Lebo schools face $2.6 million budget shortfall in 2015

Published Mar 11, 2014 at 8:46 am (Updated Mar 11, 2014 at 8:46 am)

Mt. Lebanon school district needs to plug a $2.6 million budget shortfall in 2015, according to a presentation by Dr. Timothy Steinhauer at the March 10 school board meeting. This is primarily the result of increasing pension contributions and healthcare costs. PSERS contributions will increase from 16.93 percent to about 21.4 percent of employee salaries in 2015. Healthcare costs, meanwhile, are projected to rise 5.75 percent. Together, employee salaries and benefits account for 75 percent of the district’s budget.

Mt. Lebanon schools also have yet to receive any reimbursement from the state for the bond issues for its high school renovation project. Director of fiscal services Jan Klein said the district’s request for reimbursement on the first bond issue is currently waiting in a queue with about 350 other projects. A similar request for the second bond issue will join this queue if approved at the March 17 school board meeting. Klein said it could be several years before the district receives any of this money.

It is also unclear whether schools will receive any increased funding from the state in 2015. While Pennsylvania Gov. Tom Corbett’s proposed budget does include small increases in funding for special education and certain block grants, it faces intense opposition in the legislature.

The $2.6 million figure discussed at the meeting does not take any millage increase into account. If the board increases school real estate taxes by .47 mills, as allowed under Act 1 of 2006, the projected shortfall decreases to $1.4 million. If millage increases by the Act 1 amount plus an exception for PSERS funding, the total millage increase would be .8 mills and the budget gap would shrink to about $500,000.

One mill is $100 on a home assessed at $100,000.

As with the past two budget cycles, the administration will provide the board with a list of possible cost reductions, as well as their projected impact on school programming. In past years, the district has worked to cut costs as far from student programming as possible, though at the conclusion of last year’s process some board members claimed all the “fat” had been trimmed from the budget.

School board president Elaine Cappucci said the board will discuss the budget further at the March 17 meeting. Budget discussions will continue through April with approval of a final budget to follow in May.

The board will also vote on a $101,054 change order for the high school renovation project on March 17. This relates primarily to changes by Nello Construction’s steel fabricator.

“These have been sitting on someone’s desk longer than they should have,” project manager Tom Berkebile explained. He said some of these billings date to June 2013, adding that Nello has not been able to offer an explanation for the delay.

According to Berkebile, if the board approves these change orders 67 percent of the project’s contingency funds will have been used. About 70 percent of project costs have been billed to date, and 63 percent of the project time line has elapsed.

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