Pine‑Richland draft budget shows $2.78M operating gap; board weighs millage increase and structural options

District finance staff presented a draft 2025–26 general fund budget that shows an operating deficit of $2,776,000 and a proposed $6.9 million transfer to capital, prompting discussion of a millage increase, targeted cost reductions and one‑time fund balance uses.

Chris Jeswick led the presentation and said staff built the draft line by line, including personnel and benefits, and that projected expenditures rose primarily from salary and benefits, special‑education tuition, charter school payments and higher energy costs. Jeswick said the draft assumes no millage increase and uses a state budget estimate that raised the district’s state aid projection by about $41,000 versus what staff had budgeted.

Jeswick summarized the numbers: operational revenues of about $107.37 million, operating expenditures of about $110.15 million and a $2.776 million operational deficit. He said the capital funding plan had been reduced from $8.9 million to $6.9 million and that, after planned fund balance and capital reserve uses, the district would have about $29 million remaining in combined fund balance and reserves after June 30, 2026.

Board members pressed staff on drivers and options. Jeswick said salary and benefits account for roughly $3.5 million of the increase, special education and charter costs are major contributors, and healthcare premiums remain a significant upward pressure (healthcare increases of 9% were projected as a ceiling). He explained retirement incentive payouts that fall in 2025–26 will reduce near‑term savings from retirements and that the staffing review process will be used to analyze future years’ savings.

The presentation identified structural and temporary actions: raising the millage up to the Act 1 index (the presentation showed a 4% cap as an upper option), targeted revenue actions (transportation reimbursement optimization, facility use and participation fees), delays of nonessential capital/technology refreshes, use of assigned fund balance for one‑time retirement payouts, cuts to legal fees toward a five‑year average, and continued efforts to manage utility contracts.

Jeswick presented an illustrative impact of millage changes: a full 4% increase was shown as generating about $2.6 million in recurring revenue and would raise the district millage to 20.3702 mills in the presentation example. Board members differed on the level of increase: some signaled they could not support a 4% increase and preferred something nearer 2% or a middle ground in the low‑threes.

Dr. Miller said he favors a mix of structural and temporary actions and suggested a millage increase in the “upper twos to lower threes” combined with temporary actions to address the structural gap created by the common level ratio (CLR) impact on local real estate revenue. He warned that repeated one‑time responses to a structural shortfall would erode reserves and affect program delivery.

Public commenters were split. Kathleen Rivati called on the board to prioritize expense cuts and oppose another millage increase. Britney Henderson said she supports a millage increase up to the full 4% to preserve programming and the district’s reputation; Jennifer Buse noted stakeholder survey results showing parents generally satisfied with programming and that parents preferred activity fees over larger class sizes, but said she supports a millage increase.

Next steps: staff will return with an updated draft March 17, and the board aimed to present a proposed final budget on May 12 and approve a final budget by the June meeting cycle if needed. Several board members requested a side‑by‑side “option A/option B” comparison: a balanced approach that includes a modest millage increase versus a no‑millage scenario with more aggressive structural cuts. No formal vote was taken.