The Salisbury Township School Board held a finance committee meeting Oct. 4. Topics of discussion included funding for both the middle school roof replacement project and the water infiltration mitigation project at the elementary school.

Chief Financial Officer Dawn Nickischer presented the board with two financing options for funding the roof replacement and water mitigation projects.

Option 1 would entail financing the $2.5 million roof project only or option 2 would finance both projects for a total cost of $3.5 million.

Nickischer explained her plan for repayment of the debt which includes $213,000 in extra state funding due in part to a conservative estimate of state money appropriated in this year’s governor’s budget, additional growth from local revenue and investing in CDs at 3-, 6- and 12-month intervals to generate interest.

Nickischer pointed out that while the new debt appears to be a low risk for the district, unforeseen events or expenses coupled with changes in federal and state funding can complicate matters in the future.

The board seemed inclined to borrow the $3.5 million to finance both projects which will be voted on at the November school board meeting allowing for Public Financial Management to write up a proposal and a timeline for the debt service.

The next topic of discussion centered around the Act I Index which is the amount a district can increase millages each year without putting the tax increase before a voter referendum. This percentage is recalculated every year based on the Pennsylvania statewide average wage increase and the federal employment cost index.

When the new increase is calculated all districts have the option of raising taxes up to the specified percentage.

The new Act I Index is 5.3% up from 4.1% in the previous year. Nickischer noted this figure is considered the peak and percentages most likely will go down from this point.

In her presentation she displayed a table depicting the revenue that could be generated at the level of 5.3% and highlighted the lost revenue if the board were to raise taxes at levels of 4%, 3.5% and 3%. Lost revenues ranged from $692,000 to $391,000. She also showed the compounding effect of each tax rate percentage over a 3-year period which delineates a loss in revenue from $3.1 to $1.2 million.

Director Joseph Gnall asked Nickischer to calculate what the average cost increase would be for a household at each percentage rate so the impact on residents can be factored into the board’s decision.

Director Thomas Spinner called for the board to take a look at expenses and revenue and posed the question, “what percentage rate do we need to raise taxes versus how much can we raise taxes.”

Superintendent Lynn Fuini-Hetton reminded the board the purpose of the discussion is to relay new information with the board and be transparent with the community.

The auditing process is continuing and appears to be on track for completion by December. As part of the process auditors will soon be coming to the district to complete their field work.

In a year-to-date analysis, Nickischer noted revenues for September came in at $43,837,056 which is $2,445,530 higher than this time last year due to a sizable tax check. Revenue should even out next month.

Expenditures were at $44,087,056 which is $2,340,530 higher than last year which she attributed to the timing of bill payments.

Cash and investments are trending toward last year’s numbers after an August payout to McClure Company for the GESA project at the middle school. The remaining debt owed to McClure totals approximately $800,000 which will be paid in the near future.

Board President Christopher Freas posed the idea of combining the operations committee meeting and the finance committee meeting into one meeting. This change would affect next year’s calendar and will be voted on at the December reorganization meeting.

Nickischer closed out the meeting with her monthly finance workshop designed to broaden each board member’s knowledge of the Pennsylvania Department of Education chart of accounts.

This month’s topic was focused on the functions of expenditures as it applies to the area of instruction for both regular and special programs.

The next meeting of the operations and finance committee will be held 7 p.m. Nov. 8 in the administration building, 1400 Salisbury Road, Allentown.

The next regular school board meeting will be held 7 p.m. Oct. 18 at Lehigh Career & Technical Institute, 4500 Education Park Drive, Schnecksville.