May 22, 2017 Budget Update:At the May 22 School Board meeting, the Board voted unanimously on a $95,816,075 million budget with no millage increase. The budget was balanced due to significant cost savings in the following ways:
- The District structured contracts for lower cost utilities bringing the budget in this area to its lowest level in recent years.
- The District bid out the transportation contract and found significant savings through a change in providers
- The District took advantage of restructuring the first high school bonds bringing total savings to the community of $7.6 million. Using $900,000 of these savings, the Board was able to eliminate the need for a tax increase.
In addition to using the savings from the bond to lower budgets over the next four years, there will now be an additional $3.8 million to fund capital projects over the next few years. School Board President Mary Birks said, “This is an enormous win for our community and I am proud to be part of the team that made this budget and the bond savings possible for our community. This budget preserves the programs which this community expects and our children deserve. ”
Final General Fund Budget 2017-2018
April 18, 2017 Budget Update: At the April 18, 2017 Regular Meeting, the School Board unanimously approved the 2017-2018 Proposed Budget in the amount of $96,566,075 with a millage rate of 23.93 mills, reflecting a zero mill increase for the community. Dr. Steinhauer stated, “With a careful and thoughtful budgeting process that included some significant reductions combined with a significant savings from the refinancing of some high school construction bonds, the District was able to balance the budget without a millage increase.”
Earlier in the meeting, the School Board took action to approve a bond issue to refinance the 2009 Series A General Obligation Bonds which recorded savings of $7 million to the community. The savings will allow for reductions of debt service over the next four years plus funds for capital projects of almost $4 million.
This was an exceptionally good outcome for the community as many refinancings are done to obtain savings of 2% of the bond amount. This refinancing brought savings of 13.1%. The District’s strong financial position, buoyed by Moody's Investors Service assigning an Aa1 rating before the bond sale (Mt. Lebanon is one of only two districts in Western PA with a rating that high) resulted in the positive outcome. The magnitude of the savings enabled the Board to consider and approve a Proposed Budget with no millage increase. These financial actions concluded a positive evening for our residents.
The School Board will take action on the final 2017-2018 budget on May 22. A summary of the $96.6 million budget and the bond refinancing savings chart are available below.
April 3 Budget Update: At the April 3 School Board Discussion meeting, Dr. Steinhauer presented the Board with an update on the current state of the 2017-2018 budget. Since the March 20 Board meeting, Dr. Steinhauer has identified another $40,000 (approximately) in refinement of expenditures and revenues to reduce the millage increase from .27 mills to .25 mills. He further reported that the administration continues to look for additional savings and efficiencies with continued for next year's operations. Dr. Steinhauer also shared a brief presentation to show the action that has occurred since last month’s budget discussions. At the conclusion of the Board discussion, the Board directed Dr. Steinhauer to continue to use $750,000 of the fund balance to balance the budget, but to work toward a final budget with less than a .2 mill increase using whatever methods he deems appropriate.
Recap: The Base Budget was presented at the March 13 meeting and reflected a .54 mill increase. At the March 20 meeting, the Superintendent proposed reductions in utilities, staffing and a refinancing of existing bonds to create savings in debt service costs to balance the budget at the .27 mill level. With further reductions, the millage increase as of the April 3 Board meeting is now at .25 which translates into $25 a year on a home assessed at $100,000.
Bond Refinancing Update: At the April 3 School Board meeting, Tim Frenz, the District’s financial advisor from Janney Montgomery Scott, gave a current status of the bond refinancing. He reported that Moody's has rated our new bond issue at a strong Aa1, which is one of only two such high ratings in Western Pennsylvania. Read Moody's Report
This, coupled with a slightly better market for municipal bonds, brought our projected savings to $4.8 million. The Board provided direction to allocate $2.1 million to tax reduction and the balance to fund upcoming capital projects. While the amount which can be transferred to our Capital Projects Fund was estimated at $2.7 million based on current rates, the actual amount of funds available for transfer may be more or less than that amount when the bonds go to sale on April 18. At that point, all savings and debt reduction will be locked in.
Budget Timeline:April 18, 2017
- Approve Preliminary Budget for 2017-2018
- Post for public viewing for at least 30 days
- *Approval of Bond Refinancing
- Continued discussion
- Approve final budget for 2017-2018
March 20 Budget Update: At the March 20, 2017 School Board meeting, the Superintendent reported that the administration is working to reduce the millage increase from the March Base Budget which reflected a millage increase of .54 mills for the 2017-18 School Year. With the Board's approval at the meeting to refinance the 2009 Series A General Obligation Bonds for the High School Project and other reductions, the millage increase is now projected to be .27 mills which translates into $27 a year on a home assessed at $100,000.
As of the March 20 Board meeting, budgets were reduced to recognize the lower cost of utilities due both to negotiated low rates as well as less usage due to moderate weather and smaller square footage in the newly renovated high school. While staffing is not yet complete, the administration recommends the elimination of two teaching positions due to retirements in areas where the student count is down.
The Superintendent reported that the administration would continue to look for cost efficiencies in order to bring the millage increase down further as the presentation of a Proposed Budget in April draws near.
A Final Budget is scheduled for Board action at the May 22, 2017 meeting.
March 13 Budget Update: At the March 13, 2017 School Board Discussion Meeting, the administration presented the first draft of the Base Budget for the 2017-18 School Year. The budget brings forward all programs currently offered to students only making changes in contractual obligations.
The budget requires a millage increase of .54 mills of the .60 mills permitted under the Act 1 Index. Although exceptions to the Index were requested and approved by the Pennsylvania Department of Education, the Base Budget does not require a millage increase to that extent. Of the .54 mill increase, .28 mills is for increased cost due to the PSERS rate increase for the retirement program required for all school district staff.
The administration was given direction to look at possible decreases in costs and programming to bring the millage increase down to a lower level. The budget will be a discussion item at future Board meetings. A Proposed Budget will be presented for Board action at the April 18, 2017 meeting with action on a Final Budget at the May 22, 2017 meeting.
January 18 Budget Update: The School Board approved the legally required 2017-2018 Preliminary Budget at the Jan. 16 Regular Board Meeting and authorized the Administration to apply for exceptions to the Act 1 of 2006 Index as allowable under law.
In a statement read by School Board President Mary Birks, “We are required by law to pass this budget before the end of January. All school districts across the state of Pennsylvania are engaged in this same exercise. There are many items that remain unknown. A couple of the larger items include not having a State Budget from Harrisburg, which would give us an idea of funding, as well as not knowing all of our staffing needs for classes for 2017-18.
For that reason, and in order to give us the maximum flexibility to do what is best for the District, we vote on this preliminary budget which enables the district to utilize all applicable (Act One) exceptions. The millage rate posted in the preliminary budget does not require the board to raise taxes to that level; we will once again do our due diligence to do everything possible to minimize the tax burden on our residents.”
The School Board will begin discussion about the budget in March. More information will be available here at that time.
2017-2018 Budget Summary (3/13/2017)
2017-2018 General Fund Budget Summary (12/6/2016)