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Mill Creek budget planners flag $3.7M gap; transportation bids could add about $962,000
Summary
District finance staff presented a preliminary 2025–26 budget that includes a proposed 3% tax increase, a projected structural shortfall of roughly $3.7 million and a transportation contract bid that could raise costs by about $962,000; staff recommended negotiating with First Student and cutting $765,000 from building/department budgets.
Mill Creek Township School District finance officials presented a preliminary 2025–26 budget on March 10 that includes a proposed 3% tax increase and a projected budget shortfall they estimated at roughly $3.7 million after accounting for earmarked funds and planned uses of fund balance.
Transportation bid results were singled out as a major near-term cost pressure. The district received two responsive bids and staff said one bidder’s proposal — from STA — included an excess-hours charge for routes longer than five hours that could substantially increase annual costs. "Overall, it's about a 20% increase or $962,000," the budget presenter said when summarizing the transportation impact.
Officials recommended entering negotiations with First Student on a five‑year contract that would include incentive and penalty provisions to protect service quality and costs. Board members pressed staff about fleet-age requirements, driver shortages, and how the excess-hours calculation would apply to the district's roughly 67 routes; staff said fleet-age and retirement schedules are included in the bid specifications and would be carried forward into any new contract.
Beyond transportation, staff warned of other budget drivers: a roughly $1.4 million (13%) increase in health care costs, added staff for special education and multilingual learners, and $700,000 in proposed curricular resource investments. Finance staff said the district relies heavily on local revenue (about 66% of total revenue, with 51% coming from real estate taxes) and has seen assessed-value growth level off — a factor that narrows revenue options.
To close the gap, staff outlined a combination of steps: revisit a prior board motion that earmarked 100% of investment income (proposing instead to earmark 50% and reallocate the remainder), use about $1.5 million of fund balance for one-time equipment purchases, and implement $765,000 in cuts to building and department budgets. Staff said those and other adjustments would reduce but not necessarily eliminate the shortfall and that they expect to present a revised proposed budget in April and a final budget for approval in May.
The committee asked staff to post the slideshow and supporting documents online so board members and the public can review details before the March 24 board meeting, when several budget-related items will be considered.
What's next: Finance staff will continue negotiations with bus providers, refine insurance and health-care estimates, and present updated budget materials to the board in April and May.
