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School district hears preliminary budget overview

Catasauqua Area School District Board of Education held a special meeting regarding the 2024-25 budget overview March 20. Business Manager Lindsey Wallace and Superintendent of Schools Dr. Christina Lutz-Doemling presented the current budget details for the board.

The presentation opened with a reminder of the board’s previously agreed-upon goals as well as its vision for the students. According to Lutz-Doemling, this was to help keep these priorities in mind when looking at the budget details. She said she believes the budget is in alignment with the goals to help the district and the students succeed.

Wallace noted some of the driving factors of the budget are high inflation, labor shortages, increased special education needs and mental health services, new positions, capital projects, increased charter tuition costs and losing Elementary and Secondary School Emergency Relief funding.

ESSER funds were distributed from the federal Coronavirus Aid, Relief and Economic Security Act. These funds were used for a number of things such as staffing, technical equipment, cleaning supplies, tutoring and more. Since the district is no longer receiving these funds, the district will need to cover the costs for these items.

The current budget overview has revenues at $49,296,405 and expenditures at $51,169,905.15. This leaves a deficit.

The budget detailed two large grant-funded capital projects - the Catasauqua High School roof and HVAC project and Sheckler Elementary School addition and community space. Wallace noted they are in the process of applying for the grant funding needed for both projects.

The CHS roof project involves repairing some sections of the roof to help address problems. The Sheckler extension would include extra classrooms for students and multipurpose space for the community to use to “facilitate digital inclusion activities.”

Wallace noted these projects will probably be taken out of the general fund budget and put into a separate construction fund due to the size of the projects. It is currently a $5.5 million expenditure line item. She left the projects in, so the board could see everything clearly in front of them.

To help manage the budget deficit, it is recommended they increase real estate mills. The CASD Act 1 adjusted index is 7%, but the board does not need to use the entire 7%.

It was noted the district could take advantage of the 7% adjusted index since future indexes might not be high enough to cover projects. They want to be proactive and help keep the district in a healthy financial place but understand the toll increases have on residents.

“It’s a fine line. You want to keep community in mind and what the school district’s needs are,” Wallace said.

To help with find the balance between community and district needs, it was recommended the board approve a 5% increase.

Since CASD spans two counties, the district needs to do a rebalancing. The 5% increase would put Lehigh County residents at 21.46 mills and Northampton County at 61.44 mills.

Both counties have seen increases and decreases over the past few years, but the numbers have not changed drastically. For example, the 2019 rates were 19.51 mills for Lehigh and 61.11 mills for Northampton.

The overall revenue numbers show increases in both local and state sources. A decrease in federal revenue largely came from phasing out the ESSER funds and a Title I decrease.

Wallace noted the district relies heaviest on local revenue sources, with it making up 58% of the budget. State revenue makes up 40% of the budget, and federal sources are only 2%. It was noted delays in state and federal budgets necessitate the emphasis on local sources.

Wallace noted the district is lucky to be in a position to invest funds. This is the first year the district is using Pennsylvania School District Liquid Asset Fund to invest. They hope to get on a quarterly investment cycle and want to bring in more revenue without having to touch the district’s “ready-to-go” money.

Increases to district expenses include salary, health care and insurance increases, inflation costs, special education costs, general maintenance, additional staffing roles, capital projects and more. Decreases in expense costs include long- and short-term disability, retirement and life insurance rates, contracted psychological services, debt service payments and more.

The current 2024-25 budget includes expenditures of $36,101,462.30 for salary, benefits, debt service and districtwide operations. Tuition services for other sources, such as Lehigh Carbon Community College and Lehigh Career and Technical Institute, account for $7,581,515.80 of the expenses budget. The budget for contracted services, transportation, athletics and activities is $1,314,272.10.

The rest of the budget covers supplies, the grant-funded capital projects (for now) and more. Wallace reminded the board they will probably move the $5.5 million grant-funded capital project item out of the general budget due to its size.

The special education costs are outpacing the revenue received from the state government. According to the presentation, the special education funding increase has not covered the cost of actual needs since the 2021-22 school year. Additionally, new staffing positions are needed to be compliant with caseloads and keep up with changing demographics. Reportedly, the referrals doubled for Salisbury Behavioral Health services from 2020 to 2024.

Capital projects and purchases are listed according to importance, with safety issues getting highest priority, according to Lutz-Doemling.

Charter school costs and expenses continue to rise. According to Wallace, the district is expecting to be approximately $150,000 over budget for charter school costs for the 2023-24 school year, with an additional 25 charter school students.

Approximate charter school tuition costs for 2024-25 are $15,000 for regular education and $38,000 for special education. This is a jump from $12,950.16 for regular education and $32,247.62 for special education in 2023-24.

The district works to “maintain and continue to grow a healthy fund balance to offset borrowing for future capital projects, capitalize on investment opportunities, rating, emergency reserve, etc.,” according to the presentation. The current fund balance is $6,668,975 with $3,003,449 unrestricted funds.

“I think this budget is jam-packed with a lot of good things,” Wallace said.

Wallace and Lutz-Doemling emphasized this is just a preliminary overview, and they will continue tinkering with the numbers to account for new information and changes. Board approval of the preliminary budget is expected in March, with final budget approval in June.

The next school board meetings are scheduled for April 9 and May 7. Meetings are held 7 p.m. in the district administration board room, 201 N. 14th St.