District closes final borrowing for elementary program; finance committee warns of state and local revenue gaps

The Kennett Consolidated School District told the board on March 10 that it has closed the final component of financing for its new elementary-school program and received roughly $37.9 million in net bond proceeds. District financial staff also warned the board that state subsidy adjustments and local revenue uncertainties will reduce anticipated state aid and could require an upward adjustment of the preliminary tax increase proposed for next year.

Treasurer Michael Tracy reported that the final borrowing for the elementary school program was settled as a premium bond issue. "We settled on 34.8, but they were sold as premium bonds for us, netting 37,900,000 in proceeds," Tracy said, and that full settlement will be completed on or about April 4. The series was described as a 20-year issue with an overall average yield of about 3.38 percent; district staff said the favorable structure reduces the district’s annual debt service by about $500,000 compared with earlier estimates.

At the same time, the finance committee reported adjustments the district must make to revenue assumptions for the 2025–26 preliminary budget. Committee chair Mr. Finnegan told the board that the governor’s proposed budget increases basic education aid by about 0.98 percent rather than the roughly 2 percent the district had modeled; as a result the district must reduce its revenue estimate by about $113,033. Special-education subsidy projections rose by $57,419; combined adjustments left the district with an estimated $96,554 less from the state than the preliminary budget assumed.

Finnegan also flagged two local revenue risks still unresolved in the budget cycle: pending tax-assessment appeals that could reduce district revenue by about $340,000 (Genesis buildings) and the potential enactment of an earned-income tax in East Marlborough Township that could reduce district receipts by roughly $500,000. Taken together, the committee said the preliminary tax increase originally modeled at about 2.81 percent would need to be increased to approximately 3.52 percent to balance the revised assumptions; increasing to about 3.95 percent would create fiscal room to add two special-education positions recommended by the CCIU review.

Tracy also reviewed other financial details included in the board packet: - Revenue and investment listings showed district assets and investments totaling about $49,631,461.48 on the balance schedule included with the packet. - The food-service program recorded monthly net income of $29,785 and a year-to-date operating surplus of roughly $244,000, although the district had not yet received some state lunch-subsidy payments and vendor invoices for late winter months. - The capital-projects fund report listed $2,582,430.85 in project-related payments tied to the New Garden and Greenwood elementary projects. - The February enrollment snapshot showed a drop of eight students from the prior month, producing a headcount of 3,788.

Board members noted the favorable bond pricing and expressed relief at the reduced debt-service burden. Finance committee members, however, urged caution and asked staff to return with revised budget numbers and the district’s options for balancing the 2025–26 spending plan if the state and local revenue pressures materialize.

Ending: The board accepted the financial reports for information and directed administration and the finance committee to incorporate the revised state-subsidy estimates and local risk scenarios into the final budget work before June 2025.