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Healthcare, pension and charter tuition changes top expense drivers as district flags benefit-cost increase
Summary
Administration told the board healthcare medical costs rose to a projected 14% increase (dental 8%, prescription flat), PSERS and Social Security increases continue to drive benefit-side expense, and a recent state recalculation reduced charter tuition costs by about $3,000 per pupil in the district's model.
District staff identified employee benefits and contracted services as principal drivers of the 2025–26 expense increase and described recent statewide changes that affect expenses and revenue.
Art McDonnell and other presenters said a second review with the district's healthcare consultant increased the medical-cost projection for 2025–26 from an earlier 8% estimate to 14%; dental was held at 8% and prescription costs remained flat, McDonnell said. He described the medical piece as the larger component of healthcare expense and said the slide in the packet reflects the consultant's updated modeling.
The presentation also flagged retirement and payroll-related increases. McDonnell showed a $3,000,000 gross PSERS driver on the expense side and explained that the state typically offsets roughly 50% of PSERS employer costs on the revenue side; the net local impact is therefore lower than the gross figure shown in expense columns. Board members and staff discussed that Social Security and other payroll-driven expenses appear in the 200 series line items and will add to the benefits increase.
Administration noted several other cost categories: contracted services (which increased across the district and include special-education contractual placements, custodial contractors and other outside vendors), supplies (including a $1.7 million one-time science-textbook/materials purchase discussed separately) and increased utilities/insurance line items. Transportation was discussed as another structural gap: presenters said state transportation subsidy remained largely flat while district transportation costs are substantially higher (the packet showed a roughly $1,000,000 state contribution versus roughly $8,000,000 district spending in recent years).
McDonnell also described a favorable change in the charter-school tuition calculation: the state revised its formula to allow special-education ADMs to be separated in the calculation. The packet shows a recalculated tuition figure (previously $40,001.46 in the district's slide) that declined by roughly $3,000 after the state's recalculation; McDonnell said the district included the updated, lower figure in the packet and that groups such as PASA and PASBO continue to pursue legislative adjustments to charter-tuition formulae.
Board members asked clarifying questions about the composition of the benefits-driver numbers, and Vice President Tidi pressed staff on which portions are medical versus payroll-driven changes; McDonnell answered that the increase is largely medical (about $1.3 million called out for medical in one breakdown) plus Social Security and grossed-up PSERS components embedded elsewhere in the benefits line.
