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East Penn officials outline 2025–26 expenditure plan, project $1.9 million structural deficit
Summary
Business administrator presented the 2025–26 expenditure draft showing a $1.9 million structural deficit after planned uses of fund balance and technology spending; major upward pressures include medical premiums, transportation and insurance costs.
District finance staff presented a draft fiscal plan for 2025–26 that shows total revenue of about $194 million and total expenditures near $207 million, leaving a preliminary deficit that staff said will require further adjustments. Administrators described a planned spend-down of fund balance for technology and capital work and identified a remaining $1.9 million structural deficit that the administration will work to eliminate before adoption.
Business staff highlighted major drivers behind the increases: wages (a 3.86% increase in total wages), an expected 9.75% rise in medical insurance premiums (the district participates in a multi-district insurance consortium), increases in retirement contributions tied to wages, and higher electricity transmission/delivery charges. Transportation costs are up nearly 7% because of additional special-transportation routes, and charter and cyber-school tuition payments have grown year over year. The presentation also noted that property/casualty and cyber insurance markets are volatile: the district's broker warned of potential rate increases from its carrier in the 18%–25% range for 2025–26.
Administrators reiterated that the draft incorporates the capital-millage phase-in tied to the K–8 realignment and that certain capital reserve transfers will be used to fund up-front costs rather than transferring full amounts into reserve. The presentation estimated an unassigned beginning fund balance of roughly $24.2 million and an estimated ending fund balance near $21.1 million after the draft budgeted expenditures and planned spend-downs.
Presenters told the board they will bring a long-range financial plan to the next meeting and will continue to refine revenue and expenditure estimates. No budget adoption vote was taken at this meeting.
Ending: The administration said additional budget detail and long-range plan materials will be presented at upcoming March and April meetings; board members asked for additional cost-savings ideas and flagged the volatility in insurance markets as a priority area for further review.
