Indiana Area School District financial outlook improves
The financial future of the Indiana Area School District is looking quite a bit better after Monday night.
For now, at least.
Due to a bond refinancing, the board will save nearly $200,000, while a provision in the state budget will save the district another $300,000 in pension contributions for 2010-11.
At Monday’s school board meeting, the board approved a resolution for the refunding of the 2005 series of general obligation bonds from the senior high gymnasium and fitness center project.
An auction on the remaining $5.1 million in debt from the project was held earlier that day, with UBS Financial Services emerging as the winning bidder. The district will pay an interest rate of about 3.1 percent through 2010. The district is expected to save about $196,000, with nearly $77,000 of that savings coming in the upcoming year.
When the board gave authorization to seek refinancing of the bonds in April, the target was for $75,000 in savings.
“It’s always nice to have good news,” consultant Gregg McLanahan of Public Financial Management told the board. “It’s even better to have great news, but this is fantastic news.”
Business manager Dale Kirsch said the plan will be to transfer the savings into the capital reserve, which has been the district’s custom in the past.
In addition, Kirsch told the board that the recently passed state budget included the expected subsidy increase of 2 percent, or about $180,000 for Indiana Area, as well as a decrease in pension contribution payments for all districts in 2010-11.
For the upcoming school year, districts in the state were scheduled to pay a contribution of 8.22 percent of their total salaries for the Pennsylvania Public School Employees Retirement System (PSERS). The rate was 4.78 percent for 2009-10, and it will now rise to only 5.76 percent for 2010-11, which Kirsch said would save Indiana Area about $300,000 for that year.
Still, the change doesn’t erase the potential PSERS crisis that has been a major discussion point among district officials for several years. Contribution rates are still scheduled to eventually rise to 30 percent, just more gradually.
“They haven’t passed the legislation to do anything about the crisis,” Kirsch said. “They just lowered what they were going to pay into it, so that still has to come.”
In addition, Kirsch said the state budget is balanced with federal money the state is hoping to receive, but it’s not a sure thing. not getting that federal money could lead the state to cut money from the subsidy increases.
Nonetheless, the financial news was mostly good for board members, who are facing the likelihood of major renovation projects in the near future.
“We have received some good financial news that might be able to relieve some of the pressure we might be feeling to try to be fiscally responsible,” said board member Alison Billon,
Director David Ferguson was also pleased with the news, and cited it as an example of why he believes the district should wait for the financial picture to clear up before it considers closing one of the district’s elementary schools.
Ferguson was one of three school board members to introduce his own school configuration option in addition to those presented by architects from L. Robert Kimball & Associates during the district-wide feasibility study. Ferguson’s proposal did not include closing an elementary school but instead sought to find savings through various means, including attrition and the proposed levy of a municipal services fees on Indiana University of Pennsylvania students.
“We’ve received several things that are to the good as far as the district’s finances near-term are concerned,” he said, “so again, that tells me that before the trigger is pulled on some other possibility, that we get a very clear picture on whether or not we are in some sort of financial crisis that would necessitate closing a building.”
Talk of a possible school closing took a back seat Monday as the board heard a presentation focused on moving the ninth grade to the senior high.
Kimball architect Rich O’Donald outlined what renovations would be recommended if the board elects to move the ninth grade.
In the Kimball proposal, several rooms would be renovated, a few would be switched to fill a different need, and seven classrooms would be added to one end of the building.
O’Donald said among the biggest concerns at the senior high is the small size of the science classrooms, especially three biology rooms.
He also said moving ninth grade to the senior high and switching to a three-period lunch schedule, which is the desire of the administration, would nearly fill the cafeteria to its maximum capacity. One potential solution would be to expand the cafeteria into what is now a math classroom.
A senior high renovation would also include the possibility of moving the television production studio, the computer-aided drafting and design area and the alternative education classes to different rooms.
In the Kimball plan, ninth-grade students would have most of their core classes in a “home base” area of the building.
O’Donald said renovation cost estimates would be available for the board’s next meeting, July 26.
The board is expected to vote on moving the ninth grade to the senior high and sixth grade to the junior high at the Aug. 9 meeting.
During the public comment period, district residents Matt Baumer, Josephine Cunning and Ken Sherwood each asked the board to further consider the options presented by three board members — Ferguson, Walter Schroth and Rob Werner.
Schroth’s option calls for all four elementary schools to remain open, but sections of the buildings would be “mothballed.” Werner’s plan calls for closing both borough elementary schools and building a new school at the site of Ben Franklin elementary.
Those plans were discussed during a portion of the special meeting in June, but the speakers believed those plans should receive more attention.
“Those three plans are quite serious plans, and I think they deserve to be considered,” Sherwood said. “I’m a little bit concerned how that consideration is going to fit into the timeline.”
Board President Diana Paccapaniccia said the panel will discuss the configuration plans further after a decision has been made on moving the sixth and ninth grades.
Jeff Raykes, representing the Indiana Borough Planning Commission, voiced his support for keeping both Indiana Borough elementary schools open.
“A lot of what we’ve done to date is to build and reinforce our neighborhoods,” he said, “and the schools are a very big part of that.”
At Monday’s meeting, the board also:
• Hired three special education teachers — Tara Pangonis (at a salary of $78,117), Kelli Stubbe ($57,767) and Andrew Weaver ($57,767) — and one elementary teacher, Carolyn Swartz ($55,467).
• Authorized attendance by elementary music teacher Jason Rummel at the International Conference on Narrative Inquiry in Music Education in Brisbane, Queensland, Australia, Nov. 24-27 at a cost to the district not to exceed $1,200 and $180 for a substitute. Rummel will be presenting at the conference.
• Approved bonus payments for administrators and the business manager of $200 per achieved goal, to a maximum of three per administrator for the duration of the Act 93 agreement.
• Employed Laura Wissinger as the assistant cheerleader coordinator at a salary of $1,411.07.
• Accepted the resignation of food service worker Kim Ricupero.
• Authorized payment to six nurses and four support staff who conducted sports physicals on June 19 at the per diem rate for nurses and the hourly rate for support staff.
• Granted a leave of absence to senior high math teacher Traci Sexton from Aug. 31 to Nov. 8.
• Appointed Billon, Paccapaniccia and Kathy Baker as voting delegates for the 2010 Pennsylvania School Boards Association Legislative Policy Council.
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