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North Penn finance committee narrows focus to Act 1 index, recommends moving preliminary budget to May 15 action agenda
Summary
Finance staff presented a 2025–26 budget with an $8–18 million year-over-year increase depending on a $10 million transfer to capital; committee members favored using the Act 1 index (4%) as the working tax-rate scenario and asked staff for refined tax-rate scenarios for final consideration.
The North Penn School District Finance Committee discussed the 2025–26 preliminary budget and asked staff to bring refined tax-rate scenarios to the May 15 action meeting.
Finance director Mr. Linderman presented the draft 2025–26 budget, saying the working budget totals $348,735,000 including a $10,000,000 transfer to the capital projects fund and represents an 8.15% increase year over year (about 5% excluding the capital transfer). He said the district must provide direction on the tax rate so staff can present a proposed-final budget by May 15 and a final budget in June.
The committee heard that the Act 1 index for the coming year is 4%, and staff recommended considering that figure to help cover debt anticipated for the district’s high school project. "You will need to approve your preliminary final budget next week," Linderman said during the presentation. Several board members said uncertainty about state and federal funding, and volatility in investment earnings, argued for caution.
Board members asked for more granular scenarios. Mr. Resch and other members urged using conservative assumptions because the budget baseline includes assumptions about real estate transfer taxes, investment earnings and state revenues that could change. Mrs. Stoll, Mr. Fusco and Dr. G (a board member) said they leaned toward a 4% scenario to preserve flexibility for upcoming debt service related to the high school project. Linderman said staff would provide numbers for alternative rates (3.5 percent, 3.65 percent, 3.75 percent and 4 percent) and per-household impacts before the May 15 meeting.
Staff and board members also discussed the timing for adopting a tax-rate decision. Linderman said the board could adopt one rate for May 15 and still change it in June but cautioned that changing upward at the last minute is not good practice. The committee voted to move the budget item forward for placement on the May 15 action agenda.
Budget context presented to the committee included these details: the draft budget assumes a $10 million transfer from fund balance to capital projects; most revenue is local (primarily real estate taxes); the district’s employer retirement contribution rate for next year was shown at 33.9%; the district’s per-pupil spending ranked in the lower third among county peers; and the district’s bond rating remains favorable, which staff said lowers borrowing costs over the life of projects.
Linderman and other staff noted uncertainty about state funding (including the state’s dependence on federal funds) and the effect of market volatility on investment earnings. The committee asked staff to coordinate with the new CFO and the district’s financial advisors (PFM) to present updated modeling of debt and tax scenarios at a future finance meeting.
The committee directed staff to prepare the draft proposed-final budget and the set of refined tax-rate scenarios for the May 15 action meeting; the motion to move the budget item forward passed.
