South Fayette board adopts proposed final budget; sets advertised millage at 28.088

The South Fayette Township School District board voted 7-1 on Tuesday to adopt the 2025–26 proposed final budget, advancing the spending plan required for public notice and final adoption. The proposed budget shows $77,767,523 in revenue and $83,449,235 in expenditures, with a planned draw from fund balance of $5,681,712 and an advertised millage rate of 28.088.

Director of Finance Ryan Neely presented the plan and said adopting the proposed final budget tonight starts a 30-day period before the board may vote on the final budget and millage at its June 17 meeting. “Once this budget is passed, we must allow 30 days between approval of this and the board approval of the final budget,” he said.

Neely told the board debt service is the major driver of near-term cost increases as the district phases in multiple borrowings to finance the campus construction plan. He said district debt service has been between $7 million and $8 million in recent years and is projected to rise and ultimately level out around $12.1 million after later borrowings are completed in the 2028–29 time frame.

The proposed budget as presented assumes the district raises millage to the full Act 1 index allowed by the state for the coming year. Neely said that millage increase—equivalent to the district’s Act 1 index this year of about 5.2%—would generate approximately $2.3 million in additional revenue and that the district will present alternative scenarios to the board before the June final vote. He also isolated a 0.9-mill figure that he and PFM used to illustrate the portion of millage attributable specifically to construction-related debt service for the coming year.

Neely described other budget drivers: salaries and benefits, health care and PSERS (the Pennsylvania Public School Employees’ Retirement System) together account for about 70% of the budget; debt service, interest and contingency bring those categories to roughly 84% of the district budget. He also noted a projected improvement in the district’s near-term results: a current-year projection to end 2024–25 with a deficit of about $2,590,000, improved from a budgeted $5,000,000 deficit.

Neely presented scenarios that showed the fiscal effect of choosing not to increase millage and of smaller millage increases; he told the board that not raising millage would increase the proposed budgeted deficit to nearly $8 million under current assumptions. He described an audited beginning fund balance of about $33 million and said certain portions are assigned to capital, post-employment benefits and health care; the district currently has about $9.6 million assigned for capital needs.

Board members asked for follow-up detail on several items, including updated final numbers for the current year to be provided in June, clearer cost-cut scenarios if the board considers a smaller millage increase, and confirmation that the administration and the outgoing business official had reviewed key real estate revenue assumptions. Neely said he would return to the May and June meetings with updates.

The motion to adopt the proposed final budget was made by Tom and seconded by Jen. A roll-call vote passed 7–1. The board retains authority to reduce or increase expenditures and the final tax millage before the final budget vote at the June 17 meeting; the final budget must be adopted by law no later than June 30, 2025.