The certified public accountant putting the finishing touches on the 2014-15 audit for Pottsville Area School District recommended that its school board consider a tax increase.
Richard W. Pitcavage, a CPA working for Jones & Co., Pottsville, made the recommendation at the board’s work session Wednesday night in response to a question by board President John F. Boran.
“You mentioned that you audit six districts and Jones & Co. does 12,” Boran said.
Pitcavage said that was correct.
“In your professional opinion, is there anything that sticks out to you that stands out as unusual for our district, as compared to those other districts, or is there anything we can improve upon?” Boran asked.
“One thing. You have no real estate tax increase,” Pitcavage said.
When the school board approved its 2015-16 budget in June, it announced it would be its 10th school year without a tax increase.
“That’s also governed by law,” Boran told Pitcavage.
“But there’s an index in there where you can raise it a minimal amount,” Pitcavage said.
On Dec. 2, the board voted not to pursue a weighty tax increase for 2016-17 school year.
“It is recommended that the board adopt a resolution pursuant to Section 311(d)(1) of the Special Session Act 1 of 2006 indicating that the Pottsville Area School District will not increase any school district tax for the 2016-17 school year at a rate that exceeds the index as calculated by the Pennsylvania Department of Education,” Boran said at the Dec. 2 meeting.
That index is 3.4 percent of the district’s current millage rate, Stephen C. Curran, the district’s business manager, said.
The district’s current millage is 34 mills. So the school board could increase its millage to 35.15 in the 2016-17 budget if necessary, Curran said.
“People don’t like hearing this but it’s a fact. Everybody knows your costs are going up. If you don’t raise your real estate taxes, even to the index, you lose a large amount of revenue. Let’s say you can raise your real estate tax a half a mill one year. And if you do the same thing the next year, then you’ll have a ripple effect. And if you do it again the next year, you’ll again have a minor increase, and it will become a decent real estate tax increase,” Pitcavage said.
Pitcavage also patted Pottsville Area on the back for its “debt structure.”
“Your debt is probably the second or third lowest in the area. And that’s something to be said for the size of this district,” he said.
That said, the school board at its regular meeting took care of some paperwork to go into debt.
On Dec. 4, the school board decided to enter into more than $3 million in debt to finance an energy-saving initiative on its campus, comprehensive energy-saving program to be installed by Honeywell Inc.
A legal notice published in the Jan. 16 edition of The Republican-Herald, submitted by Curran, contained more information about the “incurring nonelectorial debt” which be in the form of 2016 general obligation bonds.
The exact amount the district will borrow is $3,150,000, according to the notice.
It will be used to finance the planning, design, construction and installation, according to the notice.
On Wednesday night, the school board approved a resolution regarding that.
“Tonight, you’re locking in the rates,” Henry J. Sallusti, managing director of RBC Capital Markets, Scranton, said.
The district will have a 2.25 percent interest rate on the 15-year term and the paying agent will be Gratz Bank. The sale date on the Series 2016 general obligation bonds will be Jan. 20 and the closing will be Feb. 18, Sallusti said.
In other matters, the board agreed to hire an attorney as an “independent hearing officer” if a public hearing is scheduled regarding Gillingham Charter School and its proposal for charter renewal.
On Dec. 2, the school board rejected the charter school’s proposal for a second five-year charter, citing a list of reasons in a five-page resolution. According to the resolution, but school board resolved to hold a public hearing “on or about February 10, 2016, subject to rescheduling.” And the resolution gave the school board the right to appoint a hearing officer for such an event.
The date of the public hearing was not scheduled Wednesday night.
On Wednesday night, Richard A. Thornburg, the board’s solicitor, recommended the board hire someone.
“If the Gillingham matter moves to the point where a hearing is required, we will be required to hire an independent hearing officer,” Thornburg said.
Ellen C. Schurdak, Bethlehem, an attorney the district hired recently on a dispute with the charter school over access to special education records, recommended the district hire attorney Mark Fisher from the firm Worth, Magee & Fisher Law Offices, Allentown, Thornburg said.
“He would be involved with us at a rate of $185 an hour,” Thornburg said.
“Does Gillingham contribute toward that cost at all?” Karen E. Rismiller, board vice president, asked.
“No,” Thornburg said.
“There’s no retainer, per se?” board member Patrick F. Moran asked.
“We incur no costs unless we actually go through with the hearing,” Thornburg said.
Moran made the motion to hire Fisher. It was seconded by board member Scott R. Thomas, and carried unanimously by all other board members: Boran, Rismiller, Ann Blankenhorn, Gary A. Cortese, William R. Davidson, Christina M. DiCello and Charles R. Wagner.