WPCNR SCHOOL DAYS. By John F. Bailey. January 10, 2008: The Board of Education got its first look at Assistant Superintendent for Business Fred Seiler’s Preliminary Budget of 2007-2008 expenses which topped out at $182.2 Million (a 9.8% increase – including projected salaries).

Superintendent of Schools Timothy Connors remarked to the television audience that since The CitizeNetReporter was present and would probably write a story, that it should be pointed out that this figure was expected to and may go down to only a 5% increase or $174 Million.

The School Budget is on track to top the $200 Million mark in 2008-2009, and definitely by 2009-2010, even at a 5% rate of growth.

The Major Increase is in "Other Expenses," and $8 Million of that is in a one time payment of $8 Million in new certiorari refunds expected in 2007-2008. Seiler notes that if the district bonds that amount the budget could dip to $175 Million. Photo, WPCNR News

The pattern duplicates the Preliminary Budget of last year which came in at $15 Million over 2005-2006 when it checked in at over $169 Million and was trimmed to $165.8M.  The 2007-2008 Preliminary Budget is coming in $16 million over the present budget ($165.9M).

Projected into the future, at a flat 10% a year increase the budget will top $200 Million in 2008-2009 two years from now – barring any new programs and new capital construction. If the school district trims the increase in expenditures to 5% a year the $200 Million threshold will be breached in 2009-2010.

An estimate of the tax rate is not possible because the amount of assessibles in the city has not been determined yet. Decline in assessibles has contributed to school district and city budget woes the last few years.

To Bond for Certioraris or Not to Bond.

Seiler said that the main driver of the budget was his proposed strategy of paying an expected $8 Million certiorari bill in 07-08 out of the budget instead of bonding for the expected refund as the district is doing in the current budget.

Seiler told WPCNR Wednesday that if the Board of Education changes its mind and decides they would bond for the $8 Million (or possibly more, Seiler said), that the budget would drop from $182.2 Million to about $175M.  The Seiler strategy of paying certioraris out of pocket instead of pushing them out over five years echoes a recommendation of Richard Hecht in regard to the bonding of the Capital Project, in which he recommended paying debt off sooner rather than later.

On the matter of District Salaries, Seiler is projecting an increase of 3.2% over the entire district. Seiler said the 3.2% ($96 Million figure ballpark) does take into account expected teacher contract increases. Seiler said that it should not be taken to mean that teacher salaries would be held to a 3.2% increase. Seiler reports negotiations will begin in earnest in two months, but he expected the total salaries in the district not to increase more than the 3.2%.

Debt service increase Projected at 30.26%

The Preliminary Budget, (not shown on projection slides to the audience), shows the Debt Service increasing from $5.9 Million to $7.7 Million.

Seiler said that includes the new bonding for  $8 Million in certioraris in the 06-07 budget plus $1.7 Million in debt service expected for the first year of the Capital Project (Athletic Fields and High School Renovations). 

Seiler said that in 2008-2009, another $1.7 Million would come on board for the second portion of the $66 Million Bond, followed by a third $1.7 Million or more debt service increase in 2009-2010 when the third $20 Million chunk of the bond is planned to be floated. That is, assuming 5% interest rates and the present School District Bond Rating.  

Seiler noted to the audience that the Board of Education could choose to ease the impact on the year-to-year budget by opting to bond the new $8 Million in Certiorari expected by the School District in the year 2007-2008. That would increase the debt service slightly, while taking $8 Million out of the “Other Expenses” budget.

Seiler said he expected Utilities to decrease 27% because original projections expected them to be higher, and there would be less payments for tuition (sending students out of district)

Transportation is going to increase 9.54%. The Board voted an additional $164,000 for Transportation this evening to provide for Middle School busing.

An estimate of revenues was not provided.