The Bedford Area School District administrators will look to trim a nearly $1.6 million projected budget deficit for the 2019-20 school year.
Business manager Christina Robosson presented a preliminary budget plan that included $30.67 million in expenditures and $29 million in revenues during the district school board meeting Tuesday night.
Superintendent Allen Sell said the administration will look to reduce the deficit prior to the board’s vote next month, but said the district typically operates with a projected deficit in order to give itself spending authority during the year.
“If we can get it to around a million dollars, we’re in good shape,” he said.
This past school year the district budgeted a $1.2 million deficit. Robosson told the board that the district should be close to breaking even for the year.
The district finished the 2017-18 year with a $45,000 deficit, a $640,000 surplus in 2016-17, and a $42,000 deficit in 2015-16.
Sell said the district budgets high for projected expenses and is conservative with its revenue projections.
Robosson told the board she doesn’t anticipate the need of a tax increase at this time, but said the budget is still being worked out.
The millage rate in the district is 9.424. The allowable tax increase is 2.9 percent, which would take the rate to 9.697 and would provide about $348,000 in gross additional revenue.
Robosson projected about $9.2 million in property tax collections for the year — about 94 percent of the net property tax levy.
Sell said there’s potential for a portion of the projected deficit to be cut through health care costs. He said the district’s health insurance consortium, which includes districts in Bedford and Somerset counties, will vote later this month on whether to reinvest some of its growing fund balance to reduce costs.
“There’s a proposal to take some of the fund balance in the consortium and apply that by formula to everybody’s health care costs next year,” Sell said.
Robosson said the district is projected to have an 8.85 percent increase in health insurance costs, mfrom $2.76 million to $3.1 million.
“I believe that number will go down,” Robosson said.
Sell said the number would drop to about a 2 percent increase if the fund balance is reinvested. He said the consortium’s executive committee has recommended the reinvestment.
About $11 million of the budget is devoted to salaries, while $8.4 million is devoted to benefits.
Other significant expenses listed in the budget include charter school tuition costs, which Robosson projected at $2.35 million. That money covers tuition costs for about 160 students in the HOPE for Hyndman Charter School and online charter schools.
Sell said retirement costs also have continued to rise, from 33.43 percent to 34.29 percent in 2019-20. The cost is projected to increase from $3.6 million to $3.75 million.
The district’s general fund balance as of June 30 was $4.2 million. It’s capital reserve fund is at $2.6 million.
The district projects to receive about $7.7 million through the state’s basic education subsidy, about $330,000 in a Ready to Learn Block Grant, and about $3.5 million in other state revenue. Other local revenue sources include $1.56 million from earned income taxes and $650,000 in gaming funds.