Finance committee previews budget, potential bond refinance and IU assessment; several items to be referred to full board

The district's finance representative presented a multi'part update to the committee on Feb. 10 covering the Montgomery County Intermediate Unit (MCIU) budget, spring extracurricular approvals, a potential refinancing of the 2017 general obligation bonds and the draft 2025'26 budget outlook.

Montgomery County Intermediate Unit assessment: The committee was informed that the IU's projected budget for 2025'26 is $2,107,175, a 0.2% increase from the prior year. Colonial School District's required share was listed as $96,548, an increase of about 4% or $3,862. The presenter said the item will move to the full board agenda for approval.

Spring musicals and activity fund: Committee members reviewed plans for the Colonial Middle School and Plymouth-Whitemarsh High School musicals and related extracurricular duty contracts and contractor approvals. Presenters explained that activity funds, ticket sales and fundraising historically cover production costs and that the district would step in only if a program fund balance fell to deficit. The committee referred the items to the full board for formal approval of contractors and extracurricular duty contracts.

Possible bond refunding: Staff described the next callable series of the 2017 general obligation bonds (02/2017 A), with principal outstanding described as "a little less than $15,000,000" and interest rates on the series in the roughly 5% to 5.5% range. Conservative net savings estimates for a refunding were presented at about $683,000; staff noted that a previous refinance produced roughly $1.3 million in savings. The presenter asked the committee for authorization to proceed with the district's financial advisor (PFM) to perform due diligence, a rating call and to prepare to price bonds in March with settlement in April or May. The committee indicated support for moving the analysis forward; no formal committee vote was recorded in the transcript.

Budget impact and proposed use of savings: Staff said that, for the preliminary 2025'26 budget, the district would apply a portion of projected refinancing savings to reduce the projected tax rate increase. Under the current assumptions staff presented, the projected tax increase decreased from a previously presented 3.48% to 3.18% by recognizing approximately $330,000 of the refinancing savings in the 2025'26 year and deferring the remainder. The presenter framed options for the board about whether to recognize savings in one year or spread them across years and noted upcoming labor contract negotiations as a factor.

Other highlights and assumptions: Staff reviewed operating assumptions and noted modest state budget increases being proposed at the commonwealth level (small increases for basic education and special education and a larger program for adequacy/tax equity). They also noted district technology investments (a move to Chromebooks for K'1 on a roughly seven'year replacement cycle and interactive TVs) and added program proposals (ZeroEyes expansion and an Act 91 volunteer firefighter/EMS rebate program) that carry recurring costs. The presenter said the draft general fund budget increase was approximately 3.05% under the current assumptions and that the projected millage would move from 25.678 to about 26.495 under those assumptions.

Committee members asked questions about timing, the district's fund balance plan and whether the musicals or extracurricular funds usually operate at a deficit. Staff replied that the middle school fund balance is healthy and that the high school fund balance can run a deficit in some years but is currently about $22,000.

Actions recorded in the committee were referrals to the board for approval of the IU assessment and musicals and a direction to proceed with financial advisor work to scope a possible bond refinancing and return with final numbers; no formal vote outcomes were recorded in the transcript.