Scranton School District work session focuses on budget shortfall, property sale and third-party tax collection

The Scranton School District Board of Education's work session on Sept. 29 centered on a looming cash-flow problem caused by the Pennsylvania state budget impasse, a plan to pursue a private sale for a district lot, procurement needs for athletics and facilities, and consideration of third-party delinquent-tax collection services.

Superintendent Dr. Keating told the board the district currently held roughly $32,000,000 in cash but that payroll and benefits run about $9,500,000 per month, leaving roughly 12 weeks of payroll coverage if state subsidy payments are delayed. "We have hit what I will call a crisis point," Dr. Keating said, adding that missed October and November subsidy payments would push cumulative shortfalls above $30,000,000 and could require short-term borrowing or other cash-management steps.

Administrators described options the district is exploring if state subsidies are delayed, including: seeking short-term interfund loans from restricted district accounts (capital reserve, food service non-profit) with interest paid back to the lending fund; exploring tax-anticipation notes (with caution because they must be repaid by Dec. 31); and identifying other internal cash-management steps. The administration said it might bring a motion to authorize short-term interfund loans if needed.

Samuel Morse lot

Officials described a six-year effort to sell a district-owned parcel known as the Samuel Morse lot. An appraisal had been in the ballpark of $75,000; an earlier unsolicited offer in 2019 had been $25,000. A local real-estate agent, Pat Rogan, volunteered to list the property on MLS without charging a commission. Administration recommended asking the board to authorize (1) pursuing a private sale and (2) listing the lot with Rogan; Rogan suggested listing at $50,000 with a not-to-accept floor near $30,000. Solicitor Larry Murray explained that any private sale would be presented to the court in a petition (with the agreement of sale attached) because the school code requires showing prior attempts to sell at market value. The board did not vote on the private-sale authorization at the work session but was told two motions would appear on the voting-meeting agenda.

Swim timing system (athletics)

Administration sought early agreement to replace a 25-year-old swim timing system that the district said is failing and may not last the season. Because the purchase is time-sensitive, the board took a formal roll-call for consensus to allow administration to order the system and ratify the purchase at the Oct. 6 voting meeting. The roll call recorded unanimous "yes" from the directors present and the administration indicated it would place a formal ratification motion on the next voting agenda.

Third-party delinquent-tax collection (eCollect) and Berkheimer

Board members discussed bringing eCollect, a private audit-discovery and delinquent-tax collector, back into service for the district. A board member and administrators explained that Berkheimer serves as the single tax office that collects registered payers' payroll tax for the city and school district; eCollect's stated role is audit-discovery: locating and registering out-of-town or unregistered businesses that may have owed taxes. Solicitor Salissa Moran and administration described working out legal and procedural questions about whether eCollect can work alongside Berkheimer and under what terms. Several directors said they wanted the matter placed on the next voting-meeting agenda so the full board could approve or reject engaging eCollect; administration said it had held a meeting with eCollect and Berkheimer and would bring requested details to the Oct. 6 meeting.

Construction manager selection and procurement questions

Directors engaged in prolonged discussion about a recommended construction manager. Some directors said they reviewed the six proposals, toured completed projects and favored a firm with a strong local track record; others urged use of a formal, scored evaluation or outside expert review before final selection, and noted that several submitted proposals had lower percentage fees. The operations committee recommended a firm and forwarded that recommendation to the full board. No final award was made at the work session; the item was expected to be on the next voting-meeting agenda.

Facilities and other items

The board reviewed capital needs including replacement or repair of gym floors at Scranton Heights and Western Intermediate and work to tile and carpet areas of the building; administration said some work could be done in-house using leftover materials to reduce costs. Administration also presented an information item on a budgeted $15,000 renewal with Vector Solutions for districtwide training and compliance software (IT budget).

Policy, donations and benefits

Administration said it would present several policy second reads and revisions at the next voting meeting, including policies on donations and RFPs; the board discussed a proposed voluntary flexible spending account benefit for employees and said it would return options comparing multiple vendors.

Next steps

Several items discussed at the work session were scheduled for motions at the Oct. 6 voting meeting: ratification of the swim timing system purchase, potential authorization to pursue the private sale of the Samuel Morse lot and to list it with Pat Rogan, consideration of eCollect engagement, and the construction manager appointment. Administration and the solicitor were asked to provide additional legal and procurement detail to the board before those votes.