2017-18 budget close to balanced

Revenues higher than expected; $4.5 million deficit nearly closed

As the North Penn School Board prepares to spend the next several months finalizing its 201819 budget, good news has come in about the current year.

Director of Business Administration Steve Skrocki reported Monday that the wide budget deficit that appeared to be looming last year may now have narrowed.

“We entered the current fiscal year with a $4.5 million dollar budget deficit. Our projections are indicating, right now, that we’re going to be close to break-even,” he said.

“That’s a combination of bringing in more revenue than was budgeted, investment income has been very, very strong this year, real estate collection is strong, earned income tax collections are strong — all signs there’s an upwardmoving economy,” he said.

Last summer the district’s 2017-18 budget was approved with total revenues and expenses of roughly $252 million, a

1.99 percent tax increase, and that deficit of roughly $4.5 million, which staff anticipated making up by spending from district reserve funds. Skrocki told the school board, acting in their capacity as the board’s finance committee, this week that the picture has gotten considerably better, on both the revenue and expense sides.

“We are within one percent on expenditures, and we do plan to spend less money than budgeted,” Skrocki said.

“The trend is showing we’re going to come close

to even on the 2018 budget, which is about a $4.5 million positive, favorable to the school district. We’re really pleased with revenues, the way they’re coming in,” he said.

The financial picture could still change slightly depending on any personnel moves made between now and the end of the school year, Skrocki told the board, and finance staff do not anticipate any large losses or gains from any local real estate tax appeals.

“We don’t have any home run tax appeal settlements,

but nonetheless, we’re really pleased with the economy, and the earned income tax and the real estate tax revenues,” he said.

Board member Ed Diasio asked how North Penn’s returns on investment income over the past year compare with other neighboring school districts, and Skrocki said he had no specific figures, but has aggressively shopped for higher rates to store certain reserve funds for the short term.

“When we get one bank up to a rate, we call the next bank saying ‘We’re

getting 1.5 (percent) from this bank, you need to up yours to 1.5.’ It’s as simple as that,” Skrocki said.

Interest rates could be raised by the Federal Reserve as many as three times in 2018, so investment income could climb even higher, Skrocki said, and as of Monday the 201718 budget had already gained roughly $614,000 more in investment income revenue over the prior year.

“The interest rate environment isn’t that much better than last year, but we’re just being that much more aggressive in negotiating,” he said.

“That $614,000 was generated by negotiations: if we sat on our hands, that would not be money we would have been able to generate,” Skrocki said.