Wertsch optimistic on 2018-19 school budget

By on April 4, 2018

The 2018-19 Warwick School District budget continues to look favorable, as the district completes final touches on the upcoming budget.

Nathan Wertsch, chief financial officer, provided an update and analysis of a proposed budget during the Warwick School Board Committee of the Whole meeting on May 3. Wertsch provided a snapshot of the budget to the board last month where he indicated it remained much the same, with a few positive factors. A few of those factors include favorable revenue generation for special education with more programs being brought back into the school district, attritional savings through additional retirements and analysis of positions, state basic education funding and special education funding, and budget trending that constantly analyzes year to date.

“The district has made great progress in budget development, cutting the potential deficit down by over $571,000, through a mix of favorable anticipated revenues,” said Wertsch, noting that there are $134,000 in state budget and local revenues, with anticipated expense reductions of $437,000 in special education and attritional savings. Wertsch pointed out that the 2018-19 budget is still fluid, reporting that there are still a number of unknowns that will sway the budget, but he is optimistic that it will continue to head in a favorable direction.

In previous years, Warwick School District had budget deficits that ranged from about $1.5 million to $3.3 million. Nathan Wertsch, chief financial officer, on Tuesday told the school board he hopes the 2018-19 budget will be a repeat of last year’s balanced budget.

“Similar to last year, the district is in a good position to balance its second budget in a row that would not require a tax increase near the district’s allowable index, while still being very forward focused towards long-term capital planning,” said Wertsch. For the first time in 10 years, the district had a balanced budget in 2017-18. The deficit was $0 for the $70,508,932 budget. In previous years, the district had a budget deficit that ranged from $1,487,743 in 2016-17 to $3,255,979 in 2014-15. Wertsch hopes that the 2018-19 budget will be a repeat of last year’s balanced budget.
The budget snapshot for the 2018-19 budget in March was for revenue of $72,105,479 and expenses of $72,814,083. The district will be continuing to work on mitigating the difference, in order to reach a balanced budget.

Reporting on tax revenue implications in 2018-19, Wertsch noted that the Act 1 Tax Index is 2.4 percent. For the fifth year in a row, the Warwick School Board voted to stay within the adjusted index of 2.8 percent. The current 2017-18 millage rate is 21.1623, compared to the Lancaster County 2017-18 average millage rate of 20.5361. Based on January 2018 taxable accessed values of $2,047,620,000, the median assessed value is $148,000 and the increase at the 2.8 percent index is $87.69. The proposed final budget and presentation will come before the board in May, and will be up for final vote in June. In another financial matter, Ken Phillips, managing director of RBC Capital Markets, provided board members with an update on the district’s debt profile and new money options.

“Act I has changed the landscape over the past 11 years, when it comes to funding and planning budgets,” said Phillips. He reviewed the game plan for debt service that would be required to fund future projects, such as school updates and renovations. He told the board that it was unlikely that the district would ever be debt-free, due to the fact that schools would require maintenance and renovations over the years. As the district pays down its current debt, it will be in a position to fund new debt.

“With $3 million in cash, the district would be able to fund future projects,” said Phillips, noting that a millage increase might be necessary down the road. The Warwick School District is currently in the process of a feasibility study for the future of existing schools, with renovations and updates at the high school, middle school and elementary schools.

In other business, the board reviewed an update to a Title I policy relating to students lacking English proficiency and another policy relating to updating of staff that would be retired, due to another policy in its place.

Laura Knowles is a freelance feature writer and regular contributor to the pages of the Record Express. She welcomes feedback and story tips at lknowles21@gmail.com. 

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