Lower Moreland SD narrows budget gap to $416,000 but S&P downgrades district to AA- over lower reserves

Business administrator Mister McGuinn presented a monthly budget update to the Lower Moreland School District board on April 8 and said a combination of expenditure reductions and revenue adjustments had reduced the district's January shortfall from earlier estimates.

McGuinn reported that adjustments in March — including a $50,000 expenditure-side change tied to staffing, an increase of about $169,000 in projected revenues from assessment and miscellaneous lines, and an updated collection percentage for real-estate assessments — reduced the net gap so the district was "still short about $416,000." He said the district used a state-approved referendum exception for special-education expenditures this year as part of the 2025–26 planning.

McGuinn also told the board that S&P had downgraded the district's bond rating to double A minus (AA-) with a stable outlook, citing reserves lower than S&P prefers. He said the downgrade does not affect existing bond issues but could affect future borrowing costs. McGuinn described steps the district is pursuing to reduce reliance on fund balance and to increase revenue certainty, including possible capital-project transfers, tracking of transfer-tax revenues from new properties, and monitoring of county assessment updates.

On transfer taxes and development, McGuinn said the county has provided a list of recent purchases; using a conservative assumed average assessment of $250,000 for certain new units, the district estimates a potential one-time transfer-tax generation in the low millions (he referenced a $1.8 million estimate under particular assumptions) but cautioned timing is uncertain because many properties had not yet been assessed by the county.

McGuinn said the district will present a proposed final expenditure budget at the April voting meeting and continue updates through May and June before adopting a final budget. He said the district's preferred path is to limit use of healthcare fund balance and to avoid drawing additional one-time reserves if possible. Board members asked for clarification on timelines for county assessment updates and how the district would use transfer-tax proceeds if and when they materialize.

Next steps: staff will post the proposed final budget for public review as required and continue to update the board on revenue and expenditure actions; McGuinn said he would present options in May to reduce the structural deficit and to improve reserve levels ahead of any future borrowing.