Cheltenham finance committee reviews $139 million preliminary 2025–26 budget; $1.9 million planned draw from fund balance

Cheltenham School District finance staff presented a preliminary 2025–26 budget of $139 million at the finance committee meeting on Feb. 4, and staff said the draft would use $1.9 million from fund balance to close the projected gap. The presentation, led by district finance staff (Mr. Swaggart), said the draft includes no proposed real estate tax increase.

The preliminary budget matters because salary and benefit obligations — including two years of contractual increases that were not fully budgeted last year — and the district's high pension contribution rate drove most of the projected spending increases. In the presentation, staff said the district's retirement contribution (PCERS) remains at 34% of wages and that salaries and benefits account for roughly 68% of total expenditures.

Finance staff opened with interim fiscal results through Jan. 31. The district shows total assets of $98.7 million and a cash balance of $90.0 million, up from $87.0 million a year earlier. "We are showing a cash balance of 90,000,000 versus 87,000,000 last year at the same time, so cash moving in a positive direction," the presenter said. Through January staff reported $113.0 million in revenues and $69.0 million in expenditures, a $43.8 million change in fund balance through seven months of operations.

Staff identified several year-over-year expenditure pressures. Total expenditures were about $7.7 million higher than the prior year through January, and staff said roughly $3.0 million of that increase resulted from a three-payroll month in January (a timing issue expected to resolve by year end). Other drivers flagged for later review included an uptick in special-education tuitions and placements, a December contract settlement referenced as the "CA settlement," and facilities-related spending for EPIC setup and refurbishing at Elkins Park School after a steam leak.

On the revenue side, staff said local sources remain the largest share of district revenue (about two-thirds), with state sources representing roughly 23% and federal sources about 1% of general-fund receipts. The presentation called out two state items included in the draft: a Ready to Learn block grant of $1.1 million that was approved in the prior budget cycle but available in 2025–26, and a charter-school reimbursement included at about $289,000. Staff noted interest income is down; fiscal staff reported last year's interest earnings near $3.7 million and a decline of about $200,000 through January compared with the prior year.

Staff said the $1.9 million shortfall in the preliminary draft is approximately equivalent to a 2% increase in real-estate taxes; the presentation also noted the district's weighted Act 1 index is 4.7% (the index used for tax-cap calculations). The presenter emphasized the draft assumes no tax increase at this stage and that several elements remain to be finalized, including the governor's recently released budget and unsettled contract allocations.

Board members asked questions about delinquent-tax collections (staff explained the district uses a third-party collector and that collections can lag by one to two years), bond-refinancing opportunities (staff said market windows have not produced substantial savings since 2021–22 refinancings), and investment vehicles the district uses to manage cash (staff identified the Pennsylvania school-district liquidity pools mentioned as "PizLab" and another trust "PLIGATE," noting those vehicles are fully collateralized). Board member comments emphasized reliance on local revenue and the need for state advocacy as local property taxes drive most revenues.

Next steps noted during the meeting: staff will finalize the preliminary presentation for the full board in February, continue to model contractual and special-education cost scenarios for the final budget, and present an audit/closing update at a future meeting. No tax-rate action or final budget adoption occurred at the Feb. 4 meeting.