KCSD Tax and Revenue Anticipation Note (TRAN) May Be Needed if State Budget Fails to Pass Soon

By Christopher Miller

BALD EAGLE TOWNSHIP – It has been over 100 days since lawmakers failed to pass a state budget and Keystone Central School District begins to plan for the coming months if a budget fails to move forward soon.

“The school district can pay expenses through the end of January,” Business Manager Joni MacIntyre informed the school board.

“We are in November now but we need to be proactive if the budget does not pass soon. The best things we can do are to either cash-in on investments, or take out a loan and I don’t think we should do this.”

Instead, Joni said, the district can get a Tax and Revenue Anticipation Note (TRAN) which are offered to municipalities and school districts.

“I spoke with a local bank and they will not charge us a fee. We can draw down, similar to a line of credit. We want to be able to press the button on this if we need to do it,” she said.

Due to the legal filing and working through the bank, the district would need to go through some Bond Counseling and filings through DCED.

“We only owe a fee if papers are signed with the district approval,” Joni said.

Joni informed the board that the district would need to borrow $20 million.

“I am viewing this as an emergency fund only,” board member Elisabeth Lynch said.

“KCSD is not the only district in this pickle,” Superintendent Dr. Redmon said. “Almost every district in the state is dependent on state funds is involved in this problem. We can get through almost half of the year on local revenues. There are some districts that are already taking out loans.”

Bond counsel services through KingSpry are not to exceed $10,000 for transactions up to $20 million, and $12,500 for transactions up to $25 million.

Bond counsel services through Eckert Seamens come with a price tag of $4,500.

The school board will vote on this matter on Thursday pending the continuous impasse of a state budget.

In other news, board member Jeff Johnston informed the school board that there is a shortage of maintenance and custodial staff within the district.

“Mr. Hoy needs more staff but we are not paying out maintenance or custodial folks enough money when they could be going off to make more money at Sheetz or Walmart,” Johnston said. “We would need a memorandum of understanding (MOU) in place with support if we wanted to raise wages. It is a topic for the finance committee to look at.”

Business Manager Joni MacIntyre informed the board that even though an entirely new building was added to the school district insurance policy, “rates only went up by 10%.”

An additional $3,650 is needed to complete the bid for the concrete work outside of Mill Hall Elementary School.

“Approximately 25 feet of curb and 15 feet of sidewalk were omitted from the original public bid,” Director of Property Services Sam Hoy told the board.”This additional work required was discovered during the pre-bid meeting on September 16th at 9am. Only one of the five contractors who submitted a bid were at the pre-bid meeting. Antares Site Work, LLC was the winning bidder but did not include this additional work in their submitted bid. The additional work will increase their bid from $24,468.00 to $28,118.00. That is an increase of $3,650.00.”

On the topic of sidewalks, Lobar, Inc. submitted a letter to the school board stating that the use of deicers on the new contract surrounding the brand new Liberty-Curtin Elementary School could “potentially void the warranty if it is determined to the use of deicers are determined to be the cause of any type of failure in the concrete in the future.”

Hoy said that the office “will do their best to ensure these alternate practices are attempted, but ultimately the safety of our students, staff, and community members will dictate what measures of anti-skid or deicers get used.”

Such alternate practices include avoiding ice melters that will chemically attack concrete, using an ice melter with extended refreezing protection capabilities, removing slush and water from melting ice and snow before refreezing occurs, not using ice melters on weak or damaged surfaces (non air-entrained), and applying a commercial strength sealer prior to precipitation.

Board member Chris Scaff also brought up the question of ADA access to the building.

“We are talking about solutions after I walked the perimeter of the building with the principal,” Hoy said. “Until everything with the contractor is done and things are removed with permitting, the district will not do anymore work where we are bound by change orders.”

Dr. Redmon added that right now, due to the state budget impasse, the district is watching spending money on unanticipated, unbudgeted expenses very closely.

An executive session was held from 5:30 to 6:16 p.m. for legal and personnel issues.