Centennial SD forecasts $4.5 million deficit; board weighs using IU credit and refinancing to narrow gap

Mr. Greenwood, the district’s chief financial officer, told the Centennial School District Board of School Directors on June 10 that the current draft budget projects $151,904,000 in revenue and a $4,500,000 deficit for the 2025–26 year.

The forecast assumes the full Act 1 index increase (the district discussed a 4% scenario) and incorporates a roughly $2,700,000 credit the district expects to receive from the Bucks County Intermediate Unit (IU) in the coming months. "We are anticipating a roughly $2,700,000 credit from the IU in this current year," Greenwood said, adding the credit will be applied to the 2024–25 fiscal year and likely be received before December.

Greenwood told the board he would recommend using the IU credit instead of transferring the same amount from the district’s debt service fund, and he said the district should pay a prior-year IU overage of $934,000 in 2024–25 to "clean the books." That choice would, he said, lower the immediate deficit but still leave roughly $1.8 million to address for 2025–26.

Greenwood reviewed other revenue and expense drivers: a $3,300,000 homestead/farmstead rebate the district expects from the state, swings in investment income (about $3,400,000 in 2024 versus roughly $66,000 in 2022), and mandated pension costs that are now roughly 34 percent of payroll under PSERS. He said special-education costs and increases in purchased services — including an approximately $439,000 increase in outplacement services and a $250,000 rise in IU transportation costs — are major expense pressures.

On possible offsets, Greenwood said the district routinely finds annual savings through targeted reductions (about $1.3 million identified this cycle) including technology, staff reorganization and a retirement incentive that likely yields roughly $367,000 in recurring savings. He also described two anticipated bond refinancing steps — one planned for late summer and another in February 2026 — that could produce additional debt-service savings. "We're expecting some savings to come of that," he said of the refinancing plans.

Board members pressed Greenwood for clarity on recent changes to the proposed deficit. Board member Mr. Martin noted the proposed deficit shown to the board two weeks earlier was $5.8 million and asked what produced the $1.3 million reduction. Greenwood attributed the change to closer analysis of reimbursements (including PSERS and Social Security reimbursements) and updated retirement-savings estimates.

Greenwood emphasized timing constraints: the district posted the required PDE form and public notice of intent to adopt a budget and is working to finalize a budget by the June 30 statutory deadline. He said ongoing uncertainty in the state budget process limits the district's ability to rely on additional state revenue. "We don't have the luxury of putting it off until July until we hear from them," he said.

The board discussed potential future actions: moving the IU credit into the 2025–26 year rather than pulling funds from debt service this year; pursuing refinancing savings; and monitoring state proposals such as a possible cap on cyber-charter tuition that the governor had proposed, which Greenwood estimated could reduce costs if enacted. No formal budget action was taken at the June 10 meeting; Greenwood said a final budget vote is expected in a later session before the June 30 deadline.

Why it matters: the district projects multi-year deficits under current assumptions and is balancing one-time credits, debt-service strategy and targeted cuts while continuing to fund instruction, special education and curriculum investments.

Next steps: Greenwood will present an updated draft to the finance committee and continue discussions with board members ahead of the district’s final budget adoption meeting.