The Fox Chapel Area School Board adopted the 2023-2024 final budget at its regular business meeting on June 12, 2023.
Total Revenues $114,667,200
Total Expenditures $115,373,219
Total Net Change $ -706,019
The district plans to balance the budget via a drawdown from the fund balance.
The 2023-2024 final budget reflects an increase of 1.5% to the millage rate, which will go from 20.4288 to 20.7352. The increase in millage is expected to add more than $1 million in revenue each year. The millage increase falls below the 4.1% Act 1 index increase allowed by the state. Each mill generates approximately $3.7 million for the school district.
The budget includes annual increases in tuition outplacement costs (4.5%) and rising medical (14%), dental (3%), and vision (3%) insurance premiums for staff. It also includes approximately $622,000 in planned ESSER (Elementary and Secondary School Emergency Relief Fund) federal allocations. Plans for these funds include the purchase of textbooks, summer learning initiatives, after-school programs, reading and math intervention programs, and student and staff support services. ESSER funds must be spent by September 30, 2024.
The 2023-2024 budget also includes a transfer of $2.5 million into a capital reserve fund to be put toward the school board’s Projects and Planning Committee’s recommended multiphase Capital Projects Plan. Projects in the current phase of that plan include heating, ventilating, and air conditioning upgrades at Hartwood Elementary School; an indoor lighting project at Hartwood; and turf replacement on the baseball, softball, and multipurpose fields at the high school.
The 2023-2024 budget reflects costs of more than $17 million for the Public School Employees’ Retirement System (PSERS) employer contribution. This accounts for 15% of the overall budget. For 2023-2024, the PSERS board set an unprecedented decrease in contribution rates. The 2023-2024 employer contribution rate of 34% is a decrease from 35.26% in 2022-2023. Costs, however, are projected to increase again within two years. The state reimburses the school district 50% of the PSERS contribution, and that is reflected in the revenues section of the final budget.
Gaming Funds Distribution
On May 2, 2023, the Pennsylvania Department of Education notified the Fox Chapel Area School District that the district’s share of gaming funds will total $1,850,491.31. The method of distributing these funds, as prescribed by Act 1, the Taxpayer Relief Act, will be via the implementation of the homestead exclusion. Under this provision, any property in the school district that was approved by Allegheny County as a homestead will have the lesser of its taxable value, or an estimated $11,480 of its taxable value, excluded for the purpose of calculating school district real estate taxes for the 2023 tax year. The owners of the 7,798* approved homestead properties in the district will receive up to the equivalent of a $238.04 reduction in their property taxes. Property owners who currently do not have an approved homestead exclusion will have the opportunity to apply again when the district sends out letters to those homeowners in December 2023.
*Allegheny County has certified that there are 7,798 approved homestead properties in the Fox Chapel Area School District. If that number is adjusted by the county to include fewer or more properties, it could affect the amount of the final reduction.
The Fox Chapel Area School Board Projects and Planning Committee recommended and approved a multiphase Capital Projects Plan, which is expected to cost upward of $25.5 million during the next six to seven years. The 2023-2024 budget includes a transfer of $2.5 million into a capital reserve fund to be put toward projects in the current phase of that plan. Those projects include many internal upgrades at all of the district’s buildings, except Kerr Elementary, which is newly built. Some projects include upgrades to boilers, hot water heaters, HVAC improvements, and indoor lighting projects, as well as continuing improvements to athletic fields and resurfacing of the tennis courts at the high school.
The contribution to PSERS continues to be a challenge for all school districts in Pennsylvania.
The employer contribution rate is set by PSERS trustees, not by the district.
The district anticipates paying more than $45 million in PSERS contributions during the next five years.
COVID-19 and its economic impact for the current and future budget years continue to be an uncertainty. While federal ESSER funding was made available to help offset costs, it will be exhausted by September 30, 2024. Expenses that were able to be covered by federal dollars will then need to be paid for through local funding.