NORTH PENN, Pa. - A potential 2.1 percent tax increase by the North Penn School District could hit taxpayers’ wallets next year in order to cover a $4.2 million deficit in the budget.

To a homeowner with an abode assessed at $150,000 that means an additional $72 in taxes next year, if passed by the school board.

A 2.1 percent increase will generate $3.265 million in new revenues, with a new millage rate in Montgomery County of 23.1819 mills. The current millage rate in the district for Montgomery County residents is 22.7049, and 122.7997 for Bucks County residents. A homeowner’s real estate tax rate is calculated by taking the millage rate and multiplying it by the property assessment.

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Director of Business Administration Stephen Skrocki said at last week’s school board meeting the proposed budget for 2015 shows $227.2 million in expenses, a $12.3 million, or 5.7 percent, increase, over 2014 expenses. Medical benefits alone will boost by 6.9 percent next year and retirement pensions are estimated at $4.775 million. Revenues are proposed in the preliminary budget at $223 million.

The Act 1 Law of 2006 established an index as to the maximum millage increase a district may levy each year. In 2008-2010, North Penn the maximum rate under Act 1 was as high as 4 percent.

“The Act 1 index at 2.1 percent doesn’t come anywhere close in covering a total expenditure increase,” he said.

Skrocki said 2.1 percent is the maximum tax increase allowed next year under Act 1 without using the exceptions of retirement ($2.1 million), special education ($394,000), electoral debt referendum or grandfathered debt.

However, North Penn has taken steps to apply for approval to use two of those exceptions, in case the board wanted to raise the tax increase by as much as 3.7 percent. He said if the board chose to use the exceptions, 3.7 percent would be the maximum permitted by law.

“North Penn has two exceptions under by which the district would be eligible—the retirement and special education exceptions,” Skrocki said. “Now, we did go ahead and apply for those exceptions and we did get approval from the Pennsylvania Department of Education for those exceptions, but that does not mean the board needs to utilizes those exceptions and we are not recommending use of those exceptions.”

New Proposed Personnel

North Penn is estimated to spend $665,029 in new personnel costs in 2015: $511,561 in salaries and $153,468 in benefits.

New expected hires include a Pennsylvania Information Management System Specialist at $60,000; a benefits clerk at $40,000; a boost in elementary secretary wages to $75,836; a special education supervisor at $105,000; special education teachers at $140,238; and a Gifted position at $45,746.

PIMS is the collection of state and federal education statistics that must follow student-level data reporting requirements.

“PIMS expectations have mushroomed … we do 27 submissions a year, and each one has tens of thousands of records and hundreds of fields to track,” Assistant Superintendent Dr. Diane Holben said. “We find our technology staff are spending an inordinate amount of time doing data aggregation … We could lose thousands of thousands of dollars if tracking isn’t done correctly.”

In regard to the other personnel, Holben said there is a changing nature of a school secretary position. Building secretaries do not work full time, but principal secretaries do, she said. The recommendation is to bring those part-time building secretaries up to full-time 8-hour shifts.

“It does not push them into benefits eligibility because they are already all benefit eligible. It’s a differential in salary,” she said.

The special education supervisor role fills a vacancy and takes the caseloads off the manager of special education, Holben said. The position had previously been eliminated. The special education and gifted teacher positions will cover those students enrolled in the early intervention programs and help cap the caseloads for gifted instructors, she said.

Charter School Funding

The preliminary budget also contains $2.1 million to fund two charter schools in the district should appeals by two charter school applicants be approved by the state Charter Appeals Board. North Penn cannot contest the appeal approval by the state appeals board.

“Based on some appeals and delays in the process, we are now scaling back that figure in half, thinking that the earliest the charter schools could open is mid-year, mid-January,” Skrocki said. “We have cut budget from $4.2 million to $2.1 million.”

Superintendent Dr. Curt Dietrich said both charter school applications are under active appeal.

“One is waiting for their hearing in Harrisburg. The other group had an initial application denied and they have had difficulty getting their petition certified in the county court. However, they filed a new petition for a new hearing. They are on track also to appear before the charter appeal board,” Dietrich said.

A $10 million bank-qualified bond issue to be requested at the June is proposed to cover renovations to Hatfield Elementary School in 2014. Another $10 million bond will be recommended in 2015, totaling $20 million in bonds for renovations.

“That project is estimated at $19.4 million,” he said.

Skrocki also recommended the board use $500,000 in Pennsylvania School Employees’ Retirement System stabilization funds to cover the deficit, as well as reducing other costs. Over the years, when expenses were under revenues, money was set aside in a stabilization fund to withdrawal in times of pension crises.

“During the next couple of weeks, we’re going to see what’s coming out of Harrisburg, and we’re going to see what we’re seeing in our earned income tax and the trends of our transfer tax,” Dietrich said.