The Upper Perkiomen School Board voted last week to approve a proposed final budget for the 2021-22 school year with a two percent tax increase. However, the work to determine the size of that rate hike seems far from complete.

            Board President Melanie Cunningham declined to endorse the proposal to cover the cost of a 5.67 percent budget increase, saying the board needed more information to make a decision.

            Solicitor Kyle Somers recommended that the members only approve a reduction in the rate before final approval next month. Superintendent Allyn Roche said he inserted the rate into the action item because it would cover the approximate cost of funding full-day kindergarten, a new program for the upcoming school year.

            Sandra Kassel, the district's business administrator, warned the board during its May 13 regular meeting that the proposed transfer to cover a budget shortfall would decimate its reserve fund balance.

            She said the proposed transfer of $3.783 million was higher than the members should consider.  Cunningham said the Finance Committee did not recommend that percentage of rate hike. She said its members needed to examine the updated actual figures for the current budget before it would weigh in.

            "This figure will probably not be the final one," Cunningham said during the meeting, hosted on Zoom. "Hopefully it will be less."  Members Raeann Hofkin and Keith McCarrick voted against the action item regarding the $70.431 million proposed budget. Major cost increases in the budget include $1.006 million for salaries, $447,742 for retirements, $341,665 for professional and technical services, $929,419 for other purchases services, $87,399 to the Western Montgomery Career Technical Center and $1.559 million for budget reserves and charter schools, according to information provided by the business administrator.

            "There's no fluff in this budget," Kassel said prior to the vote.

            With a two-percent increase that would generate an additional $700,000, the median property owner in Montgomery County would pay an additional $81.05. A Berks County property owner would owe an additional $31.62. At that rate, a $3.783 million transfer would be necessary to cover a budget shortfall.

            Kassel repeated her concerns that the proposed transfer might force the district to borrow money to deal with a number of capital items on the board's horizon. She praised the board for their management of those projects, and warned that a reduced fund balance would lead to higher loan costs.

            According to information provided by the administrator, $5.432 million remains in unreserved fund balance. A recent transfer to the capital projects account reduced the district's overall fund balance to $14.800 million. Of that amount, $5.500 million is committed and $3.867 million is assigned, according to information provided by district spokesperson Nicole Gum prior to the meeting.

            If approved, the transfer would be the district's largest in recent years. According to Member Mike Elliot, the district utilized $37,263 to cover a shortfall 10 years ago.  Several members expressed concerns that a large tax increase may not be necessary because projected deficits have ended up as budget surpluses. Judith Maginnis said it would be impossible to make a decision without knowing the actual fund balance for the current school year.  "The most important thing is that the budget is accurate," Kerry Drake.

            McCarrick cited the issue of projected to actual reserve fund accounting as a reason for his no vote. He also said he would be in favor of passing a budget with no tax increase. "Extreme times call for extreme measures," McCarrick said.

            Kassel told the members she would continue to look at ways to reduce expenses. Steve Cunningham and Dana Hipszer verbalized their support for making sure the full-day kindergarten program, which they voted to start earlier this year, proceeds. The business administrator described the decision to add programs but not fund them as dangerous.

            "I'm very concerned about where we're at," said Member Peg Pennepacker, who also serves on the Finance committee. "We need to see where we can reduce some things, otherwise things are just going to keep snowballing."