Finance director: Mill Creek reports pre-audit $1.1M operating deficit, bond program near completion

Mill Creek Township School District finance staff presented pre-audit year-end financial results and a construction update that showed the district operated at a roughly $1.1 million deficit for fiscal 2024–25 before earmarks and transfers.

Aaron O’Toole, the district’s finance/operations presenter, said variability in local revenue lines — especially real estate transfer taxes and delinquent real estate collections — and investment income shortfalls contributed to a revenue picture that was close to budget overall but shifted across categories. O’Toole described several large drivers of variance: a $126,000 shortfall in real estate transfer tax, about $402,000 under budget in delinquent real estate tax collections, and roughly $162,000 below budget in earnings on investments.

At the same time, the district unexpectedly received a competitive environmental grant for exterior restoration and ADA restroom upgrades with a total award near $2.9 million; the grant is competitive and requires a 50% local match. O’Toole said the grant revenue and related capital expenditures offset on the books, but they distorted the operating variance when reviewing general fund results.

On the expenditure side, salary savings (fewer filled positions and increased long-term substitutes) produced lower-than-budgeted teacher salary costs, but benefits — particularly health care — finished about $1.5 million over budget. O’Toole said overall salaries were under budget by roughly $571,000, but unpaid days and other factors offset some of that advantage.

Construction and bond-related spending remain substantial. O’Toole reported about $151 million spent on project work to date and summarized remaining work on marquee items: M.I.H.S. and McDowell projects, exterior restoration, and the Gus Anderson field project. After accounting for current project budgets and known change orders, the capital program faces an estimated shortfall of about $962,000. The district has identified potential mitigation steps including reprioritizing scope and watching interest-rate and state budget developments that could affect available funds.

O’Toole also reviewed the district’s fund balance: the combined general fund and capital projects balance was reported just under $27 million, but portions are committed or assigned (for capital projects, salaries, technology). The board and finance director discussed the uncertainty from the continuing state budget stalemate and asked staff to estimate lost interest income and the local cost of delayed state funding to support advocacy to state legislators.

Board members asked for a follow-up forecast once the state budget is known, and O’Toole agreed to provide estimates of lost interest revenue and to reconcile pre-audit results with the final audited numbers once the audit concludes.

Quotes in meeting: “We operated at a $1,100,000 deficit,” O’Toole said, describing the pre-audited operating result before earmarks. He also described the environmental grant as a competitive award the district did not expect, saying it will require a 50% local match. The reporting concluded with staff noting minimal capital-project contingency remains and asking the board to consider future financing or scope adjustments if additional projects are required.

The presentation did not include any board votes but led to direction for staff to prepare a forecast and a breakdown of state-budget exposure for board advocacy.