Chambersburg Area SD warns debt service could more than double as "Schools of Distinction" plans advance

At the Chambersburg Area School District board meeting, Board President Ed and Superintendent Bigger told the board the district’s planned "Schools of Distinction" building program could push annual debt service from about $11.7 million today to more than $26 million within roughly five years, based on April estimates that included a possible $200 million borrowing.

The increase — roughly $15 million in annual debt service compared with current levels — has prompted administrators and trustees to examine financing options, tax implications and program trade-offs as the district develops detailed project and bonding plans.

Board President Ed said the April numbers, which assumed a $200 million borrowing for three new buildings, drove the projection that annual debt service would rise from about $11,700,000 to over $26,000,000. He told the board that the district is working to refine those figures and expected an updated presentation next month on the financing plan.

Finance staff reported related budget and cash-balance context: the district’s aggregate fund balances rose from roughly $72,000,000 at the June 2024 close to about $81,000,000 at June 2025, driven largely by growth in the capital reserve. The capital reserve balance increased from about $9,500,000 to approximately $16,700,000, and a newly created debt-service fund showed a balance near $6,800,000. The finance update also noted real-estate tax collections of about $18,500,000 as of Aug. 12 against an $89,900,000 budgeted total and reported earned-income-tax collections at roughly $22,100,000 (about 90% of budget to date).

Officials warned a continuing delay in the state budget would erode cash balances. Finance staff explained that, because the commonwealth had not passed a budget, the district had not yet received some state subsidies and had elected to withhold cyber charter payments until the state budget is finalized to mitigate interest-income losses. The general-fund cash balance showed a decline of about $5,500,000 between early-July snapshots, the finance presentation said.

Board members and administrators discussed how much new annual revenue would be needed if the district follows the $200 million borrowing scenario. President Ed used examples to show the scale of the gap: a 1% tax increase was described as generating about $1,000,000 annually for the district, while 1 mill was characterized as roughly $800,000. Using those figures, trustees noted the district would need multiple revenue and cost-management actions over the coming years to cover the higher debt service if the borrowing proceeds as estimated.

Speakers emphasized uncertainty in the preliminary numbers and the need for more precise debt-service modeling. Ed said the board and administration will continue working through the details and that an updated financing presentation is scheduled for an upcoming meeting. He and other board members also discussed branding and community engagement plans for the Schools of Distinction initiative, including possible student involvement and a public-facing slogan or campaign once the program parameters are clearer.

Board and administration next steps include the updated financing presentation next month and additional planning sessions and work groups to refine timelines, bonding scenarios and communications strategy. No final borrowing or bond authorization was approved at the meeting.

The board’s comments reiterated that grant timing and the end of some federal or foundation-funded programs could change the district’s revenue picture, and staff said they would return with refined numbers and scenarios for trustee consideration.