Taxpayers who live in the Northern Lehigh School District may in fact see no increase in their property tax rates in the 2011-12 school year.
Business manager Jeremy Melber informed the school board on Monday that "this district is on target for a zero-percent tax increase."
Melber said that out of 18 teachers who were present at a recent meeting with district administrators, 11 of them indicated they would likely take part in an employee retirement incentive plan the board created last month.
"Our target goal was eight," Melber said. "We do think we're going to exceed that number."
At present, Melber said next year's budget currently reflects a $1.2 million deficit, which does not count any teacher retirements.
Melber said the district would know by April how many teachers will agree to take the early retirement incentive program.
Superintendent Michael Michaels echoed Melber's sentiment.
"We're constantly working on the retirement incentive plan," Michaels said. "I agree with Jeremy's assessment of between eight to 11 retirements."
However, Michaels said the district is "very concerned with the budgeting process."
"Our goal is to come in with the least budget impact as we possibly can," Michaels said. "The budget is very tough for us because we don't know what's going on at the state level and how many teachers (in the district) will retire."
Michaels said the district is in the process of negotiating a new five-year contract with the athletic trainer.
He said there would be a zero-percent increase in the first year of the contract; a 1-percent increase in years two and three; and a 2-percent increase in years four and five.
In a related matter, the board on Monday approved the inclusion of Ralph L. Williams, fifth grade teacher, in the Northern Lehigh School District's 2010-11 Retirement Incentive Plan adopted by the board on Jan. 10.
The board then accepted the retirement resignation of Williams from his position as fifth grade teacher, effective on the day following his contractual obligations for the 2010-11 school year, with the date being determined by the board upon completion of snow make-up days. At this time, he will begin his retirement from the district after 39 years of service.
To date, Williams is the first teacher to be included in the plan.
Last month, the board agreed to adopt the plan for all eligible professional employees, on a voluntary basis, for the 2010-11 school year. The creation of an employee retirement incentive plan figures to save Northern Lehigh School District about $800,000.
Melber said at that time the program would ask those high-end teachers who account for about $111,000 per position to retire and not be replaced, which would result in a savings of over $1 million with its fund balance and long range plan.
The offer is a one-time only program that enables teachers in the district to submit a letter in writing between then and April 6 that says they will retire from the district, Melber said at that time.
Also at that time, Melber said the district anticipated that between six to 10 teachers would retire, which would save the district anywhere from $700,000 to $900,000 in the 2011-12 budget.
Melber said the district came up with the retirement incentive plan in an effort to lower a projected $1.2 million shortfall in the 2011-12 school year.
As per the program, Melber said the teachers would receive a $25,000 incentive paid into a tax shelter account in two equal amounts of $12,500 on Oct. 31, 2011, and Feb. 8, 2012.
However, Michaels noted at that time there is the potential that some of the vacancies may eventually be filled.
Also at that time, the board unanimously agreed to adopt a resolution to not raise taxes above the Act 1 tax index, which is currently set at 1.9-percent, or, 1.22 mills.
As a result, Melber said the board will now have until May to adopt the 2011-12 preliminary budget. Otherwise, he said the board would have had to adopt a preliminary budget by February.
In December, Melber said a proposed 15 percent increase in insurance costs had been whittled down to 8 percent, or a $190,000 savings to the district.
But, with the expected loss of $825,000 in basic education funding, coupled with a $450,000 increase in salary and benefits, the board is still faced with a $1.2 million deficit, Melber said.
However, he said the district may be able to shave about $200,000 from that, which would leave it with about a $1 million deficit that could be offset by the retirement incentive plan.
Also at that time, Michaels told the board the district could save $10,000 on energy costs.
In November, Melber told the board that the district will likely lose about $1.2 million in state funding in the 2011-12 school year; $825,000 in basic education funding, and another $365,000 in Accountability Block Grant funding.
In June, the board approved the 2010-11 budget with a 2.38 percent, or 1.5 mill increase that raised the millage rate from 62.873 to 64.373 mills in Lehigh and Northampton counties.
That meant a person with a home valued at $100,000, and assessed at $50,000, paid $3,219 in property taxes to the district this year, $75 more than last year's $3,144 rate.