Financial firm outlines more options for Scranton School District

Scranton, Pennsylvania Sarah Hofius Hall The Times-Tribune August 30, 2017 Finance + Operation

The Scranton School District should create a multi-year capital plan, evaluate school enrollments and consider raising taxes if a budget gap still exists, according to an updated plan presented to school directors Tuesday.

As the district seeks ways to eliminate a deficit expected to grow to $40 million by the end of the year, directors received an update on the financial analysis being prepared by Philadelphia firm PFM. New findings include:

  • From 2011 to 2016, tuition payments to charter schools, vocational schools and programs outside the district increased by $3.38 million. Enrollment in cyber charter schools has grown from 117 students in the 2008-09 school year to 243 students in the 2015-16 school year. Should growth trends continue, charter school tuition payments are expected to grow from $4.8 million in 2016 to $7.8 million in 2022. The district’s new cyber school may help bring students back to the district and control payments.
  • The district should assess current and future capacity at all schools to determine whether redistricting or consolidation can be done. Officials should develop a multi-year capital plan for maintenance and repair of buildings.
  • In recent years, the district has taken steps to control spending on maintenance by reducing staff and eliminating positions. Options to control it further include eliminating contract language requiring maintenance staff to be present when a facility is open or prohibit any non-district use of facilities, unless the outside group pays the full cost of overhead.
  • Financial and human relations operating systems must be updated, which would result in more accurate and timely financial projections and planning. The board should also adjust spending during the year if revenues do not meet expectations. The business office should consider moving from a calendar year to a traditional fiscal year budget. The district should also create a central inventory of supplies, which can stop unnecessarily expensive or redundant purchases.
  • Savings can be found by sharing services or through joint purchasing with other governments or school districts. The district should also bid its transportation contracts and improve utilization of current buses and vans.
  • If cost savings are not sufficient to close the gap, the district could consider raising property taxes annually to the maximum permitted by the state.

The state put the district on “financial watch” status in June, the first in a series of steps that could eventually lead to a takeover by a state receiver. Working with the city, the district is using a $30,000 grant from the U.S. Department of Housing and Urban Development’s National Resource Network for the analysis by PFM. The Pennsylvania

Department of Education is providing a $10,000 match to the federal dollars.

After Tuesday’s work session, Superintendent Alexis Kirijan, Ed.D., called the report “on target,” and that many of the firm’s findings are observations she made when she became superintendent two years ago.

“I’m very encouraged,” she said. “Hopefully we can make some headway.”