Categories Elizabethtown Area School DistrictFeaturedNewsSchool Board News

EASD Makes Five-Year Plan for Finances

By DIANE M. BITTING

Special to the Advocate

Much of the Elizabethtown school board’s workshop meeting on Tuesday, Oct. 8, was devoted to plans: specifically, development of the Elizabethtown Area School District’s five-year financial plan as well as the three-year comprehensive plan that the district is required to submit to the state, covering 2020 to 2023.

The board was also presented with several contracts to be voted on at the Oct. 22 action meeting. These include one to continue working with a consultant that has helped the district obtain federal “E-rate” funding discounts for upgrading internet technology, saving over $250,000 during the past five years.

Jeffrey Ammerman, the district’s director of finance and operations, presented the most recent version of the five-year financial plan, covering budgets from 2020-21 to 2025-26. As presented at recent past meetings, the plan gives three possible projections for annual revenue growth: with no real estate tax increase, with a 1.5% increase and with a 3% increase.

For instance, for next budget year, the revenue growth ranged from $501,735 with no tax increase to $1.6 million with a 3% increase. In 2025-26, the range was $588,224 to $1.86 million.

The plan also projects salary and benefit increases, with certain assumptions: six retirements or resignation of professional staff with replacements at lower salaries, a 5% increase in health insurance costs and pension cost increases tied to salaries.

With no tax increase for 2020-21 and a salary/benefit increase of $1.27 million, there would be a shortfall of more than $777,000. With a 3% increase, there would be an additional $321,000. Likewise, for 2025-26, the $1.6 million growth in salaries and benefits would produce a $1 million shortfall with no tax increase and an additional $258,000 with a 3% increase. (With a 1.5% increase, there would be shortfalls of $228,000 next year and about $424,000 in 2025-26.) The financial plan anticipates other major expenses, with transportation costs estimated to grow $75,000 a year and an annual growth of charter and other tuition (special and alternative education) at $25,000 and $40,000 respectively.

An additional $100,000 will be needed for debt service in 2021-22 for upcoming projects, namely Rheems Elementary and creating space for sixth-graders at the middle school. For the current year and next year, the budget includes $500,000 in transfers to capital reserve.

The five-year plan can help the board determine a mix of cash and borrowing for future projects, Ammerman said.

With the high school/ middle school renovation about five-plus years away, Ammerman noted that each million borrowed costs about $40,000 annually in interest; thus a $40 million renovation costs $1.6 million in interest and an $80 million project, $3.2 million in annual interest charges.

In summarizing, Ammerman stated, “The district will need an annual tax increase as a result of these assumptions at or near the Act 1 index to support the existing personnel, programs and other costs.”

The state’s Act 1 index limits how much school districts can raise property taxes. For the 2020-21 budget Elizabethtown’s index will be 3.3%, Ammerman said.

Also, Richard Schwarzman and Daniel Serfass, assistants to the superintendent, and board member M. Caroline Lalvani discussed the state-required comprehensive plan, which lays out the district’s goals for student learning, growth and achievement. Part of the plan is due Nov. 30; a second part is due March 30.

Brian Lownsbery, director of technology, gave an overview of the federal E-rate program, which provides subsidies to school districts from a universal fee charged to telecommunications companies to help pay for internet services and hardware.

Working with Tritt-Schell Consulting Services of Mechanicsburg, the district realized a 50% discount on hardware, such as network switches and wireless access points, saving $254,000 over five years, he said.

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