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Elizabethtown Area SD preliminary budget projects $1.48 million deficit; finance review highlights reserves and ESSER effects
Summary
At a May 13 workshop the district's finance chair reviewed 12 years of audits, explained how ESSER federal funds distorted recent averages, and presented a preliminary 2025–26 budget that shows a $1,481,365 shortfall expected to be covered from fund balance absent other changes.
The Elizabethtown Area School District finance committee presented a 12-year audit review and a preliminary budget update May 13 that projects a $1,481,365 deficit for 2025–26, to be drawn from the district's fund balance unless the board changes revenue or spending plans.
The preliminary numbers matter because the shortfall would reduce reserves that the district has used in recent years and because one-time federal pandemic funds (ESSER) boosted recent revenues and expenses, making multi-year averages less predictive of future baselines.
"So the total that as of today the preliminary budget will be a negative $1,481,365," finance committee speaker Mr. Strickler told the board. Strickler walked trustees through fund-balance history dating to 2013–14, noting that each fund (general, capital projects, food services, internal service and fiduciary funds) has a separate balance and cannot be commingled.
The committee review highlighted several items board members and the public should know: ESSER (federal pandemic relief) money in 2021–23 produced a one-time revenue spike that distorted 10-year averages; food-service deficits must be covered by the general fund under state law and have reduced general-fund balances in prior years; the district issued roughly $16 million in bonds late in the 2023–24 fiscal year (capital projects balance spiked accordingly before planned spending on projects such as a field facility); and the finance team is still finalizing April/May entries for 2024–25.
The draft preliminary budget includes an added full-day kindergarten initiative (three long-term one-year positions) that raised payroll and benefits lines; the administration said professional-staff contract costs remain flatlined in the numbers because a new contract had not been approved and therefore was not included. The administration presented $82,095,633 in planned expenditures and $80,614,268 in revenue in the preliminary document shown to the board.
Finance committee members emphasized that recent audit years included both red (years that reduced fund balance) and black (years that increased it), and cautioned trustees that relying on reserves to cover recurring operating shortfalls is risky. The committee also reiterated that cafeteria deficits legally must be covered by the general fund and are not optional.
The board did not adopt a final budget at the May 13 workshop; the preliminary budget remains open for changes during the statutory 30-day public-comment period. Administrators said they will continue to refine entries before the board's final vote.
Key figures and clarifications presented to the board:
- Preliminary expenditures: $82,095,633; preliminary revenue: $80,614,268; projected preliminary deficit: $1,481,365 (to be covered from fund balance unless adjusted).
- Building/capital bond timing: $16,000,000 in bonds issued at the end of fiscal 2023–24 contributed to a capital-projects fund balance spike.
- ESSER funds (federal pandemic relief) in FY2021–23 produced one-time revenues that departments were directed to spend on allowable projects; those funds will not recur and skew multi-year averages.
Administrators and finance committee members encouraged board members and the public to review the audit summaries and to submit questions; the committee said it will provide more detailed breakdowns when they are complete.
