BOARD FINANCE COMMITTEE MEETING MINUTES

JANUARY 10, 2005

 

Members of the Board Finance Committee, Chairperson Charlene Koch together with board members William Heske, Loretta Leeson, Joseph Craig, Dr. Haytmanek, Margaret Williams, Julie Venanzi and Diane Rowe met with Superintendent Dr. Joseph Lewis, former Director of Business Affairs Stanley J. Majewski, Jr., Associate Superintendent Michele Kostem, Interim Director of Business Affairs Kathleen McCann, and Acting Board Secretary Ann Behers, in Superintendent’s Conference Room A. Also in attendance was Precious Petty from the Express Times and Genevieve Marshall from the Morning Call.

 

OPEN FORUM – No items for discussion.

2005-2006 BUDGET GUIDELINES – Dr. Lewis presented the 2005-2006 budget guidelines. Building allocations represent an increase of 3 percent. The proposed budget will not include an additional $1,000 per school for library books. Budget forms will be distributed at the end of the week.

 

An “On Demand Supply System” is in the process of being established. Mr. Majewski explained that a school may be purchasing in excess of its current needs and maintaining an inventory is expensive. The system will allow for purchases on “an as needed basis.” Mrs. Behers will over see this process in Mr. Majewski’s absence. The process allows for discount buying and purchases will be delivered directly to the appropriate building.

 

CONCESSION STAND REPORT - The net profit from the districts’ stadium concession stands totaled $20,236.12. This amount will be disbursed as follows: $12,141.68 each to Liberty and Freedom Booster Clubs and the remaining $8,094.44 to the district.

 

MAINTENANCE VEHICLE PURCHASE – Mr. Majewski stated that the district does not have a replacement schedule for maintenance vehicles and, as a result, many of the vehicles, especially snow removal vehicles, have become unreliable. The Board of School Directors has allotted $125,000 from 2001 bond funds to be used for vehicle purchases and will approve the purchase of four vehicles at the January17, 2005 board meeting.

 

TAX COLLECTOR COMPENSATION – An increase in tax collector compensation was presented for approval. Once every four years tax collectors are elected and the district sets the rate of compensation. Mr. Majewski suggested a 3 percent compounding rate for the previous four years be used to calculate the future compensation paid.

 

ACT 72 UPDATE - Dr. Lewis reported that he, Mrs. Koch, Mr. Haytmanek, Mrs. Behers and Ms. McCann attended a presentation given by Dave Sallack on January 6 regarding Act 72. Act 72 is not a tax reduction but rather a tax shift. Taxpayers are unaware of all the complications with the acceptance of Act 72 and are of the belief that a reduction in their real estate taxes will occur.

 

Dr. Lewis suggests that the district form an Act 72 community advisory committee which would be comprised of representatives of our stakeholder groups from the community, administrators, board members, parents, teachers, local taxpayers, both retired and employed, as well as senior citizens.

 

Mr. Sallack from Public Financial Management, Inc. has agreed to be involved with the task force and public meetings as his schedule will allow. Much discussion followed.

 

The committee agreed that a task force should be established with various community representatives and gave Dr. Lewis permission to proceed with the formation of an advisory committee.

 

ANALYSIS OF FINANCIAL POSITION – Mr. Majewski presented a financial analysis for the district. Approximately 80 percent of the districts’ revenue is funded by local sources such as Real Estate Taxes, Per Capita Taxes and Act 511 Taxes. The only tax rate that can be increased, (as a result of statutory limits), is the Real Estate Tax.

 

Growth within the five municipalities has been steady for the last four years. Anticipated growth within Bethlehem and Hanover Townships is expected to continue, but may begin to slow within the coming years.

The City of Bethlehem and the Borough of Freemansburg had little assessment growth during the past four years; however, it is hopeful that growth in the City will accelerate in the near future.

 

The real estate tax base with the district is positive and expected to generate additional revenue in the future.

 

Earned Income Tax has consistently increased at a rate of 3.77 percent and should continue at a similar pace. This should generate an additional $300,000 per year.

 

Other local taxes should continue with modest growth with a net gain of about $200,000 annually. Total revenue growth, excluding tax increases, should be between $2,700,000 and $300,000 per year.

Expenditures for salaries and wages will continue to increase by 5-5.5 percent over the next several years resulting in an additional cost of $3,700,000 to $4,500,000 to the district.

 

 

 

 

 

In addition, employe benefits will increase as salaries and wages increase. Expect an annual increase of $150,000. Retirement costs will not only be affected by salary and wage increases but also by employer contribution rate increases, which combined will require an additional $100,000-$150,000 annually.

 

Debt Service payments will increase by $6,500,000 over the next several years resulting in costs of $2,000,000 annually. In addition, equipment costs, capital improvements, and capital projects will require additional funds.

 

Mr. Majewski suggested using some of the district’s fund balance to moderate millage increases while advancing a cost containment plan. He further suggested taking a multiple year approach to budget planning.

 

The meeting adjourned at 9:30 p.m.

 

Minutes prepared by __________________________________________

                                    Adele C. Embardino, Confidential Secretary to the

                                    Director of Business Affairs/Board Secretary