EAST ROCKHILL — The numbers are still being audited and likely will change a little before being finalized, but it looks like the district had about $1.5 million more income than expenses for the 2019-2020 school year.
Had it not been for the coronavirus pandemic and its economic impact, though, that gap would be bigger, Sean Daubert, the district's business administrator, told Pennridge School Board members at the board's Sept. 14 combined Facilities Committee and Finance Committee meetings.
With expenditures $1,640,145.15 below the $141.5 million budget, those numbers were in the area the district likes to see, he said.
Revenues, though, were also below budget, coming in $145,592.42 short of the budget and even further from expectations.
“We are generally one to two percent above budget on our revenues, so we were definitely impacted in the last four months of the fiscal year,” Daubert said.
A lot of the difference between the amount of revenue that was expected and was actually received comes from less than expected numbers in four budget lines — earned income taxes, real estate transfer taxes, delinquent real estate taxes and interest — he said.
Earned income taxes and real estate transfer taxes topped the budgeted amount for the year, but came in less than pre-pandemic expectations while delinquent real estate taxes and interest income dropped below both the budget and expectations.
All total, it came to more than a million dollars less income from those four areas than had been expected, Daubert said. Concerns about those four line items continue in the current budget year, he said.
The board previously decided that the unused funds left at the end of the 2019-2020 school year will be kept as fund balance to help allow a cushion for this year's budget if needed, rather than transferring the money to the district's capital projects fund, which is usually done, Daubert said.
Another area of concern is in food services funding, he said.
Figures from the 2018-2019 year show the district's Nutritional Services had a net profit of $73,128.30, compared to a $301,503.75 loss for 2019-2020.
“That's a pretty substantial hit for that fund, but what worries me even more is what's going to happen to that fund in '20-'21,” Daubert said.
When the schools closed in March, the district had to continue to pay employees, so the food service and other costs continued, but the food service income came to a halt.
“We had no revenue at all from March on except for the revenue that we were getting from the state and federal government for the meals that we were providing to our families through the shutdown and over the summertime,” Daubert said. “Those meals were very few compared to what we would normally do in that time period.”
The board should consider transferring money to the Nutritional Services fund to cover a part or all of the 2019-2020 deficit, he said.
In answer to board President Bill Krause's question about what the options are, Daubert said the financial statements show a loss because the statements include pension fund liabilities, but that Nutritional Services has about a million dollars of operating cash.
The 2019-2020 loss would take away about 30 percent of that, though, and if there is a similar loss this year, more than half would be gone, he said.
“Can it be left alone? Do you have to do anything? No, you don't. It could be left alone, but if it continues onward, it's going to begin to impact the ability of that fund to operate and kind of cripple it and then eventually the district would have to fund it if it went to a complete negative,” Daubert said. “The way I'm thinking about it is almost putting the band-aid on to heal the cut now and next year rather than trying to suture it with stitches down the road.”
The state and federal funding that provided free meals while the schools were closed in the spring and summer has been continued to the end of the year. The lunches are free for anyone under 18, Daubert said.
In answer to a question from Finance Committee Chair Megan Banis-Clemens of whether the free lunches are a positive for the district budget, Daubert said it has a positive effect, but only if more students get the meals.
Some parents know the free meals are available for their children, but don't get the meals because they think there are other people more in need and don't want to take advantage of the meals, Banis-Clemens said.
“I don't think they realize it benefits the district. I didn't know 'til I just asked you,” she said.
“It's a good program. It's a good program to feed kids,” Daubert said.
The meeting also included a report from Daubert on the district's tax rebate program. This is the first year for the program which provides property tax rebates for senior citizens, widows, widowers and disabled persons who own their home and have an annual household income of less than $35,000.
“We've received 180 tax rebate applications as of September 9,” Daubert said.
The 150 rebates already paid or pending totaled $12,187, with an average payment of $81.25, a chart showed.
Some of the more than 250 calls received about the program came from people who did not realize they had to first apply for a state rebate, Daubert said.
“They actually didn't know the state program was there, so those folks are applying for the state program and then will circle back and apply for our program,” he said.
The Pennridge rebate is 25 percent of the state rebate, according to district information. Applications for Pennridge rebates for the 2020-2021 tax year must be received before June 30, 2021.
Information about the rebates is included with school district property tax bills and next year an application form will be included in the information, Daubert said.
This year, the application form could be printed out, but many of the applicants do not have computers in their home, he said. The district mailed out forms to people who called and requested it, he said.
“Thank you for the update. It's good to see that the community is taking advantage of the program,” Krause said at the conclusion of Daubert's report.