Kennett finance committee previews 2025–26 budget: Act 1 index at 4%, small enrollment uptick and $415,000 farm‑property settlement

The finance committee began the district—s 2025–26 budget process with a detailed presentation by Mark Tracy, the district chief financial officer, who highlighted the newly announced Act 1 index, enrollment figures, charter-tuition exposure and capital-reserve status.

Tracy said the Pennsylvania Department of Education set Kennett Consolidated School District—s Act 1 index at 4%, a reduction from recent years. He explained Act 1 limits the district—s tax‑rate increase absent statutory exceptions or a voter referendum and described the two primary exceptions districts typically pursue (retirement costs/PCERS and special education costs).

Why it matters: the Act 1 index constrains how much the district can raise property taxes without qualifying for exceptions, and current charter-school tuition and special‑education cost trends could push the preliminary budget above that index if not managed or if PDE exceptions are not requested.

Key details and outcomes

- Act 1 index and options: Tracy said the district—s index is 4% and reviewed three board options: (1) an accelerated opt-out before the preliminary budget; (2) submit statutory exceptions to PDE (for example, rising retirement or special-education costs); or (3) seek a referendum. He recommended preparing exceptions options to preserve flexibility if state subsidy projections change.

- Enrollment: The district—s October 2024 enrollment was presented as 3,844 students overall; kindergarten enrollment rose to 305. Tracy used PDE retention/promotion ratios and a third-party Sundance Associates enrollment study to frame multi-year projections.

- Charter tuition and special education: Current charter census results and budget-based tuition calculations show pressure on the charter line. Tracy said the district currently estimates it may need an additional roughly $200,000 to cover charter tuition for 2025–26, depending on special-education identifications and final reconciliations.

- Capital reserves and positions: Tracy reported the district maintains a substantial capital reserve (he stated it is "in excess of $25,000,000" in the presentation), and noted three positions were temporarily funded from budgetary reserves; trustees discussed whether to make those recurring or fund them differently.

- Property settlement: Tracy announced the Bridal Farm property settlement and sale is scheduled to close; he said the district signed documents and the sale price is $415,000, with court approval obtained previously.

Quotation highlights

- "The Act 1 index for the Kennett Consolidated School District... is 4%," Mark Tracy told the committee. - On charter tuition: "Based upon the current census and the increase, I need to increase that line item approximately $200,000," Tracy said. - On the farm sale: Tracy said, "We go to settlement tomorrow, and that property has been sold for $415,000."

Next steps

Tracy asked the committee to prepare for the full budget timeline: draft preliminary numbers in January, a detailed salary-and-benefits meeting in February (which composes roughly 60% of the budget), and final budget approval in June. The committee asked for follow-up materials on charter-tuition assumptions, special-education growth scenarios and any steps needed to pursue PDE exceptions if the preliminary budget exceeds the Act 1 index.