Northampton Area School District (NASD) Board of Education voted 8-1 to approve the preliminary budget for 2018-19, with a general fund of $107,532,563, athletic fund of $219,125 and food service fund of $2,446,795.

NASD Superintendent of Schools Joseph S. Kovalchik said potential revenue from proposed commercial development may improve the district’s tax base in the near future. Kovalchik also said residential growth in the district may add to the increasing student population and require the hiring of new teachers and building a new elementary school on the district-owned Seemsville tract in the next 10 years.

School Director Dr. Michael Baird voted against the preliminary budget. After the Jan. 22 school board meeting, Baird explained his vote.

“We’re using way too much of the fund balance, and 3.9 percent is too much to start with,” Baird said. “The main reason is, I didn’t like the use of that fund balance. You may need that fund balance in the future. I just want to be careful on how we do things.”

The preliminary budget has expenditures of $107,532,563 and revenue of $101,481,113 for a deficit of $6,051,450.

The use of $400,000 from the committed fund balance and $3,420,000 from the unassigned fund balance and increasing property taxes by 3.9 percent, which is a 2.06 millage hike, is proposed to offset the deficit. One mill equals about $1.1 million in the district.

The school board vote Jan. 22 also authorized the NASD administration to seek approval from the Pennsylvania Department of Education (PDE) for exceptions allowed under Act 1 that, if approved, will allow the district to increase the rate of tax for fiscal year 2018-19 by more than the 2.9 index allowed under Act 1 and for the administration to advertise its intent to seek exceptions at least one week prior to submitting the request to PDE.

The preliminary budget was available for public inspection at least 20 days prior to adoption, and public notice of the board’s intent to adopt the preliminary budget was given at least 10 days in advance, pursuant to Act 1 of Pennsylvania Taxpayer Relief Act, approved by a special session in 2006 and signed into law by then-Gov. Ed Rendell.

Millage would increase 2.06 mills from 52.77 to 54.83 mills, a 3.9-percent increase, which exceeds the state-mandated 2.9-percent increase allowed under Act 1.

Based on the 2017 average NASD assessment of $58,223.43 and a 2017 tax bill of $3,072.45, the 2018 tax bill would increase to $3,192.39, or $119.94 annually, $9.99 monthly and $2.31 weekly.

Lehigh Township resident Michael Meyers objected to the proposed budget during the courtesy-of-the-floor portion of the Jan. 22 meeting. Meyers pointed out more than 60 percent of the proposed budget is salaries and benefits.

Mentioning one of the NASD school directors wears a “No-bullying” pin on his lapel, Meyers said, “If you don’t give the teachers what they want, they go on strike. That’s bullying.

“There’s a lot of money that goes into the teachers’ unions, which goes into political action committees, which goes against me. I hope you can see why I don’t like the way public schools are funded,” Meyers said.

In the 2018-19 preliminary budget, nondiscretionary expenditures are $101,598,080, or 95 percent of the 2018 budget of $107,532,563.

Allocations

The budget allocation by categories and percentages is:

Salaries and benefits - $72,712,527, or 68 percent

Debt service - $10,300,120, or 10 percent

Transportation - $5,999,465, or 5 percent

IU services/alternative education/special education - $4,919,600, or 5 percent

Charter/cyber schools - $3,150,000, or 3 percent

Tuition outside student programs - $3,031,793, or 3 percent

Utilities - $1,591,425, or 1 percent

Insurance - $293,150

Program areas

Expenditures by program area in the $107,532,563 budget are:

Instructional programs - $64,114,511

Maintenance - $8,814,152

Transportation - $6,054,019

Instructional support - $5,947,209

Health services - $1,277,894

Security - $849,114

Federal programs - $326,784

Administration support - $8,012,199

Debt service, transfers and reserves - $10,601,689

Noninstructional costs - $1,534,992

Revenue

The summary of the 2018-19 general fund budget revenue of $105,301,113, an increase of $2,558,791, or 2.49 percent, over the 2017 revenue of $102,742,322, is:

Local - $68,444,000

State - $32,285,314

Federal - $751,709

Committed fund balance, PSERS - $0

Committed fund balance, districtwide technology and curriculum purchases - $0

Lehigh Elementary School financing - $400,000

Unassigned fund balance - $3,420,000

Fund balance

The 2018-19 fund balance review is:

Beginning fund balance - $11,826,851

Ending fund balance - $8,406,851

Committed/assigned fund balance

Inventory - $275,000

Prepaid expenses - $140,000

Districtwide capital improvements - $1,450,000

OPEB obligations - $100,000

Chromebook reserve - $45,000

Balance/next year budget - $1,000,000

Ending fund balance/unassigned - $5,396,851

Act 1

The Act 1 exceptions being sought for the 2018-19 preliminary budget are:

PSERS - $1,307,197

Health care - $674,168

Special education - $180,923

Charter schools - $150,000

Kovalchik and NASD Business Administrator Terry Leh had presented the preliminary budget to the board at the Jan. 10 school board meeting.

Also at the meeting, school directors approved and welcomed new NASD Konkrete Kids head football coach Kyle Haas, effective for the 2018-19 school year, at a compensation of $12,244. (See story on page A7.)

“It’s truly an honor to be the next football coach at Northampton Area High School,” Haas told school directors.