Though still in its infancy stage, Palmerton Area School District appears poised to adopt next year's proposed preliminary budget with a 1.18-mill increase.

That was the general consensus of the board of directors after a workshop meeting on Tuesday in which business Manager Diane Serfass reviewed revenues and expenditures for the 2013-14 spending plan.

Serfass discussed scenarios that called for a zero-mill, .50-mill, .75-mill, 1-mill, and 1.18-mill increase.

She said the 2013-14 base index is 1.7 percent, but that the district's has been adjusted to 2.3 percent based on its wealth.

Since the district's current millage is 51.444 mills, and the index is 2.3 percent, the most millage could increase without an approved exception or approved referendum is 1.18 mills, Serfass said.

The board's options are to adopt a resolution to not exceed the index; adopt a resolution to apply for exceptions, plus its 2.3 index increase in millage; or referendum to voters to go above the index, plus exceptions.

Serfass then told the board her recommendation is to raise taxes to the full index, and to apply for any exceptions it qualifies for. The only exception the district currently qualifies for is the retirement exception, she said.

Even if the board were to do that, it would still have to utilize $504,635 from its fund balance, Serfass said.

The board is expected to adopt next year's proposed preliminary budget with a 1.18-mill increase, and file for any exceptions it qualifies for, when it meets at 6:30 p.m. Jan. 22.

However, Serfass noted that doing so does not mean the board is locked in at that rate, as it will still has several months to modify next year's spending plan.

The Pennsylvania Department of Education has requested that the preliminary proposed budget is due to the state by Jan. 31; the proposed budget, Feb. 20; the proposed final budget, May 29; and final budget adoption, June 28.

By Jan. 31, the board must either make its proposed preliminary budget available for public inspection, or adopt a resolution indicating that it will not raise taxes above the index.

On March 7, PDE will inform the district whether their proposed tax rate increase is less than, or equal to, the index, at which time the district must seek PDE approval for exceptions.

Then, on May 14, a public presentation of the proposed final budget will be given in the high school auditorium. June 18 would then be the target date to adopt the final budget.

In June, the board adopted the 2012-13 spending plan, which called for a 4.68-percent, or 2.30-mill increase, in the property tax rate.

The $27,267,701 budget raised the millage rate from 49.14 to 51.44 mills, which means a person with a home valued at $100,000, and assessed at $50,000, had to pay $2,572, or $115 more, in property taxes to the district.

As part of that approval, the board authorized $179,700 of the 2012-13 committed fund balance to be allocated to the payment of the district's 2013-14 Pennsylvania School Employees Retirement System obligation.

The spending plan also calls for the use of $272,486 from the fund balance to pay for the 2011-12 positions that were restored.

Also as part of that budget, the board rejected the transfer of $44,945 from the Special Athletic Account to general fund to reimburse the expense of the wrestling, cross country, golf and tennis programs for the 2011-12 fiscal year as per the board resolution dated June 7, 2011.

Exceptions the board used as part of that budget pertained to various items that dealt with construction and debt service; special education costs; the Pennsylvania Public School Employees' Retirement System (PSERS) increase; and a total millage increase of 1.17 mills.

In addition, the board rejected a motion to utilize the following formula to allocate the donation of $46,351 from the Save Our Sports group before June 30, 2012; 2011-2012 total athletic expenditures less 2011-2012 gate receipts less 2011-2012 budgeted local revenue equals the amount of the donation to be utilized to fund the total 2011-2012 athletic program. Any remaining donated funds shall be used in the same manner in subsequent years.

Afterward, the board approved to authorize the transfer of $32,471 from the Special Athletic Account to General Fund to fund a portion of the 2011-2012 athletic program. The remaining SOS allocation were to have been placed in a separate account.