The Northampton Area School District 2020-21 preliminary budget has been approved with the general fund set at $114,717,283.

Included in the 8-1 vote by NASD school directors at its Jan. 13 meeting is approval of the food service fund of $2,504,747 and the athletic fund of $258,743 for the 2020-21 school year.

Approval of the budget calls for a 3.8-percent tax hike and the use of $3.2 million from the school district fund balance. The ending unassigned fund balance would be $5.7 million, which is 5 percent of NASD expenditures.

According to the Pennsylvania School Boards Association website, finance experts recommend unassigned fund balances of between 5 and 10 percent of total district expenditures. On average, Pennsylvania districts are at 6.5 percent of unassigned fund balances of total expenditures.

Dr. Michael Baird, board member, urged the board to add the information about the percent of tax rate increase, amount of fund balance use and the amount and percentage of remaining unassigned fund balance to the motion.

“Shall we include that?” school board President David Gogel asked fellow board members.

There were no objections voiced by the school directors. By consensus, the information was added to the motion for the budget under the agenda’s finances section.

“The more transparent we are with the numbers, the better,” Baird said before the board vote on the 2020-21 preliminary budget.

Voting to approve the preliminary budget were board members Baird, John Becker, James Chuss, Chuck Longacre, Robert Mentzell, Ross Makary, Vice President Chuck Frantz and Gogel.

Voting against approval of the budget was Roy Maranki.

Approval of the budget guarantees it is available for public inspection at least 20 days before adoption and public notice of the board’s intent to adopt the preliminary budget is given at least 10 days in advance.

The 8-1 school board vote includes authorizing the administration to seek approval from the Pennsylvania Department of Education for exceptions allowed under Act 1, which, if approved, would allow NASD to increase the tax rate by more than the district index.

The Pennsylvania Department of Education set the Act 1 Index at 3.2 percent for NASD for 2020-21.

The exceptions apply to school construction, special education and retirement contributions. NASD routinely applies for exceptions but has not used them.

The school board’s vote also authorizes the administration to advertise in a newspaper of general circulation and on the NASD website at least one week before submitting the request of the district’s intent to seek exceptions.

“Everything is status quo,” NASD Superintendent of Schools Joseph S. Kovalchik said of the budget.

“We’re waiting on a whole host of things,” he added. “We’re waiting on a couple of updates: the governor’s budget, potential revenue and retirements. Exceptions are the last of the wild cards.”

The tax impact requires 56.99 mills, an increase of 2.1 mills (or 3.8 percent), from the 2019-20 millage of 54.8 mills.

The average increase per household is $115, based on the district average residential assessment of $54,600, which accounts for 50 percent of NASD taxpayers.

At the Dec. 16, 2019, school board meeting, when the 2020-21 general fund budget was unveiled, it was stated the administration “will continue to work on reducing the budget deficit.”

At the Jan. 13 meeting, school directors voted 7-2 to authorize the school board president to execute a financial security agreement, which provides security to the district in the form of a letter of credit for $80,000 to be drawn upon in the event that JW Development Partners defaults in its obligation to maintain stormwater facilities and traffic signal in accordance with a Pennsylvania Department of Transportation highway occupancy permit application filed by East Allen Township for the benefit of JW Development Partners and NASD.

The agreement pertains to Route 329 and Seemsville Road intersection improvements.

Voting against the financial security agreement were Chuss and Longacre.

“This is a follow-up to the agreement of last fall. I feel $80,000 is grossly inadequate, and a five-year term is grossly inadequate,” Longacre said before the vote.

In other business at the Jan. 13 meeting, school directors voted 9-0 to approve an agreement with Lehigh University for the rental of Stabler Arena for the 2020 graduation ceremonies at a rate of $8,433.44, plus any actual expenses.

Kovalchik said the 2020 graduation is scheduled for 4 p.m. June 6 at Stabler.

“We’re pretty confident with snow days. We don’t like to announce it too early,” Kovalchik said.

School directors also approved the 2020-21 school calendar. Students’ first day of classes is Aug. 31. NASD staff begin Aug. 24.