As the school district enters the final two months of budget season, the East Penn Board of School Directors received a presentation April 27 of the administration's recent changes to the budget. The changes have resulted in a lower figure for the tax increase than was initially expected when the proposed preliminary budget came out, dropping to 3.78 percent.

Superintendent Michael Schilder emphasized to the board cuts had been made very close to the margin and further decreases in expenditures would have to start coming from personnel and programs.

Revenue increases, on the other hand, may still be expected and some increases may yet be realized.

One of the more controversial items affecting the most recent adjustments include the acceptance of the $326,380 donation from the developer of the Hamilton Crossings, referred to as the TIF donation, based on East Penn's involvement with the tax increment financing district of the project.

Another item is the use of $250,000 from the committed fund balance. These two together are considered one-time sources of revenue and generally might not be used toward lowering tax rates as is being proposed this year for that reason.

Schilder, along with Business Manager Deb Surdoval, argued use of these funds is justified at this time, in part because of a rise in the district's Public School Employees' Retirement System obligation. This year is "one of the worst," Surdoval said, for retirement rate, being at just under 26 percent.

Schilder reported the budget had been reduced in two levels, the first with a reduction of $1.2 million in appropriations, largely through the removal of additional teaching positions and retirement benefits, reduction in medical benefits, savings from the copier contract and debt refinancing savings. A further $852,339 had been found in revenue, including state property tax allocation, real estate transfer tax and basic education funding.

In the second level, leading up to the current state of affairs, appropriations decreased another $585,350, in large part thanks to reduction in the central office and building budgets. Schilder says he asked each principal to cut the building budget by 10 percent. That resource for savings is tapped out, Schilder said. "They've done all they can [to cut down] in those areas."

At $6,066,390, the budgetary reserve is also left slightly lower than the goal of five percent, according to Surdoval, though the administration will continue working to get that number up.

Board Director Charles Ballard pointed out the budget is currently presented with a built-in structural deficit. But the administration is "comfortable" with the knowledge further revenue is expected for next year from new construction. "This is the year to do it," Schilder said. He expressed confidence in the expected revenue increase next year and stressed to the board the difficulty of getting the numbers even to where they are now.

Ballard, however, remained hesitant to build in a structural deficit in "these uncertain economic times."

Dr. Kevin Bacher suggested the school resource officer, discussed in detail at the board's last meeting, be tabled for another time in consideration of the added expense – $100,000 to the budget.

In addition to these considerations, the administration will look into producing a more detailed report on the cuts made in each building budget. Schilder says this would amount to small decreases in each of many line items. The administration will also come up with a better estimate of projected revenue.

Board Chair Alan Earnshaw, while noting his and the other directors' concerns with the structural deficit, expressed his confidence in the administration to provide a conservative budget, and noted even in the recent past, expenditures have been lower than predicted and revenues often higher than the budged allowed.

In other business, the board approved the award of a roof replacement contract for Area 12 of Emmaus High School to C & D Waterproofing Corp in the amount of $542,940, several thousand under what was budgeted, as Earnshaw noted.

The board accepted $32,483.62 in funds from the state Attorney General's office to set up a memorial scholarship fund in the name of Sgt. Ashly Lynn Moyer.

The subject of paperless board meetings, raised previously by Rebecca Heid, continues to be a topic for discussion with no action. By board consensus, the administration will look into what costs and potential cost savings might look like should the board "go paperless," including specifically how it would affect board meetings with documents like the budget packet customarily printed for board members, and the agenda with its attachments which is printed and made available for the public at meetings.