North Penn finance committee reviews $348.7 million preliminary budget, discusses 4% tax scenario

North Penn School District finance committee on Monday reviewed a preliminary budget that would increase next year's total spending to $348,670,000 and discussed a tax-rate approach that would keep the district within the state Act 1 index.

The presentation by business manager Todd Linderman laid out the draft numbers and drivers: "The budget for this current year is a little over $322,000,000. The first draft of the budget for next year is $348,670,000," Linderman said. He said that, as presented, the draft shows a roughly $18 million gap between projected expenditures and revenues because the draft includes a $10,000,000 transfer from the district's fund balance to capital projects for the high‑school project.

That $10 million transfer, Linderman and board members said, is a planned allocation the board previously authorized in a parameters resolution. "We are spending our own savings on the project at least in part," a board member said, noting the funds are coming from reserves. Linderman said excluding that transfer reduces the operating increase to about $8.6 million, or roughly a 5% operating increase compared with the current year.

Why it matters: the committee must set a preliminary tax rate that complies with Pennsylvania's Act 1 index and positions the district for future borrowing for a multi‑phase high‑school renovation. Linderman recommended the board consider a tax increase near the Act 1 index and said a 4% scenario would give the district more flexibility for long‑term borrowing for the project.

Key drivers: Linderman identified salary increases (roughly a 4% contractual increase), medical insurance premiums (14.8%) and prescription costs (10.8%) as major expenditure drivers. Charter tuition rates also rose substantially in the draft: regular‑education charter tuition was shown rising from $15,600 (2023‑24) to $17,800 and special‑education charter tuition rising from $39,200 to $43,900 per pupil. Utilities were flagged as a pressure: Linderman said the budget includes about $725,000 for electric increases and about $100,000 for natural gas increases.

Revenue side and fund balance: Linderman said the draft assumes roughly $330 million in revenues and noted modest natural growth in the tax base, some earned‑income tax growth and an anticipated $1.5 million increase in investment income assumptions. He said the district's unassigned fund balance remains near Moody's guidance (about 7% of the budget) and that the committed $10 million for capital will reduce the fund balance accordingly. "Moody's does recommend 8% or at least one month's expenditures. You have 7%, close enough," Linderman said.

Public comment and questions: Talmadge Township resident and supervisor Mr. Osei, a North Penn graduate, urged the committee to consider demographic change when planning capacity, saying, "the rate of change for the number of school‑age children is negative for both existing households and new households." Jason Lanier of Lansdale pressed the district on comparative costs of virtual options versus cyber charter schools and asked why savings from the district's North Penn Virtual Academy did not appear to offset cyber charter costs; Superintendent Dr. Bauer replied that per‑pupil figures do not capture district overhead and highlighted the disproportionate flat fee charged for special‑education students who attend cyber charters.

What the administration asked the board to decide: Linderman said the staff needs direction on a tax‑rate target (within Act 1 limits) and noted staffing requests will be presented at the May budget meeting. He recommended the board consider the 4% Act 1 allowance as a practical approach to build a reserve for future borrowing.

Next steps: the finance committee scheduled a special meeting for April 22 to hear more detailed budget presentations and a regular finance meeting on May 6; the final budget adoption is scheduled for the district's June meeting cycle.

Ending: The presentation ended with committee discussion about utility contracting and the health‑clinic cost savings; Dr. Bauer said last year's health clinic savings were about $1,100,000 and offered to provide a year‑end analysis of clinic effects on insurance claims.