Board to weigh Lehigh school financing
Two options are under consideration to finance the $34.2 million Lehigh Elementary School project.
A vote on the options is expected to be on the agenda of the next Northampton Area School District Board of Education meeting, 6:30 p.m. April 9.
Also expected to be on the April 9 meeting agenda is an update on the 2018-19 district budget by NASD Superintendent of Schools Joseph S. Kovalchik and NASD Business Administrator Terry Leh.
NASD school directors heard a presentation by Jamie Doyle, managing director, PFM Financial Advisors LLC, the district’s financial consulting firm, on financing the new school along Blue Mountain Drive in Lehigh Township during the March 26 meeting.
The options Doyle presented for financing Lehigh Elementary are:
Option one: 0.93-mill tax increase over four years with $27,415,535 million in interest
Option two: 1.94-mills tax increase over four years with $16,347,400 million in interest
After the board meeting, Leh said he would prepare a business information sheet for school directors to consider for the April 9 meeting.
The NASD administration has included $400,000, or the equivalent of about 0.38 mill, toward the Lehigh Elementary project financing in the proposed 2018-19 district budget.
According to Doyle, just under $10 million, or $9,995,000 annually, over three fiscal years, plus a lesser amount for a fourth year, would be raised through a bond offering.
The bond would be offered in April, with interest locked in May, and settlement 30 to 35 days after that, Doyle said.
“This plan is very similar to your last financing plan. It has a lot of the same strategies,” Doyle explained.
Doyle told school directors and administrators that even if option one is chosen for the first year of the financing, it could be changed to option two if and when district tax revenue increases.
“In other words, you can switch back and forth?” NASD School Board President David Gogel asked.
“Yes,” Doyle replied.
“We could be expecting additional revenue of projects already approved,” Kovalchik said, referring to tax revenue from pending commercial development in the district. “It’s something to consider when we choose the options.”
After the meeting, Kovalchik offered a preview of the April 9 board meeting.
“At our next board meeting, we’re going to provide the board with an update on the 2018-19 budget. Our goal is to reduce the budget from our presentation in January from that 3.9-percent (tax increase). We’re going to provide the board with six different options to consider,” Kovalchik said.
Among areas under consideration for reducing expenditures in the budget are school building supplies, equipment and technology.
An increase in revenue is also expected to be a factor.
The NASD 2018-19 preliminary general fund budget of $107.5 million has a $6 million deficit to be balanced with $3.8 million from the district fund balance and an increase in property taxes of 3.9 percent.
Kovalchik and Leh presented the budget to the NASD board at a Jan. 10 meeting.
In the preliminary budget, millage would increase 2.06 mills from 52.77 to 54.83 mills, a 3.90-percent increase, which would exceed the state-mandated 2.9-percent increase allowable for NASD.
Based on the 2017 average NASD assessment of $58,223.43 and a 2017 tax bill of $3,072.45, the 2018 tax bill would increase to $3,192.39, or $119.94 annually, $9.99 monthly and $2.31 weekly.
The preliminary budget has expenditures of $107,532,563 and revenue of $101,481,113 for a deficit of $6,051,450.
NASD school directors voted 8-1 at the Jan. 22 meeting to approve the preliminary budget for 2018-19, with a general fund of $107,532,563, athletic fund of $219,125 and food service fund of $2,446,795.
Also at the March 26 meeting, Robert J. Steckel, Northampton Area High School principal, was promoted to the position of NASD assistant superintendent, effective July 1, at a salary of $121,015. Steckel succeeds NASD Assistant Superintendent Jeanette Gilliland, who is retiring.
Steckel is in his 12th year with NASD. He was head NAHS head football coach for five years when he also taught social studies. Steckel was NAHS principal for two-and-a-half years. He previously taught social studies for five years in the Parkland School District. Steckel and his wife, Janice, live with their three daughters, ages, 7, 5 and 3, in North Whitehall Township.