JACKSON TWP — The Seneca Valley School Board Monday night heard two options for its 2016-17 budget, both of which would raise taxes.

The budget proposed by the administration is for $121.5 million and would include a 4.03-mill property tax increase.

A proposal by board Vice President Jim Nickel would keep the expenditures the same, but reduce the tax increase to 3.1 mills by using $500,000 more from the district’s fund balance.

The board can vote to adopt a budget next Monday and make its final approval in June.

This year’s budget is $115.5 million with a tax rate of 119.9 mills.

The value of one mill is expected to be $565,000, an increase from this year’s figure of $548,000.

Including referendum exceptions granted by the state, the district may increase its property tax by a maximum of 4.28 mills this year, business manager Lynn Burtner said.

The district each year budgets $750,000 to cover any unexpected expenses that may come up.

Under Nickel’s proposal, the district would use $500,000 from its fund balance to cover part of that line item, if needed.

“I think it’s the prudent thing to do. I think it’s the approach to take that keeps in mind the constituency of our district that are taxpayers,” he said.

Burtner said she can’t predict how much of that contingency line item the district will need to use, but in an average year it uses $300,000 to $400,000.

If the district has less than $250,000 in unexpected expenses during the 2016-17 school year, the money would not be used from the fund balance.

“If you don’t need it, you don’t spend it,” Burtner said.

The district already plans to use $2.25 million from its fund balance to help close a budget shortfall created by increasing pension costs and a need for new textbooks.

The increasing cost of pension plans is a big reason costs are increasing, officials said.

Nickel said the district must increase its contribution to the Public School Employees’ Retirement System by $2.1 million this year, half of which will be paid back by the state.

“That’s an expense we have no control over,” Nickel said.

Superintendent Tracy Vitale said she recommends a tax increase because the district needs to be prepared to pay for capital improvements.

The district has a “healthy” fund balance, but it needs to continue to plan for future costs, she said.

“Planning for the future means facility upgrades. They can no longer be patched together,” she said.

Board President Eric DiTullio said the district is looking into work at older facilities such as Evans City Elementary School.

Officials also have recently discussed options for replacing the swimming pool in the intermediate high school.

“We’re looking now to say, ‘What can we do to make sure that we don’t have to have wire and silly putty holding our buildings together?’ Let’s fix things right,” DiTullio said.

District resident Tom Murray asked the board to limit tax increases and to focus investments on academic programs, not athletic facilities.

Murray said he doesn’t think the district can afford to build a new swimming pool.

“It appears to me that you are focused more on athletic expenditures than you are on the classroom. I’m probably wrong about that, but that’s what it looks like,” he said.