Finance committee reports unqualified audit, recommends $5 million transfer; discusses Act 1 opt-out, five-year projection, Eastern Center dues and bus stop-arm

The Hatboro-Horsham School District finance committee reviewed the 2023–24 audit, a multi-year financial projection and several budget-related items at the Jan. 13 work session and recommended board action at the Jan. 27 legislative meeting.

Finance director Mr. Stone told the board auditors issued an unqualified opinion for 2023–24. The general fund finished the year with a $1.8 million operating surplus and staff recommended a one-time transfer of $5 million from the general fund to the capital reserve, pending approval at the Jan. 27 legislative action meeting. Stone reported the general fund ending balance as of June 30, 2024, at $26.9 million and said the capital reserve balance currently stands at $19.8 million with roughly $8 million committed to approved projects.

Stone said favorable revenue—higher interest earnings, strong tax collections and increased state aid—drove the surplus; expenditures were roughly $200,000 under budget before the proposed capital transfer. He noted the childcare fund was closed June 30, 2024, consistent with a transition to Right At School, and the food-service fund operated roughly at break-even after required pension entries.

On state budget rules, Stone recommended the board adopt the Act 1 opt-out resolution for the 2025–26 budget, which limits real-estate tax increases to the Act 1 index (projected at 4% for 2025–26) rather than preparing a preliminary budget that could later pursue exceptions or referendum. A board member asked how the district would meet the Jan. 30 filing deadline if weather canceled the Jan. 27 meeting; Stone said the board could hold a special meeting (virtual if necessary).

The committee reviewed the five-year financial projection showing revenues and expenditures converging by the end of the projection window and emphasized the importance of staying within the Act 1 strategy. The projection assumes average salary increases in line with the strategy, no change to total headcount and phasing in of outstanding debt, including the Keith Valley project. Stone cautioned that the model depends on many assumptions and showed what a zero-tax-increase year would do to long-term fiscal trajectory.

Separately, the district's share of the Eastern Center for Arts and Technology budget is projected to rise by about $40,000, bringing the district's contribution to roughly $1.4 million next year; the increase reflects a 3.1% overall increase among sending districts and the final year of a $1,050,000 capital assessment. The committee recommended moving the Eastern Center contribution to the Jan. 27 legislative meeting for approval.

On student-transportation safety, the committee reviewed a recommendation to contract with Bus Patrol for automated school-bus stop-arm camera enforcement. Stone said Bus Patrol will install cameras at no upfront cost and is paid from violation proceeds. Under the model presented, the fine for passing a stopped bus would be $300 total, of which $250 would be allocated to the district, $25 to the local police department and $25 to a Commonwealth school bus safety grant program. The Bus Patrol arrangement includes a $250 per bus per month technology fee (about $138,000 annually for 46 buses) paid from violations and a $65 per-violation fee; if violations do not cover the technology fee Bus Patrol would not bill the district during the initial five-year term, Stone said. The administration will present the Bus Patrol agreement at the Jan. 27 legislative meeting and later seek intergovernmental agreements with the Hatboro and Horsham police departments before activating enforcement.

Committee members asked whether neighboring districts using Bus Patrol have seen long-term violation reductions; staff said the program is relatively new and anecdotal reports show mixed results. The committee recommended moving its finance items to the Jan. 27 legislative meeting for action.