East Penn officials say full K–8 realignment and redistricting look unaffordable; district to pursue smaller option and refine 2026–27 budget

East Penn School District administrators and outside advisers presented updated schematic designs and new financial models on Feb. 9, and concluded the full K–8 realignment and larger redistricting plans are not affordable under current revenue and operating-cost assumptions.

"As we analyze both the realignment and the redistricting scenarios, both appear to be unaffordable from our standpoint based on the various current assumptions that are built into the model," Ken Scott Shear of PFM told the board, citing operating costs that are projected to increase faster than tax revenue growth allowed by Act 1.

The presentation reviewed programmatic designs for K–4, 5–6 and 7–8 configurations, an "Innovate" special for elementary grades, and schematic additions at the proposed five–six center (IRE/Ayer) and the seven–eight center (Lower McKungee). Breslin Architects described efforts to reduce building size and preserve existing site circulation while adding classrooms, upgraded libraries and specialized spaces.

Financial advisers and the district's project managers presented updated cost estimates: the realignment option was modeled at about $119 million and the redistricting option at about $141 million. Advisers also modeled a smaller, more affordable scenario at $75 million and emphasized that rising operating costs—projected increases in transportation, health insurance and other major expense categories—drive long-term stress on fund balance.

"The main driver is that operating costs of the district . . . are increasing faster than the tax revenues that are allowed to increase under Act 1," a member of the financial team said, summarizing the factors that push the larger options toward unaffordability.

Administration told the board it would continue to analyze core needs, prioritize projects, and return with refined options. "We will continue to scrutinize the needs that exist at the K to 8 level," Doctor Campbell said, noting that the administration will present proposals they consider financially viable.

Budget context and early 2026–27 numbers were presented immediately after the facilities briefing. Finance staff said the draft 2026–27 budget carries an early structural deficit of about $2.1 million, with draft assumptions that include a proposed 4.1% tax increase (22.735 mills) and use of audited FY25 fund balance as the starting point. Administration and advisers noted that if the district pursues a capital path even as small as $75 million, the models assume moving tax rates near the full Act 1 index in future years and will still require careful expense management.

Board members pressed advisers on the realism of operating-cost forecasts and the driver behind a roughly $1.96 million reduction in projected 2026–27 revenues compared with earlier models. The finance team said the revision reflects updated revenue inputs including assessed-value growth, federal and state allocations, and more current year data.

Several board members expressed disappointment that the larger plans are fiscally constrained but urged administration to return with prioritized, implementable steps. "Constraints drive creativity," Doctor Whitney said, while others emphasized the need to protect fund balance and avoid relying on one-time reserves for recurring costs.

Votes at a glance - Approval of minutes — motion carried (8 ayes). - Personnel items (consent): motion carried (vote recorded as 8 ayes). - Business operations items (a–c together; d, e, f separately): all motions carried (each recorded as 8 ayes). - Kutztown University affiliation agreement (graduate assistants/interns): motion carried (8 ayes). (Individual motions were moved and seconded on the record; roll-call tallies were announced as eight ayes for each listed action.)

What happens next Administrators said they will continue to refine cost assumptions, prioritize core capital needs (including targeted work at Emmaus High School), and return with proposals that better align with the district’s operating and fiscal realities. The budget process will continue over the spring with further refinement of revenue assumptions and a more detailed look at expenditures.

Public comment and other business During public comment, Adam Smith urged the board to fill its LCTI JOC seat to ensure district representation, and Reverend Dr. Jeff Whitcomb, a district alumnus and teacher, urged more timely and equitable state funding. The board also heard policy updates and reports from regional entities (CLIU and LCTI), and later convened an executive session on legal and personnel matters before adjourning.

The board is scheduled to continue budget work in upcoming meetings; administration said it would present prioritized, financially feasible facility recommendations in a future session.