Budget deficit may prove painful
The Saucon Valley School Board, which has been running meetings virtually through the Zoom application switched to a “webinar format,” which became necessary after the aborted May 26 meeting, which saw over 200 people try to attend.
The crowd, which included many teachers and other district employees attending in anticipation of discussion of necessary budgetary cuts, was too large for the regular application to contain and several board members were not able to join the “room,” necessitating the postponement and ultimate cancellation of the meeting.
Dr. Craig Butler addressed this topic and more in his opening superintendent’s report. He expressed his pride in the faculty for their recent work as they have “persevered through uncharted waters” and “met the challenge with success” and spoke of the anticipated continued disruption from Covid-19 as well as tentative state guidance for reopening schools in the fall. Butler then addressed the “devastating financial impact on the community and district” from Covid-19 and the district’s subsequent anticipated revenue deficits for this year and potentially for years to come. He said Covid-19 has had a “significant impact on the collection of property taxes and individual earned income tax revenue” and that the district expects “to incur significant costs associated with the reopening of school in the fall.”
According to Butler, they are expecting to have a budget deficit anywhere between $3 million, which is their “best case scenario” and $8.5 million. He said that the possibility of using the district’s fund balance to cover the deficit is ”not a long-term solution… regrettably, it is going to take reductions to the district budget in order to keep the district solvent moving into next year and beyond.”
Business Manager David Bonenberger echoed the budgetary concerns with a summary of the Finance Committee Meeting from May 13, also estimating about a $3 million shortfall for the 2020-21 school year. Board member Michael Karabin asked if Butler had any idea as to what cuts might need to be made, which Butler confirmed would be discussed at the following evening’s Finance Committee meeting.
Board member Bryan Eichfeld mentioned that 71 percent of the budget is earmarked for salaries and benefits and said, “we’re going to need some help from the employees” to make up for the shortfall. He pointed at the salary increases in the recently-approved teachers’ contract as something that may need to be revisited.
Bonenberger did mention that there are outstanding grants and other funding coming from the state that have yet to be officially accounted for, including the federal CARES Act as well as state assistance programs.
David Lloyd, an eighth grade math teacher who also lives in the district, joined the meeting during the public comment portion to express his concern that the board was too quick to suggest that employee salary cuts would be the best option to make up the shortfall. He said, “some of you spent the first 45 minutes or so of the meeting painting an absolute doom-like picture of the future.”
He criticized Eichfeld’s prior comment and countered by calling attention to the fact that the district has raised taxes only once in the last 11 years, and that the Fund Balance sits at $11 million. “The rainy day fund is there. It’s raining,” Lloyd said, adding, “if the doom and gloom is in fact the case, then you can start looking at other options.”
Several other teachers and district parents also joined to echo Lloyd’s concerns.
Supervisor of Campus Operations John McCabe shared an overview of Facilities and Operations with the board in a presentation. McCabe said the overview project began in October shortly after his hiring and was recently completed with the help of the Facilities Committee, which meets once a month. Opening the presentation, he started by saying, “the environmental health and safety of our students, teachers, administrators, employees and community is the most important thing with everything that we do, along with fiscal responsibility.” The department currently employs a total of 70 folks, along with two administrative assistants and has historically spent about $4.6 million per year, according to McCabe. The overview projected that there will be approximately $16 million in expenditures over the next 10 years total, with about $5 million of that allocated for projects categorized as either “Urgent” or “Important.” McCabe indicated that since the department is only allocated for about $5 million total over the next 10 years, there will need to be adjustments in both funding and expenditures, which will be even more difficult because of the budgetary impacts due to Covid-19.