Dear North Penn School District Community Member:

After five months of public discussion, the final budget for the 2018-2019 school year was
passed Thursday night, with a 3.4% tax increase. This year’s tax increase included Act I
exceptions. As North Penn School Board directors, we take our obligation seriously to balance
the needs of the taxpaying community with the needs of North Penn students. This year, the
board approved 21 new positions for the upcoming school year. A majority of these hires will
address classroom safety, school climate and academic needs with a focus on mental wellness,
special education, and character development. The district responded to a clear priority shared
by community members, families and students in response to the Parkland tragedy and other
incidents this past year, and beyond.

The North Penn School District has a $260 million annual budget. In January of this year, at the
start of the budgeting process, the finance committee was told balancing the budget would
require $9.7 million. The 3.4% tax increase just passed will contribute $5.8 million dollars
toward closing that gap. In actual dollar amounts, the average tax increase for the year is
$124.00 or $2.40 a week, based on the average assessed value of a home in NPSD of
$147,965.

Due to a revenue imbalance created by unfunded mandates from the federal government and
Pennsylvania legislature, a majority of North Penn’s school directors voted for a logical,
strategic plan to address structural deficits caused by shortfalls in pension and special
education funding. Though this was a difficult decision to make, this increase is the most
responsible corrective course of action to address the repercussions of years of underfunded
district budgets. We are adamant in our goal to attain long-term manageable deficits and a
healthy fund balance which 1) protects taxpayers by maintaining one of the lowest tax rates in
the county 2) secures North Penn School District’s fantastic credit rating while 3) allowing
flexibility during inevitable economic downturns and continuous funding uncertainty from
Harrisburg.

North Penn has the fifth lowest millage rate in Montgomery County out of all 23 districts. Even
with the increase, North Penn will remain the fifth lowest tax rate, 24% below the next-highest
district. Most importantly, for our senior citizens, a new program exists to coincide with the
PA-1000 Homeowners & Renters property tax rebate. To qualify for the NPSD, you must own a
home and have qualified for the rebate at the state level. If so, you will qualify at the district level
as well. North Penn is one of only two districts in the state offering this program to its seniors.
You can download a form by going to: ​http://www.npenn.org/Page/24592

Pennsylvania school districts face a massive fiscal challenge from obligations to PSERS, the
Pennsylvania State Employee Retirement System. In the early 2000s, while teachers continued
to make their required contributions into the pension, lawmakers attempted to provide relief to
the commonwealth and to school districts by reducing their PSERS contribution rates to nearly
unsustainable levels. Today, local districts shoulder the burden of that decision. North Penn’s
 contribution rate increased from 3% of the district’s total annual budget in 2010 to 16% of the
district’s budget today, totalling $1,746,621 of taxpayer’s dollars in the 2018-19 budget. Starting
​ this year, ​and for the next decade, North Penn will drawdown on our fund balance (the district’s
savings account) a total of $16.9 million dollars to meet the challenges of the pension liability.

Complicating matters, since Congress passed what is now known as the Individuals with
Disabilities Education Act over 40 years ago, they have failed to provide its legally mandated
share of special education funding for states across the country. This failure on Congress’ part
means districts like North Penn must make up the difference.

The North Penn community has enjoyed a combination of a strong tax base, good fortune and
decisive financial stewardship over the past few years, as evidenced by stronger than
anticipated investment returns, ​em ​ ployee insurance expenditures kept in check by taking plan
design changes, and several large tax assessment settlements that brought in a one-time $7
million dollars to the district. All of this has led to an Aa1 bond rating from Moody’s for the
district, one of the top ratings in the state. To put it another way, it is effectively the school
district’s credit score and we need that score to be as high as it can be in light of the borrowing
that will have to take place once we proceed with the renovations at Knapp Elementary and
North Penn High School.

We cannot, however, budget with a focus on long-term planning and stability by hoping for
continued good fortune. The needed increases in revenue for this year’s budget will help to
address those shortfalls in state and federal unfunded liabilities. The corrective action of this
increase will have a lasting impact on the district’s bottom line for each additional year to follow.
We will continue to work diligently to balance the needs of all stakeholders while also focusing
on long term fiscal sustainability for the district with prudent fiscal planning that delivers the
highest quality education and opportunities for all students.

Tina Stoll, President

North Penn School Board of Directors