Option one allows us to take this off the books quickly,” Iriti said. “I know it puts a burden on us to pay it off, but I think the overall cost of the property is much more reasonable than the other options. If we need to dip into the fund balance in one or two of those years, I think it’s reasonable.”
Tony said that while the district’s $23 million fund balance may seem large, it can dwindle away quickly. He said while the business office has been able to cut costs to lower the amount taken out of the fund balance in recent years, he is worried about the augmenting difference between revenues and expenditures in recent years. This year, the budget is projected to have a $3.8 million shortfall, while the last two years were $2.3 million and $1.6 million.
“That number keeps getting bigger,” Tony said. “Now, when you add another .45 of a mill each year, that’s a big hit. Then we’re reluctant to increase the millage, because we don’t want to do that, so we pull from the fund balance.”
As many school districts throughout Allegheny County continue to experience decreases in enrollment, South Fayette Township is doing the opposite.
The board planned to vote on the motion June 19, but two board members, Teresa Burroughs and Lena Hannah, said they were not ready to vote and needed more time.
“It’s a lot of money, and it’s a lot of money that will impact the community,” Burroughs said. “I need more information before I’m asked to make a decision. Receiving this information tonight and then making a decision, I can’t do it.”
The board plans to vote on the bond sale during its July meeting.
This isn’t the first time the school board has purchased additional farmland. In the early 1970s, more than three decades before the new high school was built in 2002, the district purchased the Boch Farm in preparation for future development and growth. That land off Sygan Road includes the property on which the high school now sits.
“It sat vacant for many years until we had to build the high school and expand the footprint of the campus,” Vezzi said.
Vezzi said the purchase gives the board more “possibilities” for the district’s future.
The South Fayette School Board passed a proposed budget May 22 that includes the maximum tax increase.
“We don’t know where the campus is going to be in 10 years,” he said. “ What will our needs be in the future? Looking at future growth, we thought it would be a prudent move to lock that property down to have it for the future.”
Also during the meeting, the board discussed the 2018-19 budget. The board will vote on the budget at its next meeting scheduled for June 26.