Board mulls $1.2M surplus
LOWER POTTSGROVE » With one exception, the school board has put off until after the election decisions on what to do with a budget surplus of nearly $1.2 million.
The exception, which was the subject of a unanimous vote Oct. 24, is $375,000 which the current budget had anticipated removing from the PSERS retirement fund to help balance this year’s budget.
That not being necessary, the board voted to put it back into the retirement fund in what board member Rick Rabinowitz called “a no-brainer.”
According to Business Manager David Nester, the exact amount of the surplus is $1,173,000. Rabinowitz noted that the budget had anticipated a $600,000 deficit for the year, so the amount over expected bottom line is closer to $1.7 million.
Several factors contributed to the surplus, according to Nester.
Perhaps the largest and most unexpected was revenue from the real estate transfer tax, which he said means many properties changed owners in the past year.
Much of that, however, was driven by the change in ownership of the Upland Square shopping center in West Pottsgrove, which netted the school district about $264,000 in revenues.
An additional $100,000 was also collected through the earned income tax, which after a few years indicates a trend of higher income that the district will begin to estimate upwards in coming budgets, said Nester.
Another nearly $300,000 comes from savings in salary and benefits budget lines, said Nester.
A warm winter, cool spring and the advent of solar panels on the renovated Pottsgrove High School also provided lower utility bills, said Nester.
Nester also had several suggestions for the surplus.
He noted that he recently made the board aware of the fact that the accounting software used by the district will be shut down in the coming year and a replacement could cost as much as $200,000 when all is said and done.
He also noted that the district’s 10-year capital plan calls for $10 million to $15 million worth of work, part of which is a new roof for Pottsgrove Middle School and a new air-conditioning unit for West Pottsgrove Elementary School — both of which are scheduled for the next year and are estimated between $3.5 million and
$4 million. Currently, the district’s capital reserve fund stands at $8.6 million.
However, Rabinowitz said that in the past he has argued that major financial decisions like this, so close to an election, should be decided by the new board that will have to live with the consequences.
He made the same suggestion and board member Robert Lindgren agreed and subsequently, so did the rest of the board.
“Considering this surplus, I hope the new board will make a commitment to the taxpayers not to raise taxes next year,” said board member Bill Parker.