School board receives 2021-22 budget update during workshop
By SARIT LASCHINSKY
Special to The Press
In addition to discussing business items which will come up for a vote at their regular meeting, Northwestern Lehigh School Board members focused much of their Feb. 3 workshop on a presentation discussing the 2021-22 fiscal year budget.
Business Administrator Leslie Frisbie presented the information, noting budgetary discussions are routinely shown to the board in February, and as more information is released regarding the state’s budget and grant opportunities, the information will be updated in the coming months.
Frisbie reviewed the district’s eight 2021-22 budget goals, which she said are kept at the forefront of budgetary discussion.
“These are really a good reminder for us to say what we’re building into this budget: is it meeting our operation goals, is it meeting our educational goals, and how do we create a budget that really keeps the integrity of what the board has set out to do with these goals,” she said.
According to the presentation, as of the end of the previous school year June 30, 2020, the district was left with a total fund balance of $15,843,295.
Frisbie said she would discuss the fund balances committed and assigned categories, which totaled $7,094,293 and $6,713,865, respectively.
She noted the board acted last fall to formally commit several categories and their ending balances to the fund balance, such as post-employment benefits and a variety of stabilizations.
Additionally, Frisbie said for the assigned category, there are several topics, such as technology, curriculum materials and capital projects, which did not need formal board action, but are used to offset shortfalls in the budget and help with long-term planning.
Looking at a fund balance trend from 2011 to the 2021 school year, Frisbie said as of 2019-20, the estimated fund balance was at $15.9 million, which would be reduced to $14 million after the fund is tapped for proposed use in 2021.
She also said with future projections over the next five years, the district anticipated a continuing shortfall to be balanced by use of fund balance, adding that over time it was anticipated to completely deplete the funds.
However, Frisbie said there was good news from Independent Fiscal Office projections, which were “significantly higher” than the district’s anticipations.
“So, when I take a look at the next five years out, compared to what we had planned on, I do believe ... if we would raise taxes to the maximum increase in each of those years, the ability to increase taxes an additional $1.2 million over that period of time compared to what we’ve built into this model today,” she said.
Regarding 2021-22 millage options, Frisbie said the board adopted a resolution last month to stay within the Act 1 Index and not raise taxes beyond 3 percent, which would result in a 0.5165-mill increase and generate approximately $855,000 in new tax revenue, at an average cost increase to taxpayers of $113.65.
As of January, Frisbie said the 2021-22 budget included estimated revenues of $44,720,160 and estimated expenditures of $48,450,577, for an estimated operating shortfall of $3,730,417 before the millage increase.
Including the millage increase, Frisbie said the revised shortfall would be $2,875,417, and the district would continue working to reduce that amount further by increasing revenues, decreasing expenditures or use of fund balance.
Frisbie also discussed different budgeting strategies, giving her recommendations on how the district should address post-employment and retirement benefits, transportation fleet replacements, capital reserve transfers, fund balance stabilization funds, diesel fuel and heating oil pricing, and other topics.
She said with a proposed use of fund balance of $1.65 million, combined with the proposed millage increase, would leave a remaining shortfall of $1,225,417, and work would continue to accommodate this amount.
Frisbie concluded by saying additional updates will be provided to the board over the next few months, and a proposed budget will be presented and adopted in May before a final budget is approved in June.
In other financial information, Frisbie presented the board with the scholarship report, saying the district is responsible for maintaining the custodial funds for several scholarships for senior awards.
She said the report was an informational item listing the maintained scholarships, the anticipated award amounts and the number of awards which are tentatively planned for senior awards in May.
For additional information items, the board also discussed several items, including the district’s 2021-22 trash bid.
Frisbie said Waste Management had usually extended its contract and pricing with the district, but noted Northwestern Lehigh had not received information about whether Waste Management would extend its pricing.
She also said the district had experienced some service issues with the hauler in the past several months, and recommended the board give Waste Management some more time to get back with a proposal and, if there is no response or pricing hold, put out a new bid.
Board members also heard information regarding the insurance services for the upcoming school year, and whether to renew its existing policies or assemble a new proposal to put out for pricing.
Members elected to discuss the matter with the district’s current broker, and for the information to be brought back to the board.