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Expecting Savings Later, Lower Merion School Board OKs Preliminary Budget

Officials said the district had a favorable bond sale Monday.

A Lower Merion school tax increase of about 4 percent advanced another step in the 2012-2013 budget process Monday night, but school board and administration officials said the increase stands a good chance of being reduced later.

The owner of a $250,000 house paid a $5,757 tax bill in 2011, which would go up $225 to $5,982 in 2012 under the preliminary budget approved Monday, business administrator Vic Orlando said. The board must propose a final budget by April 16 and pass one by June 11.

Superintendent Chris McGinley noted the district has assembled a preliminary budget earlier than in a typical year and two months before seeing any state-aid guidance from Gov. Tom Corbett's office.

"We are still very much at the beginning of the budget process," McGinley said. The preliminary ledger "has a lot of question marks associated with it ... We expect to be able to refine this budget downward."

School districts are legally allowed to reduce budgeted expenses, but not add to them, after a final budget is approved.

Board members heard Monday night that J.P. Morgan had won Monday's auction of $30 million in bonds, purchasing them at a 0.85 percent interest rate. The proceeds are being used to pay off holders of bonds from 2002.

The upshot is a $3.3 million savings for the district, Orlando said.

Board member Subha Robinson urged her colleagues to take the bond-auction results to heart when considering whether to spend cash reserves.

"The reason we were able to to get this rate is because of the reserves we have," Robinson said. "If we reduce reserves, we could lose our AAA (bond) rating."

Narberth resident Maureen O'Leary, however, questioned why the district had in past years raised taxes yet not used its full tax revenue. She was the only member of the public to address the board.

The meeting was the first regular board session in the district's administration building board room. Past meetings have alternated between Lower Merion and Harriton high schools. The next one is scheduled for Tuesday, Feb. 21, the day after the Presidents Day holiday.

The board observed a moment of silence , the Welsh Valley Middle School student who died Jan. 13 after a stroke.

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