Cheltenham finance committee flags cash impacts from stadium payments, warns of up to $4.27M in budget pressure

Cheltenham School District finance staff reported at a finance committee meeting that interim cash reserves are down year over year because the general fund is advancing payments for capital work, including stadium expenses, and that several cost pressures could combine to create as much as a $4.27 million budgetary gap in coming years.

"Tonight, as usual, we'll look at the interim financial statements for the school district through the October," said mister Swankham, the staff presenter, as he opened the committee's financial review. He told the committee that cash is lower than a year ago because funds previously held in the capital reserve were paid from the general fund to cover large stadium expenditures.

The presenter reported that revenues collected through October were about $103 million this year versus about $108 million a year earlier — a roughly $4.4 million shortfall — while expenditures were roughly $1.4 million higher. The expenditure increase, he said, is concentrated in operations and includes approximately $1.1 million spent on a roofing project for which state reimbursement has not yet been received.

Swankham said state and federally sourced revenue remains delayed because Pennsylvania has not passed a budget to enable distribution of federal funds. He described the delay as creating a temporary cash-flow constraint: "The state of Pennsylvania is also charged with distributing federal funds. So whether they come back online or not, the federal government, we won't receive our money to the state until the state budget passed." The transcript records the committee clarifying the mechanics of that delay.

On the local revenue side, staff reported an increase of roughly $4 million driven mainly by real estate tax collections and about $2 million tied to stop-loss (reinsurance) recoveries for high-cost health claims. The district's structural-balance review showed tax collections (real estate, EIT, transfer taxes) and delinquent tax collections remain strong so far in the season.

Enrollment and per-student allocations factored into the presentation. The district's Oct. 1 enrollment was reported at about 4,120 students. Using that count, staff said the district will allocate roughly $1.05 million for school/classroom supplies across buildings this year, with some reallocations noted (for example, Elkins Park to Cedarbrook East).

Staff walked committee members through major budget drivers in the district's roughly $140 million budget: $59 million in salaries; about $19 million in pension costs; approximately $12 million for health, prescription and ancillary benefits; roughly $3.9 million for special-education tuitions; about $3.5 million for charter school tuitions; $10 million in debt service; and roughly $7 million for transportation.

On pensions, the presenter said the pension contribution rate (PCR) has held at 34 percent for the past two years and discussed actuarial factors and historical market losses that drove higher contributions. On health insurance, staff said market trends point to an 8 percent increase this year; last year, bargaining concessions limited the district's increase to about 1 percent. The presenter said several very large claims (roughly $5 million in high-dollar claims) were largely offset by reinsurance recoveries but cautioned that reinsurance costs could flow back into premiums.

Special-education tuition payments were highlighted as a rapidly increasing cost. Staff said the district paid about $1.3 million for special-education placements in 2022 and estimated special-education placement payments could reach approximately $4.2 million this year, driven by higher tuition rates, increased support-service costs and some growth in placement counts.

Staff also identified upcoming debt-service increases tied to the Cedar Brook and Glen Side projects: an increase of about $900,000 in the first of the modeled years, followed by roughly $800,000 and $600,000 in subsequent years. When combined with potential salary increases through collective bargaining and other projected cost escalations, staff estimated a worst-case pressure of about $4,270,000.

The presenter said the Act 1 index — the statutory index that generally caps how much a district may increase real-estate taxes without special voter or state approvals — is 3.5 percent for the coming budget cycle. Staff noted December is the typical timeframe to decide whether to seek an increase beyond the Act 1 index.

For the 06/30/2026 projection, staff built in one-time effects: about $3.7 million of outstanding real-estate tax settlements (roughly $3.0 million of which staff characterized as a one-time settlement) that depress this year's revenue but are not structural for future years. Several state funding items remain unknown pending the state budget.

Committee members asked clarifying questions about the timing of reimbursements for roofing and other state-related payments, the mechanics of federal funds distribution via the state, the formula behind pension contribution rates, and the district's assumptions about health-insurance trends. The committee did not take final action on major budget adjustments at the meeting.

The meeting record shows procedural approvals (approval of an earlier meeting) and routine adjournment motions, but no final vote on changes to the 2025–26 budget at this session.

Sources: meeting transcript (finance committee), staff presentation remarks by mister Swankham.