Amid a warning of possible bankruptcy, Highlands school board members told a stunned audience Monday night that they were considering consolidations and a 3 percent tax hike for the upcoming year.

The board will hold a meeting at 7 p.m. Monday to vote on the budget. If it were to approve layoffs, the earliest the board would make an announcement would be at that meeting, according to district solicitor Lisa Colautti.

The board shared a sobering financial picture, with expenses outpacing revenue.

The proposed 2018-19 budget includes a deficit. Expenses are almost $48 million, while revenue is $41.8 million.

The big ticket items driving the deficit are escalating expenses for the Pennsylvania State Employees' Retirement System, tuition charges for charter school enrollments and special education tuition costs, according to school officials.

To cover the pension expense and restructure debt, the board voted unanimously Monday night to borrow up to nearly $11.5 million.

"If we sit and do nothing, we will be looking at bankruptcy in a couple of years," said board President Debbie Beale.

The audience did not take the news well. Rumors have been circulating about the district possibly closing Fawn Primary Center.

Fawn and Fairmount primary centers would no longer serve as elementary schools under a reconfiguration plan that would consolidate students into one building.

"This feels a little 'shotgun,' " said Clint Crowell, 36, of Harrison. "My concern is I want to be able to trust that this is a well-thought-out plan."

Crowell and others urged the district to post the budget details as soon as possible on the school website for more transparency.

Looking to show a positive side of the consolidations, Beale said, "This will be a first in Highlands history, that our students will be together and no longer in separate buildings."

But some in the audience wanted more details, saying they didn't understand the financial reasons for the consolidation.

"If you are keeping the buildings open (Fawn and Fairmount), where are you saving the money?" asked Beth Ringer, 37, of Harrison.

A former school board president, Carrie Fox of Tarentum, said she, too, was not sure how the district would save money.

Superintendent Michael Bjalobok said there are expenses for those buildings that could be deferred.

The board went into executive session to discuss personnel items, particularly the possibility of layoffs, according to Bjalobok.

Bridget Seery of the Highlands School Association said the teachers union is concerned about potential layoffs, but she added there isn't any credible information about what will happen.

Mary Ann Thomas is a Tribune-Review staff writer. Reach her at 724-226-4691, mthomas@tribweb.com or via Twitter @MaThomas_Trib.

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