Cheltenham finance committee readies final budget vote; district flags $2 million potential savings if state caps cyber-charter tuition

Finance Committee Chair Dan Schultz called the June 10 meeting to order and the committee heard a final-budget overview from district staff, who said the district will present a proposed final budget and proposed tax rates at a special board meeting on June 17.

Staff reported Cheltenham School District’s draft audit shows a $27,900,000 fund balance and that administrators transferred $4,750,000 into a capital reserve after last year’s results. Staff said year-to-date local revenues are about $5,700,000 higher than the prior year while expenditures are about $6,000,000 higher; total expenditures have moved from roughly $111–112 million to nearly $117–118 million through May.

The budget presentation emphasized several drivers of higher spending: contractual increases (including a recently settled contract), rising special‑education placement tuition and services, and a recurring roughly $900,000 operations variance tied to the EPIC setup and HVAC work at Elkins Park. “So, we can confidently lock in our fund balance at $27,900,000, and we were able to transfer $4,750,000 into cap reserve for capital projects,” staff said.

Committee members and staff flagged investment earnings as a near‑term benefit that is not recurring. “That is not money we should bank on,” Finance Committee Chair Dan Schultz said, referring to more than $3,000,000 in earnings on investments that have helped this year’s local revenue totals.

The district’s proposed final budget lists roughly $140,000,000 in total revenues and an initial proposal that included a 3% tax increase; staff told the committee they are more confident that a 3% rate increase may not be necessary and that the board can revise the proposed budget up to the June 17 vote if either the tax rate or expenditures are reduced.

Staff also reviewed pending state budget developments that could materially affect Cheltenham’s numbers. The district had been tracking a possible increase to the Ready to Learn block grant the governor proposed, but staff said negotiations appear to be shifting funding instead toward the basic and special‑education subsidy lines under Pennsylvania’s funding formula. Staff cautioned that the state’s discussions had only recently resumed and that additional detail was expected in the following two weeks.

A major line-item issue discussed was cyber‑charter tuition. Staff reported that of about 130 students attending charter schools from Cheltenham, roughly 90% attend cyber‑charter programs (about 120 students). The district estimated that a statewide flat cap of $8,000 on cyber‑charter tuition for both regular and special education would produce “a little over $2,000,000 in savings” to Cheltenham. Board members asked whether the district tracks which students enroll in cyber charters; staff replied that charters provide residency information back to the district and that the district maintains a listing of students, residence, charter provider and start date.

Other routine items scheduled for board action at upcoming meetings were listed by staff: on June 10 the board will consider approving the district’s banking institutions (including the PA School Liquid Asset Fund and the Pennsylvania Local Government Investment Trust), authorization for certain staff to make investments (staff said investments are limited to U.S. Treasuries and similar vehicles under the School Code), participation in cooperative purchasing programs including COSTARS and PEPPM, designation of purchasing agents, renewal of the district’s insurance (staff said property and umbrella coverage rose by about $50,000 owing to replacement‑cost estimates), approval to keep lunch prices unchanged after another year of food-service surplus, and a renewal for “Woodson’s” for the 2025–26 school year. On June 17 the board will consider final budget adoption and formal approval of the district’s real estate transfer tax, mercantile tax, net profits tax and local services tax rates.

Discussion and next steps: staff reminded the committee that the final proposed budget materials will be posted on BoardDocs 24 hours before the June 17 meeting. Committee members encouraged outreach to state legislators while the state budget is being negotiated and discussed the possibility of local outreach or programs to re‑engage students who enrolled in cyber charters if the state cap does not materialize.

The committee adjourned after a motion approved by the members present.