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Tredyffrin-Easttown officials present $194.5 million operational budget; district cites multimillion-dollar gap, approved referendum exception
Summary
District staff presented the second and final budget workshop for fiscal 2025–26 showing $194,476,000 in anticipated operating spending, a remaining deficit after revenue scenarios, PDE-approved referendum exception revenue, and discussion of capital transfers and bond timing.
Tredyffrin-Easttown School District administration on April 7 presented a draft 2025–26 operating budget that lists $194,476,000 in anticipated spending and leaves a multimillion-dollar shortfall under current revenue scenarios.
The presentation to the Board of School Directors was led by Art McDonnell, the district business manager, who said the packet numbers reflect the district's current estimate and that a proposed final budget will be presented to the board on April 28 and brought to adoption on June 9. McDonnell said the Pennsylvania Department of Education has approved the district's Act 1 referendum exception for special education; the packet was adjusted to reflect that approval.
The workshop cast this budget cycle as one in which routine revenue and expense drivers — salary and benefits, healthcare, pension costs, and one-time program costs — combine with planned capital projects to create pressure on fund balance and borrowing plans. McDonnell told the board the district currently models scenarios that reduce initial projection deficits from roughly $11 million down to about $4.33 million after application of the Act 1 index and the approved referendum exception, though he stressed the millage revenue estimate is subject to assessment growth and appeals.
Board members and staff discussed the capital-fund transfer and debt service as key variables. McDonnell said the budget includes a planned $6,000,000 transfer to the capital fund (a line now shown within anticipated spending rather than as contingency). He noted prior years' transfers of $5,000,000 and $6,000,000 and said the district has roughly $34,000,000 in fund balance cash on hand while it continues a multi-year bond program tied to the new elementary school and athletic fields. Administration said bids and pre-bid meetings are under way for the elementary project and that final bond sizing — and therefore debt-service estimates — will depend on bid results and whether the district defers issuance.
Revenue drivers were also explained. McDonnell said the board's tax-authority ceiling for the year is 4.66% (4% base plus referendum exception authority), and the packet estimates that increase could generate roughly $6.8 million; he noted the actual revenue collection depends on assessed values, appeals and growth assumptions. He repeated that Act 1 projections and the referendum-exception millage (0.186 mills in the presentation) are estimates and will be refined before the proposed-final budget presentation.
Directors pressed staff on fund-balance implications and Moody's rating sensitivity. Several board members expressed concern about the district's fund balance as a percentage of operating budget and the long-term trend, and urged caution to preserve borrowing capacity and favorable interest rates. McDonnell and other administrators said staff will continue refining expense projections and that the board can choose to move capital transfers or use fund balance at year-end if needed; they also described modest opportunities for additional savings in the hundreds of thousands rather than millions.
The presentation closed with scheduling reminders: the proposed-final budget presentation is April 28 and final adoption is scheduled for June 9, with additional finance-committee meetings planned before those dates.
