Board approves roof repair contracts as budget talks proceed

A project to repair the roofs at five North Penn School District buildings is moving ahead, and so is the process of shaping the district’s 201718 budget.

The North Penn School Board voted unanimously Thursday to award two contracts totaling just over $2 million to repair roofs at four schools and another district facility, while looking ahead at potential problems like a possible cut in state aid to local school districts and growing costs for retired employees.

“Of particular note was a proposed $50 million reduction in transposition subsidies,” said board member Frank O’Donnell.

Last month Gov. Tom Wolf proposed a $32.3 billion 2017-18 state budget that calls for increases

in general education funding, but proposes a cut of $50 million statewide from school transportation aid subsidies. O’Donnell and Director of Business Administration Steve Skrocki said the board’s Finance committee and staff have already started to discuss the impact that cut could have locally.

“The impact to North Penn could be upwards of $226,000 if that is just evenly prorated among the 500 school districts” in the state, Skrocki said.

“We don’t have details yet exactly what the ramifications of that reduction will look like, or how it will be calculated, but potentially that could have a significant

impact on North Penn,” he said.

If the budget is passed as Wolf has proposed, Skrocki told the board, the district’s net result could be roughly even thanks to the proposed increase in general education funding

“If North Penn receives everything the governor proposed, that would result in an additional $350,000 over what we received this year, so if you net the two out, it’s pretty much nothing,” Skrocki said.

In December, the school board approved a $20 million bond borrowing meant to fund renovations at Montgomery Elementary School and other district projects, and the board voted Thursday to spend part of that balance. Two contracts were approved for roof repairs, one for $746,933 to contractor

D.A. Nolt Inc. to repair and replace roofs at Penndale Middle School and the Northbridge School, and another for $1.544 million to Pro Com Roofing Corp. to do similar repairs and replacement at Gwynedd Square and Walton Farm elementaries and the district Support Services Center.

Bids on the roofing projects were opened in late February, according to O’Donnell and Skrocki, and a total of twelve contractors submitted bids, with the total of the awarded contracts coming in $1,210,123 under prior estimates.

The school board has already passed a motion stating it intends that the 201718 budget keep any potential tax increase below the state’s Act 1 Index level of 2.5 percent, and O’Donnell said staff are preparing their department budgets

for that 2017-18 plan, with details to be discussed over the next several weeks.

“Department administrators will be presenting their department budgets at the next two Finance committee meetings,” O’Donnell said.

Those meetings will be held at 6:30 p.m. on March 27 and at 6 p.m. on April 6, both at the district’s Educational Services Center. O’Donnell said there’s one other number the board and public should keep in mind as budget talks proceed: a rapidly growing increase in expenses for retired employees, which has grown from just over $6 million in 2010-11 to $36.6 million in 2016-17, and projects to be over $40 million in 2017-18.

North Penn’s share of retirement expenses is calculated based on eligible payroll

amounts and uses a rate set by the state PSERS board annually, Skrocki said, referring to the Pennsylvania State Employees’ Retirement System. The 2017-18 estimate of $40 million is roughly eight percent higher than the 201617 amount of $36.6 million, and the PSERS expense as a share of the district’s budget has grown from less than three percent in 201011 to nearly 16 percent in 2017-18.

According to Skrocki’s presentation to the district Finance committee, early estimates are that keeping taxes at current levels for 2017-18 would produce a $14.6 million budget deficit, while raising taxes at the Act 1 level of 2.5 percent would create $4.2 million in new revenue and leave a $10.4 million deficit. As budget talks

proceed, staff plan to do a line by line review of all expenses and revenues, while developing five year projections of those expenses, and refining and updating data based on state and federal allocations, and labor agreements with district employees.

“Next year, we have to pay $40 million. I’d like everyone to think about that when we talk contracts,” O’Donnell said.

North Penn’s Finance committee next meets at 6:30 p.m. on March 27 and 6 p.m. on April 6, and the school board next meets at 7:30 p.m. on April 4. All of those meetings will be held at the district Educational Services Center, 401 E. Hancock St.; for more information or meeting agendas and materials visit www. NPenn.org or follow @ NPSD on Twitter.