BASD board hears budget update
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BELLEFONTE -- Bellefonte Area School District's Director of Fiscal Affairs Kenneth Bean provided comment regarding the Pennsylvania Budget's push to Gov. Josh Shapiro and its effects on funding within the district.
According to Bean, the Basic Education funding totaled $10,254,682, which is $900,000 more than what was originally budgeted.
The Special Education funding totaled $2,154,000 -- $204,000 more than what was budgeted.
With the Food Service budget, the state came through with subsidized free breakfast for all students. Reduced lunches for students will continue to be free.
Board President Jon Guizar said, "Food should not be a key indicator of success in school. It just shouldn't."
Scott Shearer, Managing Director at Public Financial Management, spoke about increased inflationary concerns.
He noted that the Federal Reserve has raised short-term interest rates seven times throughout 2022 and four times in 2023.
"The consensus at the moment is that they probably will not increase short term rates anymore, and then later in 2024 maybe start lowering short term interest rates. The interest rate environment is controlled not just by what's going on within our borders here but also internationally," said Shearer.
"Right now we're projecting some fairly positive numbers," said Bean. "We'll be able to generate interest hopefully north of the $1 million line that will take another million off of what we might need to finance and/or cut from the building project to make it sustainable for the district and the taxpayers."
He went into detail about processes the district has utilized previously such as a "Parameters Bond Resolution."
According to Shearer, this process gives the finance team for the district more flexibility to get through the paperwork and board approvals and price the bonds at appropriate times.
"It puts parameters on the amount that we can borrow and the interest rates," said Shearer. "One main action (will) occur and then we will be working with the district administration on pricing the bonds and doing the bidding process on each individual piece. It has worked well for the school district in the past."
According to Shearer, rates are moving to more historic levels; his presentation included a graph that marked out the rates from 1993 to 2023.
He showed the graphs of the municipal market to the board and indicated where it currently falls on the rates. According to his graph, the rate reached a maximum of 6.150 percent on Nov. 17, 1994, and a minimum of 0.580 percent on Aug. 7, 2020. The current rate, as of Aug. 9, 2023, is 2.720 percent.
"In order to keep the budget impact to a minimum -- there will be a budget impact... but we're looking to restructure a small portion of the district's outstanding debt to help minimize some of that impact in the early years," said Shearer.
More information about the tentative borrowing plan will be discussed in greater detail at a later meeting.
The Bellefonte Area School District board will meet again on Sept. 5 at 7 p.m. at the Bellefonte Middle School.