The Keystone Central School District Board of Directors recently held its final meeting of the year, which included a reorganizational meeting and voting session. This article delves into the details of the district's 2023-2024 End of Year Report and the proposed capital projects.

Surplus and Reinvestment

Business Manager Joni MacIntyre presented the school board with a $1.3 million surplus. As of November, the district's financial outlook showed higher local revenues and lower projected expenses. Budgeted expenses were set at $89,377,620 but came in under at $88,745,389, saving $632,231. Budgeted revenues were projected at $89,377,620 but exceeded expectations, reaching $90,060,119, an increase of $682,499. This surplus is set to be reinvested in various improvement projects.Administrators recommend transferring the surplus to Fund 32 to finance several capital projects within the district. These include allocating $500,000 for rooftop units at Central Mountain High School, $500,000 for tennis court upgrades at both Bucktail and Central Mountain High Schools, and $250,000 for an automated logic HVAC system at Mill Hall Elementary.

Expense Analysis

In terms of expenses, the district came in $630,000 under budget due to savings in several areas. Contracted services saved $270,000, repairs and maintenance saved $130,000, capital fund transfers saved $1.2 million, the copier lease saved $5,000, and auditing services saved $20,000. Lower-than-anticipated costs in contracted services were partly due to the district's inability to provide certain special education services during the 2023-2024 school year. The Intermediate Unit was unable to provide these services, and no external companies were found to fill the gap. While the district saved a quarter of a million dollars, it came at the cost of critical support services.The district's largest expense was charter and cyber school tuition, which increased by $2.1 million over the past year due to rising enrollment and tuition rates. The district also saw approximately $155,000 in additional costs related to the use of contracted legal services.

Revenue Sources

Regarding revenue, the district's $680,000 surplus was attributed to local sources. Local revenue streams generated $1 million more than anticipated, from earned income, business privileges, and real estate taxes.The earned income tax generated a $750,000 increase for the district, which MacIntyre attributed to the natural growth in wages over time. She noted that this growth in income tax revenue is something the district generally expects.Regarding the increased revenue from business privileges, MacIntyre credited the tax office's successful efforts in collecting back taxes. She said, "I think over the years, you're going to see that level out as we have resolved a lot of the back business privilege tax issues."In terms of real estate taxes, MacIntyre said, "We actually had a slightly higher increase in the amount of people we thought were going to pay this year, so that’s actually a very good sign."Locally, funding from investment interest, IDEA revenue, and Summer Rec and Adult Education all decreased. Investment interest declined by $135,000, IDEA revenue by $100,000, and Summer Rec and Adult Education funding by $140,000.State funding was $225,000 less than in previous years with only slight increases in the Basic Education and Vocational Education Subsidies. MacIntyre noted that the vocational subsidy reflects an increase in school enrollment, calling it "really positive."The decrease in state funding is mainly attributed to reductions in several areas: a $35,000 decrease in the Special Education Subsidy; a $525,000 decrease in the Transportation Subsidy, which can be ascribed to decreased ridership and fewer bus routes; and a $165,000 decrease in other subsidies.Federal revenue was $110,000 below budget, primarily due to reduced funding from federal Title programs, specifically Titles I, II, and IV.

Capital Project Timeline and Discussion

After reviewing the financial situation, the board briefly discussed the capital project recommendations, which will be taken up at the district's Finance Committee meeting on Jan. 28, 2025.Board member Chris Scaff asked if the municipality will help pay for the tennis courts at BHS and CMHS since they are often used by the public. Board President Roger Elling said the courts are a district asset and therefore they are responsible for maintenance.Board member Elisabeth Lynch suggested the tennis court project could potentially be paid for with a Pennsylvania Department of Conservation and Natural Resources Community Conservation Partnerships Program Grant. She has proposed this idea annually for the past four years, only for it to be consistently overlooked. She said, "Every year the conversation doesn't go anywhere, so I'm just putting it out there again. It's an opportunity since we do allow the public to use them and they are an asset to all the neighborhoods."Elling chimed in to note the district determined they were ineligible for the grant, which is another reason the district plans to absorb the cost, rather than involving the municipalities.Finally, MacIntyre reviewed the timeline for balancing the 2024-2025 budget, which will span the first half of 2025.On Dec. 12, the board previewed the general fund budget and passed a formal motion to notify the Pennsylvania Department of Education that the district would not raise taxes beyond the Act 1 index, which caps taxation at 7.1 percent.The board emphasized this motion has no impact on whether the district will raise taxes, stating that it is purely a procedural step.The board will revisit the General Fund budget on March 13, 2025. The proposed budget will be reviewed and posted for public inspection on April 10. The proposed final budget will be adopted on May 8, 2025, and the final budget for 2025-2026 will be approved on June 12, 2025.