HOLLIDAYSBURG - Hollidaysburg Area school board members clashed Wednesday on what they thought was the best budget option for next school year - a crucial year in regard to what the district anticipates will be a long-term financial crisis.
The board voted 6-3 to pass a $42.9 million 2012-13 budget with no tax increase.
With no tax increase, the budget requires $781,000 to be taken from the district's fund balance, which the district will need more of each year as pension costs increase.
Based on anticipated flat state funding and a hypothetical 2-mill real estate tax increase each year, district business office administrators expect the district's fund balance to have a deficit of $1.2 million by the end of 2014-15.
The projected deficit does not include savings from closing Allegheny No. 1 Elementary School, however. Savings from closing the school still have to be added to update the district's financial projection, Business Manager Sam Wilson said.
"It could be very easy to vote yes. But if we go into a hole, control of the district will no longer be with us," said board member Wally Tomassetti, who voted against the budget.
Board members Robert Vonada and Bill Padamonsky voted no, both favoring a 2-mill tax increase that would generate $400,000 annually.
The district needs revenue to pay debt from the high school renovations completed last year, Vonada said.
"Plans made to fund renovations require $200,000 each year from our debt service fund and we are not paying that," Vonada said. "But we could be with a 1-mill increase. The other mill we could put away for pension obligations that we can't cover at this point."
The district cut $4 million in the last two years, Wilson said.
"There is not much else the district can cut," he said.
Board member Stephanie Wertz reluctantly voted in favor of the budget but said the district needs to be more diligent in cutting expenses.
Science, technology and other classroom equipment have been cut deeply in the last two years, Superintendent Paul Gallagher said.
"When we made those cuts, we didn't have a choice," Gallagher said. "We had to do it. Kids are still achieving, but it will catch up with us."
Wertz suggested reducing administrative staff, and Gallagher agreed more cuts to administration can be done but said the district is working on that.
Allegheny No. 1 Principal Francine Endler will become Foot of Ten elementary's principal, replacing Bob Gildea, who will serve as principal of the district's new cyberschool program and the district's athletic director.
"We have one administrator doing the work of two," Gallagher said after the meeting.
Padamonsky was appalled that the board did not increase taxes.
"We are shirking off our duty as school board members. Not increasing some tax millage is fiscally irresponsible of the board," he said.
Board vice president Darlee Sill criticized Padamonsky's "pontificating."
"The prior board caused the gluttony," Sill said. "The $4 million we cut in the past two years, they should have cut a long time ago."
Sill and Wertz agreed that past spending priorities have not been prudent.
"The district spent $200,000 to surface the running track a few years ago and didn't buy things like microscopes," Sill said. "They would have had the money for the microscopes, had the board not voted for that."
Although more surplus money could have been designated toward pension costs had the board increased tax revenue, Sill supported his vote for using reserve funds to balance the budget by saying the district is required by law to keep a surplus fund equaling only 8 percent of the current budget.
At the end of the 2012-13 fiscal year, the district's fund balance is estimated to be $3 million.
Mirror Staff Writer Russ O'Reilly is at 946-7435.