Derry Area School District is expected to hold the line on property taxes next school year.
At Thursday’s school board work session, Derry Area Administrative Assistant for Business Affairs Joe Koluder presented to school directors the district’s tentative 2021-22 budget, which calls for no increase in property taxes.
Keeping taxes steady would maintain the tax rate at 91.8 mills, according to budget figures. School directors last year approved a final budget with a 2-mill increase in property taxes. Before that, the board moved forward a 2-mill increase in 2019-20, a 5-mill tax increase in 2018-19 and a 2.8-mill bump in 2017-18.
Each mill is projected to generate $136,361 in 2021-22, compared to $135,258 for the current fiscal school year.
A primary reason for the decision not to raise taxes is the federal money coming into the district. Derry Area, like other school districts across the country, will receive federal Coronavirus Response and Relief Supplemental Appropriations Act Elementary and Secondary School Emergency Relief Fund money, also known as ESSER II, which Congress passed in December.
“I’m glad we are able to have a zero-mill tax increase,” Koluder told the school board. “It’s the result of a lot of hard work and the ESSER funding driving it.”
Koluder said ESSERS II funding will be part of the next two budgets beginning in the 2021-22 school year, while the district is expected to receive additional ESSERS III money in the future. He estimated total ESSERS II funding will be about $2.1 million and ESSERS III funding will be more than $4 million.
“There are some restrictions on how we use those monies,” he said.
“We have to be careful how we use that money, because by September of 2024, we’re no longer going to have that federal money and we don’t want to create a cliff that we have a big hole in our budget to make up.”
Added Superintendent Eric Curry: “We have to be very prudent with not utilizing those funds to fund long-term expenses, because these are only short-term funds. These funds also have limitations as to what we can utilize them for.”
Some of the federal money to be used over the next two years, Koluder noted, will be utilized because of an anticipated decline in local tax collections. The funding will also pay for increase cyber charter school costs and one-time cost items such as Chromebooks for kindergarten and first-grade students.
According to budget projections, Derry Area is expected to receive $20.3 million in funding from state sources for the 2021-22 school year, the same amount as the current school year. Basic education and special education are the two main subsidies the district receives from the state.
The tentative budget also shows an increase — 17.9% — in federal funding. Derry Area is projected to receive $1.7 million at the federal level for the coming school year compared to more than $1.4 million in 2020-21. Also projected is a slight bump from local sources at 0.9%.
Koluder projects a $105,744 increase, or 0.5%, in salaries and benefits for the upcoming school year. The tentative budget also calls for additional spending in special education (an increase of $32,045) and plant operations ($57,595), along with a decrease in transportation at $5,045.
To cut costs over the past decade, the district has eliminated staff through attrition without eliminating programs. According to district figures, Derry Area will have eliminated 31.5 teaching positions and three administrative positions between the 2010-11 and 2020-21 school years.
According to Thursday’s budget presentation, the district is planning for the retirement of five teachers and the elimination of five teaching positions in 2021-22.
Derry Area Education Association (DAEA) president Mike Moximchalk said the five teachers that won’t be replaced include three learning support teachers, a music teacher and a secondary math teacher. He asked that administrators reconsider the elimination of the positions, noting these teachers have made strong connections with students over the years and that learning support students are considered among the “most vulnerable” within the district.
Curry said the district is exploring ways to utilize additional, short-term staff funded through ESSERS funds to assist students with learning needs.
If Derry Area were to maintain those five teaching positions, Curry added, the district’s total salary increases would be more than $600,000 as opposed to the estimated $105,000-plus.
Another issue is the district’s declining enrollment, as Koluder said Derry Area has 115 fewer students in the 2020-21 school year compared to 2018-19. This year’s graduation class is roughly 150 students while Curry noted that 94 students are currently enrolled in kindergarten, with each of the past three kindergarten classes under 110 students.
Elsewhere in the tentative budget, district’s debt service is projected to be $76,400 less, totaling just over $2.6 million, compared to the current fiscal school year.
The district’s fund balance is projected to be at about $4.6 million for the upcoming school year, a total that represents a $42,046 decrease from 2020-21. The fund balance includes items such as budgetary reserve, textbooks, cyber/charter school funding, equipment, repairs, capital improvements, supplies, fees, contracted services and professional services.
Koluder said the district’s fund balance has moved in a more positive direction the past few years.
“About three years ago, we were using fund balance at a pretty good clip and we were concerned we were using all our fund balance over the next few years,” he said. “But for many reasons, the last three years, with two being the pandemic year, we’ve turned that tide a little bit.”
Koluder noted in the past 25 years, Derry Area increased taxes a total of 34.4 mills, an average increase of 1.38 mills over that period. During that same stretch, the average increases among Westmoreland County schools was 40.16 mills.
The district’s tentative budget shows $38.4 million in expenditures, up from $38.3 million in 2020-21. Listed expenditures include $22.1 million for salaries and benefits, $5.5 million for special education, $2.3 million for transportation, $1.1 million for plant operations and $2.6 million for debt service, along with the fund balance.
The school board must pass a tentative budget by the end of May and a final spending plan by June 30.
Thursday’s budget presentation was the last for Koluder, who is retiring at the end of the school year.
“Your many years of service are much appreciated,” Curry said.
Added school board president David Krinock, who praised Koluder along with district administration and staff for their efforts with the annual spending plan: “I’ve sat through a lot of your budget presentations and you kind of made this one seem easy with no tax hike and federal monies, but we on the board know it was not easy. I’d like to thank you for what I’ve seen you do for our district.”
In other business, the board approved:
- Request for an extended leave for employee No. 541, as per the custodial/maintenance collective bargaining agreement, retroactive to April 19;
- To employ Caitlin Wightman as confidential accounts payable secretary, effective July 1, at a salary of $42,500 with all other benefits per the confidential secretary’s agreement;
- Memorandum of understanding between Westmoreland Community Action Head Start and the district for the 2020-21 school year;
- Hearing waiver memorandum in student discipline incident No. 237, dated April 23;
- Continued offering of a credit recovery program through Edmentum software, utilizing ESSERS III funds;
- Two four-week summer school recovery sessions for secondary students under the following schedule, utilizing ESSERS III funds: Session 1, June 7 through July 5 and Session 2, July 12 through Aug. 6;
- The board held an executive session before the meeting for personnel and legal issues.