William Penn SD faces multiyear budget shortfall; consultants outline $9.2 million gap under status quo

Consultants from Public Financial Management presented a baseline multiyear projection Wednesday showing William Penn SD would face a $9.2 million shortfall in a status‑quo budget and recurring deficits averaging roughly $5.7 million per year from 2025–26 through 2029–30.

"This is a status quo projection," said Soraya Loussaint, a PFM consultant, describing the model that holds existing revenue assumptions and does not include corrective actions. The presentation and backup analysis were shared with the board so staff can use the projection in upcoming budget development.

The projection drew on the district's audited statements from 2019–20 through 2023–24, PFM said. The consultants reported the district had three of five years with negative net operating results and a negative $4,700,000 ending fund balance for 2023–24. PFM said the district budgeted a roughly $3,000,000 positive operating result in 2024–25 tied to cash‑flow borrowing; the consultants assumed a remaining cash‑flow balance of about $3,000,000 at year end for modeling purposes.

Ian Tyson, a PFM director, summarized the drivers behind the shortfall as limited recurring revenue growth and expenditures that are growing faster than revenues. "The district has a structural deficit," Tyson said. He added the large 2024–25 state subsidy increase is not sufficient to sustainably fund the district over the long term.

PFM and the district staff identified several specific contributors to the gap in the slides and Q&A: elimination of one‑time ESSER federal funds (about $25,400,000 historically), reliance on cash‑flow borrowing in 2024–25, salary and benefit growth (salaries historically rose about $1,300,000 annually, roughly 3%), rising personal care assistance costs (a $2,300,000 adjustment in 2024–25), charter school tuition growth, and debt service and transportation cost increases.

On state aid and supplements, presenters said the Commonwealth's 2024–25 enacted budget added roughly $6,300,000 to the district through basic and special education increases plus an adequacy and tax‑equity supplement. PFM noted statutory restrictions on how some supplements may be spent and said some supplemental amounts must be spent in the following fiscal year.

PFM's baseline assumptions include no local tax increases, a held collection rate (about 92% for current collections and 99.5% for delinquent collections), no future ESSER funds, and modest inflation and reimbursement increases used to grow expenditures. The model also assumes charter school enrollment of about 864 students in 2024–25 and projects an average increase of 25 charter students per year in future years; PFM said historical trends produced an average $1,200,000 annual increase in charter costs in prior years. Presenters explained that the per‑pupil charter tuition calculation can change when federal offsetting items such as ESSER are removed from the district budget.

When asked whether the extreme revenue options shown on the final slide were additive, Mr. Callahan asked, "Is that a combination or is that an either or selection?" Tyson replied, "That's an either or selection. So if you did one, that would close the $9,200,000 gap. And if you did the other, that would close the full gap." Tyson also said the slides are reference points—not recommendations—and explicitly noted, "We're not here to recommend that you consider a 17.9% tax increase for next year." Board staff later reminded the public the board has already set internal limits on tax increases.

Board leadership and consultants emphasized no final decisions were made at the meeting. "I do want to say that we have not made a decision, as it relates to how we will address the shortfall of about $9,200,000," said Doctor Beacotz (identified in the meeting transcript as the item host). Beacotz said the district has a legal duty to adopt a balanced budget by June 30 and that staff will return with options for closing the structural gap.

PFM said the next phase of the engagement will present possible initiatives and their budget impacts and that staff and the consultants will work together to develop choices for the board during the formal budget process.

The presentation prompted several public questions about charter tuition methodology, enrollment assumptions, and whether students returning from private or charter schools were captured in projections. PFM said enrollment modeling uses historical trends and that the 25‑student figure is an average used in the projection; district staff offered to provide additional, detailed enrollment numbers to interested board members and representatives.

No formal vote or action to adopt budget changes occurred during the meeting. PFM and district staff framed the presentation as diagnostic: a quantified status‑quo picture to inform upcoming deliberations.