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Auditor warns of need to raise tax rates in coming years

The Lancaster School District is in good financial shape right now, but it's time to start planning ahead to make sure that remains true, an independent auditor told the School Board on Monday.

Thomas Malecki cautioned the board that residents prefer a steady increase in the tax rate, rather than a roller coaster of minimal increases followed by jumps in the tax rate to compensate for them.

"I don't want it to sound like things are in disarray, because they're not," said Malecki, of Drescher and Malecki. "But I think we have to plan and be aware of what's out there."

The district has "a lot of cash in the bank and a very solid financial statement," he said, including a fund balance of $1.2 million, close to the maximum set by the state.

But the district will need to raise taxes soon to cover its growing costs, he said -- and it's best to let residents know about that as soon as possible.

"To balance your budget in future years, you're going to have to increase your tax rate," Malecki said. "You're going to have to state that to the public early."

He did not provide any predictions about how much the tax rate would have to go up, but he urged the board to adopt a financial planning system that would enable the district to look ahead three to five years.

After the meeting, Edward Myszka, assistant superintendent for business, said the auditor's report was not cause for worry.

It's too early to project tax rates, but Myszka said he does not anticipate any spikes in the tax rate.

"I see some stability over the next couple of years," he said.

Lancaster has accumulated $22 million in debt for capital projects over the past two years to accommodate its growing student population, such as the expansions at William Street School and Lancaster Middle School.

In addition to payments on the bonds, those projects also bring increased staffing and maintenance costs, Myszka said.

The district will not be launching any other building projects in at least the next two years, he said, so cost increases should be comparable to those in other districts.

e-mail: mpasciak@buffnews.com

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